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Western Price Survey

May 20, 2005
Bargain-Basement Power: Too Cheap to Last

Many regions in California saw midweek peak prices in the 30s and 40s and attractive off-peak power prices in their teens. At those levels, California electricity was substantially cheaper than the rate at Ercot in Houston, which saw midweek peak prices in the 60mills/KWh range. Midweek power in some regions of California was also cheaper than the going rate in Dayton, Ohio.

Then came Friday. One hundred degree weather on the Southern California-Arizona border, as well as the higher cost of Monday deliveries, pushed prices into the stratosphere, especially for Palo Verde and South of Path 15 customers.

Northwest prices remained somewhat cushioned by ample hydroelectric resources. At the California-Oregon border, peak power started the week trading at 45 mills/KWh but dropped half of its price strength midweek, going for a low of 19 mills/KWh on Wednesday before ending up Friday exactly where it started the week. Off-peak power took a similar route: On Monday it traded in the low 30s but fell to 11.75 mills/KWh on Wednesday. On Friday it was trading at 29 mills to 37 mills/KWh.

The rainy Mid-Columbia region continues to draw the lowest prices. Peak power began the week trading in the low 40s but toppled to 10.5 mills/KWh for Thursday deliveries. Friday trading saw a spread of 25 mills to 43 mills/KWh. Off-peak power went for 25 mills to 31.75 mills/KWh at the start of the week, but by Wednesday and Thursday suppliers practically gave away the commodity for 5 mills/KWh. Friday brought a spread of 19 mills to 33 mills/KWh.

Power prices in California, particularly in the southern part of the state, were the most volatile.

North of Path 15 peak power traded at about 50 mills/KWh on Monday and reached the low 40s Wednesday and Thursday before climbing to 59.5 mills/KWh on Friday. Nighttime power, which started the week in the low 30s, plunged as low as 12 mills/KWh for Thursday deliveries before reaching a high of 47 mills/KWh Friday.

South of Path 15 peak power started in the range of 50 mills/KWh Monday, lost about 8 mills in Wednesday trading, then raced above 60 mills/KWh on Friday. Low-demand power, which was trading in the low 30s Monday, went for as low as14 mills two days later, only to rocket to 51mills/KWh for Monday deliveries.

Palo Verde peak power was priced at about 50 mills/KWh for Tuesday deliveries and traded at a low of 43 mills KWh for Thursday deliveries before reaching a high of 62 mills/KWh at the end of the week. Off-peak power also hit its apex Friday at 50 mills/KWh, though it had started the week in the 30s and bottomed at 15.5 mills/KWh on Thursday.

Transmission problems were not significant. The Western Electricity Coordination Council reported that the Ashe-Marion 500 KV line relayed and reclosed Thursday morning forcing 1,683 MW of Columbia River generation off line. Another 966 MW was dropped Thursday afternoon after the same line tripped again. The Bonneville Power Administration reported that, in both cases, the generation came back on line instantaneously following remedial action scheme procedures [Chris Raphael].

Natural Gas Prices Weaken

Natural gas prices steadily eroded throughout the week. By Thursday, the commodity was trading below the $6/MMBtu even at the PG&E CityGate.

San Juan Basin natural gas, which drew the lowest prices, went for a high of $5.53/MMBtu on Monday and reached a low of $5.09/MMBtu in Friday trading. Southern California border gas was at $5.90 on Monday but stayed at $5.40/MMBtu in Thursday and Friday trading.

Permian Basin gas spread at $5.45 to $5.99/MMBtu, with the low and the high both reached in Friday trading.

An additional 90 Bcf of natural gas went into storage last week from the previous week, the U.S. Department of Energy reported. Storage in the West stood at 250 Bcf, a gain of 13 Bcf from the previous week [C. R.].

Western Electricity Prices
May 16 - 20, 2005
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 9.60-156.02 8.25-181.90
Mid-Columbia 10.50-43.25 5-33
COB 19-46 11.75-37
NP 15 41-59.50 12-47
SP 15 42.75-61 14-51
Palo Verde 43-62 15.50-50

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 Shauna O'Donnell, editor with questions regarding Price Survey Content.

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