Power Prices Surge as Montana Fire Shuts Down Lines

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Fri, 11 Aug 2000, 3:25pm EDT Power Prices Surge as Montana Fire Shuts Down Lines (Update1) By Gene Laverty

Portland, Oregon, Aug. 11 (Bloomberg) -- Electricity spot prices in the western U.S. rose 59 percent as a power plant in Montana was forced to reduce production because of forest fires, exacerbating weather-related shortages on the West Coast.

Prices for next-day delivery at Mid-Columbia, a delivery point for power produced by Portland, Oregon-based Bonneville Power Administration, rose to $199.13 a megawatt-hour from $125 in midafternoon trading.

Earlier this week, Bonneville Power, a federal agency that sells about 46 percent of the power used in the Northwest, had to ship 1,000 megawatts, enough to light 1 million homes, to the Montana-Idaho border to make up for shortages caused by the fire.

Three of the five generators at the Colstrip coal-fired plant in Montana, which usually produces some electricity for export to the West Coast, were turned off because the fire forced operators to shut down two 500-kilovolt power lines. Without the lines, the transmission system didn't have the capacity to handle all of Colstrip's output.

``The fires caused the Colstrip (generators) to back off, and Bonneville supplied energy to the state to make up for what couldn't be transported,'' BPA Chief Operating Officer Steve Hickok said. More than 20,000 firefighters from Canada and the U.S. are fighting fires burning over 847,000 acres of forest in 11 western states.

As of this morning one of the damaged transmission lines was back up, and the Colstrip plant was running at full capacity, though the fire could knock out service again. The plant belongs to Allentown, Pennsylvania-based PPL Corp., which bought all of Montana Power Corp.'s plants last year for $757 million.

In California, power prices have surged over the last few weeks as a heat wave strained the state's electricity production capacity. Bonneville Power, which owns a system of high voltage lines that ship electricity produced by Grand Coulee and other federal dams, moves electricity into the state, and has been trying to increase supplies.

The agency last week reconfigured water supplies in its dams on the lower Columbia River, upstream from Portland, to increase output and prevent blackouts in California, Hickok said. It's reconfiguring reservoirs at the Hungry Horse and Libby dams in western Montana and Grand Coulee in Washington to meet Montana's needs.

http://quote.bloomberg.com/fgcgi.cgi?ptitle=Top%20World%20News&s1=blk&tp=ad_topright_topworld&T=markets_bfgcgi_content99.ht&s2=blk&bt=blk&s=AOZQ9hRVQUG93ZXIg

-- Martin Thompson (mthom1927@aol.com), August 11, 2000


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