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Western Price Survey / Archives

May 5, 2000
Return of Nuclear Units Takes Edge Off Power Market

Although real-time power prices lingered in the upper ozone layer late into the week, prescheduled prices on the California Power Exchange and in bilateral trading appeared to be returning to earth. The easing of a wild week coincided with the return to full power of a Diablo Canyon nuclear unit and steadily increasing output at the refueled Palo Verde unit.

Nuclear operator Arizona Public Service reported that Palo Verde No. 3 was back in service in a record 31 days, and the plant at least was able to contribute to needed generation at the Southwest dealt with a second week of 100-degree-plus temperatures. By Friday morning, PV3 was reported at 70 capacity while engineers checked the systems. Unit No. 1 was down slightly to 96 percent for control valve testin..

Diablo Canyon No. 1, which had been at half capacity while technicians cleaned out ocean water intake systems, had put a hole in the middle of California's market early in the week, in part causing the Southwest price spikes to spread into Northern California and the Pacific Northwest.

The CalPX day-ahead market was marked by a wide range of hourly clearing prices-from 9 mills/KWh in low-load morning hours up to 75 mills/KWh for afternoon peaks. The daily clearing price average moved in a curve from 42 mills at the start of the week to a high of 54.7 mills/KWh midweek and back down to 34.9 mills/KWh for Friday deliveries. The off-peak averages rose to a high of 27.2 mills but dropped to 17.5 mills/KWh.

But it was in the zonal price charts and the day-of/hour ahead market where prices took to the skies and stayed. With California's utilities consistently underscheduling their loads by more than 1,000 MW during peak period hours, the CalPX day-of market shot up frequently to the 200 mills/KWh mark. The high point was on Tuesday afternoon at 225 mills, but even when things were calmer on Thursday, the prices were as high as 167 mills for hour 15, on 1,200 MW of incremental generation.

Southern California prices were dragged upward by the Southwestern price spikes, particularly at Palo Verde, where the range of prices went from the moderate 37 mills all the way up to 130 mills/KWh. It appeared that Tuesday's ceiling would lower but another burst of hot weather in Arizona and a transmission line problem on the Midway/Vincent 500 KV line turned the heat up again. The transmission line was temporarily derated to 500 MW from its 2500 MW limit, severely hampering the ability to move power around in Southern California and again driving the Cal-ISO imbalance energy price to $750/MW at SP15 and points south.

In the Pacific Northwest, prices also elevated to as much as 75 mills/KWh midweek, but it seemed more in response to market opportunities than system constraints. An unexpected outage at the Colstrip station in Montana last Friday was over, and two Centralia coal-fired plants that are changing hands were sitting idle-but were available for real-time sales at premium prices. WNP-2 nuclear plant was still following load at 60 percent of capacity.

Mid-Columbia peak power moved from 31 mills early in the week to 75 mills/KWh during Tuesday trading. The California/Oregon Border price jumped from 44 mills to 80 mills/KWh.

By the end of the week, these markets showed some sense of normalcy, with Mid-C down to 30 mills/KWh peak and 17.25 mills/KWh off-peak. COB dropped to the 33 mills to 34 mills/KWh range for daytime power and about 19 mills/KWh for overnight and weekend deliveries. Palo Verde settled in the 48 mills to 57 mills/KWh range.

The Alberta Power Pool experienced calm for the first time in weeks- until Wednesday when a transmission line trip and related power plant outage in British Columbia helped push Pool prices up to 265 mills/KWh [Arthur O'Donnell].

Gas Tags Along for the Ride

Natural gas prices followed the same price curves as Western electricity, but with nowhere near the same extremes. Still, gas at the Southern California Border traced a large arc from $3.14 to $3.24 before slipping to $3.12/MMBtu by week's end.

Similarly, the Alberta index price moved broadly. After starting the week at about $(C)3.88/Gigajoule, the Alberta price crossed the $4/Gj mark midweek, softening again to $3.93/Gj.

Aside from the high plateaus of prices, the Southern California system experienced several operational flow orders (OFOs) late in the week, forcing shippers to balance their nominations with deliveries [A. O'D.].

Western Electricity Prices
Week of May 1-5, 2000
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 24.5-265 9-25
California PX (WAC) 34.9-54.7 17.5-27.2
Mid-Columbia 30-75 17.25-19
COB 33-80 18-20
Palo Verde 40-130 22-25

Archives of the Western Price Survey for the past year are also available online.


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