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Western Price Survey

Week's End Edition
May 18, 2007
Power Prices Run Mostly Lower Before Jump in Friday Trading

System reliability this summer should be adequate if temperatures turn out to be normal, according to the North American Electric Reliability Corp.'s 2007 Summer Assessment released Friday. Nevertheless, electricity prices will be 20 percent to 30 percent higher this summer, largely thanks to rising natural gas prices.

The NERC assessment coincided with a similar summer price forecast released by the Federal Energy Regulatory Commission (see story in the latest California Energy Markets at [14]).

Western prices this week were driven by plant outages and warmer weather predicted next week. The temporary loss of the 1,080 MW Unit No. 3 of the San Onofre Nuclear Generating Station drove early-week prices at South of Path 15. The plant came down Saturday for 48 hours due to transformer work. On Monday, peak power hit a high of 84.25 mills/kWh. The plant returned to full power Wednesday, according to the U.S. Nuclear Regulatory Commission, and peak power traded for a low of 67.50 mills/kWh Thursday. Nighttime power traded for around 46 mills/kWh most of the week before jumping 10 mills in Friday trading.

At North of Path 15, peak power prices steadily dropped from Monday's high of 84.50 mills/kWh to 68.50 mills/kWh for weekend deliveries. Warmer weather is forecast for the San Francisco Bay Area early next week, and power prices flirted with 80 mills/kWh in Friday trading. NP15 nighttime power prices dropped though Wednesday, but ended the week on a high note of around 57 mills/kWh.

Triple-digit temperatures at Palo Verde kept the heat on power prices there. Daytime power traded for a high of 81.75 mills/kWh Monday, a low of 63.75 mills/kWh Thursday, and finished the week around 72 mills/kWh. But nighttime deliveries went nowhere but up. Tuesday's off-peak deliveries brought a low of 35.95 mills/kWh before Monday deliveries commanded prices in the 50s.

At the California-Oregon Border, heavy-demand prices dropped to the low 60s though the week before rebounding to a high of 70.75 mills/kWh for Monday deliveries, when Portland temperatures are expected to rise. Nighttime power traded a bit above 40 mills/kWh all week (save for one exchange reporting trades for 25.50 mills/kWh Wednesday) and values ballooned to 56.75 mills/kWh in Friday trading.

In the Mid-Columbia area, peak prices eased down through weekend trading despite the planned outage of the 1,107 MW Columbia Generating Station nuclear plant and warm temperatures early in the week. After trading for around 62 mills/kWh Monday, values dropped 8 mills or so for Thursday heavy deliveries before gaining them back Friday. Nighttime power meanwhile trended upward, moving from a low of 35 mills/kWh Monday to 53 mills/kWh in Friday trading.

On Thursday, predicted a hotter-than-normal summer and-below average rainfall in the Southwest and the Rockies [Charles Redell].

Lower Natural Gas Injections Could Prelude Summer Electricity Prices

The U.S. Energy Information Administration reported Thursday that national natural gas stores increased in the West last week by 12 Bcf and by 95 Bcf overall, slightly lower than industry expectations.

Stores are still below levels last year at this time, indicating that summer electricity prices could be affected by lower gas stores (see story at [14]).

Gas-price movements depended on trading hubs this week. At the Southern California Border, prices were high in Monday trading, reaching $7.73/MMBtu. By Friday, the average price dropped to about $7.25/MMBtu.

The same pattern emerged at the Permian Basin in Texas. There, the high price was $7.53/MMBtu on Monday and the low was $6.94/MMBtu on Friday. Prices averaged near $7/MMBtu all week.

But San Juan Basin, N.M. prices had some recovery to do after last week. They started with a low of $5.77/MMBtu on Monday, gained value through Thursday with a high trade of $7.07/MMBtu, and finished the week around $6.93/MMBtu.

At Malin, Ore., prices dropped from Monday's high of $7.45/MMBtu to a low of $7.12/MMBtu on Wednesday. By Friday, though, most of that value was recovered [C. R.].

Western Electricity Prices
Week's End: May 14 - 18
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 4.80-300.40 5.00-56.24
Mid-Columbia 50.25-65 35-53
COB 58-70.75 25.50-56.75
NP 15 68.50-84.50 45-58.75
SP 15 67.50-84.25 44.50-58.50
Palo Verde 63.75-82 35.95-54.50

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 Chris Raphael, editor with questions regarding Price Survey Content.

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