Western Price Survey
October 27, 2006
The one true thing about the price for electricity traded in Western spot markets is that where go natural gas prices, there goes the cost of power. With gas costs climbing, the price for electricity did the same during the first half of this week.
In the South of Path 15 market, daytime power traded for between 70.75 mills and 74 mills/KWh during the Monday-through-Wednesday period, an increase of well over 10 mills when compared with last week's figures. Prices held steady on Thursday before recording a slight slippage on Friday, down to about 71 mills/KWh.
The rise in power values reflected the jump up in gas costs over the same time period. While gas imported into Southern California at the Topock delivery point cost between $4.86 and $6.175/MMBtu over the first half of last week, prices ranged from $6.80 to $7.05/MMBtu for the Monday-through-Friday period this week.
Off-peak power at SP15 attracted between 51 mills and 53.50 mills/KWh on Monday, about 20 mills/KWh more than last week. By Wednesday the price eased back down to between 49 mills and 52.50 mills/KWh for nighttime deliveries at SP15. The end of the week brought another bump up in cost, with nighttime power trading for as much as 60 mills/KWh that day.
North of Path 15 power also saw a hefty increase in value from last week to this week. NP15 peak-time power opened this week trading from between 69.75 mills and 75 mills/KWh, compared with last week's opening price of around 52 mills/KWh. Friday trades settled in the range of 71 mills to 72 mills/KWh. Off-peak power at NP15 changed hands for a high of 54 mills/KWh on Monday before sloughing off a few mills to close on Wednesday in the range of 50.50 mills to 53 mills/KWh. Next-week nighttime deliveries attracted between 55 mills and 61 mills/KWh in transactions on Friday.
Power scheduled for daytime delivery at Palo Verde traded for between 64.25 mills and 68.75 mills/KWh at the start of the week. By midweek the price slipped back to between 59.50 mills and 63.50 mills/KWh, before hovering near the 60 mills/KWh mark on Friday. Nighttime deliveries at PV moved for as much as 50 mills/KWh at the start of this week before dropping down to between 38.50 mills and 47 mills/KWh on Wednesday. That range narrowed for next-week deliveries as Friday transactions closed for between 44.50 mills and 46 mills/KWh.
The cost of spot power at the California-Oregon border also jumped up this week. After opening last week trading for close to 51 mills/KWh, COB peak-time power drew as much as 72.25 mills/KWh this Monday. The value of daytime power at the border moved very little over the course of the week, trading each day just around the 70 mills to 71 mills/KWh range.
Further north, at the Mid-Columbia hub, the price of electricity also gained in value this week compared to last week. Peak power at Mid-C traded for between 67 mills and 70 mills/KWh throughout the week. The price of daytime power generally stayed below the 60 mills/KWh mark the prior week. Nighttime power at Mid-C hovered close to the 58 mills/KWh level, topping out at 62 mills/KWh on Friday [Shauna O'Donnell].
Pre-Halloween Jitters Scare Gas Prices Upward
Natural gas prices found some legs this week, trending upward each day to cross above the $7 threshold on Thursday. By Friday, it seemed traders had thought better of the move upward and pulled back on spot-market transactions to drop back down into the upper $6 region.
Few obvious causes for the run-up in prices were evident during the week. Jitters about impending colder weather and higher demand likely played a role, as did increased trading activity as the end of the month approaches. Still, expectations generally prove to be unstable ground to base prices on, and the shedding of value at the end of the week bore this out.
Opening on Monday trading for between $6.84 and $7.05/MMBtu, Southern California border deliveries at Topock traded for as much as $7.51/MMBtu on Thursday. Transactions recorded Friday paid out between $6.83 and $6.94/MMBtu.
Gas entering the state at Malin traded for a low of $6.90/MMBtu on Tuesday before topping out at $7.51/MMBtu as well on Thursday. Values were drawn down below the $7 mark on Friday for some packages, but some cost as much as $7.10/MMBtu.
The cost of gas at the Permian producing basin hit a high of $7.19/MMBtu on Thursday, while the low of $6.47 was recorded on Tuesday [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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