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Western Price Survey

Week's End Edition
July 17, 2009
Scorching Heat Sends Prices Higher

Blazing heat across the West sent power demand over 40,000 MW in California for the first time this summer.

In response to the warmer temperatures, and anticipated higher Monday demand, average prices ended higher this week by as much as $10/MWh.

The recession, however, has kept prices tame overall. Last year at this time, peak electricity went for more than $100/MWh. This week, even with blazing weather and higher demand, peak prices did not break past $46/MWh.

Electricity use and natural gas prices, of course, were much higher last July. This week, while spot natural gas prices in the West increased an average of 20 cents/MMBtu, they kept in the range of $3/MMBtu and appeared not to play a significant role in climbing electricity values. Natural gas prices have been so low for so long that a minor bump-up in trades doesn't significantly affect prices.

Peak demand for electricity crept from 41,200 MW on Monday to a high of 42,800 MW on Tuesday, the California Independent System Operator reported. Usage ebbed to 42,100 MW on Wednesday, grew to 42,600 MW on Thursday, and was projected to fall to 40,700 MW on Friday.

A ridge of high pressure is parked over California, and won't provide much respite from the warm weather. Temperatures will climb into the low 90s in Los Angeles this weekend and remain in the high 60s in San Francisco. Phoenix will roast in triple-digit temperatures, with a high of 115F expected this Sunday.

Average daytime California trades added $5 to $42.11/MWh at North of Path 15 and South of Path 15. Nighttime prices gained $6 to average $30.39/MWh in the north and $29.61 in the south.

Palo Verde peak prices closed out the week $3 higher to $43.65/MWh, while off-peak trades rose over $6 to $28.14.

The dry weather is boosting the risk of wildfires and has already led to a few across California. In Trinity County, dry thunderstorms touched off a fire last week that is burning 6,306 acres and remains only 45 percent contained, according to the California Department of Forestry and Fire Protection. In Southern California, firefighters fully contained two fires in San Diego and Los Angeles Counties Wednesday that scorched more than 300 acres.

Wildfire season typically heats up in mid-July and continues through the rest of the summer as temperatures climb and dry the ground. Afternoon thunderstorms, which can spark lightning strikes, are expected over the Four Corners and the Sierras this weekend.

In the Northwest, warm weather and lower capacity at the Columbia Generating Station put some pressure on prices this week. On Thursday, the Columbia nuclear plant in Washington state ramped up to 99 percent capacity after a pipe leak in the condenser system was repaired. The 1,150 MW plant had been powered down to 55 percent capacity for the repair.

The Mid-Columbia hub saw prime trades settle at an average of $36.83/MWh, an increase of about $10 since Monday. Nighttime values clocked a $7 rise to $29.03/MWh.

Peak power at the California-Oregon border climbed $10 to average $40.35/MWh. Off-peak values rose $7 to average $30.50.

Natural gas stockpiles rose last week to 2.886 Tcf, the highest level for any week in July since the U.S. Energy Information Administration started collecting data 15 years ago. The weekly injection of 90 Bcf was higher than the five-year average, thanks partly to cooler-than-usual temperatures in the West last week. Compared to a year ago, stockpiles are 25.6 percent greater, and 18.7 percent higher than the five-year average.

Western supplies saw a meager rise of 9 Bcf to 443 Bcf, yet inventories remain plentiful and are 37.2 percent higher than the same period last year and 25.9 percent greater than the five-year average [Kristina Shevory].

Western Electricity Prices
Week's End: July 13 - 17, 2009
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 13.36-599.88 12.98-165.35
Mid-Columbia 24-40 20-30
COB 30-41.50 22.25-32
NP 15* 35.75-42.50 23.50-31.25
SP 15* 36-42.75 22.50-30.50
Palo Verde 38-45.75 20-28.95

* 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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