Western Price Survey / Archives
October 27, 2000
Western power markets entered a midweek hiatus as many traders and schedulers attended the Northwest Power Pool schedulers' conference in Portland. Monday's trading set the pace for the week, with three-day blocks of energy sold in advance. Unlike some previous NWPP meetings, nothing of great importance happened while the market sat idle, so when people got back to business on Thursday, conditions were essentially the same as when they'd left.
Power prices, while still at unprecedented levels, had no major stimuli to respond to. The normal patterns, higher prices on Monday to test the market and a tailing-off of prices for the Friday/Saturday blocks, were in evidence-just at a much higher level than might be expected for mid-October. After wavering in the 103 mills to 109 mills/KWh range, daytime prices on the California Power Exchange fell to 94 mills/KWh for Friday deliveries. The off-peak price of 92.9 mills/KWh was about the midpoint of the week's range from 81 mills to 100.5 mills/KWh.
The high off-peak price continues to confound veteran traders and utility executives alike, who tend to see it as proof that the market is "broken," "dysfunctional" or "not workably competitive." Others say it is merely a reflection of continued high gas prices, the costs of emissions offsets and the averaging effect of price caps at the California Independent System Operator.
As the CalPX price fell, so did bilateral prices around the region and three definite tiers appeared: Palo Verde took the low rung at 72 mills/KWh, Mid-Columbia settled at 85 mills to 86 mills/KWh and the California/Oregon Border price hung at 99 mills to 102 mills/KWh. NP 15 was flat to COB, traders said.
Bonneville Power Administration is making a tentative return to the sellers' market on Friday and Saturday, offering 100 MW of power in the 7am to 10 am period for prices pegged to the CalPX. Though not a strong presence, it represents the first time in about two weeks that BPA has had surplus energy to sell. October means special water- release conditions to aid spawning efforts at Vernita Bar in the Northwest. It remains to be seen how power generation will be affected this autumn.
Transmission repairs continue throughout the Pacific AC and DC systems, although this weekend the California/Oregon Intertie returns to full capacity for the first time in two weeks. Next week, repairs on the Imperial/SDG&E El Centro line will pull the line from service for two days [Arthur O'Donnell].
Gas Prices Retreat
A surprisingly strong injection report, coupled with lack of significant events or major weather changes translated into lower prices throughout Western gas markets this week. Nationally, the 71 Bcf injection into storage this week pulled NYMEX numbers down by about $0.60/MMBtu compared to last week, and the November contracts dove below the $5 mark.
Western storage was not as strong, but more went into the ground than was pulled out this week. Capacity still remains about 12 percent below last year, but the anxious edge seems to have come off the market, with forecasters calling for a slightly warmer than normal winter. The Southern California Border price dropped from $5.37/MMBtu at the start of the week to about $5.20/MMBtu Thursday. With electric power loads quite low in California the only force driving demand was heating load in the cooler mountain regions. Otherwise cloud cover over the state kept temperatures moderate.
Permian Basin and San Juan Basins trailed the SoCal price with varied premiums in the $4.30 to $4.80/Mmbtu range.
Northern California and Northwest prices followed the pricing leaders lower. Malin dropped from $5.14 to $5.02/Mmbtu, while the PG&E CityGate hung at $5.35/Mmbtu.
The Alberta price dropped sharply on US trends. After starting the week at $6.37/Gigajoule, but fell to $5.94/Gj Thursday [A. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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