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Western Price Survey / Archives

November 19, 2004
Power Costs Buoyed, then Sank in Tandem with Gas Prices

Movement in the price of electricity throughout the Western region this week was almost solely attributable to the cost of fuel for generating units. Natural gas prices went on a roller coaster adventure over the course of the week, elevating then descending. The cost of power on the spot market went along for the ride.

Peak-time power prices South of Path 15 opened the week between 53 mills and 55 mills/KWh and jumped up as high as 63 mills/KWh the following day. By Wednesday, the price for power in the SP15 region had shed 5 to 7 mills, keeping below the 60 mills/KWh mark for next-day deliveries. The trade price for power to be delivered early next week bottomed out on Friday, dropping as low as 45 mills/KWh for peak-time deliveries.

Off-peak power prices at SP15 ranged from a low of 34.50 mills/KWh on Monday to a high of 43.25 mills/KWh on Tuesday. Sellers were offering low-demand power on Friday for between 36.50 mills/KWh and 40 mills/KWh.

Though the price of power over the first three days of the week displayed less volatility in the NP15 region than at SP15, the cost of electricity in Northern California remained the highest in the West, again, primarily due to the high price of gas. For example, spot-market gas at PG&E CityGate attracted as much as $6.70/MMBtu early in the week. Peak electricity prices at NP15 ranged from a high of 69 mills/KWh on Wednesday to a low of 48 mills/KWh on Friday. The cost of natural gas at CityGate had dropped to between $4.67 and $5.10/MMBtu at the end of the week.

Southwest power prices also went up then down this week. At the Palo Verde hub, peak power costs were recorded between 46 mills and 50 mills/KWh on Monday. The price the following day hit a high of 57 mills/KWh before dropping down to just under 51 mills/KWh in Wednesday dealing. Sinking even lower, PV power closed at the week at just 38.75 mills/KWh. Off-peak power at Palo Verde opening Monday at between 32 mills and 34.25 mills/KWh. Tacking on another 4 to 7 mills on Tuesday, the cost for nighttime power at the hub dropped to around the 35 mills/KWh mark at the end of the week.

The price of peak power at Mid-Columbia remained below 50 mills/KWh this week, topping out at 49 mills/KWh in Tuesday trading. By Friday the price for both peak and off-peak power at the hub was recorded as between 38.25 mills and 45 mills/KWh.

California-Oregon border power drew a high price of 53.50 mills/KWh early in the week but in contrast to transactions at other hubs in the West, COB did not record a significant erosion in price as the week wore on. On Thursday the price of peak-time power at the hub remained between 48.25 mills and 52.50 mills/KWh.

Peak-load figures for the California Independent System Operator territory stayed just above the 30,000 MW mark this week. Despite the ongoing scheduled outages of three major nuclear units in the state, there was ample generation to meet demand [Shauna O'Donnell].

Spot Gas Dives at End of Week

Natural gas prices in the Western spot markets gained between 30 and 40 cents between the Monday and Tuesday trading session. At the Permian Basin producing hub, the commodity attracted as much as $6.195/MMBtu on Tuesday, after closing out Monday between $5.40 and $5.84/MMBtu. At the Southern California border delivery point of Topock, the price of gas ranged from $5.70 and 6.11/MMBtu at the beginning of the week. Tuesday's high price at the hub was recorded at $6.48/MMBtu.

Still, by Wednesday the price of gas showed signed of slipping. The price of gas at Topock dropped to between $5.55 and $5.71/MMBtu while at PG&E CityGate the cost of gas dropped nearly $1.00 from Tuesday's high of $6.70/MMBtu.

It was in Friday's trading session that the value of the commodity really lost ground. Prices at the producing basins at Permian and San Juan each shed more than $1.00 between Thursday and the end of the week. After topping out at $5.97/MMBtu on Tuesday, gas at San Juan traded for an average of $5.10/MMBtu Thursday. The following day the price sank as low as $3.95/MMBtu.

Slumping crude oil prices and the Energy Information Administration's natural gas storage figured contributed to the weakening of spot prices between Thursday and Friday. The EIA reported just 6 Bcf was withdrawn from underground storage last week, while overall figures pegged the amount of gas stored as 9 percent more than the five-year average [S. O'D.].

Western Electricity Prices
November 15 - 19, 2004
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 5.32-69.66 5.72-22.97
Mid-Columbia 38-49 36-44.75
COB 43.75-53.50 39.75-45
NP 15 48-69 43.50-48.75
SP 15 45-63 34.50-43.25
Palo Verde 38.75-57 33.25-40.75

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 Shauna O'Donnell, editor with questions regarding Price Survey Content.

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