Western Price Survey / Archives
November 30, 2001
The first topic of conversation in the energy business this week was a short word: Enron. The energy giant was dealt numerous blows on November 28, when rating agencies downgraded the company's stock to junk status, Dynegy bailed on its buyout plans, and operation of EnronOnline was halted (though it was back up the next day for limited use).
Western traders and other market participants seemed relatively unfazed. They conceded that the events of the last three weeks were astounding but said that Western trading would continue, and price volatility because of the Enron situation did not look to be in the cards for the region. "People will work around it," said one trader.
Another kind of exposure was making its way through the West this week, with wind, rain and cold descending on the Bay Area Wednesday. In Los Angeles and locations further south, temperatures barely nudged above the 60-degree threshold, and they did not even reach that throughout California on Thursday. Winter storms hit the Northwest this week, with a lot of snow accumulating in the Northwest mountain ranges. The current precipitation bodes well for spring runoff.
After making daily offers of 50 MW for the better part of two weeks, the Bonneville Power Administration's Web site posted no availability throughout this week and into the beginning of the next.
On November 24, more than 500,000 Pacific Gas & Electric customers experienced power outages, and winds knocked transmission lines down. The winds reapplied themselves midweek, and more rain and snow is expected over the weekend throughout the West.
The Wednesday storm knocked out the better part of Mirant's Pittsburg facility, and by Thursday morning Units 1, 2, 3, 4 and 7 were forced off line. Unit 6 was also out, but that was planned. Both Units 1 and 2 were back up by the end of the day, and Unit 3 was operating by the early evening.
Sometime after midnight on Tuesday, Four Corners Unit 4 tripped. It was back up by 6 am, but Unit 5 remains off line because of a condenser tube leak. Another forced outage occurred at San Juan Unit 3 because of a boiler tube leak. In California, Hyatt/Thermalito was down to below a third of its 900 MW capacity, and the Los Medanos facility was also forced off line for the better part of the week. Nevertheless, California Independent System Operator control area generation was more than enough to match load, even with nearly 14,000 MW off line each day. Loads for Cal-ISO's control area hovered just above 31,000 MW at peak.
Both peak and off-peak prices crept up during the first half of the week, though some decline was seen in off-peak prices on Tuesday, mostly at Palo Verde. Still, Wednesday brought gains at all hubs, though prices softened a bit by the end of the week. At Four Corners, peak prices ran between 29.68 mills/KWh and 34 mills/KWh, and off peak between 13.44 mills and 22 mills/KW. Mead prices were quoted at between 20 mills and 31.50 mills/KWh overall.
Alberta Power Pool off-peak prices hovered at around $(C)30.82 on Monday and bottomed out at $13.42 early Thursday morning. On-peak ranged from $50.97 to $59.47, with loads in the 7,200-7,500 MW range, jumping up to 7,800 MW during the late afternoon peak period [Shauna O'Donnell].
Nip in the Air Nudges Prices Upward
Gas prices throughout the West managed a steady growth curve for the week, then dipped a bit in end-of-week trading. All hubs reported about a one dollar per MMBtu gain in price from Monday to Wednesday. This trend was evinced in the Alberta hub almost to the penny. Priced at $(C)2.48 on Monday, natural gas was moving at a $(C)3.47 clip by Wednesday. By Thursday, AECO prices were hitting $(C)3.94/MMBtu. San Juan Basin prices had gone from $1.44/MMBtu on Monday up to $2.57/MMBtu by the end of the week. A similar pattern was seen at other hubs as well.
Rumors of unspecified possible terrorist attacks on pipelines, natural gas or other, were being made this week by the US Attorney General's Office and the new national office for homeland security. Most pipeline companies seemed unfazed by the announcements--not because they were blasť about the issue but rather, they said, because they had already taken precautionary measures and had stepped up security around their facilities [S. O'D.].
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