Good Morning,
The start of June always meant the start of summer, at least for me. Summer 17 is coming in like a lamb, at least in California and the Northwest, whether it ever becomes a lion remains to be seen. The ISO had a tough weekend:
Most HA prices cleared below $20, a few deep into the red. BPA realized peak hydro energy over the weekend:
And, to add insult to injury, the wind blew and the turbine blades spun:
And in the end, it was just butt ugly out there. Last night said it best:
Even in the post-solar ramp, HE 21, the BPAT node posted a negative price, then it went down from there. Enough doom and gloom, let’s find the silver lining in today’s dark and foreboding clouds.
Demand
We don’t need to look far for a sliver of silver; we just need to look south, not north:
A Buck Ten in Phoenix today; interesting that our weather forecast first picked up the 110 about three weeks ago and the subsequent forecasts flirted with that number nearly every day, now we are that day, and the 110 is still there. 110 is as close to a design day as it gets in Palo and all hands are on deck, as in all generators are queued up to serve load:
500 mmcf is a strong summer day; only a few last summer exceeded that level. Interesting that Mesquite and Gila swapped roles as the largest nom from yesterday to today, just says there is a cap on how high Palo real-time can trade given that only 10% of Gila is currently nominated. Another cap on prices is the rest of the WECC; without help from California prices are going nowhere, and it doesn’t look like the Golden State is that golden:
Burbank had hotter days in March than today, and the rest of the week looks even worse. But we promised silver in the linings, and in about two weeks Sacramento is set to approach triple digits, though for just a day and the LA basin isn’t hot. All in all, this is a butt ugly forecast for the ISO.
How do things look in that energy exporting machine called the Mid-C?
The Northwest is a tale of two profiles; the one that matters for loads is bearish. The I-5 corridor is set to plunge into the low 60s later in the week – that is very bearish for demand. The Mid-C interior will realize some early heat: Boise – 97; Spokane – 95; Kalispell – 90. Definitely AC load in those BAs but warm in early June is more bearish than bullish, at least in the interior. What little snow is left will recharge the already-full rivers. Let’s just call it butt ugly and move on.
Hydro
Hard to find silver linings in the Hydro group, but let’s try:
California has a glimmer of silver; half our stations are realizing average flows, the other half are at six-year highs. The state hasn’t seen material precipitation in six weeks, so all of that water is snow melt, and SWE is melting away quickly:
Only our Yuba station has material inches left; the rest are pulling a Houdini and disappearing; natural river flows will continue to collapse but offsetting that sliver of silver are the state’s full reservoirs.
Each one is at a six year high rendering a weakened outlook for most of the summer, and the silver is at best a thin plating of silver-colored paint.
The Ansergy side flow indexes are at record highs, all except for the Lower Columbia. But even at highs they too are coming off, except for the Clark Fork which is still building all of which is making refill at Roosevelt a breeze:
34′ in three weeks and just 22′ to go. Takes the wind out of the June sails. The only respite Mid-C will realize is the end of the melt, and there are signs that is coming soon:
Every station, but the Clearwater, is into single digits and that means the % of snow cover is quite small.
June 4, 2017
May 18, 2017
Those two pictures say it all – the Northwest runoff has crested and it’s all downhill from here, and the descent down that hill might be quite steep. On an aside, look at the massive snow still left in British Columbia. The province will “enjoy” strong inflows through July and be looking for bids all summer long.
Most stations are at highs; the Peace is not as the project stores bullets to spray at future strength. Don’t expect inflows into Coulee to collapse, not given BC’s snow levels.
This basket of projects is our MidC hydro silver lining – many are just flowing normal today and with little snow left will continue to drop. These 90s this week should drive the final nail in the WY17 coffin – if only the Canadians could divert their water into the Hudson Bay.
On a final hydro note we must turn to our friends in Portland and share their thoughts:
Not pretty, huh? Butt ugly comes to mind. We were spouting off about their big cuts last Wednesday, and just as we were inserting our foot deep in our mouth, they reversed courses (aka whipsawed themselves) and jacked flows in a monstrous way. Given that today is STP Monday we are inclined to suggest a bearish forecast for June, but we’d think July would be bullish, as would Aug and Sep. The 90s will accelerate melt rendering less natural river flows for the rest of summer. Might be an interesting update.
TransGen
BC saved the MidC day yesterday through its aggressive buying – they were probably “paid” to take BPA’s energy, and they took a lot – like 1000 amW all day long. The work on the DC yesterday didn’t help anyone and may have accounted for the south-bound flows out of ZP.
ISO outages are weak, but it is the time of year where that is to be expected, though adding 7000 MWs of cheap gas capacity doesn’t help things.
Returned Units
New Outages
A few more tripped than returned, but mostly it was hydro that dropped out of the stack and net gas outages declined.
Gas Noms remain weak everywhere but Palo; the MidC noms have tanked:
Conclusions
- Mid-C
- Weak demand later in the week with strong melt, but light is flickering at tunnel’s end; the snow is disappearing, yet you still need to work yourself through this weak week.
- Long the July: June HL roll
- Short the July: June LL roll
- Weak demand later in the week with strong melt, but light is flickering at tunnel’s end; the snow is disappearing, yet you still need to work yourself through this weak week.
- SP15
- Weakening demand later this week, hard to get too excited about BOM
- But we are excited about owning contract lows in the roll
- Long Jul: June HL roll
- Weakening demand later this week, hard to get too excited about BOM
- Palo
- Hate to short the hub on a day that hits 110, but that’s the time to do it, especially with Gila barely nominating
- Like SP, long the July : June roll at a contract low
- Hate to short the hub on a day that hits 110, but that’s the time to do it, especially with Gila barely nominating