Good Morning,
We sought, in vain, to find something to like about WECC length; at best we like something out 10-15 days but that is just wishing and hoping at this point; it looks mean out there.
We already talked about the pounding the cals have been taking this week, now the pounding is happening in the front, call it contagion, everywhere is mean and getting meaner. Today’s post will be about finding the silver lining in the dark WECC cloud, but at best we’ll find a lighter shade of dark gray.
Markets
EIM provides a sliver of silver hope as that irrational/dysfunctional market posted some 1k ticks this week, even one yesterday:
$1000, wouldn’t it be great if it actually reflected the state of the market? If you are looking for the good news about your long positions in BOM, even DEC, stop reading and go back to the ICE screen and lift some more offers, they are all really cheap, and getting cheaper, but the rest of this post probably won’t comfort you over the weekend.
Day Ahead LMPs were up a $3.00 week on week, that is good, right?
Like the EIM, the disconnect between LMP and reality (spot) is big.
Can’t call it carbon tax, not $16.00, and it’s not carbon + losses, it is just dysfunction, just a mean market that likes to tease.
Gas isn’t dysfunctional, it is just mean:
Compare the settles to last year, it is a brave new bear market where only the brave bears are having a good time. The good news is the IOUs are printing cash and praying they aren’t hauled into a rate case.
Term market is a mirror of gas:
Out of 64 monthly markets we post in this report there is only one that is up …. drumroll please ….. March Palo Light Load … up $0.20. Who has that in their book, besides our friends at Salt River?
The Qs are equally gruesome, out of 84 Qs only 5 are up, and those are all in 2018. It is a mean market and may get meaner. We’re talking really mean, really.
Demand
SP is sporting a sweet 2k rally, week on week, and NP and Palo are up too, but the Mid-C slipped 300 MW off of ridiculously lovely northwest weather – you’d be thrilled to get a day like yesterday in September but its Nov 10. That too shall pass:
Mid-C Composite Temperatures & Precip Outlook
Three circles, must be important, and it just might be important. Circle One, in the temps, shows the first days of below normal in eight weeks; Seattle realizes low 30s, flirts with a 20 handle, but it is too far out to count on but our eyes will be watching. Circle Two, a surprise storm that wasn’t there a few days ago and delivers a sizeable sprinkling of rain and snow at hte higher elevations. Circle Three, a very large storm that has refused to go away, we pointed it out a week ago, it is still there, it hasn’t diminished, it will be big and will arrive along with the cooler temperatures … call that snow and call it bearish. Still far enough out that mother nature may just be playing with us. Sadly these three circles are heading in opposite market direction – the cold is bullish the wet is bearish. The near-term wet is going to happen, not too sure about the back-end wet or cold.
Both NP and Mid_C hub level precip (10 day sum) have rallied and are now above normal:
Recall the numbers during the Great Deluge, those were in the high 2s and low 3s, so this isn’t in the same ballpark, but the one behind could be. Plus rain is cumulative, and now that the ground is saturated, new precip is sticky and will be hard to work itself out of the system, but more on that in the hydro section.
Nothing there, boring forecast, a reversion to the mean which means some a/c load gets shed but not cold enough to crank the heaters.
Red circle, as in ‘danger ahead’, LA has had a wonderful fall but looks to be winding down, heading towards cooler temperatures and loads will come off, but we bet we’ll still some a few 1k ticks in the EIM, especially if any of those BAs dare to try to buy from that market.
Just like Burbank, sliding out of the lingering heat and into normal weather; the good news is loads are about done sliding and the hub will find its floor, soon.
Hydro
You want mean? Here is mean, complements of the RFC:
Our friends in Portland are trying to make the RFC Great Again by jacking next week’s hydro energy output another 1k. Ouch, that is mean, especially given that the market has pounded BOM into the teens. This plot portends for a scary (mean) STP next Monday.
We already pointed out the hub-level precip at NP and Mid-C rallied from our Wednesday post, let’s examine the cities:
Everywhere is above normal but it is the 1.4″ at Kalispell that caught our eye; all of that will be snow north of 5k elevations and the snow gauges will gap and the RFC’s water supply outlook will go up, and so will ours and everyone’s outlook for Q1-3 will go down, will get meaner, as if it could get meaner than where it sits today.
Two things to talk to: First, the discharge at Brilliant is big, most of this is coming from the Libby draft, and is forcing Arrow to back off and refill :
Refilling in front of big storms, this is called a deferral in accounting-speak, and BPA is deferring today’s pain into some future market, but all that rain only means more meanness and at some point deferring is not an option, like around Jan 15 when the first Flood Control is released.
Oh Oh, more red circles. PRD posts a mind-numbing 180k discharge, that is like the numbers you see in June. But we told you we would find some silver linings ..err gray linings ..and the other circle is the Clark Fork backing off, though that gray turns to black with the big rain heading towards the Clark.
Generation
ISO Outages – New
Total ISO outages dropped 1K, so black is the new gray, and the market just gets meaner. This new storm system arrives via changes in air pressure, aka wind, and so our forecast for northwest wind energy is rallying somewhat:
Bear in mind some of those actuals (to the left of the spikes) are the result of economic dispatch by BPA, but not all, it has been calm in the northwest of late, but by the looks of the chart that too shall change.
Same with NP, wind energy will rally from the more recent levels, not real big, but in this market every bearish MW only creates more pain as the hubs desperately cling to gas on the margin:
Every now and then we like to look at the Balancing Authorities actual generation, why not? Since the EIA started publishing this data we have become enthralled with it, and now they are talking about forcing the BAs to publish generation by fuel type. This would be great as we could impute a lot of interesting things, like actual hydro energy, unit outages, etc.
Ansergy was asked this week to send emails to the powers that be to insist the BAs post this data (fuel-type generation), we encourage you to send emails to them too:
Please send comments, preferably by email, to:
DOE Desk Officer
[email protected]
Office of Information and Regulatory Affairs
Office of Management and Budget
New Executive Office Building
Room 10102, 735 17th Street NW
Washington, DC 20503
With a copy to:
Rebecca A. Peterson
[email protected]
U. S. Energy Information Administration
Mail Stop EI-23, Forrestal Building
1000 Independence Avenue SW
Washington, DC 20585
We digress, let’s look at some BA gen data:
Mid_C BAs
Two circles – first is BPA, they have cut 1600 MW of gen from two weeks ago …silver lining? The other circle highlights the 50% rally for both Idaho and Tacoma; Idaho is probably more load driven but Tacoma reflects its large hdyro energy output from the Cowlitz … have you been seeing them bid whacking lately?
PNM is off 800 MW, we are guessing a major coal unit was taken off line. Related to the Gen is the BA interchange, look at the flows from PNM to El Paso:
That probably gives you the date and hour the plant came off line. We see something similar in Palo:
APS is generating 2000 more aMW today than it was two weeks ago, despite loads having come off about 3000 MWs at the hub; aslo note Salt River and Tucson are off close to 2000 MW.
If you are trying to establish a date:time for an outage just look at PacEast’s interchange with APS and you have a pretty idea when they took down one of the Utah plants.
Final gen report – Mid-C Noms:
Our job was to find silver linings, we found one, albeit a small one. Avista fired up its peaker yesterday. Read into that whatever you like, we just read random noise coming from a mean market.
Conclusions
- BOM
- Mid-C – we smarted off on Wed and said “wouldn’t it be great to be long Mid_C?” Well it is not so great, the position is an embarassment and with a tidal wave of bearishness heading towards the hub we are puking like a 16 year old on Tequila night. Short
- Everywhere else – short
- DEC
- MidC – we love that hint of cold out in the 15-21 day; but alas, it is just a hint. We will be watching and if it holds over the weekend wil lay some on; for now …Flat
- Q1-Q3
- MidC – in front of two storms, one for sure, the other increasingly likely, we will sell.