[render_email_report name=”Change – MidC” date=”2018-09-15″]
Category: Uncategorized
Thursday Fundies
Good Morning,
More of the same, weather cooling down in the Northwest and staying unseasonably hot in the Southwest while all of the west remains dry.
The above dashboard is NOAA’s outlook starting on Day 6, before that the Northwest will get a spattering of rain:
Nothing that will make much of a difference, maybe a few hundred MW west-side rally, but zero impact where the production resides. Term markets, led by BOM, continue their slide.
The ISO contracts are low; the NP is at a contract low price-wise, and Palo and MidC are approaching the same. Surprising at Palo, given that its temperatures have been well-above normal but goes to show its all about SP15; if the mother ship crashes so do all her wards.
Off Peak is a similar story, perhaps less dramatic. All both dashboards say is how poorly the market traded during the late-July early-August period. Mostly, you can blame liquidity; there isn’t enough depth to stop these rabid moves. No big daddy left in the market to stand in there and sell into the rally. Instead, the market gaps up $50 on about 200 MWs and guess who pays? The Ratepayer, of course. And who is to blame? The FERC and other paranoiacs who don’t understand trading.
Noone talks about term markets anymore; go to a conference and everyone is drooling over the EIM -a five-minute market. Why? Because you can’t lose much money in five minutes, its safe and predictable, meanwhile the 1000s of open term MWs are left unhedged to be ultimately covered in real-time.
LMP spreads are tight at SP-PV because PV still has strong summer loads; the spreads blow out between SP and NP and SP and NOB. The NP-COB spreads remain tight, in fact, most hours the COB line is not full. You’d think the spread would trade at losses, but it just trades flat.
Socal Citygate spot continues to melt back to reality; now she’s back to a three handle, something we haven’t seen since June. Not surprised, the hub is sitting on 20 bcf more gas today than the same day last year. Yet, Socal still commands a premium over PG&E even though the latter is 15 bcf behind last year. I guess the fear of running out of winter gas lingers.
Premiums linger; the Dec sports a six handle at Socal Citygate. Contrast Socal with PG&E for Dec:
If I were to guess, I’d say Socal has an embedded twenty-degree cold anomaly within that price. That is about how cold every day between Nov 1 and Dec 31 would need to be to support those prices. Does anyone want to take that bet? Obviously not, given the current market price. Remember, this is Dec and will quit trading around Thanksgiving. Its price will be a function of November cash as much as where Dec spot clears.
How cold does Novy get? or Dec?
Just for fun, we computed the Average, Minimum, and Maximum temperatures at Burbank for Nov and Dec over the last twelve years. Burbank has a better shot at heat than cold in November, the coldest it ever got (on any hour) was 39, and that was in 2011 and 2015; last year it hit 45 for a single hour.
December is chillier, about five degrees on average, but still, the odds of extreme cold are less than Trump resigning.
In fact, there is less than a 1% chance of seeing any hour colder than 36 degrees; 97% of all December hours were warmer than 40 degrees (last twelve years). The odds of extreme LA cold are even lower if you throw out the years 2006-2010, given the warming trends of late. The point is, Dec is over-priced, still.
Meanwhile, California gas fundamentals continue decaying and, with no heat in sight, will probably decline even further. Note Socal supply hasn’t moved while sendout plummets, hence the massive storage builds.
The above plots daily totals for Jackson Prairie; we were curious to see how far behind the Northwest fell because of tight water. The circles reflect same day for the previous four years; JP is behind, but not by much and would only take a few weeks of hearty injections to be back on track.
Power Fundies
Loads are off, week-on-week, at all four hubs.
Vegas has now fallen 5-10 degrees behind Phoenix, Burbank has bounced along in the low 80s for a week, and the Northwest is flirting with Heating Degree Days.
SP’s forecast got a bit warmer in days 5-7; San Jose will see steadily warmer weather, but nothing hot and the Northern portion of the state will stay bearish. Phoenix remains hot, but its price can’t rally because of that bearish ISO. The Northwest got colder in days 6-8, and many homes will be flipping the thermostats to heat mode.
Meanwhile, the Southwest and Northwest continue running most gas turbines; the former because of loads, the latter due to the dearth of water.
Gas outages rallied, let’s see which ones are off:
It looks like the entire Encina project is offline as of a few days ago. Seems too early for planned maintenance and odd that the whole complex is down.
The ISO saw surges in wind energy coincidental to peak solar. The Northwest saw a massive and steady block of wind energy over the last couple of days.
Arrow remains cut which is driving flows at the Border to set seasonal lows. Fortunately, the wind is blowing south of the border, and BPA doesn’t need the water.
Coulee remains castrated by a lack of inflows and BPA’s desire to maintain the reservoir elevation, all of which has constrained the project’s shaping capacity. Yesterday was the least-shaped day in months. Perhaps that suggests its time to buy the On: Offs?
Not to say “I told you so” but I told you so. RFC jacked Nov (800 aMW), we don’t think that is over, and we believe Dec is due to a lift as well.
Not sure why BPA published its DC outages yesterday, they are identical to what they released in June. Perhaps just a reminder that the line is going to zero in another month. The AC has uprates in the back of the 21-day forecast.
Flows are net northbound on the Northern Intertie reflecting weak MidC Prices; same direction for Path 15 and for the same reason; Path 26 flipped, most energy went into SP, and Palo realized its single most significant swing of the season.
Conclusions
It is tempting to go long; we’d be net long, all off of low prices, and hope for Socal heat. The position remains somewhat protected by dry Northwest and all of the WECC is approaching the fall maintenance season.
Mid-Week Update
Good morning,
Mid-C is expected to move from unseasonably cool to perfectly average over the next two weeks, while PV should stay above normal for the foreseeable future. Northern California sees a return to the mean as well while Southern California remains relatively warm.
It looks dry across the West where precipitation generally falls below normal, albeit normal doesn’t amount to much in late summer.
$4 of congestion in the SP-PV day ahead spreads on the 10th were widened as much as $11 by the 11th. SP-NP tightened during the same span of time, moving from $22 to $10.
Crude jumped $1.60 yesterday after reaching as high as $69.27. Natural gas finished up $0.02 at $2.83 after rallying from $2.79.
SoCal Citygate October saw a hard fall over the past several days and is now $0.43 lower than it was on the 4th. January is also trickling down, (though the rate has slowed compared to last week) after shedding $0.21 over the last seven days.
AECO increased $0.66 day-on-day to again push north of a dollar. Citygate dropped $0.50 from last week, and while it’s a far cry from the highs we saw in the summer, the hub remains a steady $0.80 higher than it was last year.
Jackson Prairie dipped to -13 MMCF yesterday, only the second withdrawal since August 14th. Northern California saw additions to its storage for the third-consecutive day following a steady two weeks of withdrawals.
Seattle is forecasting highs in the mid-60’s consistently until late next week where we may see temps peek above 70 once again. Portland has much of the same though generally 4-5 degrees warmer. Not much to suggest demand moving in either direction for the next couple weeks.
Loads fell 150 MW day-on-day yesterday and were 600 MW short week-on-week thanks to neutral-degree days blanketing the Northwest.
Demand took a sharp fall in NP where peak loads were off 750 MW day-on-day and 900 MW week-on-week. Light loads managed a 250 MW increase day-on-day however.
San Jose dipped to 50 overnight but is forecasting its warmest day for the next week at 77 today. Watch for a return of 80 degrees by next Friday and moving into the weekend.
SP demand fell 1,150 MW day-on-day in SP as well though yesterday was still high enough for a 100 MW increase week-on-week. Light loads were off a more modest 70 MW.
Burbank temps are forecasting consistently in the mid-80’s though Sept. 21st where they are projecting a brief jump back into the 90’s. Lows are staying above 60 through the next two weeks as well.
Light were off in both light load and heavy load in PV, though peak demand showed an increase week-on-week.
Triple digits remain on schedule through the entirety of the forecast in Phoenix, but the highest temp projected currently is 105 on the 21st. Look for temps to dip to 78 during late night hours on the 13th and 14th. Slightly cooler in Las Vegas where several days climb to just the high 90’s, particularly on the 13th where the high is expected to reach just 97.
PV2 is back online following the weekends reduction to 80%.
SP gas noms dropped 260,000 MCF wince the 7th and now sit at their lowest level since August 23rd. NP also had a similar, though more muted drop, as noms checked in 360,000 MCF lower than just one week ago, a 42% decrease.
SP-15 solar generated 500 MW higher at its peak yesterday than it did one week prior. We still haven’t seen a 7,000+ MW day in weeks, however. Mid-C wind recorded an impressive 2,440 MW peak on Monday, the highest hour since August 24th.
ISO gas outages fell 150 MW yesterday but remain elevated over last week which checked in 1,300 MW lower.
Hydro
After hitting 1,278.9 on the 3rd, Grand Coulee has seen its elevation rise to 1,280.1 as of yesterday. Meanwhile, Libby has bottomed out at 1,24.8 and Hungry Horse and Dworshak continue their steady decline.
Not much spill to note outside of a few blips at John Day (generally around 1,500 CFS).
Transmission
Note the 1,100 MW increase in TTC beginning on the 19th and increasing again on the 22nd. There is some erratic scheduled activity for the 25th as well.
No shifts in NOB TTC to report this week.
Have a wonderful day,
William
Weekly Change Report
Good Morning,
Ansergy added a new report which summarizes weekly changes in crucial WECC fundamentals and markets. “Change” is easy to use and informative. Everything is relative, nothing more so than trading/hedging. At a glance, you can identify the key drivers, at a hub-level, that are pushing the markets around. You can also view how much the market is pushed around through our market metrics.
You can find the Change Report here: Execution Tools / Change
Ansergy reports 3 to 4 value types:
- Last Year – Current week, one year ago
- Last Week – Days 8-14
- This Week – Days 1-7
- Next Week – Days 0-6
NOTE: Only Weather has next week data; we are working on incorporating our forecast into the other Metrics.
Each week is seven days. In some metrics we break out HL and LL, others are 24 Hour averages. Filter on the following:
- Source – the type of data, there are eight sources
- Hub – the location of the data, we have fourteen locations
- Agg – the aggregation method, includes Minimum, Maximum, and Average
- Metric – A subset of the source
- Metric Agg – A combo of Agg and Metric, used for mixing different Agg Types in a report
You can incorporate different sources to derive custom reports. In the following example, we combined Term Markets with Spot.
At a glance, you can quickly see how the market has traded this week (last seven days) versus the prior week or last year. Note: we excluded Next Week since its moot with market data, next week hasn’t traded.
Mixing Metrics, Aggregations, and Locations
A powerful feature of Change allows blending across metrics from many locations aggregated uniquely, For example,
In this report, we pulled Peak Demand (max) and compared to average hydro, max wind and solar, and average BOM prices.
The Change Report will become our Friday blog post, replacing TradeBook. We are not disbanding TradeBook, it is still available live on the site, but we believe Change is more appropriate. Each Friday, you’ll receive our recap of the week just ended (through the previous Thursday) and any thoughts on the week to come.
All The Best,
- Team Ansergy
- [email protected]
- 206-877-0991
STP Update
Good Morning,
The following reports reflect the energy impact of the most recent NWRFC STP.
Monthly
Energy Scorecard:
- September – Down 450 aMW
- October – Down 225 aMW
- November – Up 810 aMW
- December – Down 854 aMW
September decreased for the third consecutive week, this time 200 aMW deeper than last week drop with 450 aMW shaved off in total. October dropped 225 aMW following last week’s steep increase. November jumped 810 aMW and now sits at its highest point in several weeks. December fell 854 aMW and completely wiped out last week’s increase in the process.
Daily
September 16th’s sharp decrease remains in place in the most recent update, but it’s now followed up with an almost equally sharp increase by the 19th. The remainder of September and October is down week-on-week while November, particularly the first half, shows steep increases across the board. December sits 1,600 aMW below last week’s forecast until the 16th where it remains 400 aMW short.
Year on Year
December trails the next-closest year by 1,200 aMW. November and January also pace behind every other year this century.
William
Monday’s Fundies
Good Morning,
Let’s start with NOAA’s outlooks.
In a word, bearish demand-wise and very slightly bullish hydro-wise. That cold anomaly in the 6-10 day spills deep into California; this will crush ISO demand. The deserts will remain hot, but that’s the only place, aside from New England, where it is roasting. It is that warm weather, held in place by a blocking high, that is pushing Hurricane Florence into the Carolinas.
They say no hurricane since 1950 has hit the US from where Florence sits today. Never say never!
This monster is set to land as a Category 4 and will rain on everyone’s parade. Speaking of monsters, the WECC genie has been put back into the bottle.
Check out those four crashes; prices are back to pre-summer, pre-Aliso Hype, levels. You may color in all the area above the red line and label it “hype” or better, “fear”. Now the fear is gone and its safe to be long, all you need is one of those Santa Anas to get paid, but we don’t see any in the next fourteen days.
Prompt premiums have been removed, too. Could this be the start of a long-term bear market? If LA doesn’t get hot, and it doesn’t always have a late-season heatwave, then there is nothing to rally this market until it gets cold, and that is at least two months from having a snowball’s chance in Burbank of coming to fruition. Two months of just bearish news. But there’s money to be made in those kinds of markets; there are always pricing anomalies. Perhaps its time to dust off APT?
The LMPs are noteworthy in two ways. First, the external hub’s heat rates are still sky high when compared to the ISO. Second, note how flat the off-peak prices are. Across every node, there isn’t even a dollar spread.
Socal Citygate still commands a premium, but now its just $1.30 over PG&E and Border is below both. Check out the train wreck in Canadian gas; both AECO and Kingsgate busted the buck, they can’t even give their gas away. Finally, and most interesting, the only hubs that saw a rally over the last five days were Sumas and Stanfield, which speaks to the lingering tight water situation in the Northwest.
Hey, don’t those charts look like BOM? Well, those are plots of Citygate, why would the MidC chart look like LA gas? Meanwhile, the fear has been beaten out of these strips, and without that late-season heat, the angst won’t return until LA dips into the 30s and even then, it has to stay cold for an extended period to make a difference. Remember, Socal is sitting on 15 BCF more gas today than the same day last year or the year before.
PG&E is in the opposite position; that LDC is about ten bcf behind the previous two years. Socal hasn’t had a draw in a month, PG&E is still drawing while Jackson Prairie injects most days.
Not a lot to say except everything in Cal gas land is back to normal.
Power Fundamentals
Loads rallied across all four hubs with SP leading the charge off of the 90s in the LA Basin.
The Northwest was as temperate as temperatures get, stuck in the low 70s, perfect golf weather. That teasing heat we saw last weekend dissipated into the low 90s in LA and low 80s in San Jose. Now, it looks like those temperatures are poised to slide to the colder side.
Phoenix and Portland all show builds from the forecast three days earlier, but Portland’s build only takes the City of Roses rallied to the high 70s, not a load event. Phoenix, however, remains unseasonably hot. The ISO has no surprises, good or bad, just mostly more of the same.
PV #2 is down to 80% as it most likely is heading into its refuel (the last one was April 2017).
This is interesting, SP15 saw its gas noms spike off of the modest weekend heat, yesterday it burned almost as much as it did when Burbank hit 105 in July. I guess that’s what happens when the price of gas is just $4.00 instead of $16.00; the gencos can afford to burn their own gas. Palo and the Northwest remain quite bullish, the former off of that lingering heat and the latter off of that persistent drought.
Gas outages remain at minimum and now that SP is using its own units those outages might potentially matter – emphasis on “might.” SP is barely clearing a 10k heat rate which leaves a lot of economically dispatched capacity on the sidelines.
Seattle and Portland will get wet this week, but the production-centers won’t see much. This forecast will have zero impact on Northwest hydro resources.
The Peace swung into a baseload regime, drafts from Arrow tanked, and the flows at the US|Canadian border continue to decline.
Coulee discharge has been scaled back post-Spill, BPA doesn’t need the energy and is in its saving water mode.
BC Hydro has a hole in its system, total storage is slightly behind average, while the Northwest is precisely at normal. California quit drafting its reservoirs as it stares at a potential El Nino. Per NOAA “The odds of El Niño emerging in the tropical Pacific by fall have dropped slightly to 60% (from 65%), but remain at 70% by winter. ” Those seem like pretty good odds to us; no doubt our friends in Kalistan are praying they get one. It’s like manna from heaven for them.
Flows through the turbines on the mainstems are nearly back to Spill levels. There was a surge in energy for a week, now almost back to the August production levels.
Shasta scaled way back, the Pit quit shaping water, and the rest of the rivers are at minimum flows.
Time to climb back on this horse, the Nov-Dec STP pony, that is. We still think its way too bold for our friends in Portland to predict the lowest November in 20 years, not while they are forecasting BOM and Oct to be about average. What gives? Are they really that good that they can predict a massive precip anomaly sixty days out? From past performance, we think not.
If the 10 Day is a Tell, it is telling us to expect BOM cuts in today’s STP; those BOM cuts may spill into OCT and heck, why not cut Novy-Dec some more, too?
Some tweaks to the AC’s TTC, nothing changing on the DC front. We circled the Oct DC outage since its approaching that thirty-day window.
The Canandians are saving the Mid-C day by importing energy, otherwise, the price would be that much uglier. The AC cannot fill the line which speaks to how tight those spreads are. Despite a warm event in SP, flows on Path 26 are more north-bound than south. Flows on the Palo line have declined over the last week as APS tells the ISO “no thanks” and keeps its energy at home.
Conclusions
Bearish, but the best cure for a bear market are low prices, and that’s what we’ve got. I’d start layering in some long lottery tickets in the south and pray for a big Santa Ana. If it doesn’t happen, doubt there would be that much pain. As long as the Northwest doesn’t get any significant precip, energy will be tight everywhere.
Tradebook Spec
Recap
Good Morning,
Tradebook finished the week with a $16.8M loss as all hubs came up shy in profit this week. The heavy load position sold off 39 MW but the HL book remains 359 MW long overall. Light load sits 63 MW short after buying back 38 MW this week.
[render_email_report name=”TradeBook – Speculative” date=”2018-09-09″]
Mid-Week Update
Good morning,
California is taking a sharp turn toward cooler temps over the next two weeks as a below-normal forecast has moved into nearly the entirety of the state, save the SE corner. Mid-C will inch closer to the mean, but stay below normal, while the Southwest continues on its warm path.
Mid-C can expect above-average precip over the next seven days while the Great Basin and Rockies remain especially dry.
After heavy congestion on the 4th, SP-PV spreads were much tighter as each eclipsed the $70 mark on the 5th. SP-NP remain neck-and-neck as well.
August crude finished more than $1.25 below July while August natural gas was up $0.22.
SoCal Citygate prices fell $0.30 for October, and while not as dramatic, the other hubs followed suit. January didn’t have as much of a sharp drop but has mostly leveled out over the past week.
AECO increased $0.13 day-on-day to push north of a dollar and more than triple the price we saw just three days ago. Citygate has settled in the low-$4 range for each of the past three days.
AECO’s price continues to fluctuate, and today’s price looks like it’s reached a high point once again.
SoCal gas storage dropped from 653 MMCF, the second-highest daily storage in the past year to a withdrawal of 71 MMCF over the span of five days. Northern California and Jackson Prairie also saw movement from storage to withdrawals during the same span of time.
Seattle is forecasted to top out at 79 today, seven degrees above normal, but perhaps the last above-normal day in the next couple weeks as the 10th tops out at just 70. Portland will hit 80 today but doesn’t show another day that warm in the next fourteen.
Loads increased for the third-consecutive day as temps slowly creeped back above normal across the region. Week-on-week demand was down close to 300 MW.
Demand decreased in NP-15 with peak loads more than 600 MW short of the day before, though loads remained up week-on-week. Despite peak demand dropping day-on-day, light load hours were up.
San Jose is projecting a daily high three degrees below normal today. Highs are forecasting within a couple degrees for the next week but could see temps increase 5+ degrees above normal by the 14th. Sacramento has slightly more of a deviation from average as tomorrow projects a high of 95, five above normal.
SP demand increased 400 MW day-on-day and but also fell short week-on-week by close to 1,600 MW in peak loads. Off-peak demand was up 400 MW day-on-day.
Burbank shows a high of 85 today, four degrees shy of normal, but that won’t be the trend as we move into the weekend. The 8th is projecting a high of 95, ten degrees above normal, while the 9th checks in at 92.
Light load demand was off close to 600 MW day-on-day while heavy loads fell 1,100 MW short of Tuesday. Yesterday also marked a significant drop from last week — 1,900 MW at peak load.
Phoenix is set to reach a high of 108 on the 8th, eight degrees above normal and three degrees warmer than Friday. Highs aren’t projecting below 103 for the next 12 days. Vegas may be even warmer as the 8th is forecasting a high of 106, one degree warmer than the previous 10-year high for that day.
All nukes remain at 100% this week.
SP gas noms jumped 190,000 MCF since the 3rd of September and are approaching the third-highest total since last October. NP had a sharp increase of its own, and though it fell short of setting annual highs, it still amounted to a 415,000 MCF increase over four days.
SP-15 solar fell to just 6,300 MW on Tuesday, the lowest daily high in over three weeks. Mid-C wind topped out just above 500 MW to start off the week. This is a far cry from the 2,000+ MW peaks we saw at the end of last week.
ISO gas outages tacked on 300 MW yesterday but are still well below the daily totals we saw at the end of August (3,788 WM on the 28th).
Hydro
Grand Coulee has held steady at 1,279 for the past week. Hungry Horse and Dworshak are steadily dropping with 1′ and 4′ shed since the 31st respectively. Libby seems to have found its sweet spot at 2,443 as it’s settled in that range for the past five days.
Spill came to a halt across the entirety of the Northwest.
Transmission
A significant change to report for COI as every hour from 9/10 10:00 AM to 9/17 10:00 AM is showing a TTC at 3,900 MW. Thereafter TTC drops to 2,865 through the 20th.
No shifts in NOB TTC to report this week.
Have a wonderful day,
William
STP Update
Good Morning,
The following reports reflect the energy impact of the most recent NWRFC STP.
Monthly
Energy Scorecard:
- September – Down 232 aMW
- October – Down 254 aMW
- November – Down 247 aMW
- December – Up 299 aMW
September, October, and November all saw similar decreases in this week’s forecast update — all between 230-260 aMW. December stood out as the sole increase, and that follows last week’s 1,000+ aMW increase as well.
Daily
While September only changed 232 aMW as an aggregate, that total is made up of several massive changes in the forecast including: 1,200 aMW increase on the 7th, 1,300 aMW decrease on the 9th, 1,200 aMW increase on the 12th, and 1,800 aMW decrease on the 16th. October and November are much more stable with a near even decrease across each month. December shows a large increase beginning on the 12th and sustaining it through the remainder of the month.
Year on Year
September is the only month that’s forecasted above-average. October looks low and each consecutive month paces further behind.
William
EIM vs Daily Settles
Good Morning,
I suggested using EIM settles might work as a proxy for an hourly index. After running some numbers, I think it still might.
The test covered from Jan 1, 2017, through Sep 4, 2018. The EIM price is the average of the 12 hourly ticks, excluding the two smallest and biggest (8 ticks per hour). The MidC index is comprised of Puget, Portland, PacWest, and Powerex (Powerex started in April 2018). The average EIM HL price during this period was $22.77 while the average ICE settle was $29.74. If you exclude the blow-out prices this summer, the delta drops to about $2.00 (EIM still under).
Most of the year, the EIM Index tracks the daily settle, though in bullish markets it lags. Of course, this is not apples-to-apples, the Daily Settle is a forward of a sort, and the hourly market prices reflect the reality of that hour. A better comparison would be against the hourly settle, but we don’t have that dataset. The correlations, however, are positive and not statistically irrelevant. All hours had an R-value of 0.62 while the period after Powerex joined jumped up to 0.68. Again, the correlations should be against hourly.
We also looked at Palo Verde; the difference is there is only one entity, AZPS, participating.
The Deltas are more prominent and the correlations lower, but same issues at Palo as MidC. Half of the delta is explained over two weeks this summer.
We suspect you get an even better index if you average in Nevada Energy and even PacEast.
Drop us a note if you’d be interested in seeing Ansergy publish an Hourly Index using this approach.
- Team Ansergy
- [email protected]
- 206-877-0991