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Western Price Survey

Week's End Edition
June 20, 2008
Power Prices Rise on Scorching Heat, Natural Gas Demand

High spring runoff and full nuclear capacity barely made a dent in power prices this week as searing temperatures and high natural gas values kept power values aloft.

On Friday average trades ranged from $103.08/MWh at the California-Oregon border to $119.92/MWh at Palo Verde, though high-marks for power reached $160/MWh this week at SP15.

Triple digit temperatures blanketed the West this week; on Thursday Palm Springs tied an old record of 116 degrees and Woodland Hills, outside of Los Angeles, reached a new record of 109 degrees. Even San Francisco baked -- relatively -- with temperatures reaching the high 80s.

On Wednesday the Los Angeles Department of Water & Power reported the second-highest peak energy demand for the month of June. The municipal energy provider reached 5,509 MW, a few short of the 5,531 MW record set in June, 2006.

With southeastern California baking in 100-degree plus heat, on Friday the California Independent System Operator issued a restricted maintenance call for power plants as power demand was expected to exceed 45,923 MW, up from 37,700 MW on Monday. No significant transmission or generation outages were reported, however.

At North of Path 15 and SP15, peak prices had tumbled $16 to $17 on Thursday, but finished the week around $117/MWh, a drop of $3 from Monday values. Average off-peak trades over the week rose $31 to around $92/MWh.

Average Palo Verde prime values ended the week 17 cents lower at $119.92/MWh. Prices Wednesday to Friday slid $21. Off-peak trades increased $27 to an average of $89.96/MWh.

In the Northwest, spring runoff is keeping the regions reservoirs and dams full. The Columbia Generating Station in Washington state is still running at less than full capacity after ramping down because of excess hydropower.

Mid-Colombia saw average peak prices rise $23 to an average of $63.88/MWh. After hitting $85.63 on Wednesday, prices shed $18 on Thursday. Average off-peak prices fell from $9.46 on Monday to 35 cents on Thursday, before rebounding to $3.01/MWh.

Average daytime power at the California Oregon border climbed $13 through Wednesday before dipping Thursday to $98.84. Average nighttime power steadily climbed this week and ended $26 higher at $65.77/MWh.

Even Portland and Seattle finally saw summer temperatures with highs nipping at 80 degrees. By Monday, temperatures are expected to drift down to more seasonal levels [Kristina Shevory].

Natural Gas Prices Remain High on Low Storage, Hot Weather

Natural gas prices added an average 30 cents to 50 cents this week on reports of lackluster storage and hot weather across the United States that forced customers in the East and Midwest to flip on air conditioners.

A dip in prices on Friday was not substantial, as final average values remained at levels usually only seen during hurricanes or severe winter weather: Western prices ranged from around $11.33/MMBtu at the San Juan Basin to $12.40/MMBtu at Pacific Gas & Electric's CityGate.

The rise in natural gas hub prices corresponded to a runup in natural gas futures, which hit a 29-month high on Wednesday on hot weather, expectations of a disappointing storage report, and general strength in commodities, including crude oil. Traders are also concerned about a possible storm in the North Atlantic.

In the West, storage eked out a 12 Bcf increase last week to 279 Bcf, leaving stocks nearly 21 percent below last year and 8 percent below the five-year average.

The Independence platform in the Gulf of Mexico, the region's biggest natural gas facility, finally returned to production on Monday, the U.S. Energy Information Administration reported. The platform had been shuttered since early April to repair a pipeline leak. While the hub can process up to 1 Bcf/d, the rig has only been processing 900 MMcf/d. Its return to production, however, did little to shave natural gas prices even though it accounts for 12 percent of the Gulf of Mexico's natural gas [K. S.].

Western Electricity Prices
Week's End: June 16 - 20, 2008
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 12.40 - 190.06 7.60 - 89.88
Mid-Columbia 28 - 97 -20 - 13.50
COB 82 - 115 36.50 - 68
NP 15 114 - 145 60 - 95.25
SP 15 115 - 160 60 - 95
Palo Verde 111.50 - 146 61.50 - 94

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 Chris Raphael, editor with questions regarding Price Survey Content.

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