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Energy Market Report Thursday, January 10, 2002 *See attached pdf file. __________________________________________________________ Western Pre-Scheduled Firm Electricity Prices($/MWh) January 10, 2002 for January 11 and 12, 2002 Peak(Heavy) Low Change High Change NW/N. Rockies 16.50 -1.50 17.50 -1.75 Mid-Columbia 16.50 -1.50 17.50 -1.75 COB 17.50 -2.00 18.25 -2.25 N. California 18.25 -2.25 20.00 -2.50 Midway/Sylmar NA NA NA NA S. California 18.00 -2.50 20.25 -2.50 Mead 18.75 -0.50 20.00 -1.50 Palo Verde 17.00 -2.00 19.75 -1.75 Inland SW 17.00 -2.00 20.25 -1.50 4-Corners 17.75 -1.25 18.75 -1.75 Central Rockies 16.75 -1.00 18.00 -2.50 __________________________________________________________ Off-Peak(Light) Low Change High Change NW/N. Rockies 13.50 -1.00 14.75 -1.00 Mid-Columbia 13.50 -1.00 14.75 -1.00 COB 13.25 -1.25 14.50 -1.50 N. California 14.50 -0.50 15.00 -2.00 Midway/Sylmar NA NA NA NA S. California 14.00 -1.00 15.25 -2.25 Mead 14.00 0.00 14.25 -1.50 Palo Verde 12.75 0.25 14.50 -0.50 Inland SW 12.50 0.00 14.50 -1.25 4-Corners 12.25 -0.75 13.00 -1.25 Central Rockies 11.50 -2.25 12.50 -3.00 __________________________________________________________ Gas Pains With the latest weather forecasts revising temperatures upward from the Arctic blast predicted on Tuesday and hydropower in the Northwest remaining strong, peak power prices for Friday and Saturday delivery generally fell modestly across the WSCC. "There's simply no strength in the market right now, with flows and generation as strong as they are, temperatures so high and gas prices so low," explained one hair-pulling marketer. Meanwhile, market pundits across the region were on the edges of their seats awaiting news from Weil, Gotshal & Manges on who cast the winning bid for Enron's energy trading business, once considered the jewel in the ex-giant's crown. However, the announcement had not been made as of this writing. The law firm was scheduled to announce the winning bid on Thursday from their New York offices. In gas news, NYMEX Henry Hub futures lost ground for the second day in a row despite the AGA's bullish natural gas inventory report released Wednesday. The front month contract lost 4.3 cents to close at 2.185$/mmBtu, while the March contract fell 3.7 cents to close at 2.195$/mmBtu. Both contracts were trading higher early, but came down in late trading under a rash of short selling. "Everyone's trying to keep their positions very short on this one, with all the uncertainty around," explained one analyst. "Prices could fall to as low as 2$/mmBtu before long." Heavy load power at Mid-Columbia was the cheapest in the West on Thursday, with deals ranging from 16.5 to 17.5$/MWh, a loss of 1.75$/MWh on the high end. "Now that the brunt of the cold front is going to miss us, the bottom is falling out of the market again," ventured one stoic player. The five-day forecast called for temperatures to remain above normal through Saturday, followed by cooling to near-normal temperatures through January 14. The latest six-to-ten called for cooling to below normal temperatures from January 16 to 20. Flows at Chief Joseph remained healthy, and were even revised slightly upward for the coming week on forecasts of rain and snow showers, with Friday coming in at 65 kcfs, Saturday at 60 kcfs, Sunday at 50 kcfs, Monday coming up to 95 kcfs, and 90 kcfs through next Thursday. There were no new unit outages to report on with certainty on Thursday, but there were murmurings in the Northwest that Colstrip #3 (686 MW) had joined its sister unit #4 (700 MW) off-line. No confirmation was available. As weather forecasts continued to call for near-normal temperatures through Monday and spot gas prices at the Socal border stayed steady, power prices for the Friday/Saturday package softened in the Golden State on Thursday. Peak power at SP15 traded between 18 and 20.25$/MWh, with the bulk of deals done in the 19s, while the off-peak product changed hands from 14 to 15.25. In political news, California's Attorney General filed a civil suit against PG&E Corp on Thursday, seeking $600 million to $4 billion in damages. The state alleged PG&E Corp. received substantial, unwarranted cash flows over the past 4 years from its subsidiary PG&E, and finally did nothing to prevent the utility from falling into bankruptcy last year. For their part, PG&E Corp said CPUC auditors had thoroughly reviewed their transactions with their subsidiary and found nothing fraudulent. On the generation front, Moss Landing #6 (739 MW) was almost at full power on Thursday, operating at 690 MW. Etiwanda #4 (320 MW) exited the grid for planned maintenance. Friday forecasts called for high temperatures to the reach the mid-50s in Sacramento, the low-60s in the Bay area, and the low-70s at southern load centers. Little change was seen in the forecast through Monday of the new week. The most current six-to-ten predicted below-normal temperatures from January 16 to 20. The Southwest, locked in the grips of a heat wave pushing temperatures into the 70s in Phoenix, posted moderate decreases in peak power prices for the Friday-Saturday package. Goods at Palo Verde changed hands from 17 to 19.75$/MWh, a loss of 1.75$/MWh on the high end. Many marketers reported very light trading at other hubs in the region, such as Four Corners and Mona. The five-day forecast put temperatures in above-normal territory through January 14 in the desert region, with some cooling outside of the desert on Monday. The latest six-to-ten predicted continuing near- to slightly below-normal temperatures from January 16 through 20. In unit news, coal juggernaut Four Corners #5 (750 MW), which was scheduled for a maintenance outage on January 15, tripped off-line late Wednesday with a condenser tube leak. Plant operators decided that no attempt would be made to repair the leak and place the unit back on-line before the scheduled maintenance, so the ETR will be near March 14, 2002. Fellow coal-smoker Coronado #1 (365 MW) missed its January 9 ETR yesterday. The new estimated date of return is sometime in the evening on January 11. David Ramberg and Jessie Norris _________________________________________________________ Western Generating Unit Outages Current Begins Ends Reason CAISO units <250/6441 total NA NA planned/unplanned* Alamitos #3/320/gas 04-Dec-01 ? planned Alamitos #4/320/gas 04-Jan-02 ? planned Colstrip #4/700/coal 09-Jan-02 ? unplanned Coronado #1/365/coal 22-Dec-01 11-Jan-02 main transformer* Etiwanda #3/320/gas 22-Dec-01 ? planned Etiwanda #4/320/gas 10-Jan-02 ? @20 MW, planned* Four Corners #4 09-Jan-02 14-Mar-02 condenser tube leak* 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 ? @607 MW, unplanned Morro Bay #3/337/gas 04-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 03-Jan-02 ? unplanned Redondo #8/480/gas 09-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 10, 2002 for January 11, 2002 Peak (Heavy) in $/MWh Low Change High Change Into Cinergy 15.75 -2.75 19.75 -0.75 Western PJM 22.75 0.25 23.05 -0.45 Into Entergy 15.00 -4.00 19.00 -4.00 Into TVA 16.50 -3.00 18.25 -2.00 ___________________________________________________________ As temperatures continued their climb and gas held steady, day-ahead and near-term contract electricity prices declined again across the Eastern Interconnect on Thursday. "Peak power at most hubs was solidly in the teens, which wasn't surprising with fundamentals so bearish," commented one unfazed southeastern trader. NYMEX Henry Hub natural gas futures were up for much of the day, but fell late and ended down. The front-month contract settled 4.3 cents lower to close at 2.185$/mmBtu, while March shed 3.7 cents to end at 2.195$/mmBtu. Amid mild spring-like temperatures and much lower real-time prices, heavy load energy costs slipped further on Thursday in the Mid-Atlantic. Western PJM goods for Friday delivery changed hands between 22.75 and 23.05$/MWh, shedding 0.55$/MWh on the high end, but firming up a quarter on the low. In unit news, traders said Conemaugh #2 (850 MW) probably returned to service on Thursday, while a Keystone unit (850 MW) was off-line and expected to remain that way through the weekend. Temperatures were expected to edge slightly lower on Friday, with highs in the 49 to 52 degree range. A further 5 degree decline was expected on Saturday, and temperatures were expected to remain there through the first day of the new week. The most current six-to-ten called for below-normal temperatures from January 16 to 20. Peak power prices slumped for the third day in a row in the Midwest on Thursday as weak weather-related demand and healthy generation kept hopes of an upside in the daily market unrealized. Into Cinergy day-ahead deals were done between 15.75 and 19.75$/MWh, with most trades below the 19$/MWh mark. Balance of January was heard trading around 20.5$/MWh, and the February contract saw action from 21.05 to 21.25. While forecasts called for about 5 degrees of cooling on Friday, the outlook through Monday predicted temperatures to remain well above normal for this time of year, with lows in the upper-20s to low-30s and highs in the upper-30s to mid-40s. The latest six-to-ten predicted below-normal temperatures from January 16 to 20. As the mercury rose and spot gas made incremental gains, heavy load electricity prices in the Southeast continued to fall on Thursday. Into Entergy goods were bought and sold between 15 and 19$/MWh, losing a painful 4$/MWh off both ends. Into TVA prices also took a hit on Thursday, with daily trades heard between 16.5 and 18.25$/MWh. No new outages were reported for the SERC region. Temperatures were expected to reach highs in the upper-50s and low-60s on Friday, with overnight lows mostly in the upper-40s. Highs were expected to cool off into the mid-50s for the weekend and first day of the new week. The latest six-to-ten called for below-normal temperatures from January 16 to 20. ___________________________________________________________ California ISO Congestion Index in $/MWh Path Peak Off-peak for 11-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 $/MWh Mid-C PV SP-15 Bid Ask Bid Ask Bid Ask BOM 19.50 20.50 22.00 23.00 23.00 24.00 February 18.50 20.00 21.75 22.75 22.75 23.75 March 17.00 18.50 21.50 22.50 23.00 24.00 April 17.00 18.50 23.00 24.00 23.00 24.00 Q2 '02 16.00 17.50 25.00 26.00 25.50 26.50 Q3 '02 29.50 31.00 39.00 40.00 37.75 38.75 Q4 '02 25.00 26.50 25.75 26.75 27.50 28.50 Q1 '03 24.50 26.00 25.50 26.50 27.50 28.50 Cal '03 25.50 27.00 30.00 31.00 31.50 32.50 Represents the most recent bid/ask spread obtainable by the Energy Market Report. Alberta Power Pool Index (C$/MWh) Peak(14) Peak(16) Off-Peak Flat Change for 09-Jan-02 39.00 38.33 16.62 31.77 0.71 BPA's Offer for 01/13/02 and 01/14/02. 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 2.185 -0.043 Mar 2.195 -0.037 Natural Gas Spot Prices in $/mmBtu Low High Sumas 1.97 2.02 So. Cal Border 2.14 2.19 San Juan 2.01 2.06 __________________________________________________________ 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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