Good Morning,
As the title implies, our outlook for near-term has weakened off declining loads and cooling temperatures. Are we heading towards an extended downturn after that strong bullish run? Doubt it, there is more ISO heat yet to be realized, but the overall conditions of the WECC are teed up for a more bearish short-term trend as things now stand.
The Northwest grew colder, not cold, just not as “warm” as Monday’s outlook which wasn’t that good, to begin with. Both Portland and Seattle will lose most of their HVAC loads for the next few days; then there are some warm ones beyond that.
Same story down south, the ISO also got cooler and won’t lose its AC loads like the Northwest but won’t be setting any records, either. Beyond those bear days, there are hints of heat, but you’ll need the patience of Job to realize them.
Don’t have to wait long at Palo, that hub will bask in 100+ days for most of the next week. There are but a couple of days below average for the next two weeks. On an aside, note the downward sloping climo line at Salt Lake. The summer party is pretty much over in the interior, aside from the desert southwest.
Loads are a mixed bag of ups and downs; the MidC is off (week-on-week) while Palo enjoyed a small rally. Let’s look deeper at the ISO, beginning with its combined demand:
The ISO has shed about 10,000 MWs from the peaks a few weeks back, and nearly 5,000 from last week. Note too; the lows are lower as the nighttime AC of choice becomes a window.
And of course, the thermals took almost all of the hit (from declining demand). No surprise, just shows how much idle capacity is in the ISO. The hydro report suggests a glimmer of hope:
If you’re long ISO, that is what you like to see happening with the hydro. Lower lows and lower highs. Yesterday’s low was nearly 800 MW lower than two weeks ago; the high was about 600 MW less. That’s the good news; the other news is the state’s reservoirs are flush with water:
About three maf more than average and almost seven maf more than the previous couple years. All of which means there are plenty of hydro bullets left in the clip and the hangover from WY17 will be felt going into Q4. But CA is not the only region with lots of water, check out BC:
BC isn’t near its highs, but is above normal and will continue to be hitting bids as prices warrant. Call this a bearish overhang on MidC upside.
ISO noms have taken a pounding, but these are just the mirror image of the Thermal report. MidC remains surprisingly high; we’d expect those to continue to fall. Palo rallied and will stay healthy this week.
The Wind is adding to MidC’s woes, the last couple of days set a summer high. SP realized a net two week high, too.
Coulee is behaving oddly:
On peak discharge is off hard while off peak rallied almost an equal amount. It seems the days of heavy shaping are temporarily suspended and not sure why.
Note the small derate on the AC, and also observe the number of hours the MidC hit export limits. The hub is long, and BC isn’t helping things, the last couple of days they sold every hour, which further underscores how long the Canadians truly are.
NP is now trading premium to SP in cash, but that is due to PG&E Citygate boasting a $0.46 premium to Socal Citygate. It seems the southern part of the state is flush with gas following the collapse in power demand. The off peak is just the opposite; SP settled over NP.
Conclusions
To follow in a subsequent post.