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Western Price Survey

August 11, 2006
Northwest Numbers Inflate on Vagaries of Power Market, Weather

Northwest power prices kept pace this week with the cost of power in the Southwest, a somewhat unusual occurrence given the ample supply of cheap hydropower in Washington and Oregon. Weather did not appear to be the driving force behind the price pressure, and neither did any ratcheting back on the flow of water through the region's dams.

"The prices are high and staying high, but it's not anything we're doing," said one Bonneville Power Administration source.

Typically, power traded at the Mid-Columbia hub is valued at anywhere from 5 mills to 15 mills below Southwest spot-market power. This week, peak-time power at Mid-C hit a high of 77 mills/KWh on Wednesday, only a few mills less than the Palo Verde price. During swaps of weekend power the following day, the peak price at Mid-C lost only 3 mills.

Mid-C off-peak power values ranged from 49 mills to 52.50 mills/KWh on Monday, in line with Golden State power. Nighttime power scheduled for weekend delivery at Mid-C traded for as much as 62.25 mills/KWh, well above the North of Path 15 price of 55 mills/KWh and the Palo Verde price of 49.50 mills/KWh for similar packages. The price hit 69.50 mills/KWh on Friday.

A sudden burst of warm weather in the state jolted peak demand for the California Independent System Operator territory up to 43,702 MW on Wednesday, nearly 1,000 MW more than forecast for the day. Temperatures in the San Francisco Bay Area took off at midweek, exceeding normal high marks by an average of 15 degrees. Thermometers in the city read as high as 84 degrees on Wednesday.

Power values rose in concert with the temperatures, with deliveries moving through the NP15 hub attracting as much as 84.25 mills/KWh for peak-time power, up from Monday's range of 71.25 mills and 74 mills/KWh. Trading for weekend packages pressured the price down to about 80 mills/KWh on Thursday. Off-peak power at the hub attracted between 45 mills and 56 mills/KWh during much of the week, rising as high as 62.25 mills/KWh in Friday's session.

South of Path 15 peak-power values closely tracked those recorded at NP15, attracting between 71.75 mills and 74.50 mills/KWh at the beginning of the week. By Wednesday, daytime packages at NP15 and SP15 were running in tandem, trading for as much as 84.25 mills/KWh. The price for off-peak power in the Southern California region topped out at 62.50 mills/KWh on Friday, a gain of more than 10 mills above the Monday price.

While heat seared California, the weather in the desert Southwest remained relatively mild this week. Las Vegas temperatures hovered just below the century mark and Tucson thermometers hovered in the mid-nineties at midweek.

Peak-power values at the Palo Verde hub in Arizona started out the week sitting at between 65.25 mills and 68 mills/KWh. The cost of peak power swelled steadily during the following two days, closing on Wednesday at a high of 78.75 mills/KWh. On Thursday the cost of weekend deliveries slipped to between 71 mills and 75.50 mills/KWh. Nighttime power at the PV hub changed hands for between 38 mills and 42 mills/KWh on Monday before moving up to a high of 56 mills/KWh at the end of the week [Shauna O'Donnell].

Gas Prices Respond to Oil Signals, Move Up on Prudhoe Bay News

Prudhoe Bay and BP's troubles in Alaska attracted the attention of much of the mainstream and trade media this week. The potential oil-supply difficulties were not lost on the natural gas market, either. The continuing conflagration in Lebanon and the BP pipeline situation drove the cost of gas at most Western receipt points up above $7 at midweek.

One anomaly had Permian Basin gas nearly as dear as Pacific Gas & Electric CityGate gas. Permian prices hit $7.43/MMBtu on Wednesday, while CityGate gas moved for between $7.44 and $7.52/MMBtu before rising as high as $7.83/MMBtu the next day.

Gas shipments delivered to the Southern California border at Topock traded for between $6.54 and $6.73/MMBtu on Monday, reaching a high of $7.35/MMBtu on Thursday. Topock values slipped back to a range of $7.09 to $7.20/MMBtu on Friday.

At the other end of the state, Malin gas traded for as much as $7.34/MMBtu on Thursday, up from Monday's spread of $6.58 to $6.63/MMBtu [S. O'D.].

Western Electricity Prices
Week's-End Edition: August 7 - 11, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 27.26-484 30.96-93.18
Mid-Columbia 62-77 49-69.50
COB 67.75-80.50 49.50-69.50
NP 15 71.25-84.25 45-62.25
SP 15 71.75-84.25 45-62.50
Palo Verde 65.25-78.75 38-56

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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