Western Price Survey
June 30, 2006
Power costs moved up with the temperatures in the West after a slight midweek slump. Off-peak values especially took off, gaining 10 to 15 mills/KWh at most Western trading hubs between the Thursday and Friday sessions.
This week's trading schedule was altered to account less for the Independence Day holiday next Tuesday than for the split-month weekend. With July 1 falling on Saturday, the regular schedule would have meant weekend power packages would have bridged June and July. As traders are disinclined to do that, Friday packages were dealt Wednesday, and Saturday deliveries were settled on Thursday. On Friday the typical Sunday and Monday deliveries were exchanged.
After starting the week moving for between 66 mills and 72 mills/KWh, South of Path 15 peak-time power slipped to a range of 58.50 mills to 63.25 mills/KWh on Wednesday. On Friday the daytime price peaked at 62.50 mills/KWh, but off-peak power values at SP15 moved from a spread of 36.25 mills to 44 mills/KWh on Thursday to a range of 45 mills to 48 mills/KWh at the end of the week.
North of Path 15 power scheduled for daytime delivery attracted as much as 71.25 mills/KWh on Monday before fading to a range of 59 mills to 61.50 mills/KWh by midweek. With warm weather blanketing California at the end of the week, NP15 peak power continued to attract more than 60 mills/KWh. Nighttime deliveries at the hub attracted between 35 mills and 42 mills/KWh during the first three days of the week, but ran up as high as 48.50 mills/KWh at the end of the week.
The drop in the temperature in the Southwest cooled off power prices at the Palo Verde trading hub this week. After closing last Friday trading for as much as 80 mills/KWh, peak power opened this week moving for between 67.50 mills/KWh and 71 mills/KWh. The price eased down to between 55 mills and 66.25 mills/KWh by Friday. Early-week trades of low-demand power shed as much as 20 mills in value over last weekend. On Friday, off-peak power changed hands for as much as 53 mills/KWh for next-week deliveries.
Northwest power values also retreated some at midweek. After trading for a high of 61.25 mills/KWh on Monday, Mid-Columbia peak power drew between 49.50 mills and 52.50 mills/KWh on Wednesday, caused by a drop in the temperature. On Friday peak power attracted between 46 mills and 55 mills/KWh. Off-peak power at the hub this Monday traded for as much as 35 mills/KWh. The ratcheting back on hydro flows coupled with a heat wave pushed prices up in the region. Last Monday's price was as low as 5 mills/KWh. Nighttime power costs at Mid-C topped out on Friday at 43.50 mills/KWh.
The vagaries of the weather forced the California Independent System Operator to extend its PowerWatch alert, which was instituted last week, through the middle of this week. Still, demand remained manageable, peaking at just over 43,000 MW on Wednesday [Shauna O'Donnell].
No Fireworks in Gas Trading
Western natural gas values sat mostly under the $6/MMBtu ceiling this week, and in one instance slipped below the $5 mark. Concerns about a possible future glut of stored gas, benign weather in the Southeast and general pre-holiday ennui kept spot market prices on a relatively even keel this week.
Southern California border point gas deliveries at Topock peaked at $5.87/MMBtu on Thursday before sagging to a range of $5.15 to $5.40 mills/KWh at the end of the week. At the northern border, Malin gas deliveries opened the week trading within the narrow band between $5.30 and $5.35/MMBtu. The spread widened to between $5.48 and $5.59/MMBtu on Thursday before tumbling to a range of $5.13 to $5.19/MMBtu on Friday.
Producing-basin gas brought to market from the San Juan, New Mexico region traded for as little as $4.92/MMBtu on Friday, down from Wednesday's high of $5.35/MMBtu.
The Energy Information Administration released underground storage figures for the week ending June 23 on Thursday. The 2,542 Bcf of natural gas in underground storage currently stands at 32 percent above the five-year average. Last week's injection of 66 Bcf was greater than anticipated, leaving the price of gas on the spot market enervated [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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