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Western Price Survey / Archives

September 17, 1999
Where Have All The Traders Gone?

With many of their colleagues attending the Western Systems Power Pool summer meeting in Vancouver, British Columbia this week, power traders reported light activity and little price movement. In anything, late- week prices reflected the effects of moderate weather, diminishing loads and falling natural gas costs.

The only unusual market development was a strong off-peak price in Northern California and the Pacific Northwest. Utility schedulers pointed to transmission constraints on the Intertie system for turning around the usual relationship between peak and off-peak prices. On Thursday, congestion pricing made off-peak power more expensive that peak deliveries in the northern regions. In the Southwest, there was an opposite effect, as traders vied to unload excess capacity, driving off-peak prices lower.

The California Power Exchange showed some signs of life at the start of the week, bumping up to 36.8 mills/KWh for daytime energy and 29.6 mills/KWh for overnight bids. But as scheduled loads fell below the 600 GWh benchmark, so did prices, which ended the week at 31.8 mills/KWh for peak and 24.8 mills/KWh for off-peak.

Bonneville Power Administration took the unusual step of posting a flat price of 35 mills and 36 mills/KWh across all 24 hours for Wednesday and Thursday, but the price was out of alignment with the rest of the market. Mid-Columbia peak prices slipped below 28 mills/KWh and California/Oregon Border bids sank to 29 mills/KWh. Off- peak stayed strong at 27 mills to 28.75 mills/KWh.

In the Southwest, temperatures remained warm, but loads were manageable. As a result Palo Verde moved into the 30 mills to 32 mills range, but off-peak power dropped to 20 mills/KWh.

Most generation in the West was reported on-line and healthy (even the irregular San Juan units were up to full power) but there were a few trips reported early in the week. On Monday morning, Jim Bridger Unit No. 2 tripped, dropping 530 MW from the grid. Later in the day Dave Johnston No. 4 fell off-line with 330 MW lost. On Wednesday, a transmission line out of the Mohave steam plant relayed while carrying 670 MW, causing a blip in voltage through the system.

The WNP-2 nuclear plant is set to enter its refueling outage over the weekend. By Friday morning it was producing about 70 percent of normal capacity. Later in the month, it will be joined in seasonal outage by Diablo Canyon No. 1 [Arthur O'Donnell].

Gas Dives Despite Hurricane Turmoil in East

Natural gas prices moved faster than a tropical storm this week, but the direction was all down. Some Western hubs even outpaced the change in NYMEX benchmark prices, while the Southern California Border tried to hold its position late in the week.

NYMEX screen prices and a bearish storage report were part of the reason, traders said, although the American Gas Association's weekly inventory account was not out of line with recent net injections. Some chalked the weakening in prices up to a clash of expectations. " For the past three weeks, AGA numbers have been higher than the market expected," one trader explained. "But it's more of a neutral event."

Barring hurricanes hitting Gulf Coast production areas, traders did not expect a rally any time soon. "The Western weather outlook is mild and uneventful," one said.

The steepest drop appeared to be in Alberta gas prices, which collapsed from $(C)3.28/Gigajoule on Monday to $3.03/Gj by the end of the week. In US terms that represented a nearly $0.40/MMBtu difference from start to end of week.

The SoCal Border fell from a high of $2.90/MMBtu to $2.65/MMBtu by the end of the trading week, but no further. Permian Basin tanked from more than $2.70 to $2.30/MMBtu and the San Juan Basin price went from over $2.50 to an average of $2.22/MMBtu [A. O'D.].

Western Electricity Prices
Week of September 13-17, 1999
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 29-125 mills/KWh 5.8-25.5 mills/KWh
California PX (WAC) 31.8.2-36.8 24.8-29.6
Mid-Columbia 28-32 25-28
COB 29-35.5 23-28.75
Palo Verde 30-34 20-21

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


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