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Western Price Survey / Archives

September 28, 2001
Routines Altered for End of Month Trading

Power traders tried to wrap up balance of month arrangements early this week, tailoring double-day deals on Wednesday for Thursday/Friday and on Thursday for the Saturday/Sunday packages. The goal was to clear out September books and start October daily trading on Friday.

The unusual pattern appeared to have some effect on prices, with marketers noting a slight uplift for the weekend and brief periods when off-peak energy was actually more costly than at peak.

The differences were measured in fractions, however, as market conditions continued to dictate exceedingly low prices throughout the West. At times there were so few buyers that real-time energy in the Southwest could be bought for 14 mills/KWh, one scheduler noted.

Also helping to keep a lid on prices is the very low cost of natural gas, which was below $2/MMBtu and all major delivery points in the West-and occasionally below $1.50/MMBtu in the San Juan Basin and at the California/Oregon Border.

The continued lack of demand by utility customers is the underlying factor in the market. The California Independent System Operator never quite hit 35,000 MW of peak load again this week. Pacific Northwest direct-service industries, mainly aluminum mills remain off line, with a few indicating they will not resume in October as previously anticipated under their deals with the Bonneville Power Administration. BPA formally reports about 2,400 MW of DSI load curtailed this summer, but some sources say the conservation impact was far greater.

As a result, Mid-Columbia prices were remarkably low, starting the week at 18.5 mills/KWh for peak and about 16.5 mills/KWh for off-peak power. They climbed a bit to 21 mills/KWh heading into the weekend. COB bounced around in the 18.5 mills to 21.5 mills/KWh range. NP15 had been as high as 25 mills midweek but dropped to 19.5 mills/KWh for the weekend deals-slipping below the off-peak price of 21 mills/KWh.

Even the southern hubs kept below 30 mills all week. SP mostly tracked NP15, signaling little or no transmission congestion and Palo Verde retreated from 29.5 mills midweek to the 25.75 mills to 27.5 mills/KWh range. Off-peak was priced at about 15 mills/KWh at Palo Verde midweek but picked up to the 19 mills to 21 mills/KWh range as a few buyers covered their end-of-month shortages.

Some warmer weather was projected starting this weekend, possibly encouraging air conditioning use, and the scheduled refueling outage for Palo Verne No. 3 could put a floor under Southwest prices next week.

Unit outages continued to swell, hitting as much as 7,500 MW in California on Tuesday. The balance between scheduled and unplanned maintenance varied each day. Major facilities that were all but out of service included El Segundo, Alamitos, Etiwanda and Encina-all reporting multiple units out for servicing. The new Sutter station was at half load for a couple of days, as was its companion station at Los Medanos . The 260 MW Crockett cogeneration plant topped the short list of QF outages.

The Alberta Pool showed surprising volatility, with single-hour prices spiking to 223 mills/KWh on Tuesday as pool loads crossed 7,000 MW. The Pool calmed down later in the week, but still bumped up into the 86 mills/KWh vicinity on occasion [Arthur O'Donnell].

Gas Left Unused in Pipes

Natural gas prices continued to astound the market with their low levels. Even an apparent rally in pricing on Thursday as utilities and generators covered their positions for the end of September and prepared for the final quarter did not bring any hubs above the $2/MMBtu mark.

The most increase was noted in Alberta, as some Midwestern demand siphoned supplies from the West. Still, the AECO index barely rose to $(C)2.15/Gigajoule on Thursday.

San Juan, which had started the week at less than $1.30/MMBtu rebounded to $1.40/MMBtu. Permian Basin gas moved lower, though, dropping from $1.74 to $1.66/MMBtu.

The Southern California Border at Topock had been up to $1.86/MMBtu but slipped to $1.79.

In Northern California the spread between Malin and the San Francisco CityGate disappeared as Malin rose and CityGate fell into the $1.70 to $1.72/MMBtu range. Inventories were building on the PGT system and the pipeline suspended balancing injections. Traders said all the signs pointed to a high-inventory operational flow order heading into the weekend [A. O'D.].

Western Electricity Prices
Week of September 24-28, 2001
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 27.65-222 15-25.6
Mid-Columbia 18.5-20.5 16.7-20
COB 18.5-21.5 17-20
NP 15 22.5-25 18-21
SP 15 22.5-25.5 15-20
Palo Verde 24.75-27.5 16-21

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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