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Western Price Survey

Week's End Edition
August 20, 2010
Power Price Declines Continue

Western energy prices continued losing value throughout the week, with Northwestern hubs leading the losses for both daytime and off-peak power trades.

From Friday, Aug. 13 to Friday, Aug. 20, average daytime prices for all hubs fell. Northwest hubs lost about $12/MWh. Mid-Columbia dropped from an average of $50 to $38.06, while California-Oregon Border prices moved from $53.58 to $41.81/MWh.

North of Path 15 and South of Path 15 average peak prices also eroded this week, though not as dramatically. By Friday, NP15 and SP15 lost between $3.35 and $3.85/MWh compared with the previous week. Average pricing for those hubs was around $42/MWh on Aug. 20.

Palo Verde average daytime pricing fared little better, ending the week at about $43.75/MWh, a loss of about $4.25 compared to Aug. 13. The hub posted this week's high spot price: $47.50/MWh.

For nighttime power, average prices in the West ended Aug. 20 in a range between about $26.50 and roughly $31/MWh. Northwest prices showed significant declines -- $12/MWh at Mid-C, for example.

Peak demand on the Cal-ISO grid reached the week's high of 41,152 MW Wednesday. Future demand may exceed 42,300 MW on Tuesday, Aug. 24.

According to the U.S. Energy Information Administration, a 27 Bcf addition to natural gas reserves provided a total of 3.012 Tcf in storage as of Aug. 13.

This addition was 27 Bcf less than last year's 54 Bcf injection at this time, but inventories remain 7 percent above the five-year average. This marks the first time storage inventories have reached 3 Tcf since Jan. 1, 2010.

Natural gas prices continued to decline throughout the week. Henry Hub spot prices traded at $4.35/MMBtu on Wednesday, Aug. 18, down 3 cents from the preceding Wednesday, according to the EIA. Spot prices traded at an average of $4.19/MMBtu Friday.

The average regulated retail price of electricity increased at a rate greater than inflation in 2009, according to a newly released study by Regulatory Research Associates. The average bundled price to end consumers in 2009, the study stated, increased by 2.1 percent to 9.87 cents/kWh compared to a 1.2 percent increase in the Gross Domestic Product Price Index.

The pattern held true for the Western U.S. as well, said Rob Schain, president of RRA. In California prices were up 8.1 percent in 2009; Arizona prices were up 4.1 percent; Oregon, 5.2 percent; and in Washington prices rose 3.9 percent. Schain said infrastructure additions and replacement, including projects for green-power generation, are among the prime contributing factors to price increases.

Analysts conclude that prices should continue to rise as utilities seek to recoup various costs associated with mandated programs such as environmental compliance and greater employee benefit and health-care costs.

What's ahead: The entire West Coast is expected to have at least some warmer weather next week. Sun reaches the Seattle area Monday and Tuesday, with cloudy conditions and showers predicted Wednesday and Thursday. Portland should be warm and dry as well [Linda Dailey Paulson].

Western Electricity Prices
Week's End: 16 - 20, 2010
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 19.69-168.67 19.26-36.72
Mid-Columbia 30-43.25 22.50-28.50
COB 35-45 23.50-28.60
NP 15* 35.25-42.25 25.50-31
SP 15* 35.75-44.75 24.45-31.50
Palo Verde 35.50-47.50 23-31.50

* 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.

Please contact with questions or comments about this site.

Contact Chris Raphael, editor with questions regarding Price Survey Content.

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