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Western Price Survey

Week's End Edition
October 5, 2007
Roller-Coaster Week for Power Prices Ends With Gains Across West

Average wholesale peak-power prices rose between $5/MWh and $10/MWh in active early-week trading be-fore dipping sharply at all the hubs Thursday. By Friday, peak prices were back up across the West, regaining most of the value lost the day before.

Rising prices earlier in the week may have been influenced by warm temperatures and heavily prodded by average natural gas prices that jumped by around $1/MMBtu at some Western hubs, on fears of a tropical storm threatening the Gulf of Mexico.

By Thursday, gas prices and temperatures had cooled. But predicted colder nights through the weekend pushed off-peak prices much higher Friday.

Palo Verde peak prices were volatile all week, moving at least $8/MWh during each day. On Wednesday, peak went for $79/MWh. It dropped hard to hit an average of $51 Thursday, then gained about $9 Friday. Off-peak trading was calmer, with prices steadily rising from about $38/MWh Monday to $47/MWh by Friday.

North of Path 15 and South of Path 15 heavy power cost around $60/MWh Monday, but both jumped as high as $75 Wednesday. Thursday prices at both hubs dropped to the upper 60s. They closed the week averaging $68/MWh. The average price of off-peak power at both hubs rose from about $41/MWh Monday to average more than $51 at both hubs Friday.

In the Northwest, rain and cool temperatures have moved in, possible signs of this year's predicted La Niņa, which could help produce colder-than-expected winter weather. At both Northwest hubs, the cold nights pushed off-peak power prices way up Friday.

At the California-Oregon border, Tuesday peak deliveries cost $61.89/MWh on average and gained about $12 in Wednesday trading. Peak ended the week at about $67/MWh. Nighttime power, on the other hand, rose slightly through Thursday. Average prices rose about $1/MWh a day from $42.75/MWh Monday, reaching $56/MWh Friday.

At Mid-Columbia, Monday and Tuesday peak prices averaged $56 to $59/MWh. By the end of the week, prices climbed to nearly $64/MWh. Light power prices moved up faster -- from $42.50/MWh Monday to $57.50 Friday [Charles Redell].

Gas Prices Rise on Storm Fears, Hold Some Ground Through Friday

Natural gas values rose by more than 50 cents/MMBtu this week, largely on tropical storm fears in the Gulf of Mexico.

This week's storage report was ho-hum: the U.S. Energy Information Administration reported an overall in-jection in the West last week of 10 Bcf, leaving the region's stores at 434 Bcf, which is 30 Bcf above the five-year average. Nationwide, 57 Bcf was added to natural gas stores last week -- about what traders expected. Weather in key Midwest demand centers, such as New York and Chicago, was warm.

Despite ample storage, tropical storm fears in the Gulf of Mexico worried traders during midweek. On Wednesday, companies said they had no plans to take workers from Gulf platforms that provide more than a quarter of U.S. crude and 15 percent of natural gas needs.

Forecasters predicted Friday, however, that a low-pressure system could become a storm in the Gulf this weekend, and meteorologists are still calling for a few more hurricanes before November.

At the Permian Basin in Texas, prices began the week averaging $5.77/MMBtu and rose about 30 cents Tuesday before falling back Wednesday and Thursday to where they started. By Friday, however, natural gas averaged $6.40/MMBtu at the hub.

At San Juan, N.M., the average price for natural gas on Monday was $5.64/MMBtu and reached $6.52 by Wednesday. Prices slid a few cents Thursday and closed the week at $6.28/MMBtu.

Southern California prices started at $5.94/MMBtu and seemed to be headed toward $7 by Wednesday. But Thursday prices tailed off, closing the week at $6.49/MMBtu.

Prices at Malin, Ore., climbed from $5.86/MMBtu Monday to $6.59 Wednesday and held relatively steady, ending the week at $6.48/MMBtu [C. R.].

Western Electricity Prices
Week's End: October 1 - 5, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 19.44-499.97 9.85-117.34
Mid-Columbia 54.50-66.25 42-57.50
COB 60-75.50 42-56.50
NP 15 55.55-75 4.10-52.50
SP 15 55-75 40-52
Palo Verde 51-79.50 37.50-47.75

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


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