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Western Price Survey / Archives

December 6, 2002
Market Rises on Sputtering Generation

With power throughout the region in limited supply, electric prices pushed higher this week, though loads have yet to achieve winter-weather levels. Prices at most hubs topped 40 mills/KWh for peak-hour energy, and hydropower availability out of the Pacific Northwest appears to be tight.

The Bonneville Power Administration was in and out of the spot market all week, sitting out trades for Tuesday and Friday-Saturday deliveries. With local rainfall estimates at a mere 51 percent of average, the federal power marketer offered 100 MW of peak energy and 50 MW of off-peak supplies.

On the California Independent System Operator grid system, peak demand held at about 31,000 MW all week.

Unexpected generation outages helped to boost prices around the West. Cal-ISO reported a total of 2,000 MW of unplanned shutdowns on Monday, and that number rose to as much as 2,746 MW as the week progressed. Southern California Edison's Mohave No. 1 curtailed all 442 MW of its capacity earlier in the week before returning to service for Thursday, as did Mirant Corp.'s Potrero No. 3, which had cut back all 206 MW of capacity.

Duke Energy's Morro Bay 3 curtailed all 337 MW of capacity this week, and the company's South Bay No. 3 unit shut also reduced its full capacity (175 MW) to zero.

At the coal-fired Four Corners complex, unit 5 shut down on Monday with a boiler tube leak. Four Corners No. 4 followed along on Wednesday with its own tube leak. Capacity at each generation unit is rated at about 750 MW. According to a plant spokesperson, it is uncertain when the units will return to service.

The San Onofre Nuclear Generating Station also had some minor problems earlier this week. SONGS No. 3 eased back production to 98 percent of capacity in order to accommodate repairs to its feedwater heating system. The unit returned to full power on Wednesday.

Among Western hubs, prices at SP15 ran the highest, with some peak-hour trades on Wednesday yielding 48 mills/KWh. NP15 topped out at about 47.5 mills for the same period, with California-Oregon border peak prices reaching a high of 43.75 mills/KWh. Mid-Columbia peak prices climbed steadily, rising to 41.75 mills, and Palo Verde prices were close behind at 41.5 mills/KWh.

Off-peak prices at most hubs played between the mid-20 mills and mid-30 mills/KWh range. Palo Verde light- load prices moved from a low of 23.5 mills on Monday to a high of 31.4 mills/KWh on Wednesday. Off-peak prices at Mid-Columbia stretched up to 34.5 mills midweek, with prices at NP15 running up to 37.25 mills/KWh. Light-load trades at SP15 and COB netted as much as 32.25 mills and 37 mills/KWh, respectively.

In Alberta, real-time prices were somewhat quieter this week as generation units in the region returned to service. Loads ran higher, ranging from 6,350 MW to 8,570 MW for some peak hours [Jason Mihos].

Gas Pumps Up as Winter Nears

Storms and storage were the apparent watchwords this week as gas prices advanced at Western hubs. Heavy snows pounded the East Coast, and some weather forecasts in California are predicting a storm going into the weekend.

On Thursday, the federal Energy Information Administration (EIA) issued its weekly gas storage report. Stored gas totals about 2,956 bcf, which is 91 bcf less than the amount of gas in storage a week ago and 298 bcf less than storage levels for the same period in 2001. Still, Western gas reserves are 55 bcf higher than the EIA's five-year average.

In response, prices at most hubs gained ground throughout the week. Premiums at Pacific Gas & Electric's CityGate shot the highest, starting at about $4.05 on Monday and peaking at about $4.20/MMBtu late in the week. At Malin, prices moved between $3.88 and $3.95 early in the week and rose to as much as $4.08/MMBtu for some trades.

Gas at the San Juan Basin got more attractive with each passing day, moving from $3.45 to $3.94/MMBtu before slumping to $3.30 to $3.55/MMBtu on Friday. Permian prices ranged from $3.80 to $4.10, and trades at the Southern California border garnered between $3.95 and $4.15/MMBtu.

At Canada's AECO hub, prices bumped up to as much as $3.76/MMBtu, and local weather predictions do not indicate any sharp decreases in temperature over the next few days [J. M.].

Western Electricity Prices
Week of December 2-6, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 38.45-314.19 18.58-60.68
Mid-Columbia 35.75-41.75 28-34.5
COB 39-43.75 29.5-34
NP 15 42.75-47.5 28-37.25
SP 15 42-48 26.75-37
Palo Verde 35.5-41.5 23.5-31.4

Archives of the Western Price Survey for the past year are also available online.

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