Western Price Survey / Archives
May 30, 2003
Evidently last week's warm weather was just that, a warmup for this week's spike in temperatures throughout California. Wednesday, May 28, saw peak loads in the California Independent System Operator control area rise steadily throughout the day, topping out at 39,491 MW in the late afternoon. The day-ahead forecast for the day, 34,095 MW, was surpassed before noon and the figure was steadily boosted throughout the day until actual demand overtook the forecasted load and ultimately shoved the state into a Cal-ISO declared Stage One Emergency. It has been nearly a year since the last emergency declaration, when reserve capacity drops below 7 percent.
At just about 2:30 pm on Wednesday, Cal-ISO issued a "restricted-maintenance" notice (formally known as a "no-touch day"), in effect until 10:00 pm. That notice was quickly followed by the Stage One call, in effect from 3:00 pm until 8:00 pm. In fact, the emergency was called off just before 6:00 pm.
Cal-ISO spokesperson Gregg Fishman said that unexpectedly warm weather prompted the alert. Tem- peratures in the sun-baked Central Valley rose to the upper 90 degrees range, and according to Cal-ISO fig- ures, the ex-post price for supplemental energy during the 4 o'clock hour ran up to about $191/MWh.
Also on Wednesday, Cal-ISO changed the way it reports "non-operational generating units" on its Web site. Between its 7:15 am report and its 11:15 am posting, Cal-ISO ceased to include units that are on waivers in the "planned" category of outages. In total megawatts, this meant that the numbers shown on the earlier report, about 14,000 MW off line on "planned" outage, dropped to 3,200 MW by the time the 11:15 am report was posted. So, what at first appeared to be an astonishing amount of power rushing back on line within a four-hour span was, in fact, a shift in reporting methodology. According to Fishman, the grid operator made the change because the units on waiver can be brought on line fairly quickly and so taking them off the "outage" list is a more accurate representation of system conditions.
As the week progressed, electricity prices throughout the West rose incrementally with the temperatures. The spread was not huge, however, as adequate supply kept prices from moving upward significantly.
Power from the Northwest was consistently lower than that from the Southwest. Peak power from Mid-C was running between 29.25 mills/KWh and 38.50 mills/KWh, whereas Palo Verde power roamed the 60 mills to 75.50 mills/KWh range for peak deliveries. Off-peak power bottomed out at between 8 mills and 11 mills/KWh at Mid-C and between 11 mills and 18 mills/KWh for PV off-peak deliveries. On Friday, off-peak prices for electricity scheduled for delivery next Monday jumped up at each hub by 20 to 30 mills/KWh.
The region's nuclear power plants were running at pretty much the same level as they have been for a few weeks. Columbia Generating Station is still on a planned outage, while Diablo Canyon's two units are running at full capacity. San Onofre Nuclear Generating Station Unit No. 2 had been running at 100 per-cent, but dropped a percentage point on Wednesday. It was listed as 100 percent operational again on Thursday. SONGS Unit No. 3 was operating at full capacity. Palo Verde's three units kept to their customary 98 percent output each, until Friday, when the Nuclear Regulatory Commission reported Unit No. 1 at 97 percent [Shauna O'Donnell].
Gas Prices Cool to Hot Weather
Despite the bump up in Western electricity prices for most hubs this week because of increased heat-driven demand, natural gas played it cool: this week saw prices taper down a bit from last week's cost.
The week did see storage levels of gas reach levels not seen in a number of months. According the Energy Information Administration, injections into storage reached 1,085 Bcf on May 23, the first time the stored inventory has topped 1,000 Bcf since February.
Prices at most Western hubs hovered in the $5.10/MMBtu to $5.50/MMBtu range most of the week, with Topock topping the list at $5.74/MMBtu for Thursday deliveries.
In pipeline news, Pacific Gas & Electric's California gas transmission system was running under an operational flow order on May 30, with a tolerance level of 4 percent. The reason given for the OFO was high inventory and customers on the line faced a $1.00/Dth penalty for non-compliance. PG&E had also called a system-wide OFO last weekend [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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