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Energy Market Report Wednesday, December 26, 2001 *See attached pdf file. __________________________________________________________ Western Pre-Scheduled Firm Electricity Prices($/MWh) December 26, 2001 for December 27 through 29, 2001 Peak(Heavy) Low Change High Change NW/N. Rockies 23.00 3.75 25.00 4.00 Mid-Columbia 23.00 3.75 25.00 4.00 COB 23.25 2.25 27.00 4.00 N. California 27.00 3.00 28.00 4.50 Midway/Sylmar NA NA NA NA S. California 27.00 5.00 30.50 5.25 Mead 27.00 6.00 29.00 5.50 Palo Verde 26.00 4.50 30.00 6.25 Inland SW 26.00 5.00 30.00 6.25 4-Corners 26.00 4.50 28.00 5.00 Central Rockies 22.00 2.50 26.00 4.75 __________________________________________________________ Off-Peak(Light) Low Change High Change NW/N. Rockies 19.00 2.00 21.00 3.00 Mid-Columbia 19.00 2.00 21.00 3.00 COB 18.00 2.50 19.00 2.75 N. California 18.50 3.50 19.50 1.00 Midway/Sylmar NA NA NA NA S. California 13.60 -0.40 16.75 -0.25 Mead 16.00 1.75 18.00 3.00 Palo Verde 15.25 2.00 18.25 3.50 Inland SW 15.25 2.00 18.25 3.25 4-Corners 15.00 1.50 18.00 3.50 Central Rockies 12.50 -0.50 14.50 0.50 __________________________________________________________ Day-After Doldrums Western traders lucky enough to be back in the office the day after Christmas were greeted by rising day-ahead prices for the Thursday through Saturday package, largely due to anticipated load increases later in the week. Most parties, however, described post-holiday electricity trading on Wednesday as "thin and illiquid," especially for forward goods. Some players also attributed a bit of the daily strength to higher spot gas prices. Speaking of gas, NYMEX Henry Hub futures contracts rose sharply in early Wednesday trade amid forecasts calling for colder weather in the Midwest and Northeast, but fell late on a rash of profit taking. January Hub gas rose to a session high of 3.02$/mmBtu, before profit taking caused prices to tumble, settling at 2.911$/mmBtu, a rise of 1.6 cents from Friday' s close. The January contract expires on Thursday. February contracts ended the day 4.8 cents higher at 2.937$/mmBtu. NYMEX said it would extend Thursday's session by 15 minutes to 14:45 EST due to the late release of the AGA inventory report. Because of the Christmas holiday, the AGA will be releasing its weekly report at 14:00 PST on Thursday. Early estimates were calling for a draw of 50 to 75 bcf last week, well above the 175-bcf draw seen last year, and the five-year average draw of 140 bcf. Milder weather this year has kept withdrawls to a minimum and stocks near historically high levels. Some Northwest daily dabblers said that Wednesday trading was relatively active, "for the day after Christmas," while others said that modest loads and abundant hydro had most parties well covered for the three-day piece. Nonetheless, peak power prices for the Thursday through Saturday package rose as much as 4$/MWh on an anticipated increase in loads later in the week. Heavy load energy at the Mid-Columbia traded from 23 to 25$/MWh, with most trades occurring between 23.5 and 24.5$/MWh. Light load goods rose by an average of 2.5$/MWh, with confirmed transactions from 19 to 21$/MWh. Flow forecasts for Chief Joseph remained healthy, coming in at 105 kcfs Thursday, 95 kcfs Friday, 75 kcfs Saturday, 60 kcfs Sunday, 85 kcfs New Year 's Eve, 50 kcfs New Year's Day, and 100 kcfs next Wednesday. The latest six-to-ten from the NWS was calling for above-normal temperatures in the region's major load centers for the first week of the New Year. Peak power prices for the Thursday/Friday/Saturday package firmed up across the Golden State on Wednesday. An increase in off-line megawatts, a lack of liquidity in thin trading, and sharply increased spot-gas prices were the biggest factors in the price jump, according to California market players. Peak-hour prices at California hubs increased from 2.25 to 5.25$/MWh for the three-day package, but off-peak hours did not necessarily reflect the increase. Bucking the statewide trend, off-peak pieces at SP-15 traded slightly lower than on Friday, ranging from 13.6 to 16.75$/MWh. Players at the hub cited "getting caught with power on our hands that we had no choice but to sell." In the news, on Monday a U.S. Bankruptcy Court approved PG&E Corp.'s agreement to pay off the $265 million in outstanding power bills to Calpine Corp. Starting Monday and continuing through November 2002, PG&E will make monthly payments of principal and interest to Calpine. As for unit news, generation was perhaps the most tumultuous factor in the power market over the long Christmas weekend. On Saturday, December 22, there were 4 new outages, three of which were planned. Etiwanda #3 and #4 (320 MW each) came off line on Saturday as planned, as did Duke's 336 MW Morrow Bay #4. Helms PGP #3 (404 MW) tripped off line with an unplanned outage but came back a day later. There were two planned outages on Sunday the 23rd: Alamitos #4 (320 MW) and Morrow Bay #3 (337 MW), the latter of which came back on line on Wednesday December 26. On Christmas Day, Los Medanos (550 MW) was curtailed for the second time in less than a month with an unplanned outage, and was running at 36% of capacity as of this writing. The Sutter Plants (546 MW) were ramping up towards full power, and stood at 525 MW at 11:15am PST Wednesday. Spot electricity prices in the Southwest displayed the largest gains in the West on Friday, primarily due to rising spot gas prices, and an expected increase in loads for later in the week. Peak power at Palo Verde gained as much as 6.25$/MWh for the three-day combo, with confirmed trades anywhere between 26 and 30$/MWh. Most deals were done on the lower end of that range, with the highest prices seen late, when a few shorts reportedly entered the market. Light load goods at the Southwest hub gained an average of 2.75$/MWh to trade from 15.25 to 18.25$/MWh. In unit news, Mohave #1 (790 MW) finally returned to the grid over the long weekend, after coming down for tube leak repairs back on December 15. "That must have been one hell of a leak," joked one marketer. The five-day outlook for the Phoenix area called for daytime highs in the mid to upper 60s, with overnight lows in the mid to low 40s. "Down here 40s seem pretty cold, and they have been giving us some pretty healthy morning and evening peaks," said one Southwest trader. The latest six-to-ten from the NWS was calling for above-normal temperatures in Arizona and normal conditions in New Mexico from January 1 through 5. Patrick O'Neill and David Ramberg _________________________________________________________ Western Generating Unit Outages Current Begins Ends Reason CAISO units <250/5875 total NA NA planned/unplanned* Alamitos #3/320/gas 04-Dec-01 ? planned Alamitos #4/320/gas 23-Dec-01 ? planned* Big Creek Project/1020/hydro 09-Dec-01 ? @752MW, planned* El Segundo #3/337/gas 02-Oct-01 ? unplanned Etiwanda #3/320/gas 22-Dec-01 ? planned* Etiwanda #4/320/gas 22-Dec-01 ? planned* Grand Coulee #19/600/hydro 10-Dec-01 March repairs Helms PGP #2/407/hydro 01-Oct-01 ? planned Hyatt/Thermalito/933/hydro 02-Oct-01 ? @607 MW, unplanned Los Medanos/550/gas 25-Dec-01 ? @200 MW, unplanned* Morro Bay #4/336/gas 22-Dec-01 ? planned* Moss Landing #6/739/gas 19-Dec-01 ? unplanned Ormond Beach #2/750/gas 05-Oct-01 ? @350 MW, unplanned Pittsburg #6/317/gas 22-Nov-01 ? planned Sutter Plants/546/gas 04-Dec-01 ? planned For unit owners refer to pdf version. *Indicates a change from previous EMR. ______________________________________________________________________ Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh) December 26, 2001 for December 27, 2001 Peak (Heavy) in $/MWh Low Change High Change Into Cinergy 22.00 0.00 27.00 2.00 Western PJM 26.00 1.50 26.50 1.25 Into Entergy 23.50 1.50 25.50 1.50 Into TVA 24.00 2.00 25.50 3.00 ___________________________________________________________ With temperatures across the Eastern Interconnect firmly entrenched in below-normal territory and increasing numbers of businesses reopening for the post-Christmas pre-New Year's slack period, day-ahead prices at all major hubs strengthened over prices seen on Friday. Nevertheless, many traders were sitting out the year-end market at home or on vacation, and the traders manning the daily desks reported few trades at any hubs. Forecasts for the entire East called for increased heating demand through the New Year, though continued healthy generation managed to keep a lid on the market's high end. On NYMEX, Henry Hub natural gas contracts nudged up slightly. The January contract clung to early gains despite late profit-taking to close up 1.6 cents at 2.911$/mmBtu, while the February piece gained 4.8 cents, settling at 2.937$/mmBtu. Traders at Western PJM reported very light trading their first day back at work after the Christmas holiday, with prices for Thursday goods fluctuating slightly between 26 and 26.5$/MWh. LMPs likewise reflected the quiet atmosphere on the Eastern seaboard, with power averaging 15.58$/MWh over the course of the day. The high of 24.2$/MWh was reached between 09:30 and 10:30 EST, where actual load exceeded predictions by a sliver. Still, prices were around 1.25-2$/MWh higher than they were on Friday, thanks in large part to the cooling that has gripped the region. Temperatures were hovering near freezing through much of Western PJM, with the five-day forecast calling for temperatures to remain below normal plus a chance of snow through Sunday December 30. The latest six-to-ten echoed the prediction, extending below-normal temperatures through January 5. There were no reported unit outages in PJM on Wednesday. Temperatures were the leading impulse in ECAR markets on Wednesday, with highs in the region failing to reach even freezing, and the latest five-day forecast calling for more of the same plus a chance of snow or snow flurries from Wednesday through Sunday. As a result, Into Cinergy pieces traded as high as 27$/MWh, a two-dollar increase on the high end, but flat on the low at 22$/MWh. "With so few businesses opening over the holiday slack-time, there just wasn't enough demand to push up prices, despite the colder weather," remarked one trader. "But," he added, "more businesses will be opening as the week drags on, and if this kind of weather continues into the New Year, we could see some real strength in the market." The latest six-to-ten proved encouraging for such an outcome, calling for temperatures to remain below normal through January 5. There were no new unit outages reported on Wednesday in ECAR. SERC was no exception to the general condition of the Eastern markets on Wednesday: temperatures were well below normal, in many cases below freezing at night, and demand was light due to the small number of businesses open between the two big December holidays. Prices at Into Entergy showed modest gains, trading between 23.5 and 25.5$/MWh. "There wasn't much going on in Entergy today," commented one off-task trader, "Prices started out at the high end and came down over the course of the day as some sellers realized they were stuck and had to unload." Into TVA prices likewise strengthened, trading from 24 to 25.5$/MWh on Wednesday. The five-day forecast predicted temperatures significantly below normal through Sunday, with snow possible on Thursday and Friday. The latest six-to-ten likewise mirrored the rest of the East and called for the below-normal regime to last through January 5. There were no new units reported off-line in SERC on Wednesday. ___________________________________________________________ California ISO Congestion Index in $/MWh Path Peak Off-peak for 23-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 for 24-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 for 25-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 for 26-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 for 27-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 OTC Forward Peak Electricity Contracts in $/MWh Mid-C PV SP-15 Bid Ask Bid Ask Bid Ask BOM -- -- -- -- -- -- January 25.50 27.00 28.50 29.50 29.50 30.50 February 22.50 24.00 26.00 27.00 27.50 28.50 March 19.00 20.50 26.00 27.00 27.00 28.00 Q1 '02 21.50 23.00 27.00 28.00 29.00 30.00 Q2 '02 17.00 18.50 29.00 30.00 29.25 30.25 Q3 '02 33.50 35.50 45.50 46.50 43.00 44.00 Q4 '02 28.50 30.00 30.00 31.00 32.00 33.00 Cal '03 31.00 32.50 34.50 35.50 35.50 36.50 Represents the most recent bid/ask spread obtainable by the Energy Market Report. Alberta Power Pool Index (C$/MWh) Peak(14) Peak(16) Off-Peak Flat Change for 21-Dec-01 49.10 50.10 35.28 45.60 -24.11 for 22-Dec-01 42.69 41.96 26.83 37.22 -8.38 for 23-Dec-01 40.60 37.24 21.42 32.25 -4.97 for 24-Dec-01 33.06 31.20 15.40 26.26 -6.00 for 25-Dec-01 16.07 15.39 14.84 15.22 -11.04 BPA's Offer for 12/27/01 and 12/29/01. 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 Jan 2.911 0.016 Feb 2.937 0.181 Natural Gas Spot Prices in $/mmBtu Low High Sumas 2.52 2.57 So. Cal Border 2.75 2.80 San Juan 2.69 2.74 __________________________________________________________ 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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