Product Update – Changes to Forecast Methodology

Ansergy will be making some changes to its models and reports over this weekend. These changes are intended to make the model more transparent and improve the forecast accuracy. Please continue to send us your thoughts for improvements.

New Forecast Items

Nukes – The “Served by Stack” item in the dispatch report will be disaggregated further by breaking our nuclear generation in a separate line.
Market Heat Rate vs Model Heat Rate – Several users have been confused about exactly how we compute heat rate. To provide additional clarity there are now 2 heat rates: Market Heat Rate and a second heat rate named “Model Heat Rate” defined as:

Market Heat Rate = Power Price / Hub Gas Price
Model Heat Rate = Power Price / (Hub Gas Price + Transportation adder),

where the current trans adder is $0.25 for all hubs. The model heat rate, by definition, will always be lower than the market heat rate.
TTC – Now TTC used in the forecast as will be presented along with forecasted transmission flows. This will provide more transparency when the forecast is affected by transmission constraints.

Forecast Sensitivities

Sensitivities will now be run as full model redispatches as opposed to the post process methodology used prior to now. That means each case will result in redispatch including altering transmission flows. The range of senarios will be 2500 MW higher and lower than the base case which represents approximately 1 to 2 standard deviations. The Sensitivty report will also include the following new items: Gas Burn, Coal Burn, CO2, NOX, and SOX emissions.

Snow-Based Hydro Energy Forecast for Current Water Year

In August Ansergy began forecast water year 2016 by taking an average of flows from the EL Nino years. That change resulted in about an 80% water year for 2016, a bold assumption given that the water year had not even started. In hindsight we would rather let the anomaly be proven by a dearth of snow and are consequently switching to a purely snow-driven forecast for the current water year. This change requires we re-run all of the history back to August 1 to insure the historical forecasts are in snyc with the current.

Going forward Ansergy will base its water supply volume forecasts off of the current anomaly but assume normal for the balance of the snow build year (until April 1). Previously we assumed a “normal” that used the average flows from El Nino years. In other words the current anomaly will be weighted against 100% normal for the balance of the water year versus around 80%. This change is bearish for the Ansergy term forecast but is more in line with what we know today, rather than what we think next June will look like. The two versions would have converged around Feb-Mar if this water year is dry; if it is not the current version would have missed widely from actuals.