Warmer weather causes rise in Western spot prices


Aug. 2, 2002 — The Energy Information Agency (EIA) has reported an increase in spot prices throughout most of the Western U.S., largely caused by forecasts of warmer weather.

Prices at the SP-15, California’s southern transmission grid increased 6% to $37.09 per MWh. Prices at the Four Corners rose for the second straight day, though the increase was less than the increase of July 30, as available generation was boosted by the restart of Arizona Public Service’s Unit 5 at its Four Corners Power facility.

All five of its coal-fired generating units at Four Corners were shut down last Saturday when lightning struck a 230-kilowatt substation. Only Unit 4 currently remains off-line and is expected to come back on line within the next couple of days.

Prices at the Cinergy hub jumped over $10.00 per MWh to $59.72 per MWh as forecasted cooler weather failed to materialize, bringing little relief to utilities trying to meet cooling demand in the region.

Prices in the Northeast started to fall as temperatures have decreased from the highs seen earlier in the week. New England prices have dropped 43% to $59.13 per MWh on July 31, after peaking at $104.00 per MWh on July 29. Similarly, the PJM hub experienced a 29% decrease in price going from $111.77 to $78.55 per MWh on July 31. Prices at the New York Zone J, New York City have decreased 13% going to $108.38 per MWh on July 31.

Over the past seven days, the average price at all trading centers has ranged between $33.15 per MWh and $55.52 per MWh.

California Capacity Update
In response to the electricity shortage crisis in the summer of 2001, the state of California has increased its available generation capacity by almost 4,000 megawatts (see accompanying chart, below).

In 2001, the California Independent System Operator issued approximately 170 emergency declarations, requiring voluntary conservation of electricity and in a few cases rolling blackouts.

So far in 2002, the California Independent System Operator has issued three emergency declarations with no rolling blackouts required. The increased generation capacity and the generally more favorable weather has contributed to the decrease in emergency declarations in 2002.

This report was generated by the EIA. More data is available at http://www.eia.doe.gov/emeu/security/esar/latel.html.

Electric Power Monthly
This PDF format report is now available on EIA’s Electricity ( http://www.eia.doe.gov/fuelelectric.html) page. The publication provides a July overview of the U.S. electric power industry.

Topics include new generating units, net generation, consumption of fossil fuels, fossil fuel stocks, and retail sales of electricity. Additionally, data on U.S. electric utility receipts and cost of fossil fuels are included.

View an on-line summary of the publication at:
http://www.eia.doe.gov/cneaf/electricity/epm/epm_sum.html.

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