Western Price Survey / Archives
July 13, 2001
Each day this week saw power prices decrease by about a decade-that is, Monday's top prices were in the 80s, Tuesday's were in the 70s, Wednesdays were in the 60's, Thursday's were in the 50s and Friday deals appeared to drop into the 40s across the West.
By and large, Palo Verde prices were at the top of the market on continued hot weather in the desert, but even they fell substantially as the week wore on.
The steady decline was largely a factor of lower than expected loads in California, although Thursday's Cal-ISO peak came in right about as forecast at 33,400 MW. Still, there was so much extra power in the system that California became a net exporter, pushing as much as 1,000 MW per hour across the borders on Wednesday and Thursday afternoons..
According to traders, the Department of Water Resource's turned into a seller, having to unload contract power at a price as low as 25 mills/KWh Thursday afternoon. Given that the average price DWR paid for mid-summer energy was somewhere north of 150 mills/KWh, there might be some political fuss about the net losses registered this week.
Rivaling DWR's inventory sale for bargain of the week was the initial output from Calpine's newest power plants at Sutter and Los Medanos. Bargain hunters reported being able to pick up afternoon blocks of energy at prices 35 mills and 45 mills/KWh while those units are still in testing mode.
Few major generation outages were reported, though the Cal-ISO list grew marginally bigger as the week progressed. The grid operator has begun releasing a "snap shot" report of outages twice each day, and it carries an hourly estimate of outages as part of its newly revised resource picture on the Web page. What the charts showed this week was that planned outages moved from 525 MW on Monday to 1,635 MW Thursday, as operators took advantage of slack demand to fix small problems before they get bigger. Unplanned outages varied between 1,600 MW and 2,300 MW on unscheduled maintenance at Contra Costa No. 7, Pittsburg No. 3 and Redondo No. 6 units midweek. The full complement of nuclear units is at full or near-full output with the return of the Columbia Generating Station last weekend after a slightly extended refueling outage.
On the water side, Northwest precipitation held steady at 69 percent of normal with runoff forecasts barely half of average. However, in flows are lifting federal reservoir levels to 66 percent of full and another week of slack demand gave managers some near-term comfort. "I see no load and lots of water coming down the river," said one Northwest trader.
The Alberta Power Pool had a brief fling with price and load volatility midweek, as prices shot above 350 mills/KWh and loads climbed about the 7,000 MW mark. Things appeared to calm considerably later in the week, however, and the range of daytime prices slipped back to the 45 mills to 55 mills/KWh range [Arthur O'Donnell].
Natural gas prices presented a mixed bag, with the crucial SoCal Border/Topock index falling more than $1.25/MMBtu while basin prices in San Juan and Permian regions firmed a bit. Topock was likely reflecting and magnifying the national trend for lower prices on a continued increase in storage. American Gas Association injection figures showed 110 Bcf of newly injected supplies-well above the five- year average for this time-bringing storage capacity to 59 percent and allaying any fears of summer scarcity.
The California market was marked by high inventories on pipelines and expectations of operational flow orders being imposed on both Pacific Gas & Electric and Southern California gas systems over the weekend. Midweek maintenance at PG&E's McDonald Island storage facility cut injections by about 20 percent, further packing gas in the lines, but the big reason was lack of demand by power generators.
As a result, activity and prices at Malin were weak, in the $2.95 to $3/MMBtu range.
By the end of the week, SoCal/Topock had fallen below the $4.50/MMBtu mark. San Juan Basin prices picked up to $2.70/MMBtu and the Permian price was $3.29/MMBtu. Both points wee up $0.25/MMBtu from the Monday starting point.
Alberta prices also moved higher to $(C)3.72/Gigajoule, compared to the $3.45/Gj level seen at the beginning of the week [A. O'D.].
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