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Western Price Survey

September 16, 2005
Diablo Ramp-Down Edges Up Power Prices

Mid-Columbia peak power drew between 64.50 mills and 72.50 mills/KWh in the Monday-to-Wednesday trading period, a slippage of 10 mills relative to last week's midweek price. With the weather turning colder in the Northwest in the past few days, the price of power gained a couple of mills to close at 76.50 mills/KWh on Friday. The off-peak power price spread ranged from 56 mills/KWh on Monday to a high of 70.25 mills/KWh on Friday.

California-Oregon border power costs notched a few mills above the Mid-C marks. COB peak-time power drew a high of 80 mills/KWh on Thursday, up from Tuesday's low of 71 mills/KWh. After opening the week at between 59 mills and 61.75 mills/KWh, off-peak power changed hands for as much as 72.50 mills/KWh for next week deliveries.

California power also lost an average of about 10 mills early this week relative to last week. After opening on Monday at a low near the 74 mills/KWh mark, daytime power traded on Wednes-day for just a bit more than 80 mills/KWh throughout the state. By Friday the price had moved up to 87 mills/KWh. SP15 nighttime power ranged from a low of 58 mills/KWh on Monday to a high of 64.25 mills/KWh the following day. Nighttime power at NP15 attracted between 50 mills and 64.25 mills/KWh during the first three days of the week. The price swelled to 73.75 at both NP15 and SP15 for deliveries scheduled for early next week.

The California prices were boosted by the derating of both units at the Diablo Canyon nuclear power plant. Diablo Canyon Unit No. 2 was ramped down to about 50 percent on Tuesday for sched-uled maintenance. The 1,087 MW unit stayed at that level until late Thursday, when output was cur-tailed by a total of 905 MW, leaving the generator running at about 25 percent. Unit No. 1 was taken down to 33 percent of its total 1,087 MW on Thursday as well. Plant owner-operator Pacific Gas & Electric said it was forced to reduce output at its facility because of high sea swells in the vicinity.

In other energy market news, the Southern California Public Power Authority has issued a request for proposals seeking long-term contracts for renewable energy. The contracts can start as soon as January 2006 and extend beyond 2017, although shorter-term proposals will also be consid-ered.

"SCPPA is well positioned to facilitate the joint ownership of a renewable power project for the benefit of its members," according to the RFP, released August 30. SCPPA said it would like to hold undivided equity interest in all or part of the proposed facility, issue tax-exempt debt financing to pay for the capital buy-in, and sell 100 percent of the output at cost to interested members.

Because the association can provide low-cost capital, it prefers an equity/ownership scenario, according to the RFP. SCPPA will consider contracts where equity or ownership is not possible, but it prefers to have ownership or equity.

Up to 75 MW of total capacity of solar, geothermal, wind, biomass or small hydro would be considered under the RFP. SCPPA requests a project facility plan that includes all major permits, licenses and approvals which are required, along with a schedule for their completion. The associa-tion also wants to see maximum and minimum monthly capacity factors, summer and winter maxi-mum net capacity and the proposed power factor. Responders must also include financial statements of all entities involved as project participants or part of the management team, and any pending litigation that could affect the viability of the proposal [Shauna O'Donnell and Caroline J. Keough].

Storm Damage Does Not Bode Well for Gas Production, Prices

The price of natural gas continues to escalate in the aftermath of Hurricane Katrina. Though the greatest increases were recording in the Northeast and Midwest, gas costs also rose steadily in the West this week.

Gas delivered to the Southern California border point at Topock opened the week at between $8.67 and $8.90/MMBtu, slowly rising to a week's high of $9.52/MMBtu for Friday deliveries. In the north, at the Malin hub, natural gas changed hands for as much as $9.39/MMBtu in the latter part of the week, up from Monday's price of around $8.90/MMBtu.

The Energy Information Administration's Natural Gas Weekly Update issued September 15 recorded underground storage of as much as 2,758 Bcf, with total injections for the week ending September 9 of 89 Bcf.

Production in the Gulf of Mexico is making a valiant effort to return to normal but is being hampered by the damage wrought by Katrina. Production tallies show 3.5 Bcf per day of natural gas and 844,000 barrels of oil per day remain shut in.

The EIA's Short-term Energy Outlook forecasts an average increase of between 37 percent and 50 percent in the cost of gas this year. Domestic natural gas production in 2005 is predicted to drop by 1.5 percent because of the storms [S. O'D.].

Western Electricity Prices
September 12 - 16, 2005
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.36-158.89 7.48-119.84
Mid-Columbia 64.50-76.50 56-70.25
COB 71-80 56.50-72.50
NP 15 74-87 50-73.75
SP 15 74.75-87.50 58-73.75
Palo Verde 70-83 53-68.25

Archives of the Western Price Survey for the past year are also available online.


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