Western Price Survey / Archives
July 9, 1999
With all of the action taking place along the East Coast-where extreme heat led to record loads and severe system stress again this week- Western trading did not seem to be especially heavy and prices fell substantially by trading for Friday and Saturday.
Up until that time, prices at the three major regional hubs followed distinct tiers, but then seemed to converge due to inertia.
Palo Verde and Four Corners topped the market with prescheduled prices in a tight range of 44 mills to 46 mills/KWh before dropping to the 32 mills to 37 mills/KWh range late on Thursday.
The earlier high tariff had surprised local utilities, who claimed their loads were not especially high due to afternoon thundershowers that quelled peak loads. With real-time market prices much more varied and lower-averaging only about 34 mills/KWh for what would be a 16- hour block of daytime power-it was only a matter of time before the prescheduled market fell in line.
Both the California/Oregon Border and California Power Exchange had been holding in the mid-to-upper 30s midweek. COB held a slight edge at 37 mills to 39 mills/KWh while the PX varied from 33.25 mills to 38.3 mills, then slipped to just above 35 mills/KWh for Thursday and Friday deliveries. Off-peak PX prices bounced around between 13 mills and 18.7 mills/KWh. Daily loads on the PX climbed up to 641 GWh and the highest single hour demand was reported at above 31,800 MW.
For Friday deliveries, COB settled down to the 32 mills to 34 mills/KWh range.
Taking up the lowest tier was Mid-Columbia, in a range from 19 mills to 25 mills, falling to the low end by Friday. Sellers tried to push as much of their hydro power as possible south into California to collect higher premiums, either from the PX or from the California Independent System Operator's ancillary services market.
The Alberta Power Pool was beginning to cook after a slow start to the week. Actual loads topped expected demand on Wednesday afternoon and prices spiked to 125 mills/KWh for one hour and between 50 mills and 70 mills/KWh for much of the rest of the afternoon. The next day was more calm-running up to just 45 mills-even though loads were exceeding forecasts in Alberta.
Returning to the marketplace this week is the WNP-2 nuclear plant, which climbed to 62 percent and was holding at that level [Arthur O'Donnell].
Natural Gas Prices Collapse in OFO Frustration
While Western natural gas prices tried to rally after the Independent Day holiday on anticipation of hot, summer weather, the gains to sellers were pretty much wiped out by Thursday when prices for supplies collapsed. While part of the reason was lowered electric demand, the specific complaint was that too much gas had been packed into pipelines entering California, resulting in "operational flow orders" (OFOs) on both the Pacific Gas & Electric and Southern California Gas systems.
"Demand is way off, relative to supply," observed one utility gas buyer. Others had more choice words for the situation and complained strongly that in-state systems were "purposely" cutting deliveries by marketers.
Whether or not that was the case, the delivery-point statistics told the story. Where the San Francisco CityGate usually trades at a $0.20/MMBtu premium compared to the Southern California Border price, both were even at $2.38 to $2.40 MMBtu by Thursday. Malin collapsed from $2.22 to $2.13/MMBtu. With little or no spread in supply prices, there was no reason to pay transport charges out of the Rockies, one Northern California buyer said.
Basin prices from Alberta to Texas languished with little or no movement. San Juan hung to about $2.00/MMBtu and Permian Basin was tight at $2.12 to $2.13/MMBtu.
The Alberta Index registered little change as well, stuck in the $(C) 2.70 to $2.72/Gigajoule range all week [A. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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