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Western Price Survey

Week's End Edition
May 30, 2008
Power Prices Down on Cool Weather, High Spring Runoff

Peak power prices came off a short trading week and ended lower thanks to a cocktail of mild temperatures, cheap hydroelectric power and a shortened holiday trading schedule.

Off-peak prices, however, were a different story. They mostly ended the week on a higher note as traders bought and sold Sunday and Monday power.

The early spring melt resulted in cheap off-peak trades in the West, early in the week. Prices rebounded at all hubs except Mid-Columbia, which should have a good hydro year (see story at [14]).

Average daytime power at Mid-C slipped $9 from Monday to $13.78/MWh on Friday, while nighttime values inched down about 30 cents to -1.64/MWh.

At the California-Oregon border, average peak prices slipped a little over $4 to $63.30/MWh. Off-peak prices started the week at an average of $12.09/MWh on Monday but shot up to $35.63/MWh on Friday.

In California, North and South of Path 15 average peak prices were similar, down a little over $1 to $82.03/MWh and $82.24/MWh, respectively. Off-peak trades were up $24 to an average of $51.59/MWh in the north and $51.47/MWh in the south.

Palo Verde average peak power shed $2 to an average of $79.95/MWh, and off-peak prices soared $28 to $50.76/MWh.

The Pacific Northwest is expecting another storm this weekend and a chance of rain, AccuWeather said. California will enjoy mostly sunny skies and highs in the mid-70s in Los Angeles and the mid-60s in San Francisco. Phoenix, meanwhile, will see temperatures break into the low 100s by Saturday.

The third unit at the San Onofre Nuclear Generating Station is finally back to near-full operating capacity after being shuttered since mid-April for planned maintenance. Operators wanted to refuel and complete maintenance on the 1,080 MW unit before the summer when demand peaks. The Columbia Generating Station, which can produce up to 1,170 MW, was operating at slightly lower capacity for maintenance [Kristina Shevory].

Gas Falls on Stronger Economy

Falling crude prices and a stronger dollar muted natural gas prices this week. A revised first-quarter gross domestic product report that showed the economy is growing faster than previously thought also helped dampen prices.

At some Western trading centers, average natural gas values flattened by as much as $1.30/MMBtu and now trade between $8.29/MMBtu at San Juan and $10.92/MMBtu at Pacific Gas & Electric's City Gate.

However, natural gas prices are typically not this high in May, the U.S. Energy Information Administration said, because the weather is relatively mild across the country and cooling demand is low.

But thanks to the run-up in oil prices and a supply crunch, benchmark Henry Hub prices have risen 48 percent since the start of this year to $11.71/MMBtu on Friday.

Natural gas in storage rose by 87 Bcf to 1.701 Tcf last week, according to the EIA. The injection, which is lower than usual, leaves supplies 16 percent below last year but almost even with the five-year average.

Western supplies of gas rose 12 Bcf to 234 Bcf. Compared to last year, stockpiles are 25 percent lower, and 11 percent less than the five-year average.

The Independence Hub natural gas platform in the Gulf of Mexico has been closed since early April because of a pipeline leak. The platform is expected to be repaired in the first half of June.

The weak U.S. dollar is also crimping imports of liquefied natural gas this year because shipments are being diverted to Asia and Europe, where prices are higher. Daily LNG imports in May were 1.1 Bcf on average, versus 2.9 Bcf last year, according to the EIA.

The hurricane season officially begins on Sunday, and the National Oceanic and Atmospheric Administration is predicting a near-normal or above-normal season. The agency expects six to nine hurricanes this year, with two to five of them turning into major storms of Category 3 strength or higher. In a Category 3 storm, winds churn up to 130 mph [K. S.].

Western Electricity Prices
Week's End: May 26 - 30, 2008
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.72 - 800.60 7.60 - 107.39
Mid-Columbia 2 - 27 -3.00 - 1.00
COB 39.75 - 74 8 - 44
NP 15 74.75 - 85 21.75 - 57
SP 15 74.25 - 88 22 - 60
Palo Verde 70 - 88 18.75 - 53

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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