Monday’s Outlook

Good Morning,

Lot’s of news around the Desk … Joking, not that much news. Maybe the most material change I noted was the onset of some significant precipitation.

The rains are centered on the Northwest, California receives very little (less than a tenth of an inch). Kalispell, per today’s forecast, is poised to be the recipient of nearly an inch in a day. Spokane gets almost a half inch spread over a week, while Seattle and Portland each get over an inch cumulative. These aren’t the biblical storms that define a water year, but perhaps they’re harbingers of what’s to come? Biblical storms are the ones like the Oct 2016 event that dumped nearly 10 inches across the WECC; this isn’t one of those. Yet these are positive anomalies, and surely the RFC will take these into account in one of their STP forecasts?

NOAA puts the entire USA above normal precip, and most of that storm system is centered on the COB; we don’t see this in today’s NWS release (0Z), perhaps it shows up later, or NOAA revises? Those dark blue temperature anomalies scream Heating Degree Days even though its September. Socal is warm, not hot; Palo is hot, not warm; Nocal is neither hot nor warm, it’s just average; and the MidC is cooler than not.

That epic bear market, the Crash of 2018, is over. The above is Oct HL, and all hubs are up; it doesn’t look as if the MidC ever fell much and isn’t too far from a contract high. The other three, NP, SP, and PV are all beyond “Screaming Buy” and are closer to value though not even near “Screaming Short.”

The only thing remarkable about recent LMPs are the remarkably tight spreads. There isn’t much of a spread, not enough to pay line losses. Even the On: Off is tight.

SP: PV is starting to widen, surprising given near-record temperatures in Arizona and slightly above in the ISO; blame it on gas. There is a more significant spread between SP and PV than there is between SP and NOB.

Another tightening spread is Cal gas to Northwest gas; I guess the market final recognizes how short water has been in the Northwest. While the Cal gas markets came off, the Northwest rallied $0.15.

Meanwhile, Term Socal Citygate found its bottom (like it did in power) and has been on a two-week rally. The chances for anomalous SP heat are dwindling, but not over.

The above is a new dashboard for Temperature Forecasts; this one plots the Min|Max around the current forecast. Note the highs in Burbank, most days in Sept have been near 100, though 2018 has barely breached 90. Here is another look at Sept weather:

We added a new table to the Weather Actuals dashboard – Degree Day Anomalies. Check out San Jose and Burbank’s: negative 40% and 25%, respectively. August – in like a Lion; September – out like a Lamb.

We couldn’t resist, this struck oddly. Socal’s total storage has now passed Nocal’s; you have to go back to 2015 to find the last time that occurred. A year ago, the storage spread was 30 bcf to PG&E, now it’s 2 bcf to Socal.

Palo’s loads were off while NP’s rallied; both MidC and SP were sideways.

Burbank’s temperatures are rallying, most of this week is 1-3 degrees warmer than Friday’s forecast, and all of this week is in the high-80s, low-90s. Even San Jose is warmish while Phoenix stays hot for the duration of NWS’s 7-day forecast. Even Portland will enjoy a lovely September week before the autumn rains wash out everyone’s golf plans.

Northwest and Southwest power burn remains strong while the ISO is weak which helps explain the relative moves in the spot for each.

No outage news, but the fall season is set to begin.

The big wind blew not in the ISO and was but gusty in the Northwest.

EIM energy flows are plotted above. Both Idaho and PacEast bought big on the same tick Yesterday (5:35 pm). Also, PacEast sold into the ISO for the first time in a long while.

A bit more choppy in the Northwest, except for PacWest which sells every hour, the only variable is how much she sells. Is it odd that the utility never buys, ever?

We mentioned it was going to rain in the Northwest but flows at the Border on the Columbia are already rallying and for the first time in weeks Border flows are above normal. What happens when Kalispell gets an inch? At this time of year, each incremental cubic foot is destined for the turbines rendering cumulative rain and MidC price inversely correlated. And this rain is arriving in front of the NOB shutdown. And Oct MidC is approaching a contract high.  Hhhhmmmmmmm.

Aside from the flows at the border, not much change in the rest of Coulee’s source streams; that changes if these storms bring what the forecasts suggest they might.

It’s Monday, that means the STP is released today. Our bold forecast is a two gig bump in Dec; either this week or next. November is destined for even more water, so is Oct. Perhaps the NWRFC waits for more confirmation on the impending storms, or perhaps they jack this week?

The 10-Day Tell tells us little; at best it says BOM gets cut.

Note the drop in Peak ISO hydro energy; she’s dropping faster than August BOM did. Goes to show, the ISO doesn’t need the energy, there hasn’t been any BOM heat, but the state does need the water, even though an El Nino is potentially brewing. Kalistan is worried, and not just about flooding; it seems even birds are at risk:

El Niño fears grow as starving baby birds wash up on California beaches

As if worrying about Nat Gas price spikes, Blow-out Power Prices, Rolling Blackouts, Leaking Gas Storage sites, Pipelines that blow-up, running out of water, Nunes, Trump … now our friends in the Golden State have beaches filled with dead birds. What’s next, an earthquake?

The AC has extended derates versus the outlook a week ago. No changes on the DC.

Path 26 is also derated, but flows don’t ever approach the new derated capacity rendering the issue moot. Lots of power flowing North on the Northern Intertie suggest weak MidC prices; the NOB and COMB are mostly full. Even Palo is flowing more into the ISO.


The South will remain tight, Santa Ana could still strike LA; Phoenix will roast for another week or two. The Northwest, on the other hand, has no cooling load and its too warm for heating load, but it will get doused with the first major rainstorm of the season. Perhaps not enough to crush the hub, but if another storm slips in behind this one, a trend may be underway, just as the NOB goes to zero. We’d be inclined to own the SP-MC for Oct or Nov.

Pick your poison, though the Nov seems cheaper.