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Western Price Survey

November 25, 2009
Stuffing Falls From Power Prices

Electricity prices flat-lined or declined modestly as traders girded for little power demand while the country digests turkey and football over Thanksgiving.

Falling spot gas prices at Western hubs also helped drag down power trades, with declines ranging around 45 cents/MMBtu on average. Trades made Wednesday ranged from an average $3.22/MMBtu at San Juan to $4.32/MMBtu at PG&E CityGate, though spreads tended to be pronounced, with some hubs trading that day at their high and low marks for the week.

Meanwhile, peak power demand slipped from 30,500 MW on Monday to a projected 29,500 MW on Wednesday, according to the California Independent System Operator. Top power demand is likely to bottom out at 23,800 MW on Thursday.

Energy trading was abbreviated this week in advance of the Thanksgiving holiday. On Wednesday, peak power was bought and sold for Monday delivery, while off-peak electricity was destined for Sunday and Monday delivery.

From Monday through Wednesday, average daytime California prices dipped about $2 to $36.74/MWh at North of Path 15, and fell more than $3 at South of Path 15 to $34.56. Nighttime trades were essentially flat, moving less than 40 cents, and settled at $28/MWh in the north and $26.41 in the south.

Palo Verde peak power declined $3 to average $30.01/MWh, while nighttime deliveries slipped $1 to $25.63.

Wind gusts up to 45 mph sparked a new fire in the Anaheim Hills Tuesday night that had burned 60 acres by Wednesday morning. The fire is 10 percent contained and has not burned any structures, according to the Orange County Fire Authority. The winds are projected to die down by Thursday. In Southern California, the San Onofre Nuclear Generating Station's 1,070 MW second unit remains off line while its two steam generators are replaced, and Palo Verde's 1,336 MW second unit is shuttered while its reactor head is replaced.

It's sunny and cool in California this week, with San Francisco seeing consistent temperatures in the mid- to high 60s. In Los Angeles, temperatures are likely to drop from the low 80s into the high 60s through this weekend. The Northwest, however, is in store for more rain and cooler weather. By this weekend, temperatures are slated to fall from the low 50s to the high 40s in Portland and Seattle.

Peak California-Oregon border prices slumped more than $2 to average $35.80/MWh. Off-peak trades were nearly inert, trading Wednesday around $29.75. Average Mid-Columbia prices also moved little (see chart).

Natural Gas Injections Slow
Natural gas injections are finally starting to slow down as the weather begins to cool and heating demand picks up. Last week, natural gas in storage set another fresh high, climbing 2 Bcf to 3.835 Tcf, according to the U.S. Energy Information Administration. Inventories are 11.8 percent above last year and 13 percent higher than the five-year average. The increase came in slightly below analysts' expectations of a 3 Bcf to 7 Bcf increase, according to Platts.

Western stockpiles bumped up by 1 Bcf to 525 Bcf, and now exceed last year by 12.2 percent and the five-year average by 15.1 percent.

While the increase in national stockpiles was modest, natural gas prices for January delivery still staged an increase, rising to a close of $5.16/MMBtu on Nymex, up 39 cents from Tuesday.

Prices have been on an upswing this week because of short-covering ahead of the expiration of the December contract on Tuesday and mixed weather reports for the next week. The National Weather Service is predicting colder-than-average weather in the Northeast, while the West will be mild [Kristina Shevory].

Editor's note: This will be the only edition of the Western Price Survey this week. There will be no report Friday, November 27th, because of the Thanksgiving holiday.

Western Electricity Prices
Week of November 23 - 25, 2009
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 35-430.48 18.88-53.94
Mid-Columbia 28-37 25.75-30
COB 30-39 28-31
NP 15* 31.75-40 26-29
SP 15* 30.25-38.50 24.75-27
Palo Verde 28.50-34.50 23.75-28

* 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.

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

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