Good Morning,

The heat’s back but somewhat short-lived. We saw big heat in San Jose yesterday, today the Bay Area has cooled down, nearly ten degrees cooler than yesterday’s forecast. Still, the heat is real and will arrive this week.

Thursday

Friday

Saturday

Sunday

Monday

Sunday looks to be the hottest, seventeen degrees warmer than Thursday. BOM LL, anyone?

It’s easy to overlook days 0 to 6 if you over-focus on NOAA’s term forecasts.

Those remain warm in the southwest and well-below normal in the Northwest. Unlike the late-July early August events, the Northwest won’t find itself in such dire straights. Not only will loads be off, the spill ended.

Net, this change isn’t creating much new energy, mostly it means BPA has way more bullets in its magazines to fire at head-fake bullishness. Should NP enjoy big clears you should expect Malin500 to be full. Of course, NOB will be full as well.

Even with the relatively mild forecasts for today,

the LMPs rallied up everywhere. It seems the market wants to jump, just wait until loads support those leaps and we’ll be back to triple digits in power and double in gas.

That small rally in LMP price was in the face of spot gas declines resulting in a more normal type heat rate for SP15, 10k. The rest of the heat rates are nuts, still 13-15k on mild weather. Seattle realized a high of 73 and Burbank flirted with a 70 handle, too.

Term Socal Citygate remains in bear territory.

The above charts are all major west gas hubs, the Socal bearishness is amplified when just looking at that hub:

We think October is interesting given its proximity to September and the number of late season heat events LA has realized (Santa Ana, anyone?). Let’s see if term gets bid up this week. One fundamental reality that may have finally been factored into price is storage. Socal is sitting on 20 bcf more today than in the last two years.

The time to fear winter was last year; this year the LDC has 20 more days of 1 BCF draws than last year. The odds of LA needing 20 days of 1 BCF draws are close to zero.

PG&E is a different story, that LDC is 15 BCF behind its three-year average, but you wouldn’t know that from prices.

Demand is up, slightly at both LDCs, while imports are sideways in Socal and dramatically off at PG&E.

Power Fundamentals

We already talked about Socal heat, but didn’t mention Palo. It appears Phoenix will be getting ever hotter every day for the next ten days, cresting close to 110 which will set several new September records.

NP loads are up, SP sideways, and Palo’s are off. The Northwest’s were up. slightly, off of very cool weather last Sunday.  On the generation front, not much to report. The nukes are all running and its too early for Fall maintenance.

SP was becalmed over the weekend, as was the Northwest, but not NP.

NP’s noms staged a rally of sorts while SP’s cratered even further. Palo and MidC’s remain strong, be interesting if the latter backs off now that the spill is over. It must be tempting for BPA to make itself long by drafting into these 13-15k heat rates now that it isn’t wasting half its fuel on fish. Of course, if BPA makes itself long (by drafting) it makes all its Slice clients long too. Perhaps we might see cash spreads blow out?

Way too early to care about rain, or is it? The backend of this forecast is more wet than not and water is a cumulative commodity. Eventually, the ground gets saturated and the rain hits the rivers. Worth watching, not worth trading around it, yet.

The Peace is cycling, pretty much load following while energy flows northbound on the Northern Intertie. Arrow has been backed down mostly because BPA ended the spill.

The mainstem saw energy production jump because of the termination of spill, but total BPA hydro energy didn’t move.

Think that Pea game, no not the “Pee tapes”, the Pea Game. The one where there is  a pea beneath three shells and the scamster makes you guess which one the pea is under (when in truth, its under none of them.). BPA does the same with water; it now flows more through the mainstem turbines and backs off Coulee.

Where’s the pea? More important, where the heck are those “Pee” tapes? I’d give a free week to all my clients to see the Donald’s golden shower on CNN.

California water is getting tighter, Shasta continues to cut discharge but note that is inline with the ten-year averages. Strangely, the Pit quit shaping, not sure what is happening there. Did the reservoir  finally run dry?

Total ISO hydro energy production is off and, until it rains, will continue to drop. Although, with this week’s impending heat, we expect the ISO will draft again.

BPA raised TTC on the COB, no NOB changes.

The Northern Intertie is flowing North reflecting weak prices at MidC. Which reminds me, does anyone else follow the EIM clears?

In this plot, we filtered out the Northwest participants (Puget, Portland, Powerex, and PacWest). First, note they all begin with “Pee”; second, check out the tight settles for all four which makes sense since they are all clearing against each other, mostly. The question we have is this. “Do these prices reflect hourly real-time?” If yes, perhaps this is the long-sought hourly MidC index, published in real-time in five-minute ticks? Let us know what you think. We’ll do some averaging and compare to the dailies and publish our conclusions.

Conclusions

I wouldn’t be short SP, PV, or NP going into this heat. The MidC, maybe, but probably not. I might be tempted to own some spreads, BOM and Prompt, however. Eyes must be focused on the heat and today’s 12Z – does it build or not?

Greetings,

We added a new weather mapping tool, perhaps the coolest I’ve ever seen. You can find the link under the weather menu – “DarkSky Weather Maps.”

The report maps 13 different metrics hourly:

Metrics

• Temperature Forecast and Actuals
• Feels like Temperature
• Precipitation Radar
• Precipitation Forecast
• Cloud Cover
• Wind Speed
• Wind Speed Gusts
• and a few others

The map looks back nine days and forwards nine days.  Use the calendar tool to select the date you want to map. You can also use the forward/backward buttons to the right of the calendar tool.

The map is hourly; you can pick a date and hour, then use the buttons to jump forward/backward in three-hour increments.

Pick an hour to start; You can also zoom in and out.

Told you it was cool. One other thing, check out those San Jose temperatures next week – approaching 100 degrees. Get ready for another roller coaster rid on the SP15 express. The last heat wave wasn’t that hot in the Bay Area; this one looks like it might exceed total ISO demand.  Oooh, Lah Lah!

Mike

Greetings,

Ansergy has replaced its default home page. The old version listed the last few blogs (you can still access the blogs from the left-side Nav bar), the new is a 4X3 matrix of real-time reports.

Each report is updated hourly; the EIM is updated every 5 minutes. Click any report to expand and change locations. Changing screen resolution allows you to make these 3X3 or 2X2, etc.

These can be customized; this one is a Mid-C focused matrix, you may prefer SP15 or Palo. You might also want to see just Hydro or Transmission or Temperatures, your call. Let Garrett or Bill know what you’d like, and they’ll make the changes or, even better, you can make your own changes. The matrix is a dashboard called “Ansergy Report” and is available for modifications.

• Team Ansergy
• [email protected]
• 206-877-0991

Greetings,

Sometimes it is fun to step back and take in the big picture. For example, the Summer of 2018 will go down in the books as one of the most volatile periods in the history of power for any region on the planet. Only the WECC Energy Crisis of 2000-01 exceeded the volatility of this latest flare-up. There were winners and losers; the big winners were the unhedged generators with plants outside of SP15. Maybe a few long utes laughed themselves to the bank as well.

In times of high prices, there is always one loser – the ratepayer. He is the sheep tied to the stake in the middle of a den of wolves. No one protects the ratepayer, he is naked short and can do nothing about it. Back in the day, the utility looked out for its ratepayers but post-Energy Crisis most elected to move a disproportionate share of load into the real-time or day-ahead markets. Hedging? That’s way too risky; instead, we’ll cover his exposure in the more volatile front.

But this post is not about the miss-management of ratepayer wholesale exposures; it is about the cost of saving salmon. In a high-price year, you’d expect that cost to be even higher. We’ve compiled some data that summarizes the price of Summer Spill.

The two most expensive years to save the salmon were the last two and this year was 52% more costly than last year and 213% greater than the ten-year average ($130 million). The math is simple, take the spilled energy equivalent (adjusted for hydraulic capacity) times the hourly wholesale price.

The leap in cost wasn’t driven by spilling more, in fact, 2018 was the 3rd lowest year as measured in spill energy equivalents (MWH).

It was also the third lowest in total energy generated (Spill Plants), but the value of the generation was the highest ever.

Fortunately, all of that value was used to offset residential demand thereby protecting, somewhat, the vulnerable ratepayer.

If you are interested in learning more about the study, or would like some additional work performed, drop us a note.

• Team Ansergy
• [email protected]
• 206-877-0991

Recap

Good Morning,

Tradebook finished the week with a $6.2M loss as all hubs not named Mid-C came up short of profit.  The heavy load position came up 83 MW lighter though the HL book remains 370 MW long overall.  Light load sits 89 MW short after selling another 29 MW this week.

[render_email_report name=”TradeBook – Speculative” date=”2018-09-02″]

Good Morning,

The heat is back, at least in LA, which is where it impacts the WECC the greatest. The current forecast isn’t that mind-boggling 100+ heat, but the trend has been warming, and it wouldn’t take but a few more days of incremental warming to get back to those panic levels.

We have combined Precip with Temps since the seasons are changing and our focus on hydro will grow. For now, we aren’t too concerned about precipitation but will still watch it. Back to the heat …

Check out the deltas between today’s Burbank forecast and three days back; those are the values most interesting. The absolutes, 91 high, of course, are relevant, but the trend is too, and that is building. Keep a wary eye on it over the weekend; we will be.

Because, if temps do build in LA, this massive term socal citygate selloff will stop and reverse itself. For now, the entire strip is in a freefall which goes to show how much hype is built into term markets. You’d think after 20+ years of trading the market would be more mature but those charts suggest otherwise. I guess that is because the average tenure of a term gas (or power) trader is about five years; no one can remember what happened beyond that because they weren’t around, they were in drunk in college dreaming of becoming the next Marc Rich.

And power follows citygate, everywhere! LOL, you’d think every power plant in the WECC burned citygate gas, but you’d be wrong.  They burn Sumas, Stanfield, Malin, Permian, Cheyenne, Kern Delivery, and PG&E; but they don’t burn Socal Citygate. That is the most astounding takeaway from the 2018 Energy Crisis – the virtual gas pipeline that ties every western price point to Socal Citygate.

LMP prices are a bust of late, or maybe they are just back to reality. Probably more of the latter than not, though the weather is mild and loads are off, and prices are down. But wait, a ripple was felt yesterday in spot gas.

No, not the AECO bust-a-buck price, check out the Buck Rally at Citygate! I’m Baaaaackkkkkk! That off of the return of heat, we suspect. In the pre-Energy Crisis days a dollar rally would be astounding, now you’re so numb to these moves you may not have noticed. Well, start noticing because the moves may get bigger if that heat grows.

Check out the Socal Sendout last year versus today’s; that’s what happens when LA gets hot. It may be almost September, but that cauldron called LA runs a higher risk of deep heat now than it does in July. Also, take note of Storage in Socal vs. PG&E; the latter is running about 15 bcf behind the three year average. The former is about the same ahead of a two-year average (the Aliso-derate period).  Once the risk of summer heat fades (mid-October?) we think this reverse storage issue will impact term markets; for now, it is overshadowed by the prospects of Socal not serving its winter loads.

The decay in loads continues, every week it’s off, but that will change in LA and probably Palo, once the heat arrives.

NP and SP’s freefall in gas noms has abated; expect both to rally strong next week.

Outages in the ISO remain a non-issue. All the nukes are running making one feel like the cowboys sitting around the campfire saying “it’s too quiet out there” seconds before they all get scalped then barbequed.

Blame some of SP’s weak prices on renewables, Monday and Tuesday set summer highs . MidC’s wind remains on/off; was on yesterday and off Mon-Tues.

Told you we were starting to look at water; the Northwest gets a smattering next week. Not enough to change streamflows, but this is the biggest dump since spring. Not sufficient to saturate the ground, but its a start.

Lots of changes afoot in the regulated BC Hydro reservoirs, all triggered off of declining loads and the anticipation of Spill Abatement on Saturday. BPA doesn’t need the water; they survived summer.

All of that CFS going over the spill gates could be shifted to the turbines starting on Saturday. It won’t; most will just stay above the dam, filling the reservoirs or, more accurately, not drafting the reservoirs. That said, the return of this water for energy is a big deal; BPA’s bullets just doubled in an emergency.

There is no volatility, day to day, in Coulee’s generation. Compare the Period Average line (Black) to the Daily Average line (gray); very tight all of which says things have grown soft in the Northwest. BPA has no problems serving load.

We still don’t get the NWRFC’s November and December forecasts; both are projected to come in at 20-year lows. Huh? We understand, the reservoirs were pulled to serve big summer loads, it was a mini-Energy Crisis. Still, reservoirs are not that low, in fact, they are just average.

BC is off a bit, but I’d call that rounding error. Contrast today versus the low; it’s like 3 MAF higher. And the US Northwest is precisely at the average which is a 1 MAF above the minimum. No, these storage levels do not support those Nov-Dec STP forecasts; we are convinced they will be radically revised upwards.

The 10 Day is poised to slash total water but only because Spill goes away; water through the turbines (QG) won’t change, or if it does most likely will go up. The above plot merely reflects NOT wasting water on fish.

Several new short-term transmission outages reported by BPA.

Look at the direction on the Northern Intertie, just to show how weak the Northwest is. Plus, the DC is hitting TTC on many hours, and the AC even blew past TTC for a few hours yesterday. Now Path 15 is northbound nearly every hour, and even Path 26 is flowing North more than south.

Conclusions

Cheap often means buy, cheap coupled with growing bullish fundamentals means buy even more. We’d be long in the south off of a heat lottery ticket which means we’d be long everywhere because it doesn’t matter what a non-SP hub’s internal fundamentals are in this new world. If SP blows up, so shall the rest of the WECC.

Final thought for the day, check this one out.

The market has taken a shining to June MidC. Whoa, June? We guess its all about El Nino…

Sorry, that is one of the weakest equatorial anomalies we’ve ever seen associated with El Nino. Sure, it will build, but to jack June up to a 15k heat rate off of that?

Good morning,

NOAA Forecast Images

The Northwest is well on its way out of its late-summer doldrums as warm weather returns this week and extends into the next as well.  Southern California looks particularly warm especially in the second-half of the two week forecast.

Precipitation Forecast

Mid-C is slightly drier than normal while California stays dry, as is expected.

LMP Spreads

Day ahead prices peaked just below $60 for both SP and PV yesterday.  SP-NP spreads were more dramatic as NP topped out at just $50, $9 short of SP.

Futures

Crude peaked at $69.04 early in the morning yesterday but fell quickly toward mid-$68s to round off the day.  Gas was off just over two cents after opening at $2.87.

West Term Gas Prices

SoCal Citygate continues its fall in Sept, Oct, and January.  September’s price ($4.73) is at its lowest point since mid-July.  SoCal Border September is now lower than Henry and PG&E.

Spot Gas

AECO dropped $0.16 day-on-day yesterday while Socal Citygate jumped $0.45 after consecutive days below $4.00.

Citygate marked its lowest point since early July on Monday but remains well below levels from even a week ago.

Mid-C Demand

Seattle will top out at 74 today, three degrees above normal and well in the neutral degree day range.  Highs will drop as we move toward the beginning of September and eventually hit a high of just 64 by the 3rd, ten degrees below normal.  Portland will hit 80 today but has just a handful of days that warm in the remainder of the forecast.

Loads were up more than 1,500 MW yesterday though they remained more than 2,000 MW short week-on-week.

NP 15 Demand

Demand decreased in NP-15 with peak loads falling 500 MW short of Monday as well as week-on-week.

San Jose is projecting temps within two degrees of normal until the 2nd where temps dip five degrees below average.  A moderate warming period may be in store in the second week of September as temps could rise back into the 90s.

SP-15 Demand

SP demand increased 300 MW day-on-day and but also fell short week-on-week by as much as 1,800 MW in peak loads.  Minimum demand was up 250 MW day-on-day.

Burbank isn’t projecting daily highs above normal until the 5th of September and today’s high may come up 10 degrees short of average at just 84 degrees.  Lows are falling into the comfortable low-60’s as ACs may get an extended break.

PV Demand

No below-normal temps in Phoenix for the foreseeable future as temps are set to rise as much as six degrees above normal by the 3rd and top off at 110 degrees.

Las Vegas isn’t showing the same heat wave though temps will stay in the 100’s through the end of the month.

Nuke Status

All nukes remain at 100% this week.

Gas Plant Noms

NP gas noms hit their bottom on the 26th at 484,000 MCF and have since rallied to 640,000 MCF as of yesterday.  Mid-C demand is up slightly day-on-day but still pales in comparison to the levels we saw early last week.

Renewables

SP-15 solar was up more than 300 MW week-on-week Monday, and wind added an additional 900 MW gain compared to the previous week as well.  Mid-C wind, on the other hand, peaked at just 127 MW on Monday, down from 2,200 MW on Sunday.

ISO Gas Outages

ISO gas outages fell 1,500 MW yesterday following Monday’s 800 MW increase over Sunday.

Hydro

PNW Reservoirs

Hungry Horse and Libby each dropped a foot in elevation over the past week while Grand Coulee shed 2.5′ in the same span of time.

Transmission

BPA TTC

The COI’s line will run at 3,800 MW in TTC until midnight tonight.  Another drop is scheduled for the 6th from 9AM to 3 PM as TTC drops to 2,970 MW.

Two dramatic, albeit short, drops in TTC are scheduled for tomorrow at 7 AM and 4 PM as the line falls to 1,513 MW for each occasion.  Another decrease is scheduled for the 8th and 9th.

Have a wonderful day,

William

Good Morning,

The following reports reflect the energy impact of the most recent NWRFC STP.

Monthly

Energy Scorecard:

• August – Up 53 aMW
• September – Down 162 aMW
• October – Up 610 aMW
• November – Up 637 aMW
• December – Down 1,048 aMW

Little more than noise to round out the August forecast as just 53 aMW was added in the most recent update.  September had slightly more excitement with a 162 aMW decline.  The main attraction in this week’s update is focused in October through December where the first two months increased just over 600 aMW each (bucking a several-consecutive week decline), and where December dropped a massive 1,048 aMW.

Daily

September begins with a 920 aMW drop on the 2nd and follows that up with sustained 500-800 aMW week-on-week drops through the 16th.  From there through November it’s consistent increases with some as high as 1,100 on November 3rd.  December saw an immediate drop that was held through the entirety of the month.

Year on Year

November and December stick out as major anomalies compared to the rest of the century, especially December.

William

Good Morning,

We’d love to have a rant to rant about but don’t. Instead, we have this:

Cool to cold in the Northwest and mild to a slight warming in the south. The northwest has lost its positive precip anomalies, not that those were that important, they weren’t. All in all, it is a neutral to bearish forecast, except for that warming trend in the south. The above is Sunday’s forecast, keep an eye on today’s.

Socal Citygate continues its freefall back to reality, yet substantial premium (to April’s prices) remain. Should that Socal heat build, expect this trend to reverse, as well as this trend…

Who would have thought, on August 5, that by the end of the month Palo BOM would be trading at a 16 month low – both heat rate and price? Don’t think this cheapness is limited to Palo …

The MidC is the same story, the heat rate hit a chart low last week, and dead cat bounced to still being a low. All of which is being driven by a cash market that is in free fall.

Price wise those LMP DAs seem cheap, but not when you look at heat rates; those 12-13ks reflect most units running, which is the case outside of California:

Inside the Golden State, the power gas nominations have collapsed, but not outside. Both Palo and the MIdC remain near summer highs.

Check out those AECO prices, $0.34/mmbtu? Unreal, why aren’t the wells being capped? Why is anyone still drilling in BC or AB? Oddly, compare the AECO price to Sumas, is that all pipeline profit? And last, the PG&E Citygate to Socal Border spread has returned to status quo. For how long?

Socal’s fundamentals are unchanged over the last week or so; demand is off, but supply is constant. Not true up north, PG&E saw both supply and demand collapse (Power). Meanwhile, Socal’s storage outlook grows ever rosier (if you’re short or a ratepayer, but hey, that’s the same thing, right?):

Socal’s total storage is at a two-year high and growing. PG&E finally started injecting for the first time in a month, so did Jackson Prairie.

Power Fundamentals

Loads collapsed, week-on-week, across the WECC, every hub is way down.

Check out those frigid Northwest temperatures – the 60s! Most of the WECC will grow warmer.

No city gets hot except Phoenix which is projected to approach 108 by next week. Portland rallies for a day and collapses back to low 70s. San Jose is mostly sideways but with an upward drift. Burbank steadily grows but check out the changes in the 7-10 day; the latest forecast collapsed relative to three days earlier.

Solar is stable in the ISO, and the Northwest finally saw big wind; after a month of begging for it, and not getting any, now it comes, just when it’s not needed. Go figure.

Our forecast for the MidC shows wind coming off later in the week, same at SP, while NP is mostly sideways. Total WECC wind energy is forecasted to grow through Wednesday, then sideways.

Who’d a thunk we’d post a precip in August? These are projected daily totals in inches for six Northwest stations. None amount to much, anything that falls will be soaked into the ground. The only respite for Northwest hydro is the abatement of spill scheduled to begin on Saturday. That will only make the Northwest longer unless BPA cuts total discharge, which most likely they will. But in the next crisis, if there is a next one, the feds will have more bullets; end of the spill is bearish no matter how you spin it.

BPA’s reservoirs are now above average, all at the expense of its treaty water in BC which is below average.

Significant changes afoot for our neighbors up north. Arrow discharged has collapsed, so has the Peace. The latter because BC doesn’t need the energy; if its 66 in Seattle its 64 in Vancouver. Not to mention energy is now flowing north-bound on the Northern Intertie.

Energy production at Grand Coulee is off only because BPA doesn’t need the energy.

The rest of the mainstem was up on Sunday, not sure why given that the system was long off of wind.

All of those Canadian changes have hammered inflows at the US border. The rest of the rivers above Coulee are sideways, though at seasonal lows.

The NWRFC’s ten-day forecast has dramatic cuts in water but don’t confuse that with energy; these merely reflect the expiration of spill. As for today’s STP, we will stick with our expectation of increases in November.

The ISO has backed down its reservoir drafting; peak water is off the most. Off-peak is just sideways.

Some new cuts in TTC, see above.

The Northern Intertie is now flowing north for the first time in eight weeks. Both the AC and DC are full for the first time in eight weeks. Path 15 is flowing Northbound, so is Path 26 on a few hours. All of which reflects an endemic softening across the WECC.

Conclusions

Summer isn’t over, and Socal Gas’s problems haven’t been fixed. Cheap has always been a strong buy signal to me; I’d be placing some long wagers just about anywhere, though SP would be first on the list. Remember, last year the ISO set a high (load and price) in the second week of September. Recall too that every year there has been an October surprise.

Recap

Good Morning,

Tradebook finally reported a week-on-week loss after coming up $11.8M shy of last Friday.  The overall position moved 106 MW longer in heavy load and 22 MW longer in light load (though the latter remains short overall).

Palo accounted for most of the overall loss as the hub came up $7.6M lighter than last week.

[render_email_report name=”TradeBook – Speculative” date=”2018-08-26″]