Good Morning,

About that heat, about that massive melt from significant heat … forget about it. The heat arrived over the weekend, but the surge in rivers didn’t follow, though that might yet be coming. First the realized temperatures:

Palm Springs was a blistering 106, Phoenix bagged a triple digit, and the Northwest basked in balmy, but not hot, weather. From the looks of the that region’s gas noms you’d think Portland was over a 100:

Most low heat rate plants bid in some gas for today; most will probably wish they hadn’t, at least they will carry that sentiment if BPA plays the same game today as they did this weekend:

The feds cut spill, cut refill, and let 202,000 CFS flow through the turbines for the entire weekend, except for a slight blip yesterday during hours 10-12. Go figure because we can’t. In old world models, a 200kcfs QG would result in single digits, and no gas would be running. That world is a thing of the past, and perhaps the most singular take away from WY17 is the way the water has been shaped to support price.

We digress, back to that weekend update…

Strong DA prices that don’t appear to be as well supported in the HA. Take NP, as an example:

The above table averages the hourly markets for the last four days for DA and HA. Only two hours, 12 and 13, settled materially higher in HA.  A tight system will invariably settle higher HA over, but an over-supplied, over-hyped, market will do the opposite which is what we saw at NP over the weekend. Perhaps Monday will redeem itself, but we doubt it. There is just too much hydro, too much wind, too much solar and too much idle gas capacity, and not enough gas outages, to make May markets scream.

Demand

This party is winding down, a rally today or bust. Reminds us of that Melissa Etheridge song …

Go on and be long  till the screaming is gone
Go on and stay long when she tells you
nothing’s wrong …

It’s only fear that makes you long
The demons that you’re hiding from
When all your mtm is gone
I’m the only one (who is bearish)

AZ is hot than it’s not, but it’s not cold, either, just not that bullish after we work through Tuesday’s weather.

Loads in the Northwest are set not to go anywhere; a very temperate temperature outlook is poised to put all of us to sleep for the next few weeks.

ISO loads rallied, week on week, but PV and MidC didn’t. Today should see more rallies then a bust.

Hydro

BPA paused on its refill at Coulee and Horse; we can’t offer any solid reasons why they would do that, it wasn’t like inflows fell off at the former. We already showed discharge through the turbines soared. Regardless of why, the net effect of not filling in May is bullish for June. Perhaps they are expecting those inflows to rise over the next week, but we doubt that, not with temperatures falling by mid-week.

Today is Monday, and that means STP, so it’s worth looking at our 10 Day report to see if there are any tells which tell us anything. Friday’s ten day is in sync with last Monday’s STP telling us to not expect dramatic changes, though losing four days of refill in May suggests CHJ June inflows might be cut.

A few observations on California hydro:

• Very hot weather in N Cal drove up two stations, Yuba and Merced, but remarkably none others.
• Regulated stations, Pit, Shasta, San Joaquin, Cosumnes, and Tuolumne, didn’t budge.
• Suggests a general tightening in Cal water, though the snow remains strong in higher elevations, there is little left beneath 5000 feet.

Apparently, it wasn’t that warm in British Columbia, several stations are posting lower flows, though the discharge on the Columbia at the US border hit a season high.

Production at Priest declined, week on week, but that was easily offset by the energy surge at Coulee. While energy dropped at the former, the spill rallied hard.

We expected these relatively unregulated projects to see rallies off of warming weather and we were wrong. Four stations have seen week on week declines despite 10-20 degrees warmer, all of which suggests a tightening in the water year. WY17 remains robust, but is lower than 2014:

And lower than 2011 and 2008. What is left on the hill is way up the hill, the lower level snow has morphed into water, check out the change in snow cover over the last two months:

Today

Two Months Back

Going, going, soon to be gone.

Final point on hydro, it appears the northwest may have a new storm system building out in the 11-15:

Posted here only because the last few weeks have had next to nothing, now there are hints of another inch or so in the producing basins.

TransGen

ZP exported into SP, the DC cut to zero for a few hours, the AC continues to be mostly full with some slight cycling, and BC is a net seller into the MidC.

ISO gas outages are lower than a week ago.

A handful of units returned , and

a smaller handuful are newly offline.

This, hub-level gas noms,  might be the most interesting report of the day. Every hub is up in anticipation of a big load day today. We’re surprised that MidC would need that much gas, but it is what it is. NP set a a 90 day high and SP approached one.

Palo is  the hub de jour but there is still idle gas capacity suggesting a lid on how high it can go.

Conclusions

BOM is mostly over, its now BOW, as in bow wow.  We were long the June-May rolls (Long June, short May) and have done poorly but will hold the short side off of declining temperatures and perhaps BPA’s capitulation.

If you don’t like BOM it’s hard to like June and we’d be net short everywhere except for MidC LL. Our long call there has doubled but we still like the lotto ticket and in effect would carry the short on|off into the start of the month.  To cover our June shorts we’d buy the rolls.