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Western Price Survey

July 28, 2006
Power Prices Fall as Weather Cools; Cal-ISO Keeps Eye on Northern Blaze

Electricity prices went so high this week that there is likely to be discussion about the $400/MWh price cap for electricity in California.

The cap, which the Federal Energy Regulatory Commission approved in January, is for energy sold into the California Independent System Operator markets. On Monday, when Cal-ISO reported record demand of 50,269 MW and declared a Stage 2 Emer-gency, prices on two power exchanges for North of Path 15 and South of Path 15 power hit $400/MWh. All three of the large electric investor-owned utilities reported blackouts as transformers exploded under a punishing heat wave.

Cal-ISO spokesperson Gregg Fishman said that while no one would probably "seriously consider" changing the cap at this point, "it will be a topic of discussion." One issue is that nearby states can pay prices above the cap, he said. On Monday, for instance, Nevada power prices in the Mead area hit $415/MWh.

Cal-ISO said it did not expect to see 50,000 MW on the grid until 2011, and fortunately, it was spared gen-erating outages and could import power. Notable out-ages occurred later in the week as demand slipped. The 1,335 MW Unit No. 2 of the Palo Verde nuclear plant went down on Friday. The unit was being ramped back up after maintenance, but a bypass valve opened. Arizona Public Service officials said the unit should be operating at full capacity this weekend.

The Nuclear Regulatory Commission listed Energy Northwest's 1,157 MW Columbia Generating Station in Washington at 62 percent capacity Friday. Last week the station was undergoing maintenance.

Cal-ISO is also keeping its eye on a fire burning in the Shasta-Trinity National Forest. The 370-acre fire is located 26 miles northeast of McCloud, California, and is threatening the California/Oregon Intertie, which has a capacity of 4,000 MW.

"It's not an immediate threat to any of the lines," Fishman said. He also said Cal-ISO had more than enough resources to deal with any problems that might occur, considering that Friday demand was expected to peak around 43,000 MW and Saturday demand was expected to fall to 37,500 MW.

SP15 peak power traded between 250 mills and 400 mills/KWh Monday and steadily fell throughout the week, finishing Friday at 68 mills to 80 mills/KWh. Off-peak power, which went as high as 82 mills/KWh for Tuesday deliveries, dropped to 47 mills Wednes-day and traded Friday at around 57 mills/KWh.

NP15 prices were nearly identical to those in SP15. Peak power went as high as 400 mills/KWh Monday and was trading between 67 mills and 78 mills/KWh Friday. Off-peak power finished the week near 57.50 mills/KWh after starting at a high of 82.50 mills/KWh.

Daytime power at Palo Verde, which saw trades of 399 mills/KWh for Tuesday deliveries, slipped to between 66 mills and 78 mills/KWh on Friday. Off-peak power, which traded at a high of 70 mills/KWh Mon-day, went for about 51 mills/KWh in Friday trading.

Peak power at the California-Oregon border reached 315 mills/KWh on Monday and finished the week at around 66 mills/KWh. Off-peak power traded as high as 80 mills/KWh Monday, fell to around 50 mills at midweek, then gained a few mills in Friday trading.

In the Mid-Columbia region, peak power hit 285 mills/KWh Monday, but fell to around 62 mills/KWh Friday. Off-peak power traded around 55 mills/KWh Friday after starting the week at a high of 80 mills/KWh [Chris Raphael].

Storage Removal Ups Gas Prices

As natural gas-fired power plants worked overtime to cope with unprecedented electricity demand across the US, natural gas storage stocks fell last week by 7 billion cubic feet in the Lower 48 states.

According to data released Thursday by the Energy Information Administration, stocks in the West fell by 3 Bcf for the week ending July 21, which sent natural gas prices higher.

Southern California border gas, which traded Monday at about $6.31/MMBtu, went as high as $6.97/MMBtu in Thursday trading. Permian Basin gas, which traded between $6/MMBtu and $6.15/MMBtu at the start of the week, reached a summit of $6.85/MMBtu Friday. San Juan Basin gas traded at a high of $6.45/MMBtu Thursday after starting the week well below $6 [C. R.].

Western Electricity Prices
July 24 - 28, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 35.50-999.99 36.26-797.80
Mid-Columbia 60.50-285 45-81
COB 64.75-315 47.50-80
NP 15 67-400 46.50-82.50
SP 15 68-400 47-82
Palo Verde 66-399 39-70

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 Shauna O'Donnell, editor with questions regarding Price Survey Content.

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