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Western Price Survey

Week's End Edition
September 10, 2010
Western Prices Experience Uptick

Western electricity prices recovered by the close of trading Friday, posting appreciable gains after weeks of sluggish movement.

All hubs gained value in the Friday-to-Friday trading period spanning Sept. 3 to Sept. 10, with average peak prices increasing between about $1.25 and $3.70/MWh.

No trading occurred Monday, Sept. 6 due to the Labor Day holiday.

Over the six trading days ending Sept. 10, South of Path 15 values for peak power gained $3.67 to $37.05/MWh. North of Path 15 ended at $37.06/MWh for daytime average power, up about $3 for the period.

Mid-Columbia peak traded for an average of $37.74/MWh Friday, up $1.23.

California-Oregon Border daytime power traded for an average of $40.48/MWh Friday, up $1.82 from the previous Friday. COB recorded the week's high for spot prices among Western hubs at $40.75/MWh.

The weakest gains were recorded at Palo Verde, where peak power traded for an average of $34.41/MWh Friday, up $1.70 for the six trading days.

For off-peak power, Western hubs also gained value throughout the week, with average prices for nighttime power up between about $3 and $5.30/MWh (see chart below).

Peak demand on the Cal-ISO grid reached 32,983 MW Tuesday at 8 p.m., which was the week's high. Demand is anticipated to exceed 35,500 MW on Tuesday, Sept. 14.

According to the U.S. Energy Information Administration, a 58 Bcf addition to natural gas reserves provided a total of 3.164 Tcf in storage as of Sept. 3. This addition was 10 Bcf less than the 68 Bcf injection last year at this time. Nevertheless, storage is now 166 Bcf greater than the five-year average.

Henry Hub spot prices traded at $3.81/MMBtu on Wednesday, Sept. 8, up 10 cents from the previous Wednesday, but fell to $3.79 by Friday. Futures contracts for the hub traded at $3.81/MMBtu on Sept. 8, up from $3.76/MMBtu the previous Wednesday. On Friday futures came in at $3.88.

U.S. hydroelectric output declined about 8 percent for the first half of this year due to less spring runoff in the Pacific Northwest, according to the U.S. Energy Information Administration Short-Term Energy Outlook, released Sept. 8. The report stated that some areas within the United States (but not California) set hourly peak-load records in July and August, most of it supplied by natural gas generation. The EIA projected an 8 percent jump in natural gas generation during the second half of 2010 compared with the second half of 2009.

What's ahead: After rainy weather, Seattle expects drier conditions with temperatures near the 70s Tuesday and Wednesday, possibly warming to above normal by Thursday. Portland should be warmer and dry starting Monday and continuing into Wednesday. Meteorologists are hesitant to make any long-term forecast for the region. Conditions in the San Francisco Bay Area should be "quiet," with rain possible late in the week that could reach into the Sacramento area. Los Angeles temperatures remain below normal, but should be warmer continuing into midweek [Linda Dailey Paulson].

Western Electricity Prices
Week's End: Sept. 6 - 10, 2010
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 21.06-173.02 10.99-40.84
Mid-Columbia 32-38.50 23-32
COB 34.75-40.75 25-29.50
NP 15* 32.25-37.25 25.50-29.45
SP 15* 31.50-37.50 23.50-29
Palo Verde 30.25-38 21.75-28.50

* 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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