Western Price Survey / Archives
December 3, 1999
Temperatures in most Western regions continued to cool this week, and spot prices at several hubs coasted alongside as electric markets sustained their slumber under last week's blanket of tryptophan-slowed Thanksgiving trades. The only generation fluctuations occurred in the Southwest, which was visited by three plant outages and rising power premiums. On-peak trades at Palo Verde ran up to 36 mills, and the Four Corners hub bounced as high as 40 mills/KWh.
Prices for heavy-load hours on the California Power Exchange moved between 32 mills and 36 mills before settling to 30 mills/KWh for Friday deliveries. Off-peak power during the week hit a high of 27.3 mills/KWh. After beginning the week at 555 GWh and creeping to 563 GWh, CalPX daily volumes dwindled to 515 GWh for Thursday and Friday. For some evening hours earlier in the week, prices jumped between 45 mills and 50 mills/KWh.
"We're just trying to play it cool," said one trader in response to this week's quiet market. Reduced shipments on the California/Oregon Intertie, cut from 4,329 MW to 3,200 MW Tuesday night, did not seem to have any impact on prices. The curtailment lasted through 6 pm Wednesday.
One trader reported that hydro power factored into this week's prices, with stream flows at 170 percent of normal and reservoirs 80 percent full. The Bonneville Power Administration offered 200 MW of its surplus hydro supplies on the spot market at unusually varying prices. For deliveries earlier in the week, power into the Northwest was pegged in the upper 20 mills/KWh range for on-peak and the CalPX average clearing price (minus 1 mill) for off-peak, with COB/NOB deliveries tracking up to 30 mills/KWh. For Thursday and Friday, the spread evaporated altogether, with on- and off-peak energy into the Northwest priced at the higher of CalPX minus 1 and all power into COB/NOB tied directly to the average CalPX clearing price.
Prices at the California/Oregon Border held between 28.5 mills and 32.5 mills/KWh for on-peak power, with off-peak sticking in the low 20 mills/KWh range. Mid-Columbia prices trailed COB premiums by only a few mills for both heavy- and light-load hours.
Palo Verde prices exhibited a higher and wider range, starting the week at 29 mills and hitting 36 mills for Thursday deliveries. According to traders, the trio of generation outages caused off-peak trades to all but vanish. Four Corners Units 4 and 5 suffered tube leaks Monday, and San Juan Unit No. 4, off-line since Saturday, returned to the market Wednesday. Four Corners No. 5 restored operations on Thursday, with Unit 4 coming on line the next day.
The combined effect of the outages sucked about 2,000 MW from the Southwest market, which saw temperatures hit 85 degrees F, a record high for this time of year. The region is expected to cool off to the low 70's into the weekend.
Meanwhile, prices at Four Corners began in exactly the same place as Palo Verde trades but climbed as high as 40 mills before retreating to 27 mills/KWh.
In the Northwest, real-time power prices at the Alberta pool stayed relatively low, reaching as high as 64.95 mills for on-peak power. Load for some hours topped the 7,000 MW mark [Jason Mihos].
Gas Waits on Winter
Notwithstanding recent trades at prices above the NYMEX index, " the entire gas market is on hold, waiting for colder weather," according to traders this week. Participants in gas markets also reported that storage figures are healthy nationwide.
Prices at the Southern California Border played between $2.43 and $2.47/MMBtu before Pacific Gas & Electric curtailed Friday deliveries over its gas system. The resulting downward pressure caused prices to shrink back to $2.32/MMBtu. Despite "all the supply overhang," in the words of one trader, the market outlook is still strong. Prices at San Juan hovered around $2.10 most of the week before falling as low as $2/MMBtu. Permian supplies traded as high as $2.14/MMBtu but mostly loitered in the low to mid-$2/MMBtu range.
Malin gas began the week at $2.29, rose to $2.36 and fell as low as $2.21/MMBtu toward the end of the week. At the AECO hub in Canada, gas prices jumped from $(C)2.69/Gigajoule to $2.79/Gj earlier in the week before landing at $2.72/Gj Friday [J. M.].
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