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Western Price Survey

Week's End Edition
August 8, 2008
Power Prices Keep Cool as Stronger Dollar Deflates Commodities Prices

A shot of cool weather and tumbling natural gas prices pummeled electricity prices this week. The declines came despite a pickup in power usage and the usual increase in Friday prices. Daytime power lost $11 to $15/MWh on average; nighttime power was mixed.

A stronger dollar and recession fears pushed oil prices to a three-month low of $115.21 a barrel on Friday. Natural gas followed the descent, closing out the week around 80 cents less than Monday trades at California market centers.

California electricity trades shed $11 to an average of around $84/MWh at both North of Path 15 and South of Path 15. Off-prime values climbed to an average of $65.99/MWh, up $2, in the north, and $66.06/MWh, an increase of $3, in the south. Palo Verde peak power surrendered $13 to an average of $78.84/MWh. Average off-peak trades inched up $2 to $58.97/MWh.

A blast of cool weather in the Northwest late in the week kept prices falling steadily, with daytime Mid-Columbia power dipping $15 to an average of $73.72/MWh. Average nighttime electricity fell $5 to $61.84/MWh. Prices staged a rebound on Friday and inched up $2 and $3 for peak and off-peak power, respectively.

Average peak power at the California-Oregon border slumped $12 to $82.52/MWh, while off-peak trades coughed up $4 and settled at $62.79/MWh. Cool marine air cut temperatures Thursday in Seattle and Portland, pushing them from the 90s down into the low 70s. East of the Cascades, temperatures remained in the 90s with a chance of thunderstorms over the weekend, according to AccuWeather. Along the West Coast, temperatures were in the high 60s in San Francisco and the low 80s in Los Angeles. Tropical rainstorms from Mexico are feeding large thunderstorms over the Four Corners area and sending moisture into the Cascades and Sierras, while officials are concerned the unsettled weather could produce lightning strikes and ignite wildfires.

Many of the Golden State's remaining large wildfires started by freakish lightning storms a few weeks ago have been extinguished, but 12 large fires remain burning, the National Interagency Fire Center said. Gusty winds this weekend could make the fires harder to contain.

Power usage on the California grid pegged around 40,400 MW through Tuesday before climbing Thursday to 42,000 MW, the California Independent System Operator said. Electricity demand is expected to drop to 41,400 MW today and then to around 40,000 MW over the weekend [Kristina Shevory].

Natural Gas Prices Blow Off Tropical Storm Threat in Gulf

Economic worries have been hammering natural gas prices and drove them down for the fifth consecutive week in a row. Forecasts for mild weather across much of the country for the remainder of the summer and few hurricanes on the horizon also checked prices. Those concerns overrode the less-than-expected weekly supply injection and a tropical storm threat in the Gulf of Mexico.

Tropical Storm Edouard forced energy companies to evacuate employees and shut down platforms and rigs in the Gulf of Mexico. A little over 12 percent of the area's natural gas production was shut-in. Through May, however, domestic natural gas production climbed as energy companies drilled in unconventional fields, such as North Texas. Compared to the same period last year, production rose 8.7 percent to 8.88 Tcf, the U.S. Energy Information Administration said.

The rise comes at a good time because liquefied natural gas imports are on track to hit a five-year low this year in part because of weakness in the U.S. dollar.

In the West, natural gas prices ended the week about 80 cents lower, with average prices extending from $7.31/MMBtu at San Juan to $8.09/MMBtu at Pacific Gas & Electric's City Gate. According to the EIA, natural gas storage climbed by 56 Bcf last week, leaving stocks 12 percent less than last year but nearly matching the five-year average. The West saw stockpiles rise to 354 Bcf, up 8 Bcf. Storage is now almost 13 percent below last year and flat with the five-year average [K. S.].

Western Electricity Prices
Week's End: August 4 - 8, 2008
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 19.99-999.98 37.93-306.11
Mid-Columbia 67-94 55-70.50
COB 75-98 59-70
NP 15 79.85-97 57.50-66.50
SP 15 76.50-97 57-67
Palo Verde 72.50-93.25 50-59.50

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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