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Western Price Survey

May 12, 2006
One Nuke Up, Another Still Down in Western Region

Unit No. 2 at the San Onofre Nuclear Generating Station has returned to service. The unit had been off line for refueling and as of Friday both units at the facility were producing 98 percent of full capacity. Palo Verde nuclear power plant Unit No. 3, which was reportedly returning to service toward the end of the week, remains off line. On Friday the Nuclear Regulatory Commission still had the plant listed at zero output. The 1,247 MW unit went off line for refueling at the end of March.

South of Path 15 prices topped out at 61 mills/KWh on Wednesday after spending the beginning of the week in the mid- to high fifties. Values dipped a bit on Thursday as weekend power moved for between 50 mills and 56.25 mills/KWh, but by Friday the price made its way back up to 59 mills/KWh. Off-peak power prices edged above the 40 mills/KWh mark at midweek after opening on Monday in the range of 21 mills to 26 mills/KWh. Off-peak power for next-week delivery moved as high as 43.25 mills/KWh.

Northern California power scheduled for daytime delivery cost between 50 mills and 57 mills/KWh on Monday, gradually climbing to a high of 60.50 mills/KWh on Wednesday before slipping down by about 5 mills for weekend deliveries. Nighttime power attracted a low of 14 mills/KWh in the North of Path 15 region this week, but swelled to between 34 mills and 41.50 mills/KWh at midweek. On Friday, nighttime power changed hands for between 37.50 mills and 40.50 mills/KWh.

At the California-Oregon border, power scheduled for daytime delivery ranged from a low of 41 mills/KWh on Monday to a high of 53.50 mills/KWh the following day. By Friday the price had eased to a spread of 48 mills to 51.50 mills/KWh. Nighttime power at COB moved for as much as 37 mills/KWh on Wednesday, up from Monday's low of 9.50 mills/KWh. Off-peak power moved for 25.50 mills to 34.75 mills/KWh in Thursday and Friday sessions.

Palo Verde off-peak power traded for as much as 43.25 mills/KWh at the end of the week. Power costs in general perked up this week at the Southwest hub, driven by the higher-than-normal temperatures in parts of Arizona and Nevada, as well as the continuing outage of two units at the Palo Verde nuclear generating facility. Before moving into the 40s on Friday, off-peak power traded generally in the vicinity of 35 mills/KWh this week.

Daytime deliveries as Palo Verde opened at a low of 51.25 mills/KWh at the start of the week before scooting up as high as 61.75 mills/KWh on Tuesday. The price for peak power slated for weekend delivery ranged from 32 mills to 35.50 mills/KWh.

California Energy Commissioner James Boyd in an order this week not only denied Federal Power Avenal LLC's request to suspend the review of the Avenal Energy Project, but also granted CEC staff's recommendation to terminate the proceeding. Boyd heeded the CEC staff recommendation that the proceeding should be terminated because the data in Avenal's application for certification is over five years old. Further, the new analysis that would have to occur would be "akin to preparing and reviewing a new [application for certification]," said staff.

Federal Power Avenal LLC on April 24 asked the CEC for a fifth one-year suspension, until May 1, 2007, because the project remains without a power-purchase agreement. As proposed, Avenal was to be a 600 MW combined-cycle natural gas-fired facility located in the city of Avenal, Kings County [01-AFC-20].

The full commission will consider Boyd's May 8 order at its business meeting on May 24.

In other CEC news, the status chart of power projects under development indicates that the city of Vernon will submit an application for certification of a 910 MW facility this month. The city withdrew its original plan for a 610 MW power plant in April, stating it was going to revamp the scale of the project.

And finally, the Western Midway Sunset Cogeneration power plant will also not be realized. Approval expired for the 500 MW natural gas-fired combined-cycle plant, which was to be located in western Kern County on March 21 [99-AFC-9].

The application for the project was received in December 1999 and approved by the CEC in March 2001 [Shauna O'Donnell and Samantha Yugler].

Gas Costs Sink at Week's End

Natural gas traded on the Western spot market gently see-sawed this week, moving in parallel with the swing in oil costs. The price of gas managed to stay under the $6 mark nearly all week. On Thursday, when oil topped the $73 per barrel level, a bump up was felt across the region and PG&E CityGate gas cleared for as much as $6.05/MMBtu. The rise in cost did not last, however, as Friday saw the price of natural gas in the West move down by as much as a dollar compared to Thursday. The continuing surplus of stored gas is dragging down both the day-ahead and futures prices.

Gas produced at the San Juan basin in New Mexico opened the week trading for between $5.15 and $5.30/MMBtu and topped out at $5.46/MMBtu on Thursday. On Friday the price dropped to between $4.63 and $5.07/MMBtu. Topock gas traded for as much as $5.85 this week but sank to between $4.80 and $5.28/MMBtu on Friday [S. O'D.].

Western Electricity Prices
May 8 - 12, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 25.86-224.65 6.96-49.97
Mid-Columbia 26-48 8.75-36.25
COB 41-53.50 9.50-34.50
NP 15 50-60.50 14-41.50
SP 15 50-61.75 21-43.25
Palo Verde 51.25-61.75 21.25-43.25

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


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