Good Morning,
A big storm is teed up to strike the MidC and drive that battered hub to its bloody knees. As if there isn’t enough snow:
This latest ‘salt to the long’s wounds’ won’t affect March cash, all it does is ensure a few extra single digit days sometime in May or June, maybe even in July. More on all of that in the hydro section.
Demand
Not a lot to say about demand, the red rectangle in the summary report says it best – down.
Some real CDDs in the southwest, Palo boasts 80+ for a string of days, even Vegas jumps in with a nod towards summer.
Forget Vegas and Phoenix, check out the high 80s in Burbank. For those whining about negative on peak prices, this forecast may be just the cure for your malaise. Toss in two weeks of dry, and there just may be hope for SP, maybe.
MidC also has some red circles, but these are all HDD days, don’t even think about CDD in the northwest. BPA is making the sign of the cross across every employee every day the forecast stays cool, otherwise they’d be in a devil of a mess with an early runoff. The feds lucked out, it stayed cool, and now they’ll easily get to their drum gate targets. Easier to see this point in the following dashboard:
Lows rally in the interior while the highs remain below normal. But bear in mind, lows above freezing mean melt and we suspect natural river flows are going to start their slow, and long, rally towards eventual runoff. This is the dream scenario for BPA, slow and measured melt versus 75 degrees in Kalispell and a potential flood problem downstream.
Hydro
We’ve stolen some of our hydro thunder above, but there is more to share, let’s start sharing.
Our title is “Deluge, ” and the above dashboard is why we chose it. The MidC is set to get a significant amount of precip across the entire hub; Spokane 1.5″, Kalispell 1.2″; both well above normal. This system is timely as it comes in front of the COE’s March flood control. How can they keep their silly 1252′ target at Coulee? How especially given many of them live in Portland.
The fair state of California is poised for some fair weather; there taint a storm to be seen over the next twenty-one days. Precip-driven flows will fall but for most rivers that drop will be replaced by snow melt. Don’t expect a lot of relief from the impressive amounts of hydro energy the state has generated this winter. There may be a slight back down, not much. Respite comes from those CDDs, at least for the next few months, by then some projects should be below hydraulic capacity until that happens the only saving grace for outright length is outright heat.
Northwest water supply forecasts (RFC) remain well above the values used in the Feb flood control draft; the RFC’s Q10 should pick up this storm and jack them up even higher. How Coulee cannot get drafted to 1230s is a question we have not the answer for, aside from conspiracy theories which we shan’t entertain.
Just for fun, let’s look at snow. We tagged the basins that are behind 2014, the last big water year; only a few were tagged, and there may be none tagged ten days from now. Most of the big anomalies (between 17 and 14) are on the Snake, but in this latest event, the big water is heading towards the Upper Columbia.
California is an easier table to annotate; just highlight 2017 and then highlight every year in the past. Massive amounts of snow in the Sierras all of which suggests robust melt for a long time to come.
Flows at BON are off, but flows at PRD and GCL are up. The Snake is starting to pick up steam while the Spokane retrogrades off of its very cold weather of late. We expect all tributaries to rally hard this week, though there is always that lag between weather and flows, so perhaps we don’t see any noticeable changes until the weekend.
Coulee has backed off from Friday-Saturday. Still, it is above the 14-day average. Take a look at those spills at Priest, averaged almost 50kcfs for a few days. I guess Chelan wants gas on the margin, too?
The River Whipsaw Center has been busy adding water, taking water away, then adding it back. Its latest thoughts seem to suggest another big bump for today’s STP – oh boy.
TransGen
We’ll lead this group with Friday’s April derate on the AC – cutting TTC to 2200 MW. Oh my, wouldn’t want to be long there.
Actual flows are jumpy; the AC and DC barely flowed for a few hours; BC bought big time; and energy went south out of ZP, all of which is driven by an abysmally dismally abhorrent HA market in the ISO. I wonder what those CA ratepayers think when they pay their $300/mwh power bills and see the ISO paying $-20/mwh for power? Now that’s a head scratcher.
SP took some units offline for planned maintenance; contrast current levels with Y3 and Y4; might see some respite from planned outages in the hub; be a good time to take those units down given all the hydro.
Lots of idle capacity on the pipelines, the generators have pulled out the cribbage boards across the WECC. The only thing keeping them awake is the fear of getting fired.
Conclusions
- March
- The market hates SP, at least the HL, and note the rally in the LL. We’ll fade that, given CDDs in LA, all of which impact HL
- SP Long On: OFF
- Palo has come back to life, nice bids, and now is trading flat to SP; will fade that, too
- Long SP: PV on peak
- MidC remains mired in a world of hurt, but we see no respite no matter how many times the BPA employees make the sign of the cross
- Long SP: MC-HL
- The market hates SP, at least the HL, and note the rally in the LL. We’ll fade that, given CDDs in LA, all of which impact HL
- April
- Need to drill down on that SP on/off
- Wow, March and April are flat; fade
- Long SP on: off for both
- Wow, March and April are flat; fade
- Need to drill down on that SP on/off
- MidC
- We already feared the melting of the low-level snow; now we fear the AC derate, and we fear this new storm, but prices are pretty low, at least the off peak is pretty cheap. Our stack suggests April will need a serious bearish turn to drive coal off the margin:
- Like about 2000 MWs of either lost demand or increased hydro (or AC derate); all three of those are in the realm of reality. To be fair to the long side, the stack is at a sharp bullish inflection point too. Please tell me what those bullish fundamentals are, they escape me at the moment.
- Long SP: MC spread (HL)
- Like about 2000 MWs of either lost demand or increased hydro (or AC derate); all three of those are in the realm of reality. To be fair to the long side, the stack is at a sharp bullish inflection point too. Please tell me what those bullish fundamentals are, they escape me at the moment.
- We already feared the melting of the low-level snow; now we fear the AC derate, and we fear this new storm, but prices are pretty low, at least the off peak is pretty cheap. Our stack suggests April will need a serious bearish turn to drive coal off the margin:
- May
- if we’re seeing 80s in March, and I can buy the On: Off for next to free, I’ll be long that
- SP long on: off
- Palo also has a free on:off without the solar, huh?
- Long on: off
- MidC has rallied nicely in the off, nearly doubling, but fundamentally it’s growing more bearish. We’ll attack from the spreads
- Long them all (HL)
- if we’re seeing 80s in March, and I can buy the On: Off for next to free, I’ll be long that
- June
- The spread is blowing out on both legs; if you liked it a week ago you can’t like it as much
- SP – long the on: off
- PV – long the on: off
- MC
- long the light load
- The spread is blowing out on both legs; if you liked it a week ago you can’t like it as much