Good Morning,
Hotter than Hades, the Southwest is, and the rest of the WECC is warmer in today’s outlook than Monday’s. If you liked BOM length then – do you gotta love it now? Not necessarily as love|hate is as much a function of the market’s perception of fundamental reality as it is that very fundamental reality. Take a look at BOM markets:
NP, SP, and PV are nearly off the charts; each is up about 33% in a week. Mid-C hasn’t budged but it might shortly off of its bi-bully S&D developments. Check out recent spot markets:
Uneventful in the south but we thought the MidC was interesting. Who’d a thunk that on a day where inflows to Coulee were greater than 200kcfs you’d trade at almost a 10k heat rate? No one and I still can’t believe it did, but there are signs in today’s fundy’s suggesting more of that is to come.
Demand
Those design days we were spouting off about on Monday are now hotter. That Hell called Phoenix is projected to reach a high of 118 next week, while Sin City has a string of 110+ days. Hades doesn’t return to normal until … drumroll….. the Fourth of July. That is a bomb full of bullish bom days – no wonder the chart is a verticle line .
California escapes not the heat; the LA Basin has seen its forecast grow even warmer and is now projected to approach 100 degrees while Sacto blows past the century mark and sees a high of 106. That’s the good news; the bad is the hottest day falls on a Sunday #sad face#.
Portland shows some high 80s and will bring fresh AC load; Seattle musters a sultry 78 which will bring fresh tree-hugging. The MidC interior is hot, but we like seeing the load centers burn and they’re not, yet MidC won’t be a complete drag next week, especially when we see what’s happening with its hydro.
Hydro
Normally we don’t type “Normal” in six of our eight charts because normally those plots weren’t normal. Norms are made to be anormal, and now we are seeing the MidC water experience mean-revert; a clear indication the WY17 party is winding down, a few more balloons to pop than its one for the record books.
Coulee is back to swinging its pond, and the rate of refill has slowed. On those swings – all cuts occur during the HL hours, which has become the new standard. In the old days LL saw the cuts as the project ramped to serve HL; now LL is the sacrificial lamb, and the cuts are made during the day to save HL.
At this time of year, we like to look at BPA’s major storage projects. Usually, that exercise is akin to watching paint dry. Not today, check out the Pend Oreille, gapping up four feet. Maybe an error, but the refill of the lake has lagged the other projects:
Most are now at normal elevations, all but Lake Pend Oreille; maybe the gauge was stuck?
Flows at the border have taken a dive, most of this is from the regulated changes on the Pend Oreille.
We also noted a dramatic drop in the spill at BON, some of that can be explained by adding two feet to its micro-reservoir, but most of it is a result of overall drying of the Northwest rivers. WY17 is winding down in the Northwest, and there are signs of the same in California:
Both Cherry Creek and the Merced saw major drops in the last couple of days and will soon depart from their “run of river” status.
TransGen
Did anyone notice how much energy MidC exported yesterday?
To make it easy to see:
Rarely will you see BCH buy while the AC|DC are fully loaded; typically if the MidC likes selling to Cally the Canadians like selling to the Yanks, but not yesterday. The Canadians loved yanking the Yanks energy right out from under their runny noses.
Flows out of ZP are torpid, going neither north or south which is reflective of how bearish the ISO has been.
That mini gas outage rally at SP has petered out while NP hangs on to its outages. Noms are weak:
Palo had set a near season-low, on a day when it was in the mid-90s. Interesting, since a month ago a day in the 90s would have had 2X more gas nominated suggesting that every coal plant is back in the southwest. Also worthy of a sentence, the MidC noms were weak on the highest spot price day in months.
Conclusions
We were long going into today in the BOM, and long the prompt. We see no reason to change course and will keep those positions in light of tightening water in both the Northwest and California and probably the hottest set of days in the southwest this summer.