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Western Price Survey / Archives

March 28, 2003
Hydro Carries Spot Market Downstream

A rush of hydroelectric power and lower fuel prices for electric generators kept prices in the bilateral market moving lower all week. Flush with excess Columbia River output, Mid-Columbia saw prices fall nearly to single digits for off-peak energy.

Rain falling in the Northwest is expected to continue into April and supplies at Grand Coulee Dam are swelling higher, triggering this week's increased hydro output. Water levels at the dam are now above normal for March but are still pegged at about 51 million acre-feet for the January-July water year, which is 81 percent of the 1991-2000 average for Grand Coulee.

On Monday, prices started strong before bumping lower the rest of the week. "There's a dampening effect on the whole WSCC (Western Systems Coordinating Council) territory" because of the hydro influx, said one trader. "We should be seeing these lower prices for a while."

At Mid-C, peak prices sloshed as low as 14 mills/KWh and off-peak premiums staggered from about 30 mills early in the week to as low as 12 mills/KWh. Prices at the California-Oregon border also dropped but not as far, with heavy-load power selling for as little as 22.75 mills and off-peak supplies reported between 22 mills and 32.75 mills/KWh.

An explosion last Friday at the Vincent substation near Path 26 kept the grid operator on its toes this week. According to the California Independent System Operator, thousands of gallons of mineral oil used to insulate the transformer went up in flames. As a result, Cal-ISO derated Path 26 down to 625 MW going south to north and 900 MW north to south. The line's maximum capacity is usually about 3,000 MW.

The system operator interrupted 900 MW of non-firm load to ensure stability of the grid. In addition, Cal-ISO called on an additional 2,000 MW of generation in the southern half of the state to make up for the shortfall and asked power plants around the state to restrict maintenance operations.

According to Vincent owner Southern California Edison, the 500 KV lines at the site have been operational since Monday. Utility crews are still working on transformers and other power lines at the substation, including eight 220 KV power lines. On Thursday, Cal- ISO increased capacity on Path 26 to 1,400 MW in each direction after one of the Vincent transformers returned to service.

Cal-ISO and Edison are investigating what caused the transformer to blow up, said Jim Detmers, vice president of operations for the system operator.

Prices at NP15 slipped this week as a result of Path 26 problems, since local generation could not be readily exported south. Heavy-load prices dipped as low as 31 mills, with off-peak power trading for as little as 17 mills/KWh.

In response, premiums at SP15 tracked higher, ranging up to 55.5 mills for peak power and between 19.75 mills and 35.5 mills for light-load hours. In the Southwest, peak energy at Palo Verde traded for a high of 50.25 mills, with off-peak supplies drawing as little as 19 mills/KWh.

Pacific Gas & Electric's Diablo Canyon No.2 plant has begun its return to the grid after an extended refueling outage. On Friday morning the Nuclear Regulatory Commission reported that the unit was operating at 48 percent of full power. PG&E expects to have the plant on line by the end of the month.

At the Palo Verde nuclear complex, a ruptured condenser tube halted production from the 1,350 MW No. 1 unit on Thursday night. No estimate has been given for the plant to resume output, according to the NRC.

In Alberta, loads eased throughout the week, flattening out most real-time price spikes. Peak power traded between about 10 mills and 112 mills/KWh, and off-peak prices trickled as low as 8.84 mills/KWh late in the week [Jason Mihos].

Storage Boost Undercuts Gas Prices

With milder weather still smiling around the West and a net increase in stored supplies for the first time in months, prices for natural gas declined as the week wore on. Gas futures inched higher and lower in response to the crude oil market, which is waffling back and forth because of unsettling delays in the expected annihilation of the Iraqi military.

The federal government on Thursday reported that gas in storage crawled 7 Bcf higher for the previous week, moving to 643 Bcf. Stocks are still 918 Bcf lower than they were last year at this time, and supplies in the West dropped off by 5 Bcf down to 167 Bcf.

Gas in the basins sold for less than $5 all week, with Permian netting a high of $4.88 and San Juan drawing as much as $4.90/MMBtu. CityGate prices notched up to $5.05 early in the week and premiums at the Southern California border coasted higher, reaching $5.12/MMBtu.

At Malin, gas traded for $4.48 to $4.73, and gas at AECO fell as low as $4.14/MMBtu [J. M.].

Western Electricity Prices
Week of March 24-28, 2003
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.13-112.60 8.84-27.02
Mid-Columbia 14-40.5 12-32.5
COB 22.75-48.25 22-32.75
NP 15 31-53.5 17-36.25
SP 15 40.75-55.5 19.75-35.5
Palo Verde 37.5-50.25 19-31.25

Archives of the Western Price Survey for the past year are also available online.


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