Western Price Survey
December 9, 2005
Western power prices seem to be hitchhiking this week. While Eastern Seaboard and Midwest power costs are being driven largely by fuel-cost fundamentals and increased winter demand, prices in the West seem to be mostly going along for the ride.
Mid-Columbia peak-time power deliveries were bought and sold on Monday for between 117.75 mills and 133 mills/KWh, a hefty increase over last week's price of about 90 mills/KWh. By Wednesday the price moved up to 142.50 mills/KWh before slipping back down to between 128.50 mills and 133.50 mills/KWh at the end of the week.
To be sure, power prices this week did not match the day-ahead heights reached during the energy crisis of 2000 and 2001, but they did exceed the costs recorded earlier this year. Off-peak power at Mid-C mostly stayed in the triple-digit range this week, opening on Monday at 99 mills/KWh and closing Friday at a high of 116.75 mills/KWh.
At the California-Oregon border, peak-power values ranged from a low of 122 mills/KWh to a high of 143 mills/KWh at midweek. Off-peak power at the hub hit a high of 116.50 mills/KWh for power scheduled for next-week delivery. That peak was nearly 10 mills above the price of nighttime COB power in the preceding four days of trading.
Northern California daytime power changed hands for as much as 139 mills/KWh this week. The cost for the commodity ranged from 123.75 mills to 130.50 mills/KWh on Monday and rose steadily throughout the week, reaching its apex on Friday. Nighttime power prices ranged from 96.50 mills to 99 mills/KWh at the beginning of the week, but also rose as the week wore on. By Friday, North of Path 15 off-peak power was moving for as much as 114 mills/KWh.
South of Path 15 power costs exceeded Northern California prices by a slim margin during early-week trading. Peak power in the SP15 zone opened the week moving for between 123 mills and 131 mills/KWh. As did power costs north of Path 15, prices dropped by a few mills on Tuesday but then scooted up as high as 136.25 mills/KWh during trading the rest of the week. Nighttime power at the hub attracted between 94 mills and 101.50 mills during the first part of the week. The price of off-peak power ranged from 98.50 mills and 106.50 mills in Friday's trading session.
A drop in temperature in the Southwest pushed power costs at Palo Verde up to 126 mills/KWh toward the end of the week after they spent most of the Monday-through-Wednesday period near the century mark. Off-peak power at the hub managed to stay below 100 mills/KWh until Friday, when the price rose to between 102 mills and 106.25 mills/KWh [Shauna O'Donnell].
Jitters, Not Cold, Drive Gas Costs Up
The continuing escalation in the price of natural gas traded on the day-ahead market could reach the top soon and then bottom out. But then, what is it they say about hell freezing over? While cold weather in much of the country is putting upward pressure on prices, most of the increase can be attributed to nothing more tangible than a bad case of the jitters.
There is no sign of a supply shortage to explain the rise in prices, and while production continues to be curtailed in the Gulf of Mexico, it has certainly not ceased. Even this week's Natural Gas Storage Report from the Energy Information Administration did not demonstrate an extraordinary withdrawal last week. According to the report, 59 Bcf was withdrawn from underground storage. Not an insignificant amount, but not anything to be nervous about.
Still, prices continued their march upward this week. Permian Basin gas attracted $14/MMBtu on Thursday, while San Juan Basin gas moved for about two bits less. Gas delivered to the California border at Malin peaked at $13.80/MMBtu that same day, up from Monday's price of between $11.75 and $12.39/MMBtu. PG&E CityGate gas closed the week trading for $14/MMBtu, nearly a $2 increase from the start of the week [S. O'D.].
Archives of the Western Price Survey for the past year are also available online.
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