FW: Energy Market Report

Subject: Energy Market Report - 01/23/02

Energy Market Report
Wednesday, January 23, 2002

*See attached pdf file.
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Western Pre-Scheduled Firm Electricity Prices($/MWh)
January 23, 2002 for January 24, 2002

Peak(Heavy)
Low Change High Change
NW/N. Rockies 18.50 0.00 19.00 0.00
Mid-Columbia 18.50 0.00 19.00 0.00
COB 21.25 0.25 21.50 -0.25
N. California 22.50 0.00 24.50 0.50
Midway/Sylmar NA NA NA NA
S. California 22.55 1.30 24.40 0.40
Mead 21.00 -0.50 23.00 -1.75
Palo Verde 19.00 -2.25 23.00 -0.50
Inland SW 19.00 -2.25 23.75 -1.00
4-Corners 21.25 0.75 23.00 1.00
Central Rockies 19.50 -1.00 21.00 -0.25
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Off-Peak(Light)
Low Change High Change
NW/N. Rockies 16.25 0.25 16.75 0.25
Mid-Columbia 16.25 0.25 16.75 0.25
COB 16.50 0.50 17.00 -1.00
N. California 16.50 -0.50 18.00 0.50
Midway/Sylmar NA NA NA NA
S. California 16.50 0.50 18.85 0.85
Mead 15.50 1.00 19.00 3.00
Palo Verde 14.00 0.25 16.25 0.75
Inland SW 14.00 0.25 19.00 3.00
4-Corners 14.75 0.75 15.50 0.50
Central Rockies 14.00 1.00 16.00 1.00
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Duncan Demands Immunity

Day-ahead peak power prices in the Western U.S. were mostly steady for
Thursday delivery amid weather forecasts calling for a slight increase in
temperatures and an abundance of Northwest hydropower. However,
temperatures were expected to drop again beginning on Friday, which offered
sellers a glimmer of hope for a stronger end to the month. Additionally,
the latest six-to-ten from the National Weather Service showed the Western
U.S. blanketed in below-normal temperatures from January 29 through February
2. NYMEX Henry Hub gas futures were mixed in moderate trade Wednesday, with
the fronts pushed down to new lows by mostly mild U.S. weather forecasts,
and again later in the session by a bearish AGA weekly inventory report.
February Hub gas fell 3 cents to close at 2.076$/mmBtu after reaching a new
contract low of 2.04$/mmBtu shortly after the AGA report was released.
March also hit a new low of 2.06$/mmBtu, but settled 2.9 cents lower than a
day ago at 2.089$/mmBtu. The AGA inventory report indicated that 124 bcf
were taken out of storage last week, below industry estimates and the
five-year average drop of 182 bcf. Total U.S. inventories stood at 2.405
tcf, 1.036 tcf, or 76% above last year. Of the 124 bcf withdrawn, 21 were
taken out of the Western Consuming Region. Total Western inventories stood
at 379 bcf, or 75 percent full. Inventories for the same week a year ago
were 241 bcf, and have averaged 280 bcf over the past five years. Now for
your daily dose of Enron. David Duncan, the fired Andersen partner who was
the lead auditor for Enron Corp, challenged Congress by stating via his
attorney that he would invoke his Fifth Amendment rights and refuse to
testify at a hearing scheduled for Thursday unless he was granted immunity.
Committee chairman Rep. Billy Tauzin said that no immunity would be granted
Duncan without consent of the Justice Department. "I will not provide
immunity to anyone without consent of the Justice Department who is doing a
criminal investigation. I have not received such a green light to this
date, as to whether or not they change their mind I can't say," said Tauzin
on CNN.

Heavy load energy costs in the Northwest were unchanged Wednesday as
abundant hydro supplies satiated regional heating demand. "It's still cold,
but we've got plenty of hydro to cushion us," said one Northwest utility
trader. Flow forecasts for Chief Joseph were revised higher Wednesday,
coming in at 110 kcfs Thursday, 100 kcfs Friday, 75 kcfs Saturday, 65 kcfs
Sunday, 105 kcfs Monday, and 100 kcfs next Tuesday and Wednesday. There was
no major unit news to report, but Colstrip #3 (700 MW) remained down for
generator repairs. According to Weather Derivatives, heating demand in the
region was forecast to average 136% of normal through January 30, with the
greatest demand expected early next week.

Amid a healthy grid and concerns that weather could be slightly warmer than
expected later in the week, electricity prices were mostly steady in the
Golden State on Wednesday. "We're chasing gas and watching the extended
forecast pretty closely, but otherwise it is a boring day," said one Western
marketer. The heavy load product at SP15 changed hands between 22.55 and
24.4$/MWh, with the bulk of deals done around 23.25$/MWh, while light load
pieces were bought and sold from 16.5 to 18.85$/MWh. In political news, the
CPUC approved two measures necessary for SCE's return to solvency. SCE will
be allowed to raise $1.5 billion in bridge financing, which when combined
with $4 billion cash on hand, will permit the bankrupt utility to pay off
its creditors by the end of the first quarter. Secondly, SCE will raise
consumer rates to cover the bridge financing. "SCE needs to pay off their
qualifying facilities, but it will be interesting to see whether they are
actually willing and able to pay the CalPX for power purchased on the
exchange, and for power purchased on their behalf by CAISO last winter. I'm
a little skeptical, but I hope they do," commented one market analyst. In
unit news, gas-fired Scattergood #3 (445 MW) was off the grid on Wednesday
for planned maintenance. Highs for Thursday were predicted in the mid-60s
in Los Angeles, and low-50s at mid-state load centers. Temperatures were
expected to remain below normal in California through Sunday. The most
current six-to-ten called for below-normal temperatures from January 29 to
February 2.

On forecasts calling for slight warming, peak power prices in the Southwest
traded slightly lower for Thursday delivery. "Our overnight lows are
supposed to climb back into the 40s beginning tonight, and that's much more
tolerable than the 30s," said one Phoenix-based trader. Heavy load energy
at Palo Verde traded anywhere from 19 to 23$/MWh, though most deals went
through around the 22$/MWh mark. There was no significant unit news to
report on Wednesday, but there was some talk of an upcoming maintenance
outage. Sources indicated that Navajo #2 (750 MW) was coming down for
planned maintenance on February 2, and returning on February 25.

Patrick O'Neill and Jessie Norris
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Western Generating Unit Outages

Current Begins Ends Reason
CAISO units <250/7054 total NA NA
planned/unplanned*
Alamitos #3/320/gas 21-Jan-02 ? planned
Alamitos #6/480/gas 20-Jan-02 ? planned
Colstrip #3/700/coal 11-Jan-02 ? repairs
Encina #4/303/gas 12-Jan-02 ? unplanned
Etiwanda #4/320/gas 21-Jan-02 ? planned
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 #4/336/gas 21-Jan-02 ? planned
Moss Landing #7/739/gas 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
Pittsburg #7/682/gas 21-Jan-02 ? unplanned
Scattergood #3/445/gas 22-Jan-02 ?
maintenance*

Future
Navajo #2/750/coal 02-Feb-02 25-Feb-02
maintenance*

For unit owners refer to pdf version.
*Indicates a change from previous EMR.
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Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh)

January 23, 2002 for January 24, 2002

Peak (Heavy) in $/MWh
Low Change High Change
Into Cinergy 15.50 -1.25 17.90 -0.60
Western PJM 21.50 -0.50 21.90 -1.05
Into Entergy 17.10 -0.60 18.00 -0.20
Into TVA 16.00 0.00 17.50 -1.75
ERCOT 17.10 0.10 17.90 0.30
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Hope of an upswing in the spot electricity market was firmly squashed
Wednesday as a bearish AGA report, incredibly warm January temperatures, and
soft gas values plagued the market, sending day-ahead power prices mostly
lower across the Eastern Interconnect. Temperatures were expected anywhere
from 11 to 20 degrees above normal in the East on Thursday. The AGA weekly
inventory report listed a total draw of 124 bcf, a number well below
industry estimates of around 145 bcf. NYMEX Henry Hub natural gas futures,
already low, sunk further on the disappointing news coupled with the warm
weather pattern. February shed 3 cents to close at 2.076$/mmBtu, while the
March contract fell 2.9 cents to end at 2.089$/mmBtu. Both months reached
new contract lows during the day, before rebounding somewhat prior to the
close.

Heavy load energy costs slipped lower in the Mid-Atlantic on Wednesday.
"The dailies were pretty lame today, with the extremely mild temperatures
and the soft real-time prices. Prices were a little erratic early, on a
possible unit outage, but demand is too weak for even a large curtailment to
matter," summed up one PJM trader. Market players remained uncertain as to
which unit shut Wednesday. Western PJM goods for Thursday delivery traded
between 21.5 and 21.9$/MWh, while the February contract lost about 15 cents,
trading mostly around 23.5$/MWh. LMPs remained low on Wednesday, after
showing a little strength around 10:00 EST, and averaging 20.68$/MWh through
15:00 EST. Daytime highs were expected to hit 62 degrees in D.C. on
Thursday, while other PJM load centers also expected warm temperatures, with
highs in the mid-50s. The most current six-to-ten projected no relief in
sight, as above-normal temperatures were forecast from January 29 to
February 2.

Amid mild weather conditions and little else, peak electricity prices shed
value in the Midwest on Wednesday. Into Cinergy goods opened at the day's
highest levels, and fell off steadily through the session, trading between
15.5 and 17.9$/MWh. According to traders, February was actively traded,
bouncing between 19.4 and 19.55$/MWh. Temperatures were expected to reach
highs in the low-50s on Thursday across ECAR. The latest six-to-ten called
for above-normal temperatures from January 29 to February 2.

Day-ahead power prices tanked in the Southeast on Wednesday, weighed down by
bearish fundamentals. Into Entergy deals were done between 17.1 and
18$/MWh, with the bulk of transactions heard near 17.75$/MWh. February saw
action from 18.3 to 18.4$/MWh. High temperatures across SERC were expected
in the spring-like upper-60s to low-70s on Thursday. Texas power prices
bucked the trend on Wednesday, rising on cooler weather for Thursday. The
most current six-to-ten called for above-normal temperatures in the
Southeast from January 29 to February 2.
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California ISO Congestion Index in $/MWh

Path Peak Off-peak
for 24-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 NA NA NA NA NA NA
February NA NA NA NA NA NA
March NA NA NA NA NA NA
April NA NA NA NA NA NA
Q2 '02 NA NA NA NA NA NA
Q3 '02 NA NA NA NA NA NA
Q4 '02 NA NA NA NA NA NA
Q1 '03 NA NA NA NA NA NA
Cal '03 NA NA NA NA NA NA

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 22-Jan-02 39.46 39.24 19.60 33.29 6.90

BPA's Offer for 01/25/02 and 01/26/02.

Hours Amount NW delivered COB/NOB delivered
7-22 200MW Market Price* Market Price*

*Market price will be determined at time of request.

NYMEX Henry Hub Gas Futures in $/mmBtu

Close Change
Feb 2.076 -0.030
Mar 2.089 -0.029

Natural Gas Spot Prices in $/mmBtu

Low High
Sumas 2.01 2.06
So. Cal Border 2.12 2.17
San Juan 1.96 2.01
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Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201,
Telephone (503) 222-2425, Internet e-mail emr@econ.com -
Copyright, Economic Insight, Inc. 2002.