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Western Price Survey / Archives

April 9, 2004
Gas Prices Continue to Drive Power Prices

The continuing strength of natural-gas prices around the country managed to keep day-ahead electricity prices in the Western region this week consistently higher than last week. The price of natural gas has remained above last week's figure, and while the price of the fuel gave some indication of sagging midweek, it was still firmly ensconced above $5.00/MMBtu at all Western basins and hubs in late-week trading. This has buoyed electricity prices and kept the cost for the commodity 5 to 10 mills above last week's figures.

A number of large-capacity nuclear generating units remained or went off line this week. The 1,113 MW Diablo Canyon No. 1 unit began a 45-day refueling outage last week, and the 1,350 MW Palo Verde No. 1 nuclear facility began a refueling outage this week. Meanwhile, the 1,122 MW San Onofre Nuclear Generating Station Unit No. 2 has been slowly making its way back up to full power. The unit had been on a refueling outage and was expected back in service a couple of weeks ago, but a problem discovered during ramp-up required fixing and the unit, as of Friday, was listed as being at 80 percent of full output.

These major outages and a handful of others contributed to the strength of prices in the Southwest and at SP15. The 790 MW Mohave No. 1 unit and the 750 MW Four Corners No. 4 unit were off line most of the week. The Mohave unit's outage was scheduled, but the Four Corners one was unplanned. AES' 332 MW Alamitos No. 3 and 485 MW No. 6 units have been on scheduled-outage status all week, and the 900 MW Intermountain facility continues on a planned outage.

The trading week was truncated by the Passover and Easter holidays, with electricity changing hands on Tuesday for Wednesday/Thursday delivery; Wednesday exchanges were for Friday/Saturday delivery, and packages moving on Thursday were for Sunday and next-Monday power.

Palo Verde peak electricity prices opened the week at between 45.25 mills and 48 mills/KWh for peak delivery. Trading at the hub on Tuesday--for Wednesday/Thursday packages--ran between 46.75 mills and 47 mills/KWh. On Thursday, power for next-week delivery at the hub managed a high of 48.25 mills/KWh. Off-peak power prices at the Southwest hub opened the week between 32 mills and 34 mills/KWh, slipped a bit in midweek trading and scooted up to between 35 mills and 38 mills/KWh for next-Monday deliveries.

SP15 prices saw the most life of all the hubs this week. For the Monday-to-Wednesday period, the price for peak power at the hub ranged from 47.75 mills to 52.50 mills/KWh. Off-peak deliveries opened on Monday between 32 mills and 34.05 mills/KWh at the hub before falling off to 30.75 mills/KWh for weekend packages. Bids for nighttime power to be delivered early next week ran between 36.75 mills and 40.25 mills/KWh in Thursday trading.

Farther north, at NP15, narrow margins were the order of the week, as peak power changed hands for between 46.25 mills and 47.75 mills/KWh on Monday and Tuesday. Wednesday brought with it a bit of a wilt, as the price dropped down to between 43.50 mills and 46 mills/KWh and stayed in that vicinity for the rest of the week. Low-demand deliveries this week at NP15 ran steadily between 35 mills and 38.50 mills/KWh.

In the Northwest, a familiar trajectory was traced, with both peak and off-peak power prices opening the week on the low end of the Western price scale, sagging a bit for weekend packages, then returning to levels reached earlier in the week for power to be delivered early next week. California/Oregon Border high-demand prices ran between 44.25 mills and 45 mills/KWh in Monday and Tuesday trading. Two to 3 mills were chipped off the top for weekend packages, and on Thursday prices regained the amount lost.

Mid-Columbia power showed next to no volatility, as the price for peak power stayed between 38.75 mills and 42.25 mills/KWh all week [Shauna O'Donnell].

Gas Spots Rev then Sputter

Prices for natural gas continued to rise during the beginning of the week. The movement picked up where last week's left off. Permian Basin gas opening this week at between $5.28 and $5.45/MMBtu, after closing last week between $5.25 and $5.35/MMBtu. At the San Juan Basin, opening-week trading hit a high of $5.32/MMBtu.

The second half of this week brought a tapering in the cost for the commodity, with Permian closing at between $5.22 and $5.33/MMBtu and San Juan settling in the range of $5.18 to $5.30/MMBtu.

The Energy Information Administration report on storage numbers released Thursday had a dampening effect on the spot-market prices at the end of the week. The EIA reported injection into the nation's underground storage facilities of 20 Bcf, two Bcf of that placed in Western storage facilities. Prior estimates placed the injections nationwide at 2 Bcf so the significantly larger amount actually stored drew spot prices downward slightly by the end of the week.

Malin gas, which was moving for between $5.28 and $5.39 early in the week faded to a high of $5.375/MMBtu by week's end. Topock gas hit a high of $5.605/MMBtu on Monday, but managed just $5.52/MMBtu for deals done on Thursday [S O'D.].

Western Electricity Prices
Week of April 5 - 9, 2004
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 14.74-138.88 9.48-119.66
APX California 45.25-46 36-40.25
Mid-Columbia 38.75-42.25 33.25-40.50
COB 43-45.75 33-40.50
NP 15 42-47.75 33-39.75
SP 15 47.75-52.50 32.50-40.50
Palo Verde 43.75-48.25 30-38

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

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Shauna O'Donnell, editor with questions regarding Price Survey Content.

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