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Western Price Survey

April 14, 2006
Northwest Power Continues Slide, California Prices Remain Strong Heading into Weekend

On Monday afternoon, Palo Verde's operator, Arizona Public Service, was forced to shut down the plant's No. 2 unit because the facility did not meet a technical requirement regarding operability of auxiliary feed-water pumps. As of midweek, the entire Palo Verde complex, with a total capacity of nearly 4,000 MW, was off line. The No. 2 unit began its return to service on Thursday and was listed by the Nuclear Regulatory Commission as generating 12 percent of its full 1,243 MW output on Friday.

The lack of PV power, combined with a mild heat wave in the region kept peak-power costs at the regional hub close to or above the 50 mills/KWh mark this week. After starting off the week in the range of 48 mills to 50 mills/KWh, daytime power at PV peaked at 59 mills/KWh the following day.

Off-peak power traded for a high of 41 mills/KWh on Tuesday, when packages were bought and sold for delivery on Wednesday and Thursday. On Wednesday, power scheduled for Friday and Saturday delivery moved for between 17.50 mills and 27.50 mills/KWh. The drop in price was attributed to the typical slump in cost for weekend power more commonly seen during Thursday dealings. The trading schedule was moved up by a day on account of the Easter and Passover holidays this weekend. Western Traders were not conducting business on Friday.

The cost of power recorded at Palo Verde was in sharp contrast to the prices posted in the Northwest. Flush with an abundance of water running through the region's dams, Mid-Columbia power dropped in value this week. Peak power at the hub changed hands for as little as 9 mills/KWh for weekend delivery after opening the week trading for between 21 mills and 36 mills/KWh. Transactions recorded at the end of the week for deliveries scheduled for Monday kept to between 13.50 mills and 16 mills/KWh. Low-demand power at Mid-C was nearly a giveaway at 3 mills/KWh on Thursday. The most the market could muster for nighttime power at the hub was 16 mills/KWh on Tuesday.

Southern California power costs were buoyed this week by the absence of both the Palo Verde nuclear units and San Onofre Nuclear Generating Station Units No. 2 and No. 3. South of Path 15 peak power opened the week trading for between 49.25 mills and 55 mills/KWh. The price ran up as high as 61 mills/KWh the following day, but by Wednesday it eased back down to the 47 mills to 53 mills/KWh range. Next-week deliveries gained another 5 mills or so in Thursday dealings. Nighttime power in the SP15 zone attracted as much as 35.50 mills/KWh on Tuesday and as little as 16 mills/KWh on Wednesday. Off-peak power costs ranged from 24.75 mills to 36.50 mills/KWh at the end of the week.

North of Path 15 power prices followed SP15 electricity this week. After opening on Monday trading for between 45.25 mills and 50 mills/KWh, NP15 peak power gained between 3 and 5 mills in value the following day and ended the week moving for as much as 57 mills/KWh. Off-peak power at NP15 sank to a low of 13 mills/KWh at midweek after spending Monday and Tuesday in the range of 18.75 mills and 27.50 mills/KWh. Nighttime deals settled for between 16 mills and 24 mills/KWh for next-week deliveries [Shauna O'Donnell].

Gas Slips Lower Heading into Weekend

Temperate weather and ample supply continue to put downward pressure on the price of natural gas in the West. Combined with the dip in demand anticipated for this weekend, cost of the fuel on the spot market was lower this week overall compared with last week.

Gas delivered to Pacific Gas & Electric's CityGate hub managed to settle below the $6 mark during the tail end of trading this week, closing at a low of $5.84/MMBtu. The price peaked at $6.51/MMBtu on Tuesday.

After opening on Monday moving for between $5.74 and $5.83/MMBtu, Malin gas costs bumped up to $6.08/MMBtu the next day. By Thursday, trader enthusiasm had waned and volumes changed hands for between $5.425 and $5.51/MMBtu. The high at Malin last week was $6.31/MMBtu. Topock deliveries attracted as much as $6.15/MMBtu early in the week but dipped down to a range of $5.40 to $5.87 at the end of the week, about 50 cents off the closing price last Friday.

At the end of last week Southern California Edison announced the beginning of its request for offers for long-term natural gas supply contracts and financial hedge products.

The company, as indicated in the April 7 statement, is seeking contracts up to five years in duration and is seeking bids for its tolling generation agreements, its new Mountainview power plant and qualifying facilities contracts.

The California Department of Water Resources is seeking offers up to five years in duration for financial natural gas products for its tolling contracts. Offers to the department will be made to CDWR in a process managed by SCE.

Edison encourages offers for gas supply from liquefied natural gas facilities and new pipeline capacity, in addition to other new infrastructure projects.

The deadline to submit a non-binding notice of intent to offer is this Friday. April 28 is the deadline to submit an indicative offer submittal package. The shortlist notification will happen on May 12.

July marks the end of the process with the final offer submittal packages due by July 17 and the award notification on July 18.

For more information visit Edison will be holding a bidder's conference call on April 18 to answer questions of interested parties [Shauna O'Donnell and Samantha Yugler].

Western Electricity Prices
April 10 - 14, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 29.04-47.37 6.95-53.73
Mid-Columbia 9-36 3-16
COB 30.50-49.75 7-21
NP 15 45.25-57 13-36.50
SP 15 47-61 16-36.50
Palo Verde 45.75-59 17.50-41

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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