Western Price Survey / Archives
November 24, 1999
After starting the week on a high note caused by unit outages and a hint of winter weather, power prices turned steadily lower in a trading week foreshortened by the Thanksgiving holiday. By Tuesday, traders were already scheduling purchases for the rest of the month at prices far lower than expected.
Monday's clearing price of 45.8 mills/KWh on the California Power Exchange was largely a reaction to weekend curtailments at the Diablo Canyon nuclear facility. Operator Pacific Gas & Electric had reduced both 1200 MW units to 50 percent last Friday because of ocean swells. The twin units were back to full power by Monday morning, however, and bilateral markets initially responded to other incidents and a cooling trend in the weather that brought overnight temperatures below freezing in the mountains and Northwest interior. That changed as sunshine spread over the region and prices dropped in anticipation of the low-load extended holiday.
The Cal-PX price dropped by about 6 mills each day, and came to rest for Thursday deliveries at 25.6 mills/KWh. Off-peak had been holding steady in the 23 mills to 24 mills/KWh range, but slipped to 19.7 mills/KWh during midweek bidding.
Prices at Mid-Columbia and the California/Oregon Border "came down hard" according to traders, nearly crossing into off-peak price territory. Though both hubs started the week above 30 mills/KWh, COB daytime energy fell to 20.5 mills/KWh and Mid-C dropped to the 18 to 19.5 mills/KWh range.
Off-peak at both hubs came to rest in the 15 mills to 16 mills/KWh vicinity.
Helping to pull prices down was a more bountiful hydroelectric generation picture, abetted by rain in the Pacific Northwest and restoration of Columbia River flows after six weeks of limits meant to enhance fish spawning.
Bonneville Power Administration showed little change in its surplus power postings, offering on-peak at 29 mills in the NW and 30 mills/KWh at COB, but lowering the off-peak rates to 19 mills and 20 mills/KWh, or alternatively its customary PX-minus-1 price.
Southwest prices had been propped up to about 34 mills/KWh by a blanket of cold and several reported unit outages before giving way to the holiday malaise and settled at 25mills/KWh.
Power plants reportedly hampered by repair outages at least for a little while included: Intermountain No. 1,875 MW; Four Corners No. 5,700 MW; a 350 MW San Juan unit; Mohave No.2, 790 MW and the 260 MW Cholla No. 2.
Transmission curtailments scheduled for the first week of December include a cut to 3,200 MW on the southbound AC Intertie and 2,400 MW south-to-north for most hours on December 1-2.
In Alberta, colder weather has been pushing daily peak loads above the 7,000 MW mark, but generation appears to be adequate to cover the demand. Prices remained steady from 29 mills/KWh to 38 mills/KWh. Overnight prices showed a wider range, from 6 mills to 23.5 mills/KWh [Arthur O'Donnell].
Natural Gas Stages Rally, Then Rests
Natural gas prices throughout the West tried to climb out of a pricing trough based on expectations of colder weather in Canada and the Southwest. After rising on the strength of NYMEX futures prices, however, the holiday shortened week took away any further momentum.
Alberta prices made the biggest move of the week, rising from a $(C) 2.49 starting point to $2.66/Gigajoule on colder weather, eventually settling at $2.60/Gj. Power generation demand in California gave way to somewhat lesser heating load, allowing some additional injection into storage for future, more extreme conditions.
Southern basin prices bounced around the $2/MMBtu mark, falling to about $1.96 at Permian and San Juan, then rising midweek to the $2.05-2.08/MMBtu range. The Southern California Border had been as low as $2.35 on Monday but rose to $2.45 to $2.47/MMBtu on Tuesday, trades said.
Looking into early December traders were seeing even lower prices based on mild weather. That may change as soon as the first real snow storms hit the mid-continent, however, so sellers were sitting on their storage supplies in the meanwhile [A.O'D.].
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