Western Price Survey / Archives
October 18, 2002
With loads dipping even lower this week, spot prices at most Western hubs took little notice, preferring to track strong natural gas prices and the growing ranks of generating units falling off-line around California. Loads on the California Independent System Operator barely broke the 30,000 MW level early in the week and inched down to about 29,000 MW as the week wore on.
Some electric traders were puzzled by the seemingly load-defiant prices, but others pointed to concern about potential generation outages - as well as current shortfalls - as the chief reason for higher prices. Unscheduled power production outages reported by Cal-ISO spiked to more than 4,000 MW on Wednesday and remained above 3,800 MW on Thursday.
Duke Energy pulled all 754 MW of its Moss Landing Unit 6 capacity off the grid this week to repair a circulating water pump. The unit had similar problems in recent weeks as dredging in the Moss Landing harbor led to clogs in the plant's intake lines, according to a Duke spokesperson. The generator has not announced when Unit 6 will return to service.
Southern California Edison's San Onofre Nuclear Generating Station Unit 3 lost about 30 percent of its total capacity of 1,108 MW at about 2 am on Wednesday due to problems with the main feed water pump. SONGS 3 hovered at 73 percent of total power before ramping to full capacity for Friday.
Other unavailable generating units included Pacific Gas & Electric's Helms plants, of which units 1 and 2 curtailed all 814 MW of capacity; the Department of Water Resources' Hyatt/Thermalito plant, which shut down 733 MW of 933 MW of available capacity; and Reliant Energy's Ormond Beach Unit 2, which curtailed 400 MW of 750 MW available.
Salmon spawning in the Pacific Northwest appeared to have little impact on prices as federal river flow requirements went into effect this week under the Vernita Bar agreement. The Bonneville Power Administration had 200 MW of off-peak power and 300 MW of on-peak supplies for sale early in the week, then scaled back its light-load offer to 100 MW midweek and on through to the coming Monday.
BPA is currently conducting maintenance on the Pacific DC Intertie to repair old power converter facilities. Through Monday, capacity on the north-south line is being curtailed to 1690 MW and the south-north line is being curtailed to 1638 MW.
Trades at Western hubs showed a wide price range this week. Mid-Columbia prices for heavy load hours ran between 28 mills and 34.5 mills/KWh, while the California/Oregon Border saw higher on-peak trades, reaching 36.5 mills/KWh. NP15 prices rose to 40 mills, and trades at SP15 topped out at 39.5 mills/KWh.
Off-peak prices tended to stay in the low- to mid-20 mills/KWh range at most hubs, with Palo Verde prices tracking lower at 18.5 mills to 22.75 mills/KWh.
Prices at the Automated Power Exchange reached a high 41 mills/KWh for on-peak supplies, and off-peak energy traded in a wide spread, moving between 21.75 mills and 28 mills/KWh.
At the Alberta pool, demand never quite caught up to forecasts as mild temperatures continued to smile on the Northwest. Except for one or two unusually high- priced on-peak hours during the week, prices were moderate, and loads moved in a range of 5,900 MW to approximately 7,400 MW [Jason Mihos].
Gas Rests on Futures
Much like electric prices, natural gas prices this week appeared to disregard laws of supply and demand. Loads tapered off amid mild temperatures in the West, and traders reported a reduction in demand of about 10 to 15 percent on Pacific Gas & Electric's pipeline system. But strong NYMEX futures seemed to keep gas prices afloat.
"This may be the strongest futures we've seen in a while," said one trader. "Still, the fundamentals are affecting prices." Traders also said that colder temperatures around the country could mean smaller injections into storage, further supporting prices.
The CityGate point set the pace this week, reaching a high of $4.00/MMBtu early in the week before lapsing to the $3.65-$3.80/MMBtu range. Malin and Topock tracked about $0.10-$0.15/MMBtu lower throughout the week, with Malin peaking at $3.85/MMBtu and Topock hitting a high of $3.90/MMBtu. San Juan supplies traded above the $3.00/MMBtu mark for several days before slipping to about $2.92/MMBtu, and prices at the Permian Basin stayed in a tight range, moving between $3.83 and $3.93/MMBtu.
With enough supplies in its California Gas Transmission pipeline to meet demand, PG&E called an operational flow order for Thursday deliveries.
Prices at Alberta began the week at about $(C) 4.50/Gigajoule, then blew past the $5.00/Gj mark as work continued on a section of TransCanada's pipeline. The outage, which knocked 200 MMBtu off the system when the disruption began, was scheduled to end on October 16 but has been delayed. Prices ballooned to $5.25/Gj by Friday [J. M.].
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