Western Price Survey
Week's End Edition
It seems the spring runoff season has arrived, but if Northwest electricity prices this week are any indication, it could be a seesaw ride.
Electricity prices in the West are normally heavily influenced by natural gas prices, although even a group of price analysts and a Berkeley academic admit that during spring, Western prices are difficult to pinpoint because models cannot accurately capture the effects of surplus hydro generation from melting snow (see CEM No. 912 ).
This is also the time of year when generators shut down for maintenance to prepare for meeting peak summer loads. As of Thursday, the California Independent System Operator reported generator curtailments of approximately 9,000 MW.
Complicating matters this week was the loss of several 500 kV lines which restricted flows on the California-Oregon Intertie and Pacific DC Intertie, two major transmission hubs that move power back and forth from California and the Northwest. Outages of the 500 kV Marion-Lane No. 1, 500 kV Vantage-Schultz No. 1, and Table Mountain-Vaca capacitors affected the interties.
Between midnight and 3 p.m., southward flows on the COI this week were limited to 3,900 MW while northward flows were limited to 2,450 MW. During the same hours on the PDCI, southward transmissions were cut to 2,777 MW while northward movements were restricted to 1,904 MW.
There were two generally stable factors this week. Natural gas prices in Midwest basins that supply California, as well as natural gas prices at Malin and the Southern California border, were nearly motionless this week and generally did not move past $7/MMBtu despite the recent run-up in crude oil prices. Demand was also highly static, with the Cal-ISO reporting peak loads around 30,500 MW most of the week.
Despite that stability, Mid-Columbia peak prices moved between 17 mills and 57 mills/kWh on a single trading day--Monday. The hub also saw wild swings on Tuesday and Wednesday before settling between 23 mills and 33 mills/kWh in Thursday trading.
Off-peak prices finished the week around 12 mills/kWh after going as low as 3 mills/kWh and as high as 28 mills/kWh early in the week. There was no trading on Friday, and deliveries for that day had been traded Wednesday.
Electricity prices at the California-Oregon border were a bit less volatile. Peak power traded between 43 mills and 53 mills/kWh Monday, gained about 6 mills/kWh Tuesday, and nestled at around 42 mills/kWh in Thursday trading. Off-peak power, at around 20 mills/kWh Monday, gained 5 or 6 mills on Tuesday and held its ground.
In California, the 1,087 MW Unit No. 2 of the Diablo Canyon nuclear plant was listed at 64 percent capacity on Friday, according to the U.S Nuclear Regulatory Commission. North of Path 15 and South of Path 15 peak power traded a bit above 60 mills/kWh Monday and Tuesday, lost about 5 mills for Friday deliveries, and finished the week around 60 mills/kWh. Off-peak power traded near 40 mills/kWh most of the week and gained a few mills in Friday trading.
High-demand power at Palo Verde was at 60 mills/kWh Monday and Tuesday, then plummeted to around 55 mills/kWh for Monday deliveries. Off-peak power traded around 36 mills/kWh most of the week and gained 4 or 5 mills in Thursday trading [Chris Raphael].
Natural Gas Prices Stay Calm With Mild Weather, Storage Gain
The U.S. Energy Information Administration reported that 58 Bcf was added to natural gas storage for the week ending March 30. Stocks are still 125 Bcf below last year's levels, though they remain comfortably above the five-year average. Eastern states added 25 Bcf to storage while producing states added 32 Bcf. The West's paltry contribution was 1 Bcf.
Prices were nearly gridlocked this week. Values for San Juan and Permian Basin gas never spread by more than 15c/MMBtu and remained generally between $6.60 and $6.75/MMBtu, save for Thursday trading when values dropped to a low of $6.46/MMBtu in San Juan. One exchange reported a Permian Basin price of $7.61/MMBtu Monday, but other reports showed the price comfortably below $7/MMBtu all week.
Southern California border gas traded around $6.90/MMBtu most of the week before falling to a low of $6.70/MMBtu in Friday trading [C. R.].
Archives of the Western Price Survey for the past year are also available online.
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