FW: Energy Market Report

Subject: Energy Market Report - 02/01/02

Energy Market Report
Friday, February 1, 2002

*See attached pdf file.
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Western Pre-Scheduled Firm Electricity Prices($/MWh)
February 1, 2002 for February 3, 2002

Peak(Heavy)
Low Change** High Change**
NW/N. Rockies* 18.75 NA 19.75 NA
Mid-Columbia* 18.75 NA 19.75 NA
COB* 20.00 NA 21.25 NA
N. California* 21.50 NA 23.75 NA
Midway/Sylmar* NA NA NA NA
S. California* 20.25 NA 24.00 NA
Mead* 21.00 NA 23.00 NA
Palo Verde* 17.00 NA 20.00 NA
Inland SW* 17.00 NA 23.00 NA
4-Corners* 18.00 NA 21.00 NA
Central Rockies* 15.75 NA 18.25 NA
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Off-Peak(Light)
Low Change** High Change**
NW/N. Rockies* 18.75 NA 19.75 NA
Mid-Columbia* 18.75 NA 19.75 NA
COB* 20.00 NA 21.25 NA
N. California* 21.50 NA 23.75 NA
Midway/Sylmar* NA NA NA NA
S. California* 20.25 NA 24.00 NA
Mead* 21.00 NA 23.00 NA
Palo Verde* 17.00 NA 20.00 NA
Inland SW* 17.00 NA 23.00 NA
4-Corners* 18.00 NA 21.00 NA
Central Rockies* 15.75 NA 18.25 NA

*Denotes trading of flat, 24-hour products.
**"NA" changes are not applicable because prices for on and off peak goods
are not comparable to flat products.
__________________________________________________________
Western Pre-Scheduled Firm Electricity Prices($/MWh)
February 1, 2002 for February 4, 2002

Peak(Heavy)
Low Change** High Change**
NW/N. Rockies 19.75 NA 20.75 NA
Mid-Columbia 19.75 NA 20.75 NA
COB 23.00 NA 23.50 NA
N. California 24.00 NA 27.00 NA
Midway/Sylmar NA NA NA NA
S. California 24.00 NA 27.25 NA
Mead 25.00 NA 26.00 NA
Palo Verde 23.75 NA 25.50 NA
Inland SW 23.75 NA 27.25 NA
4-Corners 23.50 NA 26.00 NA
Central Rockies 21.75 NA 24.25 NA
__________________________________________________________
Off-Peak(Light)
Low Change** High Change**
NW/N. Rockies 18.75 NA 19.75 NA
Mid-Columbia 18.75 NA 19.75 NA
COB 20.00 NA 21.25 NA
N. California 21.50 NA 23.75 NA
Midway/Sylmar NA NA NA NA
S. California 20.25 NA 24.00 NA
Mead 21.00 NA 23.00 NA
Palo Verde 17.00 NA 20.00 NA
Inland SW 17.00 NA 23.00 NA
4-Corners 18.00 NA 21.00 NA
Central Rockies 15.75 NA 18.25 NA

**"NA" changes are not applicable because prices for on and off peak goods
are not comparable to flat products.
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Task Force Taken to Task

Western heavy load energy costs for Monday delivery were mostly steady from
levels reported for the Friday/Saturday package as weather forecasts called
for warmer weather in the new week and spot gas prices remained relatively
stable. Meanwhile, off-peak prices were largely stronger due to the
inclusion of the all-day Sunday piece. According to Weather Derivatives,
heating demand in the WSCC was expected drift lower through the new week,
averaging only 96 percent of normal through February 8. Additionally, the
latest six-to-ten from the NWS was predicting mostly normal temperatures
across the Western U.S. from February 7 through 11. In other industry news,
a federal judge has ordered Vice President Dick Cheney's energy task force
to explain the constitutional arguments behind its refusal to release
details of its meetings last year, which included executives from Enron
Corp. and other large energy firms. The Bush administration has so far
refused to release details such as the names of people it consulted and the
subjects discussed in drafting George W's energy policy.

Peak power in the Pacific Northwest was little changed for Monday delivery
as forecasted normal temperatures continued to whittle away at heating
demand, though regional demand was expected to remain slightly above normal
through the new week. While flow forecasts for the Columbia River were
downgraded slightly on Friday, they appeared to be more than ample enough to
satiate regional demand. Flows at Chief Joseph were forecast to be 75 kcfs
Saturday, 60 kcfs Sunday, 105 kcfs Monday, and 100 kcfs Tuesday through
Friday. In unit news, Bridger #4 (520 MW) returned to the grid following
repairs to a plugged boiler that began on Wednesday, but Bridger #1 (520 MW)
slipped into the off-line category for tube leak repairs that were expected
to end on Sunday. The return date for Colstrip #3 (700 MW) was reportedly
pushed back until February 10. Utah-based Hunter #1 (446 MW) was scheduled
to come down for 24 hours of repairs beginning around midnight on Friday.
On a side note, BPA said Friday that it expects electricity customer McCook
metals to restart partial production at its idled Longview, Washington
aluminum smelter after a new "take-or-pay" contract kicks in on April 1.
Several regional smelters agreed to halt all aluminum production back in
March 2001 due to the electricity supply crunch in the Pacific Northwest.
Several analysts, however, were skeptical as to whether any smelters in the
region would be restarted this year.

With little change in the generation landscape, flat spot gas prices at the
SoCal border, and normal temperature forecasts for the new week, electricity
prices remained steady in the Golden State on Friday. Light load prices
appreciated again on Friday, boosted by the all-day Sunday inclusion and
recent trends. Heavy load pieces at NP15 traded between 24 and 27$/MWh, and
light load deals were done from 21.5 to 23.75$/MWh, picking up by more than
buck on both ends. In political news, PG&E released the asset and debt
breakdown for its proposed spin-off companies. In their plan, a generating
company would have $5.3 billion in assets and assume $2.4 billion in debt.
An electric transmission company would be valued at $1.6 billion and take on
$1.1 billion in debt. Lastly, a gas transmission company would have assets
of $1.4 billion and assume $900 million in debt. However, U.S. bankruptcy
judge Montali has not yet ruled on PG&E's reorganization plan, and for
fracturing of the utility to move forward, the SEC's approval would also be
required. In unit news, hydro Big Creek Project PSP (1,020 MW) was only
down 150 MW, while gas-burner Alamitos #5 (480 MW) came off the grid for
planned maintenance. California weather forecasts called for gradual
warming over the weekend, leading temperatures into just below-normal
territory for the early part of the new week. Highs for Monday and Tuesday
were expected near 70 degrees in Los Angeles, while northern load centers
anticipated highs near 58 degrees. The most current six-to-ten called for
normal temperatures from February 7 to 11.

Peak power prices in the Southwest were largely steady for Monday delivery,
but some late-day selling caused prices to end near session lows. Heavy
load energy costs at Palo Verde ranged from 23.75 to 25.5$/MWh, with
unconfirmed deals as low as 22$/MWh reported about an hour after the normal
trading session had ended. "It's still supposed to be cold to start the new
week, but the worst of it is certainly over, or so our in-house forecasters
say," said one Phoenix-based trader. Some traders believed unit outages
could keep supplies a bit tight to start the new week, but that forecasted
warming would keep most strength at bay. Coronado #1 (395 MW) had its
return date pushed back once again. The Arizona-based unit was now sporting
an ETR of 06:30 MST on Saturday, but parties with a share in the unit said
they had not scheduled with it in place. Meanwhile, Navajo #2 (750 MW) was
set to enter a planned maintenance outage on February 2, with an official
ETR of February 25.

Patrick O'Neill and Jessie Norris
_________________________________________________________

Western Generating Unit Outages

Current Begins Ends Reason
CAISO units <250/7048 total NA NA
planned/unplanned*
Alamitos #3/320/gas 26-Jan-02 ? planned
Alamitos #4/320/gas 31-Jan-02 ? planned
Alamitos #5/480/gas 01-Feb-02 ? planned*
Alamitos #6/480/gas 20-Jan-02 ? planned
Bridger #1/520/gas 01-Feb-02 03-Feb-02 tube leak*
Colstrip #3/700/coal 11-Jan-02 10-Feb-02 repairs*
Corondado #1/395/coal 25-Jan-02 02-Feb-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 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
Hunter #1/446/coal 02-Feb-02 03-Feb-02 repairs*
Hyatt/Thermalito/933/hydro 02-Oct-01 ? @665 MW,
unplanned
Moss Landing #7/739/gas 29-Dec-01 ? planned
Navajo #2/750/coal 02-Feb-02 25-Feb-02
maintenance*
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

Future
Palo Verde #2/1270/nuclear 16-Mar-02 20-Apr-02 maintenance

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

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

February 1, 2002 for February 4, 2002

Peak (Heavy) in $/MWh
Low Change High Change
Into Cinergy 18.00 0.50 20.50 0.65
Western PJM 24.25 2.55 24.90 2.90
Into Entergy 19.00 1.40 20.50 0.25
Into TVA 18.50 0.00 20.50 0.50
ERCOT 19.00 0.50 19.75 -1.25
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With the return of winter weather and a rash of unit outages, peak power
prices strengthened across the Eastern Interconnect on Friday. To the
relief of sellers, forecasts called for a dip in temperatures by Saturday.
"Get out and enjoy it, because tomorrow winter is back," recommended one
Philadelphia-based energy dealer. NYMEX Henry Hub natural gas futures were
steady on Friday. March was unmoved, closing at 2.138$/mmBtu, while April
rose less than a cent to end at 2.198$/mmBtu.

Heavy load electricity prices climbed back into the mid-20s in the
Mid-Atlantic on Friday, on expectations of stronger loads in the new week
and the possibility of a weekend outage. Western PJM goods for Monday
delivery changed hands between 24.25 and 24.9$/MWh, gaining a robust 3$/MWh
at both ends of the spectrum. LMPs appreciated on Friday after spending
most of the business day near 30$/MWh, but only averaged 24.47$/MWh.
According to sources, troubled coal-burner Keystone #2 (850 MW) was expected
off-line over the weekend for maintenance. The unit was down earlier in the
week for unplanned repairs. Temperatures in the comfortable 60s were
expected to disappear over the weekend. Monday forecasts called for normal
conditions across PJM, with highs in the low-40s and lows in the low-30s.
The most current six-to-ten predicted above-normal temperatures from
February 7 to 11.

Expectations of early spring maintenance outages and colder weather
forecasts affected the grid on Friday, bolstering the dailies in ECAR. Into
Cinergy deals were heard between 18 and 20.5$/MWh, firming up 65 cents to a
day ago. In unit news, Missouri nuke Callaway (1,125 MW) was off-line on
Friday. Quad Cities #2 (789 MW) was at 95%, powering down for a maintenance
outage expected to last through the end of February. Sister unit #1 (821
MW) was still off-line early Friday, but expected to return over the
weekend. Traders continued to keep their ear to the ground, hoping for
information on other upcoming maintenance outages. Temperatures for the new
week were expected to drop back into the mid-30s across most of ECAR, with
overnight lows in the frosty low-20s. The latest six-to-ten from the NWS
called for above-normal temperatures from February 7 to 11.

With forecasts finally calling for cold temperatures and a stronger gas
market, peak power prices appreciated in the Southeast on Friday, while
Texas lost ground on little news. Into Entergy day-ahead pieces were bought
and sold between 19 and 20.5$/MWh, while balance of February traded at a
slight discount around 18.9 to 19.1$/MWh. ERCOT deals were mostly heard
between 19 and 19.75$/MWh on Friday. SERC weather was expected to turn cold
with the new week, with overnight lows expected below freezing through
Tuesday. Texas temperatures were expected to linger in the near-normal
doldrums. The most current six-to-ten called for above-normal conditions in
Texas and northern SERC and normal temperatures in southern and coastal SERC
from February 7 to 11.
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California ISO Congestion Index in $/MWh

Path Peak Off-peak
for 02-Feb-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 18.00 19.00 21.50 22.50 23.00 24.00
March 15.25 16.75 20.75 21.75 21.50 22.50
April 15.25 16.75 22.00 23.00 NA NA
May 14.75 16.25 23.25 24.25 24.00 25.00
Q2 '02 15.00 16.50 23.50 24.50 23.50 24.50
Q3 '02 28.00 29.50 37.25 38.25 36.50 37.50
Q4 '02 27.00 28.50 27.00 28.00 28.50 29.50
Q1 '03 NA NA 27.75 28.75 29.75 30.75
Cal '03 28.75 30.25 32.00 33.00 34.00 35.00

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 31-Jan-02 27.02 25.81 10.16 20.99 -8.77

BPA's Offer for 02/05/02.

Hours Amount NW delivered COB/NOB delivered
7-22 200MW Market Price* Market Price*
1-6,23,24 200MW Market Price* Market Price*

*Market price will be determined at time of request.

NYMEX Henry Hub Gas Futures in $/mmBtu

Close Change
Mar 2.138 0.000
Apr 2.198 0.008

Natural Gas Spot Prices in $/mmBtu

Low High
Sumas 1.98 2.03
So. Cal Border 2.13 2.18
San Juan 2.03 2.08
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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.