Good Morning,
Post “storm of the century” it is worth looking back and seeing how things actually played out, but first we think this picture really says it all:
OK, maybe not. There were some power outages, it rained like the beejezus, but California got more precip than the northwest, and someone’s chair fell over.
Precip Recap
Don’t bother rubbing that sleep from your eyes, you are reading Lake Tahoe correctly, 10.12 inches of rain over the last week, all of it coming in the last three days and a whopping five inches yesterday. The Donner party could have floated over the Sierra’s.
Seattle and Portland received five and four, respectively, which was in line with the forecasts a week ahead of the event. The total precip in Kalispell came in at two and half inches and some of that was snow:
SNOW – Massive anomalies, but its early, an inch would be above normal so don’t go hitting those Q2 bids just yet. As we said last week, this water year has just begun but no one can, or should, dispute the fact it is starting out bearish.
NOTE: this image comes from Ansergy’s weather image tool we added over the weekend. You can view almost a year of different images in a movie, check it out at Weather Images.
Hub Outlooks
Mid-Columbia
What is most remarkable about this storm is its persistence; next week brings even more rain. But with that rain comes very mild temperatures though next week has hints of cooling, but that is all it is …hints…not cold, though loads will rally off of that, they need to, loads are mired in calendar year lows:
Yawn … down 27 mw, that would be like someone didn’t toast their bread yesterday, but that will change with the cooler temperatures:
Those cooler temperatures are kicking out another 2000-3000 MW of demand, in our model, then it’s on to the long climb into winter loads. Prices kind of follow demand:
The lows of today are replaced by a mid 20s that extend out pretty much through November, given normal temperatures. The model, and the RFC, have this plethora of water working itself out of the system by week’s end, though we are not so sure it will be that soon.
RFC 10 Day
Today should be an interesting STP now that the water is on the ground, in the rivers, more on the way …what will the RFC do with its Nov-Dec forecasts? if the 10 day is a tell it tells us nothing, the 10 day has been stable. River flows have not been stable, let’s start with BC Hydro:
All of the non-storage sites are way up, rallying from 2X to 5X, while the regulated sites are down in response to too much water in Mid-C.
Every station but Horse is up but not “gas off the margin” up. Unregulated is up, too:
At one point we suggested the Wilamette could hit 50k cfs, we would like to retract that statement, it may hit 30k but not much more. Our takeaway is that nothing is up that much and with a return to normal the MidC will bounce back to the mid 20s this week.
With loads down and water up every ute is long and it is in every ute’s interest to support prices, which seems to be what they are doing. Check out PRD spilling today:
Chelan takes one for the team and dumps its water, apparently they couldn’t find any bids. Powerex found a few:
We’re surpised to see them selling into such a weak market but with their run of river running hard, and loads down, maybe they think things could get even worse?
Compare today’s noms with a year ago, or any of the last three years for that matter. Not surprised given low loads and high hydro.
NP15
Loads are weak but will rally later this week:
Off 1000 MW, week on week, but with modest heat hitting the bay area those negative anomalies will flip to positive:
San Jose, CA
San Jose hits highs of 87 but those are short-lived and will return, next week to normal which means no A/C loads. This certainly must mean summer’s last hurrah is this week and with the hub awash in water we don’t see many fireworks.
BC enjoyed 2x-5x bumps in its streams, theYuba and Merced are sporting 10X rallies. Much of this 10″ of rain will be caught in the reservoirs but some of it is being flipped to energy and just bodes poorly for NP BOM. The A/C line is helping things, however, as it is derated and keeping about 1000 MW of cheap northwest energy out of the Golden State:
And it gets worse, at least for a day, as BPA cuts TTC on the Thursday and Friday :
Those cuts come after the heat and are only 200 MW but it is what it is and is modestly bullish, the hub needs it as evidenced by current gas noms versus the last three years, same date:
There are a few new outages inside NP:
But there are many more to come, perhaps those will be accelerated with the hub’s new found hydro largesse? It will also need those outages as the next month will see loads drop even more:
SP15
Loads are weak here, too:
Off 3000 MW, but those drops will reverse themselves with LA returning to the mid to high 90s this week:
Wow, that is hot for this late in the year, though it is of short duration, and we show loads rallying hard:
7000 MW rally by mid-week, which should put some upward pressure on Socal gas, which took a massive dive on Friday:
Massive in like $0.46/mmbtu …ouch. We’d expect to see that drop completely reverse itself today or tomorow. A further bullish development is the extension of the DC outage through the end of the month:
We say extension because we are compaing BPA’s TTC from a week ago to today, and that pushed the outage out to the 30th, five days more than where it was last week.
There are a few more outages trickling in, we supsect come November it will be a flood of outages, for now, just a trickle.
Net, net net, we show prices rallying, but just not that much. What we see is firmer prices this week across some of the shoulder hours but the hub struggles to break into the higher heat rates:
Palo Verde
Loads slid some week on week, but should hold through this week
Temperatures remain above normal :
Next week, however, is a different story as the postive anomalies drift negative and loads will take a pounding.
Conclusions
- BOM
- Mid-C
- The market ticked up on Friday and we concur; the Mid-C survived its storm and it too will rebuild……. long
- SP
- We’re long off of this week’s heat, the extended DC cuts, and the impending outages ….. and the expected spot gas rally
- Palo
- We’ll sell off our length here and go into a short position to cover the other longs; the market has rallied, the heat is dissipating as is our sentiment towards BOM PV.
- Mid-C