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Western Price Survey / Archives

April 6, 2001
Market Settles After Shaky Start; Loss of DC Intertie Reduces System Flexibility

Heavy winds knocked the DC Intertie out of commission as the week began. The incident had the immediate impact of pushing California into a Stage Two alert Monday and Tuesday, as well as reducing system flexibility by shutting in Southern California and Southwestern power sources. The line may be out through April 12.

According to system operators, seven transmission towers on the south end of the DC line leading to Sylmar, northeast of Los Angeles, were downed by the strong winds. Another tower on the Inyo/Rinaldi line was also knocked down. At the time, there was between 1,100 MW and 1,600 MW scheduled northbound on the DC Intertie.

There were few actual sales transactions going on at the time, in part because Bonneville Power Administration was cutting back river flows to conserve water for what could be a summer of draught. The main impact of the outage may be to reduce the ability of the California Independent System Operator to schedule around transmission bottlenecks on Path 15. Operators have frequently employed the strategy of using the DC line to move power into the Northwest, then rescheduling flows on the AC line into Northern California. According to BPA sources, at the time of the outage, the DC line was being used to take return deliveries on exchange energy previously sent to California.

As the week wore on, the immediate price hikes that came in response to news of the outage gave way to a more mixed result. Mid-Columbia, California/Oregon Border and North Path 15 prices elevated, while SP15 and Southwest prices slipped.

California's continuing resource squeeze lessened slightly from Monday, when Cal-ISO had 15,500 MW of units on its outage list. Several big ticket items moved into planned maintenance-among them Palo Verde No. 1, which went into full refueling hiatus March 30. Also Etiwanda No. 3 and Moss Landing No. 7 experienced unplanned cutbacks, further reducing output from those multi-unit facilities.

The Stage Two was extended through Tuesday, but things returned to "warning" level Wednesday and Thursday as several key plants returned to service and loads remained moderate. However, the Columbia Generating Station began a long, slow coast down towards scheduled refueling outage starting on May 19. Also, about 3,000 MW of QF power is still not reporting for service, Cal-ISO said, and plant owners say they are dissatisfied with a California Public Utilities Commission ruling restoring utility payments but not resolving the back-payment issue.

Peak power prices rose early but reverted to Monday levels. Prices at Mid-Columbia and the California/Oregon Border jumped to the 345 mills to 350 mills/KWh vicinity, with off-peak bounding to the 260 mills to 280 mills/KWh range. By Thursday, they were about 50 mills/KWh lower in all periods, but trading was very thin for daytime power.

NP15 lagged behind at the 250 mills to 280 mills/KWh mark, while SP15 fell hard to the "0 to 195 mills/KWh range. Palo Verde also slipped deeply to 145 mills to 185 mills/KWh, after having been as high as 240 mills/KWh midweek.

Off-peak prices rose to 275 mills/KWh in the north midweek but separated out by the time weekend packages were dealt. Mid-C and COB were seen at 215 mills to 230 mills/KWh and NP15 was 200 mills/KWh. Deep discounts were revealed in the southern points, as inability to move power around caused a surplus and generators began backing down. SP15 was down to 100 mills, Palo Verde fell to the 75 mills to 90 mills range, but Four Corners held to 90 mills to 105 mills/KWh. trades reported constraints in the desert due to an outage on the 345 KV Cholla/Pinnacle peak transmission path [Arthur O'Donnell].

Gas Prices Give Back a Little

Increased demand and southern path constraints turned storage injections into withdrawals this week and natural gas prices seemed to be on a steady climbing pattern until Thursday, when they settled a bit. Some traders said the trend was set by national NYMEX screens, but local market events definitely helped push California border and citygate prices higher. The transmission outage between the Pacific Northwest and Southern California brought another round of system emergencies that goosed SoCal Border prices from $12.25/MMBtu a the start of the week up to $16/MMBtu. By the end of the week, Topock eased slightly to $14.50/MMBtu.

Basin prices began at remarkably low levels. San Juan had been at $3.60 and Permian less than $5/MMBtu. Both peaked and fell, leaving a wide range behind.

Malin also roamed widely between $8/MMBtu and $10.50, settling at $9/MMBtu. The SF CityGate trailed Topock by a buck or two all week, peaking at $14 but ending at $".50/MMBtu.

Alberta responded to NYMEX trends, rising to $(c)7.75/Gigajoule but slipping to $7.60/Gj [A. O'D.].

Western Electricity Prices
Week of April 2-6, 2001
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 97-125 50-83
Mid-Columbia 270-350 175-280
COB 275-345 185-260
NP 15 240-300 200-265
SP 15 130-235 100-165
Palo Verde 145-240 75-140

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


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