Western Price Survey
April 7, 2006
A new trading pattern skewed the typical drop in costs in Thursday transactions for weekend power this week. The new schedule has only Friday deliveries moving on Thursday. Packages to be delivered during the Saturday-through-Monday period changed hands on Friday. This resulted in a price for peak power South of Path 15 of 56 mills/KWh on Thursday -- when the price would usually be much lower for weekend deliveries -- and a spread of 40 mills to 60.25 mills/KWh on Friday.
Off-peak power in the SP15 zone moved for between 34.50 mills and 40 mills/KWh at the start of the week. By the end of the week the price had slipped down to 29.50 mills/KWh.
Unit outages at the Palo Verde nuclear power plant and the San Onofre Nuclear Generating Station also pushed prices in the SP15 zone higher this week. Peak power at SP15 opened the week trading for as much as 64.50 mills/KWh.
Prices at the Palo Verde hub also experienced a boost due to the squeeze on nuclear power. The price of peak power hit a high of 61.90 mills/KWh on Wednesday before shedding 10 mills or more in late-week trading. Nighttime power at Palo Verde attracted between 30.55 mills and 37.75 mills/KWh during the first part of the week, but sagged as low as 25 mills/KWh on Thursday. On Friday off-peak power costs ranged from 28.75 mills to 37 mills/KWh.
Spot-market peak power in Northern California drew a high of 51.50 mills/KWh on Monday. In contrast to the price at PV or SP15, the North of Path 15 price did not swell as the week wore on. Packages traded on Friday moved for as little as 24 mills/KWh. Off-peak power values ranged from a high of 36.50 mills/KWh in the early part of the week to a low of 17.50 mills/KWh on Friday.
Mid-Columbia and California-Oregon border power costs reflected the flush of water flowing in the Northwest. At Mid-C, the price of peak power stayed in the mid- to upper thirties much of the week. By Friday, however, the price swooned and closed at between 14.25 mills and 22 mills/KWh. Off-peak power values threatened to slip into the single digits, but ebbed at 11.50 mills/KWh on Friday.
COB peak power slid to between 25 mills and 30.25 mills/KWh on Friday after trading for as much as 46 mills/KWh at the start of the week. Off-peak deliveries changed hands for between 31.50 mills and 33.25 mills/KWh during the first part of the week. By Friday the price had bottomed out at 15 mills/KWh.
In the past year, the California Independent System Operator has restructured its managerial operations, reduced its budget and revamped its Web site. This week, the grid manager unveiled a new corporate logo that includes the tag line, "Your Link to Power."
The logo itself is a revision of the familiar yellow-and-blue design formally featured on the ISO's Web site and publications. In the April 6 announcement of the new look for the organization, Cal-ISO described the new artwork as representing a "revitalized organization that is refocused and poised for future success." The added tag line that runs under the corporate name serves as a "defining statement that helps reflect the organization's 'going forward' philosophy" [Shauna O'Donnell].
Gas Costs Nudged Up By Generators, Plans for Another LNG Facility Unveiled
The price of natural gas on the spot market remained fairly constant between last week and this week. Trades at Western hubs settled for nearly the same low-end price but saw a small increase on the high end of the range. For example, the Permian Basin price exceeded $6 this week while topping out at just $5.97 last week. The spread at the Topock hub in Southern California was $5.85 to $6.38/MMBtu for the week. Last week's top price was $6.19/MMBtu. The increased value was attributable to the strength in the price of oil and increased demand from electric generators.
Another company, Tidelands Oil & Gas Corporation of Texas, is evaluating the development of a liquefied natural gas terminal 12 miles offshore of Long Beach.
The company announced April 4 that its newly formed subsidiary, Esperanza Energy, has started a project feasibility study involving several LNG experts, including among others David Maul, former manager of the California Energy Commission's Natural Gas Office, and ENTRIX, Inc, an environmental consulting firm.
Maul, now president of Maul Energy Advisors, stated in a Tidelands press release that a preliminary analysis "suggests that a site offshore of the Long Beach area would offer considerable benefits to California residents with the greatest respect for environmental and safety issues.
Sound Energy Solutions, a Mitsubishi subsidiary, has already proposed to build a $450 million onshore LNG terminal in Long Beach. The Federal Energy Regulatory Commission and officials at the Port of Long Beach recently concluded in a joint environmental report that the SES project is an "environmentally superior alternative" although FERC has been deluged with protests about the site.
Like the Sound Energy project, the Esperenza terminal would connect to a natural gas pipeline now run by Southern California Gas [Shauna O'Donnell and Chris Raphael].
Archives of the Western Price Survey for the past year are also available online.
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