Western Price Survey / Archives
July 25, 2003
In a week marked by punishing sunshine and all-time highs for electric demand around the West, the California Independent System Operator managed to keep its load records intact. As area residents withstood the heat, however, each day brought slightly lower temperatures, and as a result spot prices tripped lower with each trading session. Peak premiums for bilateral trades cruised between 60 mills and the low 70 mills area early in the week before easing to the low- to mid-50 mills/KWh range.
"They certainly weren't as bad as they could have been," remarked one trader about this week's prices. "Most generation units are on line, and I haven't heard about any load shedding."
On Friday, both light- and heavy-load prices bounced up by nearly 10 mills/KWh for deliveries on Sunday and Monday.
Several utilities saw their all-time peak load records melt away. Demand in the Sacramento Municipal Utility District's service territory reached 2,779 MW on Monday evening, tying SMUD's record peak from July 10, 2002, then pushed to 2,809 MW on Tuesday. Sierra Pacific Power eclipsed its record of 1,590 MW, also set on July 10 last year. The utility's load climbed to 1,619 MW on Monday and up to 1,644 MW on Tuesday.
In Las Vegas, Nevada Power broke its peak record on July 21 with loads of 4,080 MW, nearly 20 MW higher than the previous mark of 4,789 MW set only 10 days before. The utility's customer population has grown by seven percent in the past year.
According to Cal-ISO spokesperson Gregg Fishman, the grid operator steered clear of its historical peak thanks to a layer of clouds blanketing portions of Southern California and the state coastline, which helped alleviate potentially higher temperatures. Demand on the Cal-ISO grid topped out at 42,656 MW this week. The system operator's all-time peak load is 45,884 MW, reached in July of 1999 (that figure includes load for SMUD, which is now no longer part of Cal-ISO's control area). Cal-ISO accounts for about 75 percent of electric load in California.
Late in the week, the agency pegged unplanned generation outages on the state grid at roughly 1,600 MW of lost capacity, down from about 2,500 MW on Monday. AES's Huntington 3 unit returned to service midweek after taking all 226 MW off line for unscheduled repairs Monday and Tuesday. The same occurred with the company's 493 MW Redondo 7 plant. PG &E Generating's La Paloma 2 and 4 units, each rated at 235 MW, clicked off on Tuesday and remained shut down through Friday morning.
The grid also averted transmission-related problems, though some line derates were in effect. The north- south Pacific DC Intertie was cut to 2,511 MW of capacity for transformer repairs and outages, and the Midway-Vincent line on Path 26 was limited to 2,500 MW in the same direction due to continuing transformer bank repairs. The outage, caused by a fire at the Vincent substation months ago, is expected to conclude on August 7, according to the Western Electricity Coordinating Council.
Prices around the West stretched themselves under Monday's sun but crept toward shadier territory as Wednesday neared. Peak trades at Palo Verde garnered as much as 72 mills, the highest price among regional hubs this week, before dropping as low as 55.5 mills/KWh on Thursday. NP 15 and SP 15 found themselves in the same range prior to Friday, with California-Oregon border prices in the high 40 mills area and Mid-Columbia premiums scuttling as low as 43.75 mills/KWh.
Real-time prices at the Alberta hub in Canada screamed to nearly 1,000 mills/KWh during the 4 o'clock hour on Tuesday, and loads crested 8,200 MW the following day [Jason Mihos].
Decreasing Temps Drain Gas Gains
After perking up Monday in response to blazing-hot weather and rising power-plant output for air conditioning demand, gas prices slid lower the rest of the week. The decline appeared to be due to forecasts of milder weather over the next two weeks, which pushed the price of crude oil futures lower and in turn undercut future and cash premiums for natural gas.
Reports of strong storage injections also helped send gas prices sliding. The federal Energy Information Administration said that compared to the previous week, nationwide gas supplies rose by 83 Bcf to 1,949 Bcf. Western stocks are now 1 Bcf higher than the five-year average for the region. National inventory, however, is 286 Bcf below the five-year average and 537 Bcf lower than last year's figure at this time.
Prices around the West mostly held below $5/MMBtu. On Friday, San Juan Basin premiums dipped as low as $4.28, and the low end at Malin settled at $4.32/MMBtu. Prices drooped to $4.72 at CityGate, $4.74 at Topock and $4.21/MMBtu at Alberta.
Also this week, Pacific Gas & Electric's California Gas Transmission affiliate announced that it will offer backhaul service under its tariffs for firm gas transportation [J. M.].
Archives of the Western Price Survey for the past year are also available online.
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