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Western Price Survey

Week's End Edition
May 6, 2011
Western Energy Prices Tumble

Western natural gas spot prices dropped after a selloff Thursday, May 5, and failed to recover by Friday. Power prices followed suit.

News of slower-than-anticipated economic growth triggered a general drop in commodities prices early in the week. Oil tumbled to less than $100 a barrel, and Henry Hub spot natural gas prices tumbled more than 40 cents for the week to trade at $4.24/MMBtu by Friday.

Over the Friday-to-Friday trading period from April 29 to May 6, PG&E CityGate gas lost 31 cents on average to close at around $4.35/MMBtu Friday. Southern California Border gas lost 28 cents to $4.19/MMBtu.

Working natural gas in storage rose to 1.757 Tcf by Friday, April 29, after a 72 Bcf net injection, according to the U.S. Energy Information Administration. This amount is 226 Bcf lower than last year and 17 Bcf below the five-year average.

As commodity prices tumbled, the West had no weather extremes that would typically bolster electricity prices. In the Friday-to-Friday trading period, April 29 to May 6, here's how average peak power prices fared:

  • Mid-C: Lost $2.90 to almost $30.90/MWh.
  • California-Oregon Border: Decreased $3.30 to about $33.20/MWh.
  • NP15: Lost $7 to $32.25/MWh.
  • SP15: Declined $4.75 to $36.10/MWh.
  • Palo Verde: Dropped about $4.20, ending at almost $35.60/MWh.

Average prices for off-peak power also dropped, although the losses were slight -- from a few pennies to as much as $3.50 during the trading period. Nighttime prices ranged from about $15.80 to $24.45/MWh (see chart).

Peak demand on the Cal-ISO grid reached 33,553 MW Thursday afternoon. Demand is expected to slacken in the week ahead with the advent of cooler weather. Peak use should generally remain less than 30,000 MW the week of May 9.

What's ahead: A weather system entering the Pacific Northwest should keep skies throughout the region clear early in the week. Seattle and Portland expect dry conditions Monday into early Tuesday; rainy, cooler weather returns to the region Wednesday. Temperatures in both metropolitan areas should remain in the 60s most of the week.

California temperatures remain cooler than normal. San Francisco should be sunny Monday afternoon following possible showers. A "modest warming trend" starts Thursday with a predicted high of 70 degrees. Los Angeles temperatures, which start in the 60s on Monday, should reach the 70s by the end of the week. Palo Verde highs could reach 100 by the end of the week [Linda Dailey Paulson].

Western Electricity Prices
Week's End: May 2 - 6, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 12.53-46 10.76-28.83
Mid-Columbia 20-43.25 13.50-27.75
COB 25.25-45 17-27.75
NP 15* 32.25-43 19.50-19.50
SP 15* 35.80-46.50 20.50-29
Palo Verde 34-47 19.50-29.25

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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.

Please contact with questions or comments about this site.

Contact Chris Raphael, editor with questions regarding Price Survey Content.

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