Western Price Survey / Archives
June 23, 2000
Western energy markets began and ended the week at the 100 mills/KWh level for peak power at all bilateral trading hubs, but it was the roller coaster ride in between those two end-points that kept everyone hopping. Although it appeared that prices would begin to stabilize after last week's emergency situation, a midweek surge on the California Power Exchange signaled that there was still severe price volatility on hand.
On Wednesday's bidding, the CalPX shot up to 132 mills/KWh for daytime deliveries on Thursday and 107 mills/KWh for the whole day average. The reversal completely caught traders by surprise and dragged bilateral prices higher.
The CalPX hour-ahead market took off like a rocket with single hour prices hitting 320 mills at peak on Wednesday afternoon, then zooming upward again on Thursday to 604 mills/KWh.
Just a few weeks ago, those prices would have been record-breakers, but now they are just part of the Summer 2000 charts.
The California Independent System Operator's imbalance energy market frequently hit the $750/MW limit on Wednesday and Thursday afternoons.
The great mystery was: Why?
"Nobody has a clue," one trader observed. "There's no change in transmission, no change in generation and loads are down." Still, many attributed the prices to hot weather in California and a lingering trigger-happy approach to pricing.
While several relatively large generation units in the Pacific Northwest are offline for scheduled maintenance (this normally being a low-load, low price time of year), the only unplanned outage of note was at Colstrip, where the 740 MW Unit No. 3 tripped early Tuesday morning. Otherwise, nuclear generation remains at full capacity, except for occasionally wavering to 99 percent at Palo Verde No. 3. Transmission limits on the California/Oregon Intertie were set for repair work on the Round Mountain/Table Mountain line and to accommodate the NW generation outages, as well as California load- related limits.
But it really seemed that the unexplained spikes on the CalPX were the main market drivers this week.
The Mid-Columbia price moved down to about 59 mills midweek but returned to 105 mills/KWh for Friday/Saturday trades. The California/Oregon Border price also dropped into the 60s before resuming its 100 mills perch.
Off-peak power was pulled by the CalPX from the mid-30s into the low 40s at Mid-C and COB. The exchange's clearing price ticked up to 45 mills/KWh for Friday off-peak deliveries.
In the Southwest, Palo Verde daytime energy moved from 72 mills to 100 mills/KWh and overnights rose to 40 mills/KWh.
The Alberta Power Pool also exhibited shaky behavior, featuring wide price ranges with a top price for the week of 506 mills/KWh [Arthur O'Donnell].
Gas Volatility Tagged to NYMEX
Western natural gas prices were just as volatile as electricity prices this week, although the market dynamic was set by national NYMEX trading rather than any local phenomena.
As in the power market, prices first seemed to be returning to earth from a high promontory, dropping substantially on Tuesday. But when the weekly gas storage figures were released on Wednesday, the market reverse course and has not looked back-taking back all of the discount and then some.
The Southern California Border price was a real barometer, plunging from $4.72 to $4.40 then spiking back to $4.93/MMBtu.
Prices at the Southwestern basins followed the pattern and the spreads, with Permian ending out at $4.39 and San Juan hitting the $4.10 to $4.13/MMBtu range on Thursday. At their low points, prices were below $4/MMBtu at both hubs.
In Northern California, traders noted the accordion-like pull and squeeze between Malin prices and the PG&E CityGate-anywhere between $0.40 and $0.71/MMBtu depending on the day. Malin ended out the week at $4.39/MMBtu while the in-state price mimicked the SoCal Border rate.
In Alberta, the gas price index moved in the $(C)4.71 to $5.32/Gigajoule range, hitting the high point at the end of the week [A. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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