I suspect everyone is at work today after the long holidays; probably easy to miss last week given it was a short week, plus there were no exciting fundies in play to pull you from home. We scoured Ansergy’s plethora of reports and found a few nuggets to share, but sorry to say none of these have us too excited about long or short, but more on that in Part Two to follow.
Let’s start with the weather outlooks:
What else is there to say? This is a moderate and mild forecast for WECC and warm for the USA (watch out, Nymex). How about Precip?
Kalistan is at ground zero of a major storm system, one that may pull the state back to normal. Some of the system spills into the Northwest, but mainly the Snake, so MidC’s water outlook will be about the same as it is today – low 90s. This forecast takes us out to Jan 21, here is where that puts the water year, on average:
About 38% of the year will be realized by Jan 21, on average. As you can see, in just another two weeks more than 50% of the water year has been realized. In other words, it’s getting close to “now or never” though after 25 years in this business the word “never” is one you’d be wise never to use.
There is a telling chart. Sumas is now trading, in the spot, beneath Stanfield. The Westcoast Pipeline explosion, maybe the greatest potential threat to energy supplies the Northwest has seen since 2001, is over. We’re now back to cheap Sumas gas, and we’d guess the slide continues given a robust and full Jackson Prairie and very weak demand.
I love anomalies, that is what I look for when I run all of these reports. The above has an interesting one; NP cleared over SP on a few peak hours in the Day-Ahead LMP market. That hasn’t happened for a while, plus we saw some COB congestion. Given strong exports to the ISO and a weakening Sumas market, we’d expect more congestion in the coming weeks.
The AC line continuously hit TTC over the last few days and more telling, even the weakest hours were exporting over 2000 MWs. Same story on the DC, all of which speaks to the underlying weakness at MidC. Those exports don’t suggest the ISO is strong, just a long supply balance in the Northwest, and it is growing longer.
TTC on the Malin500 line (AC) is scheduled to drop to 3100 MWs and stay there for over a month. In other words, the Northwest just found itself 1500 MWs longer on most hours. Go back to the transmission flows dashboard, you’ll see that BC has become a significant importer again. Without that swing demand, MidC would struggle to keep all of its 7k heat rate units running.
Surprisingly, gas demand in Socal is quite robust. Check out those storage draws over the last week – 4 BCF. Now, total storage in Socal is below last year’s low levels. Supposedly, the LDC will complete its repair of the Transwestern Topock line by mid-April which will restore another 500 MMCF. I’ll believe that when I see it, but this is important because once that fix is in place, the utility will commence repairing on a parallel line. All of which suggests that by summer there may be another 1 BCF of import capacity. Stay tuned.
Loads are mostly sideways, except at NP which saw a slight uptick.
We already talked about NOAA’s 6-14 day; these are the hourly temperature forecasts. Burbank is about as close to average as you can get while San Jose is forecasted to see more hours warmer than normal. But the one that jumped out was Portland – nearly every hour is above average.
SP saw a few big gas units come offline over the weekend, NP just one. Who cares, they don’t have the demand to run all of them anyways.
Solar took a massive hit on Saturday – rain! Total renewables on that day were near a season-low.
Meanwhile, the snow anomalies across the WECC have dropped over the last week. The MidC is now at 86%, falling from a water year high of 93%. California is in the high 70s to low 80s, but we’d expect the state to push closer to normal after these storms land.
This is the week of the first Flood Control guidance released by the Corps of Engineers. Here’s ‘our take:
Forecasts for the April-August at The Dalles are 91% of normal – that’s the period used by the USACE. Dropping the 91s into our historical tool suggests a Coulee draft to 1248′ and Libby to 2420′. You can get the rest of the projections from the report.
Coulee’s already drafted down to 1278, meaning that BPA only must pull another thirty feet in ninety days, not too much. This level of water supply also says there might be drum gate work if needed. Should they elect to work on those, they’ll pull Coulee to 1255′ by March 15. That would be bearish for Feb and March, given that 70% of the draft would take place in those two months. On top of that, most of the BC draft takes place in Feb and March. Hhhhmmmmm.
Flows out of Coulee are up, week-on-week.
Because inflows are up and the reservoir isn’t being filled.
Folsom discharge soared over the weekend in anticipation of that massive storm. No one wants to see another spillgate disaster, right?
Total hydro energy production in the ISO is down over the last week, though we have to believe that trend will reverse itself once these storms make landfall.
Today is STP, and if the NWRFC’s 10-Day is a tell, it is telling us mixed signals. The feds posted a big rally for this week (more MidC weakness) but are cutting energy next week. We still think their STP forecasts are overall, too low.
Just from a regulated water perspective, these levels seem too low. There will be a draft, that is a given with a 91% water supply forecast, though these summaries don’t suggest that. Maybe April is right after the 1500 MW bump last week, but we think the Feb-March remains light.
Weather doesn’t bring us to a bullish sentiment. Socal Gas’s diminishing storage kind of gets us excited but that’s weakened by above normal weather. Further curbing our enthusiasm are these massive storms set to slam the WECC. Watching Sumas slide below Stanfield pours more rain on the flickering bullish embers. The only thing left to make us want to buy are cheap prices, and we’ll get to those in the next post.