WESTERN MARKET SNAPSHOT

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1 The Market Monitor is published on the Market Surveillance Administrator's web site ( every Tuesday reporting on key market indicators and weekly trends in Alberta's evolving electricity market. Alberta's Market Surveillance Administrator (MSA) is in place to monitor Alberta's electricity market for fairness and balance in the public interest. Market Surveillance keeps a close watch on the overall performance of Alberta's electricity market - checking that it operates fairly, efficiently and in an openly competitive manner. The Market Surveillance Administrator monitors market activity, investigates complaints and makes recommendations for changes, including changes to rules and procedures. The goal is to assess which aspects of the market are working well and determine where changes are needed - to address issues before they reach the formal complaint stage. That involves keeping an eye on the behaviour of all market participants to make sure rules are followed and actions are competitive and above board. WEEK OF April 4, 2004 All electricity prices are quoted in Canadian dollars per megawatt hour (MWh) WEEKLY HIGHLIGHTS The week of April 4 saw continued lower Pool price volatility as the standard deviation of Pool price remained below the four-week moving average value. Pool price reached a high of $ in hour ending (HE) 12 on April 4. The weekly high in the previous week was $ Pool price remained at or below approximately 95 percent of the time last week (See weekly price duration curve, page 2). The average Pool price for the week of April 4 decreased by $3.87 to $39.56 from last week s average Pool price of $43.43 The year-to-date (YTD) average Pool price was $48.03 as of the end of April 10. On-peak prices averaged $41.78 last week, decreasing from the previous week s average of $ Average off-peak prices increased to $31.95 compared to $28.14 for the prior week. Loads last week were 2.8 percent lower than the CONTACT US week before as the total volume of energy traded Alberta's Market Surveillance Team last week was 1,184,076 MWh compared to 1,218,796 MWh a week earlier. The maximum hourly demand last week was 7,861 in HE 13 on April 5 with a price of $ The previous week s highest hourly demand was 7,857 MW on March 31 at a price of $ The minimum hourly demand last week was 6,386 MW in HE 03 on April 8 at a price of $9.48. WESTERN MARKET SNAPSHOT Average on-peak prices for other market areas were higher compared to the previous week. Electricity prices are quoted in $CDN/MWh at an exchange rate of $ Mid-Columbia (Mid-C) averaged $54.58 compared to $47.97 for the previous week. California/Oregon Border (COB) averaged $58.88 compared to $52.07 for the previous week, while Palo Verde (PV) averaged $62.02 compared to $55.44 for the week before. Mid-Continent Area Power Pool (MAPP North) averaged $57.10 compared to $54.24 for the previous week. At North Path 15 in California (NP 15) prices averaged $61.31 compared to $56.26 for the week before. (See weekly market hub graph page 5) NATURAL GAS MARKET SNAPSHOT The Alberta natural gas closing price recorded on Friday, April 9 was $6.30 per gigajoule (GJ), increasing from the previous Friday s closing price of $6.15/GJ. Spark spreads were mostly negative last week. (See spark spreads chart, page 4). Martin J. Merritt President & Chief Executive Officer martin.merritt@albertamsa.ca W.W. (Wayne) Silk Vice President & Chief Operating Officer wayne.silk@albertamsa.ca Douglas Wilson Legal Counsel & Secretary douglas.wilson@albertamsa.ca Mike Nozdryn-Plotnicki Manager, Market Monitoring mike.nozdryn-plotnicki@albertamsa.ca Robert Spragins Manager, Investigations robert.spragins@albertamsa.ca Bethan Kirkpatrick bethan.kirkpatrick@albertamsa.ca Chris Joy chris.joy@albertamsa.ca Doug Doll doug.doll@albertamsa.ca Mark McGillivray mark.mcgillivray@albertamsa.ca Natasha Solotina natasha.solotina@albertamsa.ca Wes Green wes.green@albertamsa.ca Donna Ehrhardt Executive Assistant donna.ehrhardt@albertamsa.ca 1

2 Daily Average Pool Price $200 $ $150 $50 $53.75 $44.64 $37.84 $45.14 $45.76 $34.12 $16.25 Sun 4-Apr Mon 5-Apr Tue 6-Apr Wed 7-Apr Thu 8-Apr Fri 9-Apr Sat 10-Apr Date The solid bars illustrate the range from minimum to maximum price. This weekly price duration curve illustrates the percentage of time that prices were at, or above, a given value. For a selected price (vertical axis), the curve yields the percentage of time that the price was equaled or exceeded (horizontal axis). Weekly Price Duration Curve (All Hours) week of: Sunday, April 04, 2004 $200 This Week Last Week $150 $50 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80% 85% 90% 95% 100% % of the Time 2

3 $160 Weekly Pool Price Analysis: Average Price and Standard Deviation Pool Price ($/ MWh) $120 $80 $40 10-Apr May Jun Jul Aug Sep Oct-03 Week of April Nov Dec Jan Feb Apr-04 Average Hourly Price Hourly Standard Deviation 4 per. Mov. Avg. (Hourly Standard Deviation) This chart illustrates the average weekly pool prices for the past year, as well as the standard deviation of the hourly pool prices in each week and the four-week moving average standard deviation of pool prices. The standard deviation of pool prices is a measure of the volatility and the four-week moving average is useful in identifying trends in this volatility. $1,000 Hourly Pool Price vs 7-Day Moving Average 30 Day Window $10 $ Avg Pool Price = $ Avg Pool Price = $ Avg Pool Price = $ Avg Pool Price = $ YTD Avg Price = $ Day Moving Average Hourly Pool Price 13-Mar Mar Mar Mar Mar Mar Mar-04 3-Apr-04 6-Apr-04 9-Apr-04 This chart provides a rolling 30-day view of the hourly pool price together with the 7-day moving average. The moving average is useful in identifying trends over the period. 3

4 Daily Avg. Pool Price vs AECO - C Hub 30 Day Window $10 Pool Price AECO - C Hub $80 $8 $60 $40 $6 $4 Gas Price ($/GJ) $20 $2 12-Mar Mar Mar Mar Mar Mar Mar Mar Mar Mar-04 1-Apr-04 3-Apr-04 5-Apr-04 7-Apr-04 9-Apr-04 Date This chart provides a rolling 30-day view of average daily pool prices and intra-alberta gas prices (AECO-C Hub). It illustrates the correlation between the pool price for electricity and the price of gas. Daily Spark Spreads Spark spreads (in $/MWh) give and indication of the revenue available to cover costs (including O&M, capital costs, depreciation, etc ) after fuel costs have been paid. These spark spreads compare the revenues of two units with different thermal efficiencies: 7.5 GJ/MWh (representing a combined cycle gas turbine) and 10 GJ/MWh (representing a simple cycle gas turbine). For this analysis, Gas Price is the weighted average daily spot gas price at AECO-C ($/GJ) and electricity price is the AESO daily average Pool price ($/MWh). A positive spread indicates it is more economical to buy gas and generate power while a negative spread indicates it is more economical to buy power from the grid. Gas Price Heat Rate Price Heat Rate Price Heat Rate Price (all hrs) (on peak) (off peak) Date $/GJ $/MWh GJ/MWh GJ/MWh $/MWh GJ/MWh GJ/MWh $/MWh GJ/MWh GJ/MWh 4-Apr (11.12) NA NA NA (11.12) 5-Apr (3.03) (18.91) (9.09) (22.69) (38.57) 6-Apr (8.53) (23.98) (0.34) (15.80) (24.89) (40.35) 7-Apr (1.51) (17.06) (8.94) (17.75) (33.30) 8-Apr (1.67) (17.48) (5.77) (21.58) (9.30) 9-Apr (13.15) (28.91) (11.32) (27.08) (16.81) (32.57) 10-Apr (30.80) (46.48) (27.76) (43.45) (36.87) (52.55) 4

5 Weekly Market Hub Report for April 4 - April 10, 2004 $80.00 $60.00 On Peak - Average On Peak - Prior Week Off Peak - Average Off Peak - Prior Week Note: All prices in $CDN at an exchange rate of : N/MWh) Price ($CD $40.00 $ NP 15 MID-C COB Palo Verde MAPP AESO Market Hub This chart illustrates a comparison between the current and previous weekly average on-peak, and off -peak prices for the given hubs. Note all prices are quoted in Canadian dollars per megawatt hour (MWh). 5