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Energy Market Report Tuesday, January 15, 2002 *See attached pdf file. __________________________________________________________ Western Pre-Scheduled Firm Electricity Prices($/MWh) January 15, 2002 for January 16, 2002 Peak(Heavy) Low Change High Change NW/N. Rockies 20.00 1.25 21.50 0.25 Mid-Columbia 20.00 1.25 21.50 0.25 COB 23.00 1.50 23.50 0.50 N. California 25.00 2.50 28.00 2.50 Midway/Sylmar NA NA NA NA S. California 25.00 2.00 27.25 1.00 Mead 25.00 2.25 27.00 1.25 Palo Verde 23.95 1.95 27.50 1.50 Inland SW 23.95 1.95 27.75 1.75 4-Corners 24.00 1.50 26.00 2.50 Central Rockies 19.75 2.00 24.00 2.00 __________________________________________________________ Off-Peak(Light) Low Change High Change NW/N. Rockies 16.25 -0.25 17.50 0.25 Mid-Columbia 16.25 -0.25 17.50 0.25 COB 17.25 0.75 17.50 -1.50 N. California 17.25 0.25 20.00 1.00 Midway/Sylmar NA NA NA NA S. California 16.75 0.00 19.50 0.75 Mead 18.00 1.00 19.00 0.75 Palo Verde 16.00 0.00 18.25 0.25 Inland SW 16.00 0.00 19.00 0.75 4-Corners 16.00 0.00 17.00 0.00 Central Rockies 14.50 1.50 16.00 1.00 __________________________________________________________ Andersen Partners Feel the Heat Day-ahead peak power prices continued to rise in the Western U.S. Tuesday amid expectations of stronger weather-related demand and higher natural gas values. Some parties also believed that an increase in the amount of off-line generation had something to do with strengthening the daily market. Not surprisingly, the real talk of the town on Tuesday surrounded the ongoing Enron saga. Enron Corp and Swiss bank UBS Warburg detailed their agreement on Tuesday to split profits from Enron's trading business. Under the terms of the deal, UBS would take over the unit and pay Enron 33 percent of profits for up to 10 years. The deal give UBS the right to buy one-third of Enron's royalty interest in the third year of the deal based on the previous year's profit. UBS could buy another third in year four, and the final third in year five. The deal still requires approval from Judge Arthur Gonzales of federal bankruptcy court, which may come at a hearing scheduled for Friday. While this was good news for some Enron employees, it was not all roses for the one-time energy-trading giant on Tuesday. The NYSE suspended trading of Enron shares and related securities while it worked to "delist" the stock because of the "expected protracted nature" of Enron's bankruptcy case and the impact it will have on the company's stockholders. In our "if I'm going down, I'm taking you with me" category, Andersen fired David Duncan, the lead partner for the Enron audit, on Tuesday for his alleged role in destroying documents related to its review of Enorn Corp.'s books. Andersen said thousands of emails and large numbers of paper documents related to Enron were destroyed shortly after Duncan learned on October 23 of a an SEC request for information on the audit of Enron. Duncan was scheduled to meet with congressional members on Wednesday. In addition to the firing of Duncan, Andersen said it put three other partners involved in Enron's audit on leave, and four Houston-based partners were relieved of their management responsibilities. One market analyst said of the Enron-Andersen fiasco, "People are going to go to jail over all this, but they'll be in good company." Peak power prices rose by an average of 75 cents in the Northwest on Tuesday, largely the result of rising heating demand. "Our in-house forecaster is now saying that the cold weather is going to be more severe and more prolonged than previously expected," claimed one Northwest utility trader. Meanwhile, the latest six-to-ten from the NWS continued to call for below-normal temperatures across the entire region through January 25. Flow forecasts for Chief Joseph were revised upward on Tuesday, which surprised several players since colder weather typically means less runoff and side flows. Flows were projected to be 110 kcfs through Thursday, 100 kcfs Friday, 65 kcfs Saturday, 55 kcfs Sunday, 100 kcfs Monday, and 95 kcfs next Tuesday. In unit news, Bridger #3 (520 MW) was reportedly back in service Tuesday, but the returning megawatts were more than offset by a tube leak outage that occurred at Colstrip #4 (700 MW). An official ETR for the Montana-based Colstrip unit could not be obtained, but was presumed to be between 48 and 72 hours. Amid stronger natural gas prices at the Southern California border and colder weather across the state, day-ahead electricity prices strengthened across the Golden State on Tuesday. "Outages are on the rise and the extended forecasts still look cold," explained one California utility trader. Peak power deals at NP15 were done from 25 to 28$/MWh, and balance-of-January contracts were heard from 25.25 to 26.25$/MWh. SP15 goods for Wednesday delivery were priced below NP15 deals, but by less than a buck, and BOM was quoted at 26$/MWh. On the generation front, nuclear unit Diablo Canyon #2 (1,087 MW) was operating at 50% capacity on Tuesday for maintenance on the secondary or non-nuclear side of the plant. It was expected to ramp back up to full power sometime over the weekend. As for gas units, Encina #5 (332 MW) was generating at 290 MW, on its way back from a planned maintenance outage that started January 11, and Etiwanda #3 (320 MW) powered up to 150 MW, returning from an outage that began December 22. Temperature forecasts called for highs to reach 64 degrees on Wednesday at southern load centers, while highs in the mid-50s and upper-40s were expected at mid-state. Temperatures were expected to stay two to six degrees below normal through Saturday, and the latest six-to-ten called for continued below-normal conditions from January 21 to 25. Cooler weather and rising spot gas prices gave the daily electricity market in the Southwest a lift on Tuesday. Peak power at Palo Verde traded from 23.95 to 27.5$/MWh, with the bulk of transactions heard between 25.75 and 26$/MWh. According to Weather Derivatives, heating demand in the desert region was forecast to average 116 percent of normal through January 22, while the latest six-to-ten from the NWS calling for a combination of normal and below-normal temperatures from January 21 through 25. In unit news, San Juan #4 (534 MW) was having trouble retuning from tube-leak repairs that began on January 10. The New Mexico-based thermal unit had reportedly ramped up to about 75 percent of capacity, but an ETR to full was not available as of this writing. Patrick O'Neill and Jessie Norris _________________________________________________________ Western Generating Unit Outages Current Begins Ends Reason CAISO units <250/7871 total NA NA planned/unplanned* Alamitos #3/320/gas 04-Dec-01 ? planned Alamitos #4/320/gas 04-Jan-02 ? planned Bridger #3/520/coal 12-Jan-02 14-Jan-02 tube leak Colstrip #3/700/coal 11-Jan-02 18-Jan-02 repairs Colstrip #4/700/coal 15-Jan-02 18-Jan-02 tube leak* Diablo Canyon #2/1087/nuclear 15-Jan-02 20-Jan-02 @50%, maintenance* Encina #4/303/gas 12-Jan-02 ? unplanned Four Corners #5 09-Jan-02 14-Mar-02 maintenance Grand Coulee #19/600/hydro 10-Dec-01 March repairs Haynes #6/341/gas 07-Jan-02 ? planned Helms PGP #2/407/hydro 01-Oct-01 ? planned Hyatt/Thermalito/933/hydro 02-Oct-01 ? @506 MW, unplanned Morro Bay #3/337/gas 04-Jan-02 ? planned Moss Landing #6/739/gas 11-Jan-02 ? unplanned Moss Landing #7/739/gas 29-Dec-01 ? planned Naughton #3/330/gas 13-Jan-02 16-Jan-02 tube leak 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 Redondo #8/480/gas 09-Dec-01 ? planned San Juan #4/534/coal 10-Jan-02 15-Jan-02 tube leak* For unit owners refer to pdf version. *Indicates a change from previous EMR. ______________________________________________________________________ Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh) January 15, 2002 for January 16, 2002 Peak (Heavy) in $/MWh Low Change High Change Into Cinergy 17.75 1.75 18.75 0.25 Western PJM 22.80 0.80 23.05 -0.60 Into Entergy 18.95 0.95 22.35 -0.15 Into TVA 20.00 2.00 21.50 0.00 ___________________________________________________________ Amid stronger natural gas values, average peak power prices firmed up across the Eastern Interconnect again on Tuesday. "Crude oil prices were up today which in turn drove natural gas higher, and the dailies rallied on gas support, especially in the Southeast," commented one much-encouraged marketer. NYMEX Henry Hub natural gas futures settled higher. February climbed 4.1 cents to end at 2.291$/mmBtu, while March gained 3.3 cents to close at 2.273$/mmBtu. On the assumption of healthier generation, heavy load energy costs slipped by less than a dollar in the Mid-Atlantic on Tuesday. "I'm hearing the Keystone unit is back, and the Salem outage should be over as well," said one usually accurate PJM source. Western PJM goods for Wednesday delivery traded between 22.8 and 23.05$/MWh, and the February contract saw action from 24.5 to 24.7$/MWh, losing about a dime to a day ago. The NRC admonished the operators of Pennsylvania-based nuke Limerick #2 (1,115 MW) for not having sufficient safety measures in place for a worn-out relief valve. The NRC gave the problem a "white" rating, their second lowest classification indicating a low to moderate safety violation, but said they may conduct further inspections at the plant. There was no word yet on when the unit would be off-line for the repair. Real-time prices were lower on Tuesday, and averaged 19.85$/MWh through 15:00 EST. The mercury was expected to dip on Wednesday, with high temperatures anticipated in the low-to-mid-40s and low temperatures at or near freezing. The most current six-to-ten from the NWS predicted above-normal temperatures from January 21 to 25. As weather forecasts for Wednesday projected temperatures about five degrees above normal, day-ahead peak electricity prices edged up in the Midwest on Tuesday. Into Cinergy deals were done between 17.75 and 18.75$/MWh, picking up a quarter on the high end and almost two dollars on the low. February saw action from 20.2 to 20.65$/MWh, with the vast majority of deals done at 20.5$/MWh. In unit news, traders said Cook #2 (1,090 MW) was expected to exit the grid on Friday for a refueling outage. The unit has been powering down since last Wednesday. High temperatures on Wednesday were forecast to be in the upper-30s, and corresponding lows were expected in the mid-20s. The latest six-to-ten called for mostly above-normal conditions, with normal temperatures in Michigan and Indiana, from January 21 to 25. With long-awaited strength in the gas market, peak power prices rose in the Southeast on Tuesday. Into Entergy deals were heard from 18.95 to 22.35$/MWh. Traders said the front-month contract rallied, driven mostly by the dailies, with transactions completed between 19.3 and 19.6$/MWh. Into TVA pieces were bought and sold from 20 to 21.5$/MWh. Temperatures were expected near normal to slightly above normal through Saturday, with lows only forecast in the upper-30s to low-40s. The most current six-to-ten called for above-normal temperatures from January 21 to 25. ___________________________________________________________ California ISO Congestion Index in $/MWh Path Peak Off-peak for 16-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 OTC Forward Peak Electricity Contracts in $/MWh Mid-C PV SP-15 Bid Ask Bid Ask Bid Ask BOM 19.50 20.50 24.25 25.25 25.50 26.50 February 19.25 20.75 23.00 24.00 24.75 25.75 March 17.50 19.00 22.50 23.50 23.75 24.75 April 17.50 19.00 24.00 25.00 23.50 24.50 Q2 '02 17.50 19.00 25.50 26.50 25.50 26.50 Q3 '02 31.00 32.50 39.50 40.50 38.50 39.50 Q4 '02 26.00 27.50 26.50 27.50 28.00 29.00 Q1 '03 25.50 27.00 26.25 27.25 28.50 29.50 Cal '03 27.50 29.00 30.50 31.50 32.00 33.00 Represents the most recent bid/ask spread obtainable by the Energy Market Report. Alberta Power Pool Index (C$/MWh) Peak(14) Peak(16) Off-Peak Flat Change for 14-Jan-02 41.04 40.90 24.76 36.07 3.95 BPA's Offer for 01/17/02 and 01/18/02. Hours Amount NW delivered COB/NOB delivered 7-22 100MW Market Price* Market Price* 1-6, 23-24 100MW Market Price* Market Price* *Market price will be determined at time of request. NYMEX Henry Hub Gas Futures in $/mmBtu Close Change Feb 2.291 0.041 Mar 2.273 0.033 Natural Gas Spot Prices in $/mmBtu Low High Sumas 2.05 2.10 So. Cal Border 2.23 2.28 San Juan 2.08 2.13 __________________________________________________________ Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201, Telephone (503) 222-2425, Internet e-mail emr@econ.com - Copyright, Economic Insight, Inc. 2002.
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