FW: Energy Market Report

Subject: Energy Market Report - 02/04/02

Energy Market Report
Monday, February 4, 2002

*See attached pdf file.
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Western Pre-Scheduled Firm Electricity Prices($/MWh)
February 4, 2002 for February 5, 2002

Peak(Heavy)
Low Change High Change
NW/N. Rockies 19.00 -0.75 20.25 -0.50
Mid-Columbia 19.00 -0.75 20.25 -0.50
COB 21.75 -1.25 22.75 -0.75
N. California 24.00 0.00 24.75 -2.25
Midway/Sylmar NA NA NA NA
S. California 24.00 0.00 26.00 -1.25
Mead 23.50 -1.50 25.25 -0.75
Palo Verde 23.00 -0.75 24.25 -1.25
Inland SW 23.00 -0.75 26.00 -1.25
4-Corners 23.25 -0.25 24.00 -2.00
Central Rockies 19.00 -2.75 23.00 -1.25
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Off-Peak(Light)
Low Change High Change
NW/N. Rockies 17.25 -1.50 20.00 0.25
Mid-Columbia 17.25 -1.50 20.00 0.25
COB 18.00 -2.00 19.50 -1.75
N. California 19.75 -1.75 21.00 -2.75
Midway/Sylmar NA NA NA NA
S. California 18.50 -1.75 21.25 -2.75
Mead 18.00 -3.00 20.00 -3.00
Palo Verde 15.00 -2.00 17.50 -2.50
Inland SW 15.00 -2.00 20.00 -3.00
4-Corners 16.00 -2.00 18.50 -2.50
Central Rockies 14.50 -1.25 17.25 -1.00
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Ken's Not Coming

Peak power prices for Tuesday delivery were slightly lower across the
Western U.S. on Monday, unquestionably the result of less weather-related
demand. "Temperatures are forecast to be normal to slightly above-normal
through the week in most regions, so we're feeling pretty bearish right
now," commented one marketer. A late-session rally for off peak power was
reported at the Mid-Columbia, but most players believed that one or two
parties must have been caught a little bit short given the mild weather and
abundant supplies. Heating demand in the WSCC was only expected to average
94 percent of normal through February 11, and the latest six-to-ten-day
forecast was calling for mostly normal temperatures from February 10 through
14. In other industry news, former Enron CEO Ken Lay told Congress on
Sunday that he would refuse to testify before two committees preparing to
hear his testimony. As a result, the Senate Commerce Committee cancelled
Monday's hearing at which Mr. Lay was to have been the sole witness. The
Senate Commerce Committee said it would meet Tuesday morning to subpoena Mr.
Lay. Senator Byron Dorgan, the North Dakota Democrat who heads the
committee's consumer affairs subcommittee, said, "We decided that we really
had no choice but to issue a subpoena to require his attendance." Mr.
Dorgan said he had been assured by some Republicans on the Commerce
Committee that they would vote in favor of a subpoena.

Tuesday's heavy load energy costs in the Northwest fell slightly from levels
seen for Monday as regional temperatures had begun to moderate. A late-day
rally occurred in the light load arena when some shorts reportedly entered
the market. "There wasn't a whole lot of activity for the off peak when the
session began, but later on it just shot up," said one Oregon-based utility
trader. Heating demand in the region was forecast to pick up over the
coming weekend, rising to an average of 121 percent of normal next Sunday
and Monday. Flow forecasts for Chief Joseph were revised upward on Monday,
coming in at 110 kcfs through Thursday, 105 kcfs Friday, 75 kcfs Saturday,
60 kcfs Sunday, and 115 kcfs next Monday. There were a few goings on in the
generation landscape Monday. Bridger #1 (520 MW) was back in service, but
Bridger #3 and #4 (520 MW each) were brought down so engineers could perform
some "boiler unplugging." The Wyoming-based units were both expected to
return to service sometime on Thursday.

Amid stagnant gas values and slightly below-normal temperatures, power
prices settled lower in the Golden State on Monday. "I think prices will
trend down this week, with the warmer weather," commented one California
player. Heavy load goods at NP15 changed hands between 24 and 24.75$/MWh,
with unconfirmed trades heard as high as 26$/MWh. Light load pieces were
bought and sold from 19.75 to 21$/MWh. NP15 Balance-of-February was heard
near 23.25$/MWh. Of hydroelectric interest, the California DWR listed
snow-water equivalents in the northern section of the state at 111% of
normal. Spot gas values at the Socal border remained flat to Friday levels,
between 2.13 and 2.18/$mmBtu. In unit news, gas-fired Alamitos #4 (480 MW)
returned to the grid on Monday, and Pittsburg #7 (682 MW) went down for
planned maintenance on Saturday. On the weather front, Tuesday forecasts
called for highs to reach 70 degrees in L.A. and 58 to 61 degrees at
mid-state load centers. Overnight lows were anticipated in the mid-30s to
mid-40s. The five-day outlook predicted little change through Friday. The
most current six-to-ten predicted normal temperatures from February 10 to
14.

With Phoenix forecast to see daytime highs in the 70s and overnight lows in
the 50s through the week, day-ahead electricity prices headed lower in the
Southwest on Monday. Peak power at Palo Verde ranged from 23 to 24.25$/MWh
an average decline of 1$/MWh from levels reported for Monday. Mead
commanded a premium to PV, with several players stating that the
higher-priced electricity was bound for the California market. In unit
news, Coronado #1 (395 MW) was operating at 260 megawatts on Monday, but was
still having trouble ramping all the way to full power. Meanwhile, Coronado
#2 (385 MW) was scheduled to come down early Tuesday for some planned
maintenance slated to last until February 10. The latest six-to-ten from
the NWS was calling for above-normal temperatures in eastern New Mexico and
normal temperatures everywhere else from February 10 through 14.

Patrick O'Neill and Jessie Norris
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Western Generating Unit Outages

Current Begins Ends Reason
CAISO units <250/6810 total NA NA
planned/unplanned*
Alamitos #3/320/gas 26-Jan-02 ? planned
Alamitos #5/480/gas 01-Feb-02 ? planned
Alamitos #6/480/gas 20-Jan-02 ? planned
Bridger #3/520/gas 04-Feb-02 07-Feb-02 repairs*
Bridger #4/520/gas 04-Feb-02 07-Feb-02 repairs*
Colstrip #3/700/coal 11-Jan-02 10-Feb-02 repairs
Corondado #1/395/coal 25-Jan-02 02-Feb-02 @260 MW, tube
leak*
Coronado #2/385/coal 05-Feb-02 10-Feb-02
maintenance*
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
Huntington #2/455/coal 03-Feb-02 05-Feb-02 tube leak*
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
Pittsburg #7/682/gas 02-Feb-02 ? 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.
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Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh)

February 4, 2002 for February 5, 2002

Peak (Heavy) in $/MWh
Low Change High Change
Into Cinergy 20.00 2.00 24.00 3.50
Western PJM 24.90 0.65 25.30 0.40
Into Entergy 20.25 1.25 22.00 1.50
Into TVA 21.00 2.50 24.00 3.50
ERCOT 18.50 -0.50 19.35 -0.40
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As the expected colder temperatures materialized across the Eastern
Interconnect, peak power prices appreciated on Monday. With the exception
of Texas, which tanked on low gas values, heavy load goods changed hands
firmly in the 20s everywhere. Maintenance outages also contributed to the
bullish tenor of the day. NYMEX Henry Hub natural gas futures slipped on
Monday, with March falling 2.1 cents to close at 2.117$/mmBtu. April also
edged down a comparatively mild 1.4 cents to end at 2.184$/mmBtu.

Amid much stronger load forecasts and colder temperatures expected for
Tuesday, heavy load energy costs rose in the Mid-Atlantic on Monday.
Western PJM pieces were bought and sold in a narrow range from 24.9 to
25.3$/MWh. LMPs bounced up and down three times in the late morning and
early afternoon on Monday, and averaged 22.38$/MWh through 15:00 EST. On
the generation front, sources gave Keystone #2 (850 MW) a revised expected
off-line date of February 8. The unit was reportedly slated to undergo 20
days of maintenance. High temperatures were expected in the upper-30s on
Tuesday, and predicted in the low-40s by the end of the workweek. The most
current six-to-ten called for above-normal temperatures from February 10 to
14.

Traders in the Midwest characterized the dailies as a "wild ride" on Monday,
with heavy load electricity prices strengthening considerably on the
aggregate. "Cinergy opened near 20, climbed to 22.5, came off, and leapt up
all the way to 24$/MWh at the end," said one Cinergy commentator on the day
after the Super Bowl. While the dailies changed hands from 20 to 24$/MWh on
Monday, market players said the bulk of deals were seen around 21.5$/MWh.
Balance-of-February trades were heard between 20.25 and 20.5$/MWh. In unit
news, Quad Cities #2 (789 MW) was off the grid for refueling and pump
repairs on Monday, with a tentative ETR of March 11. Sister unit #1 (821
MW) was in start-up. Fellow nuke LaSalle (1,144 MW) was also in start-up at
25% late Monday, and expected at full by mid-week. Temperatures were
slightly colder than anticipated by Friday forecasts, with highs across ECAR
in the mid-30s and lows in the low-20s. The outlook called for slight
warming, into the low-40s by Thursday, and the latest six-to-ten called for
above-normal temperatures from February 10 to 14.

The Southeast saw some strength on Monday as daily power prices responded to
the colder forecasts. Into TVA day-ahead peak power prices were heard from
21 to 24$/MWh, with the low end reached late and the bulk of deals done in
the 22 to 22.25$/MWh range, according to traders. Balance contracts into
TVA were heard trading between 20 and 20.15$/MWh. Texas electricity prices
weakened on gas, with transactions heard between 18.5 and 19.35$/MWh. ERCOT
balance-of-the-month saw action mostly from 18 to 18.6$/MWh. Tuesday
forecasts called for temperatures well below normal across both regions,
with highs expected in the mid-40s. SERC lows were forecast to drop into
the low-20s. The most up-to-date six-to-ten predicted above-normal
temperatures from February 10 to 14.
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California ISO Congestion Index in $/MWh

Path Peak Off-peak
for 03-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

for 04-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

for 05-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 NA NA 21.75 22.75 NA NA
May 14.75 16.25 23.50 24.50 NA NA
Q2 '02 15.00 16.50 23.50 24.50 23.00 24.00
Q3 '02 28.00 29.50 37.25 38.25 36.75 37.75
Q4 '02 27.50 29.00 26.75 27.75 28.50 29.50
Q1 '03 27.25 28.75 27.75 28.75 29.75 30.75
Cal '03 28.75 30.25 32.50 33.50 34.50 35.50

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 01-Feb-02 31.64 30.21 12.40 24.74 3.76
for 02-Feb-02 20.09 19.11 10.48 16.38 -8.36
for 03-Feb-02 17.26 16.08 9.65 14.04 -2.34

BPA's Offer for 02/06/02.

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 2.117 -0.021
Apr 2.184 -0.014

Natural Gas Spot Prices in $/mmBtu

Low High
Sumas 1.95 2.00
So. Cal Border 2.13 2.18
San Juan 2.01 2.06
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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.