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Western Price Survey / Archives

July 26, 2002
Southwest Not So Hot; Northwest Not So Wet

Power markets pulled back from their extremes this week, as the spot of extra-hot weather over the Desert Southwest shrank and water flows receded in the Pacific Northwest. Rally attempts in both markets faded, and by the end of the week, prices centered and stacked in traditional patterns of lower-to-higher heading southward and inland.

Helping to return the market to normalcy was a restoration of transmission capacity ratings on the California/Oregon Intertie at 4,200 MW to 4,300 MW southbound. The DC Intertie was fairly steady at 2,990 MW, according to the Western Electricity Coordinating Council.

Minor derates to 3,900 MW on the COI and 2,431 MW on the DC line were enacted for Friday. Wildfires and smoke still mar Western skies in many places, but there appeared to be no direct threats to power operations this week.

After having averaged in the 8 mills to 9 mills/KWh over the past six weeks, Mid-Columbia energy picked up to the 20 mills to 25.5 mills range midweek before sliding back to 16.5 mills/KWh heading into the weekend. Hydroelectric output in the Northwest was demonstrably off, with Grand Coulee reducing generation and the Bonneville Power Administration withdrawing from surplus sales. BPA had begun the week offering 750 MW round the clock, but said it had nothing to sell for Friday/Saturday. The agency later said it would offer 200 MW of peak-only power on Monday.

At the other end of the market, Southwest prices had been bolstered by hot weather forecasts that turned out to be moderate and seasonal. While the high point of PV pricing was 41.5 mills/KWh on Monday, Thursday's range from 30 mills to 40 mills/KWh covered the most territory, with the edges coming off in later trades.

Marginal reductions in output at the Palo Verde nuclear complex and at San Onofre No. 2 in Southern California added to concerns that there might be a resource squeeze in SP15. The California Independent System Operator had issued restricted maintenance notices for SP15, but terminated them without seeing any kind of emergency. the Cal-ISO outage list diminished with each day, down below 4,400 MW by Thursday with the majority of maintenance located in SP15. No big unusual outages were reported, just a smattering of units and partial output reductions through the southern zone.

California peak loads rose as the week progressed, from 34,800 MW Monday to an expected 39,500 MW Thursday, but coastal fog helped offset the warmer inland temperatures and kept a lid on power demand.

In-state prices stayed pretty much in the ranges set during Monday's trading at both NP15 and SP15, although by the time deals for Friday/Saturday were closing out, transactions scraped the bottom of the ranges. Having reached 34 mills on Monday, NP 15 was down to the 28 mills to 29.5 mills range. SP15 topped out at 40 mills and twice crept up to 36 mills before sliding into the 31 mills to 32 mills/KWh bracket.

Off-peak energy showed more of a bell curve, with Mid- C down to 12 mills to 13 mills, California hubs roaming the 16 mills to 19 mills range, and Palo Verde clinging to 15 mills/KWh.

The Alberta Power Pool declared a Level 1 Alert for about three hours Thursday following the loss of the 300 MW Sheerness facility. Loads were already slipping from 8,082 MW, so the near emergency was over by 6 pm, Calgary time. Prices briefly spiked to 333 mills/KWh [Arthur O'Donnell].

Gas Upsurge Might be Suppressed

Natural gas prices bounded higher during Thursday's trading sessions but gains are expected to be trimmed by a higher-than-anticipated gas storage report that pulled August contracts below daily spot prices. The Western upswing was attributed to increased power generation as the valve closed on Northwest hydroelectricity production, putting gas back on the margin.

After weeks of weakness, the Alberta index finally came to life, picking up about $(C)0.60/Gigajoule over the course of the week. Even Rocky Mountain fuel prices gathered some strength, with Opal climbing out of its rut to the $1.67/MMBtu level.

Northern California gas deliveries at the SF CityGate slipped midweek but regained footing at $2.87, while Malin picked up from its $2.40 trough to about $2.61/MMBtu.

Only the SoCal Border/Topock price managed to hit the $3/MMBtu mark among Western hubs, bouncing between $2.90 and $3.14 for the week before settling at $3.04/MMBtu. Although Texas finally got a burst of real hot weather, it did not propel the Permian Basin price much above $2.90/MMBtu [A. O'D.].

Western Electricity Prices
Week of July 22-26, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 18.5-333 11-24.6
Mid-Columbia 16.5-25 12-13.5
COB 19.75-25.5 15-17.5
NP 15 28.5-34 17-19.5
SP 15 30-39 16.25-19
Palo Verde 29-41.5 15-15.5

Archives of the Western Price Survey for the past year are also available online.


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