Western Price Survey / Archives
July 19, 2002
On-again off-again transmission curtailments left power traders and utility schedulers scrambling to cover their pre-existing commitments early this week as fires in south central Oregon threatened key links to the California/Oregon Intertie. As firefighters attempted to contain the so-called Toolbox and Winter fires in the area south of Summer Lake, transmission operators issued notices of deep curtailments for Wednesday that were later rescinded-but not before a lot of power schedules had been disrupted.
The Western Electricity Coordinating Council reported "numerous interruptions" to COI beginning Sunday night through Wednesday. Besides affecting the lines leading to the Captain Jack substation near the California/Oregon Border, the problem also limited transfers between Idaho and Oregon.
The sporadic outages caused as much as much as 2,500 MW of repeated load shedding at Grand Coulee and Chief Joseph and resulting voltage instability. The Bonneville Power Administration and the California Independent System Operator had prepared to cut southbound COI capacity to just 1,000 MW so firefighters could work in close proximity to the lines.
That order never took effect as Oregon's Bureau of Natural Resources said it was unable to move the crews as expected, but many traders had already cut their prescheduled power deliveries and worked out alternate delivery paths. With the partial restoration of capacity, they had to scramble to redo their arrangements, worrying that failed deliveries might trigger liquidated damage provisions that their sales agreements are subject to. "It's causing chaos," said a Northern California utility scheduler looking at a sheet of transactions with unusual delivery patterns.
For most of Wednesday and Thursday, COI was held to 3,200 MW southbound while the DC Intertie was trimmed to 1,956 MW. Cal-ISO's actual transmission schedules showed that somewhat less power was being moved across state lines-as little as 1,450 MW moved across state lines at noon on Thursday.
Even though its peak loads were moderate in the 36,500 MW vicinity, the California grid operator was on partial alert and had issued "no touch" notices. The restricted maintenance order was lifted earlier than anticipated on Thursday, however.
As a result, Mid-Columbia energy continued to be locked in the region and peak prices never rose from the 5 mills to 7.5 mills/KWh range established on Monday. BPA kept its daily offer at 800 MW through the weekend. Off-peak had been 3 mills but edged up to 6 mills/KWh for Friday/Saturday deliveries. Prices elsewhere had their ups and downs in reaction to the transmission situation. COB had been in the 12 mills to 16 mills/KWh range Monday. After popping up to 34 mills/KWh midweek, peak power dropped to the 16 to 20 mills/KWh range.
California's in-state prices ran from the low 30s up to 41.5 mills at SP15, then down again. Palo Verde crept up to about 42 mills and Mead bumped up against the 50 mills/KWh mark midweek but dropped by 8 mills/KWh in later trades. Off-peak power roamed the 11 mills to 17 mills/KWh range regionally [Arthur O'Donnell].
Gas Firms Nationally, Holds Locally
Natural gas prices started the week at an especially low level, despite lingering heat in the Southwest, and rose on increased demand from California power generators covering for lost imports as transmission problems plagued the Pacific Northwest. Even though prices were expected to drop again heading into the weekend, the erosion was not so pronounced as usual, leaving gas traders to speculate about the reasons. Some pointed to an upswing on NYMEX that pushed daily prices above August contract levels. Others suggested that the agricultural sector was increasing its demand for harvest and processing purposes.
In any event, trading volumes got a boost and the SoCal Border/Topock price generally hung on to the $3.00/MMBtu level on Thursday. Basin prices slipped by about $0.10 to $0.15/MMBtu, leaving Permian supplies in the $2.60 to $2.79/MMBtu range while San Juan centered at $2.55/MMBtu.
Bargain hunters drove Rocky Mountain gas prices up from the low, low levels recently logged but at $1.60, the Opal price was still quite a bargain for those with access. Malin rose from a low of $2.16 to $2.56 but then centered around $2.35/MMBtu. The San Francisco CityGate covered a range of $2.50 to $2.85 during the week but found equilibrium at $2.76/MMBtu.
The Alberta price languished in the $(C)2.10 to $2.24/Gigajoule range all week [A. O'D.].
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