Western Price Survey / Archives
November 10, 2000
Though the weather was turning blustery with colder temperatures in the forecast, power prices throughout the West returned to summer levels this week. The 24-hour index price on the California Power Exchange rose to 123 mills/KWh midweek and hung there. Daytime averages climbed to 137 mills/KWh for Friday deliveries but individual hours on the CalPX day-of market shot to 178 mills/KWh.
Overall power demand in California was moderate-generally near the 33,000 MWh mark at peak-but the continuing refueling outages at two nuclear units in the state put pressure on other resources to meet baseload demand. "All the plants that can go are going and blowing," said one market watcher. The heavily gas-fired portfolio of generation put extra pressure on natural gas costs, which reverberated back in the form of higher electricity prices.
With gas on the margin and Northwest hydroelectricity scarce, off-peak power moved back up to 91.3 mills/KWh on the PX after having fallen to 85.5 mills/KWh.
Bilateral markets tried to play catch-up with the exchange prices but were still about 20 mills to 25 mills/KWh beneath the clearing price at about 110 mills/KWh at Mid-Columbia, California/Oregon Border and zonal locations.
Because of the Veterans' Day holiday, traders were already dealing for next Monday, and the results indicate no let up in prices. COB rose to 145 mills/KWh for peak power while Mid-C and NP15 hit 130 mills/Kwh. Off-peak power rose above 100 mills, with COB energy going for 110 mills and NP15 power hitting 104 mills/KWh. Expected cold weather was given as the major reason for such unseasonal prices.
Even Palo Verde, which had fallen well below other markers in recent weeks, boosted to the 115 mills to 120 mills/KWh for Monday, with weekend and overnight power going for 87 mills/KWh, Southwest traders said.
After an unusual event at Diablo Canyon nuclear plant-in the form of a hoax bomb scare-and minor problems with control rod circuitry, operators were getting ready to bring Unit No. 1 back to the grid sometime this coming weekend. San Onofre No. 2 was still reported in cold standby, meaning that return to service may not be until next week.
Palo Verde No. 2 got back to work on Monday and was approaching full power on Friday morning. Non-nuclear generators at San Juan and Four Corners were off-line this week but were expected back soon.
The question of Northwest hydroelectric power remains unresolved. Once again, Bonneville Power Administration said it has no surplus power to sell-at least through next Tuesday. Water releases for fish spawning enhancement appear to be limiting power generation for the near future. "Where it's at is where it's gonna be," a trader observed.
A cold weather front moved across Canada, driving electric loads higher on the Alberta Power Pool. Beside two firm load alerts declared early in the week as pool peak load approached 7,300 MW, prices skyrocketed to 994 mills/KWh. Even off-peak prices hung in the 90 mills to 97 mills/KWh range for much of the week [Arthur O'Donnell] .
Gas Prices Scream Higher
Natural gas prices across the nation jumped on expectations of colder weather this coming winter. Adding to the bullish pricing sentiments was yet another gas storage report indicating possible shortfalls.
In the West, where the Southern California Border price again hit $7/MMBtu, electric demand was the driver because gas-fired generation was still standing in for baseload nuclear units a month into their refueling outages. "If we didn't need the gas, we wouldn't pay $7 for it," one purchaser said. Adding to the pressure was competing demand from other regions, pulling fuel from Alberta and Texas into the Midwest.
Price ranges for the week were quite wide as a result of the run-up that began Wednesday. Topock climbed from $5.60 to $7.20/MMBtu before settling out at $7/MMBtu.
San Juan Basin and Permian Basin prices tracked within a dime of each other, with San Juan going from $5 to $5.50 in a day and more than a dollar for the week and Permian hitting $5.60/MMBtu on Thursday.
Things look dear for the rest of November. Balance of month trades put the gas price at $6.50/MMBtu at Topock, $5.20 from San Juan and $5.32/MMBtu at Permian.
The Alberta gas transaction price covered a huge range during the week-from $(C)6.05/Gigajoule to $7.75/Gj. The AECO index settled at $7.40/Gj Friday [A. O'D.].
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