Western Price Survey / Archives
October 19, 2001
Just when it seemed the Western power market had taken a path of upward mobility, prices retreated Thursday, giving back whatever gain had been previously recorded. The midweek energy hike was mostly caused by a big jump in natural gas costs across the region. But after the collapse of gas futures prices following the weekly AGA storage report, the cash market followed suit, tugging Western electricity prices back to the mid-20s.
Another factor was the start of precipitation season in the Pacific Northwest. "It's raining like crazy here," said one coastal weather watcher. Utility managers can only hope this marks the beginning of a long wet spell that will replenish reservoirs and build a solid snow pack for later consumption.
With colder nights and little daytime demand, there was scant difference in peak and off-peak prices at Mid-Columbia for the Friday/Saturday packages. Daytime energy was seen at 23.5 mills to 25 mills/KWh, but overnight power was just a notch lower at 22.5 mills/KWh.
California/Oregon Border slipped in volume and pricing after hitting a midweek high of 29 mills/KWh. Peak power was 25 mills/KWh heading into the weekend and off-peak trading was minimal around 22 mills/KWh. NP15 was seen stronger at 25.75 mills peak and 23 mills to 24.5 mills/KWh off-peak.
After being tied to NP numbers over the past few weeks, SP15 moved closer to the Palo Verde levels-their main link was the combined outage of about 3,600 MW of nuclear power at Palo Verde and San Onofre, plus sporadic unit outages at desert coal plants, including Four Corners No. 4.
There were reports of Palo Verde power reaching 32.5 mills/KWh midweek, but as the replacement fuel prices diminished, so did energy. PV dropped below 26.5 mills at peak, with off-peak lingering around 16 mills/KWh.
Just as prices had their ups and downs, so did loads on the California Independent System Operator's charts-though there seemed an out-of- phase correlation. The week's highest prices were set on the day of lowest peak demand and vice versa. Overall, peak loads bounced around in a range of 31,000 MW to 32,500 MW in California. Thursday's actual demand was stronger than the forecasts by about 700 MW. The Cal-ISO maintenance list, boosted by the nuclear unit outages, also fluctuated within the 10,400 MW to 11,400 MW range each day [Arthur O'Donnell] .
Gas Centered but Not Steady
Western natural gas prices leaped at the start of the week but stumbled Thursday, losing about half of the total gains seen since Monday. After the American Gas Association's weekly injection report confirmed that inventories are at near capacity heading into the late- Autumn, futures prices tumbled. The cash market and balance of month contracts followed suit during Thursday's trading sessions.
As a result there were wide spreads noted in the market but little certainty of direction. The end of week prices were pretty much in the middle of the range, with Southern California Border prices centering at $2.32/MMBtu, Permian dropping to $2.19 and San Juan falling to $2.11/MMBtu.
The San Francisco CityGate price seemed to top the Western market at $2.71 midweek, but it soon retreated to $2.45/MMBtu. Malin trailed at $2.25/MMBtu.
Colder weather and snow falls in the far north helped pull Alberta index prices to $3.41/Gigajoule midweek, but like all other hubs, AECO returned about half of what it picked up through the week to close at $3.04/Gj [A. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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