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Western Price Survey / Archives

April 8, 2005
Western Electricity Prices Skittish in the Wake of Oil Price Volatility

Observing that the price of crude oil was hovering at $56 per barrel at midweek on the New York Mercantile Exchange surely falls into the "be grateful for the little things." Earlier in the week, the price topped out at a new record high of $58 per barrel. Another thing to be grateful for, it seems, is that the majority of power plants are not running on any oil derivative. There is no telling what the price of power on the spot market would be if that were the fuel of choice.

Still, if one is on the buy side of the equation, it is bad enough that the push upward in the cost of oil is pressuring the price of natural gas--which does happen to be the fuel of choice for many electric generating facilities in the West. Gas costs at delivery locations on the California border hovered in the upper $6 to lower $7 range during much of the week--between $6.78 to $7.25/MMBtu at Topock and between $6.76 to $7.15/MMBtu at Malin. These prices reflect a gain of up to fifty cents at some locations in the Western region compared to last week's costs.

Peak-time power in California attracted between 3 to 6 mills more per kilowatt than much of last week. NP15 power traded for as high as 62 mills/KWh on Monday and Tuesday before dropping a couple of mills in late-week trading. Off-peak power at the hub drew a high of 47 mills/KWh at the beginning of the week but slipped down to the 45 mills/KWh mark on Wednesday. The price moved back up at the end of the week as next week's deliveries moved for as much as 50 mills/KWh.

Northwest prices continue to be elevated by the ratcheting back of water flows in the region and the concern over the drought conditions in both Washington and Oregon.

Mid-Columbia peak-time power changed hands for between 53.75 mills and 57 mills/KWh this week while off-peak power drew a high of 51.50 mills/KWh on Friday. California-Oregon border power ran in the same range as Mid-C this week, opening on Monday in the range of 57.25 mills to 59 mills/KWh before sloughing off a few mills at the end of the week. Off-peak power at COB jumped up to 50.25 mills/KWh on Friday after spending most of the week hovering around the 45 mills/KWh mark.

In the Southwest, power costs at Palo Verde ranged from a low of 54.25 mills/KWh to a high of 60 mills/KWh this week for daytime deliveries. The price of nighttime power changed hands for between 40.50 mills and 43 mills/KWh during the first half of the week. By Friday the price had moved up to a high of 45.75 mills/KWh.

Power plant outages this week in the California Independent System Operator control area included three peaking units at the Indigo facility. This planned outage removed nearly 150 MW from the grid. The 329 MW Encina Unit No. 5 was one of the few larger generating facilities on a forced outage all this week. On Thursday the 900 MW Intermountain power plant in Utah tripped off line and remained down the following day [Shauna O'Donnell].

Gas Costs Remain High Despite Easing of Oil Costs

Natural gas prices in the West either opened this week where they left off last week or traded higher on Monday. All California delivery points started the week above the $7 mark, with PG&E CityGate deliveries remaining above that level for the entire week.

The CityGate hub topped out at $7.555 on Monday and slowly eased down to between $7.10 and $7.165/MMBtu by the end of the week.

Northern California deliveries at Malin attracted between $7.10 and $7.15/MMBtu on Monday, dipped down to near $6.80/MMBtu the following day, and again reached $7 in Thursday trading. The retreat in the price of oil drew gas costs down on Friday, and Malin gas slipped to between $6.68 and $6.74/MMBtu. Futures price for oil went from a high of $58 per barrel earlier in the week to $52.80 on Friday.

San Juan Basin natural gas closed out last week in the range of $6.375 to $6.60/MMBtu. This Monday the price reach $6.91/MMBtu. The commodity cost tapered down to between $6.45 and $6.56/MMBtu at midweek, then dropped another dime in Friday trading.

The Energy Information Administration natural gas storage report this week reflected a net 10 Bcf injection into underground facilities during the week ending April 1. A withdrawal of 2 Bcf was recorded in the East, but both the Western and producing regions recorded inputs [S. O'D.].

Western Electricity Prices
April 4 - 8, 2005
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 9.61-78.24 7.73-116.70
Mid-Columbia 53.75-57 44.50-51.50
COB 56.25-59.75 45-50.25
NP 15 58.25-62 43-50.50
SP 15 58.25-62.50 42.50-50
Palo Verde 54.50-60 40.25-45.75

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


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