Western Price Survey / Archives
October 20, 2000
With virtually no change in circumstances from last week, Western electric power prices stuck to a fairly narrow range this week, except for definitive downward movement in the Southwest.
All of the characteristics of an in-between market were on hand. Low demand, changing weather, hydro uncertainty, nuclear refueling outages and planned transmission maintenance all balanced each other in the demand/supply equation. The difference is that the starting point for prices was much higher than the typical mid-October level.
The California Power Exchange began and ended the week at 111 mills/KWh, rising to 121 mills/KWh on Thursday but giving the gain back as other hubs retreated. Off-peak prices bounced around in the 84 mills to 90 mills/KWh range, ending at 85 mills/KWh for Friday.
Prices in the Northwest moved narrowly in the 104 mills to 115 mills/KWh range. Mid-Columbia showed slightly softer prices than the California/Oregon Border, dropping below 1`00 mills/KWh for the weekend. Off-peak energy mimicked the CalPX in the 84 mills to 90 mills/KWh range.
Even though natural gas prices eased, the dearth of hydroelectricity means gas is on the margin and traders have so far seen no reason to reduce their off-peak prices much. Bonneville Power Administration, which has some ability to shift operations between day and night, was reportedly buying heavily at off-peak in order to maximize daytime generation and meet its commitments. BPA, however, has not reported any surplus energy for sale in two weeks.
Overall trading activity was very light everywhere as daily loads dropped. Cal-ISO logged a scant 32,000 MW peak all week.
California and the Northwest are in the midst of transmission maintenance season and various repairs are adding to congestion in the north. Even at midnight real-time prices on congested paths at Humboldt and NP15 were hitting the California Independent System Operator's $250/MWh cap.
Transmission repairs are scheduled through the end of the month, particularly around Captain Jack/Olinda lines and Round Mountain/Table Mountain stretches of the California/Oregon Intertie. The AC line southbound was cut to about 2,900 MW this week. More extensive work on the DC line means curtailments to 1,086 MW for much of the rest of the month, plus a two-day weekend outage beginning October 28.
Traders, however, said the work was planned so far in advance it did not alter transactions to any noticeable degree.
The Southwestern market was on a different trend, with prices falling sharply at Palo Verde and Four Corners. Some unit outages, at San Juan and Four Corners early in the week helped keep prices up in the 90 mills to 95 mills/KWh range, but after those facilities were back, the prices fell to the 78 mills to 81 mills/KWh range for Friday/Saturday deliveries.
Southwestern schedulers called it the "in-between" market, "Customers don't need to heat and they don't need to cool." More of the same is expected next week [Arthur O'Donnell].
Gas Prices Tumble on National Trends
Although Western gas prices did not follow the national pattern exactly, prices eventually moved downward on the coat-tails of warmer weather and improved expectations. Even though American Gas Association storage injection figures rose by only 29 billion cubic feet this week, that appeared to be enough to give traders some comfort.
The NYMEX contracts for November fell below $5/MMBtu for the first time in weeks, pulling down prices everywhere.
The Southern California Border price moved to the $5.54 to $5.59/MMBtu range Thursday and San Juan Basin dropped to $4.64/MMBtu. The spread between San Juan and Permian diminished to about $0.20/MMBtu, traders said.
There was no spread at all between CityGate delivery prices in Northern California and the Malin hub, meaning people could not move gas with any expectation of meeting costs. As a result, a high inventory situation clogged the PGT pipeline, making for "a very awkward market," in the words of one trader.
"There's no demand anywhere at this point," said another, although price levels continue to be relatively high on several nuclear outages and other factors.
The Alberta situation was something else for the first part of the week. reduced field receipts and gathering system constraints drove prices above $(C)7/Gigajoule, but the overall market trend eventually forced prices much lower on Thursday to $6.34/Gj [A. O'D.].
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