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Monday May 16, 2016   
The sunny blue skies quickly disappeared this weekend in the Pacific Northwest saw plenty of rain hit the region and cooler temperatures.  The change in the weather pattern has an impact on the supply/demand components starting with the wind generation.  As you can see in Figure 1, the weekend output increased on Saturday but really jumped up on Sunday as the peak output topped the 3,300 MW mark during the morning ramp hours. Figure 1 | BPA Wind Generation - Hourly It still was not as high as last Monday, but quite a bit higher than what we saw during the ... » read more
Friday May 13, 2016   
With the passage of Oregon’s new RPS obligations, it seems like Pacificorp and Portland General are gearing up for a new round of renewable procurement. There is a flurry of activity as developers are dusting off their pipeline assets and transmission positions to see if they can get one more PPA out of their Northwest wind assets in the next few years before the production tax credit expires. The world has changed a bit since the last flurry of activity more than four years ago. Compared to a centralized RTO market, the BPA wind integration and transmission ... » read more
Thursday May 12, 2016   
With temperatures rising across the South Central an West this week, the Northeast is experience the type of weather one would expect in the Spring as Boston is showing highs in the mid/upper 60's. As a result, we have seen a convergence between the Northeast gas markets (Algonquin) and Henry Hub.  For example, in early April the Algonquin gas market was strong due to winter-like weather hence carried a $1.10 average premium over the entire month.  Up until this week, the spread between Algonquin and the hub was sticking around $0.50, but as we saw for today ... » read more
Wednesday May 11, 2016   
Over the course of the week, both California and Texas have been warming up withe former showing Sacramento/Burbank topping the 88 degree mark today and tomorrow. Figure 1 |  Sacramento Temperatures - Actual and Forecast The latter is showing Houston's temperatures slightly higher than last week as the highs are in the 88-90 degree range with some humidity. Figure 2 | Houston Temperatures - Actual and Forecast This has led to both ISO's load to increase over the course of the week.  For example, CAISO's day on day load forecast shifted the peak demand ... » read more
Tuesday May 10, 2016   
On April 29th there was a rupture on the Texas Eastern Pipeline just east of Pittsburgh near the Delmont compressor station. At the time the pipe was moving 1.4 BCF per day from Western Pennsylvania to the Mid Atlantic. This explosion knocked out a large amount of supply to the most populous part of North America. Flows through the Delmont station went to zero. Assuming that the rupture would lead to shut-ins in Western Pennsylvania and the need for the East Coast to draw molecules from the Gulf via the Transco Pipeline, the front month NYMEX contract jumped from ... » read more
Monday May 9, 2016   
Over the next few days, both Northern and Southern California are looking at above normal temperatures once again with Sacramento showing highs in the upper 80's/low 90's by Wednesday/Thursday and Burbank in the mid/upper 80's for the same time period. Figure 1 | Sacramento Temperatures - Actual and Forecast As you can see in Figure 1, the warmer temperature fits the pattern since the beginning of April, where we have a few days of moderate temperatures only to give way to above normal for a 4-5 day period. From a load perspective, California is calling for higher ... » read more
Friday May 6, 2016   
We’ve been having some fun lately digging around the CAISO solar production and price data. The grid and corresponding price action is changing so quickly – each month brings new data and new insights as the solar penetration rate continues to grow. In this newsletter we take a look at what is happening to the real-time price distributions and look into some things that may be causing these changes. We start with a monthly view of the distribution of SP15 real-time prices. We have created three bins for the prices: Negative – This includes all ... » read more
Thursday May 5, 2016   
The natural gas market has steadily increased over the the last two days with Henry Hub's June contract trading up 6 cents to close at $2.14 yesterday.  Part of the bullish market sentiment is driven by strong power burns which have sat around 26 BCF/day to start the month. Figure 1 | North American Power Burns - BCF/day  This is surprising considering that total power burns are averaging 1.5 BCF above last May's average yet net load is down compared to last May.  See yesterday's newsletter "On Big Turbine" for a robust ... » read more
Wednesday May 4, 2016   
Over the past 5-6 years, the Renewable Energy drive has kicked into high gear with California taking the bull by the horns and implementing its Renewable Portfolio Standards program.  This kicked off the whirlwind growth of both wind and solar across the West.  Across the rest of the country, the penetration has been made up of wind capacity as certain states mandated their own program or the economics of wind generation (including the Federal Tax Credits) penciled out.  The most notable increase over the past 12-18 months has been seen in both SPP and ... » read more
Tuesday May 3, 2016   
On Friday one of the oldest and most reliable pipelines in the country ruptures right in the heart of the Marcellus producing area. The rupture on the TETCo Pipeline in the M3 delivery zone stopped 1.4 BCF per day from flowing from the Delmont compressor station east of Pittsburgh to the Mid Atlantic. Immediately, upon hearing of the news front month NYMEX futures jumped 10 cents on the news to close the day at $2.18 cents. The market assumption that losing such a critical pipeline would cause supply disruptions and production to shut in after such a catastrophic ... » read more
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