Western Price Survey / Archives
December 7, 2001
The little movement seen in power prices this week was related mainly to a trim around the edges, as the top prices seen at the start of the week slipped and the lowest prices recorded midweek firmed heading into the weekend. Colder weather brought somewhat higher loads in California and power traders reported an increase in spot volumes--likely the result of buyers and sellers reverting to traditional methods in the wake of the Enron bankruptcy. Though Enron's marketers were still in business, the company pulled the plug on electronic trading via the EnronOnline platform and directed inquiries to the trading desk.
Quite a few entities said they were shying away from doing business with Enron because of credit concerns-- giving the former giant a little taste of its own medicine. Enron had all but withdrawn from dealings with the California Independent System Operator's markets after utilities lost creditworthiness early this year, and it had infrequent transactions with the Department of Water Resources.
The continuing maintenance outages among California power plants--hovering about 13,000 MW on a daily basis--is generally not seen as a problem by the California Independent System Operator. However, with peak loads concentrated in the early evening hours, Cal-ISO admitted a challenge in bringing units on line under a very quick dispatch order.
Though average loads are quite moderate, Cal-ISO is experiencing a spike in the 6 pm hour that requires careful monitoring, said Jim McIntosh, director of grid operations. "Load is climbing by 100 MW per minute for 25 minutes. Steamers can't keep up with that kind of schedule." The shortfall between scheduled load and actual peaks has been as much as 1,700 MW this week and meeting the evening peak has required some increase in out-of-market calls to secure enough power, McIntosh said.
Wednesday's peak was right around 33,000 MW, up from 31,600 MW Monday.
Peak prices at Mid-Columbia were about 26 to 27 mills/KWh, centering from the 25.5 mills to 28.5 mills range seen earlier. California/Oregon Border was within 26 mills to 29.5 mills/KWh all week and NP15 edged down to the 27.5 mills to 31 mills/KWh range from a high of 32.5 mills on Monday.
SP15 was in the 27 mills to 29 mills range, a step higher than Palo Verde, which moved from 26 mills to 28 mills/KWh before giving back half a buck heading into the weekend.. Off-peak power was as low as 16 mills/KWh at Mead, but generally stuck in the 20 mills to 23 mills/KWh range elsewhere.
Bonneville Power remained out of the daily market, devoting its increased runoff to filling major reservoirs or doing some late evening drafting to maintain elevations for chum salmon spawning below Bonneville Dam. After a slight decrease in precipitation in November, the NW system is tracking average rainfall for the new water season, so managers are still holding back power generation [Arthur O'Donnell].
Gas Prices Move Uncertainly
With the change of month and start of storage withdrawal season, natural gas prices lurched forward and retreated this week. Starting from a very low point on December 1, with supply basins below $2/MMBtu and delivery hubs not much higher, prices appeared to jump by as much as $0.40 to $0.50/MMBtu Tuesday, only to collapse midweek and trickle lower into the weekend. While the end prices were not quite as low as the starting point, traders suggested that it would take a serious cold weather snap to stage another rally.
The American Gas Association on Wednesday reported national storage withdrawals of 16 Bcf, a moderate figure that lent support for the bearish market response. Despite a healthy dose of rain and this week in California and the Pacific Northwest, and a significant initial snowfall in the mountains, there was no sustained gas demand to support the early run up in prices Tuesday.
From weekend to weekend, the rage of prices was quite large, with San Juan running from $1.60 up to $2.02, then dropping back to $1.72/MMBtu. Permian tracked the same trends at a nickel to dime higher.
The Southern California Border price began at $2.15, peaked at $2.55, then slipped to $2.30.
In Northern California, the SF CityGate got as high as $2.85/MMBtu and Malin topped out at $2.75/MMBtu. The low end was seen between $2.20 and $2.35.
Alberta gas price scratched the $3.50/Gigajoule mark midweek but ended out at $3.02/Gj [A. O'D.].
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