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Western Price Survey

Week's End Edition
June 17, 2011
Western Power Prices Slip

After a midweek struggle to eke out gains, Western day-ahead power prices lost between 40 cents and $2.25 in the Friday-to-Friday trading period from June 10 to June 17.

Although California hubs' off-peak spot prices managed to break the $10/MWh mark Friday, prices stayed flat during the week. Northwestern off-peak power values were unable to break out of negative territory; Mid Columbia recorded a low spot price of -$10/MWh Friday.

Western natural gas prices also recorded losses compared with June 10. By June 17, Malin gas lost almost a quarter, closing at $4.35/MMBtu. PG&E CityGate gas lost 23 cents, closing at $4.68. Southern California Border gas slipped 21 cents, closing at $4.42/MMBtu.

Natural gas futures wobbled throughout the week. The U.S. Energy Information Administration reported a 27-cent drop in futures between June 8 and June 15, with contracts ending trading Wednesday at $4.58/MMBtu. The agency reported that on June 8, "the July futures contract plunged 33.7 cents (6.9 percent), in a mysterious 'flash crash,' ignoring real-world market fundamentals. The price fireworks were attributed to either a trader entering an accidental extra zero on a sell order ('fat finger syndrome') or a black-box automated trading algorithm that had its buy/sell signals crossed." Henry Hub futures ended trading Friday, June 17 at $4.36/MMBtu, according to Bloomberg.

Working natural gas in storage rose to 2.256 Tcf by Friday, June 10, after a 69 Bcf net injection, according to the EIA. Current stores are now 275 Bcf below last year's storage amount for this period.

Here's how average peak-power prices at Western hubs fared over the trading period:

  • Mid-C: Down about $1.10 to $29.75/MWh.
  • California-Oregon Border: Lost roughly $2.20 to about $34.05/MWh.
  • NP15: Slipped $2.25, ending at $37.75/MWh.
  • SP15: Lost almost 40 cents, trading at almost $40.25/MWh.
  • Palo Verde: Down $1.75, trading at almost $39.20/MWh.

Western nighttime price values eroded, with hubs losing between about $2.70 and $5.80 over the trading period (see chart). The Bonneville Power Administration continued periodically cutting non-hydro generation, including wind, to cope with surplus hydropower and protect fish under its "environmental redispatch" initiative. The agency cut 12,900 MWh of generation June 10 through June 15. Since May 17, the agency has curtailed a total of 79,119 MWh of generation.

Peak demand on the Cal-ISO grid reached 34,831 MW Wednesday afternoon, and Cal-ISO expects another peak of more than 37,700 MW next Wednesday, June 22.

What's ahead: Seattle should have dry, warm weather early in the week with temperatures in the 60s. Portland should be slightly cooler later in the week. Temperatures in the 70s are forecast for San Francisco, with cooler weather starting Wednesday. Southern California's desert locations will reach triple digits for the first time this year either Tuesday or Wednesday. Slightly cooler weather is expected in the region starting Thursday [Linda Dailey Paulson].

Western Electricity Prices
Week's End: June 13 - 17, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 14.36-77.86 12.33-27.24
Mid-Columbia 18.75-31.50 (-)10-5
COB 21-36.50 (-).50-5
NP 15* 29.10-39 5-12.50
SP 15* 30.60-44 6.75-15
Palo Verde 34-43.25 6.25-16

* 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.

Please contact with questions or comments about this site.

Contact Chris Raphael, editor with questions regarding Price Survey Content.

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