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Western Price Survey / Archives

May 21, 2004
Prices Weaken Going into Weekend

The price of power in California and the Southwest was on a slow trajectory on a downhill slope, while Northwest prices ran up then down throughout the course of the week. The weakening forces included lagging gas prices and waning temperatures. Early last week, the cost for power traded on the spot market for delivery to NP15 hit a high of 65.50 mills/KWh. After opening on Monday close to that price, peak power at the hub slipped to between 57.95 mills and 59.75 mills/KWh by the end of the week.

At SP15, the price for daytime power during the first three days of this week ranged from 63.50 mills/KWh on Monday to 57.50 mills/KWh on Wednesday. The slide in prices was brought about by the slip in natural-gas costs and the return to operation of a handful of major generating units. The hub price regained a couple mills in Friday trading.

Though Diablo Canyon Unit No. 1 remains off line, the two Palo Verde nuclear units that were curtailed at this time last week were back to full output at the beginning of this week. Off-peak power prices at the Southern California delivery point opened the week between 41.75 and 42.50 mills/KWh before dropping a mill or two in Wednesday trading. Low-demand power scheduled for delivery early next week traded on Friday for as much as 45 mills/KWh.

Southwest hub power prices also weakened in line with the return to the grid of the two Palo Verde units. Palo Verde high-demand power changed hands for between 53.25 mills and 55 mills/KWh at the beginning of the week, but shed a couple of mills over the following two days, settling at a high of 52.25 mills/KWh by mid week. The price moved little the rest of the week. Low-demand power costs opened the week at Palo Verde at 36.50 mills/KWh and closed on Friday at a high of 41 mills/KWh.

In contrast to power prices in California and the Southwest, prices in the Northwest gained as the week wore on. A gentle cooling trend in the region quietly pushed up the price of next-day power at Mid-Columbia throughout the week. After opening on Monday at between 45 mills and 47.50 mills/KWh, the price for peak power skipped up to 50.75 mills/KWh on Wednesday and remained in that vicinity for the duration of the week. Off-peak power at the hub also gained as the week wore on. Opening on Monday at between 39.50 mills and 40.25 mills/KWh, trading edged up to a high of 45.50 mills/KWh on Friday trading.

Power-plant derates within the California Independent System Operator territory included few unplanned outages of any major consequence. The major-megawatt curtailments were nearly all listed on the ISO's outage list as planned derates. Among the units taken off line for scheduled reasons were the 861 MW Delta Energy Center, the 549 MW Elk Hills project, and all four units at the La Paloma facility. Redondo No. 6 was also shut down much of the week, but the 175 MW unit was listed as being on an unplanned outage. By Friday the AES unit was on line but its 178 MW sibling, Unit No. 5 was shut down for unscheduled reasons. The 225 MW Huntington Beach No. 2 unit was down for planned reasons, but the 227 MW No. 4 unit at the site was ramped down for unplanned reasons [Shauna O'Donnell].

Gas Mixed on Crude Oil Costs, Storage Figures

The daily price for next-day gas deliveries had trouble finding its footing this week. Factors such as lower demand for firing of electricity generating units, mild weather and injections into underground storage provided little enthusiasm for any sort of sustained rally.

With the futures price for natural gas riding the crude-oil wave, it too has been bounced around some. After healthy gains last week in tandem with the increase in oil costs, a $1.00 per barrel drop in the price for oil led to a sag in the NYMEX prices this week.

Inventory in the nation's underground storage swelled by 85 Bcf last week, reported the Energy Information Administration. This injection brought the amount of gas in storage to nearly 400 Bcf more than a year ago. Still, the 1.388 Tcf in storage is, on average, slightly less than the five-year average of 1.403 Tcf. Western storage is lagging by 7.2 percent compared to the five-year average, while the producing basins show a gain of 8.4 percent over the historical average.

Speaking of surplus, Pacific Gas & Electric's California Gas Transmission system has called an operational flow order for May 22 because of high inventory in the pipelines. The system-wide, Stage 2 OFO has a 3 percent tolerance band [S. O'D.].

Western Electricity Prices
May 17 - 21, 2004
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 24.85-998.01 10.04-125.18
Mid-Columbia 45-50.75 39.50-45.50
COB 55.50-60 41.75-45.85
NP 15 57.95-64.50 41-47.75
SP 15 57.50-63.50 39.50-45
Palo Verde 50.25-55 33-41

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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