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Western Price Survey / Archives

September 24, 1999
Power Market Struck by Lightning

Power markets throughout the West felt the surge after lightning struck the Diablo Canyon switchyard on Wednesday morning. The 1069 MW Unit No. 1 automatically tripped when a bolt of electricity hit the facility's 500 KV line terminus at 9:32 am, September 22. Real-time markets energized like Frankenstein's Monster-driving prices on the California Power Exchange "day-of" market to about 80 mills/KWh and pushing some trades in bilateral markets to as high as 170 mills/KWh.

While the price spikes were temporary, the nuclear outage added pressure to an already constrained California market. Day-ahead bids on the Power Exchange had been creeping upward through the week because of transmission maintenance work and increasing loads. The trend accelerated on Thursday, as daytime clearing prices jumped from 34.9 mills/KWh to 46 mills/KWh. Late on Wednesday, off-peak prices hit 60 mills/KWh on the PX for several hours, pushing the average to an unusually high 35 mills/KWh.

The storm incident managed to halt the usual end-of-week price erosion at other hubs. Palo Verde and Four Corners had been recording prices in the 29 mills to 31 mills range most of the week, but stepped up a notch to 32.75 mills/KWh for Friday/Saturday deliveries.

Mid-Columbia and the California/Oregon Border also edged upward to the mid-30s. The spread between on-peak and off-peak power was negligible, largely because transmission work was limiting sellers' ability to enter the California market.

There was a contradictory response in the Southwest, as sellers of excess capacity bid prices to access Southern California down to 16.5 mills to 18 mills/KWh. By Thursday, off-peak power at Palo Verde was at 19 mills to 19.25 mills/KWh, traders said.

The late word from Diablo Canyon owner Pacific Gas & Electric was that Unit No. 1 reconnected to the grid on Friday morning and would reach full power over the weekend. At the same time, PG&E is preparing Unit No. 2 for a month-long refueling outage beginning Saturday. Plant output was already drifting down to about 95 percent on Friday morning.

Aside from numerous distribution outages, the midweek lightning storm set a used-tire pile on fire near the town of Westley. The tires are a fuel source for a small power plant near Modesto. PG&E reported no threat to transmission lines, despite heavy smoke [Arthur O'Donnell].

Gas Prices Powered by NYMEX

A big hike in NYMEX benchmark prices on Thursday pushed natural gas markets everywhere higher. The big jump appeared in Alberta prices, which had been eroding to about $(C)2.75/Gigajoule earlier, but bounded above the $3.00/Gj mark by Friday morning.

Southern California Border prices rocketed from $2.55 early in the week to as high as $2.80 before narrowing in the $2.67 to $2.74/MMBtu range. "Strong demand from power generators" was listed by traders as a contributing factor in the Southwest. Gas turbines throughout the region cranked into operation to capture the high prices being commanded on real-time power markets in the wake of a Diablo Canyon nuclear plant outage.

Basin prices followed suit. San Juan rose from $2.12 to $2.28/MMBtu, while Permian Basin prices hit $2.35/MMBtu late in the week.

Repairs at TransWestern's Kingman station cut deliverability by about 100 MMCfd, while maintenance at El Paso's Roswell facilities trimmed San Juan output by 50 MMcfd [A. O'D.].

Western Electricity Prices
Week of September 20-24, 1999
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 32-125 mills/KWh 5.8-34.5 mills/KWh
California PX (WAC) 32.5-46 24.7-35
Mid-Columbia 31-35 30-32
COB 35-37 31-35
Palo Verde 29-33 16-19.5

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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