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Western Price Survey

Week's End Edition
November 19, 2010
Cold Weather Lifts Gas, Power Prices; BPA Wholesale Rates May Rise

Plenty of natural gas remains in storage as the winter season approaches, which should moderate gas prices (and subsequently power values) this winter. According to the U.S. Energy Information Administration, a 3 Bcf addition to natural gas reserves provided a total of 3.843 Tcf in storage as of Nov. 12, which is an all-time record.

That doesn't mean power and gas prices remain unresponsive to cold weather. Spot power prices followed a jump in natural gas values across the West the week of Nov. 15 as winter weather entered the region.

For the Friday-to-Friday trading period from Nov. 12 to Nov. 19, Southern California Border spot gas jumped 32 cents to an average of $3.81/MMBtu, and Malin gas rose 43 cents to $4.18/MMBtu.

Not surprisingly, average prices for daytime power jumped between $3.30 and $14.15 over the same period.

Mid-Columbia posted an average price of $45.29/MWh for daytime power Friday, gaining more than $14 during the trading period. Meanwhile, California-Oregon Border daytime power rose $13 to an average price of $46.28/MWh.

Meanwhile, North of Path 15 gained almost $6.90 to reach $41.95/MWh. South of Path 15 average peak power prices earned $4.25 by Friday, closing at $39.36/MWh.

Over the trading period, Palo Verde peak power earned about $3.30, trading for an average of $36.04/MWh Friday.

Off-peak power prices jumped between $1.65 and $9.45 by week's end, with the Mid-C hub leading the charge (see chart below).

The Bonneville Power Administration announced a proposed 8.5 percent average wholesale power-rate increase this week, which it contends is needed to maintain and overhaul the region's hydroelectric and nuclear generating facilities.

The increase affects consumer-owned utilities throughout the Northwest; different rate structures apply to investor-owned utilities and direct-service industries. "The strategy keeps rates lower for now amid a difficult economy, but exposes ratepayers to greater rate volatility," according to the agency. "If Columbia River streamflow and the economy do not improve over the coming year, BPA would rely on short-term borrowing instead of reserves to meet financial obligations. The agency would then have to quickly raise rates further to repay the borrowed funds."

What's ahead: A wintry blast is predicted in the Pacific Northwest through at least Tuesday, Nov. 23. Snow is possible in western Washington after the weekend, with temperatures in the mid-to-upper 30s through Wednesday, warming to 41 degrees by Thanksgiving.

Meanwhile, snow is possible at lower elevations in Oregon Sunday and Monday; temperatures in the 20s and 30s are predicted Monday and Tuesday for the greater Portland area. Showers are forecast for the greater San Francisco area Monday, with temperatures in the 60s Wednesday and Thursday, but Lake Tahoe could see several feet of snow at higher elevations. Drier, cool conditions are anticipated for the Los Angeles area Monday and Tuesday with a 68-degree high predicted for Thanksgiving. The Southern California valleys and deserts may experience frost Tuesday and Wednesday nights [Linda Dailey Paulson].

Western Electricity Prices
Week's End: November 15 - 19, 2010
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 12.24-377.45 11.29-30.03
Mid-Columbia 28-47.50 21-42
COB 31-48.50 24.45-41.25
NP 15* 35.50-42 28-34.75
SP 15* 34.50-40 26.25-32
Palo Verde 29.75-37 21.75-30.50

* Prices represent both day-ahead locational marginal prices (financial swaps, or EZ Gen DA LMPs) and quasi-swap prices (EZ Gen) as reported by ICE.

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.

Please contact with questions or comments about this site.

Contact Chris Raphael, editor with questions regarding Price Survey Content.

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