Western Price Survey / Archives
April 12, 2002
Maintenance of electric transmission and natural gas pipelines were the most notable aspects of energy markets so far this week. Most of it was pre-scheduled spring cleaning and repairs, but it managed to affect pricing for fuel and power in interesting ways. Curtailments to the Pacific AC Intertie capped the amount of energy that could flow from the Pacific Northwest into California to 3,200 MW for the first part of the week. The California/Oregon Intertie is already being limited in order to allow Northern California hydro to flow over the wires, but outages on the Captain Jack/Olinda 500 KV line and the John Day/Marion No. 1 500 KV line also reduced transfer capacity within the region.
That pushed Mid-Columbia prices down to about 22.75 mills/KWh on Monday but rebounded on Wednesday to the 26.75-28 mills/KWh range, pretty much in line with other hubs. However, the prices dove on Thursday at Mid-C, reaching levels that have not been seen in months. Traders said the drop was due to boosts in hydroelectric output in the Northwest. Also affecting the price at that Hub, Bonneville reopened its daily offers for Thursday-Saturday deliveries, offering 300 MW for both Northwest and COB/NOB delivery. No offers were available on Monday and Tuesday.
"Resource limitations" were the reason for a cut in the El Dorado transmission lines from 1,400 MW to 840 MW on Tuesday in both directions (east/west and west/east), which appeared to shut in some Southwestern supplies and pushed the Palo Verde price below 30 mills/KWh.
As for the region's nuclear facilities, both Diablo Canyon and the San Onofre Nuclear Generating Station were running at full capacity in the early part of the week. Palo Verde Units No. 1 and No. 3 were operating at the 99 percent level, with Unit No. 2 down as expected.
At the Columbia Generating Station all systems were "go" at 100 percent, but the unit is said to drop down to 40 percent this Sunday, April 14-just for three hours. Next weekend, the same thing will occur, but it is not known whether it will be Saturday or Sunday. In both instances, Columbia should be up to full capacity after the three hour dip. The reason for the dip was said to be a prescheduled maintenance of pipes related to the steam turbine.
Aside from the fluctuation in Mid-C prices, electricity prices remained fairly consistent across hubs during the early part of the week. The only real variation came on Thursday, when prices dropped 2-3 mills across the board. That trend continued on Friday, as well.
Prices at NP15 ranged from 27 mills/KWh to 33.5 mills/KWh off peak and 27.75-34.75 mills/KWh on peak. Prices at SP15 held steady at about the same range, 28.75 mills/KWh to 35.75 mills/KWh on peak.
The APX California index showed on-peak prices within a 30 mills/KWh to 40 mills/KWh spread, while off-peak prices ranged from 21 mills/KWh to 25 mills/KWh [Arthur O'Donnell].
Spring Housekeeping Stymies Some Shipping
Gas prices were skewed by a host of maintenance on pipelines and storage facilities coming out of the Rocky Mountains. Aside from some maintenance on El Paso's San Juan lateral the temporary closure of the big Clay Basin storage facility in northeast Utah meant that shippers without firm capacity on West- bound pipelines had no place to put their supplies. The San Juan Basin index price plummeted to $0.99/MMBtu Tuesday and pipelines were ordering their customers to follow their reservations or face penalties. According to a notice from El Paso Natural Gas, the Caprock Unit No. 2 went down for unscheduled maintenance on the compressor on April 4 and will be back in service April 9.
Clay Basin can handle 51 million Decatherms of working gas annually from its 44 wells and connects with all of the major pipeline systems into California and the Northwest from the Rockies. It is expected to reopen on April 16th.
The San Juan prices were back up to the $2.55/MMBtu to 2.85/MMBtu range on Wednesday and Thursday.
Prices were hovering over $3.20 at the SoCal Border most of the week, but Friday saw a fairly significant drop all around. The border price was down to between $2.45/MMBtu and $3.09/MMBtu on that day.
Other hubs also slipped on Friday. San Juan, though up from mid-week, was down to $2.60/MMBtu and Malin, which hit $3.21 /MMBtu on Monday, was trading as low as $2.575/MMBtu at the end of the week [A. O'D.].
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