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Western Price Survey / Archives

December 19, 2003
Prices Remain Healthy Heading into Weekend

Power prices kept to the range established last week at Western hubs, even rising by 5 to 10 mills at some locations. The elevation was driven by the continued strength in the price of natural gas, the fuel of choice for much of the West's generation.

The continued outages as a handful of the region's major power plants leaned on prices as well. Four Corners Unit No. 5 has been off line on an unplanned outage throughout the week. According to Southern California Edison spokesperson Steve Conroy, a leak in a boiler tube brought down the 750 MW unit. Conroy said that repairs were underway and the facility should be back on line by the weekend.

Edison also reported a curtailment at the San Onofre Nuclear Generating Station on Wednesday. While the Nuclear Regulatory Commission's Web site listed Unit No. 3 at full power, Conroy confirmed that at about 3:15 am operators at the 1,108 MW facility identified an electrical problem. The unit was taken down to about 50 percent while the unit was worked on. He said that by 8:00 am the repairs were completed and operators began ramping the unit back up. By Thursday, the unit was back up to 100 percent output.

Meanwhile, Palo Verde Unit No. 2, which had been off line for a refueling and maintenance, began ramping up at the beginning of the week right on schedule. When the unit was taken off the grid at the end of September, Edison said it anticipated the return to operation in about two and a half months. The facility was at about 13 percent output Monday, increasing to 69 percent by Friday. In addition to refueling, new steam generators were installed and other work conducted during the unit's hiatus from the grid. The improvements added about 90 MW of capacity to the facility's output.

The loss of output at SONGS Unit No. 2 had an effect on the grid on Wednesday, as Path 44 was derated to 1,576 MW in the north-to-south direction from 0900 to 2400. Few other transmission-related events or curtailments were noted by the Western Electricity Coordinating Council this week. In fact, on Monday the WECC's daily status report noted that there were no restrictions on any WECC paths because of outages in the California/Mexico Reliability Center.

The WECC also noted that the Bonneville Power Administration on Thursday had two transformers damanged by gunshots during the week. One incident took place in Central Washington and the other in the northwest part of the state. BPA did not have any evidence that the events were related.

In the Northwest, Mid-Columbia peak power was moving for up to 48.50 mills/KWh in Monday trading. The price tapered a bit in Wednesday exchanges but the price for off-peak power at the hub stayed steady throughout the first half of the week, sticking solidly to the 38 mills to 40.75 mills/KWh range. By Thursday, when prices typically dip for power scheduled for weekend delivery, trading at most hubs stayed the course, budging very little from levels reached earlier in the week.

Palo Verde power opened the week changing hands for between 49 mills to 55.50 mills/KWh for peak deliveries. Prices slipped downward to between 50.50 mills and 52.50 mills/KWh in late-week trading while off-peak power was moving for as much as 38.50 mills/KWh.

Trading at the California hubs--SP15 and NP15 also did not exhibit a significant dip in prices going into the weekend. Some indices even reported slight gains compared with prices earlier in the week. NP15 kept to the 55 mills/KWh for peak-time deliveries and off-peak power moved for between 40 mills and 42.75 mills/KWh much of the week. SP15 peak power held out for up to 57 mills/KWh in Thursday trading, a gain of about 4 mills over the cost of power at the hub at the beginning of the week [Shauna O'Donnell].

Spot Gas Surges on Weather, Demand

Natural gas prices continued to trade in the high-five to low-six dollar range throughout the week, boosted by increased weather-driven demand. The heating season is getting into full swing throughout the country as temperatures dip.

Prices at all US hubs in the West exceeded $6.00/MMBtu at some point during the week. In fact, the cost of gas at the Permian Basin slipped below that mark only on Wednesday and CityGate gas kept to between $6.08/MMBtu to $6.25/MMBtu most of the week. On Thursday, however, the hub price jumped by as much as $0.25 in some exchanges, topping out at $6.49/MMBtu.

Both San Juan and Malin deliveries managed to stay below the six bucks mark much of the week before being driven upward in end-of-week trading. Malin closed the week out at a high of $6.16 MMBtu and San Juan gas hit $6.21/MMBtu for Friday transactions.

The Energy Information Administration natural gas storage report this week showed withdrawals for the prior week of 134 Bcf, with all regions taking some gas out of underground storage. The West withdrew 11 Bfc, leaving stocks in the ground at 360 Bcf--still above the five-year average of 350 Bcf at this time of the year [S O'D.].

Western Electricity Prices
Week of December 15-19, 2003
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 19.79-144.15 10.55-43.41
Mid-Columbia 41.75-48.50 37-40.75
COB 47.25-52.50 37.50-42
NP 15 53-57.50 39.50-43.50
SP 15 53.25-57 36.50-43
Palo Verde 48.75-56.50 28.50-43

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.

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Contact Shauna O'Donnell, editor with questions regarding Price Survey Content.

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