Western Price Survey / Archives
May 17, 2002
The planets Mercury and Neptune were not the only entities changing apparent direction this week. Western power and fuel markets abruptly reversed course midweek, turning what had been a brief pricing rally into a retrenchment.
The continuing nighttime chill in the Northwest combined with the first true burst of 100 degree weather in Arizona to propel prices in California and the Southwest toward 40 mills/KWh.
Loads appeared to be on the rise as well, with the California Independent System Operator logging a 33,000 MW peak on Monday for the first time since the end of January.
Mid-Columbia peak prices rose from 29 mills to 33 mills, but in-state California points and Palo Verde approached 38 mills/KWh at peak Tuesday.
The situation reversed midweek, as it became apparent that the desert heat was not going to last or extend into surrounding areas. Water flows in the Northwest were still a bit tight as everyone waited for increased runoff to materialize, and the Bonneville Power Administration withdrew from the daily sales market. Cal-ISO loads also dropped to the 31,400 MW level. But the biggest factor appeared to be the collapse of natural gas prices across the region and prices softened considerably.
Even though Pacific Gas & Electric issued a conservation reminder in advance of an expected two- day warming trend on Thursday and Friday, the week's trading period was pretty much over with lower prices already set for Friday/Saturday deliveries.
Mid-C backed down to the 22 mills to 24.5 mills/KWh range at peak and slipped below 18 mills/KWh for off- peak. The California/Oregon Border peak price eroded to 26.25/KWh on average.
NP15 slid to 28 mills/KWh range for daytime power and about 17 mills to 18.5 mills/KWh for overnights, while SP15 dropped to the 28 mills to 29.5 mills bracket at peak and the 15 mills to 17.5 mills/KWh range for off- peak energy. Palo Verde peak fell to 27 mills to 28.5 mills/KWh and a deeply discounted 13 mills to 14 mills/KWh for off-peak deliveries.
Although there was an increase in unplanned outages reported by Cal-ISO early in the week, it was mainly among smaller generators and combustion turbines. Many found a reason to return to service when prices were high but slipped back into hiatus soon thereafter. The 320 MW Etiwanda No. 4 and 335 MW El Segundo No. 4 units were the largest unplanned outages on the list this week, until Thursday at noon, when the 750 MW Moss Landing No. 6 fell off line. The scheduled maintenance roster was headed by the still-refueling Diablo Canyon No. 1 at 1,100 MW.
Next week San Onofre No. 2 will enter a month-long refueling and maintenance outage. It was already in coast-down mode, slipping to 97 percent by Friday morning, according to the US Nuclear Regulatory Commission [Arthur O'Donnell].
After what seemed like a major rally that added $0.25/MMBtu to prices at key Western hubs, natural gas markets flipped and gave back all the gains, plus some. "It's pretty volatile," remarked one trader who was watching the screen prices float up and down. "If you could figure that out, you'd make a bundle."
Most, however, were just trying to keep from losing their shirts as the difference between forward price curves and daily demand patterns caught many traders off guard. Heat in the Southwest did not linger long enough to translate into cooling load and the demand from peaking power generators never materialized. Even though a second California nuclear unit is heading toward refueling next week, traders expect a continued lackluster demand-especially if it warms up in the Northwest to increase hydro runoff.
The latest injection figures from the Energy Information Administration showed that nationally 55 Bcf of gas went into storage, reflecting the low end of projections. But EIA also adjusted last week's figures upward by 8 Bcf. Markets really did not react to the news as much as they followed crude oil prices lower.
The most volatile Western point was at San Juan Basin, which on Tuesday had jumped to $3.25/MMBtu but collapsed to $1.88/MMBtu by Thursday. The up and down trend was seen elsewhere, though not to such an extreme. Permian Basin reached $33.7 but fell to $2.91 and Topock bounced around the $3.06 to $3.49/MMBtu range.
The San Francisco CityGate was showing a nickel premium over Topock for much of the week, hitting $3.55/MMBtu at one point, but later it dropped below the SoCal Border price and landed in the $2.98 to $3.10/MMBtu range. Malin trailed the CityGate by about $0.15/MMBtu.
Alberta's price had stretched to $(C)4.44/Gigajoule but dropped to $3.98/Gj in advance of the Victoria Day extended weekend [A. O'D.].
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 firstname.lastname@example.org with questions or comments about this site.
Contact Shauna O'Donnell, editor with questions regarding Price Survey Content.
Check out the fastest growing database of energy jobs in the market today.