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Western Price Survey / Archives

October 22, 1999
Prices Jump While No One Is Looking

With many Western utility schedulers and interested marketers attending a Northwest Power Pool conference this week, power market activity was light. But a relative price stability that marked the early part of the week soon gave way to a jump in prices led by the California Power Exchange and bilateral trades at the California/Oregon Border.

While prescheduled loads on CalPX did not vary much from the 560 GWh to 570 GWh range, peak prices popped from about 45 mills early in the week to 62.9 mills/KWh for Friday deliveries. The off-peak price also moved higher, from 32 mills on Monday to nearly 39 mills/KWh both Thursday and Friday. Individual peak hours on the PX day-of market climbed to as much as 90.5 mills/KWh on Thursday afternoon.

As a result, COB deliveries moved over a wide range from 42 mills to 52 mills/KWh, although trades for Friday/Saturday peak deliveries centered at 48 mills to 49 mills/KWh traders said.

Mid-Columbia trades were also over a wide range, but landed in a lower tier between 42.5 mills and 46 mills/KWh by the end of the week.

Bonneville Power Administration said it had 200 MW of surplus capacity to sell, but at relatively high prices. Northwest peak prices were posted at 59 mills and COB/NOB deliveries at 60 mills/KWh, with off- peak going for 39 mills and 40 mills/KWh. For Saturday, though, BPA dropped the daytime price to 49 mills and 50 mills/KWh, while retaining the high off-peak premium.

Surprisingly, Southwest desert prices were the lowest of all, running generally between 37 mills and 40 mills, aside from a few late peak deals up to 45 mills/KWh. The return to service of three San Juan units and Four Corners No. 4 helped offset the loss of a 750 MW unit at the Navajo steam generator. Alamitos No. 5 in Southern California tripped on Monday, dropping 400 MW from the system.

Off-peak power was anything but a bargain. trading activity was light, reflecting the dearth of available off-peak power because of hydroelectric cutbacks. At COB and Mid-C, mid-30s prices were the order of the week, while Palo Verde and Four Corners stayed to about 25 mills and 26 mills/KWh.

Transmission curtailments still had an effect on the market, although the California/Oregon Intertie was fully available. The DC Intertie, however, was cut to accommodate scheduled repair work. Much of the week, the DC line was cut from its 2990 MW rated capacity to just 1086 MW. That line will see continuing work through the end of the month that will, at times, remove it from service entirely.

Derating of critical Path 15 to 900 MW continues to cause a big differential in prices between Northern and Southern California. Pacific Gas & Electric was working on substation facilities at Gates during the layoff of Diablo Canyon No. 2. When the plant returns to service, Path 15 will likely return to its full capacity as well.

Three nukes in the region are still undergoing refueling, but two will soon return. WNP-2 in Washington has been refueled and is scheduled to return to the grid this coming weekend. Diablo Canyon is currently scheduled to return before the end of the month [Arthur O'Donnell] .

Go West, New Gas

Natural gas prices moved higher this week, largely in response to national NYMEX benchmarks, but also driven by continued electric generation demand in California and perceptions of supply shortages in Canada because of low field production figures.

However, traders noted that Alberta has tremendous storage capacity and even though as much as 700 MMcfd was leaving storage, there ought to be enough in the ground to meet needs. The big question for winter will be where that gas will go. "Alberta gas has the ability to follow demand," one California buyer said, noting the increase in pipeline capacity to the Midwestern market.. Prices and supplies this winter will be a function of which region is willing to bid a higher price.

In the meantime, Alberta prices neared the $(C)4.00/Gigajoule high- water mark this week. Starting the week at about $3.77/Gj, the AECO index rose to $3.99/Gj before settling at $3.95/Gj on Friday.

Prices at the Southern California Border hit as high as $3.17/MMBtu this week, then receded to about $3.13/MMBtu.

San Juan and Permian supplies moved in lock-step, ending the week in the $2.90 to 2.95/MMBtu range.

Looking ahead, some traders thought prices might come down next week as two of three nuclear units return to service in the West and temperatures cool down. Southern California had a bout of hot weather and the dreaded Santa Ana winds this week, but that is expected to pass [A. O'D.].

Western Electricity Prices
Week of October 18-22, 1999
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 49-500 mills/KWh 5.8-46.5 mills
California PX (WAC) 45-63 mills 31.8-38.9
Mid-Columbia 42.5-50 35-37
COB 43.5-51 36-37.5
Palo Verde 36-45 25-27

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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