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Western Price Survey

Week's End Edition
September 24, 2010
Likely Heat Wave Spikes Western Prices

Predictions of a late-season heat wave prompted Western electricity price spikes, with California hubs posting increases exceeding $13/MWh in Friday trading.

In the Friday-to-Friday trading period spanning Sept. 17 to Sept. 24, South of Path 15 average peak prices jumped about $15.50 to $54.08/MWh. North of Path 15 average peak prices climbed more than $13, closing Friday at $51.01/MWh.

Peak demand on the Cal-ISO grid reached 34,123 MW Sept. 20, the high for the week. But forecasters are predicting searing weather that would likely lead to a surge in demand on Monday, Sept. 27. Cal-ISO's Gregg Fishman says the system operator is not anticipating demand to exceed 42,000 MW Monday, which meteorologists expect to be the hottest day. With days now shorter, the odds are less of surpassing the summer's peak demand -- set Aug. 25 at 47,350 MW. Plus, Fishman says, adequate generation is available.

At the California-Oregon Border, daytime power traded for an average of $47.79/MWh Friday, posting a gain of $9.46 from the previous Friday.

Over the six trading days ending Sept. 22, Palo Verde peak power gained about $5.30/MWh, trading for an average of $42.75/MWh Friday.

Mid-Columbia posted an average price of $39.26/MWh for daytime power Friday, gaining a comparatively modest $2.28 during the trading period.

For off-peak power, most Western hubs gained value throughout the week, with average prices for nighttime power up between about 50 cents and $3.75/MWh (see chart below). In contrast, COB lost about 50 cents versus the previous Friday.

At peak production, California renewables provided 12.77 percent of system power on the Cal-ISO grid over a 24-hour period Wednesday, Sept. 22. Of the 80,773 MWh generated, wind contributed 31,634 MWh; geothermal sources contributed 23,527 MWh; and biomass generation contributed 9,147 MWh.

According to the U.S. Energy Information Administration, a 73 Bcf addition to natural gas reserves provided a total of 3.34 Tcf in storage as of Sept. 17. This addition was 7 Bcf more than the 66 Bcf injection last year at this time. Storage is now 195 Bcf greater than the five-year average, according to the agency.

Henry Hub spot prices traded at $4.02/MMBtu on Wednesday, Sept. 22, down 4 cents from the previous Wednesday. By Friday, the average price was $3.96 MMBtu. Futures contracts for the hub traded at $3.96/MMBtu on Sept. 22, down 1 percent from the previous Wednesday.

What's ahead: Meteorologists predict "widespread triple-digit temperatures" throughout California. The heat should linger until Tuesday, with cooling predicted for the week's end. From this same system, Seattle and Portland expect drier conditions for the week after a slight chance of showers Monday and Tuesday [Linda Dailey Paulson].

Western Electricity Prices
Week's End: September 20 - 24, 2010
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 23.25-38.82 14.13-30.85
Mid-Columbia 33.25-41 23-34.25
COB 35.75-49.50 26.75-35.75
NP 15* 36.50-51.25 26.25-28
SP 15* 35.50-55 25-35.50
Palo Verde 34.75-46.50 23.75-35.50

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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.

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Contact Chris Raphael, editor with questions regarding Price Survey Content.

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