Western Price Survey / Archives
June 14, 2002
Compared to last week, when brush fires and unit outages brought California to the edge of a system emergency, the Western power market seemed calmer and prices less extreme (in either direction). There were still system concerns in Alberta, Canada, and threatening fires in Colorado, but an increased sense of stability prevailed throughout much of the region.
Though cheap hydroelectricity was still setting the price in the Pacific Northwest, there was some tightening of supplies noted midweek that pushed daytime Mid-Columbia prices into more normal ranges. However, as the weekend approached, any sense of generation deficits disappeared and NW prices collapsed into the single digits. California peak loads moderated to the 34,000 MW level and some suggested the California Independent System Operator might find itself in an overgeneration situation this weekend.
Monday was touch and go for the Alberta Power Pool, which issued an emergency alert that lasted for about an hour and a half. The Pool warned that all available resources were in use, as the clearing price spiked to over 780 mills/KWh. Even after the emergency ended, Alberta suffered from a very limited 50 MW connection to BC because of the outage of the Cranbrook/Langdon 500 KV line.
The Northwest showed signs that the flood of snow melt and excess hydroelectric generation might be diminishing at the same time that load is increasing. Though the Bonneville Power Administration was still offering 500 MW of daily surplus, operators of the Columbia Generating Station were asked to bring the unit up to full capacity Thursday. The 1,050 MW unit had been reduced to just 45 percent last weekend.
Mid-Columbia power prices moved up to the 17 mills to 25 mills/KWh range midweek but dropped to 9.5 mills to 13 mills/KWh for Friday/Saturday deliveries. Off-peak was still in the basement at 5.5 mills to 6 mills/KWh, however.
The low overnight prices spread throughout the region, except at NP15, which was still up around 16 mills/KWh for off-peak even heading into the weekend. Traders attributed the continuing limits on the DC Intertie and the California/Oregon Intertie, preventing NW power from flowing freely southward, resulting in a pretty wide range of off-peak prices at NP15 for the week.
After its brush with brushfires last week, the DC line was back to 2,990 MW southbound and the COI was returned to its 4,100 MW summer load.
California peak period prices bounced around from 25 mills/KWh to 33 mills/KWh, with the chart looking like a bell curve. COB ended in the 20 mills to 22 mills/KWh range. Palo Verde peaking power was reported in the 35 mills to 36.5 mills/KWh range midweek but slipped to about 30 mills/KWh later. Temperatures in the Southwest were seasonably hot but not extreme. "Temperatures and loads are down," said one scheduler. "The excitement is waning."
The off-peak prices at Palo and SP15, in the 9 mills to 10.5 mills/KWh range, seemed less influenced by NW hydro than set by the marginal price of coal generation [Arthur O'Donnell].
Gas Prices Lose Momentum
There was little sense of direction in natural gas markets this week. Daily prices moved up and down within relatively narrow ranges-except for a price collapse at the San Juan Basin late in the week. National storage figures were slightly less than anticipated at 83 Bcf but Western trends seemed to indicate a higher than average level of injection.
Certainly the difference in today's gas price compared to still high prices for July and August indicated an incentive for storing now and selling later. "The forward market is telling you to store," said one trader. As pipeline volumes increased, though, it put even more downward pressure on prices heading into the weekend. The PG&E Redwood Path was packed at nearly 1.9 Bcf this week and a high inventory OFO was in effect.
Southern California Border sellers tried to maintain a $3/MMBtu price but gave way to the $2.83 to $2.95/MMBtu range Thursday. Permian Basin prices dropped from $2.95 to the $2.70 to $2.80/MMBtu range. San Juan, however, tumbled to as low as $1.72/MMBtu from $2.50/MMBtu earlier in the week.
Malin weakened to $2.40 and the SF CityGate reverted to about $2.60/MMBtu.
Alberta prices were lackluster, falling to $(C) 3.18/Gigajoule from $3.39/Gj. Mild weather was blamed for the price drop [A. O'D.].
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