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Western Price Survey

Week's End Edition
July 10, 2009
Power Prices Return From Holiday

Electricity prices finally recovered from the July 4 weekend and rose slightly on hotter weather and increased demand, posting increases between $3 and $5/MWh this week.

But low natural gas prices and timid overall electricity demand -- a result of the current recession -- continue to keep a lid on prices.

The Northwest will see temperatures in the 70s and 80s this weekend and a ridge of high pressure in the Southwest will push heat into much of California. But the coast will remain cool, with temperatures in the 60s in San Francisco. Los Angeles will be mixed, with temperatures in the mid-80s downtown and the 70s at the airport. Phoenix will cook in triple-digit weather.

Since Monday, trades for California daytime power rose $4 to $5 to average around $33/MWh at North of Path 15 and South of Path 15. Average prices for nighttime power rose $4, to reach $25.13/MWh in the north and $24.02 in the south.

Palo Verde peak and off-peak trades also gained $5, settling at an average of $36.49 and $23.77/MWh, respectively.

Daytime Mid-Columbia values added $4 to settle at an average of $24.67/MWh, while nighttime values increased over $5 to $21.65. California-Oregon border values were a few dollars higher (see chart).

Peak power demand climbed from 34,900 MW on Monday to 35,200 MW on Wednesday, according to the California Independent System Operator. Usage ebbed to 35,000 MW on Thursday, but was projected to shoot to 37,000 MW on Friday before falling to 34,100 MW on Saturday and 33,300 MW on Sunday.

It's been a hectic week at the Columbia Generating Station in Washington state. On Monday, the 1,150 MW facility was running at full capacity after a fire started in the insulation surrounding the plant's turbine system a week ago. But on Thursday, the plant powered down and by Friday was running at 55 percent capacity while a pipe leak in the condenser system was repaired.

Meanwhile, full power was restored at the Diablo Canyon nuclear power plant July 5 after a blown fuse the previous week caused a loss of power to its transformer support system.

Working natural gas in storage last week climbed by 75 Bcf to 2.796 Tcf, the second-highest point for any week in July for the past 15 years, the U.S. Energy Information Administration reported. Storage is 27.4 percent higher than the same period last year and now exceeds the five-year average by 19.3 percent.

Western supplies bumped up by 3 Bcf to 434 Bcf, leaving inventories 39.1 percent higher than a year ago and 27.3 percent above the five-year average.

What's Ahead: A surplus of natural gas supplies and moribund demand will continue to crimp prices and keep Henry Hub trades below $4/Mcf until late this year, the EIA said in its monthly short-term energy outlook, released Tuesday. However, a projected economic rebound next year is likely to lift prices from an average of $4.22/Mcf in 2009 to $5.93/Mcf in 2010. Last month, spot prices averaged $3.91/Mcf, 5 cents below May's average.

According to the EIA, consumption of natural gas is slated to fall 2.3 percent this year and remain flat next year. Although residential, commercial and industrial sectors will trim their natural gas use, utilities will actually increase their consumption by 2.4 percent this year as they take advantage of lower natural gas prices compared to coal.

This year, companies and homeowners are projected to use 2 percent less power than in 2008, but electricity prices haven't responded yet to lower power consumption, the EIA stated. During the first quarter of the year, residential electricity prices jumped 8 percent versus the first quarter of 2008. But lower costs for natural gas have yet to be passed on to electricity consumers, and likely won't filter down to them until later this year [Kristina Shevory].

Western Electricity Prices
Week's End: July 6 - 10, 2009
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 14.30-85.59 10.50-33.05
Mid-Columbia 19.50-25.25 15.50-22.25
COB 24-28 17.75-23.50
NP 15* 27.25-33.25 20.20-25.50
SP 15* 27.50-34.20 19-24.50
Palo Verde 30-38.50 17-24.50

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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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