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Subject: Energy Market Report - 1/28/02 Energy Market Report Monday, January 28, 2002 *See attached pdf file. __________________________________________________________ Western Pre-Scheduled Firm Electricity Prices($/MWh) January 28, 2002 for January 29, 2002 Peak(Heavy) Low Change High Change NW/N. Rockies 18.80 -2.95 22.00 -0.50 Mid-Columbia 18.80 -2.95 22.00 -0.50 COB 21.00 -2.25 22.25 -2.50 N. California 23.50 -1.50 25.00 -1.50 Midway/Sylmar NA NA NA NA S. California 23.00 -2.00 25.00 -2.00 Mead 22.75 -2.50 25.75 -1.25 Palo Verde 22.75 -0.75 25.75 0.00 Inland SW 19.50 -4.00 25.75 -1.25 4-Corners 23.00 -1.50 24.50 -1.50 Central Rockies 22.00 0.25 26.00 3.25 __________________________________________________________ Off-Peak(Light) Low Change High Change NW/N. Rockies 17.25 -3.75 18.50 -3.50 Mid-Columbia 17.25 -3.75 18.50 -3.50 COB 17.00 -2.00 18.00 -4.00 N. California 16.75 -4.75 19.50 -4.00 Midway/Sylmar NA NA NA NA S. California 17.00 -4.00 19.00 -4.00 Mead 17.50 -3.50 19.50 -3.50 Palo Verde 14.00 -3.75 16.50 -4.00 Inland SW 13.50 -4.25 16.50 -6.50 4-Corners 14.50 -4.50 16.50 -4.00 Central Rockies 11.50 -4.50 13.50 -6.00 _________________________________________________________ Enron-omic Stimulus? Despite the continuing grip of a cold snap, and a rash of unit outages over the weekend, most Western power prices for Tuesday delivery ended slightly weaker in the first trading session of the new week. "Flows are up and hydro's cheap," explained one marketer of the weather's inability to inject strength into Western markets. "If the weather weren't as cold as it is, the market could even be worse for sellers." As usual over the past few months, references to Enron were peppered across the mainstream media on Monday. UBS Warburg, the Swiss bank that is in the process of purchasing the now-defunct EnronOnLine, plans to have the trading business in full operation by the end of February. To staff the reborn operation, UBS Warburg has offered contracts to about 625 of EnronOnLine's 800 former employees. The transaction is still pending the approval of various federal agencies. In another chapter of the Enron saga, Vice Chairman J. Clifford Baxter's death was ruled a suicide by Harris County Medical Examiner Joye Carter on Saturday. Baxter was considered an important potential witness in the Enron affair after whistle-blower Sherron Watkins cited his discussion with then-CEO Jeff Skilling about the company's dubious accounting practices. A suicide note was found at the scene, but the details of the note have not yet been released. Equally serious are allegations made by Rep. Henry Waxman of California, indicating that the White House had apparently changed the contents of a draft energy proposal circulated through Congress in March of last year to add a provision that specifically aided Enron Corp. in India. According to Rep. Waxman, "the provision appears to have been added to the plan during the period in which the White House directly controlled the drafting." The Bush Administration has understandably tried to distance itself from their biggest political contributor, denying that its energy plan was crafted to help Enron. In related news, GAO head David M. Walker will likely sue Vice President Dick Cheney for refusing to turn over documents relating to the VP's meetings with Enron representatives last year. It would mark the first time the investigative arm of Congress sued another branch of the government for refu sal to cooperate with an inquiry. The Vice President insisted that the GAO was overstepping its bounds. "Their jurisdiction extends to agencies created by statute. That's not me," asserted Cheney, "I'm a constitutional officer. And the authority of the GAO does not extend in that case to my office." Save it for the judge, Dick. In gas news, NYMEX Henry Hub natural gas futures fell hard in Monday trading, with the February contract losing 12.9 cents to settle at 1.908$/mmBtu, and the March contract close behind, plummeting 12 cents to close at 1.984$/mmBtu. Heavy load energy prices in the Northwest fell almost 2$/MWh on the low end for Tuesday delivery. Healthy hydro flows and a cold front that did not quite live up to its prediction took the brunt of the blame. Peak goods at Mid-Columbia changed hands from 18.8 to 22$/MWh on Monday. Flows at Chief Joseph remained as strong as ever this year, coming in at 110 kcfs Tuesday, 105 kcfs Wednesday and Thursday, 100 kcfs Friday, 85 kcfs Saturday, 65 kcfs Sunday, and 110 kcfs next Monday. Temperatures were predicted to remain well below normal through Friday, with lows expected to flirt with freezing. The latest six-to-ten likewise called for temperatures to remain near to below normal from February 3 to 7. There were no new unit outages to report on Monday. Despite cold weather and a modest rise in natural gas values at the Socal border, day-ahead electricity prices softened in the Golden State on Monday. Heavy load goods lost about 2$/MWh everywhere, while light load prices took a bigger hit, slipping almost 4$/MWH. Peak power at SP15 traded between 23 and 25$/MWh, with the bulk of deals done closer to the high end, above 24.25$/MWh. In California politicking, the CPUC voted to reject a compromise put forth by SDG&E parent Sempra Energy. The proposal would have used $219 million of the $363 million earned selling power from five-year contracts at wholesale prices last summer to pay down the balancing account, and thus benefiting SDG&E rate payers, while allocating the remaining $144 million to shareholders. The CPUC said they think the courts will award a higher number to the balancing account. Californians may soon be allowed to choose their power provider again, if CPUC administrative law judge Robert Barnett has his way. The initiative, a cornerstone of the 1996 deregulation bill, was revoked September 20, 2001. However, consumers would have to hurry their selection, as the option would be back in play for a limited time, through July 1, 2002. Barnett said competitive choice was essential to keep utility customers from unfairly footing the bill for last year's energy crisis. On the generation front, Morro Bay #4 (336 MW) and Pittsburg #7 (682 MW) returned to service over the weekend. Helms PGP #1 (407 MW) joined sister unit #2 (407 MW) in the out of service category on Monday. Alamitos #3 (320 MW) exited the grid on January 26. Hydro Big Creek (1,020 MW) was derated, operating at 720 MW. Sutter Plants (546 MW) was generating at 270 MW. Tuesday forecasts called for temperatures to linger almost 10 degrees below normal, with highs in the upper-40s to mid-50s across the state. The latest six-to-ten predicted below-normal temperatures from February 3 to 7. The Southwest was a slight exception to the conditions prevalent across the WSCC on Monday. While temperatures were lower than on Friday, peak power prices remained mostly flat. Heavy load pieces at Palo Verde traded between 22.75 and 25.75$/MWh, a loss of 75 cents on the low end and no change on the high. Temperatures were expected to linger well below normal through Friday, and the latest six-to-ten predicted likewise from February 3 to 7. In unit news, coal-fired Navajo #3 (750 MW) returned to the grid Monday morning, while the ETR for Coronado #1 (395 MW) was revised to early morning Tuesday, January 29. Fellow coal unit Huntington #2 (455 MW) also climbed back onto the grid over the weekend after repairing a tube leak. David Ramberg and Jessie Norris _________________________________________________________ Western Generating Unit Outages Current Begins Ends Reason CAISO units <250/7145 total NA NA planned/unplanned* Alamitos #3/320/gas 26-Jan-02 ? planned* Alamitos #6/480/gas 20-Jan-02 ? planned Big Creek Project/1020/hydro 28-Jan-02 ? @710MW, planned* Colstrip #3/700/coal 11-Jan-02 ? repairs Corondado #1/395/coal 25-Jan-02 29-Jan-02 tube leak* 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 @392MW, maintenance* Grand Coulee #19/600/hydro 10-Dec-01 March repairs Haynes #6/341/gas 07-Jan-02 ? planned Helms PGP #1/407/hydro 28-Jan-02 ? planned* Helms PGP #2/407/hydro 01-Oct-01 ? planned Hyatt/Thermalito/933/hydro 02-Oct-01 ? @665 MW, unplanned* 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 Scattergood #3/445/gas 22-Jan-02 ? maintenance Sutter Plants/546/gas 28-Jan-02 ? @270 MW, unplanned* 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. ______________________________________________________________________ Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh) January 28, 2002 for January 29, 2002 Peak (Heavy) in $/MWh Low Change High Change Into Cinergy 17.00 -0.20 18.50 0.50 Western PJM 20.95 -1.30 22.10 -0.40 Into Entergy 15.50 -1.40 18.00 -0.25 Into TVA 16.25 -0.50 17.50 0.40 ERCOT 17.00 0.00 17.50 0.25 ___________________________________________________________ As unseasonably warm weather continued and traders harbored little hope of an upside in the gas market, peak power prices remained mostly steady on Monday across the Eastern Interconnect. Traders reported light trading volume and lots of sunshine outside their windows. NYMEX Henry Hub natural gas futures reached new contract lows on Monday, a familiar refrain heard during the past week. February lost 12.9 cents in its second to last trading session, ending the day at 1.908$/mmBtu. March plunged a similar 12 cents to close at 1.984$/mmBtu. With a healthy generation landscape and temperatures more usual to late spring blanketing the region, day-ahead peak electricity prices settled lower in the Mid-Atlantic on Monday. Western PJM goods for Tuesday delivery changed hands between 20.95 and 22.1$/MWh, with most deals done in the 21.05 to 21.5$/MWh range. Balance of the week trades were heard around 21.7$/MWh, while balance of the month deals went through near 23.4$/MWh. Despite an unusual brief spike to 73$/MWh just after 13:00 EST, LMPs were averaging 21.26$/MWh through 15:00 EST. Traders reported lackluster trading and no new outages on Monday. Tuesday forecasts called for high temperatures to linger in the balmy 63 to 68 degree range across PJM, before cooling about 5 degrees on Wednesday. The most current six-to-ten predicted normal temperatures from February 3 to 7. Despite record highs near 60 degrees and more of the same expected for Tuesday, heavy load energy costs were flat to slightly higher in the Midwest on Monday. Into Cinergy deals for Tuesday delivery were heard between 17 and 18.5$/MWh, with the bulk of transactions from 17.75 to 18$/MWh. Most traders were surprised by the relative strength of the Cinergy hub. "I suspect there are quite a few coal units turned off, and most maintenance schedules have been pushed forward, since the generation clearly isn't needed," commented one ECAR trader. In unit news, Quad Cities #1 (821 MW) remained down for pump support maintenance. Sources said they expected sister unit #2 (821 MW) to be taken off-line for the same repairs when #1 returned to the grid, possibly as soon as this week. The south shore of Lake Erie, a region where January snow is usually measured in feet, enjoyed high temperatures in the low-60s on Monday and anticipated the same on Tuesday. Indeed, all of ECAR expected similar conditions for Tuesday, while cooling into the upper-40s was forecast for Wednesday. The latest six-to-ten called for normal temperatures from February 3 to 7. As weak weather-related demand dominated SERC and Texas, peak power prices weakened on Monday. Into Entergy deals were done between 15.5 and 18$/MWh, with the low end reached late in the day. "I don't see any possibility of a rally for February. Gas was hammered again today; the market is very soft right now," commented one SERC realist. Tuesday was expected to see high temperatures solidly in the 70s across SERC and Texas, with slight cooling predicted as the week progresses. The most current six-to-ten called for normal temperatures from February 3 to 7. ___________________________________________________________ California ISO Congestion Index in $/MWh Path Peak Off-peak for 27-Jan-02 NW1 to NP15 0.00 0.00 NW3 to SP15 0.00 0.00 AZ3 to SP15 1.25 3.75 LC1 to SP15 0.00 0.00 SP15 to NP15 0.00 0.00 Path Peak Off-peak for 28-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 29-Jan-02 NW1 to NP15 0.00 0.00 NW3 to SP15 0.00 0.00 AZ3 to SP15 0.00 52.75 LC1 to SP15 0.00 0.00 SP15 to NP15 0.00 0.00 OTC Forward Peak Electricity Contracts in $/MWh Mid-C PV SP-15 Bid Ask Bid Ask Bid Ask BOM 20.00 21.00 22.50 23.50 23.00 24.00 February 17.00 18.50 21.00 22.00 22.50 23.50 March 15.00 16.50 20.75 21.75 21.50 22.50 April 16.00 17.50 NA NA NA NA Q2 '02 15.75 17.25 24.00 25.00 23.50 24.50 Q3 '02 29.50 31.00 37.00 38.00 36.50 37.50 Q4 '02 27.00 28.50 26.50 27.50 28.25 29.25 Q1 '03 27.50 29.00 NA NA NA NA Cal '03 28.75 30.25 32.00 33.00 33.50 34.50 Represents the most recent bid/ask spread obtainable by the Energy Market Report. Alberta Power Pool Index (C$/MWh) Peak(14) Peak(16) Off-Peak Flat Change for 25-Jan-02 37.57 37.27 16.23 30.95 -3.26 for 26-Jan-02 23.80 22.52 11.86 19.17 0.00 for 27-Jan-02 25.82 24.32 11.45 20.25 0.00 BPA's Offer for 01/30/02. 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 1.908 -0.129 Mar 1.984 -0.120 Natural Gas Spot Prices in $/mmBtu Low High Sumas 2.02 2.07 So. Cal Border 2.05 2.10 San Juan 1.92 1.97 __________________________________________________________ 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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