Whimper

Good Morning,

Winter is whimpering; it’s a beaten dog that’s finally relinquishing the bone; the WECC is looking weak, especially the Mid-C. That hub is facing new precip and declining loads, yet still, contains a lot of stored energy via low-level snow:

Today’s Snow Cover:

Two weeks ago:

The west side gave up its snow, but the rest of the Northwest remains covered, two months of cumulative precip sitting on the ground waiting for a fifty-degree day to melt. When that day comes, and it won’t for a while, the whimpering will be wails of pain, for length, though the whimper will be lessened by Friday’s robust sell-off of Feb MidC.

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Demand

Loads are sideways to down across the WECC with the Mid-C leading that downward charge; that hub is off 6000 MW from its two weeks ago peak, and there is nothing in today’s outlook which suggests that will change too much.

This week looks to be Winter’s last hurrah, but it won’t be a loud one or a very convincing one; both Portland and Seattle realize some freezing temperatures, but barely. The east-side has warmed up but not enough to rapidly melt the snow, more likely it will just slowly dissipate – too bad, would have generated some nice volatility.

California’s forecast doesn’t even warrant a whimper; a stifled yawn would be more appropriate.

The WECC Interior has warmed up considerably and will find itself a lot longer than it was a week ago; the outlook for the next 21 days is bearish.

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Hydro

Love these dashboards; can write this blog in half the time! Both NP and MidC are going to get, and stay, wet for the next few weeks; the Mid-C is poised to soak up 1.5″ and soggy NP will best that with 2.5″, like Nocal needs more rain! More impressive than the 1.5″ at Mid-C are the inch plus in both Kalispell and Spokane; seems all of the upper Columbia will get a solid douching.

Water supply is picking up, the RFC’s that is; note we are now using Apr-Sep, exclusively; their Jan-Jul is broke, in our opinion. The two forecasts (Ansergy and NWRFC) are mostly in sync, though the latter is more bullish at TDA than we, the delta isn’t material. Most likely the Feb 5 number used in the Feb flood control order will be about the same as Jan’s – 94%. Typically that should kick out a decent draft at Coulee, deeper than the miserly 1256′ suggested in last months:

Fortunately, we have several model years where the TDA was the same as this year; using those past years as a basis for predicting this year would suggest an April 30 target between 1239′ and 1261′. No clue why there is such a wide spread, it is what it is.  It does suggest that the Corps could do drum gate work, should it be so inclined. Before leaving this table, note the number of years 100% or higher – Three! 3 out of 18, or 17%. I always thought normal meant normal, I guess with water normal means very wet, and around 94% means normal, but let’s not guess, let’s use math.

The average draft over the last 19 years was 1254.43, but the average TDA as of Feb was 90%, while Coulee’s average water supply was 93%. The median was higher, at 94%, which suggests that it can get a lot dryer than it can wet.

And wetter it shall get, for the next ten days, per the RFC. Every day for the next ten, the folks in Portland have added 500-800 aMW to their forecast. Lay that onto your stack model, after backing off a few thousand MW of demand, and you’ll get a collective whimper.

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TransGen

Not a lot to report here.

NP has seen some strong wind; the ISO outages remain lame, all the nukes are running…whimper. Want a bone, read on …

Three new gas units are offline, chew on that as there isn’t anything else to chew on, from the long side.

Which may be why the ISO is relatively weak, especially at PSEI and PACW, both of which saw their HAs materially under the DAs, barely clearing $20 which doesn’t pay for the gas.

Everyone is selling; the lines are mostly full, even ZP is sending its energy into NP. Speaking of bones, we need to take a small one away from you March dogs:

BPA is doing work on the AC; there are a few days where the line is derated down to 1000 MW – ouch – whimper.

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Conclusions

We’ve just about talked ourselves into shorting, but we’re already short at MidC, let’s see how the market behaved on Friday:

Mr. Market spanked MidC very severely on Friday; as it should have.

• Feb
  • 
    • We see no reason to change our position for what is now BOM
      • Short Mid-C
      • Long SP
• Mar
  • 
    • If you hate BOM how can you like Prompt – we don’t
      • Short Mid-C
      • Short Palo on its recent runup
      • Long SP – hoping for some big outages, maybe some CDDs, can’t get any worse than it is now
• Apr
  • 
    • More water is coming, we think there could be a bigger draft (than Jan’s 1256′) and the April MidC hasn’t moved much
      • SHORT MidC
      • Long SP, more to hedge, but still, think its got decent upside.
• Q2
  • 
    • SP has made a dramatic run; a while back we suggested it was one of the Big Three – those three trades you need to nail each year ..we were right; now it is less so, most of the juice is gone, but the trend is friend, so we’d stay long, but nervous length
  • MidC
    • 
      • The market has loved this trade, too; but we wouldn’t be worried length, we’d be “wet your pants” length, and not in the good way.
        • SHORT