Western Price Survey / Archives
April 11, 2003
As power plants around the state dropped from the grid for unscheduled repairs, prices in the spot market ranged higher this week. Gains appeared to be encouraged by strength in the market for natural gas, the fuel of choice for many in-state generators.
Hydroelectric power seemed to be in short supply. In the words of one market trader, flows on the Columbia River are under "controlled conditions," meaning that water is being apportioned for various uses and that excess hydro supplies are generally not available. "Expectations are that flows will pick up at the back end of the month" as fish-flush activities increase, according to the trader.
Rains in the Northwest this week kept to the coast rather than moving inland and replenishing the Columbia. However, National Weather Service reports indicate that Grand Coulee Dam levels are at 52.9 million-acre feet, or 84 percent of normal-up from 81 percent two weeks ago.
Southern California Edison crews continued their repair of damaged transformers at the Vincent substation, which was ravaged by fire in late March. Power deliveries over nearby Path 26 are still being constrained to accommodate the work, though the line rating has considerably increased. Repairs completed last week allowed capacity over Path 26 late last Friday to be raised from 1,400 MW in each direction to 2,500 MW, according to California Independent System Operator spokesperson Gregg Fishman.
The regular transfer capability of the line is 3,000 MW in either direction.
One half of Pacific Gas & Electric's Diablo Canyon nuclear complex remained inactive this week. The utility had expected to have the 1,105 MW No. 2 unit on line before last Monday, but crews noticed another "operational issue" on the steam side of the plant, according to PG&E spokesperson Bill Roake.
The utility hopes to get unit 2 on line "as soon as possible" but has set no estimate for its return, Roake said. No. 2 sat at zero percent capacity as of Friday morning.
The maintenance bug appears to be catching. According to Cal-ISO reports, a whopping 4,299 MW of capacity fell off line Friday morning due to unplanned repairs- with 3,447 MW of that total occurring south of Path 15.
Duke Energy's Morro Bay No. 3 plant is still awaiting the delivery of a refurbished rotor and should have its 337 MW of capacity in operation by June. Whether Duke's Morro Bay No. 1 unit is available depends on whom you listen to. Cal-ISO reports that the unit is off line for unplanned maintenance. Duke spokesperson Pat Mullen said that the 163 MW No. 1 is not being run for economic reasons and because of that, the unit has been placed under a "nitrogen blanket" that prevents corrosion.
But the blanket also means that the plant requires 24- hour notice to start, which puts the plant on Cal- ISO's unplanned outage list.
At Duke's Moss Landing facility, units 1 and 2 (each 510 MW) went off line due to problems with an electrical breaker at the site. Unit 1 returned to service after the company discovered the breaker problem to be connected to No. 2, which is still off line and will be for a few more days, according to Mullen.
Other unscheduled outages this week include the shutdown of the 480 MW Redondo 7 unit owned by AES; Reliant's 420 MW Etiwanda No. 4 plant; and La Paloma units 3 and 4, each 260 MW (owned by PG&E Corp. subsidiary La Paloma Generating LLC).
Around the West, peak prices heaved into the 50 mills range except at Mid-Columbia, where premiums topped out at 38.75 mills/KWh, and at the California-Oregon border, which saw prices rise to 46.5 mills/KWh midweek. In the Southwest, higher temperatures and increased air-conditioning load pushed prices as high as 56.5 mills/KWh.
At Alberta, heavy-load prices continued their recent quirk of peaking at about midday. Real-time premiums for peak energy reached to 223.19 mills/KWh. Off-peak prices cranked up to more than 90 mills/KWh for the midnight hour on Monday [Jason Mihos].
Current, Coming Climates Keep Gas in Place
Though cooler temperatures this week put their shoulder to gas prices, prospects of warmer weather in the near future pushed right back, keeping daily premiums steady. Futures on the NYMEX exchange ranged lower in response to the weather outlook.
According to figures released Thursday by the Energy Information Administration, gas supplies declined by 9 Bcf compared to the previous week. The net decline came after two consecutive weeks of increases in gas inventory.
Prices at most Western hubs showed little mobility throughout the week and mostly observed the mid- to upper-$4/MMBtu range. Exceptions included the mercurial San Juan Basin, which saw prices slingshotting between $2.85 and $4.50/MMBtu, and CityGate, with a weekly low of $4.98 and a high of $5.24/MMBtu.
At the AECO hub in Canada, cash deals moved between $4.23 and $4.62/MMBtu [J. M.].
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