Western Price Survey / Archives
June 6, 2003
At the beginning of this week all signs were pointing to a repeat of the week before: very hot weather throughout the state, high demand for electricity and some possible teetering on the edge of inadequacy for supply reserves. On Monday, the California Independent System Operator forecasted a demand of just over 40,043 MW. The figure was revised downward a couple of times and the final figure for the day settled at 36,029 MW. Tuesday's final peak-demand figure of 32,962 MW did not come close to the initial forecasted demand for the day-39,468 MW.
And that is how the story of the weather and elements of the electricity system in the region played out this week. Each successive day brought lower peak demand; the anticipated severe heat did not materialize and air-conditioning-driven load did not strain the system.
Prices at western hubs followed the mercury, sinking consistently throughout the week.
Palo Verde peak prices began the week at between 63.50 mills/KWh and 75.75 mills/KWh. By Thursday, peak deliveries were trading as low as 42.50 mills/KWh, softened in part by the slack load expected during the coming weekend. The off-peak price for APX trades started the week at between 34.75 mills and 54 mills/KWh, but quickly bottomed out in the 17 mills to 18 mills/KWh range the rest of the week. Still, some off-peak electricity was trading at 54 mills as late as Thursday, reported APX.
Power is "inordinately cheap today," said one trader on Wednesday. "All of California started at a reasonable level, then quickly went soft," he said, summing up the movement in prices during the last three days.
Prices in the Northwest did perk up a bit on Wednesday, as a heat wave moved into Oregon and Western Washington. Mid-Columbia peak and off-peak prices ticked upward by 2-5 mills from Monday to Wednesday, but faded again on Thursday and Friday as more water drove the turbines on the Columbia River. Mid-C peak trades were moving as low as 32.50 mills/KWh for next Monday delivery, though off-peak prices ticked up to about 22 mills for post-weekend delivery.
A couple of large generating units that started the week off line were removed from the Cal-ISO plant- outage list by Tuesday, no doubt helping to ease prices. Four Corners Unit No. 5 went off line on an unplanned outage Saturday morning, as did Mohave Unit No. 2. The total capacity of more than 1,400 MW from those units was available a couple of days later. Mirant's 682 MW Pittsburg Unit No. 7 was also down on June 1-2 but back on the grid on Tuesday. On Thursday morning the 549 MW Elk Hills power facility showed up on the Cal-ISO list because of an unplanned outage.
The West's nuclear-powered generating facilities percolated smoothly this week. Diablo Canyon's two units stayed at full capacity, as did the San Onofre Nuclear Generating Station's Unit Nos. 2 and 3. Washington's Columbia Generating Station has been out for refueling for a number of weeks. It is likely to be back on line next week.
The explosion at the Vincent Substation in March continues to keep a lid on north-to-south capacity on Path 26. It is being maintained at 2,500 MW and according to the Western Electricity Coordinating Council is anticipated back at full capacity by July 1 [Shauna O'Donnell].
Gas Tapers Too
Natural gas pipeline operators were also feeling the pinch brought about by the softened demand in electricity throughout this week. Pacific Gas & Electric's California Gas Transmission system called a system-wide operational flow order with a 0 percent tolerance band for Thursday, June 5, because of high inventory. According to the CGT Web site, no OFO was called for Friday, as the inventory forecast of 4,372 MMcf for that day was within operating limits. CGT did, however, call another systemwide OFO for Saturday, as inventory was forecast to be 4,606 MMcfd. The pipeline operator allowed a tolerance band of 2 percent for that OFO.
The Department of Energy's weekly gas-storage report sang a familiar refrain this week: the country's stores of natural gas continue to be below the five- year historical average. Still, last week's injection did boost the figure for the Lower 48 by 114 Bcf, with a net increase of 10 Bcf in the West.
Prices at San Juan ratcheted downward throughout the week, moving from a range of $5.30 to $5.55/MMcfd on Monday to as low as $4.70/MMcfd on Friday. Prices at the Southern California receipt point had a bit more cushion underneath them, starting the week at just about $6.00/MMcfd and trading on Thursday for up to $6.20/MMcfd [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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