Western Price Survey / Archives
September 29, 2000
Power prices throughout the West appeared to be slipping on moderate weather and diminishing loads, but an unplanned outage at the Palo Verde No. 3 unit Wednesday night reversed the slide, at least in the Southwest. The market was anticipating a refueling outage for Unit No. 2 to begin Saturday and were surprised by the report of a steam leak taking Unit No. 3 offline.
Despite cloudy skies and a bit of precipitation in Northern California, there is still a dearth of hydroelectricity-evidenced this week by the departure of Bonneville Power Administration from the surplus sales market. No reason was given for BPA's elimination of the 200 MW daily offer, but the federal marketer had been excluding California buyers all week anyway because of transmission curtailments into the Golden State. The list of transmission repairs was quite extensive as operators shifted seasonal patterns and prepared for winter peaking season in the Northwest. At points along the California/Oregon Intertie, southbound flows were limited to 2,700 MW, while the DC Intertie was capped at 1,956 MW midweek.
The limits did not strongly affect trading, according to marketers, but did seem to add strength to congestion prices North of Path 15. No other generation outages were reported aside from the Arizona nuclear incident.
There was no hint of any emergency at the California Independent System Operator. System loads have been significantly lower this week, edging below 34,000 MW at peak.
The California Power Exchange daytime market illustrated bell curve pricing, rising from 113 mills/KWh Monday to a peak of 132 mills midweek, then falling to 96.8 mills/KWh for Friday deliveries. Off- peak pricing was up and down and up in a range from 64.5 mills to 78 mils/KWh at week's end.
While bilateral trading had been edging down below the 100 mills mark at all other hubs, the unexpected outage at Palo Verde pushed prices back up Thursday. Operator Arizona Public Service said it would use the down time to make other repairs, extending the outage from "a couple of days to a week." It was unclear whether the situation would alter the ramp-down schedule for No. 2.
Traders in the Southwest scrambled to meet loads and cover other commitments, driving real-time peak prices to 140 mills/KWh on Thursday and day-ahead block prices to 125 mills/KWh.. Temperatures were still reported in the mid-90's in Arizona, even though forecasters said it would be cooler.
Off-peak prices were set mostly by the zonal charges into CalPX, in the 37 mills to 65 mills/KWh range.
The Pacific Northwest closes out its hydro year September 30; so far it has seen about 97 percent of normal precipitation-about 22.5 inches. This marks the third year in a row of average rain after three above-average years, 1995-97. Stream flows were said to be slightly above normal and the federal reservoir system was reported at 83 percent of storage capacity [Arthur O'Donnell].
Gas Closes Out and Excitable Month
At times during September, Western natural gas prices reached their highest recorded levels and traders do not see much chance of significant decreases in the near future. Volatility remains the prevailing characteristic of daily markets, with key indexes rising and falling as much as $0.50/MMBtu in a week-sometimes even in a single day. Continued fluctuations in storage reports-and perceptions of future supply problems-color market expectations.
The trend for most of this last week in September was skyward until the national NYMEX screen collapsed from exhaustion Thursday. SoCal Border prices that started the week at $5.32/MMBtu climbed as high as $5.90 before slipping to $5.78/MMBtu.
Many traders closed out their books early as the weekend coincided with the end of month and a new season beginning October 1.
The Canadian gas price at Alberta inflated from $(C)6.33 to $6.67/Gigajoule, but closed the week at $6.58/Gj [A. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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