Western Price Survey / Archives
October 8, 1999
After watching the week begin with a high price hangover from last week, marketers reported generally decreasing prices but major differences between bids and post-congestion costs. Last week's market volatility was largely due to a confluence of heat, generation losses and transmission outages. This week, transmission was the main culprit for keeping prices at relatively high levels.
The California/Oregon Intertie still experienced repairs and related curtailments of north-to-south transfer capacity but much of the attention was focused on Path 15. Previously scheduled work on the Midway/Vincent No. 3 line finally got underway in co-ordination with the refueling outage at Diablo Canyon, cutting Path 15 to 900 MW.
A few sporadic transmission outages acted like potholes in the middle of power delivery paths. Early in the week, fires caused relays on the 500 KV Miguel/Imperial Valley line that links San Diego to the Southwest. As operators restored service on Monday, Arizona Public Service delayed until Tuesday scheduled maintenance on its 500 KV Mead/Perkins line.
On Wednesday, traders reported that a transformer outage cut the link between the Geysers geothermal region in Northern California and the main grid, dropping 600 MW of generation from the system and pinching real-time imbalance energy prices.
For the most part, though, prescheduled prices diminished during the week-although the California Power Exchange clearing prices bumped up a bit for Friday deliveries.
Starting at 57 mills/KWh for Monday peak deliveries, the CalPX prices slipped to 41.5 mills before rebounding to 47.4 mills/KWh for Friday peak deliveries. Off-peak prices remain unusually high at about 34.5 mills/KWh on the PX, and were responsible for pushing Northwest and Northern California prices upward. Within congested Northern California, prices were still running in the 52 mills to 56 mills/KWh vicinity. COB eventually settled at 41 mills to 43 mills, with Mid-C slightly lower.
Bonneville Power Administration found a niche for its daily surplus offerings at 44 mills to 45 mills/KWh most of the week (tied to the PX price, if higher). BPA let the prices fall to 38 mills and 39 mills/KWh for Saturday deliveries, however.
Palo Verde prices saw an uptick from 35.5 mills to 37.5 mills, then a dropoff to 32 mills/KWh. Off-peak power at Palo Verde rose from 19.5 mills to 23 mills/KWh midweek.
Sporadic curtailments scheduled on the DC Intertie through the month will affect deliveries between the Northwest interior and Southern California. Exactly how prices may change remains to be seen. Some suggested that excess energy may get locked in or that alternate routes into California will be congested when the PDCI is taken out of service completely this coming weekend and in the week of October 24-30.
The Alberta Power Pool experienced repeated firm load alerts because of generation shortfalls and higher than forecast loads. Midweek prices hit 499 mills/KWh on the pool but settled down to the 44 mills to 52 mills/KWh range on Thursday [Arthur O'Donnell].
Gas Trades in Tighter Formations
Natural gas prices did not change all that much through the week, but traders' psychology appears to be making a transition. Some suspect that the market has not seen the last of summer-type weather and they believe that prices may move higher once Santa Ana winds start blowing across Southern California this weekend.
Generally, though this week's market traded in tight ranges. A late uptick in Alberta was attributed to changes on the NYMEX screen and a weekly storage report that indicated supplies might be tight this winter. The AECO hub index was the only price point that showed single-minded direction upward, starting the week at $(c) 3.19/Gigajoule and moving higher to $3.29/Gj.
Other hubs wobbled. San Juan showed a slight premium over Permian Basin supplies, but both were in a range of $2.40 to $2.47/MMBtu.
The Southern California Border price was anywhere between $2.74 to $2.80/MMBtu but by late Thursday was mostly at the lower end.
Various seasonal repairs are trimming deliverability on El Paso and TransWestern pipelines. PG&E declared OFOs midweek, but stronger demand from power generators managed to pull excess inventories out of the system.
With temperatures on the rise in the Southwest, and three regional nuclear plants out for refueling, traders looked to a possible late- week hike in gas prices [A. O'D.].
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