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Western Price Survey

Week's End Edition
April 24, 2009
Hydro, Wind Lead Northwest to Sell Power for $1

Electricity prices and demand ebbed this week as cool air swept into the West and replaced a heat wave.

Through Thursday, power prices fell by as much as $11 in some areas, but rebounded slightly on Friday as traders made their usual prediction that more power will be needed on Monday.

The return of cool weather to the Golden State pushed power demand down from a high of 38,000 MW on Tuesday to 28,900 MW on Thursday, according to the California Independent System Operator. Peak demand is expected to continue to fall from 27,400 MW on Friday to 25,500 MW on Sunday.

Increased hydropower and high winds helped the Mid-Columbia hub post the lowest prices of any major Western hub this week, touching $10 for peak power and $1 for off-peak trades on Thursday. Although the snow in the mountains isn't expected to start melting and sending water downstream until mid- to late May, the Bonneville Power Administration began releasing water from the Grand Coulee Dam for flood control in case spring runoff begins suddenly. High winds have also driven power production from wind turbines to nearly 2,000 MW, a new record for BPA.

From Monday through Thursday, daytime Mid-Columbia values dropped $11 to average $13.93/MWh, then climbed to a week's close of $19.65. Nighttime trades finished the week at an average of $7.84/MWh the next day.

Average peak California-Oregon border prices plunged $11 to $18.67/MWh on Thursday, but inched up to end the week at $24.30. Off-peak trades gave back $14 through Thursday to $5.20/MWh, but rose on Friday to $11.13/MWh.

In California, average prime power values dropped $10 through the week at North of Path 15 and $8 at South of Path 15 to around $25/MWh at both hubs on Thursday. On Friday, trades picked up $2. Deals for nighttime power in the north ended nearly even with Monday at $18.54/MWh. In the south, nighttime power was down $2 for the week at an average of $16.90/MWh.

At Palo Verde, where temperatures are more stable though still comparatively hot, prime trades fell $3 to $27.15/MWh while off-prime values gained just $1 on average for the week, to $17.

Natural gas prices continued their trek southward, etching new lows as the recession and plentiful supplies kept a lid on prices. On Nymex, natural gas for May delivery hit $3.29/MMBtu on Friday, the lowest level in six years.

In the West, average natural gas spot prices slipped anywhere from 14 to 39 cents/MMBtu this week. Permian Basin gas went for $2.64/MMBtu on Friday; the PG&E CityGate price was $3.25/MMBtu.

Mild weather compelled homeowners and businesses to turn off their heaters last week, pushing up natural gas stockpiles nationwide by 46 Bcf, according to the U.S. Energy Information Administration. The recession and lower consumer demand for a wide range of products also has slashed natural gas demand and plumped up storage. At 1.741 Tcf, storage is 35.8 percent above last year and 22.7 percent higher than the five-year average.

Natural gas prices have tumbled 76 percent since touching a high of $13.69/MMBtu in July. This week, the number of rigs drilling for natural gas fell to 742, the lowest point in about six years, according to Baker Hughes, a Houston energy services firm.

Washington state's Columbia Generating Station is slowly shutting down in advance of scheduled maintenance that begins on May 9. The 1,150 MW unit ran from 60 to 65 percent capacity from last Friday through Tuesday to fix bearings and a coupling in the feedwater pump assembly. The scheduled May repair will include the replacement of a third of the fuel assembly in the reactor core. The third unit at the Palo Verde nuclear power plant in Arizona remains off line through late May for scheduled maintenance. The 1,336 MW unit was shuttered early this month [Kristina Shevory].

Western Electricity Prices
Week's End: April 20 - 24, 2009
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 16.35-191.55 11.96-45.44
Mid-Columbia 10-26.50 1-18.25
COB 17.25-30 4.50-20
NP 15* 24.75-36 13.75-21.50
SP 15* 25-33.50 13.50-30.50
Palo Verde 24-33.25 11.50-18

* Includes day-ahead locational marginal prices (financial swaps) and quasi-swap prices for these hubs.

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 Chris Raphael, editor with questions regarding Price Survey Content.

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