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Western Price Survey

November 16, 2007
Mild Weather, Nuke Returns Drop California Values, But Northwest Rises

Prices generally eased up this week as unseasonably warm weather set in and one nuclear unit returned to full production. Trading was a bit erratic because markets were closed on Monday in observance of the Veterans Day holiday. Unit No. 3 at the 2,254 MW San Onofre Nuclear Generating Station in Southern California finally came back to full operation on Thursday. SONGS Unit No. 2 has been slowly returning to full capacity this week.

Power prices across the western U.S. generally lost ground this week, with some dipping as much as $9/MWh in California and the Southwest. However, in the Pacific Northwest, prices reversed course and ended the week up from $2/MWh to $4/MWh. The increase was likely due to the onset of cold and rainy weather and a resumption of power service to some residents late in the week. A windstorm lashed the region on Monday and Tuesday, cutting service to as many as 94,000 people.

At South of Path 15, peak-power prices started the week at an average of $62/MWh and gradually shed value to finish Friday at $53. Off-peak prices dipped from $43 to the high 30s before ending at $43/MWh.

North of Path 15 saw peak prices slip around $8/MWh to $55 by week's end. Nighttime power fell from $43 to $36 this week and then spiked $8 on Friday.

Daytime power for Palo Verde dropped around $9 this week to hit $43 by Friday. Off-peak power ended the week almost where it began in the mid-30s.

The California-Oregon border lost $1/MWh to $59/MWh on Wednesday, then roared back to $62 by Friday. Off peak power saw the same trend, falling from $49 to $46 on Wednesday. Prices staged a comeback to finally end the week around $55.

At the Mid-Columbia hub, average prices fell throughout the week, from about $58/MWh to $56 before climbing to $60 on Friday. Off-peak prices showed the same pattern, starting at $49/MWh on Tuesday, dropping to $47, then soaring to $56.

Cool air is coming to Southern California, with temperatures falling from the high 70s to the low 70s by Tuesday in Los Angeles. Palm Springs will see blowing dust and highs in the 70s by Tuesday. Only in Phoenix, Ariz. will the weather stay the same, with plenty of sun and lows in the 80s. Portland and Seattle should get plenty of rain this weekend. Temperatures are expected to dip from the mid-50s into the mid-to-high 40s by Tuesday [Kristina Shevory].

Natural Gas Prices Mixed; Weather, Supplies to Blame

Colder temperatures in the Northeast and higher electricity use shaved natural gas supplies last week by 9 Bcf to 3.536 Bcf. It was the first decline for this heating season, but was in line with analysts' expectations, according to the U.S. Energy Information Administration's weekly storage report.

Despite the decrease in natural gas stockpiles nationwide, there is 2.5 percent more of the heating fuel in storage than last year thanks to high production, mild weather and few supply disruptions, such as hurricanes.

However, the story was completely different for the Western U.S. Mild temperatures kept heating demand down and boosted stockpiles by 6 Bcf to 471 Bcf, or nearly 5 percent above last year.

Natural gas prices generally fell this week, aided by ample supplies and mild weather. Most hubs lost $1/MMBtu to come to rest at around $4.40/MMBtu this week, with only Malin and City Gate ending the week in positive territory. At Malin, the average price was $6.73/MMBtu, while City Gate's was $7.05/MMBtu.

Despite short-term cold snaps, like one predicted for the Northeast next week, natural gas prices should remain low this winter. Most of the country will enjoy above-normal temperatures this winter courtesy of the La Niña weather phenomenon, the National Oceanic and Atmospheric Administration said in its final winter outlook released on Thursday. The Northwest is expected to get more snow and rain than usual this winter, while most of California will enjoy drier weather. There are equal chances for above-average and below-average temperatures in both areas. It is forecast to be hotter and drier than normal in the Southwest [K. S.].

Western Electricity Prices
Week's End: November 12 - 16, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 14.17-137.19 13.26-43.95
Mid-Columbia 54.25-62 43.50-57.50
COB 58.25-67 45.75-57
NP 15 51-65.25 36-53
SP 15 47.25-65.25 35-45
Palo Verde 40-54.50 29.50-42.50

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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