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Western Price Survey

Week's End Edition
May 27, 2011
Power Prices Continue Slide

Western day-ahead power prices gained just a little ground over the week as a glut of hydropower, especially in the Northwest, continued to suppress prices.

Daytime power prices gained between 25 cents and $1.85 in the Friday-to-Friday trading period, May 20 to May 27, save for North of Path 15, which lost about 70 cents in only two days' trading. Peak power in the Northwest could not break $30/MWh while California hubs finished the week a bit above that mark, led by Palo Verde, which recorded a high price of $38/MWh.

In advance of the Memorial Day holiday, no Western hubs posted trades for peak power on Thursday, May 26.

Off-peak prices in the West remained sluggish. Values at California hubs stayed below $5.25/MWh during the week. Mid-Columbia posted a low spot price of -$5.75/MWh Monday, while California-Oregon Border traded at -$2/MWh.

The Bonneville Power Administration continued periodically cutting non-hydro generation, including wind, to cope with surplus hydropower and protect fish under its "environmental redispatch" initiative. After cutting 1,967 MWh of generation Monday, May 23 and 550 MWh on Tuesday, an additional 1,301 MWh of generation was cut late Wednesday.

The agency said curtailments were necessary to protect salmon and steelhead, maintain the reliability of the power grid and avoid shifting costs to BPA's customers.

Forecasters expect the Columbia River to crest at either 16.5 or 17 feet Monday, May 30.

Western natural gas values rose over the trading period. Malin earned 30 cents, closing at $4.24/MMBtu. Southern California Border gas earned 18 cents, closing at $4.13/MMBtu Friday.

Henry Hub futures reached $4.54/MMBtu Friday, according to Bloomberg, a three-week high. It was also the highest intra-day price recorded since May 5.

According to the U.S. Energy Information Administration, natural gas futures increased based on forecasts of warmer-than-typical weather in the central and eastern U.S. through June 10, which should spur power demand. Dallas, for example, should approach 100 °F during the first week of June, while New York City expects 80-degree temperatures.

Working natural gas in storage rose to 2.024 Tcf by Friday, May 20, after a 105 Bcf net injection, according to the EIA. This is the first triple-digit injection this season.

What's ahead: Seattle and Portland expect showers Monday through Thursday with continued cool temperatures. Seattle may break into the 60s, while Portland will remain in the 60s through midweek. Mostly sunny skies and temperatures in the 60s are anticipated for the San Francisco area starting Monday, with a slight chance of rain for the North Bay by Wednesday.

Southern California should be sunny and clear Monday and Tuesday, with temperatures dipping into the 60s Wednesday and Thursday [Linda Dailey Paulson].

Western Electricity Prices
Week's End: May 23 - 27, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 3.41-53.74 0-21.35
Mid-Columbia 17-26.75 -5.75-0
COB 22-28.20 -2-1.25
NP 15* 30.75-31.25 3.75-8
SP 15* 27.50-34.75 3.50-10.25
Palo Verde 31.25-38 4.50-14.75

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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 Chris Raphael, editor with questions regarding Price Survey Content.

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