Western Price Survey / Archives
August 2, 2002
All five units at the 2,056 MW capacity Four Corners facility in New Mexico were knocked out of service last weekend. Just after 7 pm on Saturday, July 27, two lightning strikes threw the coal-fired plant into disarray, and system frequency was also destabilized, dropping to 59.787 Hz, according to the Western Electricity Coordinating Council. The transmission system recovered to 60 Hz about an hour later.
Units No. 1, 2 and 3 at Four Corners were providing power to the grid by Sunday, but the 740 MW Units No. 4 and 5 lagged in being put back on line. By Monday, Unit No. 5 was back providing power to the grid, and only Unit No. 4 remained down. By Friday, output from that unit was only slightly curtailed. This act of God appeared to be the most significant occurrence in the Western power markets in the last week (the Federal Energy Regulatory Commission's new standard-market- design plan notwithstanding).
Prices at the New Mexico hub ranged from 34 mills to 42 mills/KWh, a bit higher than at other hubs. Prices were not significantly affected by the Four Corners outage, most likely because reserve margins throughout the West were sufficient and because the outage occurred on Saturday, after the weekend trading had closed.
Mid-Columbia prices remained fairly steady following their recent rise out of the single-digit cellar. Off- peak ranged from 14.50 mills/KWh to 18.75 mills/KWh, while on-peak prices held between 16.25 mills and 21.50 mills/KWh. The Bonneville Power Administration began the week offering no power but was back in business for Wednesday deliveries.
Off-peak availability was 200 MW and peak was 400 MW. On Wednesday, the BPA offering for Thursday delivery was boosted to 800 MW for peak supply and 500 MW for off-peak. For this coming Sunday through Tuesday period, BPA was hawking 800 MW of power for peak delivery and 600 MW off-peak.
Temperatures throughout the West were within the seasonal-norm range, with a bit of cooling occurring throughout the region. This was in contrast to conditions on the East Coast, where record demand was recorded up and down the Eastern Seaboard.
The California Independent System Operator forecast peak loads in the range of just under 36,000 MW to just above 37,000 MW. Both Tuesday's and Thursday's peak topped out somewhat higher than expected, but the system was more than able to handle it. Throughout the West, reserves held steady, with the WECC reporting Northwest reserve margins between 9.2 and 12.3 percent and Southwest margins hovering around 6.5 percent.
Cal-ISO's record of nonoperational units listed a reduction of 293 MW at the San Onofre Nuclear Generating Station Unit No. 2 last Friday afternoon, but that lasted just a few hours, and the unit was at full capacity throughout this week. Other nuke plants in the West were also consistently running at between 98 and 100 percent.
The 442 MW Mohave Unit No. 1 was off line Friday morning on unplanned outage, and the 739 MW Moss Landing Unit No. 7 was on planned outage.
Trading positions did not shift a great deal with the change in months on Thursday. A slight overall rise in prices occurred, but that tapered off for Friday and weekend deliveries. In the words of one trader, "nothing's really changed." [A. O'D.].
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