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Western Price Survey

August 05, 2005
Western Power Nudged Up on Heat Forecast, Gas Costs

West Coast electricity prices kept to the lower end of the power-cost range in the nation this week. As the Midwest and East Coast heated up, Western temperatures stayed within the seasonal norm, and weather in the region put little pressure on the daily price of electricity. More influential was the price of fuel used to run power plants. Natural gas costs moved up in the wake of a new record set this week in crude-oil futures. The high of $62.50 per barrel was reached on Wednesday and was, in large part, a result of market jitters brought on by the death of Saudi Arabia's King Fahd.

On Monday, Northern California peak power attracted between 70.75 mills and 75.50 mills/KWh. Trades at the hub steadily tacked on another 5-10 mills in subsequent days, and by Wednesday the price of daytime power at the hub drew a high of 81.75 mills/KWh. Prices were drawn downward some for week-end deliveries, but Friday trading of power scheduled for next-Monday delivery nudged the price back above the 80 mills/KWh mark. Off-peak power north of Path 15 traded for between 47 mills and 51 mills/KWh much of this week, but shot up to a high of 63 mills/KWh for next-week deliveries.

In Southern California dealings, traders hawked their peak-time wares for between 73 mills and 78 mills/KWh to start the week. By Wednesday the value of power scheduled for daytime delivery had increased to as much as 84 mills/KWh, where it hovered at the end of the week as well. Low-demand power south of Path 15 traded for close to the same range as in NP15 territory — between 46.75 mills and 51.75 mills/KWh — during the better part of the week. Mirroring NP15 transactions, peak-time power packages at SP15 changed hands for as much as 63.50 mills/KWh on Friday.

Palo Verde peak power attracted 70 mills/KWh on Monday, tacked on another 5 mills or so the following day, and then scooted up to 78.50 mills/KWh on Wednesday. PV power managed to elbow its way up to 81.75 mills/KWh for a handful of deals conducted on Friday. Off-peak power at the PV hub moved for some of the lowest prices in the West this week. Deals for Tuesday delivery traded for between 43.75 mills and 44.75 mills/KWh, while midweek values notched merely 1-2 mills more for packages scheduled for Thursday delivery. More than 10 mills was added to the cost of off-peak power on Friday. Nighttime power to be delivered early next week at PV traded for between 55.75 mills and 59.50 mills/KWh that day.

California-Oregon border daytime power was bought and sold for as much as 78.50 mills/KWh on Wednesday, up from Monday's range of 68.75 mills and 71 mills/KWh. Nighttime power at COB changed hands for between 45.50 mills and 50 mills/KWh during much of this week. Similar to other Western hubs, the price of off-peak power at COB swelled on Friday, pushed up by forecasts of in-creasingly warmer weather. Nighttime power at COB moved for between 58.50 mills and 61 mills/KWh at the end of the week.

Mid-Columbia power values pushed their way up to the mid-seventies this week. After trading Monday for between 64 mills and 69.75 mills/KWh, daytime power at Mid-C climbed up to 76 mills/KWh at midweek and lingered in that vicinity for the rest of the week. Nighttime power at Mid-C stuck to the mid-to-high forties until Friday, when the cost of off-peak power posted a gain of more than 10 mills, closing the week between 53 mills and 58 mills/KWh [Shauna O'Donnell].

Gas Remains Strong in Oil's Shadow

The record price of $62.50 per barrel of crude oil reached Wednesday was reflected in the price of natural gas on the spot market that day. A noticeable boost in the cost of gas was recorded in the Western region — as high as $8.07/MMBtu at Permian Basin. Nevertheless, gas prices in other parts of the country were on the whole higher than in the West, with New York deliveries drawing as much as $9.85/MMBtu.

The cost of gas delivered into California stayed above the $7 mark after breaching that barrier on Monday. Having opened the week at between $6.80 and $6.94/MMBtu, Malin gas peaked at $7.56/MMBtu on Wednesday. Gas entering the state at the Southern California border delivery point of Topock on Monday cost between $6.97 and $7.07/MMBtu. The following day saw the price increase to as much as $7.445/MMBtu, which was exceeded by Wednesday's price of $7.67/MMBtu. The end of the week brought a dip in the price, as Topock gas closed out Friday's trading session for between $7.28 and $7.55/MMBtu [S. O'D.].

Western Electricity Prices
August 1-5, 2005
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 9.57-497.93 13.83-139.70
Mid-Columbia 64-76 44.25-58
COB 68.75-78.50 45.50-61
NP 15 70.75-81.75 47-63
SP 15 73-84.75 46.75-63.50
Palo Verde 70-81.25 43.75-59.50

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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