Western Price Survey
May 26, 2006
The shift in the trading schedule this week in anticipation of the upcoming Memorial Day weekend skewed the ebb and flow of electricity prices on the spot market in the West. The spread in peak-time power prices widened on Tuesday, when two-day packages scheduled for delivery on Wednesday and Thursday changed hands. Power costs dropped significantly on Wednesday, when traders dealt Friday and Saturday packages. The around-the-clock deliveries scheduled for Sunday and Monday kept prices from gaining any momentum in Thursday exchanges. Also driving the cost of power downward was an across-the-board fade in the price of natural gas.
Peak power traded north of Path 15 for between 43.50 mills and 50 mills/KWh on Monday before climbing up to between 50 mills and 60 mills/KWh the following day, but returned to the low forties for weekend power traded on Wednesday. ATC electricity attracted between 16.50 mills and 23.50 mills/KWh on Thursday. Friday saw prices return to their pre-weekend levels. Off-peak power at NP15 moved for between 10.25 mills and 14.25 mills/KWh at midweek, down from Tuesday's high of 24 mills/KWh. Packages of off-peak power to be delivered next Tuesday cost between 10.50 mills and 14 mills/KWh on Friday.
South of Path 15 peak power was not able to sustain upward movement any more effectively than NP15 power this week. After topping out at 61.25 mills/KWh on Tuesday, daytime power traded for between 41.40 mills and 44 mills/KWh on Wednesday. Power scheduled for all-day delivery this Sunday and Monday drew between 18.50 mills and 25 mills/KWh.
Nighttime power scheduled for weekend delivery in the SP15 zone attracted a spread of just 11.25 mills to 15.50 mills/KWh at midweek after trading for between 17.50 mills and 28 mills/KWh the previous day.
Water flows in the Northwest exerted downward pressure on the price of power traded at the Mid-Columbia hub. Peak power moved for between 24.50 mills and 37 mills/KWh at Mid-C in the early part of the week before skidding to between 13 mills and 23 mills/KWh at midweek. Off-peak power at Mid-C flirted with double digits on Tuesday, hitting a high of 15 mills/KWh that day. That mark was sandwiched between Monday's range of 4.50 mills to 9 mills/KWh and Wednesday's spread of between 3.25 mills and 6 mills/KWh. ATC power at Mid-C had traders digging for pocket change on Thursday, when the commodity moved for as little as 2.50 mills/KWh. On Friday, peak power could only manage to rally to between 7 mills and 14 mills/KWh, while off-peak power moved for as little as 1.50 mills/KWh.
Above-average temperatures in parts of the Southwest kept power costs in the region somewhat inflated. Palo Verde peak power changed hands for as much as 60 mills/KWh on Tuesday, 10 mills more than on Monday. The cost of daytime power at PV stayed a bit higher than California power for weekend deliveries, ranging between 43.75 mills and 46 mills/KWh on Wednesday. ATC power topped out at 27.75 mills/KWh the following day. Peak-time prices returned to the mid-forties in Friday's session, while off-peak power attracted between 10 mills and 20 mills/KWh.
In preparation for the summer peak, the refueling season for Western nuclear power units is coming to a close. Pacific Gas & Electric's No. 2 unit at Diablo Canyon began exiting its refueling outage this week and should be up to full output early next week. With the return of that 1,087 MW unit, only the troubled Palo Verde No. 1 unit will head into summer off line [Shauna O'Donnell].
Western Gas Resides Under $5
Natural gas traded on the daily market has decided to go its own way--at least temporarily. The link between the cost of a barrel of oil and the price of gas weakened toward the end of this week, with Western gas fading into the $4 range at producing basins and California receipt points alike.
San Juan basin gas traded for a high of $5.65/MMBtu on Tuesday, but dropped down to a low of between $4.45 and $4.65/MMBtu on Friday. Malin deliveries also lost value as the week wore on. After reaching $5.60/MMBtu early in the week, gas at the California-Oregon border point sagged to a low of $4.80/MMBtu on Friday.
Topock gas fared even worse. Tuesday saw the price of gas at the Southern California hub hit $5.95/MMBtu before a steady decline took the price down to a range of $4.62 to $4.90/MMBtu on Friday [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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