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Western Price Survey / Archives

December 23, 2004
Holiday Hubbub Holds Back Prices

Please note: there will be no price survey distributed next week as the CEM office is closed.
Have a great, safe holiday.

The price for power in the Western United States--while not entirely static--moved within an expected range this week. In light of the upcoming Christmas holiday, the usual spot trades for next-day delivery gave way this week to a hodgepodge of swaps of one- to two-day packages for delivery as far as five days out.

Peak-load figures in the California Independent System Operator's territory remained in the low 30,000 MW vicinity during the first half of the week. Demand put little pressure on supply, as the amount of power in the state was more than enough to cover need. Seasonal temperatures clung to the West this week, while the winter solstice observed Tuesday brought frigid temperatures, snow and ice to much of the rest of the country.

With both Diablo Canyon nuclear generating units back in service and the majority of other power plants in California hale and hearty, the week passed with little incident in the operation of the electricity system.

Power costs in Northern California opened the week between 62.50 mills and 64 mills/KWh. Delivery days for Monday trades were both Tuesday and Wednesday. Tuesday's trading session brought a drop in the price of power as packages were being dealt for delivery over the holiday weekend. Peak prices at NP15 dropped to between 57.75 mills and 60 mills/KWh before rebounding a bit the following day. On Wednesday peak-power prices tacked on a few mills to bring the average cost back up to 62.50 mills/KWh.

Prices throughout the West followed a similar pattern. At SP15, the cost of peak power ranged from 62.50 mills to 64 mills on Monday, dropped down to about 59 mills/KWh on Tuesday and rose back up to Monday's price range on Wednesday. Off-peak power traded for close to 46 mills/KWh much of the week, though trading for Sunday and Monday deliveries saw prices rise to as much as 51.50 mills/KWh.

Low-demand power at the California-Oregon border mirrored that trend, with weekend deliveries changing hands for between 42 mills and 44 mills/KWh on Tuesday, then scooting up to about 50 mills/KWh on Wednesday for next-week delivery.

Power scheduled for daytime delivery at Mid-Columbia attracted between 45 mills and 51 mills/KWh on Monday before slipping to between 43 mills and 46 mills/KWh the following day. The price managed to climb back up to a high of 54 mills/KWh on Wednesday. The price for off-peak power at the hub did not close out the week much lower than that, as next-week deliveries drew as much as 49.50 mills/KWh.

According to the Cal-ISO status report of unit outages, the great majority of curtailments at generating facilities this week merely ramped units down by a slight percentage of overall capacity. Of the few units to be completely off line, San Onofre Nuclear Generating Station Unit No. 3, with a capacity rating of just over 1,100 MW, was by far the largest. Other power plants with production curtailments this week included Mohave Generating Station's Units No. 1 and 2, which were ramped down by 150 MW and 50 MW, respectively at the beginning of the week.

The Donald Raesfeld power plant was also off line this week on an unscheduled outage, noted the ISO. The 148 MW facility, owned and operated by Silicon Valley Power, was formerly called the Pico power plant. According to an SVP representative, construction on the facility is not quite completed, but it is in testing mode. It will be available for commercial operation shortly [Shauna O'Donnell].

Gas Costs Slip

Natural gas prices in the West slid in late-week trading. Prices at both producing basins and California delivery points lost a dime to a quarter in value from Wednesday to Thursday. On Thursday, gas was trading for Friday through Monday delivery on account of the Christmas holiday.

Gas deliveries to the Southern California border point at Topock dropped from a high of $6.69/MMBtu at midweek to a low of $6.28/MMBtu on Thursday. In Northern California, Malin deliveries drew between $6.08 and $6.15/MMBtu on Thursday, after opening the week close to the $6.40/MMBtu mark. San Juan Basin gas costs ran just a penny lower than the Malin price, bottoming out at $6.07/MMBtu at the end of the week.

The largest draw from underground storage for this withdrawal season was recorded by the Energy Information Administration for the week ending December 17. Gas companies took out 123 Bcf, leaving just over 3,000 Bcf in storage. Late last week, the Federal Energy Regulatory Commission issued a brief summary of the storage-withdrawal reporting error that occurred on November 24. The mistake, which was factored into the EIA's weekly report on underground storage, is said to have driven up gas costs in the month-ahead market by more than $1.00/MMBtu within a few hours that day. The error was estimated to cost consumers more than $1 billion in gas costs during December. In its summary, FERC said that due to a clerical error, Dominion Transmission sent the EIA the wrong withdrawal data showing the firm made a much larger withdrawal than it actually had made. Initially, Dominion did not know it had submitted incorrect data but when pressed for information on the report by FERC's Office of Market Oversight and Investigation, it discovered that the wrong file, with incorrect information, had been forwarded to the EIA. FERC is continuing to investigate the error and its effect on prices [S. O'D.].

Western Electricity Prices
December 20 - 24, 2004
Hub Peak (heavy) Off-peak (light)
Alberta Pool (C$) 10.54-90 8.73-339.95
Mid-Columbia 43-54 37.756-49.50
COB 47.50-57 42-50.50
NP 15 57.75-64 43.75-51.75
SP 15 58.50-64.50 45-51.50
Palo Verde 53-59 39.50-46

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


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