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Western Price Survey

Week's End Edition
September 15, 2006
Autumn Weather, Low Generation Outages Dampen Power Plays

With the weather in California waffling between summer and fall temperatures, prices for power on the day-ahead market over the course of the past couple of weeks have been vacillating between fairly unremarkable highs and lows. No doubt the fact that the Western region's nuclear generating facilities are hale and hearty, as are the large majority of gas-fired units in the state, has also aided in holding a lid on prices.

Peak demand in the California Independent System Operator control area was forecast to languish at just above the 31,000 MW mark at the end of the week. Load figures earlier in the week, while higher than that by a few thousand megawatts, were nothing to write home about.

The value of daytime power in the North of Path 15 region was recorded at between 58.50 mills and 60.25 mills/KWh on Monday, about 6 mills above Wednesday's high of 54 mills/KWh. Weekend peak power attracted between 38 mills and 47.25 mills/KWh on Thursday. The off-peak price for NP15 power hit a high of 44.25 mills/KWh at the start of the week before gently easing down to a range of 36 mills to 38 mills/KWh on Wednesday. The price dropped as low as 30 mills/KWh at the end of the week.

South of Path 15 daytime power cost as much as 70 mills/KWh on Tuesday before slipping quickly to a spread of 51.75 mills to 54.75 mills/KWh the following day. The price fell to a low for the week of 38 mills/KWh for trades conducted Thursday and Friday.

Nighttime power at SP15 moved for between 36.50 mills and 37.50 mills/KWh at the beginning of the week. The price swelled to a high of 43 mills/KWh on Tuesday, but the following day shed about 5 mills to close in the range of 35 mills to 38 mills/KWh. Friday's low matched the 30 mills/KWh posted for NP15 deals.

Northwest power attracted a bit less than it did last week. Mid-Columbia daytime packages drew between 53.75 mills and 55 mills/KWh on Monday. Mid-C peak-time exchanges gave back a mill or so the following day, and left another 5 to 6 mills on the trading table on Wednesday, closing that day at between 47.25 mills and 49.50 mills/KWh. The trend continued during the latter half of the week. Next-Monday deliveries moved for as little as 36 mills/KWh on Friday.

Off-peak power values at Mid-C opened the week in the low forties. By Wednesday the price of low-demand power at the hub hovered in the range of 37.75 mills and 39 mills/KWh. The slide continued on Thursday and Friday, as another 5 mills or so were shaved off the price going into the weekend.

California-Oregon border peak-time power traded for a high of 59 mills/KWh on Tuesday before following the trend in the West and dipping to a spread of 42.50 mills to 45 mills/KWh on Thursday. The low for the week, 39 mills/KWh, was recording on Friday. Off-peak power at COB traded for as much as 45 mills/KWh Tuesday, but the price drooped to 32.50 mills to 35.25 mills/KWh for weekend deliveries exchanged on Thursday.

Palo Verde power values remain weak relative to their Golden State brethren. High-demand power changed hands at the Southwest hub for between 48 mills and 51.25 mills/KWh on Monday before sagging to a low of 33.50 mills/KWh on Friday. Low-demand power traded for a low of 23.75 mills/KWh at the Palo Verde hub on Friday after spending the early part of the week in the 28.25 mills to 32 mills/KWh zone [Shauna O'Donnell].

Gas Skids Below $3 at Week's End

The bottom fell out of natural gas prices on the Western spot market on Friday. Most hubs reported trading in the mid- to upper $3 range that day. The average drop in value in the West was about 20 percent between Thursday and Friday. In fact, prices across the nation nose-dived in Friday's trading session. Henry Hub spot gas lost close to 15 percent in value, closing at an average of $4.40/MMBtu at the end of the week.

A major contributor to the price erosion was Thursday's announcement that underground storage in the Lower 48 had exceeded 3,000 Bcf. And injection of 108 Bcf last week put the stored-gas figure at 3,084 Bcf as of September 8, more than 12 percent above the five-year average.

The price for gas entering California at the Southern California border point at Topock reached a high of 5.58/MMBtu on Tuesday before falling to a low of $3.60/MMBtu on Friday. Malin gas costs followed the same trajectory, topping out at $5.40/MMBtu on Tuesday before skidding to a low of $3.75/MMBtu at the end of the week. Producing-basin gas at Permian attracted between $3.50 and $4/MMBtu on Friday, down from a high of $5.27/MMBtu [S. O'D.].

Western Electricity Prices
Week's End: September 11 - 15, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 21.62-306.96 12.79-127.79
Mid-Columbia 36-55 32-44.50
COB 39-57 33-45
NP 15 38-63.25 30-44.25
SP 15 38-68.50 30-43
Palo Verde 37.50-51.25 23.75-32

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 Shauna O'Donnell, editor with questions regarding Price Survey Content.

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