Good Morning,
Last week was one for the record books; everywhere was hot, the MidC Nuke was down or de-rated, loads screamed, and the system struggled to survive. It barely did, if you believe heat rates are an indicator of reserves, we do.
Prices posted high 100s, they might as well have posted high millions, there are no generating units with those costs, this was truly a no-man’s land, and only the threat of lengthy federal prison sentences kept last week from approaching the Energy Crisis levels of those good old days.
The highs were higher than the previous week’s heat wave, but also take note of the MidC Offpeak – set a high for the WECC and just goes to show how tight things really were.
NP15 cleared a 50k heat rate, not because there are 50k units, but due to Socal needing the power and the two Citygate prices remain reversed. In effect, the ISO used the transmission lines as a gas pipeline, something we might see happening more in the future … or not.
The last four days (traded) have seen Socal Citygate clear over PG&E Citygate, but we doubt that continues, things are winding down across the WECC, perhaps a few more days of pain, then we expect to see Socal fall below PG&E.
Interesting that Socal was able to inject gas over the last four days – hey, I thought Aliso was a big problem. Hah! The hub had some issues a week ago, they were pulling at about system capacity, but there have not been any problems in the last five days. Hype.
Demand
So we’ve seen where prices were (spot), where might they be going?
The Interior remains hot; Phoenix will see several days above normal but take note of that sharply declining normal curve (red line). Denver is just nice out, mid-70s, almost like Seattle used to be. These forecasts are a shade on the bullish side, but alas, Summer is mostly over and the days of breaking the system are rapidly waning.
Burbank just holds normal and there is some downward volatility out eight days, not sure what is going on there, but we’ll be keeping an eye on it. Sacto is just cool, so is San Jose, for most of this week, though the latter city posts some above normals later in the week. No one can call this forecast bullish, it is, at best, neutral.
The front of the Northwest is just hot, both Portland and Seattle are going to set records today, but then every day reverts to average which is just bearish in September. Loads will fall hard and fast after the hub works its way through today and tomorrow’s heat.
All hubs are off, week-on-week, and will continue sliding, except for the Mid-C which may set records, or at least records for September.
Actual temperatures didn’t do much yesterday, the desert was in the low 100s, the ISO coastal cities were a temperate mid-80s, and the Northwest was warm.
Generation
The Northwest nuke is ramping back to life; now it’s running at 65%. All the other nukes are fully loaded.
ISO Gas outages are up a bit from last week, and over the next several weeks we’d expect Planned Outages to start, for now, these are all forced.
Nothing of note to report on new outages, or returns. Noms are more interesting than outages:
Every hub set a season high last week, for gas nominations. As mentioned earlier, this metric is perhaps the best measure of system reserves. Every hub tapped all their plants, probably a few of those Energy Crisis diesels were turned on, too. It was the coincidental peaks that made last week so singular, but as we’ve seen from the forward looking demand – that train has left the station.
The Wind is AWOL, no hub, aside from a gust or two at NP, posted any material quantities of that renewable. Just when they needed it, the resource retired.
We find this set of charts interesting. Both are plots of the ISO’s hourly thermals through an hour or two ago. What arrested our attention were the rallies in off-peak thermals, nearly 2000 MWs at both NP and SP. Heat’s linger factor played a role, every consecutive warm day became harder to cool down, and each spilled into the evening hours.
We didn’t see the same issue with BPA’s thermals; they never budged, except to dispatch into the big wind for an hour or two. More telling is what BPA did with its hydro. Look at that ramp four days ago, nearly 3000 MW of new energy. Even with that extra energy the hub still cleared at crazy high levels.
Hydro
We love this chart because we can see at a glance the ISO hydro situation and it remains bearish but less so with each passing week. The Off Peak is down almost 2000 MWs, the on about a 1000 MW. Each has a long ways to fall, but the line trends downward and sometime around Nov the energy should be close to normal unless the state gets early rain, then you might see these lofty levels persist through Q4 and Q1 and Q2 and Q3 and …
Both BC Hydro and California are sitting on above average storage; the MidC is just normal. All are long-term bearish.
The RFC’s ten-day outlook is bearish, too, at least in the front. But what you taketh thou must at some point giveth back. And giveth they do in the last five days of this outlook. Today is the STP; we’d expect to see haircuts in BOM and Oct, some period must pay for BPA’s largesse last week. It certainly didn’t come from the clouds, that extra energy came from the pond.
BC has big reservoirs, and those are mostly filled above normal heading into Q4. Now we see the fruits of that storage – Flows at the border are approaching record levels, Mica is ramping up, and Arrow just cranks. That said, the run of river projects have run out of river (last three plots).
Mostly just a bearish set of plots in California, aside from the cuts on the Tuolumne. Here is another plot we watch, the New Melones transmission flows:
We believe this is the energy out of New Melones and gives a good indicator of how the ISO shapes its storage projects. The Pit River does something similar, though it doesn’t go to zero.
Can’t talk about hydro without mentioning GCL, can we? Output has tumbled hard from a week ago; now the reservoir is at 1279. BPA did another masterful job of teeing itself up to draft into the heat wave …atta girl, Feds.
Transmission
Lots going on in transmission, every line was working double time to serve Socal’s loads, now they are reverting to normal.
Lots of COI derates over the next two weeks, and towards the back-end of this plots, there are some new outages. Next month, the DC is scheduled to go down for about thirty days.
Conclusions
The bull refuses to leave the china shop, but the matador has entered the room. More in a subsequent post.