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Western Price Survey / Archives

April 4, 2003
Power on Even Keel

With nukes coming and going and Path 26 still woozy from a recent substation blaze, spot electric prices in the West remained fairly calm this week. Mid- Columbia premiums ran higher as cold weather impeded hydro flows in the region, but most prices showed modest movement.

Traders confirmed the temporary loss of hydro supplies in the West. "The water's not running with the cooler temperatures," said one market player. "Once the weather warms up, we should start seeing the [price] spreads again."

The level of water at Grand Coulee Dam rose to 83 percent of normal this week, a total of about 52.4 million acre-feet. At The Dalles, water levels measured 83.1 million acre-feet, only 77 percent of normal.

According to the California Independent System Operator and Southern California Edison, the Vincent substation near Path 26 is still recovering from a March 21 fire, making for continued spreads between NP15 and SP15. NP15 prices for heavy-load hours ticked up to 44 mills, while peak prices at SP15 climbed to 50.5 mills/KWh.

Path 26, whose full capacity is 3,000 MW north-south and south-north, is still rated at 1,400 MW in each direction. Edison spokesperson Marlon Walker said that all power lines at the substation are available for service but that repairs to transformers at the substation are still being made.

Cal-ISO expects the north-south capacity on the line to increase to 2,500 MW beginning at 6 pm tonight. The grid operator did not have estimates of potential south-north capacity increases.

According to Walker, the thousands of gallons of transformer lubricant consumed in the Vincent fire did not contain harmful levels of PCBs. Rather, the oil used in transformers at the substation was akin to cooking oil. Beyond the Vincent site, any Edison-owned transformer containing PCBs is "well within the regulatory limit" of 50 parts per million, Walker said.

Palo Verde prices stepped down through Wednesday as the operating status of one of the area's nuclear plants improved. Palo Verde No. 1, which faltered last week because of a ruptured condenser tube and was at zero power on Monday, ramped to 97 percent of full capacity on Wednesday and hit 98 percent on Friday.

Meanwhile, peak prices in the Southwest-after ranging from 44 mills to 48 mills on Tuesday-sank as low as 39 mills/KWh the next day.

According to Arizona Public Service spokesperson Sheri Foote, Palo Verde No. 3 has entered a refueling outage. The unit shut down earlier than expected after discovering boron residue-indicative of a possible leak-on a heater sleeve on March 29, according to the Nuclear Regulatory Commission.

Diablo Canyon No. 2 is still easing its way onto the grid after a longer-than-expected refueling hiatus. According to plant spokesperson Jeff Lewis, the unit finished its outage on March 26 and had ramped to about 65 percent by Wednesday of this week when crews detected vibrations in a main feedwater pump. Production fell to about 50 percent as a result.

Lewis said the problem can be repaired with the plant operating at half-power, and No. 2 remained at that output level through Friday. PG&E expects the unit to resume full power before Monday.

Prices at Alberta floated higher through Wednesday as cold weather pushed up local loads. Peak premiums reached their high for the week on Monday morning, rising to 374.38 mills/KWh for the 11 o'clock hour. Off-peak prices surged to 266.73 mills/KWh on Friday [Jason Mihos].

Gas Holds Middle Ground

As if affected by the chill, wet weather, daily gas prices at most Western hubs this week exhibited little desire to budge. Spot premiums tended to travel in tight ranges as support from futures or the crude oil market bobbed and dipped.

Prices appeared to retreat on the news that the federal Energy Information Administration would announce an increase in stored gas inventory. On Thursday, the EIA confirmed that supplies increased by 37 Bcf compared to the previous week. Total gas in storage amounts to 680 Bcf, a good deal less than the 1,500 Bcf on hand at this time in 2002.

Following the announcement, prices meandered in either direction around the West, though generally not by leaps and bounds. San Juan Basin prices reacted the most, gaining $0.50/MMBtu compared to Wednesday's premiums, but the hub was unusually active all week: $4 on Monday, down as low as $2.05 midweek, up to $4.25 on Thursday and scraping down to $1.92/MMBtu on Friday.

Permian supplies traded between $4 and $4.78/MMBtu throughout the week, and prices at Topock ranged from $4.72 to $4.95/MMBtu. CityGate gas drew prices between $4.80 and $5.02/MMBtu.

At Malin, prices stayed between $4.41 and $4.62, and AECO gas dutifully roved from $4 to $4.16/MMBtu.

In other gas news this week, Pacific Gas & Electric announced that April gas bills for its residential customers should drop by 19 percent compared to March charges. The utility attributed the expected decrease to milder weather and reduced prices for crude oil [J. M.].

Western Electricity Prices
Week of March 31-April 4, 2003
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 35-374.38 10.13-266.73
Mid-Columbia 20-38.5 16.5-35.75
COB 32-40.5 28-37
NP 15 37-44 25.25-39
SP 15 40.5-50.5 27.5-40
Palo Verde 39-48 25.5-37.5

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


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