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Western Price Survey

Week's End Edition
July 13, 2007
Day-Ahead Wholesale Power Prices Chill Out as Heat Fades

The week started off girding for high heat predicted especially in the Northwest. The National Weather Service issued excessive heat warnings, but some extreme temperature predictions did not match reality. Still, records fell in the Puget Sound and coastal areas of Washington. Seattle recorded 98 degrees on Wednesday, and places from Bellingham to Hoquiam recorded new all-time high temperature records. Coastal Oregon and the Willamette Valley soared into triple digits on Tuesday.

Mid-Columbia peak prices, which began the week around 67 mills/kWh, slumped Thursday as temperatures cooled and remained 10 mills below early-week values even for packages traded Friday, which normally jump. Off-peak trades, however, went as high as 41 mills Friday, up an average of 3 mills from early-week trades. California-Oregon border prices largely tracked Mid-C values, save for a difference of a few mills here and there.

The Columbia Generating Station was back up to full power by the second week of July. After the refueling outage ended in late June, staff at the 1,150 MW nuclear reactor dealt with a few other maintenance issues before returning the plant to full power. A condensate booster pump went out during an oil change, leaving only one of three operating, leading to a shutdown. That fixed, some extra attention to control-rod monitors led to the plant operating at 60 percent to 85 percent capacity in the first week of July.

As coastal areas and the inland Southwest cooled off relative to last week, prices paid heed. By Friday, predictions of a return to warmer-than-normal temperatures in the Southwest caused prices in Friday trades to firm.

Palo Verde peak power commanded as much as 80 mills/kWh on Monday, dipped to 60 mills by Thursday, and went for an average of around 70 mills/kWh in Friday trading.

High prices for the week were almost all set on Monday. South of Path 15 saw peak blocks trading as high as 85 mills/kWh. Peak power there dropped well below 60 mills to 57.75 mills/kWh by Thursday. North of Path 15 peak power topped out at 78 mills/kWh on Monday.

Off-peak electricity prices at Western hubs firmed during the week and peaked in Friday trades. High prices for nighttime power at Palo Verde picked up almost 16 mills/kWh from lows on Wednesday to fetch 54 mills Friday. At NP15 and SP15, off-peak prices gained about 6 mills for the week, ending Friday around 46 mills/kWh.

It's worth remembering after last week's hot spell that maximum temperatures in triple digits are the norm this time of year in parts of Southern California, Nevada, and Arizona, some of which were not reaching average maximums by the middle of the week [Alan Mountjoy-Venning].

Robust Injections Deflate Gas Prices

The injection season continued apace last week. A U.S. Energy Information Administration Thursday release indicated that working gas in underground storage added 106 Bcf for the week ending July 6. Storage levels are ahead of last year in the West and 16.4 percent above the average of the previous five years. Total storage in the continental United States is 96 percent of last year and 16.6 percent above the average.

The weekly range between high and low prices for day-ahead gas was small this week, as was the price differential at key Western hubs. All of the hubs listed at left reached highs in Wednesday trades and bottomed out Friday after the storage report.

Southern California Border prices led the pack again this week, topping out at $6.45/MMBtu but averaging just $5.84/MMBtu Friday. Some of the lowest prices tracked, at Arizona's San Juan Basin, were within 10 percent of the SoCal levels all week. Alberta hub prices fell to a low of $5.24/MMBtu.

The EIA's short-term energy outlook released Tuesday predicted that the Henry Hub natural gas spot price is expected to average $7.91/Mcf in 2007, a 98 cent/Mcf increase from the 2006 average. The 2008 average will be $8.39/Mcf. The report also stated that total natural gas consumption is expected to rise by 4.3 percent in 2007 and 1.1 percent in 2008. However, the third quarter of 2007 will be colder than the 2006 third quarter, dampening gas demand in the months ahead this year [A. M-V.].

Western Electricity Prices
Week's End: July 9 - 13, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 12.02-700.95 11.66-116.41
Mid-Columbia 52.25-76.25 31-41
COB 55-72 33-43.50
NP 15 57.75-78 36.50-48
SP 15 57.75-78 36.50-48
Palo Verde 60-80 34.50-54

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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