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Western Price Survey / Archives

November 1, 2002
As Clocks Fall Back, Markets Move Higher

Sensing the shorter days and longer, cooler nights coincidental with the end of daylight savings this week, spot electric prices increased accordingly. Temperatures in the Pacific Northwest stepped down throughout the week, and trades during some heavy-load hours nearly reached 50 mills/KWh at many Western hubs. Limited hydro power, along with power-line derations and generation outages, also appeared to contribute to the trend, along with strong natural gas prices.

"Loads are increasing every day. This always seems to take effect after the time change," said one trader. While this appears to be true in the Northwest, loads on the California Independent System Operator system are still meekly nudging the 30,000 MW level.

At Mid-Columbia, premiums for on-peak energy soared to a high of 49 mills, up as much as 14 mills/KWh from trades reported on Monday. Prices for off-peak supplies reached 41 mills/KWh. Traders pegged low hydro flows out of the Northwest, which is still awaiting a healthy dose of rain, as one of the reasons for the price increase. According to reports, precipitation is at 28 percent of normal for this time of year.

Continued curtailments on the Pacific DC Intertie and the California Oregon Intertie appear to be lighting a fire under prices at SP15 and NP15. On-peak prices at SP15 traded between 43 mills and 49 mills/KWh, with prices for light-load hours running up to 38.25 mills/KWh. At NP15, on-peak power traded as high as 48.25 mills/KWh, with off-peak prices hopping between 27.75 mills and 39.75 mills/KWh.

Prices at the California-Oregon Border were not to be outdone. On-peak supplies fetched between 38.25 mills and 46.5 mills/KWh, with light-load deliveries netting a high of 39 mills/KWh. At Palo Verde, on-peak power ran from 37 mills all the way up to 47.5 mills/KWh.

Generation outages, both expected and otherwise, on the Cal-ISO grid topped 17,200 MW in lost capacity on Monday morning. The figure decreased to about 14,000 MW late in the week.

Notable unplanned absences include Southern California Edison's Mohave Unit #2, with all 442 MW of capacity off line; the California Department of Water Resources' Hyatt/Thermalito complex, with 803 MW of 933 MW of capacity curtailed; Duke Energy's Moss Landing No. 2, with all 530 MW curtailed; and the AES- owned Alamitos No. 6, with all 485 MW of capacity backed down. After Alamitos #6 returned to the market, Alamitos Unit No. 5 went off line unexpectedly, with all 485 MW of capacity curtailed.

At the Diablo Canyon nuclear generating station, Unit 2 clicked down to 98 percent of full power briefly on Tuesday for routine testing. Diablo Unit 1, which was scheduled to come back on line sometime next week, will remain at zero capacity until early or mid- December, according to a plant spokesperson. Pacific Gas & Electric found problems with the generator's rotor and a replacement rotor is not immediately available.

The Bonneville Power Administration offer stayed at a steady 300 MW for heavy-load hours and 100 MW for light-load hours through Wednesday. After suspending the offer for Friday and Saturday deliveries, BPA had the same amount for sale for Sunday and Monday.

At the Alberta hub, real-time prices climbed as temperatures sank. On-peak power traded between 30 mills and approximately 80 mills/KWh most of the time, with a one-hour spike to 665 mills/KWh during the six o'clock hour on Monday. By the end of the week, loads had eclipsed 8,000 MW for several peak-use hours [Jason Mihos].

Gas Prices Spooked Upward

Concerns about being caught short and the possibility of low storage figures kept prices jumping in the natural gas market this week. Gas demand in the West, though increasing gradually, is not particularly high, and some traders speculated that prices have been trading on hype.

"People were expecting a [storage] withdrawal and they were worried they were going to be short," said one trader. "It looks like they baseloaded early in the week, especially at the basins. Everyone's in good shape now." The federal Energy Information Administration reported storage injections of 11 Bcf this week-less than was put in last week but still a cushion against withdrawal.

Prices at the Southern California Border skipped from about $4.08 up to $4.42/MMBtu as the week progressed. Gas at PG&E's CityGate followed suit, topping out at $4.38/MMBtu in some late-week trades.

Up at Malin, prices moved between $3.99 and $4.10/MMBtu early in the week before floating to $4.30/MMBtu for Friday deliveries. At the basins, Permian prices reached $4.21/MMBtu, and premiums at San Juan rose to $4.10 midweek. By Friday, prices at all hubs had retreated to beginning-of-the-week levels, with Malin dropping to $3.94/MMBtu for some trades and San Juan plummeting as low as $2.94/MMBtu.

At the Alberta hub, prices pressed higher throughout the week, rising from $3.77/MMbtu to $4.02/MMbtu.

Note: For the foreseeable future, Alberta gas prices will be reported in $/MMBtu rather than $(C)/Gigajoule [J. M.].

Western Electricity Prices
Week of October 28-November 1, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 33.05-665.21 10.87-69.88
Mid-Columbia 35-49 28-41
COB 38.25-46.5 30.5-39
NP 15 42-48.25 27.75-39.75
SP 15 43-49 25.5-38.25
Palo Verde 37-47.5 22.75-35.5

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

The Western Price Survey is excerpted from Energy NewsData's comprehensive regional news services. See for yourself how NewsData reporters put events in an accurate and meaningful context -- request a sample of either or both California Energy Markets and Clearing Up.

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Contact Shauna O'Donnell, editor with questions regarding Price Survey Content.

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