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Western Price Survey / Archives

December 20, 2002
Storms Can't Dampen Market Spirits

Keeping pace with strong winds and rain in the West this week, power markets swept higher. Charging natural gas prices, as well as the on-again, off-again status of Diablo Canyon's nuclear units, appeared to contribute to spot prices' upward mobility.

Outages in the Path 26 area of the California Independent System Operator grid system also may have played a part in prices' performance. Cal-ISO considered calling for load curtailments in Southern California to account for the situation but eventually did not, according to reports.

Systemwide, loads on the Cal-ISO grid stayed in the mid-31,000 MW range, notching up to about 32,000 MW for peak hours on Thursday.

One trader expressed surprise over prices at the Mid- Columbia point, which saw unusually high premiums for light-load energy. "No one could figure out why it was so high," he said, noting that off-peak power at Mid-C traded higher than at NP15. Other traders pointed to low hydro supplies as the reason for the runup.

Another market player said credit issues appear to be influencing prices. Traders are making deals based on who they are cleared to do business with. "For example, you see a trade for 33 mills but you skip it and take the next one for 35 mills because you can do business with that company," said the trader. "It's driving up prices."

At the Diablo Canyon nuclear complex, both 1,100 MW units ramped down on Monday afternoon because of high ocean swells and associated maintenance. The units returned to 50 percent of capacity early Wednesday and returned to full power on Thursday, though it's likely that new storm fronts and high ocean waves could again threaten to clog the plant's intake lines this weekend.

At the Four Corners coal-fired station, No. 5 returned to virtually full power on Tuesday. The 750 MW unit fell off line for tube leak repairs last week.

Peak prices at NP15 and SP15 rose to a high of 53 mills/KWh this week. Heavy-load prices at Mid-Columbia reached 46.5 mills, and trades at the California- Oregon border fetched as much as 48 mills/KWh. Light- load prices around the state hovered in the mid-30 mills range, with SP15 off-peak prices dipping as low as 28 mills and Mid-C prices reaching 41 mills/KWh.

In the Southwest, peak prices nearly cracked 50 mills, with Palo Verde trades netting as high as 49.75 mills/KWh. Prices for light-load hours at Palo Verde ranged from 26.75 mills to 35 mills/KWh.

At Canada's AECO hub, the low end of the range for off-peak load increased from 6,390 MW to 6,601 MW as the week progressed. Peak demand reached 8,510 MW by Thursday [Jason Mihos].

Low Stocks Send Gas Jumping (Again)

Not satisfied with last week's gains, spot prices in natural gas markets this week surged anew as NYMEX futures rallied and the federal government reported low levels of stored gas. Prices at Pacific Gas & Electric's CityGate point cracked $5/MMBtu, and premiums at other Western hubs were well above recent levels.

For the third consecutive week, the federal Energy Information Administration reported a decrease in the amount of gas in storage. As of last Friday, natural gas stocks totaled 2,635 Bcf, a reduction of 159 Bcf from the previous week and 560 Bcf lower than the same period in 2001.

The market must have seen it coming, as prices started the week in full stride and didn't let up. Compared to gas prices seen in mid-November, current premiums are roughly $1/MMBtu higher around the West.

At CityGate, gas traded between $4.69 and a sky-high $5.25/MMBtu. Prices for Topock supplies ranged as high as $4.91/MMBtu, and gas at Malin netted between $4.41 and $4.82/MMBtu.

Gas at the San Juan and Permian basins traded for a shade less, with San Juan prices hitting a high mark of $4.64/MMBtu and Permian gas trading for $4.36 to $4.74/MMBtu.

At the AECO hub in Canada, prices bumped between $4.23 and $4.35/MMBtu [J. M.].

Western Electricity Prices
Week of December 16-20, 2002
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.13-484.22 10.13-29.10
Mid-Columbia 40.25-46.5 31-41
COB 43.25-48 33-35
NP 15 45.25-53 32-39.5
SP 15 46.25-53 28-37
Palo Verde 39-49.75 26.75-35

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


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