Good Morning,

It’s back, the melt has returned, and it is building:

We’re referring to the Northwest melt, the California melt has been ongoing, but the Northwest has several interesting (bearish) changes in flows since Wednesday’s post:

• Brilliant – highly regulated, up 10%
• Cheakamus/Coquitlam – both indicative of BC melt
• Flathead – nearly doubled, despite regulated
• Pend Oreille – up 50%, the lake is about full; no shells left to hide the pea, at Box Canyon it has almost doubled, now posting 32kcfs
• Deschutes – up 30%
• Salmon – doubled!
• Skagit – up 140%
• Snake (Weiser) – beneath the Boise, up 50%
• Spokane – up 150% (and flowing into Coulee)
• Wenatchee – up 300%

All it will take is another sharp cold snap to arrest these arresting flows, do we get that?

Demand

No, instead you get two red circles at Boise and Spokane; at least Kalispell stays modestly chilly. Load centers (PDX/SEA) are cold but who cares when we’re talking about melt. There are hints of cooling, but climatology is working against BPA, the days are growing longer, and warmer, and all of that cumulative precip that has been sitting on the tundra is returning to mother ocean, it’s inevitable.

California is returning to moderate temperatures, the first taste of cooling degree-driven loads is departing being replaced by screen doors and open windows. That flicker of bullishness we enjoyed this past week has been snuffed out by next week’s outlook, and if there was even a single ember left it will be washed away by the 2-3″ of precip heading towards the Golden Shower State.

Meanwhile, back in the desert, it’s in the 90s. Wow, and so early in the year, but those hot days are displaced by normal, and loads are poised to tank at Palo.

The south’s loads are up, and the north’s loads are down. Next week the north’s loads will be sideways, and the south’s loads will be down.

Three circles and a red rectangle. The circles are bullish; the rectangle is bearish. The latter reflects the lows in the northwest and demonstrate why we now have a Fresh Freshet – nowhere dipped below freezing, everywhere at all hours of the day was it warm enough to melt snow. The upper elevation isn’t moving; lower is dissipating, though the Mid-C Composite Snow has declined over the last couple of days:

Declined rather sharply, we might add.

Hydro

This is a remarkable set of charts, one you won’t see every day. The hub aggregate totals is a healthy 1.5″, but look at Boise and Spokane – both are higher than SEA and almost as high as PDX. Not sure how Spokane gets 2″ of rain without as much falling at Seattle … unless the storm system has the word “Pineapple” in its name. Warm rain. Ugly/Flooding/Spilling/Puking.

And look at NP’s precip – 2.65″ of precious H2O, though the folks there don’t find it quite so precious this year as they did in the previous five. More is on the way, maybe snow north of 7000′,  the rest comes down as rain. Any respite from hydraulic capacity at any plant is over; the system gets longer.

The major northwest reservoirs all (but Coulee) showed increases in their forebays; interesting given that flows are surging and big, warm rain is on the way. Signs of desperation, in our opinion. BPA is attempting to cling to one more day with one last gas unit online and fills any reservoir that has any room. It would fill Coulee’s reservoir, but then the 50 construction workers working on the drumgates would be washed downstream, so they can’t do that.

The regulated projects are a mixed bag when viewed from flows through the turbines; the big boys, Coulee and BON are off despite a Fresh Freshet. Here’s why:

Spilling; BPA is a spill-happy utility, spilling for dollars, spilling out of desperation in an inane attempt to support prices. We’ve heard they are spilling so hard that nitrogen levels in the rivers are approaching dangerous levels for the salmon. Our fish-hugging friends are not going to like that while our short-positioned friends will love hearing that this spate of wanton spilling may be suspended.

Contrast BPA’s spill with the PUDs – they know better than trying to support price, all their water goes through the turbines as Mother Nature intended.

Water supply outlook for Coulee is now 109% of normal, the outlook at TDA is equally rosy:

Actually, rosier, TDA’s is sporting an 114% of normal. With nearly 2″ of the wet stuff heading towards the NW interior that outlook will only go up, the water year gets bigger, the outlook for Q2 grows dimmer and don’t think Q3 won’t share some of 2’s pain, it will. Builds from here til WY17 is over will directly impact July, probably August, and even possibly September.

Ten day builds again; if we had a dime for every time we’ve posted those four words over the last six weeks, we’d have six weeks of dimes.

TransGen

Exports are maxed out and will remain so putting more pressure on the ISO. MidC received some relief yesterday when Powerex became a buyer.

Poor Man’s Genscape?

Check these two plots out:

These are hourly flows from Northwestern to BPA and BPA to Avista. We think they are Colstrip generation; interesting that there was a big curtailment a few days back. This data comes from the EIA’s Balancing Authority dataset, and we think there are several paths that can shed light on generation.

Not sure if yesterday’s TTC post on BPA’s long-term report is newsworthy but wanted to point it out.  What caught our eye was the duration of the post, 70+ days from April 13 to June 22, smack dab in the middle of the runoff. The derate isn’t huge, 1200 MW, but its new and our job is to post the new news.

Gas noms in the south are up, gas noms in the north are hanging on by a thread, not sure how much longer that will last.

Conclusions

No big changes in our outlook, we think the Mid-C is more bearish than it was on Wednesday and so is every other WECC hub. When you’re already short, and you think it’s more bearish, there are only a few options:

1. Get shorter
2. Stay short

• March

  • 
    • Sell off everywhere, except MidC, which saw a slight rally
      • SHORT EVERYWHERE on the ON

• April

  • 
    • Modest selloffs over last couple of days, we concur
      • SHORT EVERYWHERE

• May

  • 
    • SHORT

• June

  • 
    • Risk Manger told us we couldn’t sell any more outrights, so we sold calls and hedged with long puts

• July

  • 
    • Ran out of ICE Credit, can’t execute any more trades.