Nuclear-Refueling Season Arrives, Prices Unmoved

Nuclear-Refueling Season Arrives, Prices Unmoved

10/6/04

If one were to take Joe Desmond, Deputy Secretary of Energy at the California Resources Agency and policy point man for the Schwarzenegger administration on energy matters, the creation of an electricity capacity market for the state is almost a foregone conclusion. Desmond spoke early this week at a two-day installed-capacity conference sponsored by the California Public Utilities Commission, the Electricity Oversight Board and the California Independent System Operator. The event served as an informational forum for California electricity-market stakeholders to learn about the capacity markets that have been operating or are currently being put in place in Eastern independent system operator control areas.

Panelists at the conference praised the value of capacity markets as a tool to use to send the appropriate market-signals to developers in order to incent investment in infrastructure. The exact form that market should take remains for California’s stakeholders to hash out, said the consultants and representatives from the East Coast ISOs, but the first step down the path toward a capacity market—or at least a capacity product—was taken in California this week.

The price for electricity, on the other hand, had little incentive go move anywhere during the first three days of this week. The cost for power throughout the West stuck close to last week’s closing prices, despite some major generating facility outages.

It would appear to be nuclear-unit refueling month in the West, what with San Onofre Nuclear Generating Station Unit No. 3 entering its second week of a planned refueling outage. That unit was joined by the 1,270 MW Palo Verde Unit No. 3 last weekend, which also began a 50 to 60 day refueling outage. The PV outage will be a little longer than a typical refueling, said Arizona Public Service spokesperson Sheri Foote, because the unit will also undergo maintenance on the pressurizing equipment while off line as well.

As if not wanting to be left out of the outage mix, Diablo Canyon Unit No. 2 was curtailed by 50 percent of its full 1,105 MW output for about 24 hours starting in the late afternoon on Sunday. It too was a planned maintenance event during which the ocean-water cooling intake was cleared and cleaned. Both Diablo Canyon units are currently operating at full output.

Even with the outages at the nuclear plants and a handful of other large facilities in California, the California Independent System Operator showed that the state had more than enough power to serve load. With available power hovering close to or above the 40,000 MW mark and load peaking at just under 34,000 MW, the likelihood of power shortages in Cal-ISO territory were not great this week.

The price of peak power at SP15 led the pack again this week, rising as high as 55.25 mills/KWh in Tuesday trading. The price of low-demand power in the southern region of California ranges from 29.75 mills/KWh on Monday to 34.50 mills/KWh the following day.

North of Path 15 peak power trailed behind slightly, topping out at 54.25 mills/KWh in trading so far this week. The price of off-peak power in NP15 did hit 37.25 mills/KWh on Tuesday, but shed 1 to 3 mills the following day.

California-Oregon Border power prices hung back from the SP15 costs by anywhere from 8 to 10 mills this week. Opening for a low of 41.50 mills/KWh on Monday, peak power at COB attached a high of 46.50 mills/KWh on Tuesday. Off-peak power at COB treaded water in the low to mid-30s during the first three days of the week, settling right at 35 mills/KWh in Wednesday trading [Shauna O’Donnell].

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