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Western Price Survey / Archives

October 10, 2003
Gas Cost Buffets Power Prices

Slippage in the price of natural gas on Thursday put downward pressure on electricity prices throughout the West. After a boost in the early part of the week ranging from a dime to two bits a day, gas prices dipped on Thursday, dropping by 10 cents or more at most Western hubs. This dip in the price of the fuel du jour, combined with relatively low demand, healthy power plants and sagging temperatures, put the price for power in the region on a downward trajectory. Still, Friday trading for next-week deliveries did boost prices slightly at the end of the week.

The California Independent System Operator reported loads as running in the 30,780 MW to 32,855 MW range each day this week — not anything to write home about. The most notable generator outage in the grid operator's territory this week was the continued refueling outage of Unit No. 2 at the Palo Verde nuclear facility. Other than that, most plant outages were of fairly short duration or low capacity this week.

Even a few tripping incidents in the Northwest had little seemed to have little affect on power availability or price. According to the Western Electricity Coordinating Council, the Alberta Electric System Operator (AESO) reported that the Battle River Unit No. 3 tripped at about 10:46 MDT on Wednesday. This caused a few line lines to shut down and, as the WECC report put it, caused the separation of the AESO from the WECC.

Then, on Thursday, October 9, at 3:07 pm, the AESO reported a frequency drop to 59.779 hz because of the loss of 2,000 MW of power from the grid. The Friday WECC report confirmed that all four units at the 2,000 MW coal-fired Colstrip generating facility in Montana went off line because of the loss of the Colstrip- Broadview 500 KV lines.

The Western grid appeared to take these events in stride.

Mirant's 337 MW Contra Costa Unit No. 6 was on a planned shutdown all week. In contrast, a number of units at the La Paloma facility could not seem to make up their minds whether to be up and running or down and out. Unit No. 4 at the plant started the week off line but by Wednesday the 235 MW unit was back on line. La Paloma No. 2, also 235 MW, was listed by Cal- ISO as being on planned-outage status Tuesday and later that day was joined by the 227 MW Unit No. 1 and 231 MW Unit No. 3 — both listed as being on unplanned- outage status. Unit No. 2 continued off line the rest of the week, while No. 3 managed to go up, then down, then back up again in the span of two days.

Aside from the one unit at Palo Verde, all of the region's nuclear power plants were in fine fettle this week. Diablo Canyon's two units operated at 100 percent of output, as did the Columbia Generating Station. According to Jeff Lewis at Diablo, the two units are scheduled for refueling in 2004. Unit No. 1 will get rejuvenated first — sometime early next year. Then, likely after the summer peak period is over, Unit No. 2 will be taken off line for refueling.

On Monday, power at the NP15 hub moved for between 42 mills and 44 mills/KWh. SP15 tracked at about two to four mills higher. By Wednesday, peak power at NP15 was offered in the range of 44 mills to 49.75 mills/KWh. After slipping a mill or two on Thursday, it ended the week as high at 50.75 mills/KWh. Off-peak power at the hub was trading for between 31.50 mills and 33.50 mills/KWh on Tuesday and Wednesday, then elevated to between 38.75 mills and 40.50 mills on Friday. SP15 peak-load power jumped up a bit more in midweek trading, topping out at 54.75 mills/KWh while off-peak electricity stayed at about the same price as at NP15.

Mid-Columbia power prices kept to the oft-repeated pattern this week of trailing the California and Southwest hub prices. The spread for peak power at Mid-C ranged from 37.50 mills to 40.25 mills/KWh on Monday before edging up to between 39.25 mills and 41.50 mills/KWh on Wednesday before trailing off slightly for the rest of the week. Off-peak power trades at the hub kept in the low thirties over the first three days of the week. Another regular occurrence — the relative strength in Palo Verde prices was seen this week as well. The beginning of the week saw Palo Verde trades being made in about the same price range as the other Western hubs. By Wednesday, however, PV peak power was moving for up to 55 mills/KWh, while off-peak power was trading in the rather low range of 26.25 mills to 30.75 mills/KWh. PV peak power closed the week at between 47.50 mills and 51.50 mills/KWh [Shauna O'Donnell].

Gas Gains Over Last Week

Natural gas prices at trading hubs throughout the Western region showed gains this week when compared to last week's anemic prices. Though prices were not exceedingly robust, at the very least all hubs kept to the high side of the $4.00/MMBtu Maginot Line throughout this week.

Prices reached their apex in mid-week trading, with Southern California Border gas moving for between $4.58 and $4.78/MMBtu on Wednesday. A bit of slippage occurred the rest of the week and the hub price closed out the week at a high of $4.67/MMBtu.

Alberta gas started the week just above $4.00/MMBtu, jumped up to $4.31/MMBtu by midweek and then gained another dime by week's end. Per usual, CityGate gas led the pack, opening on Monday at between $4.64 and $4.69/MMBtu, scooted just over the $5.00 mark in Wednesday trading before settling in the $4.565 to $4.61/MMMbtu range on Friday [S O'D.].

Western Electricity Prices
Week of October 6 - 10, 2003
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.37-457.34 10.37-61.21
Mid-Columbia 37.50-43.50 29.50-37.50
COB 39.50-46.50 30.75-39.75
NP 15 42-50.75 28.50-41.50
SP 15 42.25-54.75 28-39
Palo Verde 41-55 26.25-38.75

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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