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Energy Market Report Wednesday, January 2, 2002 *See attached pdf file. __________________________________________________________ Western Pre-Scheduled Firm Electricity Prices($/MWh) January 2, 2002 for January 3, 2002 Peak(Heavy) Low Change High Change NW/N. Rockies 22.00 -1.50 24.00 -3.00 Mid-Columbia 22.00 -1.50 24.00 -3.00 COB 23.50 -1.50 25.25 -2.25 N. California 26.00 -0.75 27.50 -2.75 Midway/Sylmar NA NA NA NA S. California 26.50 -0.25 28.50 -2.25 Mead 26.75 -0.25 28.00 -2.00 Palo Verde 25.00 -1.00 27.50 -1.75 Inland SW 25.00 -1.00 28.00 -2.00 4-Corners 25.25 -1.75 26.50 -1.50 Central Rockies 22.00 -1.75 37.00 12.75 __________________________________________________________ Off-Peak(Light) Low Change High Change NW/N. Rockies 18.00 -3.00 19.50 -4.50 Mid-Columbia 18.00 -3.00 19.50 -4.50 COB 18.00 -3.00 19.00 -5.00 N. California 19.50 -2.00 22.50 -2.50 Midway/Sylmar NA NA NA NA S. California 19.50 -1.00 23.25 -1.25 Mead 19.00 -1.00 20.50 -3.75 Palo Verde 15.50 -2.50 19.00 -3.00 Inland SW 15.50 -2.50 20.50 -3.75 4-Corners 16.50 -3.50 18.00 -6.25 Central Rockies 18.25 0.25 26.00 3.00 __________________________________________________________ Western Hangover With one notable exception, peak power prices slackened across the WSCC on the first day of trading in the New Year. Mild coastal and southwestern weather kept a lid on demand at the region's major load centers, while generation output levels in California strengthened significantly in comparison to the holiday doldrums. Combined with the fact that spot gas prices were weaker than they were on the last full day of trading, peak power prices fell anywhere from .25 to 3$/MWh across the West on Wednesday. The only anomaly in the West was the Central Rockies, where prices for peak goods shot up by as much as 12.75$/MWh, with high end trades going through at 37$/MWh. "I'm not sure why it was so expensive here today," responded one trader to a request for an explanation. "Temperatures are really cold, and unit outages are up, but other than that, I wouldn't be able to guess." The low temperature in Denver was a frosty six degrees on Wednesday, though the five-day forecast called for temperatures to warm into near normal territory by Sunday. Meanwhile, on NYMEX, Henry Hub natural gas futures fell on Wednesday. The February contract dropped 10.5 cents to settle at 2.465$/mmBtu, while March slid 11.7 cents to close at 2.443$/mmBtu. Across the Northwest, peak power prices for Thursday delivery softened from 1.5 to 3$/MWh. Peak goods changed hands from 22 to 24$/MWh. Temperatures were mild on Wednesday, and well above average west of the Cascades, with highs in the low 50s and partly cloudy skies. East of the Cascades temperatures were near freezing but still slightly above normal, while the five-day forecast called for temperatures to heat up slightly through Sunday. The latest six-to-ten predicted temperatures near to above normal from January 8 to 12. Flow forecasts for Chief Joseph were revised significantly upward over the long holiday weekend, coming in at 105 kcfs Thursday and Friday, 75 kcfs Saturday, 60 kcfs Sunday, 110 kcfs Monday, and 105 kcfs Tuesday through next Wednesday. In unit news, Montana coal-burner Colstrip #4 (740 MW) returned to the grid Tuesday night after making unplanned repairs. As weather too warm to trigger heating demand lingered in the Golden State and generation became healthier, power prices for Thursday delivery weakened in the first trading session of 2002. In a generally quiet, low-offer day, market players reported trading at NP15 was especially light, as a soft spot market in the Northwest pulled it down. "The market had a cautious tenor today, but besides the new calendar there wasn't a particular reason for it," mentioned one undisturbed California marketer. Peak goods at SP15 changed hands between 26.5 and 28.5$/MWh, with most deals done from 27 to 27.5$/MWh. Light load pieces traded in a wider range from 19.5 to 23.25$/MWh, with unconfirmed trades heard as low as 18$/MWh. A proposal for more than 31 miles of new transmission lines in southern California, running between the SCE grid and San Diego Gas & Electric, moved forward on Wednesday. The new capacity is needed to meet San Diego's swift-approaching projected power shortfall. Currently, the U.S. Department of the Interior is studying the environmental effects of the proposal. In unit news, a bevy of returning units boosted generation in California. Gas-fired Alamitos #6 (480 MW), Alamitos #4 (320 MW), El Segundo #3 (337 MW), and Morro Bay #4 (336 MW) were back in service on December 29, December 31, and the latter two on January 1, respectively. New additions to the out of service column included Moss Landing #7 (739 MW) and Morro Bay #3 (337 MW). Finally, Calpine's Sutter Plants (546 MW) tripped off-line December 29, but was back the following day. Forecasts for Thursday called for above-normal temperatures in the middle and northern sections of California, with highs in the 57-59 degree range and lows around 50 degrees. Los Angeles expected highs in the mid-60s. Little change was expected through the weekend across the entire state, and the latest six-to-ten predicted above-normal temperatures from January 8 to 12. Despite a rash of unit outages, prices for peak goods weakened by up to 2$/MWh in the Southwest on milder weather and falling demand. Peak pieces at Palo Verde traded from 25 to 27.5$/MWh. Temperatures across the region hovered around normal, though the five-day forecast predicted some slight cooling through Sunday. The latest six-to-ten predicted temperatures to remain near to above normal from January 8 through 12. On the unit front, coal unit Mohave #2 (442 MW) tripped off-line on December 27 for unplanned repairs. There was no ETR available. Fellow coal-combustor Cholla #4 (375 MW) came off-line early January 1 for undisclosed reasons and was expected back in a few days, while Navajo #3 (750 MW) came off line on New Year's Eve with a tube leak but was back on-line by New Year's Day. Meanwhile, Coronado #1 (365 MW) continued to have problems with its main transformer. It has been off the grid since December 22. David Ramberg and Jessie Norris _________________________________________________________ Western Generating Unit Outages Current Begins Ends Reason CAISO units <250/5751 total NA NA planned/unplanned* Alamitos #3/320/gas 04-Dec-01 ? planned Big Creek Project/1020/hydro 09-Dec-01 ? @752MW, planned Cholla #4/375/coal 01-Jan-02 ? unplanned* Coronado #1/365/coal 22-Dec-01 ? main transformer* Etiwanda #3/320/gas 22-Dec-01 ? planned Etiwanda #4/320/gas 22-Dec-01 ? planned Grand Coulee #19/600/hydro 10-Dec-01 March repairs Helms PGP #2/407/hydro 01-Oct-01 ? planned Hyatt/Thermalito/933/hydro 02-Oct-01 ? @607 MW, unplanned Los Medanos/550/gas 25-Dec-01 ? @125 MW, unplanned Mohave #2/442/coal 29-Dec-01 ? unplanned* Morro Bay #3/337/gas 31-Dec-01 ? unplanned* Moss Landing #7/739 29-Dec-01 ? planned* Ormond Beach #1/725/gas 28-Dec-01 ? planned Ormond Beach #2/750/gas 05-Oct-01 ? @350 MW, unplanned Pittsburg #6/317/gas 22-Nov-01 ? planned Sutter Plants/546/gas 04-Dec-01 ? planned For unit owners refer to pdf version. *Indicates a change from previous EMR. ______________________________________________________________________ Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh) January 2, 2002 for January 3, 2002 Peak (Heavy) in $/MWh Low Change High Change Into Cinergy 24.00 2.25 30.50 5.50 Western PJM 28.85 4.35 31.00 4.00 Into Entergy 23.25 -0.25 25.25 0.25 Into TVA 24.00 4.10 26.00 5.90 ___________________________________________________________ As temperatures plunged and loads climbed in the new year, peak power prices settled higher across the Eastern Interconnect on Wednesday, breaking the 30$/MWh mark in some places. "Trading was brisk today, with pricing following weather and loads up. Loads were higher than expected, I think, and some units are still down from the holidays," said one Eastern trader. "There was a run-up at the end of trading," commented a Midwestern dealer. NYMEX Henry Hub natural gas futures slipped on Wednesday, with the front-month contract losing 10.5 cents to close at 2.465$/mmBtu. March fell a similar 11.7 cents to end at 2.443$/mmBtu. Facing a key unit outage and temperatures well below freezing, heavy load energy costs strengthened in the Mid-Atlantic on Wednesday. Western PJM goods changed hands between 28.85 and 31$/MWh, up from Monday trading in the low 28s. According to traders, the bulk of transactions went through around 29.5$/MWh, with offers at 31$/MWh accepted late. In unit news, traders thought nuke Salem #2 (1,106 MW), down since the weekend, remained out of service on Wednesday, despite hopes it would be back on-line Tuesday. However, no official confirmation of the outage was available. LMPs fluctuated sharply and remained above 30$/MWh for the first part of the morning, but were averaging 26.47$/MWh through 15:00 EST. High temperatures were expected to stay in the mid-30s on Thursday, with lows in the mid-20s. Little change was forecast for Friday, and slight warming, with highs breaking into the 40s, was predicted for the weekend. The latest six-to-ten called for normal temperatures from January 8 to 12. Peak electricity prices rose in the Midwest on Wednesday, as colder weather drove energy demand up on the first business day after the New Year's holiday. Into Cinergy pieces were bought and sold between 24 and 30.5$/MWh, with the high end reached late in the session, but traders were uncertain as to why prices jumped. "New Year, new load," summed up one happy Midwestern seller. Cold weather was expected to keep the Midwest firmly locked in its grip on Thursday, with highs forecast right at freezing and lows in the mid-teens. The mercury was expected to rise into the high-30s Saturday. The most current six-to-ten from the NWS predicted mostly above-normal temperatures, with normal forecasts for southern ECAR, from January 8 to 12. After weeks in the price doldrums, day-ahead electricity prices in the Southeast finally showed some strength on Wednesday, pulled up by the bullish fundamental of cold weather. Into Entergy deals were done between 23.25 and 25.25$/MWh, gaining almost 2$/MWh on the high end. Contrary to the norm, spot power prices Into TVA carried a premium to the Entergy hub, with goods trading between 24 and 26$/MWh. Forecasts called for snow and cold temperatures across much of the deep South. Overnight lows in the mid-20s and highs in the mid-30s were expected on Thursday, with temperatures expected to remain well below normal through the weekend. The latest six-to-ten called for normal and below-normal temperatures from January 8 to 12. ___________________________________________________________ California ISO Congestion Index in $/MWh Path Peak Off-peak for 30-Dec-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 Path Peak Off-peak for 31-Dec-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 Path Peak Off-peak for 01-Jan-02 NW1 to NP15 0.00 0.00 NW3 to SP15 0.00 0.00 AZ3 to SP15 26.25 11.25 LC1 to SP15 0.00 0.00 SP15 to NP15 0.00 0.00 Path Peak Off-peak for 02-Jan-02 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 Path Peak Off-peak for 03-Jan-02 NW1 to NP15 0.00 0.26 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 $/MWh Mid-C PV SP-15 Bid Ask Bid Ask Bid Ask BOM 22.00 23.50 24.75 25.75 25.75 26.75 February 19.50 21.00 24.25 25.25 24.50 25.50 March 17.00 18.50 23.50 24.50 24.00 25.00 April 16.00 17.50 22.50 23.50 23.00 24.00 Q2 '02 16.00 17.50 26.25 27.25 26.00 27.00 Q3 '02 30.50 32.00 41.50 42.50 40.00 41.00 Q4 '02 25.50 27.00 27.00 28.00 29.00 30.00 Q1 '03 27.00 28.50 26.25 27.25 28.50 29.50 Cal '03 26.00 27.50 31.00 33.00 33.00 34.00 Represents the most recent bid/ask spread obtainable by the Energy Market Report. Alberta Power Pool Index (C$/MWh) Peak(14) Peak(16) Off-Peak Flat Change for 28-Dec-01 48.11 47.39 28.22 41.52 3.51 for 29-Dec-01 36.21 35.71 21.07 31.11 -10.41 for 30-Dec-01 34.82 33.62 25.02 30.90 -0.21 for 31-Dec-01 39.55 37.92 20.35 32.47 1.56 for 01-Jan-02 32.90 31.04 21.68 28.02 -4.44 BPA's Offer for 1/04/02 through 1/05/02. Hours Amount NW delivered COB/NOB delivered 7-22 100MW Market Price* Market Price* *Market price will be determined at time of request. NYMEX Henry Hub Gas Futures in $/mmBtu Close Change Feb 2.465 -0.105 Mar 2.443 -0.117 Natural Gas Spot Prices in $/mmBtu Low High Sumas 2.15 2.20 So. Cal Border 2.35 2.40 San Juan 2.21 2.26 __________________________________________________________ Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201, Telephone (503) 222-2425, Internet e-mail emr@econ.com - Copyright, Economic Insight, Inc. 2001.
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