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Western Price Survey / Archives

May 14, 2004
Gas Costs Lead, Power Prices Follow

This week saw temperatures in the West rise steadily. And where the mercury leads, power prices follow. Also placing upward pressure on spot electricity prices was the concerted effort of natural-gas prices to exceed the $6.00/MMBtu mark at Western hubs. The price of power in the day-ahead market was also influenced by a significant decline in output from the region's nuclear generating facilities.

Pacific Gas & Electric's 1,113 MW Diablo Canyon No. 1 unit has been on a refueling outage for a number of weeks. The unit was expected to be fired up and begin the trek back into operation over this past weekend, but plant operators have indicated it will remain off line for approximately three more weeks.

The 1,352 MW Palo Verde Nuclear Generating Station Unit No. 1 was also expected to return to service this week after a refueling and maintenance outage, but its return has likewise been delayed. The unit managed to ramp up to about 20 percent of full output on Tuesday, but remained at that level Wednesday--leaving a 1,227 MW hole in California's available-generation count. Adding to the generation-outage tally, Palo Verde's Unit No. 3, also with 1,352 MW of capacity, was derated late Tuesday to 42 percent, leaving 827 MW on the power-supply sidelines. On Friday, both PV units were listed by the Nuclear Regulatory Commission as being at 87 percent. Unit No. 2 at the facility operated at full output all week.

As gas prices swelled and the supply-demand margin narrowed, the price for power at both California delivery points increased. NP15 high-demand power prices started the week between 55.75 mills and 58.25 mills/KWh, but by Wednesday had moved up to a range of 63.50 mills and 65.50 mills/KWh. The rest of the week saw the price remain in that vicinity. The price for off-peak power scheduled at NP15 on Monday--between 39.50 mills and 42 mills/KWh--rose by about 5 mills/KWh in midweek trading and reached a high of 50.50 mills/KWh in Friday trading for next-Monday deliveries.

SP15 peak-power prices ran a bit higher than NP15 figures at the beginning of the week, but by Wednesday, trades at the two hubs were running pretty much parallel. The high in SP15 trading, 64.25 mills/KWh, was reached on Wednesday but the rest of the week saw the price drop by a mere quarter-mill. Off-peak power costs at SP15 topped out at 50.50 mills/KWh in Friday trading.

The derates of the Palo Verde nuclear units helped to drive the price of power in the Southwest upward this week. Daytime deliveries changed hands for between 53.50 mills and 54 mills/KWh on Monday before swelling to a high of 61.25 mills/KWh on Wednesday. Return of the nuclear units helped drive the price down to the mid-fifties by the end of the week. Off-peak deliveries at Palo Verde began the week between 35.75 mills and 37.50 mills/KWh before moving up to a range of 40 mills to 46 mills/KWh on Friday.

California-Oregon Border power traded for well above 50 mills/KWh much of the week, closing on Friday at a high of 60.25 mills/KWh. Low-demand power at the hub opened the week at 39 mills/KWh, but the price rose steadily throughout the week, hitting a high of 45.50 for next-week deliveries.

Mid-Columbia power prices, pressured downward by the region's reliance on hydro generation, remained well below the other hubs' this week. Peaking at 51.50 mills/KWh on Wednesday, the price for daytime power at Mid-C generally stayed in the 45 mills to 47 mills/KWh range. Off-peak power prices at the hub hovered just below the 40 mills/KWh mark much of the week before reaching 42.75 mills/KWh in Friday trading.

Loads in the California Independent System Operator territory remained well below last week's high, but were expected to edge up with warming temperatures later in the week. Tuesday's peak-load mark was 30,700 MW, Wednesday's peak exceeded 31,200 MW. For Thursday, the grid operator anticipated peak demand to reach 31,986 MW, but it actually hit 33,077 MW in the late afternoon. Weekend peak loads were predicted to exceed 30,000 MW as well [Shauna O'Donnell].

Oil Costs Lead, Gas Prices Follow

Riding the wave of an increase in the price for crude oil, natural-gas suppliers were able to command top dollar for the commodity this week. In particular, gas at Can-ada's Alberta hub swelled to a high of $6.32/MMBtu this week. The high price for Alberta gas, which usually trails the price at other Western hubs, was attributed to both the rise in oil prices and unseasonably cold weather that swept through the Western province this week.

PG&E CityGate gas trading bookended the week close to the $6.00/MMBtu mark, peaking on Wednes-day at $6.34/MMBtu. In contrast, Malin trading did not break through the $6.00 ceiling this week, sticking to a range of about $5.60 to $5.90/MMBtu instead.

Pacific Gas & Electric's California Gas Transmis-sion system called operational flow orders for May 9 and May 14 because of high system inventory. How-ever, the pipeline operator later clarified that no non-compliance charges would be levied for the May 9 OFO. Due to a "procedural error," the OFO notifica-tion was not properly disseminated to customers. CGT also said that the OFO would not count as an "occur-rence" for core transportation agents [S. O'D.].

Western Electricity Prices
May 10 - 14, 2004
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 27.81-121.50 10.11-64.55
Mid-Columbia 44-51.50 37-42.75
COB 50.50-60.25 39-45.50
NP 15 55.75-65.50 39.50-50.50
SP 15 56-65 38.50-50.50
Palo Verde 53-61.25 35-46

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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