Western Price Survey / Archives
December 17, 2004
A celebratory chorus of Hallelujah was heard emanating from the rooftop of the California Independent System Operator headquarters in Folsom, California on Tuesday. At noon that day, Governor Arnold Schwarzenegger flipped the ceremonial switch that energized the much-anticipated third line of the high-voltage Path 15 transmission link between the northern and southern halves of the state.
Another important transmission line is back in service following a hiatus of more than two months. The Pacific DC Intertie, which moves power between the Northwest and the Los Angeles region, returned to limited commercial service on December 8 after a maintenance outage. According to the Western Electricity Coordinating Council, the 3,100 MW-capacity line is currently in trial operation with 1,475 MW of available transfer capacity in the north-to-south direction and 1,446 MW south to north.
There were few surprises in the Western electricity markets this week. Prices at the region's hubs moved in tandem with demand. With volatility of demand next to nil, it followed that there would be little movement in the cost of power. The only significant change in price showed up in Thursday's indices, but this is typical for that trading day, when packages for the off-peak weekend time period change hands.
Peak-time deliveries at Mid-C opened this week at 54.50 mills/KWh but dropped to between 45 mills and 46 mills/KWh by midweek. Prices shed another 4 to 5 mills on Thursday, but by the close of the week were back up to the 46.50 mills to 48.50 mills range. Off-peak power opened the week in the mid- to upper 40s before sinking to a low of 35 mills/KWh on Thursday.
California-Oregon Border power prices also eroded in Thursday trading. Peak deliveries moved for up to 58 mills/KWh in early-week trading before dropping to a low of 46 mills/KWh for weekend packages. Off-peak power costs dropped as low at 38.50 mills/KWh but rebounded on Friday, closing the week at between 47 mills and 49.50 mills/KWh.
Power supplied north of Path 15 notched a high so far this week of 69.25 mills/KWh. Thursday saw the price slip to 60 mills/KWh before it swelled back up to 66 mills/KWh on Friday. Nighttime power at NP15 opened and closed the week at about 50 mills/KWh. In between it dropped down to the low 40s.
The price of power south of Path 15 nearly mirrored that of NP15. With little change in the supply-demand matrix and no particularly notable event such as a significant forced outage at a generating station in either half of the state, there was little to distinguish the two geographic regions from a power perspective.
Cal-ISO recorded peak loads below the 35,000 MW level all this week. The peak load in the system operator's territory was 33,269 MW on Thursday, well within manageable parameters for this time of year.
Diablo Canyon Unit No. 1 has begun to ramp up after a refueling outage. The 1,100 MW unit will join its sibling, Unit No. 2, at full capacity sometime early next week. It is currently at about 48 percent output [Shauna O'Donnell].
Western Gas Costs Trail the Rest of the Country
Natural gas prices throughout the West were the lowest in the land this week. With spot prices in the Western gas markets exceeding the $6.00 mark, that bit of news may merely be a thin silver strip around a gray cloud. Still, with the New York City spot price topping out at $10/MMBtu this week on the heels of a cold snap, the high of $6.79/MMBtu at Topock starts to look pretty good.
At the producing basins at Permian, Texas and San Juan, New Mexico, gas costs peaked on Tuesday, reaching $6.70/MMBtu and $6.50/MMBtu, respectively. The price receded the following day and dropped more on Thursday following the Energy Information Administration's release of its underground storage report.
The EIA reported a withdrawal of 61 Bcf of natural gas from storage for the week ending December 10. While that was a smaller amount taken out of storage than expected, the more surprising figure is the 3,150 Bcf that remains in storage. This is a healthy 14 percent more than the five-year average. Barring prolonged cold weather and a significant increase in gas usage for the rest of the winter heating season, the available stored gas should stand us in good stead [S.O'D.].
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