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Western Price Survey

Week's End Edition
September 9, 2011
Outage Causes Price Drop

Western energy prices have been on a rollercoaster in recent weeks, with power prices primarily following natural gas values.

After a week in which high temperatures boosted prices, peak-power prices at Western hubs tumbled by Friday, Sept. 9, after a power outage swept through Arizona, Southern California, and Mexico on Sept. 8, crimping demand. Some off-peak prices jumped in the wake of the blackout.

The San Diego area reported use of around 4,300 MW Tuesday and Wednesday, according to Cal-ISO, but hit a low of 48 MW at 5 p.m. Thursday, Sept. 8, as transmission outages led to the widespread blackout (see story at [16]).

The outage caused both reactors at the San Onofre Nuclear Generating Station to trip off Thursday afternoon, compounding the region's supply woes. The 2,200-MW facility remained off line Friday. Southern California peak prices barely moved in response, but SP15 off-peak prices jumped about $7/MWh between Thursday and Friday, from $28.15 to $35.35/MWh. Palo Verde closed at $32.84 Friday, up about $6.70 compared with Thursday.

Working gas in storage was 3,025 Bcf as of Sept. 2, according to U.S. Energy Information Administration estimates, a net increase of 64 Bcf from the previous week. Stocks were 131 Bcf lower than last year at this time and 60 Bcf below the five-year average of 3,085 Bcf.

Western natural gas values eroded in the Sept. 2 to Sept. 9 trading period. Malin and Ruby-Malin gas each lost around 17 cents to about $3.83/MMBtu. PG&E CityGate traded for $4.33/MMBtu, a loss of 16 cents over the trading period, and Southern California Border was down 13 cents to $4.21/MMBtu.

Peak-power prices lost between roughly $3.65 and almost $10/MWh, bringing prices to around the $41/MWh mark. Mid-Columbia had the greatest drop, with its average price moving to less than $34/MWh by Friday (see chart).

Here's how average peak-power prices fared over the trading period.

  • Mid-C: Dropped $10 to $33.55/MWh.
  • California-Oregon Border: Lost $6.60 to $40.45/MWh.
  • NP15: Posted only a single day's trades this week; traded for $50/MWh Sept. 6.
  • SP15: Down $9.65 to $41.70/MWh.
  • Palo Verde: Lost $3.65 to $41.50/MWh.

Peak demand on the Cal-ISO grid was 45,569 MW Wednesday evening, which should be the week's high. Demand should remain less than 36,600 MW in the week ahead, according to the grid operator.

What's ahead: Seattle continues its "warm spell" with temperatures in the 70s and gradual cooling starting at midweek. After reaching a high of 83 °F Monday, Sept. 12, Portland cools into the 70s as clouds move into the region. Precipitation is possible Thursday. Forecasters say San Francisco should experience seasonally typical weather through Wednesday, with highs around 69 °F. Los Angeles should see little variation in conditions, with morning fog and temperatures around 72 °F through the week [Linda Dailey Paulson].

Western Electricity Prices
Week's End: September 5 - 9, 2011
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 15.60-999.99 15.37-104.52
Mid-Columbia 33-42.50 23.75-30.50
COB 38-48 26-34
NP 15* 50-50 27.45-31
SP 15* 40.50-54.25 26.25-37
Palo Verde 40-47 24.25-34

* 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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