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Western Price Survey

Week's End Edition
June 27, 2008
Hot Weather Ignites Power Values

Mild weather dampened electricity prices across the West during the first half of the week, but a shot of hot temperatures boosted prices in time for the weekend. Prices ended higher at every major trading center except for California-Oregon border off-peak prices.

There are over 1,000 fires burning across California; however, none seem to have downed any transmission lines this week, according to reports from the Western Electricity Coordinating Council and California Independent System Operator.

However, Western heat continues, not helping the state's firefighting efforts and doing little to lower electricity prices.

Inland California and the Southwest were expected to bake under triple-digit temperatures this weekend with highs of 111 degrees in Palm Springs and 110 degrees in Phoenix, the National Weather Service said. A shifting jet stream has also let warm temperatures sweep into the Northwest, with highs expected this weekend of 96 degrees in Portland and 90 degrees in Seattle. Los Angeles and San Francisco are forecast to have temperatures in the low 80s and high 60s, respectively, and storm warnings -- which mean lighting strikes -- will not likely help fires.

In Northern and Southern California, prime values lost $12 through Thursday to $105.16 and $105.24. On Friday, average prices settled higher at an average of $119.47/MWh in the north and $118.96 in the south. Off-prime trades were the same, with prices around $58 on Thursday but $83 on Friday.

Daytime Palo Verde power slipped $14 through the week to $102.22 on Thursday before climbing Friday to an average of $117.91/MWh. Off-peak prices lost $14 to $57.55 on Wednesday, then jumped to an average of $82.90/MWh by Friday.

Average Mid-Columbia peak power prices fell Wednesday $33 to $22.42/MWh, but then staged a nearly $40 rebound Thursday to $61.71. Friday's prices ended at an average of $90.97/MWh.

Off-peak average values were relatively weak through the week, dipping into negative ranges before gaining 29 cents Thursday to close at an average 17 cents. Prices then jumped to an average close of $14.96/MWh.

At the California-Oregon border, daytime power slid through Wednesday to an average of $72.60, but then regained $28 to average $100.42/MWh by Friday. Nighttime values finished Friday at an average of $51.32/MWh.

Power demand has fallen every day this week, dipping from a high of 40,000 MW on Monday to 35,800 MW on Thursday, according to the Cal-ISO. Friday, demand was expected to rise to 36,400 MW. This weekend, warmer weather is expected to bump demand to 37,500 MW [Kristina Shevory].

Natural Gas Rises on Low Supplies, Increased Air Conditioner Use

Natural gas values in the West dipped through Thursday, losing 50 cents to 60 cents on average despite a report of a lower-than-expected increase in supplies last week. On Friday, prices staged a 20-cent to 40-cent rebound on expected hot weather and increased power usage, but still ended the week lower than where they started.

The western United States saw an increase of 10 Bcf to 289 Bcf, leaving supplies 20 percent below last year's and 8 percent lower than the five-year average, the U.S. Energy Information Administration said.

Natural gas in storage nationwide climbed by 90 Bcf to 2.033 Tcf, according to the EIA. Stockpiles are nearly 16 percent below last year and 3 percent less than the five-year average.

According to the EIA, for the first time since December 2005, Henry Hub spot prices, considered the national benchmark, cleared $13/MMBtu. Prices could go even higher if this summer is hot because supplies are already short. A hurricane plowing through the Gulf of Mexico could also wreck platforms and pipelines and drive down production.

Lower liquefied natural gas imports have also contributed to the run-up in natural gas prices. For the first half of the year, volumes have been less than 200 Bcf, the EIA said, versus 460 Bcf last year. LNG imports are down because European and Asian customers can pay more than Americans [K. S.].

Western Electricity Prices
Week's End: June 23 - 27, 2008
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 7.79 - 148.92 7.59 - 56.77
Mid-Columbia 10 - 96 -5 - 27.75
COB 60 - 105 38.75 - 68
NP 15 100 - 138 56 - 95.25
SP 15 99.75 - 142 55 - 95
Palo Verde 99 - 135 54 - 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.

Please contact with questions or comments about this site.

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

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