Western Price Survey
May 27, 2005
Peak power prices, which started the week strong, lost strength with the arrival of cooler weather and the Memorial Day weekend, as traders swapped power for Tuesday deliveries on Friday.
Off-peak prices have been less volatile with variations in temperature. Across California, off-peak power traded for delivery during the cool night and early morning hours continues at attractive prices, flirting at or below the 20 mill/KWh range. Early in the week, however, sweltering daytime temperatures in some areas pressured peak prices, pushing them above 60 mills/KWh.
During the midweek, hot weather produced actual system loads beyond those forecasted by the California Independent System Operator. On Wednesday, the Cal-ISO predicted that peak demand would be around 35,792 MW by 3 p.m., but actual demand climbed to 36,182 MW. Actual demand exceeded the Cal-ISO forecast for much of the day. Friday, however, brought cooler temperatures, lower system loads, higher reserve margins--and, as expected, lower prices.
South of Path 15 power started the week trading 55.50 mills to 59.50 mills/KWh and dropped a few mills as the week progressed, ending at around 48 mills/KWh for Tuesday deliveries due to the Memorial Day holiday. Off-peak power remained steadier, trading in the range of 15 mills to 24 mills/KWh most of the week, though a single trade was recorded for 37 mills/KWh on Friday
Palo Verde power has begun to fetch the highest prices. Peak power started at around 60 mills/KWh before sliding to a low of 42.75 mills/KWh for Tuesday deliveries. Off-peak power started the week at around 23 mills/KWh and dropped to a low of 11.50 mills/KWh in Friday trading.
As testament to the effect of temperatures, power prices cooled the further north one traveled. On Monday, North of Path 15 peak power traded between 52 mills and 58.50 mills/KWh, but lost spread midweek, week, ending at around 47 mills/KWh on Friday. Nighttime power traded between 15 mills and 19 mills/KWh for most of the week.
Daytime power at the California-Oregon border traded in the range of 32.50 and 40.25 mills/KWh most of the week, lost a few mills in Wednesday trading, but regained pricing power on Friday. Off-peak power started the week between 12.25 mills and 17 mills/KWh and ended at a low of 11.50 mills/KWh in Friday trading.
Mid-Columbia power continues to be the cheapest. Peak power started the week between 17 mills to 34 mills/KWh and ended between 30 mills and 35.5 mills/KWh on Friday. Off-peak power started the week between 11 mills and 15 mills/KWh, then plunged to a low of 9 mills/KWh in Tuesday and Wednesday trading, regaining little strength at the end of the week.
Unit No. 2 of the Palo Verde nuclear power plant came back from a refueling outage and was at 100 percent of capacity on Friday, according the U.S. Nuclear Regulatory Commission. Unit No. 3, however, is on scheduled maintenance for the next few weeks to repair pump reactor seals [Chris Raphael].
Ample Storage Drives Gas Costs Down
Natural gas prices in the nation fell to three-month lows as more gas moved into storage, even though the price of crude oil rose later in the week to above $52 a barrel.
In the West, natural gas in California hit weekly lows for deliveries Friday and Tuesday. San Juan Basin gas has been closing in on the $5/MMBtu mark and traded between $5.07 and $5.60/MMBtu. Southern California border gas continues to be the priciest and traded between $5.41 and $6.08/MMBtu.
Th U.S. Department of Energy reported that an additional 93 Bcf of natural gas went into storage tanks last week from the previous week, putting total storage at 1,692 Bcf--22 percent above the five-year average. An additional 14 Bcf went to storage in the West, which is at 264 Bcf, some 18 percent above the five-year average [C.R.].
Archives of the Western Price Survey for the past year are also available online.
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