Good Morning,
Watching this precip in the northwest reminds me of the “Love Me, Love me Not” game kids play with a daisy. Each petal pulled drives a new result, each day brings a new quantity of water. Yesterday the forecasts pulled back, today they had builds. And for those with just south exposure, apologies in advance for the MidC obsession but that’s the hub de jour, the one with the dynamic fundamentals …the other hubs are as interesting as watching outdoor paint dry on a rainy day.
Builds at MidC but note the week on week build at NP, now it’s getting wet. In fact, the storm really hasn’t abated much in intensity, it just has slipped further south. That rain in NP will have a one for one affect on hydro energy, positive correlated that is, and the hub is going to grow more bearish, albeit to much less of an extent as its northern cousin.
One for the records, Portland that is, and I guess we owe apologies to our buddies in PDX …. they may just be right, at least right about October, not on board with their NOV-DEC yet. Six wet inches of precip in the City of Dripping Roses, that is an event.
Take note of the rain in Sacto as well, an inch where last week the outlook was 0.13 inches, but the city of bizarre legislation doesn’t even come close to setting a record (10 year), it would need PDX type rain to do that.
Point of all this is that this is a wet event, but mostly to the south of the big production areas. Check out the change at Kalispell – 0.73 today versus 1.59″ last week. Maybe we won’t apologize to the NWRFC. The west side rivers are going to hydraulic capacity, little doubt about that, but how much impact will this have on the regulated east side? Not as much, we think, as the RFC thinks, but you can expect side flows to soar and those are unregulated and on the east side.
Our forecast has taken an ass-whipping post-STP:
Big haircuts up front but remarkably less effect in Nov; the Dec cuts are driven by both hydro and a drop in gas:
November doesn’t take as big a hit as it sits on fat part of the stack and can absorb the new water, unlike Dec. To wrap up this water commentary, we would be very nervous about any Mid-C length for BOM (check out those daily forecast prices in the teens – spring time prices) but if the market wants to pound nov into submission we’d be getting our fingers ready to load up on cheapness, but you won’t see that until next week as this rain needs to find its way to the turbines.
Loads
Northern California (includes BANC and TID + NP)
Not much you can say about a 100 MW change except to point out the 5000 MW delta between this year and last.
SP15 (includes LDWP and IID)
Same story at SP except the yoy delta is 10000 MW. BTW, this is about the day last year that Aliso sprung its leak, or more accurately, discovered its leak.
Loads up and will stay up as the desert “roasts” in the mid 90s.
Loads are flat but we are seeing a changing of the guard, the morning set the peak yesterday. Puget also realized a big rally, week on week:
And note the change in peak from evening to morning and note that peak was 600 MW higher yesterday than last week. Winter is coming … but not for a week or so, the rains are coming before winter is coming.
Weather Forecasts
AZ will enjoy a 3-5 degree positive anomaly for the foreseeable future and we will stay long there for that foreseeable future, unless you agree with us too much, then we will sell into any strength. Just not hot enough to work though the stack, but its not bearish like elsewhere in the WECC.
This week is toast, LA is well below normals, but next week there is a glimmer of heat with temperatures posting 90 handles for a day (Wed-Thurs) then back to another cold reality. Hard to like this hub with cool temperatures and delayed outages.
The warm weather is bearish, not warm enough to drive much AC load, but the cooling trend in the back should support stronger offpeak demand. Much of which will be offset by the season’s first precip which will drive up hydro production, perhaps doubling it for a few days.
Mid-C Composite Temperature and Precip
Beyond this week’s big storm holds the key to a possible MIdC recovery via much cooler lows. Though that net change in demand most likely will be washed away by this weeks increased hydro output. Also note hints of another storm system in the 11-15 day.
Hydro
We’ve said our piece on hydro already, but we have two more pieces to add to what was previously shared.
Bonneville (as in the dam) is seeing a sharp increase, week on week, and year on year, in outflows. This is just a precursor of what is coming but found in interesting to see more water already showing up.
The 10 Day forecast now includes yesterday’s STP and is starting to return to a normal looking plot. It will be interesting to see if they inch this forecast up some given the inching up of the total precip inches, perhaps inch back to where they were last Friday?
Generation
Not seeing the ISO kick in its outage season just yet, still behind previous years, but that should come very soon. Palo 3 is now down for its refuel.
The Los Esteros unit is a new out along with a few smaller units, but we think the ISO is due for another 3000 MW of units to be taken off line over the next several weeks.
Conclusions
- BOM
- Mid-C
- Fear the reaper, this one may experience some serious pain next week…………………SHORT
- SP15
- SHORT, nothing to like about SP15
- Palo
- Still long
- Mid-C
- Nov
- MidC – Flat atm, waiting for low teens in cash next week and the typical spill-over into the near-term…would buy then. More because we like where the hub sits in the Nov Stack.
- SP
- Short; the DC returns, loads will continue to fall, and who knows, it might rain in southern callifornia
- Palo
- Staying long here to cover the other shorts
- MidC – Flat atm, waiting for low teens in cash next week and the typical spill-over into the near-term…would buy then. More because we like where the hub sits in the Nov Stack.
- Q2
- Mid-C
- Short, if cash gets pounded next week the entire strip is going down
- Mid-C
