Western Price Survey / Archives
June 20, 2003
Prices at Western hubs perked up during the early part of the week as normal to above-normal temperatures returned to the region. The movement was quickly tempered on Thursday as trading was conducted for Friday and Saturday deliveries of electricity- typically lower-demand days. The typical Thursday taper was also influenced by the anticipation of slightly cooler weather. Aside from a couple of days a few weeks ago, when the California Independent System Operator called its first system emergency in quite a while, a searing hot spell has yet to take hold of the region this summer season and prices at Western hubs have moved to a heat-up/cool-down beat weekly.
Though temperatures early in the week were normal for this time of year, that is, in the triple digits in parts of California's Central Valley and Nevada, as well as most of Arizona, a late-week cooling trend pushed power prices down. By and large, the heat was not abnormal for this time of year, but compared to last week's cooler days, the first few days of this week were met with the switching on of air conditioners throughout the West.
At Palo Verde, power prices rose steadily from Monday through Wednesday. Starting the week at between 48.50 mills and 54 mills/KWh, power for delivery at peak times was moving at between 55 mills and 61.75 mills/KWh by Wednesday. Prices for off-peak power at Palo Verde also stayed on an upward trajectory, selling for anywhere between 17.75 mills and 28 mills/KWh at the beginning of the week and sailing into the 31 mills to 39.50 mills/KWh for end of week deliveries.
Peak power at Mid-Columbia hit the 40 mills to 46 mills/KWh range on Wednesday, a level that has not been reached at that hub in a while. On Thursday the prices dipped to a spread of 39.50 mills to 40.75 mills/KWh but moved back upward by about 5 mills on Friday. Off-peak power was trading nearly as high at the hub by the end of the week. Friday off-peak trades were moving between 39 mills and 41 mills/KWh. Flows have been backed off federal dams in the Northwest, constricting the availability of relatively cheaper hydroelectric generation.
Palo Verde Nuclear Generating Station's Unit No. 3 was operating at 40 percent capacity on Monday and by Wednesday its entire 1352 MW had been taken off line. A leak in the condenser was diagnosed as the problem. The unit is expected to be shut down for a few days.
Another nuclear unit, Columbia Generating Station also remains off line this week. While conducting tests to bring the unit back to operation after a month-long refueling outage, operators discovered a valve that was not functioning properly. Energy Northwest spokesperson Don McManman said that diagnosis and repair of the balky equipment was well on its way and Columbia should be ramping back up in a "matter of days."
There was little concern about supply availability throughout the week. Loads in the California Independent System Operator control area did not warrant a great deal of concern as they did not even break the 35,000 MW barrier. Total megawatts out of service, as reported on the Cal-ISO Web site, topped out at about 5,000 MW. The 260 MW capacity La Paloma Unit No. 3 joined Unit Nos. 2 and 4 on the outage list over last weekend, but was back in service on Monday- only to go off line again on Thursday.
Few transmission constraints of note occurred this week. On Wednesday, congestion backed up north to south flows on Path 26 for a few hours. For HE 13 through HE 17, no capacity was available in that direction in Cal-ISO's hour-ahead market. The same was true the following day for HE 14 through HE 16.
The Army Corps of Engineers ended its practice of posting electric power output data for federal dams in the Northwest at the beginning of this month. The Corps continues to post flow data, spill levels and reservoir elevations on its Web site [Shauna O'Donnell].
Flow-F-Os Keep Coming
Operational flow orders bookended the week on PG&E's California Gas Transmission system. The pipeline operator called an OFO on both June 14 and 15. The Saturday order was a Stage 3, system-wide event with a 4 percent tolerance. Sunday's OFO was also a Stage 3, system-wide order, though with no play in the tolerance band. Most of the week was uneventful, but by the end of the week, OFOs were called for June 20 and 21. Shippers had a little more to play with on Friday, however, as the OFO had wiggle room of 9 percent. Saturday's OFO tolerance was 6 percent.
Also on Thursday, the Energy Information Administration released its weekly numbers on natural gas storage levels in the country. During the week ending June 13, about 114 Bcf had been injected into storage, 13 Bcf of that in the West. Though the quantity of gas in storage remains well below historical averages, the EIA has reported injections of more than 100 Bcf for each of the three previous weeks.
Price movements throughout the week were fairly predictable. During the first three days of the week the price at Western hubs were nudged gentle upward concurrent with electricity prices. Then, on Thursday and Friday prices slipped a bit and some hubs but rose at others. For example, San Juan gas was moving at between $5.10 and $5.15/MMBtu on Wednesday, but slipped to between $4.63 and $4.78/MMBtu according to one reporting agency. CityGate gas started the week trading at between $4.92 and $5.14/MMBtu, edged up to between $5.26 and $5.35/MMBtu on Wednesday, but then found a bit of renewed life on Friday, rising to between $5.16 and $5.30/MMBtu [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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