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Western Price Survey

Week's End Edition
August 17, 2012
Power Prices Drop at Heat Wave's End

Western temperatures -- and power prices -- cooled Friday as triple-digit heat exited the region. Power prices had soared above $100 in the Northwest, but by Friday average values across the West returned to the $28/MWh to $40/MWh range.

California-Oregon Border ended Aug. 17 trading at about $34.36/MWh, down almost $9 compared to the previous Friday. Likewise, Mid-Columbia settled at about $28.45/MWh Friday, losing just pennies over the Aug. 10-17 trading period.

Here's how prices at California hubs fared compared with last Friday:

  • North of Path 15: Down about $9.50 to almost $38.85/MWh.
  • South of Path 15: Lost almost $12.60 to $39.80/MWh.
  • Palo Verde: Dropped almost $21.45, trading Aug. 17 at about $34.50/MWh.

Off-peak prices ended lower in Friday-to-Friday trading. Palo Verde led losers, dropping $6 to about $23.40/MWh. Off-peak prices on Aug. 17 ranged from averages of $19.35/MWh at Mid-C to $28/MWh at SP15.

Western wildfires are being closely monitored. The Bonneville Power Administration's Doug Johnson said a single structure on the Keller Tap 115 kV line was lost to a fire near Grand Coulee Dam. Power in Keller was out since 9 a.m. Thursday, Aug. 16, and was expected to be restored Friday (see story at [13.2]).

In Northern California, the Reading and Chips fires caused temporary power disruptions. PG&E's Plumas County customers were without power for as long as two hours Aug. 15. Some transmission lines were de-energized for three hours on Aug. 10 to allow firefighters to conduct aerial fire-suppression attacks.

Working gas in storage reached 3,261 Bcf as of Friday, Aug. 10, according to the U.S. Energy Information Administration, a net increase of 20 Bcf from the previous week.

Western spot natural gas prices also dropped in Friday-to-Friday trading. Henry Hub natural gas lost 14 cents, ending at $2.70/MMBtu. Southern California Border gas was down 23 cents, ending at $2.81, while Malin lost 22 cents, finishing at $2.61/MMBtu.

Cal-ISO grid demand peaked at 46,654 MW Monday, Aug. 13. The Northwest Power Pool reported use of 59,673 MW Monday.

What's ahead: Natural gas prices could fall further by injection season's end, according to a newly released analysis of gas markets by Kenneth B. Medlock, an energy economist at Rice University who has advised the U.S. Department of Energy and the CEC on energy-modeling efforts. If summer demand is not high enough to offset production volumes, storage could approach capacity by October, Medlock noted, ultimately resulting in sharp price declines. "However, absent another warm winter, prices should rise as the market rebalances going into 2013," the analysis stated.

Taking a longer view, Medlock said gas prices will be "likely in the $4 to $6 per Mcf range for the next couple of decades" as "market responses should generally push prices back toward their long-run equilibrium level."

Meanwhile, temperatures will cool in the coming week, with Seattle, San Francisco and Los Angeles in the 70s and Portland staying near 80 °F into Thursday, Aug. 23 [Linda Dailey Paulson].

Western Electricity Prices
Week's End: August 13 - 17, 2012
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 11.05-69 10.94-27.28
Mid-Columbia 27.75-108 16.50-21.50
COB 33.50-135 19.50-24
NP 15* 38.75-73.50 22.25-22.25
SP 15* 38-72 22.25-28.50
Palo Verde 33-63 19-24

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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 Chris Raphael, editor with questions regarding Price Survey Content.

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