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Western Price Survey / Archives

April 26, 2002
Prices Bob Up and Down with Water Flows

From surplus to squeeze to surplus again, Western power markets moved in mysterious ways this week but the near-term trend will be for an abundance of hydroelectric energy and moderate weather to prevail as the main market drivers.

Loads in California are already flattening out-with the "peak" seen by the California Independent System Operator shifting to the noon to 3 pm period on some days, or waiting around until sunset in the 8 pm hour. Overall demand is lower and the Cal-ISO high point of power usage barely hit 30,000 MW since Wednesday.

Last weekend, there was so much excess on the system that Cal-ISO enacted "over-generation" protocols and ordered about 530 MW off line. As Moss Landing No. 6 was ramping up to 266 MW early Sunday morning, the unit tripped and sent voltage levels briefly higher. Sunday also saw a washout of the Swift No. 2 powerhouse on the Lewis River in Washington and a loss of 60 MW for Cowlitz PUD and isolation of 240 MW at the Swift No. 1 power station.

Then on Monday, Cal-ISO began the day with an unusually high level of unplanned outages at 3,591 MW from a total maintenance list of 16,351 MW. Several thousand megawatts returned to service later in the day, in part to respond to some brief hikes in Cal-ISO imbalance energy markets to about $90/MWh. At the same time, Cal-ISO helped Public Service New Mexico with emergency assistance of 125 MW at 11 am and 75 MW at 3 pm on Monday. There had been an outage of all five Four Corners units late last week, but an excess of energy over the weekend with California's Department of Water Resources dumping excess off-peak energy, said a Southwestern scheduler. "The whole thing was crazy," he noted.

In response, daytime prices jumped to about 37 mills to 38 mills/KWh in California on Tuesday. Although Northwest power was still down in the low-to-mid 20s, it was constrained from export because of scheduled limits on the AC Intertie that held transfers to just 2,400 MW.

The panic receded as the week progressed, and peak power dropped to around 20 mills/KWh at Mid-Columbia and 25 mills/KWh at COB. NP15 and SP15 were in the 26 mills to 29 mills/KWh range, while Palo Verde dropped to the 24.75 mills to 27.25 mills/KWh vicinity.

Low prices in the off-peak periods seeped throughout the region, however, and prices down around 12.5 mills to 15 mills/KWh were common heading into the weekend [Arthur O'Donnell].

Pipes and Storage Brimming with Surplus Gas

Western natural gas pipelines were jammed with supplies that faced weakening demand this week, and the rush to put the excess into storage was maxing out injection capability in Southern California.

Nationally, storage got a big boost as well with 69 Bcf going into the ground, and the American Gas Association even revised last week's figures upward by 8 Bcf, indicating that mild weather was slackening gas consumption across the land.

While prices throughout the West eroded, the biggest drop was seen out of the San Juan Basin, with prices dropping to as low as $2/MMBtu as supplies were being shut in by operational flow orders in California. Diminishing electricity loads and the continued flood of hydroelectricity in the Northwest was pushing gas right off the margin. "There's no place to put all this gas," said one market watcher.

Permian basin supplies stepped down from a high of $3.36 to $3.18/MMBtu.

Other hubs were up and down, but mostly lower heading into the weekend. Topock slipped from $3.50 to $3.28/MMBtu while the San Francisco CityGate fell even lower to the $3.07 to $3.17/MMBtu range, and Malin touched down at $3.04/MMBtu Thursday.

The Alberta index price was still above $4/Gigajoule, but reported volumes were scant [A. O'D.].

Western Electricity Prices
Week of April 22-26, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 57-470 10.3-75.5
Mid-Columbia 14.75-24 12-15
COB 25.5-33.75 13-16
NP 15 26-38 15-16.25
SP 15 26-37.5 14.75-17
Palo Verde 24.25-32.5 12.5-13

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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