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Western Price Survey

Week's End Edition
December 1, 2006
Power Prices Dip in Pacific Northwest, But Hold Ground in California

Power prices in the Pacific Northwest fell late in the week as the area warmed, but California nighttime prices could not catch much of a break, as chilling Santa Ana winds blew across the state on Wednesday. A massive snowstorm also clobbered the Midwest later in the week, hiking prices for natural gas, which fuels California generators.

Earlier in the week in the Pacific Northwest, peak prices approached 90 mills/kWh and, with lows well under freezing in many areas, off-peak prices rose well past 70 mills/kWh. By Thursday, however, as the cold front moved off and the low-demand weekend approached, peak power fell to below 80 mills/kWh at the California-Oregon border. Off-peak power, which started the week there between 67 mills and 74 mills/kWh, dropped to 64 mills/kWh Thursday and finished the week at around 70 mills/kWh.

In the Mid-Columbia region, peak power had been going for as high as 89 mills/kWh in Tuesday trading but lost around 10 mills for Friday and Monday deliveries, and finished the week between 72 mills and 76 mills/kWh.

California prices seesawed this week. The partial shutdown of the 1,100 MW Diablo Canyon Unit No. 1 helped push up prices midweek, but the plant had returned to full service by Friday.

North of Path 15, peak prices started the week around 75 mills/kWh, pushed past 80 mills/kWh midweek, then lost a few mills in Thursday and Friday trading. Low-demand power, however, went on a steady hike and finished the week around 64 mills/kWh.

Daytime power at South of Path 15 also rose a bit above 80 mills/kWh midweek and retreated a few mills in late-week trading. Nighttime power was at a low of 50 mills/kWh at the start of the week, but finished strong at around 64 mills/kWh in Friday trading.

A curious exception to the Western price trend was in Palo Verde territory, where prices steadily gained strength through the end of the week. Peak power traded below 60 mills/kWh on Monday, but gained a few mills each trading day to settle between 65 mills and 67 mills/kWh Friday. Off-peak power swung wildly, trading between 38 mills and 52 mills/kWh Monday, but finished the week with a very tight spread between 54 mills and 55 mills/kWh [Chris Raphael].

Gas Out of Storage and Up in Cost

Cold weather in the West pushed natural gas prices up steadily throughout the week, and prices took a sharp hike at the end of the week on news of an Eastern storage withdrawal.

While a nasty snowstorm attacked the Midwest, the U.S Energy Information Administration on Thursday reported that natural gas stocks lost 32 Bcf for the week ending Nov. 24. While the West gained 1 Bcf, Eastern states gobbled 28 Bcf and producing areas took out 5 Bcf. The good news is that total gas in storage is still 3.4 Tcf, which is about 174 Bcf over last year's stocks.

Early in the week, Western prices reacted to a cold front that kept many areas of the Pacific Northwest under freezing temperatures and held lows in some areas of California barely above 40 degrees Fahrenheit. Chilling Santa Ana winds also gusted through Southern California Wednesday, and some areas were near their record lows.

Unable to shake freezing temperatures during low-demand periods, gas prices in Malin, Ore., which went for Monday at a low of $7.56/MMBtu, reached $8.03/MMBtu in Thursday trading. The price dropped about 10 cents for weekend deliveries.

Southern California border gas, which had been trading below $7/MMBtu at the start of the week, reached $8.07/MMBtu in Thursday trading, then dropped to around $7.89/MMBtu for weekend deliveries.

Permian Basin natural gas traded Monday at a low of $6.35/MMBtu and gained well over $1 in Wednesday and Thursday trading, approaching $8/MMBtu before shedding a few cents for weekend deliveries.

Pacific Gas & Electric reported in a Nov. 30 news release that it expects its December gas bills to drop 15 percent from a year ago. The average gas bill for residential customers was $43.55 in November and is expected to rise to $75.24 in December. That is a month-to-month increase of 72.8 percent, but the amount would still be $13.25 less than what customers paid last December [C. R.].

Western Electricity Prices
Week's End: Nov. 27 - Dec. 1, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 47.21-892.78 23.87-212.11
Mid-Columbia 72-87 61-73
COB 74.75-88.50 63.25-74
NP 15 72.25-85.45 54-65.50
SP 15 71.50-85.25 50-65.50
Palo Verde 54-69 38.75-57

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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