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Western Price Survey

Week's End Edition
April 4, 2008
Electricity Prices Have Mixed Response to Demand, Natural Gas, Weather

After soaring past $100/MWh at the start of the week in California, peak power prices eased as natural gas prices fell and grid demand abated. But it was a different story in the Northwest, where daytime power prices staged a comeback Thursday. A chance of snow and cooler weather were the drivers behind the increase. Peak prices rose $11 on average, while off-peak prices added between $18 and $20.

Last weekend, the 1,150 MW Columbia Generating Station in Washington reduced power to fix its control-rod systems and a feed-water pump system. The scheduled maintenance was completed Wednesday. Palo Verde Nuclear Generating Station in Arizona shuttered its 1,336 MW second unit last weekend for a refueling outage that is likely to take seven weeks.

In California, wholesale prices exceeded $100/MWh at the start of the week, continuing to ride an economic roller-coaster propelled by a weak dollar and stronger crude and natural gas futures. Natural gas storage is also not looking solid for the West.

Peak prices in California tended to dip on Wednesday and Thursday. They regained some strength on Friday for Monday's higher demand profile, but not enough to record an increase for the week. Off-peak prices at South of Path 15 and Palo Verde rose for the week, as did Northwest peak values.

At the California-Oregon border, prime values rose an average of $1 to finish the week at $98.38/MWh. Off-peak prices shot up $14 to average $92.52.

The Mid-Columbia hub saw average daytime prices climb $6 to close at $96.28/MWh. Nighttime prices jumped $9 to $94.10/MWh.

Average prime power dipped $6 to $95.96/MWh at North of Path 15, while off-prime electricity rose $11 to $86.03/MWh.

Daytime power prices for South of Path 15 slipped around $4 to an average of $96.03/MWh Friday. Nighttime prices settled at $86.13/MWh, down from $75.92 on Monday.

Meanwhile, Palo Verde peak power prices inched down $2 to an average of $89.19/MWh. Off-peak trades grew from $69.63 on Monday to an average of $80.07/MWh on Friday.

Cool weather in California cut demand on the grid this week, sending it from 30,200 MW on Monday to below 29,000 MW at midday on Friday. Demand for power also typically falls with the onset of the weekend.

In Seattle and Portland, another storm arriving on Saturday is expected to dump snow at low elevations. Northern and Southern California will enjoy sunny and dry weather this weekend, with temperatures at or near average levels, according to AccuWeather [Kristina Shevory].

Natural Gas Prices Drop on Lower Demand, Warmer Weather

Natural gas prices caved in this week as investors cashed out futures, demand fell and the weather warmed in the Northeast and Midwest. Prices slumped this week between 50 and 70 cents on average, and ended the week between $8.53/MMBtu and $9.43/MMBtu.

Nationwide, natural gas stocks slimmed down by 29 Bcf to 1.248 Tcf last week, the U.S. Energy Information Administration said in its weekly storage report. The drop, which was less than expected, left stockpiles nearly 20 percent below last year and almost equal to the five-year average.

Thanks to mild weather in the West, supplies dipped a modest 1 Bcf to 175 Bcf, leaving levels nearly 27 percent lower than last year. Stocks are 13 percent less than the five-year average.

Over the last month, prices have swung between $9 and $10/MMBtu across the country because investors have been taking their dollars out of stocks and dumping them into commodities. The energy sector has been seen as a hedge against inflation as news has mounted that the economy is souring.

Still, natural gas buyers won't get a large reprieve on high prices as indicated by forward contracts. Last Thursday, before the April contract expired, natural gas futures sold for $9.57/MMBtu, while the May contract went for $9.67 and June was going for $9.78.

Prices could quickly change in the next few months depending on summer weather and hurricane forecasts that could spell supply disruptions [K. S.].

Western Electricity Prices
Week's End: March 31 - April 4, 2008
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 74 - 699.99 39.21 - 402.14
Mid-Columbia 79 - 105 72 - 98
COB 85.25 - 104.50 72.75 - 95
NP 15 89.75 - 108 72 - 79.50
SP 15 89.50 - 106 71.50 - 88
Palo Verde 77.75 - 95 62.25 - 81.25

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


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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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