Western Price Survey
Week's End Edition
Electricity prices continued their march downward this week as cooler air swept into the West, power demand dropped, and traders factored in low holiday electricity demand.
Price declines across the West varied from $2/MWh to nearly $9/MWh, with off-peak power often trading a few dollars below $20/MWh at many hubs by the end of the week.
Power demand, and consequently prices, are already low as a result of the recession. Prices went even lower this week as trading was compacted in observance of Labor Day on Monday. For example, electricity bought and sold Friday will be delivered Tuesday.
Peak power demand steadily rose from 42,000 MW on Monday to 46,000 MW on Thursday, but was expected to drop to 41,700 MW on Friday, the California Independent System Operator reported.
Consequently, power values dropped in anticipation of low holiday demand. For the week, California average peak trades slid $2 to $31.81/MWh at North of Path 15, and tumbled $5 to $29.73 at South of Path 15. Off-peak values were off about $2 in the north to $20.80/MWh, and $3 in the south to $17.88.
Average Palo Verde daytime power slipped over $6 to $24.35/MWh, and nighttime trades were down almost $4 to $14.99.
A heat wave, decades-old brush and low humidity helped wildfires spread this week. Power outages have been scattered, and there has been no significant damage to transmission lines or substations due to the fire, according to Southern California Edison. But high demand and temperatures were the likely culprits behind a substation fire that cut power to more than 8,000 people in East Los Angeles and Montebello earlier this week.
The Station fire, the largest in Los Angeles County history, has now burned 148,258 acres, destroyed 60 structures and sent thousands on evacuation orders since it started over a week ago, according to the California Department of Forestry and Fire Protection. Investigations announced it was started by arson and is now 44 percent contained.
Fortunately for firefighters, the ridge of high pressure over Southern California has been weakening, ushering in cooler temperatures and high humidity that will help firefighters as they battle wildfires across the region.
In the Northwest, Mid-Columbia trades for peak power dipped $7 to average $31.81/MWh, while off-prime values were down almost $9 to $17.89.
Meanwhile, the California-Oregon border saw peak prices ebb nearly $7 to average $33.13/MWh. Off-peak trades fell $8 to an average of $19.36.
Temperatures in the Northwest are expected to fall from the high 70s into the high 60s this weekend in Portland and from the low 70s into the low 60s in Seattle, according to the National Weather Service.
The weekly injection of natural gas into storage is now 242 Bcf short of the all-time record peak of 3.565 Tcf at the end of October 2007, according to the U.S. Energy Information Administration.
Energy companies tucked away 65 Bcf into storage last week, pushing total inventories nationwide to 3.323 Tcf, or 17.3 percent higher than last year, and 17.8 percent greater than the five-year average.
In the West, supplies climbed 6 Bcf to 461 Bcf, leaving totals 22.3 percent higher than the same period last year and 20.1 percent higher than the five-year average.
A high amount of gas in storage and low demand have kept gas prices moribund. Alberta gas, for instance, is now trading below $2/MMBtu, and prices in the San Juan and Permian basins have also gone below $2.
For the last week, Diablo Canyon's second 1,138 MW unit has been operating at 80 percent capacity while its steam valve was being replaced. The unit will return to full operation in the fall at its next scheduled refueling outage. The Columbia Generating Station in Washington returned to service on Tuesday after a nearly month-long shutdown and was at 49 percent capacity on Friday. The 1,150 MW plant was closed after an electrical bus bar in the turbine building overheated and sparked a fire [Kristina Shevory].
* 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.
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