Western Price Survey / Archives
April 21, 2000
The long-awaited spring run-off season finally hit the Western power market with full force this week, as increased flows on the Columbia River dunked energy prices below the surface. At Mid-Columbia, the steady decline in pricing washed traders on the shores of single-digit off-peak power and even daytime deliveries spilled over the dams of price resistance that had been in place in recent weeks.
By the end of the week, Mid-C power was going for 23 mills/KWh for Friday/Saturday/Sunday packages, with many traders wrapping up transactions in advance of the Passover/Easter weekend. Off-peak in the Northwest dropped from 12 mills earlier to 9 mills/KWh, as hydro pushed more expensive generation out of the queue. While the WNP-2 nuclear plant had been ramping up and down all week in load-following mode, it was moving firmly lower by Friday at 61 percent of capacity, where it would likely remain for several days.
Even Bonneville Power Administration's premium prices daily surplus offering trended lower to 24 mills and 25 mills/KWh over the weekend, and down to 13.5 mills/KWh for Northwest off-peak deliveries.
The California Power Exchange had been holding onto the 31 mills to 32 mills/KWh range for hours all week until Friday's bids pulled the clearing price down to 28.9 mills/KWh. Off-peak slipped to 14.6 mills from a high of 16.47 mills midweek. Increasingly, the low price point on the CalPX charts dipped below 8 mills/KWh during low-load early morning hours.
After some midweek congestion on the California/Oregon Intertie, paths cleared up and COB prices dipped to 28 mills peak and 12 mills/KWh off-peak.
While Palo Verde was finally coming off its relatively high plateau based on natural gas fuel costs, it was still seen at 32 mills to 34 mills/KWh late in the week. Off-peak was forced down by warm weather and the highly competitive CalPX prices, landing at 13 mills to 14.5 mills/KWh by week's end. Palo Verde No. 3 was reported in fuel loading mode, indicating that the refueling outage was going smoothly and hinting the unit might return even sooner than the May 5 date previously set.
Seasonal transmission line work continues next week but with lesser restrictions. The big outage will be on Monday April 24, as the Four Corners/Moenkopi 500 KV line is de-energized for at least one hour. This is the second of three pre-scheduled outages on the El Dorado Intertie to accommodate equipment change-outs.
Also scheduled are limits to the Pacific AC Intertie and the DC Interie for maintenance on the Captain Jack/Meridian 500 KV line in Oregon and at the Tracy switchyard in California. For much of the week, the AC line will be rated at 4,250 MW to 4,290 MW north-to-south and as low as 2,450 MW northbound. The DC line southbound will be held to 2,684 MW and 1,904 MW northward.
The Alberta Power Pool was shaking off the system disturbance of last Sunday, caused by a transmission line grounding in a storm, which threw more than 500 MW of generation offline. Prices were still prone to fly up at the least provocation and the pool exhibited a wide range of prices up to 500 mills/KWh through the week [Arthur O'Donnell].
Gas Prices Still High but Trail Off for Extended Weekend
Natural gas traders wrapped up the week early with four-day packages that reflected somewhat lower national benchmark prices. Gas is still trading at much higher levels than usual for this time of year and marketers chalked it up to increased demand by new power generators across the nation as well as the rerouting of supply lines from Canada to reach-Midwestern markets in addition to the usual West Coast delivery points. And while there is no longer a direct linkage between oil and gas prices, traders said the high petroleum prices internationally were also exerting upward pressure on gas costs.
Whatever the reasons, high gas prices had been the primary reason for higher electricity prices, at least until this week's flood of hydroelectricity in Northern California and the Pacific Northwest. With excess water and hydro power now pushing gas units out of the dispatch queue, fuel prices may continue the falling trend that began late this week before the low-demand Passover/Easter holidays.
Where the Southern California Border price had stuck above $3.06/MMBtu most of the week, it was falling to $2.98 and $2.99/MMBtu on Thursday. Dropping even farther was Permian Basin, which moved from $2.92 to $2.83/MMBtu. San Juan trailed at $2.75/MMBtu after hanging in the mid-$2.80s.
The PG&E CityGate was much lower this week than last, reported at $2.98/MMBtu, while Malin was down to $2.87/MMBtu.
Those prices might not seem to be much of a bargain-they were nearly a full dollar cheaper last year at this time-but compared to the high Alberta hub price, they represented value to buyers. AECO index was just shy of $(C)4.00/Gigajoule most of the week, but came to rest at $3.78/Gj on Thursday [A. O'D.].
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