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Western Price Survey

Week's End Edition
November 10, 2006
Power Prices Chill on Autumn Weather

With the peak summer demand season over, many power plants are on hiatus. Units No. 1 through No. 4 of AES Corp.'s Los Alamitos power plant, for instance, were out most of this week, keeping over 1,000 MW off the grid in South of Path 15 territory.

Unit No. 4 of the 335 MW El Segundo plant was also off line, as was the 337 MW Unit No. 3 Morro Bay plant, owned by Duke Energy. Calpine Corp.'s Los Medanos Energy Center was on an unplanned outage, with output cut by 297 MW.

More importantly, two nuclear units also remain out. Unit No. 2 of the 1,335 MW Palo Verde nuclear plant is being refueled, as is Unit No. 3 of the San Onofre Nuclear Generating Station. The SONGS refueling has limited imports into the service areas of San Diego Gas & Electric and northern Mexico by 2,300 MW. It has also contributed to limiting southward flows on Path 44 to 1,650 MW this week.

In summer, the collective outages might be enough to send power prices through the roof, but not in the lower-demand autumn, although off-peak prices seemed to grow teeth as the week wore on. SP15 peak power started the week at about 62 mills/KWh, gained a few mills Wednesday, and tapered off Thursday. Off-peak power traded at around 40 mills/KWh at the start of the week before steadily rising to 50 mills/KWh on Thursday.

In all California regions, power was traded Thursday for deliveries through Monday. Daytime power at Palo Verde was at 54 mills/KWh Monday, reached 60.50 mills for Thursday deliveries, and retreated the next day. Nighttime power, priced at 34.50 mills/KWh Tuesday, reached 44.50 mills/KWh in Thursday trading.

Power values for the North of Path 15 kept pace with Southern California. Peak power went for about 60 mills/KWh much of the week, save for a Thursday drop to 52.50 mills/KWh. Off-peak power escalated through the trading week to reach 49 mills/KWh on Thursday.

The 1,1,60 MW Columbia Generating Station in Washington, which was off line at the start of the week for maintenance, had ramped back to full output by Friday. Mid-Columbia peak prices, however, did not seem to take much notice. Prices started the week between 49 mills and 54.50 mills/KWh and were between 47 mills and 53 mills/KWh for Friday deliveries. Off-peak power was at about 40 mills/KWh for most of the week.

Daytime power at the California-Oregon border seesawed between 53 mills and 62 mills/KWh. Off-peak power wobbled more tightly between 41 mills and 46 mills/KWh [Chris Raphael].

High Storage, Warm Forecast Could Keep Gas Prices Low This Winter

While some power plants rest, natural gas is waiting in storage for the approaching winter. According to the US Energy Information Administration, total storage levels of natural gas were at 3.2 Tcf for the week ending November 3. The agency said Tuesday that storage is near its maximum estimated working capacity of 3.6 Tcf.

A slight drawdown started last week. According to EIA, natural gas in storage fell 7 Bcf in the lower 48 states for the week ending November 3. Much of the decline was in the East, however, as the West gained 1 Bcf.

According to the EIA's short-term energy outlook released Tuesday, the relatively high levels of natural gas in storage and a forecast of slightly warmer-than-normal weather should keep Henry Hub prices below $9/MMBtu through the winter heating season. The Henry Hub price is expected to average $7.79/MMBtu in 2007, as natural gas consumption increases 1.3 percent.

California gas prices mostly peaked on Wednesday and then retreated to where they started the week in Friday trading. Permian Basin gas rose to $6.58/MMBtu in Wednesday trading, but by Friday neared its low of $5.47/MMBtu.

PG&E CityGate gas was the priciest, reaching $7.51/MMBtu in Wednesday trading and slipping to a low of $6.36/MMBtu for weekend and Monday deliveries. Southern California border gas was at $6.77/MMBtu for Thursday deliveries and at $5.48/MMBtu Friday [C. R.].

Western Electricity Prices
Week's End: November 6 - 10, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 43.29-673 10.06-152.96
Mid-Columbia 47-60.25 38-45.25
COB 53.25-62 41.50-46.25
NP 15 52.50-63 40-49
SP 15 57.50-65.25 39.50-50
Palo Verde 54-60.50 34.50-44.50

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 Chris Raphael, editor with questions regarding Price Survey Content.

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