Mike’s Take – Oct 26

Good Morning,

I am seeing a slight uptick in NW loads:


Comparing week on week, Saturday to Saturday, there is a 500 aMW bump; looking two weeks back the increase is 700 aMW; since this is just a subset of the total population we can project that the increase to the Mid-C is closer to 1000, perhaps 1500 aMW.  Given that temperatures have been notably cooler we can also attribute all of this load change to HDDs.

California remains mired in the inevitable slide into bearish winter conditions though the LA Basin is clinging to summer like temps, though those are soon to wane:


Loads have fallen precipitously,


yet there is more shedding to be had at both NP and SP:

001_DemFCnp 001_DemFCsp

Note that the NP trough is short lived as it realizes a slight bump from heating loads while SP realizes no change until April.  The Mid-C, on the other hand, is ready to burn up the electrons to meet just normal winter demand:


But forget loads, that isn’t the story of the day … .the story of the day is about water, water that was there last week, gone this week.  Oh my, I was right, the RFC has begun shearing November back to reality:


Don’t bother cleaning your glasses that big black line, standing so tall about the blues, is the STP forecast from last week.  Yes, that is a 2,000 MW cut from the STP for the same days.  Were I to venture a guess, and I have been venturing this guess for the last six weeks, those forecast cuts in the RFC 10 day will make their way into today’s STP.  Where BPA’s slice customers (and BPA) thought themselves long perhaps tonight they will find themselves less long, perhaps even short, and to the bid they will march.  Mark me as more bullish Nov than I was last week.

Adding tinder to the fire, reservoirs are still below normal:


Though by looking at current conditions, GCL for example, you might think things were just fine:


BPA is filling which is never bullish but they are still a few feet behind where they have been in the last five years.    Renewable s also cast a slightly bullish outlook to the story:


Though wind and solar can change overnight and wind probably will given the recent stormy west coast weather.  It’s still an El Nino year and the RFC apparently concurs as they are modeling a 90% water year for TDA:


We agree with them (current Nino 34 is 2.5 vs same week in 1997 of 2.6 …its gonna be a big one) though Ansergy may restate its hydro forecast for WY16 this week.  In early September we began forecasting the new water year using El Nino years but in hindsight we would rather let the water year play out through our model and will be switching back to a pure snow-driven forecast.  More on that later this week.

Two nukes are down (one in PV, one in NP) and scheduled to come back in Nov:


As for the market, and my sentiments, I’ll hold off until tomorrow post-STP update.

Enjoy your day,