Western Price Survey / Archives
August 27, 2004
Lots of power and lagging loads did little to lift electricity prices this week. Throughout the West, market fundamentals chipped away at the cost of power on the spot market during the first three days of the week.
In the California Independent System Operator's territory, loads averaged about 35,500 MW early in the week. A warming trend in California pushed up demand later in the week, and the grid manager estimated Friday's peak demand would reach 39,500 MW.
The return of the Columbia Generating Station helped ease any supply constriction in the Northwest and did its part to drive down the price for power on the spot market in that region. According to the plant operator, Energy Northwest, the 1,100 MW nuclear facility was operating at full power by Tuesday morning. Columbia had been off line since July 30, when an electronic part failed. The next scheduled outage of the unit is planned for May 2005, when the facility will be refueled.
Peak-power prices at Mid-Columbia opened the week at between 39 mills and 44 mills/KWh before rapidly slipping to a range of 36 mills to 41 mills/KWh the following day. Weekend packages traded on Thursday for between 35 mills and 37 mills/KWh. Off-peak power at the hub was driven as low as 28 mills/KWh on Tuesday, after hitting 37.50 mills/KWh the day before. Later in the week the price stabi-lized in the 33 mills/KWh vicinity.
California-Oregon Border power did not fare much better in early-week trading. After hitting a high of 47 mills/KWh in Monday trading, the price for daytime power at COB shed up to 8 mills the following day. Power for Friday and Saturday delivery notched a mill or two lower still. In contrast, nighttime power did not lose much value as the week wore on. Having opened Monday at between 34 mills and 37.75 mills/KWh, the cost for off-peak power at COB hovered in the 34 mills to 35.75 mills/KWh vicin-ity for weekend deliveries.
California power prices also dropped as the week wore on, only to rise with the temperatures on Friday.. In Northern California, peak-power prices ran within the narrow spread of 49 mills to 51.50 mills/KWh at the beginning of the week. After dropping as much as 6 mills in Tuesday trading, the price tripped up as high as 54 mills/KWh for next Monday deliveries. Off-peak power at NP15 changed hands for as much as 39 mills/KWh on Monday but soared to 45.75 mills/KWh on Friday.
Peak-power prices in the southern half of the state ran close to NP15 prices early in the week. After topping out at 52 mills/KWh on Monday, high-demand power stalled at about 48 mills/KWh for the week. Off-peak power at SP15 drew significantly lower prices compared to its northern counterpart, man-aging to hover around the 30 mills/KWh mark during the second half of the week before reaching 39.25 mills/KWh in Friday trading.
Power prices in the Southwest trailed the California prices by about 5 mills this week. Off-peak power at Palo Verde ranged from 28.50 mills to 29.25 mills/KWh on Monday before dropping as low as 26 mills/KWh for late-week deliveries. Peak-time power at PV drew between 44.50 mills and 46.15 mills/KWh at the begin-ning of the week. Average temperatures chipped away at the cost for daytime power, leaving it to close out the week no higher than 45.50 mills/KWh.
Very few major power plants were reported off line by Cal-ISO this week. Morro Bay Unit Nos. 1 and 2, each rated at 163 MW, continued on forced-outage status and Moss Landing Unit No. 7, rated at 755 MW, was the facility with the greatest capacity out of service in Cal-ISO territory this week. The unit was out on Monday but returned to the grid the following day. Calpine's 527 MW Sutter facility had some difficulty staying at full output early in the week but had made a full recovery by Thursday [Shauna O'Donnell].
Gas Loses Ground
Natural gas prices rode out this week on a gentle, downward sloping trend. With injections into storage continuing to outpace last year's volumes by a respectable margin and demand showing no signs of picking up significantly in the next month, neither spot-market nor futures trading of gas displayed any bullish trends this week.
The Energy Information Administration's storage report recorded a gain of 84 Bcf in the nation's underground storage for the week ending August 20, bringing the total amount of natural gas squirreled away up to 2,614 Bcf. This figure factors in a 6 Bcf downward adjustment for the gas burned off during the week-long fire at Duke Energy's Moss Bluff facility. The fire, which began August 19, finally burned out on the evening of August 26.
The price for basin gas at both San Juan and Permian Basins slipped as the week wore on. San Juan traded for as much as $4.92/MMBtu on Monday before dropping to the $4.43 to $4.50/MMBtu range at the end of the week. Deliveries of gas to the Malin hub were driven from $5.01/MMBtu at the beginning of the week down to a low of $4.64/MMBtu for weekend delivery [S.O'D.].
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