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Western Price Survey / Archives

November 8, 2002
Rain, Hydro Wash Over Markets

At long last, the rat-a-tat of rain arrived in the Pacific Northwest this week, followed closely by the pitter-patter of retreating prices in the electric spot market. Adding to the descent were increased hydro flows on the Columbia river system, receding fuel prices for gas-fired generation units, and relatively light demand coupled with milder temperatures.

Prices at many Western hubs dropped as the week progressed. On-peak power at Mid-Columbia, which started the week in the 35 mills to 38.5 mills/KWh range, traded for as low as 27 mills/KWh on Thursday. Mid-C light-load supplies netted in the low 30 mills range Monday and Tuesday before dipping to 24.5 mills to 25.25 mills/KWh at the end of the week.

California/Oregon Border prices fared better, ranging from 30 mills to 39.75 mills for heavy-load hours and 29.5 mills and 33 mills/KWh for light-load periods. At NP 15, on-peak power traded in the low 40 mills range early in the week, settled to 33.75 mills to 37 mills/KWh on Thursday, then rose to 38 mills to 41 mills/KWh on Friday.

Repairs and maintenance on the DC Intertie appear to be keeping prices strong at SP 15. On-peak power drew prices in the 36.25 mills to 45 mills range through Wednesday and traded for as much as 43 mills/KWh on Friday. Work on the Intertie is scheduled to continue through Monday.

The Bonneville Power Administration offered 300 MW for peak hours and 100 MW for off-peak hours for Wednesday-Friday deliveries. As hydro availability swelled, BPA bumped up its light-load offer to 150 MW for Saturday and Sunday supplies and kicked its heavy- load offer to 400 MW for Monday and Tuesday.

At San Onofre Nuclear Generating Station Unit 2, staff tripped the reactor early last Saturday morning when a feedwater regulating valve failed to work. The 1,123 MW unit remained shut down before ramping to 98 percent of capacity on Friday.

Diablo Canyon Unit 2 was shut down early Friday morning as high ocean swells clogged the plant's cooling intake ports with kelp. Pacific Gas & Electric expects Unit 2 to restore capacity over the weekend. Diablo Canyon Unit 1, still awaiting a new rotor, is expected to come on line in December. Capacity for both units totals 2,200 MW.

At the Palo Verde nuke complex in Arizona, Unit 1 is still emerging from its maintenance outage and was producing power at 70 percent of its 1,270 MW capacity by Friday. Palo Verde units 2 and 3 are still hovering at 98 percent and 99 percent of capacity, respectively.

Otherwise, generation outages in California ran the usual gamut this week, ranging between 3,000 MW and 4,000 MW of unavailable capacity throughout the week. In the category of unexpected shutdowns, all 442 MW of capacity at Southern California Edison's Mohave Unit 2 is still curtailed, and Reliant's Ormond Beach Unit 2 remains stuck at 400 MW of a total 750 MW of capacity.

At the Alberta hub, real-time prices stayed on an even keel most of the week. Rainy, temperate climates kept loads under 8,000 MW for virtually all on-peak hours, and prices averaged in the 50 mills/KWh range [Jason Mihos].

Gas Markets Retreat with Load

With heaters in Western regions yet to crank on in earnest, prices in the natural gas market this week were lulled to sleep. Premiums at most hubs stayed locked in a tight range as rain and mild temperatures swept across the Northwest and California.

"Our loads are not doing anything," said one trader. "Volatility has been minimal, and weather is really keeping a lid on."

Though loads don't appear to be supporting prices, what little support there is might be coming from increased electric power output in California. Diablo Canyon Unit 1 remains off line, SONGS Unit 2 is returning to service after the reactor shut down earlier this week and Southern California is seeing decreased power flows from the Northwest.

By Friday, prices began to recede around the West. At Topock, gas traded between $3.90 and $4.02/MMBtu for most of the week, then sank to the $3.65 to $3.72/MMBtu range on Friday. Prices at CityGate stood transfixed between $3.95 and $4.06/MMBtu through Thursday before dropping to $3.78 to $3.87/MMBtu. Prices for San Juan Basin supplies ping-ponged between $3.40 to $3.70/MMBtu all week and then withdrew to $3.10 to $3.30/MMBtu on Friday.

On Wednesday, Pacific Gas & Electric called a low- inventory OFO on its in-state pipeline, further suggesting brisk demand for electric generation.

Supplies at the Alberta hub, which touched the $4/MMBtu range for some trades last week, began the week at $3.46 and ended at about $3.41/MMBtu [J. M.].

Western Electricity Prices
Week of November 4-8, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 43.89-146.90 10.11-59.90
Mid-Columbia 27-38.5 24.5-35
COB 30-39.75 29.5-33
NP 15 33.75-45 28.5-35
SP 15 36.25-45 27-34
Palo Verde 30.5-40.2 23.25-30

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

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