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Western Price Survey

May 19, 2006
Western Prices Record Late-Week Slide

With the West Coast getting a taste of summer weather this week, electricity demand increased. Peak load in the California Independent System Operator's territory maxed out at 35,127 MW on Thursday, the highest it has been all year. Temperatures waned in the Golden State heading into the weekend and combined with a dip in the cost of natural gas, the weather brought down the price of electricity at week's end.

Peak-time power packages for delivery South of Path 15 were bought and sold for between 55 mills and 59.25 mills/KWh on Monday. The spread widened to a range of 57.75 mills to 60 mills/KWh the following day but dropped to between 45 mills and 50 mills/KWh on Friday. Off-peak power in the SP15 region topped out at 35.50 mills/KWh at the beginning of the week. The price of low-demand power wilted to 19 mills/KWh on Thursday before closing the week trading for between 22 mills and 29 mills/KWh..

North of Path 15 power attracted between 55.25 mills and 59.50 mills/KWh for daytime packages traded Monday. The price hovered just below or at the 60 mills/KWh mark at midweek and dropped to a low of 40 mills/KWh on Friday. Nighttime power at the hub moved for between 30 mills and 33.25 mills/KWh at the start of the week before dipping down to a low of 15 mills/KWh on Thursday.

On Wednesday, Unit No. 3 at the Palo Verde nuclear power facility returned to full output following a refueling outage. For the first time in weeks, two units at the plant were operating at full capacity. The return of the 1,247 MW No. 3 generator helped temper the rise in the price of power in the Southwest. With temperatures in much of the region exceeding normal highs, consumers are flipping on the switch to air-conditioners throughout the desert states.

Peak power at PV cost between 55.50 mills and 63.50 mills/KWh at the beginning of the week. By Friday the cost of daytime power scheduled for next week delivery changed hands for between 44 mills and 50 mills/KWh. The value of off-peak power at the hub drooped to a low of 18.75 mills/KWh for weekend deliveries traded Thursday. This was a loss of more than 10 mills/KWh from the price recorded early in the week.

Power prices in the Northwest were robust early in the week on account of the lessening of hydro flows through the region's dams. The Mid-Columbia peak-time power price on Monday ranged from 41.75 mills to 55 mills/KWh. The price of Mid-C peak power hovered close to that range until Thursday, when the commodity moved for a low of 37 mills/KWh. On Friday the price fell further, settling between 29 mills and 36.75 mills/KWh. Off-peak power changed hands at Mid-C for as much as 33.75 mills/KWh on Tuesday. The price of low-demand power deflated rapidly on Wednesday, however, dropping to between 17.50 mills and 22 mills/KWh. By Friday, power was exchanged for between 13 mills and 18 mills/KWh.

A discussion of the summer supply and demand situation in the country was held during this week's meeting of the Federal Energy Regulatory Commission. Not surprisingly, Southern California stood out as one of the regions that would be most stressed under conditions of warm weather and significant unplanned generation or transmission outages in coming months. Still, commission analysts noted that the state's resource-adequacy requirements for load-serving entities would help ensure adequate supply to meet increases in demand [Shauna O'Donnell].

Spot Gas Follows Downward Slide in Futures Price

With the cost of a barrel of oil dropping down to $69 and the futures price of natural gas falling below $6/MMBtu at Henry Hub, spot prices for gas ran out of steam at the end of the week.

After trading for between $5.49 and $5.64/MMBtu on Wednesday, gas received at the Topock hub in Southern California attracted a low of $5.03/MMBtu on Friday. A similar sag was recorded at the Northern California receipt point at Malin. Midweek gas at that hub attracted a high of $5.35/MMBtu but closed on Friday trading for between $5.06 and $5.12/MMBtu.

With 91 Bcf of gas injected into underground storage last week, the total amount stored rose to 2,080 Bcf, more than 50 percent above the five-year average. In the East, stored gas volumes exceeded the average by more than 60 percent. The hefty storage numbers contribute to the recent slippage in the cost of natural gas [S. O'D.].

Western Electricity Prices
May 15 - 19, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 29.56-585 8.02-112.09
Mid-Columbia 29-51.25 9.50-33.75
COB 37.50-56 11.75-30
NP 15 39-60 15-30.25
SP 15 43-61 17-35.50
Palo Verde 44-64.25 18.75-33

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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