Friday’s Update

Good Morning,

No pithy title today, just some facts on what has happened and what is poised to take place within the WECC. Always something, sometimes more material than other times, today more of the latter.

Demand

Let’s begin by examining hub-level actual loads.

Today we wanted to see how a warming trend in the south has impacted the morning and evening peaks. At NP15 the evening peak was unchanged but the morning lost 1100 MW of load. It just wasn’t that warm in the afternoons to turn on the ACs but was warm enough in the morning to NOT turn on the heaters.

A slightly different story at SP. Here we saw week-on-week evening loads rally 1100 MW while nearly an equal amount of morning (8 AM) loads fall to the wayside. Burbank hit a high of 86 yesterday; now we know how much those CDDs are worth on a March day.

Phoenix also realized a high of 86 yesterday but only mustered a 350 MW rally while its morning loads shed 700 MW. Net for the day was bearish, regarding energy, but the hub did add some more gas noms. Weather is expected to breach the 90s next week so stay tuned on that event’s impact on loads.

MidC didn’t warrant two arrows, just one bearish one, as it shed 850 MW on the morning peak and was unchanged in the evening. More of that load shedding is expected as the hub appreciably warms up next week. Let’s examine the Utilities:

The I-5 Utes saw major decay while Avista’s loads held steady and Idaho’s fell off a cliff.  Both Puget and Idaho now have identical loads to last year, the other BAs are still above, but that too shall pass.

Phoenix will approach ten year highs next week and will add to loads, what is remarkable in that forecast is the number of days at or above 90 degrees.

The heat teaser in LA is fading back to normals, and whatever sputter of a load rally will fade as well.

The Northwest is warmer next week than its been since early November and will drive more melt. Boise has a slew of days in the high 60s, maybe even touch 70, all of which will set the Salmon and Clearwater afire. We see loads decaying and energy rallying, despite the abatement of the draft at Coulee.

The 86s at Burbank and Phoenix were impressive while the MidC interior remains the icebox it’s been for four months, though that will change.

Hydro

The flood control update is now priced into the market, or is it? The Corps used the March 3 5-day QPF which was 105.5 (Apr-Aug, TDA). On the day they released their update, March 8, the same was 110, suggesting there is more draft in store if the next 30 days receive normal water. Or is there? An alert client pointed out that there may not be a deeper draft as the constraint will be the rate of draft as that is limited to 1-1.2 feet per day and there just won’t be enough days to draft Coulee deeper than 1235. So that will most likely be our number unless BPA drafts in the last half of March and first half of April. But why would they? Not if they are faced with a wall of water pouring off of the mountains and into their reservoirs.

Flows on the Columbia at Birchbank are off, more from regulation than anything else, though the BC interior has been cold, just like the Mid-C interior. Flows on the Sacramento continue to plummet back to reality but still have a ways to go. We suspect some of their projects are either approaching hydraulic capacity or maybe below; if not below today they will start shedding some energy over the next couple of weeks, we think.

Coulee output has tanked, from 150kcfs last week to 115 today. At this stage of the year the project has officially become a very large run of river plant; what comes in must go out, and not much is coming in, at the moment. That too shall pass, with warming weather melt will rally. We’ll be so bold as to predict that the Spokane crests at 45kcfs this year, the Pend Oreille may approach 100kcfs. The more important question is “when?” And we can’t answer that, but we can look at where some of these critical rivers played out in the past:

We like this index as it is a good measure of the runoff; when the index rallies its all hands on deck, the Mid-C is under attack. The index barely registers today; there is no melt coming off of the Cascades. We think this one is the straw that breaks BPA’s back; 50kcfs flowing in below Coulee and into the 12000 MWs of downstream capacity – unregulated except by Mother Nature.

Look at those sick flows in 2011 and 12 at the Canada-US border – 250kcfs but also note there hasn’t been an early event in the last five years; betting that we’ll see big early melt may be risky except for the fact that there is more low-level snow in this year than any of the above years. Low level melts first, and there is plenty to melt. Next week will be a good indicator of how much early melt we may get with the warmup expected.

The Pend Oreille can contribute over 100 kcfs to BPA’s malaise but it too peaks in June, not April.

The Spokane is typically an early melt since most of its source snow is lower elevation; we are already seeing an early surge and expect that river to rally hard over the next two weeks.

The WECC is drying up, of sorts, as the storm passes through and is not yet replaced with another event. This one did leave its mark, however, on snow:

Every basin in the Mid-C is up week-on-week.  More telling, there isn’t a basin below 100%, we don’t think this has happened since 1999. This is a very big water year, duh, but especially so on the westside and the Snake.

Most reservoirs are where they should be, though Hungry Horse is 30′ feet fuller this year versus last which is offset by Dworshak which is about the same in the opposite direction. Only one slight difference – this year has more snow; one would think the reservoirs would be drafted deeper, not the same.

The RFC continues trickling out more energy – this time they’ve bumped the 15th up 4500 aMW from Monday’s STP – oh my, that is going destroy our March forecasts, it already has, now they will just get uglier.

Those Snake River (IHR) forecasts are sick – 145% of normal. With the passing of the storms, the GCL and TDA are being backed down but remain quite high.

GenTrans

Signs of life at SP and the Great Basin, both have seen appreciable gas nom gains, even Palo is sputtering to life.

The Mid-C is filling its lines southbound which means stranded energy should net demand change. Those flows on the AC will be subject to numerous outages over the next few weeks:

 

Conclusions

• March
  • 
    • Not much has changed in our outlook; probably the biggest change is the rally at PV and SP rendering length a shade less attractive, at least at the former. The MidC hasn’t sold down due to reasonably robust cash, but fundamentally it is more bearish today than on Monday because of the confirmed warming trend.
      • Long the spreads
• April
  • 
    • Interesting that the March SP rallied more than the April, and off more than on, yet we’ve demonstrated that loads are more elastic to heat in  the evening than the morning. We still don’t buy the LL at parity to the HL.
      • 
        • Buying the ON|OFF turned out to be a good move, but we think there is more juice in the fruit and will keep it on.
    • MidC – prices are low, could they go lower? If cash tanks so shall the strip, so it is just a matter of where March cash goes. The evacuation of Coulee is over so that should be bullish, right? We don’t think so, the only way Coulee got drafted so easily was by curtailing drafts on the upstream projects, and the two std deviations cold the Mid-C realized throughout that drum gate draft. Return to normal will trigger the first freshet, and the inflows to Coulee will dwarf the draft-driven outflows.
      • Long the spread
• May
  • 
    • Nice rallies in the south and the Ansergy forecast for MidC has fallen off a cliff (we are going to audit that today, not 100% sure we agree with its current forecast).
      • Long the spread
• June
  • 
    • We hit a double, if not a triple, off of the long SP-Midc here and will take it off and replace it with:
      • Mid-C – short the ON|OFF
        • 
      • SP – flat
• July