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Western Price Survey / Archives

October 25, 2002
Prices Wax, Freeze, then Wane

With most trading activity in the spot market wrapped up on Monday due to a schedulers' conference in the Northwest, prices saw little movement this week. Trades for Tuesday-Thursday deliveries inched higher compared to last week's prices-despite moderate loads and an extended absence of chilly weather. By Friday, prices had begun to sag.

Some traders estimated that electric prices continue to play puppet to higher premiums in the natural gas market. Others cited the uncertainty of trading a three-day block of power. "Sellers have to sell high so they don't look like idiots, and buyers need to get enough power to secure their loads," said one market player. "It looks like people guessed wrong." Another trader said that the lack of rain in the Northwest and the resulting shortfall in hydro supplies will likely start to push prices higher.

On-peak prices at SP15 traded in the 39 mills to 43 mills/KWh range before relaxing to about 37 mills/KWh. At NP15, prices pushed up to 43.25 mills before moving in the 38 mills to 40 mills/KWh range. Light load at NP15 and SP15 hovered in the 23 mills to 26 mills/KWh range.

At the California-Oregon Border, prices expanded to 38 mills for heavy-load hours, and Mid-Columbia rose to 36 mills/KWh. In the Southwest, Palo Verde trades peaked at 38 mills, with Four Corners trades as high as 38.75 mills/KWh. At both points, power for light- load hours traded in the 21 mills to 23 mills/KWh range.

Automated Power Exchange supplies traded in a range of 35.5 mills to 40.75 mills/KWh for on-peak power, with off-peak prices occupying the familiar 23.75 mills to 38 mills/KWh territory.

Loads on the California Independent System Operator system were nearly immobile, holding between about 29,500 MW and 29,950 MW. Meanwhile, in-state generation units began the week with a shudder. Cal- ISO reported about 17,860 MW of outages on Monday, of which approximately 3,700 MW was unexpected. Both figures had ebbed by Friday, but a few significant resources are still limping: Four Corners Unit No. 4, in the midst of unplanned tube leak repairs, is operating at half its 753 MW capacity. The unit was expected to return to service on Wednesday but has yet to do so.

Duke's Moss Landing Unit 6 capacity (754 MW) is still fully curtailed. Diablo Canyon #1 is undergoing a scheduled maintenance outage on its turbine generator and is planned to be shut down for two weeks.

Major transmission routes underwent further work this week. The Pacific DC Intertie was shut down completely for many on-peak hours to repair and upgrade power converters. On the California-Oregon Intertie, the south-north line experienced similar curtailments during both heavy- and light-load hours.

The Bonneville Power Administration, also on the spot- market sideline for most of the week, offered 100 MW off-peak and 200 MW on-peak power for Friday and Saturday deliveries. Real-time prices at Alberta hit a high of (C$) 65.90 for peak hours, and loads rose steadily throughout the week, reaching about 7,700 MW Thursday evening [Jason Mihos].

Full Storage Reserves Halt Prices' Upward Climb

Yet again, prices in Western natural gas markets this week continued to be pulled upward by strong NYMEX futures prices and concerns about possible production outages related to recent storms in the Southeast. Though temperatures have been comfortable in Western states, chilly Midwest forecasts may also be taking a hand.

Spot prices increased each day until Thursday, when the Energy Information Administration's weekly gas storage report showed an unexpectedly large amount of gas on hand. With this news, prices began to decline at most hubs.

At CityGate, trades stayed above the $4/MMBtu mark nearly all week, reaching a high of $4.20/MMBtu before retreating to $3.92 to $4/MMBtu. Prices at the Southern California Border, tracking close behind in the $3.96 to $4.18/MMBtu range, ended between $3.98 and $4.05/MMBtu. Supplies at the Permian Basin wavered in the $3.95 to $4/MMBtu range, running up to $4.11/MMBtu late in the week.

Trades at Malin followed the trend. After starting the week between $3.80 and $3.93/MMBtu, prices jumped to $4.10/MMBtu before easing to the $3.90 to $3.94/MMBtu range.

San Juan Basin prices proved invulnerable to the late- week falloff. Trades played between $2.73 and $2.82/MMBtu for Tuesday supplies, roamed in the $3.15 range later in the week, then exploded to a high of $3.75/MMBtu for weekend deliveries. Traders speculated that cold weather in the Rockies or less gas arriving at the basin from Northwest pipes may be causing prices to skyrocket at the basin.

Alberta prices opened the week in the $(C)5.40 to $5.48/Gigajoule range and zipped to $5.65/Gj. TransCanada continued to repair parts of its pipeline this week, which appears to be exerting pressure on prices. Alberta trades ended up at about $5.35/Gj on Thursday [J. M.].

Western Electricity Prices
Week of October 21-25, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.08-65.90 9.85-45.02
Mid-Columbia 30.5-36 21.5-26
COB 33-38.5 24-25
NP 15 38-43.25 23.5-26.75
SP 15 37.25-43 23-26
Palo Verde 34.75-38 21-25

Archives of the Western Price Survey for the past year are also available online.


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