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Western Price Survey

Week's End Edition
July 20, 2007
Day-Ahead Power Prices Cool Before Rising in Late-Week Heat

Even with Unit No. 1 at the Palo Verde Nuclear Generating Station off line longer than expected, prices for day-ahead power continued last week's decline. However, they reversed direction Friday as warm weather again took hold, values for natural gas rose on lower-than-expected storage injections, and traders priced for higher-demand Monday deliveries.

Of course, prices could be a lot higher than the 70 to 75 mills/kWh highs that peak power traded for at some Western hubs this week. Early in the week, temperatures in the West remained below average for this time of year. Even Tuesday's 102 degrees in Palm Springs was a full six degrees below the seasonal average. Fresno was 10 degrees below the average for July 18.

Things started to change midweek, however, when daytime maximum temperatures went from four to eight degrees above normal in inland California and the Northwest. Thursday's 109 degrees also pushed Phoenix a couple of degrees above normal.

Palo Verde No. 1 was originally scheduled to be back in service more than a week ago following a planned May 19 refueling shutdown. The U.S. Nuclear Regulatory Commission listed the plant as operating at 20 percent capacity Friday.

The California Independent System Operator reported loads were below forecasts as the week began. By Wednesday, forecasts appeared accurate and with ample available resources, pressure on wholesale prices eased.

Most Western hubs saw peak prices drift to their lowest price of the week by Thursday only to shoot to their highs Friday. Peak power at North of Path 15 traded for an average of 64 mills/kWh Monday, fell sharply to 56 mills, then gained more than 10 mills on Friday.

South of Path 15 power traded for an average of 64 mills/kWh Wednesday, off about a dollar from Monday. By Friday, trades hovered around 70 mills/kWh.

Off-peak power at both California hubs jumped 20 percent or more Friday, with lows of around 40 mills/kWh set Monday.

Daily-average weighted prices for peak power at Palo Verde stayed around 71 mills/kWh through Wednesday, dropped on Thursday, then shot up Friday. Off-peak values reached a low of 37.75 mills/kWh Monday but by Friday traded between 48 and 49 mills.

Mid-Columbia peak trades had a narrower range but showed the same pattern of drifting to the week's low on Thursday -- 49.50 mills/kWh -- before vaulting to 59 mills/kWh Friday. California-Oregon border power generally traded just a few mills above Mid-C values [Alan Mountjoy-Venning].

Natural Gas Prices Gain Strength on Weak Storage Report

Summertime: that means natural gas is either going into storage or being sucked out by electrical generators. The latter seemed to be true this week.

Gas prices snapped into a downward slide after the U.S. Energy Information Administration released its storage numbers on Thursday. The report's lower-than-expected injections of 65 Bcf last week in the continental United States, along with forecasts of very hot weather in the East for the last full week of July, were a one-two punch that turned natural gas prices higher.

According to the EIA, Western states gained only 10 Bcf during a hot-weather spell and Eastern states gained 48 Bcf.

Permian Basin gas traded for around $5.88/MMBtu to start the week and rose above $6 on Thursday following the storage news, before reaching a low of $5.87/MMBtu in Friday trading.

San Juan Basin gas started the week at an average of around $5.46/MMBtu, gained about 30 cents by Thursday, then dropped a dime in Friday trading to settle around $5.64/MMBtu.

Southern California border gas, after starting the week around $6/MMBtu, gained around 20 cents by Thursday before slipping to an average of around $6.07/MMBtu in Friday trading.

The prospect of cooling in the West over the weekend, with Rocky Mountain and Pacific states predicted to have below-normal maximum temperatures by the middle of next week, did not do much to dampen prices [A. M-V.].

Western Electricity Prices
Week's End: July 16 - 20, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 20.07-999.99 25-250.04
Mid-Columbia 49.50-59 34.50-49
COB 52.75-62.50 38-49.75
NP 15 56.50-69.50 39.25-53
SP 15 59-72 39.75-54
Palo Verde 63-74 35.75-49

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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