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Western Price Survey

Week's End Edition
November 21, 2008
Economy Takes Toll on Energy Prices; Electricity Also Falls on Lower Demand

Natural gas futures have remained relatively flat this week in New York, losing only 20 cents through the week to $6.47/MMBtu on Friday. West-Coast spot trades have been mostly even, losing or gaining about 20 cents on average.

Natural gas in storage, boosted by warm weather, rose to 3.488 Tcf last week, up 16 Bcf over the previous week, the Energy Information Administration said. Inventories are about 1 percent lower than last year but 4 percent above the five-year average. A boom in domestic onshore drilling and the drop in overall energy demand have helped to supplement the drop in liquefied natural gas imports.

Meanwhile, the U.S. economy likely won't start growing until the middle of next year as banks tighten lending, companies lay off thousands and consumers slam their wallets shut, according to the Federal Reserve Bank. Jobless claims hit a 16-year high last week, wholesale prices posted their deepest drop in more than 60 years in October, and consumer prices plummeted the most in one month, according to the Labor Department.

On Thursday, oil closed at $49.62 a barrel, the lowest price since May 2005. Lower consumption over the next year will likely crimp energy prices going forward. This year, Americans will use 5.4 percent less oil, or 1.1 million barrels, according to the Energy Department, and 1.3 percent less next year.

In the Golden State, electricity usage peaked at 32,200 MW on Monday and fell steadily through the week to 31,100 MW on Thursday, according to the California Independent System Operator. Demand was expected to drop to 30,700 MW on Friday and remain at about that level through the weekend.

Trades for daytime electricity in California shed $5-$6 since Monday to average $55.32/MWh on Friday for North of Path 15 and $54.85/MWh for South of Path 15. Off-prime average values were essentially flat in NP-15 (see chart), but about $2 higher at $45.13 in SP-15.

The four wildfires around Los Angeles that burned more than 43,000 acres last weekend have been fully contained as of Friday, according to the California Dept. of Forestry and Fire Protection. Over 41,000 people lost power, hundreds of poles and 32 transformers were destroyed. The Pacific DC Intertie power line also sustained damage, according to Southern California Edison.

The Sylmar substation in the San Fernando Valley, was also damaged, but temporary repairs should be done by this weekend, according to the Los Angeles Department of Water & Power. It will take two additional weeks to make permanent repairs.

Santa Ana and Sundowner winds will ease in Southern California this weekend with wind speeds less than 40 mph, AccuWeather said. Temperatures in Los Angeles will drift lower from the low 80s on Friday into the mid 70s this weekend. Expect sunny skies and temperatures in the low 60s in San Francisco this weekend.

Palo Verde peak trades climbed nearly $3 to an average of $43.51/MWh, while off-peak prices were at $34.79/MWh, a $4 increase.

The Northwest will see another rain storm tonight, with temperatures in the low 50s and high 40s predicted in Portland and Seattle.

Peak prices at the California-Oregon border fell $8 to an average of $52.82/MWh. Average off-peak prices lost $1 to $47.

Daytime Mid-Columbia prices shed $4 to average $48.50/MWh. Average nighttime trades were about flat at $46/MWh.

The Columbia Generating Station in Washington State was at 65 percent capacity on Friday after the 1,150 MW plant went offline last weekend for repairs. Finishing a seven-week maintenance outage, the Palo Verde nuclear plant's 1,336 MW first unit is ramping up this week. Meanwhile, the San Onofre Nuclear Generating System's 1,080 MW third unit remains offline for refueling and maintenance [Kristina Shevory].

Western Electricity Prices
Week's End: November 17 - 21, 2008
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 42.14-689.48 15.30-81
Mid-Columbia 45-55.50 42.50-49
COB 49.50-61.25 44-50
NP 15 50.25-62.25 40.50-46.30
SP 15 50-61.25 39.75-45.75
Palo Verde 37-52 29.75-38

Archives of the Western Price Survey for the past year are also available online.


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