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Western Price Survey

Week's End Edition
July 6, 2007
Wholesale Prices Take Wild Ride But Cal-ISO Keeps Cool

The West's first real heat wave ignited wholesale power prices Monday but values returned to sane levels by the end of the week.

On Monday, Palm Springs hit 107 degrees, Phoenix reached 106 degrees and Las Vegas rolled up to 110 degrees. On Tuesday, approximately 1,900 MW of generators tripped offline in Southern California. Then an early morning plane crash outside of San Diego took out a 230-kV transmission line, a 138-kV transmission line and a 12kV distribution line. The loss of those lines knocked out power to a few thousand San Diego Gas & Electric customers for a few hours, according to a company representative.

When the day-ahead wholesale power markets opened Tuesday, traders reacted quickly by driving prices at every Western hub skyward in spite of the July 4 trading holiday. In Southern California, even though no power emergencies were issued by Cal-ISO, daytime power prices reached above 300 mills/kWh. Even in the relatively cool Pacific Northwest, power at one zone traded for 300 mills/kWh.

The crisis was short lived however. Most of the power plants were back online for Tuesday's afternoon statewide peak of 42,500 MW. Demand hit 44,700 MW Thursday

At North of Path 15, prices spread by 73 mills/kWh Monday and swung 209 mills to reach 320 mills for Thursday deliveries. By Friday, peak power averaged about 70 mills/kWh. Off-peak power values moved wildly Monday and Tuesday, but settled to the low 40s Thursday and the mid 40s Friday.

South of Path 15 peak prices moved well past 100 mills/kWh Monday and reached to 334 mills Tuesday. By Friday, prices cooled to the upper 70s. Off-peak power started in the mid 40s on Monday then spread between 33 mills/kWh and 88 mills for Wednesday and Thursday deliveries. By the end of the week, nighttime power values stayed near the mid 40s.

At Palo Verde, daytime power traded between 100 mills/kWh and 171 mills Monday then moved from 210 mills/kWh to 330 mills on Tuesday. Peak prices averaged a mere 80 mills/kWh on Friday. Off-peak block trading was quieter, moving from 40 mills/kWh Monday to 80 mills Tuesday before dropping to the upper 30s Thursday and the low 40s Friday.

At the California-Oregon border, peak power prices averaged 104 mills/kWh Monday and 260 mills Tuesday, then fell to around 65 mills/kWh Friday. Nighttime power moved only slightly from the upper 50s to the mid 40s.

At the Mid-Columbia hub, peak blocks reached as high as 250 mills/kWh Tuesday before dropping back Thursday to around 100 mills and the upper 50s on Friday. Off-peak deliveries moved from the upper 50s Monday to as much as 86 mills/kWh Tuesday. They settled back in around 40 mills/kWh Thursday and Friday.

The heat wave that hammered the West all week is expected to move east over the weekend but temperatures is some parts of California will remain baking.

By Monday, Palm Springs should be about 107 degrees, Phoenix will be 108 degrees and Las Vegas should be about the same. In California, Sacramento may see 101 degrees on Monday but highs elsewhere in the state are expected to be around 96 degrees at most [Charles Redell].

Natural Gas Prices Keep Dropping

The U.S. Energy Information Administration reported yet another injection of natural gas into the nation's stores last week. The nation put 78 Bcf into storage last week, with the West adding 10 Bcf.

Prices were highest this week at the Southern California Border, though they did fall down by Friday. Traders found support for an average price of $6.40/MMBtu Monday and $6.50 Tuesday. By Friday, $6/MMBtu was all they could muster.

The drop at the Permian Basin in Texas was even stronger. Prices there moved from an average of $6.12/MMBtu Monday to $5.55 Friday.

At the San Juan Basin in New Mexico, prices started lower Monday, averaging around $5.80/MMBtu. Traders tried to gain some ground Tuesday but by Friday, prices averaged $5.35/MMBtu [C.R.].

Western Electricity Prices
Week's End: July 2 - 6, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 17.74-999.99 9.44-248.45
Mid-Columbia 51-250 26.25-86
COB 61.25-300 30-58.25
NP 15 65-320 34-89
SP 15 70-334 33.75-88
Palo Verde 74.15-340 31.50-80

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

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