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Western Price Survey

Week's End Edition
July 27, 2007
Power Prices Taste Spring in July Until Off-Peak Values Spike Friday

Cool weather, lax demand, rainfall in the Northwest and adequate generation deflated wholesale power prices for much of the week before more typical warm and hot weather returned to the region by Friday.

The California Independent System Operator showed hourly load ahead of forecasts by midweek, with the trend continuing until right before press time when hour-ahead and scheduled loads began to edge past actual demand. On Friday, while peak prices stayed cool, heavier off-peak trading volumes accompanied a rise of $10 to $15/MWh in nighttime power for Monday deliveries.

All three units at the Palo Verde Nuclear Generating Station were operating at 100 percent this week following the restart of Unit No. 1. Trading for day-ahead peak power in Palo Verde started close to last week's lows and dropped to $55.50/MWh on Tuesday, with average prices below $60 for the rest of the week. Nighttime power dipped below $30/MWh three days in a row, something that has not happened since late March, until reaching above $40 on Friday.

On Tuesday, a fault in Pacific Gas & Electric's underground electric system knocked out power to 40,000 customers in San Francisco, including popular Web sites such as Craigslist and Second Life, but power was restored within a few hours.

At North of Path 15 and South of Path 15, daily averages stayed tightly around $61 to $62/MWh with little volatility. Peak prices picked up to $66.50 on Thursday before sliding below $60 in late trades for weekend power. Off-peak power hovered in the mid-$30 range most of the week until it gained around $10/MWh in Friday trading.

Up north, Mid-Columbia peak-power prices fell on Monday and some daytime power traded for below $50 each day until Friday, when average prices went up more than $4. Off-peak Mid-C values fell below $30 on Monday for the first time since earlier this month, drifting to Thursday's low of $25 before surging on Friday to close to $40. Daytime high temperatures in the Northwest were below normal until Thursday, when memories of recent rain began to fade and seasonal temperatures returned.

California-Oregon border peak power traded above $55/MWh Wednesday, then drifted lower before reaching as high as $60 Friday. Low-demand power fell to as low as $27.50 Thursday before a $10 gain for Monday deliveries.

Despite typical upswings in prices in advance of the weekend, calm seems to be the prevailing con-dition in Western power markets and the nation as a whole. In late May the National Oceanic and At-mospheric Administration reported a 75 percent chance of an above-average Atlantic hurricane season this year. But since then, it's been a quiet season for hurricanes. Short-lived Tropical Storm Barry came on the scene, bringing much-needed rain to Florida before dissipating. Storm damage in the Gulf of Mexico affects natural gas prices in the West, and with relative calm in the Gulf, Henry Hub spot gas sank close to $5.50/MMBtu by midweek, indicating that this barometer portends little in the way of short-term worries. Near-month New York Mercantile Exchange natural gas futures hit a 30-month low this week, as news indicated economic activity is slowing [Alan Mountjoy-Venning].

On Strong Storage, Natural Gas Flirts With Prices Below $5/MMBtu

A small blip upward in natural gas futures after the weekly storage report was issued on Thursday withered as the report's overall bearish news sank in. Spot prices all over the West ended down 10 per-cent or more compared to the end of last week.

The storage report showed injections of 71 Bcf in the Lower 48 states for the week ending July 20, a little ahead of consensus estimates of 70 Bcf. Storage now equals the highest level for that week in the 2002-2006 period. This is also the first time this year that overall storage ended up above year-ago lev-els.

El Paso Permian gas bottomed at $5.12/MMBtu, the lowest level since Thanksgiving. Likewise, San Juan prices went for an average of just over $5 on Wednesday, and Friday's trades averaged $4.95/MMBtu on the Intercontinental Exchange platform [A. M-V.].

Western Electricity Prices
Week's End: July 23 - 27, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 6.95-999.98 6.95-126.15
Mid-Columbia 45-55.25 27-39.50
COB 52.50-60 27.50-42
NP 15 59-66.50 33.75-45
SP 15 60-67 33.50-45
Palo Verde 55.50-67.25 28-42

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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