Western Price Survey / Archives
November 9, 2001
The upcoming Veterans' Day federal holiday pushed power trading into an unusual pattern, with Saturday/Sunday deals being transacted on Thursday and Monday/Tuesday deliveries set on Friday. Late trading into the weekend saw a slight uptick in peak prices in the north and a slippage to the south. Also, the difference between peak and off-peak shrank for the weekend packages.
The California Independent System Operator reported nearly 13,500 MW of unit outages Thursday with most of the planned maintenance variety. Some traders suggested that at least part of the generation outage list might be made up of economic outages as some units were "quot;out of the money"quot; given the low energy prices and middling gas prices.
Not that it mattered in terms of meeting load. Cal-ISO load topped out at 30,500 MW midweek and was projected to fall below the 30,000 MW mark Friday. Weather was mild and the pacific Northwest continued to receive welcome rains.
October precipitation on the Columbia River system was 150 percent of normal, and November started out right on track. "quot;There is water,"quot; proclaimed one NW marketer. Bonneville Power Administration dipped its toes in the sales market with a 50 MW daytime offer at market prices.
Palo Verde No. 3 was back on the grid following 37 days of refueling, not a record, but still a relatively swift return to service. Following on its heels will be Unit No. 2, which has been out for steam system repairs. The second PV unit should be back to full capacity over the weekend. Those returns more than made up for outages at two San Juan units, one of which is set to come back later in the week anyway.
In response to the nuclear returns, Palo Verde prices fell steadily through the week from a high of 35.5 mills to about 26.5 mills/KWh. Off-peak moved the other way, from a low of 19 mills midweek to 23.5 mills/KWh.
Mid-Columbia had been down to 24.5 mills but picked up to the 26 mills to 28.5 mills/KWh range. Off-peak centered at 27.5 mills for the two- day package. The California/Oregon Border moved uncertainly during the week in the 28.5 mills to 31.5 mills range, but was on the down side toward the end of trading. Off-peak ranged from 21.5 mills to 26 mills/KWh.
NP15 kept a range of 27.5 mills to 32 mills but SP centered at 28.5 mills late in the week; both locations had been up to 35 mills earlier.
A number of utility schedulers said they had no real need to purchase off-peak energy, so trading was pretty thin. Though some media outlets reported EnronOnline trading has dropped, that could be an artifact of the advanced holiday trading patterns [Arthur O'Donnell].
Gas Slides into Weekend
Natural gas traders did not follow the accelerated schedule for trading in advance of a three-day weekend, but you would not know that from the prices or drop in trading activity Thursday. Continued mild temperatures depressed demand and the PG&E system went into a high inventory alert that was expected to last through the weekend.
National benchmarks for December had rallied to above $3 but slipped to $2.95/MMBtu, pulling the rest of the daily markets down with them. Gas injection into storage slowed to a trickle with the approach of withdrawal season. The American Gas Association reported that just 10 Bcf went into storage last week, 4 BFC of that in the West. But levels are so much higher than last year that few are worried about a return of supply shortages. Western storage systems reported in at 93 percent of capacity compared to 76 percent this time last year.
All hubs were at the low end of their weekly range Thursday except Alberta, where NGX reported a jump in daily volumes to 1.6 Bcf with a boost in demand from the Midwest. The Alberta price slipped from $(C) 3.74/Gigajoule to $3.60/Gj, but the low was set earlier in the week at $3.55/Gj.
Otherwise, Topock fell to $2.52 to $2.58/MMBtu from a peak of $2.74/MMBtu. San Juan dropped to $2.22 from $2.48/MMBtu and Permian tanked to $2.37 after reaching $2.60/MMBtu.
Malin was down a quarter to $2.42/MMBtu by week's end and the SF CityGate tracked Topock at $2.58/MMBtu [A. O'D.].
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