Western Price Survey / Archives
August 13, 2004
Triple-digit temperatures throughout Central California and much of the Southwest pushed loads to record-breaking levels this week. On Wednesday, the California Independent System Operator recorded a new peak-demand figure of 44,871 MW. This was almost 400 MW higher than the record set the previous day. The lion's share of the load was in Southern California Edison territory, which also hit a new peak-demand record this week. According to Edison, demand hit 20,518 MW at about 4 pm on Tuesday, more than 350 MW greater than the previous record set last month.
Nevada Power also reported a new record peak on Wednesday in the late afternoon. The southern Nevada utility's load swelled to 4,969 MW, breaking the record set just the previous day by about 35 MW.
Neither Cal-ISO nor Nevada Power experienced any major operational difficulties because of the record demand, though pleas for conservation were constant throughout the first half of the week. The only significant hitch came on Tuesday, when Nevada Power was forced to declare its lowest level of alert, "code blue." The alert was called at about 2:45 pm when reserves fell below the required minimum because of the loss of about 350 MW of generation. The utility was back to normal operations within an hour.
The price of power throughout the West stayed in the mid-to-high sixties for peak-time delivery during the first three days of this week at most hubs. By Thursday, however, cooling temperatures and waning natural gas prices deflated costs somewhat.
California-Oregon Border peak power changed hands for between 64.50 mills and 66.50 mills/KWh at the start of the week before easing down to a range of 55.75 mills to 58.50 mills/KWh for Friday deliveries. Off-peak power prices moved little during much of the week after opening for between 47.50 mills and 49 mills/KWh. The price ticked upward to a high of 52.25 mills/KWh on Friday for next-week deliveries.
Mid-C peak power traded for up to 65 mills/KWh on Monday before shedding 10 mills for weekend packages. Aside from a handful of trades recorded in the vicinity of 54 mills/KWh on Monday, low-demand power prices at the Northwest hub stuck close to the 47.75 mills to 49.25 mills/KWh range this week.
The price for power at the two California hubs of record, SP15 and NP15, moved in concert with each other for much of the week. As is typical, the price for power in the southern region attracted 3 to 4 mills more than power for delivery to Northern California. On Monday, high-demand power at SP15 drew between 69 mills and 74.50 mills/KWh, while NP15 power attracted between 68.50 mills and 71.25 mills/KWh. Daytime power for Wednesday and Thursday delivery at both hubs sloughed off about 5 mills by midweek. By Friday, peak-time packages at the two hubs were priced nearly identically and ranged from 56 mills to 60 mills/KWh.
Power prices at the Palo Verde hub dipped this week in midweek trading. After opening the week at as much as 71 mills/KWh, peak-time power dropped down to between 52.50 mills and 58 mills/KWh for Friday delivery. Power for Monday delivery dropped down to a low of 50.75 mills/KWh [Shauna O'Donnell].
Gas Fades on Storage, Weather
In contrast to last year at this time, storage inventory around the country looks to be in good stead. The figures announced by the Department of Energy's Energy Information Administration this Thursday pegged stocks underground at more than 2,400 Bcf, a reasonable, if not comfortable 5 person above the five-year average. Less comforting was the EIA's short-term energy outlook for August. According to the report, the nation can expect $6.60 to be the average price for natural gas within the next two years.
This week saw prices dip toward the end of the week as a mild cooling trend hit California, easing the demand for gas by electricity generators.
After hitting a high of $5.85/MMBtu on Tuesday, Topock gas was moving for between $5.36 and $5.52/MMBtu on Friday on the spot market. Gas at the basins followed the same patter. San Juan gas reached $5.40/MMBtu early in the week, but closed on Friday just below the $5.00 mark [S. O'D.].
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