Southern California Gas, Power Strengthen on Nuke Decision Delay

Spot power and natural gas in Los Angeles strengthened after regulators pushed back a decision on the restart of Edison International’s San Onofre nuclear plant, the largest power source in the area.

The U.S. Nuclear Regulatory Commission expects to issue a decision on the start of Unit 2 at the plant by the end of May, a month later than planned, an updated timeline posted on the commission’s website shows. Units 2 and 3, with a combined capacity of about 2,200 megawatts, have been shut since January 2012 because of tube wear.

Wholesale power at Southern California’s SP15 hub increased $1.10 to $47 a megawatt-hour for April through June at 1:04 p.m. New York time, according to data from energy broker Tullett Prebon. Natural gas at Southern California’s Citygate hub gained 3.6 percent to 15.7 cents per million British thermal units above spot gas at the U.S. benchmark Henry Hub, according to data compiled by Bloomberg.

“You can assume that utilities will be forced to pay more for power in the short term until the nuclear units come back online,” Bob Yawger, director of the futures division at Mizuho Securities USA Inc., said by telephone from New York.

Higher costs for natural gas may boost electricity above year-earlier levels, Yawger said.

The NRC delayed its decision to conduct more inspections at the San Onofre plant, Victor Dricks, an agency spokesman in Arlington, Texas, said by telephone. The commission will hold a public meeting in Southern California regarding the inspections in mid-April, Dricks said.

Wholesale power prices in Southern California for July through September gained $1.50 to $55.50 a megawatt-hour as of 4:59 p.m. New York time, according to Tullett Prebon.

Futures based on California carbon allowances for December 2013 delivery rose 55 cents, or 3.9 percent, to settle at $14.60 a metric ton, according to Atlanta-based IntercontinentalExchange.

Two gas-fired, more emissions-intensive units at Edison Mission’s Huntington Beach power plant were returned to service last summer to because of the shutdowns at the San Onofre plant.

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