Good Afternoon,
I wanted to hold off on posting this morning because it would have been the same post you’ve read the last few days…. alas, it’s still pretty much the same post …. wet and warmish, though its a bit less wet and a lot less warm:
Mid-C Composite Weather Forecast
The star of this forecast is Temperature – not Precipitation – as the composite forecast for Mid-C is dropping back to normals from the tropical winter highs recently realized. The high of 46 (Jan 26th) is replaced with average temps in the mid 30s and you should expect peak load bumps in the 2000-3000 mw range. That is kind of bullish but is pretty much washed away by the next seven days of above normal precip, which is followed by a spat of dry days, something not observed in the 15 day outlook for 15 days or so.
Another bullish factor is the northwest wind no longer blows:
Don’t bank on this “calm before the storm” lasting too long, the storm is coming and so are the winds. The DC is back and the lines are filling up rendering Mid-C less bearish and the ISO less bullish, though we don’t see much change in prices.
This is about as bullish as transmission exports out of the Mid-C will get as BC has backed off, ironically, with the return of the DC. That said there is about 2000 MW more energy leaving the Mid-C this week than last and the mirror image can be seen in the ISO Imports.
Casting a long, and wide, shadow over these hints of northwest bullishness is the ever-increasing water supply outlook. This week’s Water Supply forecasts are up, as to be expected, and will rise again next week just in time to be deployed by the COE in setting flood control drafts:
These water supply forecasts are higher than what was used last month and will be higher still after the latest storm lays down another couple feet of snow. One can/must expect Coulee to be asked to draft another 5-10 feet in April which will further batter that battered month.
Given what I see today I’d not enter Feb short, but I wouldn’t be too long either as the price is probably at value. If you make anything in Feb, from either side, it will be a result of news that is not yet public. The Q2, and the Q3, on the other hand should, remain short as the outlook is more bearish today than it was last week. That sentiment shall remain the same until the price plummets further or we see a string of dry days or we see some unseasonably warm weather which triggers the first freshet. We don’t see any of that today and we can only stay short, maybe shorter, given today’s facts.
Mike