Good Morning,
The big news over the weekend, and it is big, was the suspension of Coulee’s draft:
Skeptics that we are; did the Tribe really request this or did BPA suggest it? Either way, the draft at Coulee is over, it will be drawn down no lower than 1233′, eleven feet higher than the water supply warrants. The obvious implications are:
- Bullish BOM and early May
- Bearish June
Water not pulled in April is storage capacity not available in June; the total volume has not changed, if anything it is increasing given the big precip the Northwest has realized, and will realize, over the next week. We hinted this might be taking place last week based upon the dramatic changes in the RFC’s 10 Day:
Those changes have grown even more dramatic and now today’s STP looks setup to be quite bullish BOM and May. The big question is June – will the RFC do the honorable, and correct, thing by shifting the above cuts into June where they will take place? Knowing our friends in Portland (we actually met them, so perhaps they are our friends?) they won’t. They will adopt the scientific technique known as “the trend is your friend” and cut water in June, too. Oh if they do, and you rally June, we will pounce on theirs, and your, blunders.
Demand
Enough about hydro, demand is almost as interesting.
SP and Palo both realized strong week-on-week rallies while the Northwest and NP were mostly sideways.
The Northwest has a mini-heat wave towards the end of the first week of May. Notable because those days are 10-15 degrees warmer than today and the event strikes all of the Mid-C. Also notable is the climo rally which follows, most stations will end up 10 degrees warmer than today all of which suggests that weekend might mark the moment when WY17’s runoff begins. Emphasis on might, it still isn’t hot, but the 70s in Wenatchee will get the side flows flowing. Also, for the record, there isn’t a day in any of those plots that are bullish for demand; the Mid-C is in its Spring death-spiral which won’t end until Portland hits 90.
California is warm this week, even Lake Tahoe is posting high 60s. Should be a good week for loads, and might even help this moribund HA market:
Ugly is the appropriate adjective for this weekend’s HA market; even with hot temperatures, the market failed to move up, anywhere.
Palo is poised to get whipsawed; temperatures plunge into the low 80s for one to two days, then soar back into the 100s setting a CY17 high. Those highs aren’t realized til the end of the first week of May giving the hub another week to return AWOL units.
Hot in the deserts, relatively speaking, but ever so mild in the Northwest whose temperatures are as temperate as temperatures get, and growing more temperate.
Hydro
Some of our thunder was stolen in the opening paragraphs, but this fundy is worth a closer look:
The blue numbers are the target elevations per the April Flood Control; doesn’t look like all the reservoirs are going to bother trying. We know Coulee won’t, nor will Dworshak which was slated to draft to 1448, instead its filling and is now over 1500′. Hungry Horse has reached its target, but Libby isn’t even close, doubt BPA tries.
California is amidst a mini-draught but they don’t care, there is so much snow in the Sierras everyone will be tearing out the astroturf and adding sod to their lawns.
The Northwest refuses to go dry, another 1-2″ is slated for the production basins and will add to the SWE build. Another nail in the June, and perhaps July, coffins, though we doubt the RFC acknowledges this fact. They’ve assumed the water year is over, but it isn’t; what snow falls in April-May must melt in June and July. Couple these builds with the suspension of the draft, and you have the makings of some ugly prices. Maybe it is time to coin a new term – “Optional Draft,” we are all familiar with “Optional Spill,” now we have a new one.
Cal Rivers are mostly dropping; Shasta continues to evacuate for that mountain of snow in the mountains, but the other rivers are dropping. With no rain in sight that only leaves melt to recharge these and there isn’t any low-level snow left. We suspect California rivers continue to tighten through the remainder of summer, perhaps there is another surge, but these streams are already full.
BC Hydro’s rivers are more up than down, some of their unregulated rivers, like the Cheakamus and the Kootenay at Ft Steele, are staging rallies. Flows out of the Peace are way off reflecting low demand and imports from the Northwest. Flows at the Border remain strong and is forcing BPA to run Coulee flat.
See what I mean, Coulee is back to 180 kcfs with no shaping which explains why MidC cash LL has tanked. If there is a prayer for LL, it will have to come this week as these warmer temperatures, and more rain, mean more water.
The Spokane is sideways, stuck at 20kcfs for the time being, but the Clark Fork, Salmon, and Wenatchee are staging rallies. The regulated Pend Oreille is off, but that will reverse itself with the Clark Fork bumps.
TransGen
Both the AC and DC had big cuts yesterday, more a reflection of big cuts in the ISO price than the northwest running out of energy. BC Hydro has been a team player by buying the hub’s largesse, without their support we’d see negative prices. Flows out of ZP are negative as Socal serves its cooling loads.
Part of the ISO’s problem this weekend was massive NP wind, up over 1000 MW across most hours. SP outages remain strong while NP’s have realized a reversal:
Lots of units returned over the last four days, most of those are in NP.
And there are a few big boys are offline, most are in SP.
Conclusions
Am going to lead with a new product we are working on, called APT (Algorithmic Power Trading). We won’t be releasing this for a few more days, but it does a good job of flagging what we like, and don’t like:
I’ll be doing a Product Update on APT later this week, for now just think of it as a way to look at 758 charts in about five seconds. APT returns the best of the best and our preliminary results suggest it does a pretty good job of finding good trades:
