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Western Price Survey

Week's End Edition
December 22, 2006
Prices Fall as Pacific Northwest Recovers from Winter Storm

'Twas a few days before Christmas,
And on the trading exchange,
Power prices flew south,
Higher values disdained.

The big nukes were running,
Demand for heating was down,
Natural gas futures dropped,
Nearly touching the ground . . .

Electricity prices started the week strong, as the Pacific Northwest slowly crawled away from the worst winter storm to hit the region in a decade, leaving 1.5 million at one point without power.

Several 500 kV transmission lines that had been curtailing two major interties and power flow between the Northwest and California came back on line, and thousands of megawatts also returned to the Golden State's grid. In California, the Diablo Canyon nuclear plant and the San Onofre Nuclear Generating Station returned to full service this week. The 1,087 MW Unit No. 2 of Diablo had been shut down after a small explosion last week. The 1,080 MW Unit No. 3 of San Onofre went out of service due to an oil leak.

Power traded Thursday in off-peak blocks and today for next-Tuesday deliveries. California-Oregon peak power traded Monday at about 66 mills/kWh, lost about 12 mills in Wednesday and Thursday trading, and settled for the week at 55 mills/kWh. Values for off-peak power were around 55 mills/kWh in Monday trading and 49 mills/kWh in Friday trading.

Daytime power at Mid-Columbia went for 63 mills/kWh Monday, between 50 mills and 57 mills/kWh on hump day, and for about 52.50 mills/kWh on Friday. Off-peak power, after starting the week at about 53 mills/kWh, slipped to about 46.50 mills/kWh Friday.

Electricity values at North of Path 15 and South of Path 15 followed a nearly identical route. Peak power was at 70 mills/kWh Monday and spread between 51 mills and 63 mills/kWh Wednesday, before finishing tightly between 54 mills and 57 mills/kWh in Friday trading. Off-peak power closed the week at about 48 mills/kWh, after going for a high of 56 mills Monday.

At Palo Verde, high-demand power went for 48 mills to 55 mills/kWh Monday and fell to 50 mills/kWh for deliveries next Tuesday. Off-peak power finished the week at 42.75 mills/kWh after starting the week at around 38 mills/kWh.

Reindeer will have a few less transmission lines to avoid for Christmas deliveries. Westward flows on Path 49 were limited to 6,288 MW because the 500 kV Devers-Palo Verde No. 1 line went off line Wednesday. The outage of the Buckley-Grizzly 500 kV line this week also limited the California/Oregon Intertie and Pacific DC Intertie [Chris Raphael].

Warm Weather Sends Natural Gas Prices into Free-Fall

Natural gas futures for January deliveries fell to $6.60/MMBtu Thursday, the lowest point since January 2005, before gaining 20c as traders tried to cover shorts and a storage withdrawal was reported.

The U.S. Energy Information Administration reported that for the week ending Dec. 15, natural gas in storage declined 71 Bcf. Eastern states took out 71 Bcf, while the West withdrew 5 Bcf. Total stocks, however, are at 3.1 Tcf, about 300 Bcf above stocks last year.

Generally U.S. weather was warm this week, except in the Rockies, which were hit with a blizzard. Henry Hub futures dropped Friday to below $6.60/MMBtu due to high temperatures from Chicago eastward keeping demand low.

Natural gas traded Friday for deliveries between Saturday and Tuesday. Permian Basin gas went for about $6.23/MMBtu Monday and spread between $6.05 and $6.39/MMBtu Wednesday. It closed the week at around $5.75/MMBtu. San Juan Basis gas was nearly identically priced. Southern California border gas was trading at a high of $7.03/MMBtu Monday, lost about 20c by Wednesday, and dropped another 25c by Friday, closing at an average of $6.36/MMBtu [C. R.].

Western Electricity Prices
Week's End: December 18 - 22, 2006
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 35.53-502.27 22.07-66.83
Mid-Columbia 49.25-64 46-54.75
COB 50.50-67.25 48-56
NP 15 51.25-70.75 45-56.25
SP 15 51.25-70.50 44.25-55.50
Palo Verde 48-55.75 37.50-42.75

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 Chris Raphael, editor with questions regarding Price Survey Content.

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