Western Price Survey / Archives
June 25, 1999
The market image for the week is that of a swimmer executing a perfect swan dive off the high board into the cool waters below. Power prices followed the same trajectory as that swimmer this first week of summer, bounding upward on Monday only to dive headfirst into the pool and ending the week with a splash of moderate prices.
Expecting a heat wave based on weather reports last Friday, power traders pushed energy prices well above 40 mills/KWh at bilateral hubs for deliveries on June 21. Utility loads were relatively high and several areas of the Desert Southwest experienced temperatures greater than 100 degrees, but the high pressure zone was not as extensive or as widespread as projected. Cloud cover and some rainfall put a lid on temperatures in the Southwest, causing loads and prices to trail off considerably midweek.
The California Power Exchange was a little behind the trend. PX daytime prices moved up to 40.7 mills/KWh for Tuesday deliveries as daily scheduled loads crossed the 600 GWh mark for the first time this year. This was followed by a big drop to 29.3 mills/KWh by Friday's bidding. Off-peak trailed to the lower end of the 13.5 mills to 15 mills/KWh range by the end of the week.
Both Mid-Columbia and the California/Oregon Border began the week above 40 mills/KWh but fell to nearly half that by Friday. Mid-C transactions were last reported at 19 mills/KWh for peak and 5.5 mills/KWh for off-peak. COB eroded to stuck at 25.5 mills to 26.5 mills/KWh for peak and 10.5 mills/KWh for off-peak. Increased hydro availability and repair curtailments on the California/Oregon Intertie to 4100 MW may have been factors in the price differences between the two northern hubs.
Heading into the week, traders had pushed Palo Verde prices above 50 mills/KWh. The mark was so high that a weekend outage at the Palo Verde nuclear unit No. 2 did not even impact prices except on the real-time market Saturday. By the time PV No. 2 was back in service on Monday, the landscape had altered considerably and prices were on their way down. By Thursday's trading, Palo Verde weekend prices had dropped to 29 mills to 33.5 mills/KWh and off-peak prices fell to 12.5 mills to 13 mills/KWh.
The Alberta Power Pool got caught in a resource squeeze on Tuesday, as several generators were lost and prices spiked above $500 mills/KWh for the late afternoon peak period. The high mark was $998 mills/KWh for a single hour. Pool operators said that a contributing factor was Bonneville Power Administration's inability to provide reserve capacity because of its own market conditions. The Alberta Pool had to issue a curtailable load alert and a brief firm load alert on Tuesday. For the rest of the week, the pool calmed down into the 33 mills to 38 mills/KWh range, while off-peak power fell to 5.8 mills to 12.25 mills/KWh [Arthur O'Donnell].
Gas Moves Steady to Lower
Natural gas prices in the West held fairly steady this week but for some softening in the San Juan Basin as a TransWestern Pipeline compressor motor failure backed up supplies in the region. About 100 MMBtu/day was taken out of the delivery pipeline through July 7. Rather than driving market prices higher, the incident depressed San Juan prices even as the national NYMEX screen moved upward on Thursday.
San Juan prices moved between $1.98 and $2.05/MMBtu, significantly lower than the $2.10 to $2.16/MMBtu range recorded at Permian Basin.
Southern California Border prices were slightly elevated in the $2.30 to $2.35 MMBtu vicinity.
Alberta gas prices eroded all week, moving from $(C)2.80 Gigajoule down to $2.73 Gj [A. O'D.].
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