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Western Price Survey / Archives

March 29, 2002
April Looks Less Bullish

After a high point last weekend of just over 50 mills/KWh in Northern California and the Pacific Northwest, power prices took several giant steps downward during the week to close out the month of March in the 30 mills to 35 mills/KWh range.

Part of the trend was the reduced load profile associated with religious observances for Passover and Easter weekend. Traders set an advanced schedule for dealings, with Thursday's trades covering Friday/Saturday deliveries. The last trades of the week will actually spill over to April scheduling, so another factor is the arrival of a whole different set of conditions related to power plant maintenance, natural gas prices and water flows on hydroelectric systems.

Exactly how they will play out is uncertain, but the early indicators are for eased pressure on prices because of a near freefall in delivered gas prices toward the end of the week.

From having the highest prices last week, Mid-Columbia dropped to its usual place at the low rung of the pricing ladder, showing a 30.5 mills to 35 mills/KWh range for peak power heading into the holidays.

Off-peak was still in the 27 mills to 29 mills/KWh range.

Mid-Columbia, NP15 and SP15 all settled in the 33 mills to 35 mills/KWh vicinity, while Palo Verde broadened its reach in the 31 mills to 36 mills/KWh bracket. Off-peak power, which had been above 30 mills everywhere midweek, crept below that mark.

There was little to report by way of unplanned generation outages or transmission curtailments. Some work at Grand Coulee had minimal impacts on both the AC and DC Interties midweek, but no one seemed to notice.

The California Independent System Operator reported outages of the usual kind at about 12,500 MW, mostly planned spring maintenance, and barely crossed over the 30,000 MW load mark for a single peak hour each day. A slight bump in the capacity of unplanned outages on Thursday seemed to coincide with an outage at the 337 MW Contra Costa No. 7 unit. About the only other major newcomer to the planned maintenance list this week was the 442 MW Mohave No. 1 generator [Arthur O'Donnell].

Gas Prices Collapse as Season Changes

For most of the world, winter turned to spring last week, but in the natural gas business April 1 marks the real change of the business calendar. Barring an unusual turn of events gas withdrawal season has closed and shippers and utilities will either be sitting on their reserves or sending extra into the ground from now on.

The latest American Gas Association storage report showed 65 Bcf taken out of the ground last week-much more than average for late March-but that was a reflection of the high market prices in effect that made it more economic to withdraw supplies.

Next week will see takeout competing against what could be much lower prices. As traders closed out their books for the month, Western gas prices plummeted, in part due to reduced demand on the Easter weekend and in part just an adjustment to diminished expectations for spring.

The Southern California Border price had begun the week at nearly $3.50/MMBtu, much as the national NYMEX benchmark price was floating higher. By the end of trading for April 1 delivery, however, the SoCal/Topock index had fallen to $3.14.MMBtu.

In Northern California, the PG&E CityGate price mimicked the Topock changes, while the Malin price followed a similar trend from a slight distance, tripping from $33.9 down to $3.01/MMBtu. traders noted slackening demand and high inventory on pipelines. Southwest basin prices dropped below the $3/MMBtu mark after being as high as $3.33/MMBtu.

The Alberta price had been up to $(C)4.84/Gigajoule, but eroded to $4.35/Gj [A. O'D.].

California Snowpack Reports Approach Normal

The latest surveys of snowpack and hydrological conditions show that Northern California watersheds are having an average year. In terms of projections for hydroelectricity production into spring, average translates into a sigh of relief from water managers and utility schedulers. "We are really close to average," said Frank Gehrke, chief snow surveyor for California.

Water content of residual snow above the American River watershed is running 103 percent to 112 percent of normal, Gehrke reported Thursday.

There has been a little more snow-water content than average in key Northern California regions of the Sierra Mountains, 42.35 inches since October 1, reported the Department of Water Resources this week. Less rainfall to the south is less of a concern because the major hydroelectric facilities draw from upper rivers and reservoirs. However, measurements for the Colorado River system--a prime source for hydroelectricity at Hoover Dam--are far below normal, signaling some concern in the Southwest.

In advance of spring runoff, major reservoirs are showing healthy water levels. Lake Shasta is already at 89 percent of capacity; Trinity Lake 75 percent, Lake Oroville, 67 percent; New Bullards Bar 77 percent, Lake Folsom, 71 percent; and New Melones 67 percent.

In the south, drier conditions prevail, with DWR's Pine Flat Reservoir at 46 percent and Lake Isabella at just 19 percent [A. O'D.].

Western Electricity Prices
Week of March 25-29, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 45-202 21-63
Mid-Columbia 30.5-38 28-31
COB 33-38 28-31
NP 15 33.5-41 29-31.5
SP 15 33.5-41.5 28-31
Palo Verde 30-40.25 26-29

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


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