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Western Price Survey

Week's End Edition
October 6, 2006
Peak, Off-Peak Power Prices Spurred in Opposite Directions

Power values across the West trended upward on the off-peak side of the ledger and edged down in the peak-side column at the end of this week. Overall, there was no significant movement in the price of electricity on the daily spot market, just a bit of tugging to and fro on account of vacillating natural gas prices.

The price of peak power in the North of Path 15 region reached 49.50 mills/KWh at midweek, while the spread on Monday ranged from 43 mills to 45.25 mills/KWh. Following the bump up on Wednesday, values slipped to a range of 43.75 mills to 45.50 mills/KWh on Friday. Off-peak power prices at the Northern California hub stuck close to the 30 mills/KWh mark early in the week before edging up to a range of 32.75 mills to 33.75 mills/KWh on Wednesday. End-of-week trades were recorded for as much as 35 mills/KWh.

South of Path 15 daytime power also attracted as much as 49.50 mills/KWh on Wednesday, a bump up of about 5 mills over the Monday price. Daytime values at SP15 were dragged back down to a range of 43.50 mills to 46.25 mills/KWh on Friday. Off-peak power at SP15 started out the week trading for between 28.75 mills and 31 mills/KWh. Packages of nighttime power drew between 31.30 mills and 33.50 mills/KWh at midweek and tacked on another couple mills in trades conducted Friday.

In the Northwest, power values remained in the low forties, with a few trades closing at a price of 39 mills/KWh. Mid-Columbia power scheduled for daytime delivery moved for between 39 mills and 43 mills/KWh at the beginning of the week. By Wednesday the spread had narrowed to between 41.50 mills and 42.75 mills/KWh. The Mid-C price hovered close to that range until Friday, when the spread slipped to between 39 mills and 40.50 mills/KWh. Off-peak power values topped out at 37.50 mills/KWh on Friday after spending much of the week in the range of 34 mills to 36 mills/KWh.

As of this past weekend, two of the three units at the Palo Verde nuclear power plant were out of service. Unit No. 1 was forced off line late last month because of problems with its pressurizer heaters. The 1,243 MW plant reportedly may start to ramp back up this weekend. Also rated at 1,243 MW, the No. 2 unit was taken off line over the weekend for refueling. It should return to service in approximately six weeks.

The Nuclear Regulatory Commission began an inspection at the Arizona facility this week because of concerns over operational difficulties and equipment problems at the plant over the past two years. The inspectors will draft a report on their findings once the inspection is complete.

The outages at Palo Verde pushed up prices at the hub relative to last week. After opening for between 37.75 mills and 42 mills/KWh on Monday, PV peak-power values rose as high as 46 mills/KWh the following day. High-demand power at the hub dropped back down to between 38 mills and 40 mills/KWh on Friday. The end-of-week spread last week was between 34.25 mills and 37.50 mills/KWh. Low-demand power at Palo Verde traded for between 24 mills and 30 mills/KWh during the first half of this week. By Friday the price edged up to 31 mills/KWh. At the end of last week the off-peak price topped out at 28.25 mills/KWh [Shauna O'Donnell].

Gas Costs Take Cue from Weather, Oil

Spot-market prices for natural gas perked up some this week in comparison to last week, with the uptick in values riding the coattails of a price increase in the futures market. The New York Mercantile Exchange price for November deliveries at Henry hub averaged $5.995/MMBtu at midweek, a gain of about $0.55 over the price last week.

The increase was attributable to a bout of cold weather moving into the Midwest and East Coast regions. Gas costs also drew a bit of strength from speculation that the Organization of Petroleum Exporting Countries would announce a cut in crude production. Still, a downward trend in the cost of Western gas was apparent in Friday's trading session, as skepticism over OPEC's resolve to curtail output grew.

After peaking at $4.50/MMBtu on Thursday, the price of gas at the Permian Basin dropped down to between $3.79 and $3.98/MMBtu on Friday. Southern California border deliveries slipped as low as $3.96/MMBtu at the end of the week, down from the previous day's spread of $4.55 to $4.95/MMBtu. The trend was similar at Malin, where prices hit $4.35/MMBtu on Thursday but skidded down to between $3.86 and $4.40/MMBtu on Friday [S. O'D.].

Western Electricity Prices
Week's End: October 2 - 6, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 29.92-999 15.46-999
Mid-Columbia 39-43 33-37.50
COB 41.50-45 34.50-38
NP 15 43-49.50 29-35
SP 15 42.75-49.50 28.75-35
Palo Verde 37.75-46 24-31

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 Shauna O'Donnell, editor with questions regarding Price Survey Content.

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