Nearly all of Thursday’s cash market experienced the steep pricedeclines that had been anticipated after the screen reactedbearishly to AGA’s Wednesday afternoon storage report.

The notable exceptions were the Northern California points ofMalin and the PG&E citygate, where traders had to cope not onlywith a low-inventory OFO issued by the utility for today (seeTransportation Notes) but also a statewide Stage One ElectricalEmergency issued by the California Independent System Operator.(The state reached an even more severe Stage Two emergency levelWednesday afternoon, but it wasn’t posted by Cal-ISO until aftermost eastern press deadlines had passed.) The citygate was downonly slightly, and Malin numbers even achieved a small gain in theface of an overall much softer market.

One aggregator said he traded a much higher volume than normalat the PG&E citygate because of the OFO. The OFO was unusual,he added, in being one of the first Stage 2 low-inventory OFOs thissummer. “Usually we’re on the high end there.”

Most of California’s heat problems Thursday were in the southernhalf, Cal-ISO said, and the Path 26 power lines that transmitelectricity from north to south had maxed out on capacity duringthe previous afternoon. Although the Nuclear Regulatory Commissionwas reporting no significant nuclear plant outages in the West,Cal-ISO said the situation was exacerbated by “unavailablegeneration within Southern California and limited imports from theSouthwest, which is also experiencing extreme heat.”

Same-day electricity prices reported by the California PowerExchange peaked at just under $500/MWh for several hours Thursday(a price cap at that level went into effect July 1). Power pricesfor today eased just a bit but not by much; Cal-PX posted day-aheadnumbers peaking at $473/MWh.

The baking heat in California and the desert Southwest served tokeep Rockies price declines of about a dime or so smaller than inmarkets to the east. Eastern drops tended to range beteen 15 and 20cents.

The Northeast is remaining cool, a marketer said, so he didn’tfind a lot of business to do there Thursday. “It [Northeast market]will stay quiet until some weather comes along, and the NationalWeather Service says don’t hold your breath on that for aboutanother week, at least.”

Although bidweek hadn’t started yet, a Texas producer saidPermian Basin basis for August seems to be much tighter thannormal. He is hearing talk of Permian deals being offered at minus5. Usually Permian gas trades more like minus 11-13, he said, andhe remembers weak markets in the past when Permian basis haswidened to as much as minus 17-24.

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