Good Morning,
It’s a freaky Friday because it’s not freaky this Friday, fundy’s pose no big surprises, but maybe worthy of a scan, you tell us. We love feedback, send us some.
The ISO flamed out after seeing its loads take a dive; tiny congestion everywhere which is surprising given the robust river flows at the MidC.
We’re in a summer mode now, prices are set by loads, and those fell from earlier this week across all hubs, most profoundly in the ISO. SP’s peak was off 3000 MW from Monday, and the daily average was down about 2000 aMW. NP was off less but %-wise about the same.
The ISO weather outlook is not freaky; it’s pretty much at normal with an occasional rally that quickly fades. Not terribly bearish, just not bullish.
AZ, on the other hand, earned four circles, all red and now suggests a day or two above 110, but not for another ten days. All climo lines are still upward sloping, so odds of significant heat keep increasing inside the interior. That trend continues through early July, then sideways for a few weeks.
The Northwest is warm now then slides back to climo, but the damage to snow pack will be done this week. The hub is setup for some feeble Memorial Day real-time prices. Hydro has either peaked or will peak over the weekend. Any AC load will be a distant memory; the new HVAC systems are called screen doors. This outlook bodes poorly for the start of June, buy May pain may bring June respite from that melting snow.
Hydro
The River Whipsaw Center changed their mind and is now piling on the water in its ten days; bodes bearish for next Tuesday’s STP. Everyone has long known the first ten days of June were scary, maybe even freaky; what we don’t know is what happens during those last 20 days. We think Coulee resumes shaping water and light load gaps to Bridger prices, at least we hope that happens.
No precip plots to peruse because there is no precip to plot – as in bone dry. Some developments in streamflows, however:
A few rivers are setting six-year highs but what is more freaky is how many aren’t. WY17 is the mother of all Kally snow years and some stations are puttering along at normal, take the Pit as case in point. That project has been actively shaping its water for the last two weeks, look how far beneath Max it is currently operating. Same with San Joquin and Shasta. In other words, we’ve seen the hydro energy highs, and it’s all downhill from here to eternity.
Flows at the US border are now 220 kcfs, a remarkable amount of water that is allowing BPA not only to pass 170 kcfs through the penstocks and rapidly fill its reservoir. Wow, and those flows will probably increase over the long weekend.
We’d not be surprised to come into work on Tuesday and have Roosevelt flirting with a 1260 handle. Loads will be relatively weak and should crest. BPA has lots of storage bullets which is why we like June if we can just keep our jobs through those first ten days.
The Clark Fork is rallying, so is the Salmon, but most of the other non-COE projects are sideways. The Spokane is a spent system, SWE is falling fast:
Still snow up there, but the percentage of ground-cover is small and growing smaller. Several stations are now just average and will be below normal on Tuesday. This weekend’s heat will put a huge dent in the above table.
Our favorite measurement of runoff is the Middle Columbia side flows and those are at six-year highs, but we expect even higher highs as the there is lots of snow in the Cascades left to melt:
TransGen
BC was a big seller yesterday, averaging almost 1000 aMW for the day. Flows on the AC are off about 600 aMW, and the DC is just full, though that line has some scheduled maintenance on June 4 which takes its TTC down to 1500 MW, but only for the day.
Just as loads dropped so did gas outages inside the ISO, these fell about 5000 MW from a week earlier, and NP seems to have taken a disproportionate share of the haircuts.
A few big units returned, most notably Pastoria.
And very few came off, only a Mexicali unit.
Renewables remain very bearish with several big wind spikes across at MidC and NP
Conclusions
June markets seem overly bid, at least to our untrained eyes:
- SP – cooling weather and declining outages makes one hard pressed to find a reason to own market highs
- SHORT
- PV – hot weather is coming, we’ll buy the spread
- LONG
- MIdC – we fear the first ten days; if cash buckles it will happen over the weekend or during that first week of June. That said, we still like the $4.00 LL lotto ticket, so we’ll sell the on: off:
- The market has bid this up to silly heights under the assumption LL cash will stay at pennies; eventually BPA will start shaping Coulee. The one caveat to this trade is big heat in the load centers; we don’t see that yet but will be watching.