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Western Price Survey

Week's End Edition
October 13, 2006
Power Costs Urged Upward By Gas

The edge-up in natural gas prices brought about a slight boost in electricity values. The price of Western power gained between 4 to 6 mills/KWh over the Monday-through-Wednesday period, mirroring a fifty-cent rise in the price of gas over the same period.

Unlike the Midwest and East Coast, where the mercury is slowly slipping into autumnal figures, the weather in California remains fairly mild. Power demand is, in turn, unremarkable, keeping peak-load values in the California Independent System Operator territory close to the 30,000 MW mark all this week.

Daytime power in the South of Path 15 zone traded for between 45 mills and 49 mills/KWh on Monday. The price moved little the following day, but by Wednesday the price of peak power had swelled to as high as 53.25 mills/KWh. Prices tapered back down to the mid-forties on Friday. Off-peak power at SP15 attracted between 33 mills and 36.25 mills/KWh at midweek, just a mill or two above the Monday price. The cost of nighttime power slipped to a low of 28 mills/KWh for next-week deliveries traded Friday.

North of Path 15 peak power attracted between 45.25 mills and 48.25 mills/KWh on Monday, before matching the high of 53.25 mills/KWh reached at SP15 on Wednesday. As with SP15 power, the cost of peak power at NP15 quickly ratcheted back to a range of 43.75 mills to 47.75 mills/KWh at the end of the week. Low-demand power in the NP15 region traded for a low of 32 mills/KWh on Tuesday before topping out at 37 mills/KWh on Wednesday. End-of-week trades attracted between 30.75 mills and 33 mills/KWh.

Palo Verde power prices appear to be taking their cue from the continuing outages at the Palo Verde nuclear power plant. Unit No. 1 at the facility was reportedly scheduled to return to service this past weekend following an unplanned outage. As of Friday, the 1,243 MW power plant remained off line. The No. 2 unit at Palo Verde will be off line for another month or so for a scheduled refueling outage that began at the end of September.

In other nuclear activity, Southern California Edison's San Onofre Nuclear Generating Station Unit No. 3 began a slow ramp down this week. The 1,108 MW facility will be taken off line Monday for a refueling and maintenance outage scheduled to last about two months.

Peak-time power values at the Palo Verde hub ranged from 41 mills to 48.25 mills/KWh during the first half of this week, about 10 mills/KWh higher than last week's prices. Still, the value of daytime deliveries at PV dropped as low as 39.15 mills/KWh at the end of the week. Off-peak power at the Southwest hub stuck around the 28 mills to 32 mills/KWh range most of the week before dropping down to a low of 26 mills/KWh on Friday.

Power scheduled for daytime delivery in the Northwest traded for between 41.25 mills and 42 mills/KWh on Monday, up from last Friday's closing high of 38 mills/KWh. The price edged up to 45 mills/KWh on Tuesday before hitting a high of 50 mills/KWh at midweek. Mid-C values eased back down into the low forties on Friday. The price of nighttime power at the Mid-Columbia hub ranged from a low of 33 mills/KWh on Tuesday to a high of 41.50 mills/KWh recorded on Wednesday. End-of-week transactions closed for between 35.75 mills and 39.25 mills/KWh [Shauna O'Donnell].

Gas Price Boost Short-Lived on EIA Storage Numbers

A bump up in the cost of natural gas early this week was offset by the gravitational pull of near-record storage figures released by the Energy Information Administration on Thursday as well as colder weather in the Midwest and other regions of the country.

In the West, prices swelled by about $0.75/MMBtu during the first half of the week. Values dove on Friday after traders took in the EIA numbers. Last week's injection of 62 Bcf into storage facilities brought the amount of available working gas up to 3,389 Bcf, an amount second only to the 3,472 Bcf recorded more than 15 years ago. The EIA estimates that gas in storage will hit 3,540 Bcf by the start of the winter heating season on November 1.

Gas deliveries to Malin cost as much as $5.28/MMBtu at midweek, but skidded down to a range of $4.13 to $4.25/MMBtu in Friday's trading session. Southern California deliveries at Topock fell as low as $3.90/MMBtu at the end of the week. Gas received at Topock reached a high price of $5.31/MMBtu on Wednesday, well above the Monday price of between $4.50 and $4.715/MMBtu.

With next to no disruption from hurricanes this year and the persistent pressure of ample supply helping to keep a lid on wholesale prices, utilities from around the country--including those in California--are giving their customers the welcome news that heating costs are likely to be less this winter than compared to last year [S. O'D.].

Western Electricity Prices
Week's End: October 9 - 13, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 38.99-915.33 28-235.72
Mid-Columbia 41-50 33-41.50
COB 43-50.25 33-41.50
NP 15 37-53.25 30.75-34.65
SP 15 37-53.25 28-36.25
Palo Verde 39.15-48.25 26-32

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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