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Western Price Survey

Week's End Edition
September 2, 2011
Peak Power Prices Gain Ground

Western energy prices have been all over the place in recent weeks, but most daytime power prices rose this week, following natural gas prices higher.

This week, natural gas prices rose, exceeding the $4/MMBtu mark at most Western hubs despite reports of softer national demand, much of it weather-related. Hurricane/Tropical Storm Irene and its aftermath weakened demand and disrupted power transmission along the Eastern seaboard; another two tropical systems -- one in the Atlantic, the other in the Gulf of Mexico -- also seem to have softened prices, according to the U.S. Energy Information Administration.

Working gas in storage was 2,961 Bcf as of Friday, Aug. 26, a net increase of 55 Bcf from the previous week. Stocks were 137 Bcf less than last year at this time and 60 Bcf below the five-year average of 3,021 Bcf.

Western natural gas prices made significant gains. By Friday, Sept. 2, PG&E CityGate traded for $4.49/MMBtu, a gain of 28 cents versus the previous Friday. Over the same trading period, Southern California Border was up 25 cents to $4.24/MMBtu Friday. Malin and Ruby-Malin gas each gained around 12 cents to around $4/MMBtu.

Power prices responded to the rise in natural gas prices. SP15, for instance, exceeded $50/MWh on average Friday, a mark it surpassed two other times since June 1. Since then, only two other hubs have posted prices above $50/MWh -- Palo Verde and California-Oregon Border. Palo Verde so far this summer has set the highest average price among Western hubs -- $56.29/MWh, recorded on July 1.

In the Friday-to-Friday trading period, Aug. 26 to Sept. 2, here's how average peak-power prices fared:

  • Mid-C: Jumped $8.35 to $43.50/MWh.
  • California-Oregon Border: Gained $8.30 to $47.05/MWh.
  • NP15: Posted no trades last Friday; traded at about $47.10/MWh Sept. 2.
  • SP15: Up $4.35 to $51.30/MWh.
  • Palo Verde: Lost $1.15 to $45.15/MWh.

Over the same trading period, nighttime average prices at most Western hubs gained between 25 cents and $4.65. NP15 lost about $1.35/MWh. Spot prices during the week ranged from roughly $19 to $39/MWh (see chart).

Peak demand on the Cal-ISO grid was 42,498 MW Monday evening, which was the week's high. Demand should remain low until Wednesday, Sept. 7, when use should exceed 45,500 MW, according to the grid operator.

What's ahead: Forecasters say Seattle temperatures should be "well above" normal until about Sept. 10. In the near term, temperatures should be in the 80s. Inland Oregon may reach into the upper 90s during that same period. Morning fog and temperatures in the 70s should prove the norm for San Francisco through at least Thursday. A low-pressure system brings slight cooling to the Los Angeles area Monday; however, this is displaced Tuesday by a high-pressure system predicted to bring warmer temperatures through the week's end. Wednesday and Thursday should be the warmest days. Inland areas should reach triple digits on those days, exceeding seasonal norms [Linda Dailey Paulson].

Western Electricity Prices
Week's End: Aug. 29 - Sept. 2, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 21.68-952.99 14.49-33.40
Mid-Columbia 30.75-44.75 19-35
COB 34.75-47.50 22-37
NP 15* 37.75-47.50 24.50-35.25
SP 15* 39.50-52.50 24.75-36
Palo Verde 39-49 24-39

* 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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