Market Update Report

"Energy Market Report" <emr@econ.com< on 10/17/2001 06:51:06 PM

To: "Energy Market Report" <emr@econ.com<
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Subject: Energy Market Report - 10/17/01

Energy Market Report
Wednesday, October 17, 2001

*See attached pdf file.
__________________________________________________________
Western Pre-Scheduled Firm Electricity Prices($/MWh)
October 17, 2001 for October 18, 2001

Peak(Heavy)
Low Change High Change
NW/N. Rockies 24.00 1.95 27.00 4.00
Mid-Columbia 24.00 1.95 27.00 4.00
COB 28.25 3.25 28.75 2.25
N. California 27.75 2.25 30.00 2.50
Midway/Sylmar NA NA NA NA
S. California 29.00 3.00 30.75 2.75
Mead 30.25 5.25 31.00 3.90
Palo Verde 27.50 2.50 31.50 3.15
Inland SW 27.50 2.50 31.50 3.15
4-Corners 28.50 3.50 31.50 3.00
Central Rockies 23.50 0.50 27.50 -1.00
__________________________________________________________
Off-Peak(Light)
Low Change High Change
NW/N. Rockies 22.00 4.00 23.50 3.75
Mid-Columbia 22.00 4.00 23.50 3.75
COB 23.25 4.00 23.50 3.50
N. California 25.00 5.75 26.50 3.00
Midway/Sylmar NA NA NA NA
S. California 21.25 5.00 26.00 5.00
Mead 24.00 8.75 25.25 6.75
Palo Verde 19.50 4.50 25.50 6.50
Inland SW 19.50 4.50 25.50 6.50
4-Corners 22.00 7.00 25.00 6.50
Central Rockies 15.00 0.75 19.00 1.50
___________________________________________________________________
Light-Load Levity

Western peak power prices were higher for Thursday delivery on rising
natural gas values, but the real gainers of the day were off-peak prices,
which rose as much as 8.75$/MWh. Some players also attributed a bit of the
daily strength to increased heating demand in the Northwest as the nights
grow longer and colder. Spot gas at the Southern California Border made
more significant gains on Wednesday, with trades heard from 2.6 to
2.65$/mmBtu, compared to Tuesday's range of 2.37 to 2.42$/mmBtu. NYMEX
Henry Hub gas contracts were on the rise early Wednesday due to cool weather
forecasts and some technical buying, but ended sharply lower following the
late release of a bearish AGA inventory report. November Hub gas ended down
17.4 cents at 2.418$/MWh, after an early rise to a session high of
2.69$/mmBtu. December shed 14.9 cents to close at 2.703$/mmBtu. Wednesday'
s AGA report showed a build of 63 bcf in U.S. natural gas inventories last
week, above industry expectations and last year's 29-bcf gain. Total U.S.
inventories stood at 3.042 tcf, 471 bcf above the same week a year ago and
267 bcf higher than the five-year average. One gas trader commented, "U.S.
stocks are already above the end-of-October levels seen the past four out of
five years." Of the 63 bcf injected last week, 12 bcf were injected in the
Western Consuming Region. Total inventories in the West stood at 464 bcf,
compared to 378 bcf a year ago, and the five-year average of 384 bcf.

Both peak and off-peak spot electricity prices in the Northwest rose by as
much as 4$/MWh on Wednesday. The increase in off-peak prices was largely
blamed on longer and colder fall nights, while the on-peak rise was
attributed to lower hydro flows associated with the commencement of Vernita
Bar. Originally scheduled to begin on October 14, Vernita Bar operations
were slated to begin at midnight on Thursday. The yearly operations involve
curtailing flows during the daylight hours, while increasing them during the
nighttime hours to ensure that salmon eggs remained covered with water.
"This is when we get into reverse load factoring," said one Northwest hydro
operator. "We will probably only be able to generate about half as much
during the day as we can at night." Historically, Vernita Bar operations
result in a narrowing of the peak and off-peak spread, as heavy load prices
rise and light load prices fall. However, as one marketer put it, "People
overreact to the start of Vernita Bar operations every year, but they need
to remember that this is a shoulder month." Vernita Bar operations are
scheduled to be in place until November 22. In unit news, reports indicated
that Wyoming-based Jim Bridger #4 (520 MW) was taken off line Wednesday for
repairs to a cooling tower. Sources indicated that said repairs would last
until October 20, and possibly longer.

Electricity prices in the Golden State gained ground across the board in
Wednesday trade, with higher natural gas prices and more off-line megawatts
propelling the cash market upward. Peak power at COB changed hands in a
narrow range from 28.25 to 28.75$/MWh, while light load goods went for 23.25
to 23.5$/MWh. NP15 heavy load pieces transacted at prices from 27.75 to
30$/MWh, while light load prices ranged from 25 to 26.5$/MWh. SP15 peak
power saw action between 29 and 30.75$/MWh, with off-peak power trading for
21.25 to 26$/MWh. Weather remained warm on Wednesday, with temperatures in
the normal range. Daytime highs were mostly in the high-60s to 70s, with
southern inland areas seeing 80 degrees. Temperatures were expected to
remain at current levels through Sunday, while the latest six-to-ten called
for below-normal temperatures for the entire state from October 23 to 27.
On the unit front, the ISO reported that the gas-fired Sunrise (338 MW) unit
was down for planned reasons. Los Medanos (550 MW) was running at 125 MW,
and Moss Landing #6 (739 MW) was curtailed to 350 MW.

Amid rising natural gas values, peak power prices rose in the desert
Southwest for Thursday delivery, but their gains paled in comparison to
those realized for the off-peak hours. Heavy load energy at Palo gained as
much as 3.15$/MWh, with confirmed transactions between 27.5 and 31.5$/MWh,
and unconfirmed transactions as high as 32.5$/MWh. Meanwhile, light load
goods at Palo Verde gained as much as 6.5$/MWh for the day, and Mead rose as
much as a whopping 8.75$/MWh. Four Corners #4 (750 MW) remained off line
Wednesday afternoon, after coming down for tube leak repairs last weekend.
Sources expected the unit to return to service late Wednesday night or early
on Thursday. Further to the north, Wyoming-based LRS #3 (550 MW) came down
around 12:00 PDT Wednesday, though no cause or ETR were available at the
time of this writing. Additionally, sources indicated that Colorado-based
Craig #1 (428 MW) would operate at about half capacity until further notice
for unspecified reasons.

Patrick O'Neill and Jessie Norris
_________________________________________________________

Western Generating Unit Outages

Current Begins Ends Reason
CAISO units <250/5517 total NA NA
planned/unplanned*
Alamitos #3/320/gas 06-Oct-01 ? @20MW,planned*
Bridger #4/520/coal 17-Oct-01 20-Oct-01 repairs*
Comanche #2/335/coal 29-Sep-01 30-Oct-01 maintenance
Contra Costa #7/337/gas 01-Sep-01 ? planned
Crockett Cogen/260/gas 15-Oct-01 ? planned
El Segundo #3/337/gas 02-Oct-01 ? unplanned
Encina #5/332/gas 17-Oct-01 ? @70MW,
unplanned*
Etiwanda #3/320/gas 05-Oct-01 ? unplanned
Etiwanda #4/320/gas 05-Oct-01 ? unplanned
Four Corners #4/750/coal 12-Oct-01 17-Oct-01 unplanned
Helms PGP #2/407/hydro 01-Oct-01 ? planned
Hyatt/Thermalito/900/hydro 02-Oct-01 ? @ 250MW,
planned
Los Medanos/550/gas 17-Oct-01 ? @ 125MW,
planned*
LRS #3/550/coal 17-Oct-01 ? unknown*
Moss Landing #6/739/gas 17-Oct-01 ?
@350MW,unplanned*
Ormond Beach #2/750/gas 05-Oct-01 ? unplanned
Palo Verde #2/1270/nuke 10-Oct-01 30 days maintenance
Palo Verde #3/1270/nuke 29-Sep-01 03-Nov-01
refuel/maint.
San Onofre #2/1070/nuke 14-Oct-01 02-Nov-01 maintenance
Sunrise Power Plant/338/gas 17-Oct-01 ? planned*

Future
San Juan #4/534/coal 20-Oct-01 11-Nov-01 maintenance

For unit owners refer to pdf version.
*Indicates a change from previous EMR.
______________________________________________________________________

Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh)

October 17, 2001 for October 18, 2001

Peak (Heavy) in $/MWh
Low Change High Change
Into Cinergy 21.50 0.35 23.35 1.35
Western PJM 26.00 1.30 27.00 1.40
Into Entergy 20.50 1.65 21.45 0.85
Into TVA 21.50 1.00 24.25 2.50
___________________________________________________________
Peak power prices across the Eastern Interconnect were up in Wednesday
trade, mainly on Tuesday's surge in natural gas prices, which continued into
Wednesday, and a busy cash market. Weather across the regions remained
cool, with daytime temperatures uniformly in the 50s and 60s. Overnight
lows dipped into the 30s and 40s, stimulating some heating demand,
particularly in the northern regions. Nuclear outages were said to be at a
minimum, with the only outages being units already down for autumn
refueling. The AGA released its report on last week's natural gas
inventories, reporting a slightly bearish 63-bcf injection. NYMEX Henry Hub
natural gas contracts tumbled on that late-session news, with November
closing down 17.4 cents at 2.418$/mmBtu. December slipped 14.9 cents to end
at 2.703$/mmBtu.

In the Mid-Atlantic, heavy load energy costs climbed 1.5$/MWh on the high
end, with Western PJM prices ranging from 26 to 27$/MWh for Thursday
delivery. Most traders believed Salem #1 (1,106 MW) was supplying power to
the grid on Wednesday. Off-line generation was pegged at just over 8,000
MW, a decrease from Tuesday's 9,176 MW figure, which dovetailed nicely with
the presumed return of Salem #1. LMPs leapt to 46$/MWh between 06:15 and
07:00 EDT, before settling back down around the day's average of 22$/MWh.
Weather in the region was cool on Wednesday, with temperatures 5 to 10
degrees below normal. Daytime highs were expected to edge back into the 60s
and 70s by the weekend, and the latest six-to-ten from the NWS was
predicting above-normal temperatures from October 23 to 27.

Amid cool weather across the Midwest and brisker trading, peak power prices
strengthened on Wednesday. Into Cinergy goods were exchanged for prices
ranging from 21.5 to 23.35$/MWh, an increase of 1.35$/MWh on the high end.
Daytime temperatures across ECAR only reached highs in the low 50s, while
overnight temperatures in the 30s necessitated heating load. However, the
jump in weather-related demand was expected to be short-lived, as
temperatures were predicted to be back in the upper-60s by the weekend and
the most current six-to-ten-day forecast called for normal to above-normal
temperatures from October 23 to 27. Nuclear generation was thought to be
healthy, with the return of large unit Braidwood #1 (1,120 MW) from its fall
refueling outage.

In the Southeast, peak power prices for Thursday delivery increased as cool
weather blanketed the regions, bringing overnight lows in the 30s and 40s.
Into Entergy pieces traded in a tighter range to a day ago, between 20.5 and
21.45$/MWh, gaining 0.85$/MWh on the high end. Into TVA prices also surged
higher, with deals done between 21.5 and 24.25$/MWh. No new nuclear outages
were known Wednesday. Weather across SERC was brisk, with temperatures 10
to 15 degrees below normal and overnight lows in the 30s. Temperatures were
expected to climb by the weekend, and the latest six-to-ten called for
above-normal temperatures from October 23 through 27.
___________________________________________________________
California ISO Congestion Index in $/MWh

Path Peak Off-peak
for 18-Oct-01 NW1 to NP15 0.00 0.00
NW3 to SP15 0.00 0.00
AZ3 to SP15 0.00 0.00
LC1 to SP15 0.00 0.00
SP15 to NP15 0.00 0.00

OTC Forward Peak Electricity Contracts in $/MWh

Mid-C PV SP-15
Bid Ask Bid Ask Bid Ask
BOM 25.00 26.00 27.25 27.75 28.00 28.50
November 27.25 27.75 26.75 27.00 27.50 28.00
December 35.25 36.00 30.75 31.50 32.50 33.50
Q1 '02 33.75 34.25 31.75 32.25 33.00 33.50
Q2 '02 27.50 28.75 35.75 36.75 34.00 34.50
Q3 '02 44.00 46.00 51.75 52.75 47.50 48.25
Q4 '02 36.50 37.75 35.50 36.00 36.75 37.50
Cal '03 38.75 39.50 39.25 41.50 42.00 43.25

Represents the most recent bid/ask spread obtainable
by the Energy Market Report.

Alberta Power Pool Index (C$/MWh)

Peak(14) Peak(16) Off-Peak Flat Change
for 16-Oct-01 63.52 60.16 29.14 50.90 11.42

BPA's Offer in $/MWh

Hours Amount NW COB NOB

BPA has no offer until further notice.

NYMEX Henry Hub Gas Futures in $/mmBtu

Close Change
Nov 2.418 -0.174
Dec 2.703 -0.149

Natural Gas Spot Prices in $/mmBtu

Low High
Sumas 2.33 2.38
So. Cal Border 2.60 2.65
San Juan 2.31 2.36
__________________________________________________________

Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201,
Telephone (503) 222-2425, Internet e-mail emr@econ.com -
Copyright, Economic Insight, Inc. 2001.

- emr101701.PDF
- EMR Prices.xls