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Western Price Survey

Week's End Edition
June 5, 2009
As Rain Falls and Hydro Flows, Power Prices Fall

Western power prices descended in unison this week as the spring snowmelt continued in the Northwest and a storm system lowered temperatures and brought rain to some parts of the West.

Higher flows at Northwest-area dams produced more power this week and hammered prices. At the Mid-Columbia hub, peak and off-peak trades fell $5 since Monday to average $18.51/MWh and $3.02/MWh by Friday, respectively. The availability of cheap hydro produced off-peak trades as low as $0/MWh, meaning power was free in the Northwest for those who could take it.

At the California-Oregon border, average prime power values slipped $6 to $19.43/MWh, while off-prime prices were down $4 to $4.55.

Since Monday, California peak trades decreased $4 at North of Path 15 and $3 at South of Path 15. Both hubs traded at an average of $25.59/MWh on Friday. Off-peak prices slid $2 to average $13.83 in the north, and nearly $1 to $14.54/MWh in the south.

Palo Verde prices have been stable compared with the rest of the West, with peak values this week dropping only 44 cents to average $27.69/MWh. Average nighttime trades rose 83 cents to $14.55/MWh.

Late in the week, a storm system off the coast of California moved inland and brought a string of thunderstorms, showers and even snow to the region, AccuWeather reported. As a result, temperatures from Los Angeles to Seattle fell, reducing electricity demand.

According to the California Independent System Operator, peak power demand in the Golden State this week fell from a high of 31,500 MW on Tuesday to 29,500 MW on Thursday. Usage is expected to come in around 25,900 MW on Saturday.

The Memorial Day holiday, teamed with mild weather and little demand, boosted the weekly injection of natural gas into storage last week by 124 Bcf, the U.S. Energy Information Administration reported. For the twelfth week in a row, the weekly injection surpassed the five-year average injection.

Since records were started in 1994, last week marked the first time that stockpiles surpassed the 2.3 Tcf level in May.

Western supplies crept up 19 Bcf to 379 Bcf last week, leaving inventories 52.2 percent higher than in the same period last year, and 35.4 percent greater than the five-year average.

Pacific Gas & Electric's California Gas Transmission unit issued alerts this week to shippers that they must cut their shipments to match demand. On Monday and Wednesday, the utility issued operational flow orders for shippers to keep within 5 percent of their scheduled loads. The request was upgraded to 9 percent on Thursday. A 5 percent alert will be back in force on Saturday.

What's ahead: The forecast for this year's hurricane season, which began on Monday and extends through the end of November, has been amended to reflect cooler-than-average water temperatures in the Atlantic and the possibility of an El Niño in the Pacific. Colorado State University forecasters now expect 11 named storms, with five hurricanes and two major hurricanes with winds of at least 111 miles per hour.

A previous forecast predicted 12 named storms and six hurricanes. This year's storms will likely have minimal impact on the energy markets because stockpiles of natural gas and crude oil are so high.

This summer, San Diego Gas & Electric expects to have enough power supplies and reserves to meet demand, the utility said this week. A new peaker plant in San Diego's Miramar area and system upgrades are projected to help avoid any power outages.

Washington state's Columbia Generating Station remains off line as one-third of the reactor core's fuel assemblies are swapped out. The 1,150 MW facility, off line since Mother's Day, is scheduled to return to full capacity mid-month. Meanwhile, the Palo Verde nuclear power plant's third 1,336 MW unit returned to full operation on Monday after finishing planned maintenance and refueling [Kristina Shevory].

Western Electricity Prices
Week's End: June 1 - 5, 2009
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 7.73-75.50 0.10-25
Mid-Columbia 15-27 0-10
COB 18-27.50 1.50-10
NP 15* 21.25-31 10-17.50
SP 15* 23-29.50 9.50-16.25
Palo Verde 24-31.50 8-17

* 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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