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Western Price Survey

Week's End Edition
December 3, 2010
Power Prices Remain Soggy

Colder, wet weather persisted in the Western U.S. after the Thanksgiving holiday trading break, dampening electricity prices but increasing natural gas demand.

With recent cold weather throughout the continental U.S., natural gas demand in the national residential and commercial sectors rose 21 percent from the previous week to reach 44 Bcf on Dec. 1, the U.S. Energy Information Administration reported. Higher demand prompted price increases, but these were similar to or below natural gas prices last year. Prices were also not as strong in the West. For the Wednesday-to-Wednesday trading period from Nov. 24 to Dec. 1, Southern California Border gas gained about 18 cents to reach $4.23/MMBtu. Meanwhile, PG&E CityGate gas dropped more than 17 cents to $4.45/MMBtu, and Malin gas slipped 23 cents to $4.16. Values eroded a few more cents by Dec. 3.

For electricity, for the trading period from Wednesday, Nov. 24 to Friday, Dec. 3 (markets were closed on Friday, Nov. 27), average prices for Western daytime power dipped between $1 and about $3.65. Across the West -- from South of Path 15 all the way to Mid-Columbia -- average peak prices tended to finish a dollar or two shy of $40/MWh (see graph).

Off-peak power prices, meanwhile, chalked up small gains over the trading period, ranging this week between about $29.05 and $36/MWh (see table).

According to the EIA, a 23 Bcf draw from natural gas reserves provided a total of 3.814 Bcf in storage as of Friday, Nov. 26. For this same period last year, there was a 2 Bcf injection into gas stores. The West's working gas stocks are 28 Bcf below last year's mark, but 5 percent above the five-year average.

What's ahead: Meteorologists are calling for a wet, cold winter for the Northwest and extreme parts of Northern California, but the California Department of Water Resources says the wet weather will not likely continue for the Golden State through the end of the water year, which runs from Oct. 1 to Sept. 30. DWR, which says the state can expect about an average water year, released the finding in a recent summary of its Water Year 2011 workshop, held in early November.

Looking ahead in the Northwest, however, meteorologists say there is a possibility the Skokomish River may flood during the week of Dec. 6, with four inches of rain expected over a 96-hour period Tuesday through Friday. Similar conditions are anticipated in the greater Portland area, which should have temperatures in the mid-40s Monday through Thursday. As the front moves east, the precipitation may become a rain-snow mix. Snow is forecast Thursday, Dec. 9 for eastern Oregon, with snow also possible for Spokane, Wash.

Meanwhile, the greater San Francisco area expects weekend showers to taper off Monday morning, with dry conditions forecast through midweek. Thursday should prove the hottest in the region, with a high of 62 predicted. The Los Angeles area may be wet Monday; with colder weather, this may bring light snow to the Interstate 5 corridor. Drier conditions should prevail through midweek [ Linda Dailey Paulson].

Western Electricity Prices
Week's End: November 29 - December 3, 2010
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 23.38-483.61 14.31-46.68
Mid-Columbia 34.75-41.25 32-36.50
COB 37.50-44.25 35-36.50
NP 15* 38.50-44.75 31.75-35.50
SP 15* 36.50-43.25 29.25-33.50
Palo Verde 32-43.50 27.75-36.25

* 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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