Western Price Survey / Archives
September 15, 2000
All things considered, the Western power system got off relatively easy Thursday. The California Independent System Operator was forced to declare its 16th Stage Two Emergency of the year and second in a row-but things could have been much worse.
Bonneville Power Administration denied the existence of any fire- related Intertie outage on Thursday afternoon-as had been reported by Cal-ISO-but did confirm a tree/line contact incident on the Captain Jack/Klamath Cogeneration line, causing a deration on the AC Intertie lasting from 1:27 pm to 2:52 pm. According to Cal-ISO records, about 300 MW of imports were interrupted for three hours.
Four years ago, a similar incident cascaded through the entire Western grid, causing a blackout that left about 4 million people without power in 11 states.
At about the same time as the transmission disruption, Grand Coulee No. 21 tripped, pulling 700 MW from the Northwest and sending another voltage disruption across the grid. BPA said there was no relationship between the unit outage and the transmission disruption.
This was followed a few hours later by outages at the 465 MW Bonanza power station and BC Hydro's Shrum facility, which lost 1,200 MW from five units.
In addition, as much as 3,964 MW was already offline in California due to mechanical failures or maintenance that could not be put off. Cal- ISO had declared it a "no touch day" but some plant operators have been deferring repairs for so long they could not postpone them any longer.
Separately, the DC Intertie was derated to 1,757 MW southbound between 12:53 pm and 10:24 pm Thursday because of a converter outage at Celilo. Friday, the DC line is at 2,681 MW, BPA said.
The Stage Two was originally expected to last through 7 pm, but Cal- ISO terminated it an hour early. The Stage One Alert remained in effect through about 8 pm, however. Cal-ISO's system load for the day reached 40,914 MW during the 4 pm hour and voluntary curtailments helped keep it from reaching higher.
After two weeks of relative calm, the California system was back on alert and expecting more difficulties. The grid operator has already prepared warning notices well into next week as a warming trend was forecast for the state. "Next week is going to be challenging," said a Cal-ISO spokesperson. Cal-ISO also revised a prior report from Wednesday. Evidently there was only one fire affecting lines in Southern California, not two separate fires as previously reported. The blaze near Castaic was said to be contained late Wednesday, but as many as five other large fires were reported in various locations Thursday.
One bright side to the trying day was the return to the grid of the Diablo Canyon nuclear plant, which moved into start-up mode at about 9:30 am Thursday after an unscheduled outage that lasted nine days. By Friday morning, the 1,067 MW unit was at 40 percent, according to PG& E. It was expected to hold at 50 percent for the day and then begin climbing back to full power by Sunday night.
While the late generation activity played havoc with real-time markets and transmission scheduling, the prescheduled marketplace moderated slightly in advance of the weekend. The California Power Exchange daytime price had reached as high as 224 mills/KWh but eased to 195 mills/KWh for Friday deliveries. Off-peak prices moved above 100 mills midweek and stayed there. The range for the week was 86 mills to 129 mills/KWh, with the Friday price slipping to 112 mills/KWh.
Other hubs shadowed the PX price from varying distances. The return of heat in the Southwest pushed Palo Verde prices up to the 210 mills to 215 mills/KWh range for peak power and about 75 mills to 85 mills/KWh for off-peak. Northwest energy varied in a range Wednesday, running between 145 mills and 195 mills/KWh. Off-peak power was seen between 100 mills and 110 mills/KWh, after starting at the 90 mills/KWh level on Monday.
Bonneville Power Administration was back in the market most of the week, although mostly in daytime periods. BPA also tried a split- pricing strategy this week, basing costs for surplus power delivered into California at the Dow Jones COB index price, while still using the CalPX zonal prices for its Northwest and Nevada Border indexes
Gas Traders Bank on Higher Prices
Natural gas futures prices for October and November reached record levels this week and even a relatively positive storage report did not stem a bullish mood among traders. Daily prices rose steadily and balance-of-month contracts showed even higher prices than the peaks set this week.
Deliveries to the Southern California Border remain at extremely high costs, rising from $6.31/MMBtu to about $6.40/MMBtu on daily trades. Balance contracts were prices as high as $6.50/MMBtu, however.
San Juan rose to $4.70 and Permian moved above the $5/MMBtu mark.
Malin picked up to $5.45/MMBtu and the PG&E CityGate price popped about $0.20/MMbtu higher to $6.30/MMBtu.
Localized drivers were expectations of hot weather and continued demand from electric generation-although the return to service of Unit No. 2 the Diablo Canyon nuclear plant may ease demand next week. At the national level, worries that a tropical storm was moving toward Louisiana supply fields added power to the national NYMEX figures Thursday.
The Alberta gas price took a steady climb from $6.16/Gigajoule at the start of the week to $6.50/Gj [A. O'D.].
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