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Western Price Survey

June 2, 2006
Temperature Gains Encourage Price Rise

Western power prices returned from the long weekend holiday well rested and ready to respond to the subtlest of signals. Weather throughout the West grew warmer as the week wore on, and the rise in the mercury caused the cost of power to elevate. Temperature-driven demand pressured both peak and off-peak power prices upward during the first half of the week. Daytime costs leveled out at the end of the week, but nighttime power prices bumped up heading into next week.

With daytime temperatures cresting above the century mark, the Southwest demand for cooling boosted the cost of Palo Verde peak power above the 60 mills/KWh mark this week. Opening on Tuesday priced at between 50 mills and 51 mills/KWh, daytime power at the Southwest hub traded for as much as 61.50 mills/KWh on Friday. Nighttime power at the PV hub drew between 11 mills and 13 mills/KWh on Tuesday before moving up to a range of 22.25 mills and 26.75 mills/KWh the following day. The price swelled to between 17 mills and 29.50 mills/KWh for weekend deliveries before soaring to a high of 42.50 mills/KWh for Friday transactions.

Northern California power prices were tempered this week by the return to service of Unit No. 2 at Pacific Gas & Electric's Diablo Canyon nuclear power plant near San Luis Obispo. The 1,087 MW facility was operating at full output by Wednesday.

The price of peak power north of Path 15 ranged from 44.50 mills to 49 mills/KWh on Tuesday and edged up as high as 54.25 mills/KWh on Wednesday. Weekend power, usually of lesser value than weekday electricity, attracted as much as 57.50 mills/KWh as the temperatures in Northern California remained warm heading into the weekend. Off-peak power moved for a low of 11.25 mills/KWh at the start of the truncated trading week before rising to a range of 17 mills to 29 mills/KWh on Wednesday. Packages of low-demand power for next-week delivery changed hands for between 35 mills and 39 mills/KWh on Friday.

The steadily increasing demand in California Independent System Operator territory fueled the increase in the cost of power in the Golden State. Peak demand in ISO territory hit 35,095 MW at midweek. Friday's forecast pegged peak load in the system operator's control area to hit 37,738 MW.

As is the norm, Southern California power costs kept just ahead of NP15 prices this week. After changing hands for between 47 mills and 52 mills/KWh on Tuesday, daytime packages attracted a high of 56.25 mills/KWh on Wednesday. Peak power in Southern California topped out at 63 mills/KWh in Friday trading. Low-demand power drew between 12 mills and 27.50 mills/KWh during the first half of the week. Weekend deliveries traded for between 22.75 mills and 30.25 mills/KWh on Thursday before skipping up as high as 41 mills/KWh on Friday.

Mid-Columbia power scheduled for daytime delivery moved for between 11.50 mills and 17 mills/KWh early in the week. By Wednesday the price spread widened to a range of 16 mills to 45 mills/KWh. At the end of the week the gap narrowed to between 36 mills and 42 mills/KWh. Low-demand power at Mid-C moved for a low of 1.25 mills/KWh on Tuesday, but by Friday traded for between 2.75 mills and 20 mills/KWh [Shauna O'Donnell].

Natural Gas Prices Vacillate

Unable to decide whether to drop or move upward, natural gas prices bounced around this week.

After trading for between $5.12 and $5.22/MMBtu on Tuesday, San Juan basin gas edged below the $5 mark the following day, dropping to $4.925/MMBtu. On Thursday, gas at the producing basin swelled to a range of $5.43 to $5.55/MMBtu after the Energy Information Administration pegged storage injection for last week at 80 Bcf, lower than anticipated by the market. In Friday's session, San Juan gas moved for between $5.27 and $5.36/MMBtu.

At the Southern California delivery point of Topock, gas closed out the week between $5.30 and $5.67/MMBtu, down from Thursday's high of $5.83/MMBtu. The low for the week was recorded on Wednesday, when Topock gas traded for as little as $5.18/MMBtu.

Pacific Gas & Electric CityGate gas managed to hit $6.15/MMBtu on Thursday, but the rest of the week stayed below the $6 mark. CityGate gas attracted a low of $5.48/MMBtu on Wednesday [S. O'D.].

Western Electricity Prices
Week of May 29 - June 2, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 39.82-397 7.00-64.36
Mid-Columbia 11.50-45 1.25-20
COB 27.50-52 6.75-33
NP 15 44.50-59.75 11.25-39
SP 15 47-63 12-41
Palo Verde 50-61.50 11-42.50

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 Shauna O'Donnell, editor with questions regarding Price Survey Content.

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