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Western Price Survey / Archives

December 13, 2002
Fuel Prices Lead, Spot Market Follows

With gas prices running amok on news of possible colder weather and low storage figures, spot electric prices couldn't resist the uptow. Prices around the West rallied, pushing into the 40 mills/KWh range despite continued modest loads and regional forecasts of mild and rainy weather.

Precipitation in the Pacific Northwest has kept temperatures mild but hasn't necessarily guaranteed the availability of hydroelectric power in the area. Offerings by the Bonneville Power Administration this week were still meager, as BPA had 100 MW of peak energy and 50 MW of off-peak energy available for deliveries from Tuesday through Monday of next week (except Thursday, when BPA sat out the spot market).

In addition, the lack of snow in the Northwest thus far this year has some utilities worried about springtime runoff, according to one trader.

By comparison, the Sierra Mountains in eastern California and western Nevada are expected to be wearing six to eight more feet of snow by next Tuesday, courtesy of a storm forecasted to arrive Friday.

At Mid-Columbia, peak prices tended to run lower than at other hubs, bumping between 36.5 mills and 43.75 mills/KWh. Off-peak prices ranged between 29.5 mills and 37.25 mills/KWh.

Heavy-load prices at the California-Oregon border, NP15, SP15 and Palo Verde cleared 40 mills/KWh for some trades this week. NP15 peak-hour premiums rose to 49.25 mills, with SP15 prices floating to 49 mills/KWh. COB trades drew as much as 42 mills, and Palo Verde prices surged to 45.75 mills/KWh by Friday.

California Independent System Operator loads stayed at about 31,500 MW, and Cal-ISO projected peak demand of about 30,500 MW for Friday and 28,680 MW for Saturday.

Shut down since late October to await a new rotor, Diablo Canyon No. 1 began to stir early Thursday morning. By Friday, the plant returned to 40 percent of its full capacity of 1,100 MW and is expected to ramp to 100 percent in three to four days. Also this week, Palo Verde No. 1 inched from 97 percent of capacity to 98 percent, with units 2 and 2 operating at 98 percent and 99 percent, respectively.

The Four Corners complex continues to experience problems. The 750 MW No. 5 unit, out last week for boiler tube repairs, returned to service on Saturday before succumbing to another tube leak Wednesday. The unit is again shut down for repairs. Four Corners No. 4, which also underwent tube fixes last week, ramped to full power (750 MW) on Tuesday.

In addition, sources said that the 740 MW Colstrip No. 3 unit in Montana is off line due to an "overexcited stator core," which could push up prices in the Northwest. PPL Montana, majority owner of the coal- fired Colstrip power plant, would not comment on the unit's operating status.

At the Alberta hub in Canada, real-time prices came in at lower levels than in recent weeks, aside from a few peak-hour anomalies in the 200, 300 and 800 mills/KWh vicinity. During heavy-load hours, demand rose to about 8,200 MW, with energy use in the early morning totaling as little as 6,343 MW [Jason Mihos].

Futures Chase Gas Prices

Spurred on by higher futures premiums on the NYMEX exchange, spot prices in Western gas markets this week galloped higher. Some hubs bounded into the $4.40 to $4.60/MMBtu range as futures prices escalated on reports that the rest of December will get colder than originally expected.

"The screen absolutely took off," said one trader in response to this week's price performance. Another trader linked the rise to the storage assessment issued by the US Energy Information Administration (EIA) on Thursday. According to EIA figures, the amount of gas in storage nationwide fell from 2,794 Bcf to 2,956 Bcf between November 26 and December 6, a reduction of about 162 Bcf. Stored gas levels are 444 Bcf lower than they were at the same time last year.

The high-flying CityGate point reached as high as $4.72 after beginning the week in the $4.12 to $4.21/MMBtu range. At the Southern California border, prices ballooned from a low of $4.05 on Monday to as much as $4.55/MMBtu on Friday.

Prices at Malin jumped in consistent blocks throughout the week, moving from $3.95 to about $4.44/MMBtu on Friday. Basin supplies found similar price support, with Permian gas trading between $3.90 and $4.42 and prices at San Juan traveling between $3.65 and $4.25/MMBtu.

Prices at the AECO hub in Canada followed the trend, increasing from $3.65 to about $4.01/MMBtu this week [J. M.].

Western Electricity Prices
Week of December 9-13, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 20.78-868.07 9.82-38.76
Mid-Columbia 36.5-43.75 29.5-37.25
COB 39-42 31.5-38
NP 15 41-49.25 32.5-39.75
SP 15 41-49 29-39.75
Palo Verde 36-45.75 26-37.5

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


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