Message-ID: <5118287.1075840035064.JavaMail.evans@thyme> Date: Wed, 9 Jan 2002 11:05:32 -0800 (PST) From: theresa.villeggiante@enron.com To: tom.alonso@enron.com, robert.badeer@enron.com, tim.belden@enron.com, sean.crandall@enron.com, m..driscoll@enron.com, mark.fischer@enron.com, chris.mallory@enron.com, matt.motley@enron.com, jeff.richter@enron.com, diana.scholtes@enron.com, mike.swerzbin@enron.com, bill.williams@enron.com Subject: FW: Energy Market Report - 01/08/02 Mime-Version: 1.0 Content-Type: text/plain; charset=us-ascii Content-Transfer-Encoding: 7bit X-From: Villeggiante, Theresa X-To: Alonso, Tom , Badeer, Robert , Belden, Tim , Crandall, Sean , Driscoll, Michael M. , Fischer, Mark , Mallory, Chris , Motley, Matt , Richter, Jeff , Scholtes, Diana , Swerzbin, Mike , Williams III, Bill X-cc: X-bcc: X-Folder: \ExMerge - Swerzbin, Mike\Inbox X-Origin: SWERZBIN-M X-FileName: -----Original Message----- From: Energy Market Report [mailto:emr@econ.com] Sent: Tuesday, January 08, 2002 4:14 PM To: Energy Market Report Subject: Energy Market Report - 01/08/02 Energy Market Report Tuesday, January 8, 2002 *See attached pdf file. __________________________________________________________ Western Pre-Scheduled Firm Electricity Prices($/MWh) January 8, 2002 for January 9, 2002 Peak(Heavy) Low Change High Change NW/N. Rockies 18.00 1.00 19.00 1.00 Mid-Columbia 18.00 1.00 19.00 1.00 COB 20.00 1.00 21.25 1.50 N. California 22.25 1.75 23.75 1.75 Midway/Sylmar NA NA NA NA S. California 21.25 0.75 23.00 0.50 Mead 21.00 1.50 22.50 1.00 Palo Verde 20.00 1.25 22.00 0.00 Inland SW 20.00 1.25 22.50 0.50 4-Corners 20.00 2.50 21.50 0.75 Central Rockies 17.75 0.00 18.75 0.25 __________________________________________________________ Off-Peak(Light) Low Change High Change NW/N. Rockies 15.00 0.50 16.00 0.75 Mid-Columbia 15.00 0.50 16.00 0.75 COB 16.50 2.25 17.00 1.00 N. California 16.50 1.00 18.00 0.75 Midway/Sylmar NA NA NA NA S. California 15.00 0.00 17.25 0.25 Mead 14.00 -0.50 14.75 -1.00 Palo Verde 13.20 -0.80 15.00 -1.25 Inland SW 13.20 -0.80 15.00 -1.25 4-Corners 13.00 -0.50 14.00 -1.00 Central Rockies 14.25 -0.25 15.50 -0.50 __________________________________________________________ And the Winner Is??? Day-ahead peak power prices in the Western U.S. rose slightly Tuesday on revised weather forecasts calling for colder temperatures over the next few days. The most significant cooling was expected in the Northwest, where heating demand was forecast to climb to above-normal levels by week's end. "They've got plenty of hydro in the Northwest and that's what limited the upside, but that also means there's less power available from the north, so our prices went up a little as well," said one Southern California utility trader. Many players anticipated more strength on Wednesday as the colder weather draws closer, but most expected the upside to be limited due to the abundant hydropower and relatively soft spot gas prices. In other industry news, Weil Gotshal & Manges, the lead law firm for bankrupt Enron, reported Tuesday that multiple bids had been filed for a controlling stake in Enron Corp.'s energy trading business. Weil plans to announce the winning bidder at its New York offices Thursday, and then present the offer to the U.S. bankruptcy court in New York for approval on Friday. Meanwhile, the court is hearing arguments from creditors on why the case should be transferred to Texas. While the bids and the bidders were to remain confidential, it was reported that Citicorp Inc. and UBS Warburg were among the suitors, though a third financial institution that had previously expressed interest, J.P. Morgan Chase & Co., declined to submit a bid by Monday's night's deadline. British company BP Plc. also said it may be interested in the operations, and had submitted a bid of $25 million for a small portion of Enron's assets, including some back office functions and some IT assets. Enron's lawyers have stated that the company is not looking for cash bids, but rather an ownership stake of up to 51 percent. Heavy load energy costs in the Northwest rose by an average of 1$/MWh for Wednesday delivery. Cooler weather forecasts were near-universally blamed for the rising dailies, though most players conceded that healthy river flows would limit the upside. "The colder weather is a small blessing for sellers, but also for the region as a whole. The recent warm weather has caused some snowmelt, something few people want to see until the spring, and the lower temperatures should put a stop to that," said one Northwest trader. According to Weather Derivatives, heating demand in the region was expected to average 64 percent of normal Wednesday, and then rise to a peak of 120 percent of normal by Sunday. Flow forecasts for Chief Joseph were little changed from a day ago, coming in at 85 kcfs through Friday, 70 kcfs Saturday, 55 kcfs Sunday, and back up to 85 kcfs next Monday and Tuesday. Despite lackluster trading and continued mild weather, day-ahead electricity prices enjoyed a tempered upturn in California on Tuesday. Gains were modest, on the order of a dollar everywhere. Traders cited colder temperatures on the horizon and an incremental upswing in Western spot gas prices as the main factors leading prices higher. "Balance of the month is trading at a premium to the dailies, which is usually a sign of coming strength," said one trader. Peak goods at NP15 were bought and sold between 22.25 and 23.75$/MWh, while the off-peak products changed hands from 16.5 to 18$/MWh. In political news, the FERC judge for the California refund case said he will hold evidentiary hearings through July 12, and submit his proposal to FERC by early August. The state accuses energy companies of overcharging during last year's energy crisis, an allegation the companies deny. On a less litigious note, last month FERC asked the CAISO to come up with a detailed plan for reforming the state's energy market. The proposal could be unveiled as early as late Tuesday, and would include elements of the much-admired PJM RTO. It would also emphasize a way to reduce intra-zonal congestion and include a plan for a day-ahead market, although on a smaller scale then the former one run by the CalPX. There were no dramatic changes in the generation landscape on Tuesday. Moss Landing #6 (739 MW) and Etiwanda #4 (320 MW) returned to the grid, while hydro unit Big Creek Project (1,020 MW) was operating at 970 MW. On the weather front, Wednesday forecasts predicted high temperatures in the mid-50s and low-60s at mid-state load centers, and in the high-60s in the south. Little change was expected in temperatures through Saturday. The most current six-to-ten called for below-normal temperatures from January 14 to 18. Heavy load energy costs in the Southwest rose by an average of less than a dollar on Tuesday, with the modicum of strength chalked up to rising spot gas prices and cooler temperatures on the horizon. Peak power at Palo Verde ranged from 20 to 22$/MWh, with the bulk of transactions seen right in the middle at 21$/MWh. Balance-of-January contracts were heard trading at about a $2/MWh premium to the dailies on Tuesday, likely in reaction to the cooler forecasts. In unit news, Coronado #1 (365 MW) was in the process of restarting Tuesday afternoon, as expected. Four Corners #5 (750 MW) was operating at 550 MW Tuesday due to air-preheater problems, with no available ETR to full. Weather Derivatives forecast heating demand in the desert region to climb from its current level of 50 percent of normal, to just above normal over the coming weekend, but the latest six-to-ten was still calling for a mix of normal and above-normal temperatures from January 14 through 18. Patrick O'Neill and Jessie Norris _________________________________________________________ Western Generating Unit Outages Current Begins Ends Reason CAISO units <250/6594 total NA NA planned/unplanned* Alamitos #3/320/gas 04-Dec-01 ? planned Alamitos #4/320/gas 04-Jan-02 ? planned Coronado #1/365/coal 22-Dec-01 08-Jan-02 main transformer Etiwanda #3/320/gas 22-Dec-01 ? planned Grand Coulee #19/600/hydro 10-Dec-01 March repairs Haynes #6/341/gas 07-Jan-02 ? planned Helms PGP #2/407/hydro 01-Oct-01 ? planned Hyatt/Thermalito/933/hydro 02-Oct-01 ? @607 MW, unplanned Morro Bay #3/337/gas 04-Jan-02 ? planned Moss Landing #7/739 29-Dec-01 ? planned Ormond Beach #1/725/gas 28-Dec-01 ? planned Ormond Beach #2/750/gas 05-Oct-01 ? @350 MW, unplanned Pittsburg #6/317/gas 22-Nov-01 ? planned Pittsburg #7/682/gas 03-Jan-02 ? unplanned Redondo #8/480/gas 09-Dec-01 ? planned For unit owners refer to pdf version. *Indicates a change from previous EMR. ______________________________________________________________________ Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh) January 8, 2002 for January 9, 2002 Peak (Heavy) in $/MWh Low Change High Change Into Cinergy 19.55 -0.95 21.25 -0.75 Western PJM 24.25 -1.25 24.85 -1.40 Into Entergy 19.00 0.00 20.00 -5.00 Into TVA 20.25 -0.75 21.50 0.00 ___________________________________________________________ Amid forecasts for warmer weather on Wednesday and little else changed in market fundamentals, heavy load energy costs drifted lower across the Eastern Interconnect on Tuesday. "The EIA revised the Q1 electricity demand estimate downwards today. That shouldn't really affect the dailies, but sometimes its what people think will happen that matters more than what actually does happen," suggested one market analyst, who added that he thought weather was a greater factor in the dip in day-ahead prices. NYMEX Henry Hub natural gas futures settled higher on Tuesday. February gained 0.9 cents to close at 2.281$/mmBtu, while the March contract picked up 2.4 cents to end at 2.285$/mmBtu. Day-ahead electricity prices softened in the Mid-Atlantic on Tuesday amid warm weather forecasts for the rest of this week and next, and on light demand in the region. Western PJM goods changed hands in a narrow range between 24.2 and 24.85$/MWh. According to traders, prices were low out of the gate, climbed to the peak within an hour, and ended the day back down at the low end. No new outage information was available on Tuesday. High temperatures were expected in the 45 to 51 degree range in PJM on Wednesday, and forecast to stay within five degrees of there through Saturday. The latest six-to-ten called for normal temperatures from January 14 to 18. Temperatures in the Midwest were expected to climb to their highest level of the week on Wednesday, bringing peak power prices down by about a dollar on Tuesday. Into Cinergy pieces for Wednesday delivery traded between 19.55 and 21.25$/MWh, dropping 0.75 and 0.95$/MWh off the high and low ends, respectively. The February contract gained some support Tuesday morning, opening strong and climbing to 23.15$/MWh before dropping back down to 22.25$/MWh. "Prior to the open, gas looked strong, and people were buying February to cover their shorts, but gas came off fast and that was the end of that," said one trader of the ill-fated early rally and fizzle. Temperatures at most ECAR load centers were expected to hit the upper-40s on Wednesday, with corresponding lows in the mid-30s. Thursday forecasts called for temperatures to stay near that level, while Friday was expected to cool five to seven degrees. The most current six-to-ten from the NWS predicted normal temperatures from January 14 to 18. As natural gas weakness continued to concern Southeastern traders, and forecasts called for significantly warmer temperatures for the rest of the week, heavy load electricity prices softened in the Southeast on Tuesday. Into Entergy deals were done from 19 to 20$/MWh, while Into TVA deals for Wednesday delivery were heard between 20.25 and 21.5$/MWh. TVA prices reached their low late in the day. In unit news, sources said one of the Scherer coal units (832, 833, 844, and 844 MW) was off-line but expected back on Thursday. The latest six-to-ten called for above-normal temperatures from January 14 to 18. ___________________________________________________________ California ISO Congestion Index in $/MWh Path Peak Off-peak for 08-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 for 09-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 $/MWh Mid-C PV SP-15 Bid Ask Bid Ask Bid Ask BOM 21.25 22.25 23.00 24.00 24.25 25.25 February 20.00 21.50 23.00 24.00 24.50 25.50 March 18.50 20.00 23.00 24.00 24.25 25.25 April 18.50 20.00 24.50 25.50 23.50 24.50 Q2 '02 17.50 19.00 27.00 28.00 26.50 27.50 Q3 '02 30.50 32.00 40.50 41.50 39.50 40.50 Q4 '02 26.00 27.50 27.00 28.00 28.25 29.25 Q1 '03 25.50 27.00 26.50 27.50 28.50 29.50 Cal '03 26.00 27.50 31.00 32.00 32.75 33.75 Represents the most recent bid/ask spread obtainable by the Energy Market Report. Alberta Power Pool Index (C$/MWh) Peak(14) Peak(16) Off-Peak Flat Change for 07-Jan-02 30.83 30.57 13.63 25.51 8.84 BPA's Offer for 01/10/02. 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 Feb 2.281 0.009 Mar 2.285 0.024 Natural Gas Spot Prices in $/mmBtu Low High Sumas 2.02 2.07 So. Cal Border 2.18 2.23 San Juan 2.03 2.08 __________________________________________________________ Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201, Telephone (503) 222-2425, Internet e-mail emr@econ.com - Copyright, Economic Insight, Inc. 2002.