Northwest Heat

Posted on by William Griswold

Good Morning,

The news is the massive warm up in the Northwest Interior (and exterior):

81 in Spokane, 78 at Kalispell, even 83 in Portland. The latter may get some AC load at those levels, I know my wife flips the HVAC in the high 70s, but that’s as much from hot flashes as hot air.

Those highs in Spokane and Kalispell will start the high-elevation melt and the days that follow are not that much colder, not cold enough to arrest that melt. The RFC seems to be picking up on this:

Friday’s 10 Day turned very wet resulting in an additional 1700 aMW equivalent in new flows. Mind you, we don’t expect 1700 aMW of new energy, we expect 1200 aMW of new spill, but some of that new water may probably will make it through the turbines. This is bearish May, bullish July, and maybe bullish late June.

California joins the party, too. Bakersfield posts its first triple digit day, and it is hotter in Sacramento than Burbank; in fact, the latter doesn’t even post its hottest day of the year, but its warm across the Golden State and loads will rally.

Of course, the real heat lies in the deserts and Phoenix is slated to post a high of 104, a decent day in July, but it’s just the start of May. Are we amidst a new weather pattern, one where the entire WECC is hot? It isn’t hard to see how this interior heat could leak its way into the Northwest which would realize a 5000 MW jump in loads, should that take place. Portland has seen the 90s in May; it may see them this year:

That high of 83 next Thursday will also tie the ten year high. Plot thickens.

Loads are mostly moribund, a few BAs are up, a few down, all that changes by week’s end, almost all loads will rally off of that Thursday heat.

Current temperatures are remarkably unremarkable; it was a mild weekend.

Hydro

It’s dry and warm, not two words we haven’t put together for the too often this year. A new weather pattern?

While spill out of Shasta is backed down, the flows on the San Joaquin are ratcheting up. We suspect most of these plots are the result of regulation, take the spike on the Tuolumne as an example. That wasn’t caused by a surge in inflows, more like a draft of the reservoir to make room for the melt. The Merced looks more like natural river flows, and it is drifting up.

Brilliant continues to discharge more each day while the Cheakamus backs down off of cooler weather and the Kootenay at Ft Steel has gone sideways over the weekend. All of which suggests it wasn’t that warm in the BC interior, but it will be warm by this coming weekend.

Regulated flows on the main stems reflect a very bearish situation for BPA. There is simply too much water, and the feds struggle to find a good hour to dump it. We noticed they are shaping Coulee again, but seems these are mainly upward spikes, not significant cuts:

All of the spikes took place on peak hours; most of the big cuts were in off peak, but BPA will lose most of its flexibility next week when the impact of 80 degrees in Kalispell works its way into Roosevelt.  One important factor, one significant change, is Refill. Technically, BPA can start adding to the pond (Roosevelt) today, if it so desires. We would expect them to start filling by this weekend given that some of the runoff will be passing through by then. They can’t fill above 1255′ (drum gate), but they still have 20 feet of bullets to expend over the next few weeks. If they do, and they could refill quickly, we’d suggest that will be bearish June, at least the first half.

The more unregulated projects are mostly down off of a general cooling, those charts won’t look like that next week, we expect all to rally sharply.

The side flows are off, except for the East Cascade “Middle Columbia” index, that one is up and has just begun its ascent to 50,000. We’d guess it hits 30k by next week.

TransGen

Big flows into SP out of ZP, and big flows northbound into BC, and big flows into California on the AC and DC. All are signs of a fragile northwest.

This weekend saw some strong HA prices in both SP and NP with SP a shade stronger, reflecting those Path 26 exports.

The gas outages have fallen at SP and slightly rallied at NP.

A few units returned …and a few new ones tripped most notable Moss Landing.

Noms at Palo remain very strong, and we saw rallies at NP, Nevada, and Colorado. SP total noms remain abysmal.

Final note, on Transmission, BPA updated its outages by derating the AC for a few days in the first half of May. Ugly.

Conclusions

  • May
    • Palo – big heat, nuke still off-line, be a good test to see if the hub can clear at where BOM is trading, but we can’t be short in front of the heat
      • HL – Long
    • SP
      • HL – Short off of the spread to NP
    • NP
      • HL – long off the spread, we see NP loads rallying hard, at least relative to SP
    • MIdC
      • We’re selling the HL and buying June off of perhaps the crest of runoff realized in BOM. The high 70s in Kalispell are worth watching, will it melt enough snow where BPA capitulates on May;  study the reservoir levels. If they don’t refill this week we like owning the June over the May even more.