Good Morning,
It’s a brave new world out there in so many ways, but we’re talking about the northwest spill. Check out these tables:
Total Outflows
Huge water year, March that is, off the charts. But is it?
Flows (CFS) through the turbines:
Hard to tell from that table that 2017 is any bigger than any of the other “big” water years; it’s just slightly over at a few stations. Where did that water go?
Spill CFS
It went over the top of the dam, that is where it went. Just how much is summarized in the table below:
Spill as % of Total Outflows
This level of spill in March has never happened before; this is Regime Change, a changing of the guards. We don’t dispute that it makes economic sense to spill water to support price, we’d do it too if we owned enough hydro and had immunity from the CFTC/FERC. But we don’t, we don’t work for the US federal government, nor do any of you. Perhaps there is another explanation; someone once suggested this spill was “maintenance-related” but we doubt that given the random levels of spill.
All of which suggests that there is a new economic paradigm in play about Northwest hydro. In any of these past six years, at spill levels reflective of those years, the Mid-C would be trading in the low single digits. It’s not because enough water is spilled to prevent that from happening. We are re-assessing how we model non-Fish Operating Spill.
Demand
Loads are a mixed bag, Mid-C and Palo posted week-on-week gains, the MidC dramatically rallied 2500 MW on its morning peak. The rest of the hubs saw loads fall off of cooler weather. Temperatures (realized) warrant a closer look:
Hot in the deserts, Palm Springs is in the low 90s, so is Phoenix and Las Vegas. The Northwest had warmer highs in the interior but markedly lower lows along the I-5 corridor, all of which explains the load rally.
Temperatures in the WECC interior are poised to cool off, and loads will fall in Palo but rally in UT and NV.
California won’t see much load volatility with its current temperature outlook – just mild everywhere.
The Northwest is cooler today than yesterday’s forecast but still warm enough to continue melting snow, just not as fast as the last couple of days. Much of the lower level snow is now in the rivers:
March 1
March 19
There is some left, but we’d expect the rate of river flow acceleration to slow, though we doubt we see many rivers back off.
Before moving to hydro, it would be fitting to recap Q1 degree days at Mid-C:
January was brutal cold, anomalies were over 20% at most cities; February was also cold, just not so much as Jan; and March has been warm in Boise and slightly below everywhere else. Winter 2017 is one for the record books, in many ways.
Hydro
Lots to talk about here, but mostly it’s on the Mid-C – sorry PV/ISO folks, your hubs don’t drive much volatility at this time of year.
California;s 10 day cumulative fell from 4″ yesterday to 1.6″ today, most of that in the north. Incrementally, rain won’t add much energy since most plants are at hydraulic capacity, plus the melt is in full swing. More rain just means more spill.
The Northwest is a shade dryer in the current outlook, but it’s not dry. Portland is poised to benefit from nearly 4″ over the next week, the interior will also get splashed, but only with an inch.
Let’s look at the rivers:
Note the steady uptick on the Yuba, that is not rain-driven, it is snow melt. Most rivers are now being filled by melting snow versus rain and will stay that way for months to come given the monster snow year.
The Peace has backed way off while Arrow is soaring. Flows at the US border are now over 100kcfs, up from 40kcfs last week. Coulee is getting slammed everywhere.
The melt has begun; this dashboard (a new one) are mostly non-Corps projects, and most have realized big jumps in flows. The Clark Fork is up 25k, the Pend Oreille at Box Canyon is up 27k, and the Spokane is on a straight-line to 50k and possibly flooding Avista’s headquarters. Nothing like being a hydro-owning ute and have your offices flood. Bear in mind all of these rallies are off of moderate temperatures, we doubt there is much melting north of 3000′.
The regulated projects, the ones BPA controls, are also worth a look, especially Coulee. Flows at that big dam surged past 180 kcfs earlier this morning, the daily average yesterday was 50kcfs above last week, and almost all of it went through the turbines. We aren’t sure what the project’s abilty to spill is, given the drum gate work, which may explain why the feds pushed 180kcfs through the turbines. Weather wont support a lessening in inflows, we see those continuing to build.
The spill is contagious, now the PUDs are puking like a fifteen year old after her first couple bottles of Annie Green Springs.
Coulee can’t catch any of this water so a few others are; Dworshak added 20 feet in five days. The shell game works well when you have more than one shell, it’s pretty easy to find the pea with one shell; BPA is running out of shells.
This report has become increasinlgly meaninless as a measurement of energy – a lot of that water is going over the top of the dam, not through the penstocks. But still, it does give an indication of total volume of water and that volume just went up on Friday’s 10 day, all of which bodes for another big bump in today’s STP. More salt in the many Slice customer wounds as they find themselves longer than they’d prefer.
TransGen
Powerex saved the Mid-C day by filling the line northbound. How ugly it would have been this weekend if they had been sellers. At some point they need to sell, they have a very big water year too. The AC was derated and just 1500 aMW heading to NP over the weekend while the DC was full.
Palo gas noms have been strong, I guess 93 degrees will do that, but with temperatures dropping back to a more comfortable mid 70s we expect the noms to drop as well. Everywhere else is low but the heating load in the Rockies should rally up Utah and Colorado’s noms. The Mid-C, forget about it.
Total outages are sideways to Friday, but NP has seen its outages drop while ZP is up.
Conclusions
- March
- Market rallied some on Friday, and gas is up as we write. We are less bearish on MidC given these spill levels but we aren’t bullish in any sense of the word. Rallies are just a better entry point for :
- Short everywhere
- Market rallied some on Friday, and gas is up as we write. We are less bearish on MidC given these spill levels but we aren’t bullish in any sense of the word. Rallies are just a better entry point for :
- April
- Would love to tell you we love something about April, but we don’t
- Long the spreads
- Would love to tell you we love something about April, but we don’t