Idled natural gas power plants cause prices to rise in Northwest

Oct. 24, 2002 — Over the past seven days, the average price at all trading centers ranged between $33.91 and $37.10 per megawatthour, according to the Energy Information Administration (EIA).

Western U.S. electricity spot prices increased over the past two trading days with the most pronounced increase at Four Corners and Mead trading centers.

Since October 17, the Mead’s prices increased almost 20 percent to $38.11 per megawatthour, and Four Corner’s prices increased almost 22 percent to $37.35. Prices at Mid-Columbia, a benchmark for the Northwest, increased 12 percent during the same period to $34.41 per megawatthour.

Plant shut downs totaling 17,866 megawatts as of October 21 contributed to the price increases in the region. Many plants were idle because of high natural gas prices in the region, apparently making it uneconomical to produce power.

With two nuclear power plants in Illinois and Wisconsin coming back on-line, electricity prices in the Mid-West region, as measured at the Cinergy trading center, decreased about 30 percent to $18.25 per megawatthour since October 17, 2002.

Mild weather in the Southeast contributed to a decline in spot prices in the region. SERC prices decreased from $29.16 per megawatthour on October 18 to $26.41 on October 21. Also pushing prices downward, Bloomberg’s Power Lines reported that Southern Company’s 924-megawatt hatch Unit was operating at capacity after being down for repairs.

Lower demand and steady temperatures caused prices at PJM West to decrease $5.44 to $32.56 per megawatthour over the past three trading days. However, prices at New York Zone J remained at $55.50 for the past four trading days while NEPOOL’s prices decreased only slightly since October 17, 2002.

Over the past seven days, the average price at all trading centers ranged between $33.91 and $37.10 per megawatthour.

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