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Western Price Survey

Week's End Edition
December 10, 2010
Gas Demand Strong, Western Power Prices Mixed

Demand for natural gas continues to be strong throughout the United States, although the U.S. Energy Information Administration predicts that milder weather in most areas of the county this winter -- except the Northeast -- will lower fuel consumption.

In its recent Short-Term Energy Outlook, the EIA said lower consumption levels should lead consumers to spend less for natural gas and electricity -- despite a forecast 1 percent increase in electricity prices -- and more for heating oil and propane during the winter months.

Working gas in storage now stands at 3,725 Bcf. By the end of the winter heating season, EIA expects 1,833 Bcf to remain, roughly 171 Bcf greater than the end of March 2010, which the agency attributes to increased natural gas production and fewer heating degree-days anticipated compared to the previous year.

Henry Hub spot prices traded at $4.52/MMBtu Dec. 9; by Friday, the average price dropped to $4.37. Futures traded for $4.43 Friday, according to Bloomberg.

As for electricity, Northwestern power prices dipped a few dollars in the Friday-to-Friday trading period Dec. 3 to Dec. 10. California-Oregon Border closed Dec. 10 with an average price of $35.65/MWh for daytime power, down $2.55 for the trading period; Mid-Columbia's average price Friday came in at $35.65/MWh, down $3.

Palo Verde climbed almost $2.10/MWh for peak power during the week, trading for an average of $35.72/MWh by Friday's close.

Over the trading period, North of Path 15 daytime power gained 25 cents on average and finished at an average of $39.21/MWh. South of Path 15 average peak-power prices earned about $1.40/MWh, closing Friday at $38.98/MWh.

Off-peak power prices were mixed. Values at Western hubs bobbed a few dollars around the $30/MWh mark, with Northwestern hubs losing between $4.75 and about $5.50/MWh during the trading period while Palo Verde and SP15 made nominal gains (for values, see chart at left).

Peak demand on the Cal-ISO grid reached 31,684 MW Dec. 8 at 6 p.m., which was the week's high. The system operator expects the next peak demand to occur Dec. 16, when use is expected to exceed 32,500 MW.

What's ahead: Rain is expected to continue in the Pacific Northwest; meteorologists warn there may be flooding in areas of both Washington and Oregon. The system scheduled to arrive midweek is expected to be colder, dropping snow levels to 2,000 feet or less in some areas of Washington.

This same system should enter California by Tuesday, Dec. 14. Meteorologists aren't making solid predictions for the greater San Francisco area, saying the system is bringing unsettled weather through next weekend. Showers are possible for the greater Los Angeles area during the week. Temperatures for the region should remain in the 60s Tuesday through at least Thursday [Linda Dailey Paulson].

Week's End Edition
Western Electricity Prices
Week's End: December 6 - 10, 2010
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 19.34-347.34 18.07-46.27
Mid-Columbia 32-36.75 27.50-32.70
COB 35.50-40 30.75-34
NP 15* 38.50-42 33.50-33.75
SP 15* 37-40.75 30-32.50
Palo Verde 32.25-40 26.75-30

* 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.

Please contact with questions or comments about this site.

Contact Chris Raphael, editor with questions regarding Price Survey Content.

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