Western Price Survey / Archives
December 17, 1999
Colder temperatures brought a short-lived crest for electric power prices in Western bilateral trades this week. As La Niņa weather conditions began to return to their balmy tendencies, the undertow pulled prices back a notch. With market players focused on serving higher native load early in the week, prices at the California Power Exchange increased slightly, with daily consumption hitting a high of 554 GWh for Wednesday deliveries before ebbing to 548 GWh for Friday.
CalPX trades for next-day, on-peak power rattled between 36.7 mills, 32.6 mills and 36.6 mills from Monday through Thursday before plopping down at 32.1 mills/KWh for Friday. Off-peak prices hit a ceiling of 28.7 mills, with 26 mills/KWh the low end of the scale. Some traders indicated that CalPX's strong off-peak market accounted for the few bilateral deals they scheduled for light-load hours this week.
California/Oregon Border trades followed CalPX, sitting at 36 mills Monday before sagging to the 31-33 mills/KWh range. Mid-Columbia prices felt the same decline, calming to 27 mills to 28 mills after zipping up to 35 mills/KWh on Monday. Midway prices hit 36 mills, then retreated to as low as 30.5 mills for Friday deliveries.
Bonneville Power Administration tied its 200 MW offering of power supplies to the average CalPX market clearing price. For Monday deliveries in the Northwest, BPA offered the higher of 33 mills or the CalPX price minus 1 mill for on-peak energy, with COB/NOB power priced at the higher of 34 mills/KWh or the average CalPX price. For Tuesday through Thursday, the Northwest power offering for all hours leveled off at the CalPX price minus 1 mill, with all COB/NOB power set at the average CalPX price.
With Navajo Unit 2 and San Juan Unit 1 finishing their weekend hiatus, prices in the Southwest made little noise. Palo Verde padded between 30 mills and 34 mills for on-peak hours, with Four Corners trading in a narrow range of 30 mills to 33 mills/KWh.
Real-time trades at the Alberta power pool topped 300 mills as loads for some hours cleared the 7400 MW mark early in the week. By late Thursday, loads had eroded to about 6600 MW, with prices rising to a high of merely 48.93 mills/KWh [Jason Mihos].
Gas Gallops on Cooler Weather
A late-week stall in gas prices this week did not succeed in undercutting substantial increases at most Western hubs. Trades at nearly all system points ran up approximately $0.20/MMBtu between Monday and Wednesday, with closing prices on Thursday retreating a few cents. Chilly temperatures supported the price gains, despite a market that one trader characterized as "up and down, up and down and really crazy," referring to the interplay between cash trades and the going NYMEX futures price.
With frigid temperatures at Sumas near the border of Washington and British Columbia, market players suspected that traders in the Northwest were sitting on gas in storage rather than sending it downstream into California markets. The resulting squeeze drove up prices at Stanfield-where Pacific Gas Transmission and Northwest pipelines interconnect-"and strengthened up the whole West," according to one insider. Because of the large volume of gas leaving its system, Pacific Gas & Electric instituted a flow-balancing order on Wednesday to right its inventory.
As NYMEX futures crept up on Thursday, warmer weather kept cash prices lagging slightly behind. Still, prices in California and the Northwest retained their early-week heft. San Juan traded in a range of $2.24-$2.48, with the Permian Basin spread exactly the same at $2.24 to $2.49/MMBtu. Gas at the Southern California Border began the week at approximately $2.49, leapt to a high of $2.68 and backed down to about $2.65/MMBtu for Friday.
Malin gas observed more conservative boundaries, trading between $2.44 and $2.58/MMBtu. The spread at PG&E's CityGate ballooned from $2.52 early in the week to $2.75, then leaned back to $2.73/MMBtu.
At the AECO hub in Canada, cold weather sent prices snowballing from $(C) 2.82/Gigajoule on Monday to as high as $3.12/Gj, with Friday's price resting at 3.08/Gj [J. M.].
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