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Western Price Survey / Archives

October 31, 2003
Fires, Flares and the FBI

Fires are raging on Earth. Fires are raging on the sun. Coupled with more reports of transmission tower sabotage, the week in review could be summed up as: not much going on with power prices, but other elements of the electricity system are keeping grid operators and power watchers on their toes.

The flames and smoke from the fires burning in Southern California have caused thousands of people to lose power and both Southern California Edison and San Diego Gas & Electric crews, along with imported help from Pacific Gas & Electric, are working around the clock to restore electricity to homes and businesses. Still, the continuing conflagration is not making that an easy task. As of Thursday, the wide-spread Cedar and Old Fires are each less than 10 percent contained.

The 500 KV Southwest Power Link shut down on Monday, preventing more than 900 MW of electricity produced in Arizona from heading into Southern California. Because the loss of the line was anticipated, additional Southern California generation was put on line to make up for the lost imported power.

The California Independent System Operator called for restricted-maintenance operation for generators south of Path 15 for nearly all hours within the last seven days, warning power-plant operators to "avoid actions which may unnecessarily jeopardize generator availability." A number of transmission emergencies were also called by the grid operator for Southern California. On Thursday, a glimmer of metaphorical blue sky was seen as Cal-ISO was able to cancel the most recent transmission emergency at 10:25 that morning.

A more distant concern also preoccupied grid operators this week. A huge solar flare drove a very strong geomagnetic storm toward Earth on Tuesday, hitting the Earth the following day. The National Oceanic and Atmospheric Administration reported that power grids in Canada and the northern United States were experiencing power surges because of the storm. No unusual events in the Western power system were attributed to the flare. Still, a handful of forecasters expressed some concern for fire fighters in Southern California, as communication devices such as radios and satellites can be affected by the disruptions in the magnetic field.

The fires in Southern California did not seem to have much of an affect on prices. At the Palo Verde hub, peak power was exchanged for as much as 48.50 mills/KWh on Monday but dropped back down to between 36.25 mills and 39 mills/KWh in late-week trading. SP15 power reached a high on Monday as well, topping out at 52 mills/KWh. Thursday saw prices bumping up against the 44 mills mark but refusing to break through and rise any higher. Off-peak power at Palo Verde managed only a high of 24 mills/KWh in trading for the weekend..

While southern-area power prices lost strength as the week went on, Northwest prices actually gained — benefiting from the drop in temperatures in the region. Mid-Columbia peak power moved for between 31 mills and 34 mills/KWh at the start of the week before creeping up to a high of 38.50 mills/KWh on Thursday. Off-peak power traded hands for as much as 29.25 mills/KWh on that day. As one trader put it, the colder weather helped to support prices because the reservoirs are "choc-o-bloc full." The increased demand helped to offset the downward pressure cheap hydro puts on power prices.

The Federal Bureau of Investigations arrest warrant for Michael Poulin in connect with a number of transmission-tower tamperings remains outstanding. The FBI issued the warrant late last week after crews spotted a man matching Poulin's description removing bolts from tower footings as a number of locations throughout the West [Shauna O'Donnell].

Cool Weather Approaches, Little Effect on Prices Yet

News of healthy storage figures continued to put downward pressure on natural gas prices this week. The lid was somewhat offset by bubbling up of demand as temperatures dropped and drove the impulse to switch on furnaces throughout the West.

On Thursday, the Energy Information Administration released its weekly figures for underground gas storage. The amount of gas in storage now compared to the five-year average finally exceeded the historical figure for all regions in the country. The EIA reported another 55 Bcf was injected into storage facilities nationwide, bringing the total to 3.12 Tcf. Though this figure is lower than last year at this time, it is 2.7 percent higher than the five-year average.

California Gas Transmission called a system-wide operational flow order for last Sunday, and another for Friday, October 31. Per usual, the reason was high inventory in the pipeline.

San Juan gas hovered in the low $4.00 range most of the week, though it bottomed out at $3.95/MMBtu on Tuesday. After peaking at $4.17/MMBtu on Wednesday, trading closed the week at $4.11/MMBtu. Topock gas showed a bit more spark, opening the week as high as $4.57/MMBtu before fading to between $4.25 and $4.41/MMBtu in late-week trading [S O'D.].

Western Electricity Prices
Week of October 27-31, 2003
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.64-354.95 10.37-74.56
Mid-Columbia 31-38.50 20.50-30
COB 36-42 23-30
NP 15 41-47 24.50-29.25
SP 15 42-52 23.50-30
Palo Verde 36.25-48.50 20-26.25

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


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