Western Price Survey / Archives
June 11, 1999
Spot electric power prices moved up, down, then up again this week as traders tried to maintain balance in an uncertain marketplace. While the California Power Exchange has been driving price trends in recent months, for most of this week PX prices did not accurately reflect trading at other hubs.
Some schedulers speculated that relatively higher prices at bilateral hubs early in the week may have been a reflection of price turmoil in other parts of the country, where utilities faced an early heat wave and unusually high loads. Prices in prescheduled trades hovered near 30 mills/KWh at California/Oregon Border and Palo Verde, but the PX barely reached 26.7 mills/KWh for daytime prices midweek.
And while trades diminished and prices softened elsewhere in advance of the weekend, the PX rallied to 27 mills/KWh for Friday deliveries.
The Pacific Northwest appeared to be following its own different drummer, in the form of somewhat more available hydroelectric power, with prices sticking in the 19.5 mills to 25 mills/KWh range.
Off-peak power was greatly influenced by hydro flows. COB and Mid- Columbia started the week at 6.5 mills/KWh and rose only to 8.5 mills/KWh. The PX, in contrast, started at the same 6.5 mills/KWh point, but raised to 11.8 mills on Wednesday, dropped to 8.88 mills/KWh Thursday before ending the week at 11.4 mills/KWh.
Bonneville Power Administration appears to expect low overnight prices to continue, setting its weekend offerings at the now-standard PX - .25 price or 5 mills/KWh for Northwest deliveries, whichever is higher. For COB deliveries, the 200 MW surplus power would go for the higher of PX prices or 8 mills/KWh.
Possibly contributing to the unpredictable price changes were unusually high gas prices in Canada and transmission repairs that curtailed deliveries into California from the Northwest.
The Pacific Intertie system is rated 7471 MW of north-to-south transfer for summer 1999, with the AC Intertie rated at 4600 MW and the DC Intertie at 2871 MW. Early this week, however, the AC line was cut to about 4200 MW on scheduled maintenance. Next week, repairs to the Round Mountain segment will cut capacity even further to 3300 MW, but only for June 14, according to the BPA.
In other resource news, a 360 MW San Juan unit went off-line for repairs on Wednesday. While marketers expected a Colstrip unit to go down on Tuesday, that did not happen and some parties had to dump surplus power on the real-time market at prices well below prescheduled transactions [Arthur O'Donnell].
Natural Gas Moves Higher, then Deflates on NYMEX Trends
Natural gas prices at Western trading hubs appeared to rise with national trading patterns--largely driven by perceived fuel shortages in a tight electricity marketplace--but then curved downward Thursday in response to NYMEX futures prices.
"Prices are falling pretty hard as we speak," one utility buyer noted late on Thursday afternoon. Up to that point, Alberta gas prices had been moving up to $(C)2.90/Gigajoule but were dropping rapidly, ending at $2.82/Gj.
The same pattern was evident at Southwestern hubs. The Southern California Border price climbed to $2.31 MMBtu before falling back to $2.26/MMBtu. San Juan Basin prices reached $2.15/MMBtu but dropped to $2.08/MMBtu and Permian Basin supplies hit $2.25/MMBtu before sliding to $2.18/MMBtu.
The West appeared to shrug off what was termed a "bearish" storage report from the American Gas Association, and gas consumption did not live up to expectations. The PG&E pipeline system experienced what was called a "high inventory condition" in which more gas was put into the pipeline than was being pulled out by end-users.
Some Canadian gas facilities were out of operation this week. A 700 MMcfd McMahon processing plant in British Columbia experienced electrical problems midweek and was offline for a day. Maintenance at Fort Nelson, BC also will keep another 100 MMcfd out of the market through June 28. Traders said the curtailments had less of an impact on Northwest and California supplies but more affected Rocky Mountain prices [A. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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