Good Morning,
Let’s cut to the chase, only thing fundamentally relevant in the WECC was the six inches of PRE heading towards the Mid-C. Emphasis on “was”, we’re seeing a slightly different tale today:
It’s still wet, just not as wet, but you wouldn’t guess that by looking at the RFC’s 10 Day:
You can circle last Friday on your calendar and label it “Biggest RFC Change of the Year”. Our friends down there have generously jacked MidC flows an outstanding equivalent of 5000 aMW worth of energy. Wow, and Ouch. The above is the Friday forecast, its way too early for the Monday forecast, that will post in a few hours, but watch it when it does (Click Here to see it).
Back to the post’s title – Head Fake?. The current precip outlook is much lower than Friday:
Off 50% from Friday though still over twice as high as normal but we don’t think that is enough rain to justify the bold, and probably foolish, RFC 10 Day numbers. That said, the table above reflects the outlook for Monday forward and Friday’s included this wet weekend. It was wet and west side rivers are responding to that wetness:
We showed the Willamette on Friday:
It rallied even more over the weekend but our bold, and probably foolish, prediction of 50kcfs is out of line given the latest outlooks. It is not just the Mid-C that is getting longer, BC Hydro is also seeing its smaller projects become the beneficiary of natural river flow rallies:
But we are more interested in rain if it will cause a catastrophic affect on Mid-C, like push the hub into the low teens, and we don’t see that coming without Friday-type rain and that is just not there, take Portland as another case in point:
Sorry, just not there; where PDX was looking at four inches now it will be lucky to realize two. Boise, however, has a build over Friday
In conclusion, the sky is not falling, nor is the rain falling as hard as it was on Friday, nor will MidC get battered into the teens, nor will the RFC’s forecast hold, it will be restated downwards probably 3000 MW.
Loads
Everywhere is up, week on week, but that too shall pass as the temperature outlook everywhere, except the Mid-C, takes a turn to the bearish side.
Temperature Forecasts
Mid-C Minimums
Still the hub persists in above normal which only means current loads are the status quo for the next week, but what caught our eye was the drop below normal in the 11-15. It is short-lived but those kinds of temps are worth 3000 MW of incremental peak. Too bad it is too far out in the forecast to bank on, and too bad it only lasts a couple of days, but hey, after the abysmally bearish weather of late it’s something to cheer over.
The Bay Area heat wave is over, below normal dominates this week’s outlook and NP’s loads will slide further. There is a silver lining, however, and we need to look a bit further east to find it:
The outlook is showing several days below normal (beyond 7 day) which bodes well for both nat gas core load and for NP off-peak.
Well, maybe not “BURRR”, but it’s not 95 either. Loads in SP are going nowhere but down.
Nothing to get overly worked up over but the deserts are above normal though that is increasingly becoming a bearish metric. Still loads will hold their own for the next week then we see some volatility as the models are undecided if it is hot or cold, though increasingly doesn’t matter, it’s too close to winter and warm is bearish, cold is bullish.
Generation
More outages are sprouting in the ISO like mushrooms after a rain:
Total outages are up 3000 MW week on week but still lag from the levels seen in the last four years. This trend of seeing an increase obviously will continue for at least another 3000 MW, maybe more.
Several new gas units are offline, all in SP15, most notably Etiwanda 3, Watson 3, and Los Medanos. Good thing, SP will need all the help it can get.
The NRC hasn’t updated its status report as of this writing but we believe PV3 has been taken down for refueling, check on that later.
The Renewable outlook is just normal for both the northwest and the ISO
Transmission
The news for this group is the cuts to the AC which comes on top of the DC being taken completely offline:
Like the Mid-C needs more bad news, c’est la vie. SP pulled energy out of ZP yesterday, that was somewhat surprising, probably from losing the gas units (see above):
And BC keeps on buying, not because they need the energy, just because Mid-C is reasonably priced, if not cheap:
Conclusions
- BOM
- Mid-C – we’d be inclined to buy back our shorts given the cuts in precip outlook. Another play would be to stay short through today’s STP and hope the RFC keeps the new water in both today’s 10 Day and the STP, then hope the northwest utes whack some more bids. Watch for the next Z release and see if the drying trend continues, or reverts back to wetter. If things stand as they are as of this morning we’d cover all the shorts with, hopefully, dumb offers.
- SP15 – stay short, weather is cooling though load loss is offset by outages so this short will be lucky to be a single, more likely a sac fly
- Palo – staying long as long as weather stays above normal and want to see market reaction to the nuke coming off and expect more thermal offline every week
- Nov
- Mid-C buying back those shorts
- SP – staying short
- Palo -staying long