Western Price Survey / Archives
October 13, 2000
Cooler weather and sporadic showers throughout the West quelled electricity demand and helped push power prices lower this week. Peak period clearing prices at the California Power Exchange and at bilateral hubs finally moved well below 100 mills/KWh, but as late as Thursday, off-peak remained surprisingly strong and generally above 75 mills to 85 mills/KWh except in the Southwest.
Keeping the floor under prices was the continued high cost of natural gas and refueling outages at three key nuclear facilities. Despite some rainfall early in the week, there has not been enough precipitation to boost hydroelectricity production in the Pacific Northwest. Bonneville Power Administration was absent from the surplus market all week and transmission limits may have discouraged other exports.
CalPX began the week at 116 mills/KWh for peak power, but saw the figure drop to 85.8 mills/KWh for Friday deliveries. Off-peak energy stayed in the 84 mills to 89 mills/KWh range. By the end of the week, there was hardly any difference between the day and night prices and little difference in the amount of load being scheduled on the day- ahead market.
Overall PX daily loads dropped below 500 GWh and the California Independent System Operator barely skirted 30,000 MW at peak this week.
Despite the low loads, transmission maintenance added to congestion, especially in the northern pathways. The Pacific AC Intertie was cut to 2,900 MW southbound at some points as crews removed trees from the paths and upgraded capacitor banks at Grizzley, Captain Jack and Tracy substations along the Intertie route. Maintenance in form will continue through the month, with flows frequently limited to 3,000 MW to 3,200 MW. Traders in California said the work required some rescheduling of flows but did not result in curtailment of any deliveries.
Nuclear units at San Onofre and Diablo Canyon joined Palo Verde in an October refueling hiatus. A few other large generating stations are also taking time off for repairs after especially grueling summer operations. Despite brief outages for two San Juan coal units, Southwestern prices slid well below the rest of the region to 66 mills/KWh at peak for Friday/Saturday offers. Off-peak energy at Palo Verde was as low as 40 mills/KWh, with the price largely determined by zonal congestion into California.
Buyers finally had the luxury of turning away prices that seemed too high, and trading activity everywhere was described as light. Mid- Columbia and California/Oregon Border prices moved lower in line with the CalPX [Arthur O'Donnell].
Gas Market Moves to New Records on Growing Worries
Natural gas and oil prices climbed to extremes this week as traders increasingly worried about the impacts of stepped-up violence in the Middle East. NYMEX national figures were already zooming higher midweek on an adverse storage report from the American Gas Association but word of missile attacks in Palestine and a suicide bombing of an American naval ship accelerated the concerns. This pushed gas contracts for November to the highest levels ever at $5.78/MMBtu and throwing crude oil prices briefly above $37 per barrel-its highest level in two decades.
While Western gas prices did not move in lockstep with oil prices, the trend was clear. "We all trade on NYMEX," one marketer noted. "Energy is energy."
Local factors, such as the diminishing demand from electric generators in California, helped keep border and basin prices from skyrocketing. However, Canadian supplies were limited by an extended outage on the ANG system that boosted prices into Northern California and the Rockies. The cut in delivery of about 200 MMcfd from ANG helped push the PG&E CityGate price to $5.96/MMBtu-above the SoCal Border price of $5.75 to $5.85/MMBtu.
San Juan Basin kept a more than $1/MMBtu distance from the border price, reaching $4.70/MMBtu Wednesday but slipping to $4.60/MMBtu.
The Alberta index proved unstable in a range, starting out at $(C) 6.42/Gigajoule and briefly jumping above $7.00 before ending at $6.99/Gj [A. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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