STP Update – Nov 9, 2015

Good Afternoon,

The NWRFC has completed it’s weekly forecast of northwest hydro flows.  The following plot summarizes the last five RFC STP forecasts.  By comparing the current week’s forecast to the previous four forecasts we can draw inferences regarding the validity of the forecast and its possible impact on the market.


Pretty chart, but what does it tell us?  For starters, our prediction that a cut in BOM has come true, though the change is small.  We also were hammering the RFC about shaping more water in Nov than Dec; as we can see from above they were listening and are beginning the process of backing Nov down and ratcheting up Dec.

But its still not right as we’d be more satisfied seeing the block of hydro energy shaped more closely with loads.  One other consideration is draft, which begins in February.  The current forecast shows Nov 1300 aMW over Feb, something we find absurd and leads us to believe both Jan and Feb will be subject to further up-revisions and BOM to be walked down further.

Another way to test validity is compare the current water year to prior years:


This most recent forecast is now looking as it should – lower in 2015 than the previous three years – because 2015 reservoir levels are lower.  A final test is to examine the daily energy, which is my favorite view:


This illustrates our issue with the overall shape of energy – the downward sloping shape of energy – we believe it should be upward sloping, more like our demand forecast for Mid-C:


Griping aside, the forecast is what it is, until it isn’t.  I believe we will continue to see water shaved out of Nov and pushed into Dec-Feb with the caveat being we don’t know weather.  If it rains like hades over the next two weeks maybe that got it right, but doubt it.