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Western Price Survey / Archives

October 26, 2001
Traders Return to Find a Different Market

Power transaction patterns were a bit unusual this week, as many market participants took a few days off to attend the Northwest Power Pool schedulers' meetings. Midweek prices were pretty much frozen at levels set Monday-generally in the mid-20s across the West. That all changed Thursday, as traders got back to their desks to find bid/ask prices had moved several notches higher.

The big reason appeared to be this week's large run up of natural gas prices that saw Southern California Border costs, for instance, rise by more than $1/MMBtu before settling at a somewhat lower level.

Also contributing is the uncertainty over transmission scheduling. The California/Oregon Intertie had long been set for a deration over the weekend to merely 600 MW in either direction. Though that maintenance work-from Saturday morning through Sunday night-was still on the books traders recalled that last year, the work was cancelled at the last minute. System conditions are not the same as last year, but given the ups and downs of the Western marketplace, no one was betting it could not happen again.

Cool and wet weather in the Pacific Northwest was cited as a driver for higher peak prices as well, though off-peak seemed relatively steady and flat across the NW and Northern California hubs.

With most of the week's activity concentrated in two discrete bursts, the range of prices was widely spread. From the 25 mills to 28 mills/KWh range set early, Mid-Columbia jumped to the 31.25 mills to 35 mills/KWh range. COB was reported very thin and volatile, hitting 37 mills/KWh at one point but seeming to stick near the Mid-C prices, as did NP15. Off-peak energy ended up mostly in the 24 mills to 26 mills/KWh range.

SP15 has been distinguishing itself with slightly higher bottoms of the peak price range and somewhat lower off-peak prices overall than its state neighbors. It had begun the week around 26.6 mills to 27.5 mills/KWh and rose to the 33.5 mills to 35 mills/KWh range later. Off- peak was seen at 23.5 mills to 24 mills/KWh.

Palo Verde had a spread for the week from 26 mills to 34 mills/KWh but seemed to be mostly at 32.5 mills/KWh Thursday. Off-peak power in the Southwest was 22 mills to 24 mills/KWh.

The resource maintenance season continues, but marketers were saying that San Onofre No. 2 seemed to be getting ready to return to service after its short repair cycle. Official word of nuclear operations is still being kept mum by the Nuclear Regulatory Commission, and some traders around the country have been complaining that the absence of information has added to the speculation and rumor mill [Arthur O'Donnell].

Gas Gives Back a Little

After a two-stage jump in prices, Western natural gas markets stepped back slightly from the highs set early Thursday. The causes of the big run-up seen since the start of the week were national in character, including expectations of much colder weather in the East and Midwest plus a very low injection rate. The American Gas Association's weekly storage report was just 25 Bcf in the past week, but since reservoirs are nearing capacity that figure was no cause for alarm.

After a weekend of unseasonably warm weather in many places, gas prices started out at very low levels. Sothest basins skirted the $2/MMBtu mark and Topock was $2.17/MMBtu. However, those hub prices rose and rose, settled a little, then rose again to reach points not seen in several weeks. SoCal/Topock hit $3.17 before slipping back to $2.88/MMBtu. San Juan had reached $2.92 before eroding to $2.70/MMBtu.

In Northern markets, Malin was as high as $3.14 but dropped to $2.86, while the San Francisco CityGate rocketed to $3.33 for a bit prior to returning to the 3.10 to 3.12/MMBtu range.

AECO briefly crossed the $(C)4.00/Gigajoule mark but closed at $3.96. Still the range for the week was $3.18 to $4.06/Gj [A. O'D.].

Western Electricity Prices
Week of October 22-26, 2001
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 40-195 30-40
Mid-Columbia 26-35.25 22-26
COB 26-37 23-26
NP 15 25-35 23.5-26
SP 15 27-35 23.5-24
Palo Verde 26-34.74 22-24

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


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