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Western Price Survey

July 1, 2005
Summer Blazes in Southwest Pressuring Transmission Operations

Prices in the northern and southern parts of California did not diverge much from one another this week. Daytime deliveries scheduled both north and south of Path 15 converged around the 55 mills/KWh mark on Wednesday. The price was down from Tuesday’s high of 63.50 mills/KWh in the SP15 zone and 62.75 mills/KWh in the NP15 region. Nighttime power delivered throughout California changed hands for as high as 31 mills/KWh on Monday, but the price slipped a couple mills by midweek. Around-the-clock deliveries for July 3-4 traded for between 40 mills and 43.25 mills/KWh on Thursday. A slight price surge was recorded on Friday at NP15, when trading for next-Tuesday deliveries reached 64.50 mills/KWh.

Power costs at the Palo Verde hub in the Southwest stayed close to those in California this week. With temperatures in Nevada, Arizona and parts of California topping 100 degrees, power costs across the region remained comparable. Daytime deliveries at Palo Verde attracted a high of 61 mills/KWh in Tuesday trading, while power packages bought and sold on Wednesday drew between 53.50 mills and 58 mills/KWh. Thursday saw holiday packages trading for between 39 mills and 42.25 mills/KWh.

The pricing pattern for the week was skewed somewhat in anticipation of the Fourth of July holiday. Power packages traded on Tuesday were for deliveries on Wednesday and Thursday, while Wednesday deals were scheduled for delivery on either Friday or Saturday.

At the Mid-Columbia hub, peak power moved for between 41.75 mills and 48.50 mills/KWh this week. Last week the price topped out at 55 mills/KWh. Off-peak power values dropped 10 mills between last week and this week. The only notable exception was for packages to be delivered over the holiday weekend. The price for around-the-clock power delivered July 3-4 ranged from 28.50 mills to 35.75 mills/KWh.

At the California-Oregon border, daytime power recorded a low of 44 mills/KWh on Wednesday, down from last week’s low of 54 mills/KWh. Still, the high price remained the same for the last two weeks—57 mills/KWh. Off-peak power at COB this week ranged from 26.25 mills to 29 mills/KWh. The midweek price at COB was about 3 to 4 mills lower for Friday and Saturday deliveries. Power prices for Sunday and Monday averaged close to 35 mills/KWh.

Fires continue to rage across the Southwest and the summer looks to be shaping up to be busy for firefighters. Already this year just about 1 million acres have burned in Arizona and Nevada alone.

The Western Area Power Administration has encountered repeated fire-related problems on two 345 KV lines that run from the Glen Canyon Dam on the Colorado River near Page, Arizona, said spokesperson LaVerne Kyriss. The fires have been tracking the transmission lines along their north-south route but appear now to be moving west where they present less of a problem for the lines, she said.

Smoke from the Cave Creek fire has caused the lines to trip numerous times in the past week, she said. The municipal utility serving Page had some outages resulting transmission problems, she said.

“Our first concern is to protect the firefighters,” Kyriss said. “The second is to protect the [transmission] equipment, and third is to keep the lights on in Phoenix.”

Arizona Public Service spokesperson Mark Fallon counted four or five fires that are raging in various locations within the utility’s service territory. The fires “really haven’t affected our ability to serve our customers,” he said.

Fallon acknowledged that firefighters planned to “back burn” an area near two 500 KV lines belonging to APS and the Interstate 17 highway. Firefighters want to prevent the Cave Creek fires from damaging the lines or highway.

The biggest problem areas for APS are near the small town called Black Canyon City, Fallon said. At the closest point, the fire is eight miles from the highway and transmission lines, he said.

The fire also is moving near the rural communities of Pine and Strawberry and getting into rugged areas where it is difficult to fight. “It’s just hot right now and dry and windy,” said Salt River Project spokesperson Scott Harelson [Shauna O’Donnell and John Edwards].

Gas Costs Drop Going into Long Weekend

Natural gas prices in the West sank as the week wore on. On Friday, traders took their cue from the slip in the cost of crude oil and the continuing boost in the amount of gas in underground storage. The Energy Information Administration recorded injections of a healthy 92 Bcf into storage for the week ending June 24.

Triggered by Thursday’s drop in the price of month-ahead oil from $57.80 per barrel to $55.90, gas costs shed a couple of dimes across the board in Friday trading. Permian Basin gas, which opened the week at $6.90/MMBtu, closed Friday in the range of $6.30 to $6.46/MMBtu.

At the Southern California border, gas slipped to $5.85/MMBtu on Friday, nearly $0.65 off the Monday price [S. O’D.].

Western Electricity Prices
June 27 - July 1, 2005
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.30-238.04 7.68-37.54
Mid-Columbia 41.75-48.50 19.50-35.75
COB 44-57 23.75-38.25
NP 15 52-64.50 27-42.25
SP 15 54.50-63.50 27.25-43.50
Palo Verde 53.50-61.25 26-42.25

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.

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