Western Price Survey / Archives
June 29, 2001
Deep into the first full week of summer, energy consumption throughout the region has remained at moderate levels as cooler weather and scattered rain showers quelled consumer demand for power. While the California Independent System Operator peak demand topped out at 33,500 MW on Thursday, there was more than enough generation in the queue, and utilities throughout the region report little urgency in their daily efforts to meet load. "There's no demand right now," said traders.
Lots and lots of generating units were standing around, with nearly 43,000 MW ready for action in California alone. Cal-ISO reported that only 800 MW of power was offline for planned outages and 2,170 MW worth were taking an unscheduled hiatus midweek. The unavailable units were most a scattershot of small plants, with the biggest outage in the market still the 1,200 MW Columbia Generating Station in Washington state, and even that was returning to service after its month of refueling. Otherwise units at Placerita, Alamitos No. 2, El Segundo Nos. 1 & 2 and Huntington Beach Nos. 1 & 2 topped the Cal-ISO list of outages.
Although the San Onofre nuclear unit reported a transformer explosion on Tuesday, there was no disruption to power flows.
Power prices remained well below the 92 mills/KWh market cap all week and fell even lower on lack of demand and scant trading activity. From the 60 mills to 80 mills/KWh range where things started in California and the Northwest, prices fell mainly into the mid-40s to mid-50s range. Palo Verde kept a bit high, but it too was just reaching up to the mid-50s after starting out at 86 mills/KWh Monday.
There was a slight uptick seen Thursday as traders put together weekend packages. The expectation of hotter weather ahead was behind the move, but most traders said actual sales were few and far between. "Lot's of people didn't need to do anything," said one scheduler, "They're just looking for opportunities to lay off their own generation."
Off-peak power was weak everywhere in the 30s, with Palo Verde falling to 25 mills/KWh. Schedulers reported that the difference between day- ahead and real-time prices was negligible [Arthur O'Donnell].
Gas Traders Redefine Parameters
With natural gas prices continuing to test the bottom ranges of the market, gas traders seem to have redefined their sense of a high price. "If hot weather keeps up and generation demand stays, prices will stay high," noted one trader. However, the "high" level being projected for the Southern California Border was something in the $4.75/MMBtu range--about half of the June monthly index.
Similarly, Northern California gas sellers looked forward to SF CityGate prices for July at $3.70/MMBtu, a price that would make moving gas out of Canada worthwhile.
Basin prices again touched $2.40/MMBtu at San Juan and $$3.29/MMBtu in the Permian region. Topock slid from over $6/MMBtu to $4.40/MMBtu.
Malin was barely traded but quotes came in around $3/MMBtu while the CityGate ranged between $3.35 and $3.50/MMBtu heading into the weekend.
Trading patterns were altered by the end of month schedule and a looming Independence Day holiday stuck right in the middle of next week. "If we have some heat next week, we could start July off with a bang," noted one hopeful seller [A. O'D.].
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