Friday

Good Morning,

A few new developments on the fundy front, shall we?

Demand

Hot in the south, both Phoenix and Palm  Springs posted 90s, but Burbank struggled to reach the 80s. That was enough for SP to sport a load rally, however:

In fact, every hub rallied except the Mid-C which saw loads fall off about 1000 MW. Looking forward there is a 102-degree day in Phoenix to look forward to:

That is some legitimate heat, and it is but April. We also suspect that heat may also provide the death knell for this out of control Palo light load market.

Unreal, huh? Who saw that coming? We liked it when it set contract lows a few weeks back but started hating it when it soared to contract highs; then it just kept soaring. There is a theory that may explain the lofty cash levels, and would also support shorting the May LL. That theory posits that there is too much baseload thermal off line. Plants that would normally have to idle in the evening to be available for the peak are not running. You can call this the Min Run energy, a price-taking supply source that normally would be dumping on the off-peak market. Those plants were not running (or weren’t running and will soon be back) which forced Palo to run gas at night to serve load. That gas wasn’t price-taker, they were price-setter.

Gila River posted large noms today, a high for the year, which suggests most of these big plants are returning, and most will now be generating at night to serve day time loads. The days of Palo LL reigning supreme may be numbered:

That’s a juicy chart, and with a fundamental reason to fade it, we’ll jump in.

Warm weekend, normal for the foreseeable future beyond that. Hard to express exuberance, let alone irrational exuberance, over these plots.

The Northwest remains cold, averaging 5 degrees below normal for the foreseeable future. The first week of May will be deja vu all over again, with one big difference. There may not be any draft that week, but then again, there might be given that BPA quit pulling Roosevelt over the last couple of days.

Hydro

We were surprised to see Coulee’s reservoir unchanged over the last 24 hours. Is that because the draft target changed, or due to the feds having so much confidence in reaching 1222′, ten more feet, that they decided to take a day off? We’ll be watching this weekend, but every day they fail to draft puts more pressure on next week, or it means they intend on doing modest drafts the first week of May.

The 10 Day forecast has been battered as compared to Monday’s STP; most days are off 500-1000 aMW. We are not sure where this comes from but it smacks of regulation given the precip forecast anomaly remains positive. Could these cuts be tied to the suspension of the draft? Plot thickens.

Its very wet in the ten day outlook; Boise is set to receive nearly two inches, Portland almost four inches, and Spokane and Kalispell over an inch. Given the cold, these storms will build upon the SWE.

California is dry, take our word on that.

Its rivers aren’t dry, though. Discharge out of Shasta is back to 30kcfs as CDWR trembles whenever she looks into the Sierras.

BPA is shaping Coulee more than it has in the last month and discharge at BON has fallen off a cliff.

Coulee is shaping, but there is no consistent on|off pattern; its being operated more like a run of river. Interesting that discharge didn’t back off much when the draft stopped, suggesting strong inflows.

Flows at the border continue to creep up.

And most other rivers are sideways to slightly ticking up, as are the side flow indexes:

The cool anomalies are keeping these from soaring, but that day is coming, just not in the next ten days.

TransGen

BC flipped from selling to buying which kept MidC from tanking. The AC and DC remain operationally full.

Palo and MIdC noms remain strong, and the ISO (SP) has a lot of gas offline:

Conclusions

  • April

All that leaps out of those charts is Palo; with the return of Gila and probably others, we’ll be …

    • Palo – short the HL and LL
  • May

    • We’ll buy the May-April rolls for
      • PV & SP, both HL, and LL