Good Morning,
Some days are like that; you’d like to catch a pithy title, one that captures the essence of the day; when it’s “Blog Fodder” you better pop a couple of NoDozes (they still make those?) as there isn’t a strong theme today, just lots of fodder for the blogger.
Markets
Gas is drifting lower in the pre-market as we write. Just another day in natty. The ISO could care less what natty does; it posted a fairly robust HA day yesterday:
Most hubs were spikey, and the NP and SP both cleared a few hours with $70 handles; interesting that PacW and PSEI don’t blow out in the same hours; we’d love to tear into the ISO’s model as it appears aberrant, at least to us.
Ten Best HA Virtuals
Just for fun, not even sure you can trade this (spec), but the above table returns the weekly average $/MWh by hour and BA. Pac West could have cleared $59.67 on hour 7 by selling the HA; though the reality is that had they tried they probably would have crushed hour 7. This is the inherent flaw in some of the studies that have been bandied about (SCL) suggesting that joining the EIM is the ticket to millions. In reality, your participation is the ticket to not getting what was posted. Call it the Uncertainty Principle – the act of participating insures you’ll get just the opposite result. Heisenberg (not the meth dude) noted the same in his quantum mechanics work (hah! you never thought I’d work in physics into this blog, did you?). Recall the title – FODDER.
Best DA markets
AZPS led the charge for the Day ahead on HE06, clearing a respectable $18.08 over the HA market; only because the HA market imploded meaning AZPS sold its length in that market.
Demand
The only thing that jumped out were the rallies at NP, setting two-week highs yesterday. The Northwest remains the Hub de Jour setting a very high bar for next year, and not melting any of that low-level snow.
The WECC interior is bullish, nearly every day in the forecast is both colder than yesterday and below normal. Too bad the load centers don’t sport the same.
California does tease with a couple of days (weekend, lol) of below normal then it’s back to above climo; pretty much been the story of the winter in the Golden Shower State.
The northwest interior, like the southern interior, is cold, but there are signs of moderation on the west-side. Overall, we see the current outlook for Mid-C demand as modestly bullish.
This is a new Dashboard Report we made; returns the six hubs hourly load forecast (Ansergy’s). A few spikes next Monday-Tuesday but mostly just sideways.
Hydro
We weren’t kidding when we called California the Golden Shower State – they’re poised to get douched in a big way, once again. Lettuce should be cheap this summer, so might power in May-June when the melt occurs; we haven’t seen a huge and extended CA runoff for a while, this one is going to be big.
The news at Mid-C is one of no rain; there is a sizeable event over the next couple of days, then it goes bone dry in the interior; Kalispell has one event, not sure where that comes from since it didn’t pass over Spokane, but this is the most bullish precip outlook at Mid-C in weeks.
Sorry about not sending an STP update last night, was distracted with other things – like moving. We’re selling our house and renting, sold all our equities, fear the Trump factor. See what I mean about Fodder?
The STP update was uneventful, anyways, so we made a dashboard for these forecast types.
Northwest rivers remain robust and will continue to put downward pressure on prices, with loads slipping so shall the Mid-C cash markets; but the hub is mired in the baseload gas units, and we just don’t see a lot of price volatility. We do note the spill at PRD, and both LIB and ALF have cut regulated flows, apparently trying to ease the situation at Coulee.
The downside looks like there is a better chance of vol than upside; we think low-level snow is the key to pushing the Mid-C out of its current comfortable position, but it’s just not warm enough, yet. We’ll be watching those Spokane forecasts and looking for lows in the 40s; then the fireworks may start.
TransGen
The Mid-C wind has vanished; we even checked BPA’s site to see if our scrape broke, it hadn’t, the only thing that broke was Mother Nature, she refused to blow leaving the blades standing limply still. Our forecast did pick up some wind at SP towards the middle of next week, not that the hub will need it, a lot of gas is coming back to the ISO:
More so at NP than SP; NP was buried in a plethora of returning units, and now outage factor is not a factor.
Mid-C is selling more energy to CA, but Powerex is selling more intot Mid-C, everyone wants to puke, yet the real pain-inducing puking hasn’t even begun yet. This market, the Mid-C, is poised for a cataclysmic meltdown, once the melt starts sending water downstream. But not just yet, we need warmer weather. When it comes, you better be short everything!
Conclusions
Our market price vendor is having some issues, and we don’t have fresh market prices (should be resolved today) so we can’t post trade rank. That said, we see no reason to liquidate Jan length, unless the market bid it up; we still fear the melt and would be big short somewhere between Feb-Apr (at Mid-C). We know Spring maintenance is about to be sprung upon us and like hedging northwest shorts against SP length; in sum, we’ll keep what we have until we see what you folks have done to those positions, then we’ll most likely fade all of you.