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Western Price Survey

March 30, 2007
California Hydro Outlook Grim

The spring runoff, when melting snow produces ample hydroelectric resources, seems to have arrived in the Northwest. Mid-Columbia peak power traded between 13.50 mills and 20 mills/kWh on Friday, while off-peak values moved for between 1 mill and 5 mills/kWh. Mid-C nighttime power had gone as low as 0.25 mills/kWh the previous day.

The outlook for California hydroelectricity is not stellar, however. According to California Independent System Operator spokesman Gregg Fishman, snowpack has been 60 or 70 percent of the average in the state. Other agencies have reported even lower figures, between 40 and 55 percent.

However, "we had such a good hydro year last year that the reservoirs are in good shape," Fishman said. "We may not be able to produce as much energy during a 24-hour period [as last year], but they should be there to meet peak demand as we get into the summer months."

The California Department of Water Resources has said much of Southern California is experiencing its driest rainfall year on record. In addition, Cal-ISO officials say they are concerned about peaking capacity next year should the state have another relatively dry winter (see story at [16.2]).

At the California-Oregon border, off-peak power was also cheap, trading from 20 mills to 27 mills/kWh on Friday. The commodity went as low as 14.50 mills/kWh on Tuesday. Peak electricity spread between 39 mills and 50 mills/kWh in trading Friday, after trading tightly at around 44 mills on Wednesday.

The Pacific DC Intertie, a major transmission path between Oregon and Southern California, went down on Tuesday. On Wednesday flows were limited to 1,446 MW northward and 1,475 MW southward.

Southern California Edison was working to restore power midweek to customers after fierce winds rushed through the area, knocked out distribution lines, and left 200,000 people in the dark. South of Path 15 peak power traded between 57 mills and 71 mills/kWh Wednesday and for about 60 mills/kWh Friday. Nighttime power went for 28 mills to 40 mills/kWh Friday, though it had traded for around 22 mills/kWh at the start of the week.

At North of Path 15, peak power was priced around 55 mills/kWh Monday but went for 58 mills to 63 mills/kWh Wednesday and about 62 mills/kWh Friday. Off-peak electricity, at around 25 mills/kWh at the week's start, reached 42 mills/kWh Wednesday and then a high of 52 mills/kWh Friday.

Palo Verde peak power was priced around 50 mills/kWh Monday, spread from 52 mills to 63 mills/kWh Wednesday, then went for about 55 mills/kWh on Friday. Low-demand electricity traded between 41 mills and 47.50 mills/kWh on Friday after going for around 22 mills/kWh Monday.

The Cal-ISO reported approximately 8,624 MW of generation curtailments as of Thursday. According to Fishman, this time of year generators shut down for maintenance and to prepare for the summer.

The Columbia Generating Station was listed at 85 percent capacity on Thursday and Friday, according to the U.S. Nuclear Regulatory Commission [Chris Raphael].

Natural Gas Prices Rise Steadily Along With Price of Crude Oil

The U.S. Energy Information Administration reported a storage withdrawal of 22 Bcf of natural gas for the week ending March 22. Approximately 41 Bcf was removed in the East, while 6 Bcf was added in the West and producing states added 13 Bcf to stocks. Stocks are 200 Bcf below last year's amounts, but remain 21 percent above the five-year average.

Traders saw the withdrawal as expected, however, and natural gas values have been more affected by crude-oil futures, which reached a six-month high this week.

Permian Basin gas, which traded below $6/MMBtu most of the week, went as high as $6.22/MMBtu in trading Friday. San Juan Basin gas reached $6.12/MMBtu after spending most of the week between $5.35 and $5.92/MMBtu.

Southern California border gas went as high as $6.47/MMBtu on Friday, though it traded around $6/MMBtu most of the week. Malin gas traded for approximately $6.80/MMBtu on Friday, a gain of about 40c compared to values set earlier in the week [C. R.].

Western Electricity Prices
Week's End: March 26-30, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 15.50-484.14 6.26-133.05
Mid-Columbia 12-44.50 0.25-16
COB 38.25-52.25 14.50-30
NP 15 54-63.50 24-52
SP 15 53.30-71 23.75-51.25
Palo Verde 48.50-63 21-47.50

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


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