Western Price Survey / Archives
December 14, 2001
Colder temperatures and impending harsh weather wrought erratic power pricing this week. A market rally that pushed prices above 40 mills/KWh at several Western hubs pooped out midweek, however. Though price levels did not fall as far as their starting point, what remained was a broad range of pricing for the week--from the mid-20s to the low 40s. Nighttime chills were felt from the Northwest to the Southwest desert, and overnight prices bolstered on heating load.
By the end of the week, Mid-Columbia peak power dropped to the 30 mills/KWh vicinity, with off-peak prices clinging to 26 mills to 27 mills/KWh. The California/Oregon Border and NP15 were between 32.5 mills and 36 mills/KWh, with overnights going for 28.5 mills to 30.25 mills/KWh--lower at the border and higher in-state.
SP15 was still bouncing around in the 32 mills to 34.5 mills/KWh range, but Palo Verde calmed to 30.5 mills/KWh for peak and 26 mills/KWh for off-peak.
Aside from gas costs, which jumped early in the week, prices were influenced by transmission constraints and unit outages concentrated in the Southwest and Southern California. One of the Palo Verde units had a minor derating last weekend, but outages at Mohave, San Juan and Four Corners pulled some of the cheapest coal-fired generation off the system early in the week. Also, most of the California outages were located South of Path 15. On Thursday, Cal-ISO showed 10,650 MW of outages with the added unplanned outage of 400 MW at Ormand Beach. Northwest and Northern California power had been constrained from being redirected to SP15 because of limits to the California/Oregon Intertie and Path 15, but much of the constraint was lifted by Friday. .
Cal-ISO peak loads were coming in a bit higher than forecast but reached their highest level Tuesday at 32,900 MW. The late afternoon load spike was like a rocket; on Thursday, for instance, Cal-ISO showed a 4,400 MW jump in load between 4:30 pm and 6 pm, with a swift drop off afterward.
Bonneville Power Administration has returned to the market with a 50 MW offering in the 7 am to 10 pm period at "market prices" into the weekend. BPA will increase its offer to 100 MW for Monday.
The Alberta Pool showed some price spiking as the evening peak is approached 8,000 MW on Tuesday, but it moderated later in the week [Arthur O'Donnell].
Gas Market Hits Midweek Wall on Low Withdrawals
As if looking for any reason to boost prices, the gas market popped this week on expectations of cold weather across the US but hit a wall of indifferent demand. The key measures of market dynamic was the weekly American Gas Association withdrawal report and an associated drop in generation demand. The AGA report showed the second week of withdrawals to be only slightly deeper than the first. Just 22 Bcf was taken from storage, leaving more than 3.1 TCf in the wells, about 94.3 percent of full capacity.
Incidentally, the AGA quelled some market uncertainty by saying it will continue its weekly reports until April 2002, when the US Department of Energy's Energy Information Administration is set to take over the reporting task. Previously AGA was planning to terminate its storage monitoring by January.
Following the AGA report, forward contract prices for January dropped and local demand evaporated. "We were big sellers Tuesday," said one trader. "The next day, we hardly sold anything."
The gas trends mimicked electricity prices, which peaked on Tuesday afternoon and retreated since.
The San Francisco CityGate set the market top at $3.03/MMBtu, with some pointing to a new load as the Lodi gas storage facility kept pumping in cushion gas with few customers taking withdrawals. The spread between the CityGate and Malin widened to $0.25 the week wore on, with Malin topping out at $2.84, then slipping to $2.70/MMBtu.
The SoCal Border price also climbed to $2.80 but dropped to $2.70/MMBtu, as the Southwest basins retreated from a high of $2.53/MMBtu into the $2.42 to $2.45/MMBtu range.. Cold weather in Canada pulled AECO to $3.61/Gigajoule midweek, but that hub also fell later in the week, landing at $3.42/Gj on Friday [A. O'D.].
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