FW: Energy Market Report

-----Original Message-----
From: Energy Market Report [mailto:emr@econ.com]
Sent: Monday, December 17, 2001 5:18 PM
To: Energy Market Report
Subject: Energy Market Report - 12/17/01

Energy Market Report
Monday, December 17, 2001

*See attached pdf file.
__________________________________________________________
Western Pre-Scheduled Firm Electricity Prices($/MWh)
December 17, 2001 for December 18, 2001

Peak(Heavy)
Low Change High Change
NW/N. Rockies 27.25 -0.25 29.50 1.00
Mid-Columbia 27.25 -0.25 29.50 1.00
COB 30.00 1.00 32.00 1.50
N. California 32.00 2.00 35.25 0.75
Midway/Sylmar NA NA NA NA
S. California 32.00 1.00 35.25 2.75
Mead 31.75 1.75 33.50 0.50
Palo Verde 29.00 0.00 33.75 1.25
Inland SW 29.00 0.00 33.75 0.75
4-Corners 30.00 1.00 32.00 2.00
Central Rockies 27.75 2.50 31.00 4.25
__________________________________________________________
Off-Peak(Light)
Low Change High Change
NW/N. Rockies 17.00 -7.50 24.25 -1.75
Mid-Columbia 17.00 -7.50 24.25 -1.75
COB 23.00 -2.75 24.00 -3.00
N. California 25.75 -0.25 28.40 -0.60
Midway/Sylmar NA NA NA NA
S. California 24.50 -2.50 28.40 0.40
Mead 22.50 -3.00 26.50 -0.50
Palo Verde 22.75 -1.25 27.00 0.25
Inland SW 22.50 -1.50 27.00 0.00
4-Corners 23.75 -1.25 26.50 0.00
Central Rockies 20.00 0.50 23.00 1.75
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West Up, But Outlook Bearish

Most peak power prices in the West rose slightly for Tuesday delivery amid
unplanned unit outages and rising spot gas prices. Nonetheless, most
traders said the strength would have been more prominent had it not been for
rain-boosted flows in the Northwest, and near-seasonal temperatures
throughout much of the WSCC. With holiday loads fast approaching and
longer-term weather forecasts calling for a mild end for the month, it was
not surprising that most balance-of-December contracts were on the decline
Monday. Despite a stronger cash market, NYMEX Henry Hub natural gas futures
contracts declined Monday on forecasts calling for near-seasonal
temperatures, as well as some technical selling. January Hub gas shed 16
cents to close at 2.686$/mmBtu, while February fell 14.7 cents to end at
2.761$/mmBtu. Early estimates for Wednesday's AGA inventory report called
for a 20 to 80-bcf draw last week, well below the 158-bcf draw seen a year
ago, and the five-year average draw of 102 bcf. Total U.S. inventories
stand at 3.106 tcf, or 37 percent above last year. "We expect the storage
spread between this year and last to grow considerably in the next few
weeks, because last year we had huge draws due to sustained below-normal
temperatures, something that seems all too unlikely this year," said one gas
trader. On a political note, Representative Joe Barton from Texas announced
the postponement of an electricity deregulation bill before Congress until
February. The busy holiday season was cited as the reason, but most summed
it up to the nervousness from the Enron collapse.

Heavy load energy costs for Tuesday rose only marginally in the Northwest,
while light load goods were seen on the decline. Seasonable temperatures
and recent heavy rains were prime culprits leading to the lackluster daily
market. Peak power at the Mid-Columbia traded from 27.25 to 29.5$/MWh, with
the lowest prices reported out of the gate. Light load goods saw action
anywhere between 17 and 24.25$/MWh, though most trades were done on the high
end of the spectrum, from 22 to 24$/MWh. Flows remained healthy in the
rain-soaked region, with Chief Joseph forecast to see 90 kcfs Tuesday and
Wednesday, 95 kcfs Thursday and Friday, 65 kcfs Saturday, 45 kcfs Sunday,
and 90 kcfs on Christmas Eve. When asked, most players believed that the
Christmas Eve flows were a mistake, and would be reduced in a future report.
In unit news, Colstrip #1 (330 MW) was brought down for scheduled
maintenance on Saturday, but was back in service 24 hours later. Weather
forecasts for Seattle and Portland were calling for temperatures to dip
slightly through the week, but not into below-normal territory, while the
latest six-to-ten from the NWS was predicting above-normal temperatures for
the entire region from December 23 through 27.

With much activity on the generation front and stronger spot natural gas
prices, heavy load electricity prices across the Golden State edged up on
Monday. "Prices were generally floating down from the high end but bounced
around a bit as the day progressed. In terms of the long-range forecasts,
it is not particularly strong," commented one trader. At SP15, heavy load
electricity prices traded in a larger range on Monday, from 32 to
35.25$/MWh. Off-peak prices were also seen on a wider scale, ranging from
24.5 to 28.4$/MWh. Spot gas prices at the SoCal border were also stronger
on Monday, trading between 2.74 and 2.79$/mmBtu, up about 14 cents from
Friday. In unit news, SP15-based El Segundo #4 (335 MW) went off-line
unexpectedly on Monday. Gas-fired Moss Landing #6 (739 MW) was back at full
power on Monday following a planned maintenance outage that began on
November 3. The weather forecast for Tuesday called for normal conditions
with highs in the upper 60s in the south and mid-50s in the north.
Overnight lows were expected to reach the mid-40s across the entire state.
The five-day forecast called for little change as the week progressed. The
latest six-to-ten from the NWS called for above-normal temperatures from
December 23 to 27.

An unexpected unit outage and rising spot gas prices helped to prop up
prices in the Southwest on Monday, albeit slightly. Mohave #1 (790 MW) was
taken off line Saturday for tube leak repairs, and was given an ETR of
"December 19 or 20." Being that we are talking about a Mohave unit, one
should err on the side of caution and go with the 20th. Some parties said
the Mohave outage had little to do with the slightly higher prices, given
that it was more than offset by the weekend returns of two 750 MW units,
Four Corners #4 and Navajo #3. Further to the north, Colorado-based Craig
#1 (428 MW) was brought down Saturday for unplanned repairs, with no ETR
given. There were also unconfirmed reports that San Juan #3 (534 MW) was
operating near 50% on Monday. Peak power at Palo Verde traded from 29 to
33.75$/MWh, with the bulk of deals done at the 33$/MWh mark. Weather
forecasts called for seasonable temperatures through the week, while the
latest six-to-ten from the NWS was predicting a mix of normal and
below-normal temperatures from December 23 through 27. "Below-normal
temperatures in the Southwest this time of year could mean some higher
off-peak prices, but little more," said one industry soothsayer.

Patrick O'Neill and Beth Goodwin
_________________________________________________________

Western Generating Unit Outages

Current Begins Ends Reason
CAISO units <250/5343 total NA NA
planned/unplanned*
Alamitos #3/320/gas 04-Dec-01 ? planned
Big Creek Project/1020/hydro 09-Dec-01 ? @752MW,
planned
Craig#1/428/coal 15-Dec-01 ? unplanned*
El Segundo #3/337/gas 02-Oct-01 ? unplanned
El Segundo #4/335/gas 17-Dec-01 ? unplanned*
Encina #5/332/gas 27-Oct-01 ? planned
Etiwanda #4/320/gas 08-Nov-01 ? unplanned
Grand Coulee #19/600/hydro 10-Dec-01 March repairs
Helms PGP #2/407/hydro 01-Oct-01 ? planned
Hunter #2/472/coal 11-Dec-01 21-Dec-01 unknown*
Hyatt/Thermalito/933/hydro 02-Oct-01 ? @607 MW,
unplanned
Mohave #1/790/coal 15-Dec-01 20-Dec-01 tube leak*
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 ? @235 MW,
planned

For unit owners refer to pdf version.
*Indicates a change from previous EMR.
______________________________________________________________________

Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh)

December 17, 2001 for December 18, 2001

Peak (Heavy) in $/MWh
Low Change High Change
Into Cinergy 17.25 1.75 19.00 0.00
Western PJM 23.75 1.95 24.10 1.40
Into Entergy 17.50 -1.00 21.50 1.25
Into TVA 17.50 0.75 19.00 0.50
___________________________________________________________
Amongst a healthier generation landscape and continued well above-normal
daytime highs, Monday's day-ahead electricity prices across the Eastern
Interconnect firmed up slightly on the low end, but softened for the most
part on the high. "We don't expect to see a whole lot of deviation in
prices until after the New Year," remarked one Eastern trader. Spot natural
gas prices were stronger on Monday amid stronger weather related demand due
to a return to more normal like weather conditions later in the week. In
the gas market, NYMEX Henry Hub natural gas futures tumbled substantially on
Monday. The January contract fell 16 cents, while February also lost a
similar 14.7 cents.

Spot electricity prices across the Mid-Atlantic on Monday were mostly steady
to Friday, trading up forty cents on the high end. Western PJM pieces
changed hands between 23.75 to 24.5$/MWh, with the bulk of deals going
through at 24$/MWh. LMPs plateaued at almost 36$/MWh from 10:00 to 11:00
EST, before settling down to the day's average of 19.86$/MWh through 15:00.
In generation news, almost 2,000 MW returned to the grid over the weekend,
adding more supply to a still weak demand. On the weather front,
temperatures for the Mid-Atlantic were expected to cool dramatically as the
week progressed. Daytime highs for Tuesday were expected in the mid-50s,
about ten degrees above normal for this time of year. By Friday, conditions
were expected to return to more seasonal levels for December. The most
current six-to-ten from the NWS called for below-normal temperatures from
December 23 to 27.

With the return of a large unit to an already plentiful supply picture,
day-ahead power prices settled slightly lower on Monday in the Midwest.
Into Cinergy goods were bought and sold between 17.9 and 18.65$/MWh, with
the majority of transactions done from 18.2 to 18.4$/MWh. Traders said
balance-of-the-week deals were being done right around 19$/MWh, with next
week trading 25 to 50 cents lower on lighter loads for the holiday. On the
unit front, Michigan-based nuke Fermi #2 (1,085 MW) returned to service over
the weekend from its fall refueling outage, although whether it was
operating at full capacity or still ramping up on Monday afternoon could not
be confirmed. "Weather-wise, the worst is behind us this week," commented
one hopeful seller. Tuesday forecasts called for highs in the
low-to-mid-40s and lows in the mid-30s, while the rest of the week was
expected to become progressively colder. The latest six-to-ten predicted
below-normal temperatures from December 23 to 27.

Amid weak weather-related demand, but despite stronger spot gas prices,
heavy load electricity prices weakened across the Southeast and traded in a
narrower range on Monday. Into Entergy prices gained fifty cents on the low
end, trading at 18$/MWh, while prices slipped seventy-five cents on the high
end to finish the day at the 20$/MWh mark. Into TVA prices were seen in a
fifty cent range from 18.25 to 18.75$/MWh. In generation news, South
Carolina Oconee #3 (847MW) returned to full capacity sometime over the
weekend. Tuesday's highs for the Southeast were expected to range from the
mid-50s to the high-60s, still well above normal for the last remaining
weeks of the year. The five-day forecast called for gradual cooling. The
latest six-to-ten called for below-normal temperatures to blanket the region
from December 23 to 27.
___________________________________________________________
California ISO Congestion Index in $/MWh

Path Peak Off-peak
for 16-Dec-01 NW1 to NP15 0.10 0.15
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 17-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 18-Dec-01 NW1 to NP15 0.01 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 26.50 27.50 28.75 29.75 30.25 31.25
January 26.50 28.00 27.75 28.75 29.00 30.00
February 22.50 24.00 26.75 27.75 26.75 27.75
March 21.00 22.50 26.00 27.00 27.25 28.25
Q1 '02 23.00 24.50 27.50 28.50 28.50 29.50
Q2 '02 18.50 20.00 29.00 30.00 28.00 29.00
Q3 '02 35.50 37.00 47.00 48.00 43.00 44.00
Q4 '02 30.00 32.00 29.50 30.50 31.00 32.00
Cal '03 30.50 32.00 34.25 35.25 36.50 37.50

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 14-Dec-01 43.13 42.32 15.57 34.24 -5.02
for 15-Dec-01 45.21 43.37 18.69 35.64 1.41
for 16-Dec-01 35.76 34.88 24.19 31.54 -4.10

BPA's Offer for 12/19/01.

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 2.686 -0.160
Feb 2.761 -0.147

Natural Gas Spot Prices in $/mmBtu

Low High
Sumas 2.65 2.70
So. Cal Border 2.74 2.79
San Juan 2.46 2.51
__________________________________________________________

Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201,
Telephone (503) 222-2425, Internet e-mail emr@econ.com -
Copyright, Economic Insight, Inc. 2001.