Western Price Survey / Archives
August 23, 2002
Prices for power deliveries in Northern California took an unexpected leap from 25 mills to 37 mills/KWh on Thursday morning as traders were putting together their Friday/Saturday packages. But the rally proved short-lived and when the Department of Water Resources dumped a load of excess power into the market, it pushed the NP15 peak price back down to about 30 mills/KWh. Off-peak picked up from 14.5 mills to 17 mills/KWh.
California/Oregon Border prices tagged along to the 26 mills/KWh level after having languished between 20 mills and 21 mills/KWh all week. The off-peak price edged up from 14.5 mills to 16 mills/KWh.
Otherwise, market activity this week was light as temperatures remained moderate throughout the West, and loads failed to hit the 33,000 MW mark on the California Independent System Operator's system. Cal- ISO's outage list swelled to more than 10,780 MW Thursday as Ormand Beach No. 2 dropped 500 MW unexpectedly. Anther big unit on the unplanned list was Alamitos No. 6 at 485 MW.
On Friday morning, Diablo Canyon No. 1 moved down to 92 percent, according to the Nuclear Regulatory Commission. Owner Pacific Gas & Electric offered no explanation for the curtailment of output.
Transmission lines were at seasonal ratings, but the California/Oregon Intertie is scheduled to drop to 3,000 MW southbound until midnight over the weekend.
With final figures for the Northwest runoff season showing 97 percent of a normal, Bonneville Power Administration has had no problem meeting fish protection protocols and has had a steady surplus of energy to sell. BPA this week kept its daily offer at 600 MW of peak and 400 MW of off-peak energy through Saturday, then upping the offer to 700 MW of peak and 500 MW of off-peak for Sunday/Monday. The Mid-Columbia price settled to 16 mills, continuing the downward trend of the week. At the top, Mid-C prices hit 19 mills/KWh but could not sustain the altitude.
SP15 broke out to 32.5 mills on Thursday, but reverted to the 28 mills to 30 mills/KWh range. Palo Verde was slightly higher at 28.5 mills to 33 mills, while off- peak wobbled between 14.5 mills and 16 mills/KWh. This despite a loss of two 750 MW Four Corners units to tube leaks. "We've seen big units go off with virtually no change in price," reported a SW scheduler [Arthur O'Donnell].
San Juan Basin Collapses
The mystery of the gas market week was why prices at the San Juan Basin dived by about $1/MMBtu while those at other hubs gathered strength in reaction to national market trends. Briefly reaching a high point of $2.65 on Tuesday, San Juan abruptly fell to the $1.65 to $1.85/MMBtu range by Thursday. Traders pointed to lack of electric load or air-conditioning demand as weather in the Southwest moderated, but the loss of more than 1,500 MW of coal-fired units at Four Corners seemed to argue a need for replacement fuels to pick up the generation slack.
If so, supplies must have come from other storage or other locations. San Juan proved to be a contrary market, as Permian, Topock and the SF CityGate else picked up above $3/MMBtu after the national storage report showed less than expected injection for the third consecutive week.
Northern California experienced some strong pull on pipeline flows, despite relatively mild temperatures in the state. Some speculated that the mix of electric generation was tipping from hydropower to gas-fired, as reservoir levels receded from their high point. Another possible factor was the bid week for next month's contract, which induced optimism among sellers for a last burst of summer-related demand. The EIA storage report of just 37 Bcf injections added to a bullish tendency on the NYMEX screen.
The biggest jump was experienced in Alberta, where the market had been pretty listless of late. From a trough of $(C)2.95/Gigajoule midweek, AECO popped to $3.30/Gj in late trades Thursday, then settled to $3.16 [A. O'D.].
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