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Western Price Survey

Week's End Edition
November 30, 2007
Power Prices Soar, Then Fall With Lower Demand, Natural Gas Values

Peak-power prices soared across the western United States through the middle of the week, then coughed back their gains by Friday as traders focused on lower power demands and a robust amount of natural gas in storage. The trajectory was different for off-peak power, however, as prices ended higher than Monday levels.

At South of Path 15, peak-power values climbed $4 to an average of $77.25/MWh on Wednesday. The slump began Thursday, and prices closed out the week at $70.45/MWh. Nighttime deliveries added around $7 to finish trading at an average of $58.32.

At North of Path 15, peak added $3 to an average of $77.89/MWh on Wednesday, but fell to $70.89 on Friday. Off-peak added around $6 to an average of $59.02/MWh by Friday.

Palo Verde's daytime trades saw the same movement, with values picking up around $5 to hit an average of $66.90/MWh on Wednesday before falling back around $8. For nighttime electricity, values climbed around $7 to about $50/MWh.

At the California-Oregon border, high-demand trades shot up $8 to around $84/MWh before shedding $14 by Friday. Off-peak values added $6 to an average of $66.92/MWh, then slipped to $62.75.

Daytime power prices at the mid-Columbia hub ballooned around $11 to $82.01/MWh on Wednesday. By Friday, though, values slid to $68.58. For nighttime deliveries, prices ascended by $8 to $67.80. They closed the week, however, at $63.20/MWh.

This weekend, storms are expected to bring rain to Southern California and Arizona, and snow to the Pacific Northwest. Rain will likely drench Los Angeles over the weekend. Temperatures will be in the mid-60s, but will climb to the mid-70s by Tuesday. Palm Springs and Phoenix will see much of the same, with rain predicted through most of Saturday. By Tuesday, sunny skies and 70-degree weather will return.

Portland and Seattle, however, will see a wintry mix. The two cities will be doused with rain and snow on Saturday, with rain lingering through Tuesday. Temperatures will improve, though, rising from the high 30s to the high 40s on Tuesday.

Unit No. 1 at the Palo Verde Nuclear Generating Station is slowly returning to production after being taken off line early Saturday to fix safety equipment. The 1,311 MW unit is expected to return to full operation by today. At the San Onofre nuclear plant in Southern California, the 1,070 MW Unit No. 2 was shut down late Monday to replace spent fuel and complete routine maintenance. It is not expected to resume operation for 45 days [Kristina Shevory].

Natural Gas Prices Crumble

A shot of cool weather in the Northeast reduced natural gas supplies nationwide last week by 12 Bcf to 3.528 Bcf, but prices remained sedated. Overall mild weather across the rest of the country limited declines, according to the U.S. Energy Information Administration's weekly storage report.

For the fifth consecutive week, natural gas in storage was above 3.5 Bcf, topping the previous all-time high of 3.472 Bcf set 17 years ago. There is now 3 percent more natural gas in storage than last year thanks to mild weather, high domestic production in the western United States, and few supply disruptions.

While stockpiles in the West inched down by 1 Bcf to 477 Bcf, there is still 1 percent more natural gas in storage than last year.

Natural gas prices fell across the West this week due in part to tumbling crude oil prices, robust supplies and hopes for a warmer winter. Prices shed 40 to 80 cents/MMBtu to bob around $6 and 7/MMBtu by the week's end. Most of the hubs, except for PG&E's CityGate which had an average price of $7.31/MMBtu, closed out the week below $7/MMBtu.

Expectations for a warmer winter, crumbling crude prices and plentiful supplies are predicted to dampen natural gas prices for much of the winter. As early as next week, warmer weather is expected to return to the Northeast and Midwest, likely reducing natural gas use. Many of the country's homes and businesses keep cool or warm by burning natural gas either directly or indirectly through their local utility [K. S.].

Western Electricity Prices
Week's End: November 26 - 30, 2007
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 35.17-531.32 11.23-198.49
Mid-Columbia 64.50-85 59-71.75
COB 69.75-86.25 58.50-71.5
NP 15 70.25-80 50.25-61.90
SP 15 69-79 48-61
Palo Verde 57-69 42-53.25

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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