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Western Price Survey

Week's End Edition
September 5, 2008
Power Prices Mixed on Hot Weather

Electricity prices seesawed this week between rising demand following Labor Day and varying weather reports for the West Coast.

Prices climbed through Wednesday on the post-holiday boom in energy demand, then diverged between the Northwest and California.

Climbing natural gas prices, which were tracking three new tropical storms in the Atlantic Ocean, provided uplift for higher electricity prices. After falling much of the week along with a weakened Hurricane Gustav, natural gas prices rebounded to end Friday nearly even with Tuesday.

A ridge of high pressure over the West Coast is pushing up temperatures in California and breaking some records around San Francisco, AccuWeather said. Over the weekend, San Francisco and Los Angeles are expected to hit highs of 88 degrees and 91 degrees, respectively, while Phoenix hovers around 105. California's Central Valley and desert regions are expected to cook in triple-digit temperatures. Beginning on Sunday, however, temperatures are expected to cool to more seasonal levels.

Temperatures warmed in the Northwest, with Seattle and Portland expected to hit highs of 77 degrees and 82 degrees by Sunday. There will be some thunderstorms in the interior Northwest.

Power demand marched steadily higher with rising temperatures in California this week, climbing from 33,600 MW on Monday to 44,200 MW on Thursday, according to the California Independent System Operator. On Friday, electricity usage was expected to top out at 43,200 MW.

Over the week, California average daytime power dropped about $1 to $71/MWh at North of Path 15 and South of Path 15. Average nighttime power rocketed $11-$12 to $59 at both hubs.

Palo Verde peak prices fell $2 to an average of $63.64/MWh while off-peak power traded $7 higher at $47.32.

Average prime trades at the California-Oregon border inched up $3 over five days to $69.70/MWh. Off-prime trades shot up to $55.19/MWh, an increase of $9.

Daytime Mid-Columbia prices climbed $3 to an average of $62.43/MWh, while average nighttime deliveries clocked in a $9 rise to $53.73.

Repairs continued to a backup generator at the San Onofre Nuclear Generating Station and kept its Unit No. 3 off line. The 1,080 MW unit has been shut down since Tuesday and there is no date for its resumption. At the Diablo Canyon nuclear facility, a new transformer is being installed at its 1,118 MW second unit after a fire damaged it two weeks ago. [Kristina Shevory].

Gas Prices Flat as Hurricane Threat Cancels Out Huge Storage Injection

Natural gas prices rebounded on Friday, pumped up by the threat of three new storms forming in the Atlantic Ocean. Despite the rebound, prices ended the week nearly flat.

Tropical storms and Hurricanes Ike and Josephine could strengthen and veer into the Gulf of Mexico. On Friday, average prices extended from $5.45/MMBtu at the San Juan Basin to $6.97/MMBtu at Pacific Gas & Electric's CityGate.

The recovery in prices came despite a huge boost in storage and Hurricane Gustav's bypassing the Gulf of Mexico's drilling equipment. Nearly all of the region's platforms and rigs had been shuttered in preparation for the storm and were resuming production by the end of the week, according to the U.S. Minerals Management Service.

Mild weather across the country pumped up natural gas stockpiles last week, pushing injections to meet or exceed the five-year average for the eighth week in a row, according to the U.S. Energy Information Administration.

Natural gas in storage rose 90 Bcf to 2.847 Tcf, outpacing the weekly injection for last year and the five-year average. It was the second-largest influx of natural gas into storage in August since the government began tracking the system in 1994. Supplies are now about 5 percent below last year and nearly 5 percent above the five-year average.

In the West, supplies inched up 7 Bcf to 378 Bcf -- 7 percent lower than last year but almost 1 percent higher than the five-year average. [Kristina Shevory].

Western Electricity Prices
September 1 - 5, 2008
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 14.12-765.71 7.60-61.25
Mid-Columbia 55-64 43-54.50
COB 64.25-72.25 44.50-55.75
NP 15 69-78 46.25-60.25
SP 15 69-80 45-62
Palo Verde 60.25-73 35-55

Archives of the Western Price Survey for the past year are also available online.


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