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Western Price Survey / Archives

June 4, 2004
Gas Costs Send Power Prices Higher

Hydro supplies kept the price of electricity at the Northwest's Mid-Columbia hub significantly below that at other Western hubs this week. Working within a truncated trading schedule because of the Monday Memorial Day holiday, power dealers at Mid-C could just muster 32 mills/KWh worth of interest in their wares for peak-time delivery. Trading for low-demand power at the hub drew a low of 19.25 mills/KWh in Tuesday trading before escalating to a high of 29.25 mills/KWh for Friday deliveries.

Trading at the Western hubs south of Mid-C was conducted as if $6.00/MMBtu natural gas mattered. Unlike the water-rich Northwest, most of the power-producing plants in California and the Southwest are natural-gas driven. With the fuel price reaching as much as $6.42/MMBtu at the PG&E CityGate hub and $6.31/MMBtu at the Topock hub in Southern Califor-nia, power prices are being buoyed despite ample sup-plies and seasonal demand.

Even power at the California-Oregon border was trading for nearly double that at Mid-C. On Wednes-day, power on the spot market at COB hit a high of 59.50 mills/KWh. By Friday, the price had cooled to a range of 42.50 mills and 48 mills/KWh. Off-peak power at the hub stuck mainly to the mid-thirties throughout the week.

In California, NP15 trades drew bids as high as 70 mills/KWh on Tuesday. High-demand power for Thursday delivery changed hands for 67.25 and 69.50 mills/KWh before slipping to a low for the week of 57.75 mills/KWh. Though temperatures in the re-gion were generally a bit higher than forecast, the pri-mary inspiration for the nudge up in power costs was the high cost of natural gas. Off-peak power at NP15 opened the week at between 36 mills and 39.50 mills/KWh. The spread narrowed on Wednesday, with most prices at the hub running from 38 mills to 39.50 mills/KWh. Off-peak power traded for delivery early next week drew as much as 46 mills/KWh in Friday trading.

Further south, at SP15, power prices lost a little luster compared with the hub's Northern California brethren. Peak power prices at SP15 opened Tuesday at between 62 mills and 65.50 mills/KWh. Still, a little burnishing took place the following day, when prices at the hub tacked on another couple of mills. Things dulled later in the week, and the peak-power price on Fri-day was recorded at between 58 mills and 60 mills/KWh. Off-peak power trades kept to the relatively unenthu-siastic range of 29.50 mills to 32 mills/KWh before soaring to between 37 mills and 43.75 mills/KWh at the end of the week.

Palo Verde trading this week was a bit weaker than deals for the California hubs. The price for peak power at PV nosed its way above the 60 mills/KWh mark on Tuesday for some trades, with others closing for be-tween 58.25 mills and 59.50 mills/KWh. By the end of the week peak power at the hub was moving for be-tween 55 mills and 57.50 mills/KWh, while off-peak trades were recorded at a high of 41 mills/KWh on Friday.

Also on Friday, the Nuclear Regulatory Commis-sion had Unit No. 1 at Diablo Canyon listed at 2 per-cent capacity. According to a spokesperson at the plant, it should be supplying power to the grid some-time over the weekend. The unit had been on an ex-tended refueling outage. All other nuclear facilities in the West were operating a full power this week [Shauna O'Donnell].

Gas Prices Stay Up

During this Memorial-Day shortened trading week, the price of natural gas at Western supply basins and transportation hubs maintained the high prices re-corded in the past few weeks. The price continues to be influenced by the fluctuations in the price of crude oil and the political uncertainties in the Middle East.

In Texas, at the Permian Basin hub, gas moved for a high of $6.25/MMBtu on Wednesday. The com-modity lost a little buoyancy by the end of the week, as the price sank to a low of $5.60/MMBtu. San Juan Basin gas was sold for an average of about $5.80/MMBtu this week, hitting a high of $5.93/MMBtu on Wednesday.

Southern California Border gas drew the most con-sistent high price this week. After opening the week just above the $6.00 mark, the price for natural gas at the hub skipped up to as much as $6.31/MMBtu by midweek. Trades on Friday were recorded at a wide spread--from a low of $5.65 to a high of $6.25/MMBtu. [S.O'D.].

Western Electricity Prices
May 31 - June 4, 2004
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 28.14-98.56 10.89-98.27
Mid-Columbia 24.50-32.50 19.50-29.25
COB 41-55 25-35.25
NP 15 57.75-70 36-46
SP 15 62-65.50 29.50-43.75
Palo Verde 53-61.75 25.50-41

Archives of the Western Price Survey for the past year are also available online.


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