Western Price Survey / Archives
September 13, 2002
Temperatures across the Western region were not extreme but they remained warm enough to push electric demand higher than forecast in California for much of the week. The pricing edge seemed to be coming off late in the week by about a mill or two, but power remained firmly in the low to mid 30s at most locations for Friday/Saturday deliveries.
The high price for prescheduled peak power was about 36 mills in Southern California and in the desert Southwest while Pacific Northwest energy centered between 26 mills to 28 mills/KWh most of the time.
Off-peak power was running 3 mills to 5 mills below the peak price at most hubs, with a floor being provided by the reduction in hydroelectricity.
Traders felt that natural gas prices were helping bolster energy costs as transmission limits cut into NW exports and a few coal-units outages pushed more reliance on gas as the marginal fuel.
Most of the significant unplanned unit outages occurred at Southwestern facilities, with 800 MW of Springerville units tripping offline Wednesday morning for unspecified reasons and a 750 MW San Juan coal unit reported out of service. The Rocky Mountain region also lost units at Craig, and Drake generating stations, requiring some system balancing efforts by control area operator.
Hydro spigots are closing Bonneville Power Administration was down to just 100 MW of surplus availability this week but raised that to 300 MW in off-peak hours for Sunday/Monday.
California/Oregon Border and NP15 prices were in the 32 mills to 35.5 mills range, but off-peak was 23 mills to 25 mills/KWh. "You can find it cheaper but you have to go looking," said one scheduler.
The Southwest was where the off-peak bargains were, at 20 mills to 21.5 mills at SP15 and 16 mills to 18.5 mills/KWh at Palo Verde.
Afternoon loads on the California Independent System Operator's grid were running higher than the day-ahead forecast until Wednesday afternoon, when the actual peak of 37, 200 MW undercut the hour-ahead forecast of 38,400 MW. Loads trended downward after that and will be moderate into the weekend.
Transmission limitations had a slight impact on resource availability, but scheduled maintenance in advance of the seasonal shift will cut flows further this weekend. The California/Oregon Intertie was as low as 2,300 MW southbound on Wednesday. COI will be less than 3,000 MW over the weekend, schedulers said.
Southern California Edison completed washing insulators at the Midway/Vincent No. 1 500 KV line on Tuesday and brought Path 26 back to full service after fires last week limited flows.
The Alberta Pool saw a huge spike in prices to over 700 mills after several hours of clearing prices above 100 mills/KWh on Wednesday. There had been transmission line relays and some generation trips, but little that coincided with the price run-ups. Peak pool loads were moderate at 7,500 MW or less [Arthur O'Donnell].
Recession, What Recesion?
Power generation, food processing and some residual air-conditioning demand helped pull gas prices above the $3/MMBtu mark throughout the West. That is, except for the San Juan Basin, which continues to mystify traders by lagging Permian Basin prices by as much as $0.70/MMBtu.
Most pipelines appeared to be full, except for the Baja line, and California utilities avoided pulling from storage to avoid the wrath of the California Public Utilities Commission, which has penalized what regulators consider imprudent summertime storage management.
The pricing dynamic was consistent this week, starting each day at a lower price than the prior close but then lifting as trading heated up. "Everyday there's more bids than offers on ICE," noted one marketer. "Why buy late in the day."
SoCal Border and Permian were close in price until Thursday, when a spread widened. Mostly, the Texas price slipped a bit to $3.08 while the border held at about $3.10/MMBtu on average. Both points had been up to $3.18 earlier in the week, while the most San Juan could muster was $2.55/MMBtu.
The San Francisco CityGate was strong in the $3.15 to $3.25 range most of the week, closing at $3.22/MMBtu. Malin eased slightly to the $3.03 to $3.10/MMBtu range.
After starting at $(C)3.49/Gigajoule, Alberta moved firmly in the $3.66 to $3.79 range even late into the week. The AECO index landed at $3.73/Gj [A. O'D.].
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