Western Price Survey / Archives
July 18, 2003
Residents of Phoenix had a hot time in the old town on Tuesday night, when the coolest it managed to get with the sun down was 99 degrees Fahrenheit. People in Albuquerque rose to greet that day with the temperature already at 78 degrees. All over the Southwest new high-temperature and electricity-demand records were being set.
According to the Western Electricity Coordinating Council's system status report, Tucson Electric Power called a Level 2 Alert on Monday because of high demand. According to the WECC, about 13 MW of interruptible load was shed by the utility. The alert lasted from 4:00 pm to 6:30 pm.
Peak trades at Southwest hubs were elevated mid-week because of the heat wave, but tapered downward a bit on Thursday when trades for weekend delivery were conducted. Palo Verde peak prices ran between 56 mills and 66.25 mills/KWh on Monday and reached 82 mills/KWh on Wednesday. At Four Corners, peak prices gained almost 20 mills/KWh between Monday and Wednesday, topping out at 84 mills/KWh midweek. Off-peak prices bumped up too, reaching figures that would have been found in the peak-price column just a few weeks ago. At Palo Verde, off-peak prices started the week between 35.75 mills and 42.25 mills/KWh but hovered between 41 mills and 43.50 mills/KWh on Wednesday. After reaching their zenith on Wednesday, prices in the Southwest eased back into the range seen at the beginning of the week.
The California Independent System Operator to call for restricted maintenance on generating facilities for both July 14 and 15. Still, it was Thursday that saw a peak demand level of 43,008, the highest it has been all year. Cal-ISO did not issue any system alerts during the week but did come close to having less power in reserve than the mandated 7 percent. Throughout the week, megawatt outage totals in the ISO's control area ranged between 3,500 MW and 4,300 MW.
Transmission constraints also frayed the edges of the state's electricity system this week. On Monday, a logging truck boom interrupted power over one of the California/Oregon Intertie 500 KV lines north of Round Mountain and the line had to be derated from 4,000 MW to 2,900 MW. Repair work was conducted quickly and the line was re-energized in time for Monday's afternoon peak demand.
The Los Angeles Department of Water & Power also reached a new peak demand figure for this year. The muni reported peak demand of 5,154 MW on Monday, but had ample reserves to get through the worst of the heat. Throughout the week, customers were urged to conserve by LADWP and the three investor-owned utilities in the state.
Outages at power plants included Moss Landing Units No. 6 and No. 7, each rated at 755 MW capacity, both of which started out the week off line because of the fire at the Duke Energy facility last week. Both units were back on line early Wednesday morning, but No. 6 dropped to about half its capacity later in the day. Other units that found themselves in the sick bay this week included AES's Redondo Units No. 6 and No. 7. Unit 6 dropped its entire 175 MW capacity and Unit 7 was curtailed by 143 MW on Thursday. Also on Thursday, Cal-ISO's unit outages Web page showed Four Corners Unit No. 4, with a capacity of 750 MW, down to 350 MW of output.
As reported by the WECC on July 17, the California Department of Forestry instituted a "red-flag warning" for fire danger on Wednesday morning. The region of concern was in Southern California, in the mountains near San Diego and San Bernardino. The warning was in effect through Thursday and was put in place because of concerns about lightning strikes in the very dry area.
Monday saw Mid-C peak prices averaging about 44 mills/KWh, on Wednesday the range for the hub was reported as between 46.50 mills and 60 mills/KWh. Prices at the hub for peak power remained strong Thursday, hitting a high of 63.50 mills/KWh. Prices for peak delivery at the California/Oregon Border tracked Mid-C figures fairly closely during the week but for a high at the hub of 84 mill on Thursday, softening just down to 70 mills/KWh Friday [Shauna O'Donnell].
Gas Prices Stay the Course
Record temperatures in the Southwest boosted electricity prices upward this week, and the demand for air-conditioning in the Southwest kept natural gas flowing to power plants at a steady clip this week. Still, spot prices for gas at most hubs in the West showed little volatility as the week progressed. Even Hurricane Claudette, which hit the Texas shore, could not shake up futures prices.
The hurricane forced producers in the Gulf of Mexico to shut in 2.54 Bcf of gas on Tuesday but was not expected to have a major impact on supplies. Gas futures prices at Henry Hub for August and subsequent months remained flat or lost about a dime in trades this week.
The price of gas San Juan opened the week at between $4.56 and $4.70/MMBtu, stayed mostly in that range during the following four days, closing on Friday around $4.66/MMBtu. Prices at the Southern California border and CityGate hubs showed a bit more strength, hovering at about $5.00 to $5.10/MMBtu over the course of the week. All Western hubs saw prices that were a bit softer than last week, despite high demand to fuel power plants.
The Energy Information Administration ran through its weekly litany of storage numbers on Thursday. While 93 Bcf was injected into US gas storage sites last week, stock remains 14 percent below the five-year average. In the West the picture looks a bit brighter. The EIA reported stocks of stored gas in the region of 294 Bcf, only 1 Bcf less than the five-year average [S.O'D.].
Archives of the Western Price Survey for the past year are also available online.
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