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Western Price Survey / Archives

August 15, 2003
Market Watchers Focused Eastward

The talk of the town late this week centered not on the activities of West Coast electricity markets, to be sure. Watchful eyes instead were focused on the eastern portion of the country, as a significant power outage on August 14 swept through a vast geographic area. According to the North American Electric Reliability Council, 28,000 MW of load experienced outages around 4:15 pm EDT. Areas affected included Con Edison's entire New York system, major portions of Detroit, Cleveland, Toronto, Ottawa and to a lesser extent, areas in New Jersey and Connecticut. Airports in the affected cities grounded departing flights. New York City saw about half of its power restored by Friday.

The specific cause for the massive blackout was still being determined but conflicting information was flying: initial reports pointed to a lightning strike at an upstate New York power plant as the likely culprit. On Thursday evening, Canadian Prime Minister Jean Chretien said his sources said the cause was a fire inside a generation facility in that state. The Wall Street Journal's Friday edition quoted a NERC official as saying it appeared that the cascading events began in Ohio. Another report claimed Michigan was the starting point. No evidence of any sort of terrorist activity was uncovered and the consensus was that an apparent mechanical failure of some kind brought the East Coast system to its knees.

In comparison, this week's events in the Western Interconnect were downright dull. Temperatures throughout the region remained within seasonal averages and did not drive electricity usage upward significantly because of cooling demand. The only incident prompting real concern occurred in Tucson Electric Power's territory: on Sunday at 5:00 pm the utility called a Level 1 Emergency Alert, but even that lasted less than an hour.

In the California Independent System Operator's control area, peak loads topped out at just over 40,000 MW on most days this week. With the quantity of power unavailable to the ISO ranging between 3,150 MW and 4,200 MW each day, there was no concern that available capacity would not be able to meet demand.

Etiwanda's 335 MW Unit No. 4 and Redondo's 486 MW Unit No. 8 have not been as fortunate. Both remained on forced outage status, a carry-over from last week. AES' 335 MW Alamitos Unit No. 4 was listed by the Cal- ISO as being on a scheduled break Monday and was back in operation Thursday. Duke's Unit No. 7 at Moss Landing was curtailed by about 50 percent on Thursday and generated 385 MW of electricity

Prices for power exhibited little volatility during the week, though when compared to last week, an overall upswing did occur. According to some traders, the buoyancy was attributed to an uptick in natural gas prices.

Peak power at Palo Verde moved for between 51.50 mills and 64.25 mills/KWh this week, compared to a range of 43.75 mills to 59.50 mills/KWh during the prior week. Mid-Columbia peak power opened the week at between 44.75 mills and 47.75 mills/KWh, wilting to between 41.75 mills and 42.75 mills/KWh by Thursday.

Off-peak power prices also were mostly static throughout the week. NP15 power traded within a narrow band of 38.25 mills and 42.25 mills/KWh during the week, as did SP15 power. Prices for trades at that hub, however, dipped down to between 36 mills and 37 mills/KWh by the end of the week.

The Palo Verde nuclear power plant, which closed out last week at 40 percent output, was recorded at 2 percent of capacity by the Nuclear Regulatory Commission on Monday morning. Still, it was quickly ramped back up and was operating at full power by Wednesday morning. All other nuclear facilities in the region are also at full output [Shauna O'Donnell].

Gas Storage Levels Calm Fears

Natural gas storage numbers released by the Energy Information Administration sent futures prices for the commodity skidding downward by about $0.35 on Thursday. NYMEX September futures ended the day at about $4.80/MMBtu.A large-quantity injection of 82 Bcf went into storage in the week that closed August 8, significantly above average weekly injections. The boost in supplies that will be available for winter use have somewhat eased concerns about skyrocketing prices and shortages in the coming months.

On the Western spot market, prices at most hubs percolated, not bubbling over in either direction. Alberta gas did see a bit of strengthening this week and managed to stay above the $4.50/MMBtu level all week. Prices at other trading hubs leaned over and under the $5.00/MMBtu mark all week [S O'D.].

Western Electricity Prices
Week of August 11-15, 2003
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 36.92-109.11 29.61-128.44
Mid-Columbia 41.75-47.75 34.75-38.50
COB 45-53.75 36.75-40.50
NP 15 49-57.25 38.25-42.25
SP 15 51.75-61 36-42.25
Palo Verde 51.50-64.25 34-40

Archives of the Western Price Survey for the past year are also available online.


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Contact Shauna O'Donnell, editor with questions regarding Price Survey Content.

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