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Western Price Survey

June 9, 2006
Average Loads, Ample Hydro Contribute to Lackluster Trading

With both California temperatures and natural gas prices on the wane, power costs wilted over the course of the week. The price of Southwest power was kept afloat by the summer heat in that region, but ample supplies from healthy generating facilities there and in the Golden State capped any demand-driven volatility throughout the West.

In the Northwest, Columbia Generating Station was operating at 85 percent of its full 1,160 MW of capacity during the latter part of the week. According to owner/operator Energy Northwest, the reduced output was in response to a request by Bonneville Power Administration that the unit be curtailed. The federal authority is running a great deal of water through the region's dams currently and is optimizing hydroelectric generation.

Mid-Columbia power prices reflected the effect of the water situation, with nighttime power hitting zero in the value department on Thursday. Off-peak power moved generally for between a quarter of a mill and 5 mills/KWh this week. Peak power changed hands for a high of 37.25 mills/KWh on Monday but slid to a range of 4 mills to 10.50 mills/KWh on Thursday.

Northern California power was bought and sold for between 60.25 mills and 63 mills/KWh on Monday before sagging to the high forties at midweek. The price dropped as low as 43.50 mills/KWh for weekend deliveries of peak power, but scooted back up to 53 mills/KWh in Friday dealings. North of Path 15 power scheduled for nighttime delivery attracted a high of 31.50 mills/KWh at the beginning of the week, but the value dropped quickly to a range of 8.75 mills to 16.50 mills/KWh on Tuesday. The following day saw the price slip to between 8.50 mills and 11.75 mills/KWh. By Friday the trend had reversed and off-peak power attracted between 26.25 mills and 30 mills/KWh.

South of Path 15 peak-time power traded for between 60.50 mills and 65 mills/KWh on Monday, dropping to between 49.50 mills and 52 mills/KWh at midweek. The week's low at SP15 came on Thursday, when peak power traded for between 49 mills and 55 mills/KWh. On the off-peak power side of the ledger book, trades were recorded at between 18.75 mills and 34 mills/KWh at the beginning of the week, but drew as little as 9.50 mills/KWh on Wednesday. The price stayed between that mark and 14 mills/KWh until Friday, when next-week deliveries were traded for between 30.25 mills and 34 mills/KWh.

According to the California Independent System Operator's status chart of non-operating units, few major units were off line in the state this week. Most curtailments, either planned or forced, were for less than 100 MW at any one facility. Scheduled outages dominated the chart, with both Units No. 6 and No. 7 at Mirant's Contra Costa facility reduced by 137 MW of each unit's 337 MW of capacity.

Peak-time power at the Palo Verde hub drew between 54.50 mills and 56.25 mills/KWh at midweek, a drop of about 10 mills since Monday. Daytime power lost little value heading into the weekend. Friday and Saturday deliveries moved for between 53.50 mills and 59 mills/KWh on Thursday. Off-peak power at Palo Verde opened the week attracting between 18.50 mills and 36 mills/KWh, but slipped to between 10.25 mills and 21 mills/KWh on Tuesday. The spread narrowed further the following day, closing between 11 mills and 14 mills/KWh. On Friday the price screamed up as high as 40.50 mills/KWh in anticipation of more hot weather in the region [Shauna O'Donnell].

Gas Costs Continue to Slide

Natural gas values in the West slumped some this week, weakened by average demand and ample supply. The storage figures out of the Energy Information Administration this week indicated just average injection into the ground last week, but spot prices took no notice.

At the San Juan producing basin, gas that traded for as much as $5.88/MMBtu on Monday changed hands for between $5.05 and $5.12/MMBtu at the end of the week. At the California-Oregon border delivery point of Malin, gas drew between $5.17 and $5.36/MMBtu at midweek, down from the Monday range of $5.80 to $6.09/MMBtu. On Thursday the price slipped as low at $5.10/MMBtu. Southern California gas deliveries shed close to a dollar over the course of the week. Pegged at a high of $6.21/MMBtu on Monday, Topock border deliveries changed hands for between $5.28 and $5.38/MMBtu on Friday [S. O'D.].

Western Electricity Prices
June 5 - 9, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.09-572.17 6.22-65.87
Mid-Columbia 4-37.50 0-6.50
COB 32-56 4-23
NP 15 43.50-63 8.50-31.50
SP 15 49-65 6.50-34
Palo Verde 53.50-66.75 10.25-36

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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