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Western Price Survey

Week's End Edition
October 15, 2010
Western Prices Stay Mixed

Western electricity prices remained mixed for yet another week.

In the Friday-to-Friday trading period spanning Oct. 8 to Oct. 15, Northwestern hubs posted increases for daytime average power. Mid-Columbia peak power traded for an average of $34.25/MWh Friday, gaining $6.22 during the trading period. California-Oregon Border daytime power traded for $37.92/MWh Friday, earning $5.46 over the trading period.

South and North of Path 15 average peak-power prices, however, lost between $4.60 and $4.70 over the trading period (see chart).

Off-peak power prices were mixed by week's end. Average prices for nighttime power in the Northwest were up between $6.75 and almost $7.70/MWh. California hubs declined between about a dollar and $2.30 compared to the previous week.

An influx of renewable power could keep natural gas demand for electricity generation low in the coming years, according to the U.S. Energy Information Administration. The EIA issued new estimates for energy consumption in its Short-Term Energy Outlook, released Oct. 13. The agency expects total natural gas consumption to increase by 4.6 percent in 2010 but then only 0.1 percent in 2011. The agency states that natural gas use for electric power through August 2010 averaged 20.75 Bcf/d compared with 19.23 Bcf/d through August 2009, an increase of 7.9 percent. Consumption growth in 2010 is attributed to warm summer weather driving up electricity demand.

But a 1 percent decrease in natural gas consumption for electricity in 2011 will result from added nuclear and renewable generation, according to the agency. Specifically, nuclear generation should increase 1.4 percent; renewable generation, which includes hydroelectric production, should grow 13 percent.

The EIA expects 2011 natural gas prices to be lower than originally projected, and now anticipates prices of $4.58/MMBtu next year. This is 18 cents less than last month's forecast. The revision was based on stronger domestic production of natural gas.

Peak demand on the Cal-ISO grid reached 35,477 MW Wednesday at 4 p.m., the week's high. Demand throughout next week is not expected to exceed 30,000 MW.

According to the EIA, a 91 Bcf addition to natural gas reserves provided 3.59 Tcf in storage as of Oct. 8.

Henry Hub spot prices traded at $3.58/MMBtu Wednesday, Oct. 13, up 2 cents from the previous Wednesday. By Friday, the average price was $3.47/MMBtu. November futures traded for $3.70/MMBtu Wednesday, down 17 cents from the previous Wednesday's price.

What's ahead: Seattle expects sunny and dry conditions to prevail with highs in the 50s or 60s Monday through Wednesday. A weak front may bring showers Thursday. Forecasters are indecisive about the week ahead for Oregon as they watch the progress of an upper-level trough over California. In greater Los Angeles, temperatures below seasonal norms are predicted Monday and Tuesday, with showers possible. Meanwhile, inland deserts and mountains may see some rain and snow over the weekend into Tuesday [Linda Dailey Paulson].

Western Electricity Prices
Week's End: October 11 - 15, 2010
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 18.12-67.70 14.19-34.11
Mid-Columbia 29-35.50 28-36
COB 33.25-38.25 30-37.50
NP 15* 35.25-44.75 28-30.25
SP 15* 35.65-46.15 27.50-30
Palo Verde 31.50-38.50 22-28.25

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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.

Please contact with questions or comments about this site.

Contact Chris Raphael, editor with questions regarding Price Survey Content.

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