Western Power Prices Decline for Third Day on Low Demand

Los Angeles, July 18 (Bloomberg Energy) --

Peak power prices for Thursday delivery in the Western U.S. fell for the third straight day with reduced demand on below-normal temperatures in the region, traders said.

"Power prices in the west are the lowest out of all of the other markets in the U.S.,'' said one Northwest trader.

Power flowing north on path NP-15 declined 23 cents a megawatt hour, with sales completed between $37.00-$40.00 to a Bloomberg index of $38.60. Power flowing south on SP-15 fell 40 cents, to a Bloomberg index of $39.88.

Power prices at path NP-15 declined 256 percent from a year ago today while SP-15 declined 273 percent, Bloomberg figures show.

In its seven-day forecast, Belton, Missouri-based Weather Derivatives Inc. predicted temperatures would average 2.0 degrees Fahrenheit below normal in the Pacific Northwest, with cooling demand 73 percent below normal levels. Temperatures in the Southwest would average 0.3 degrees below normal with cooling demand 10 percent below normal levels.

The Bloomberg index price for power at the Palo Verde switchyard in Arizona declined $2.75 to $42.33, with trades ranging from $40.50-$48.00.

Traders said that loads remain down, and that there are a lot of sellers in the market.

"Prices will probably remain at these levels until demand rises with stronger temperatures and possible unit outages,'' said one Southwest marketer.

At the Four Corners in New Mexico, peak power sold between $40.00-$48.00, declining $3.63 from yesterday.

-- PHO (owennos@bigfoot.com), July 19, 2001