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Tuesday Jul 14, 2015   
Nymex gas enjoyed run yesterday with prompt month trading up nearly 10 Cents on the day (going from $2.766 to $2.866). So what caused such a jump as we head into the middle portion of July?  From the supply side, production is down about 1 BCF compared to last week.  On the demand side, power burns continue to be strong given the load profiles across the East and Texas are increasing in the short term.  From a weather perspective, the forecasts are showing an increase in the CDD's for the 1-15 day weather runs, especially in the East region. » read more
Monday Jul 13, 2015   
As cool temperatures move across the West we were offered a short reprieve from strong power prices as the system settles back into a “typical” range with Mid C clearing below the CAISO markets for the weekend.  Prior to this, the Pacific Northwest (PNW) struggled to balance the system therefore priced itself over the rest of the West.  There were a couple of times Midc traded to levels well above SP15/NP15 that MW were exported out of the state of CA and into the PNW.  Below are the average temperatures in Portland compared to the ... » read more
Friday Jul 10, 2015   
With the weather in California plummeting all week m(13,000 MW off the high of last week) and the PNW finally cooling off today, the power demand across the entire West continues to shift down to levels not seen since the middle part of May. Figure 1 | CAISO Peak Demand - Forecast vs Actual The Pacific Northwest's supply demand shift (due to less load and higher wind output) actually pushed the bilateral Midc heavy load index $5.16 with SP15 coming in at $32.00 even while Midc settled $26.84.  Using Malin, this was still a 10.78 implied heat rate.  Down in ... » read more
Thursday Jul 9, 2015   
Our Loyal readers will recall a recent newsletter discussing the current trend with power burns and expectations for the rest of the year.  To recap: Power burns have been remarkably strong for 2015 when compared to the past two years.  The increase started in early February and continued through May.  June values were particularly strong with the month averaging 29 BCF a day, up nearly 5 BCF from 2014 and 2013.  Figure 1 | US Nat. Gas Power Burns – 7 Day Average From a weather standpoint, the month of June saw waves of weather ... » read more
Wednesday Jul 8, 2015   
Coming off a Pacific Northwest (PNW) winter that gave us hints of a high ridge system locking into the region, the river system had its ups and downs as the lower elevation snowpack saw its first melt in February and never really replenished itself heading into Q2.  The higher elevation snowpack looked to be pretty healthy, which was going to be counted on to help refill Grand Coulee dam (GCL) after the drum gate work was completed by mid-March.  This plan was coming together as system operators were refilling GCL at a clip of 1.5 ft/day with the help of the ... » read more
Tuesday Jul 7, 2015   
A collective sigh of relief is being heard across California this week as temperatures fall.  Sacramento and Burbank are not expected to get above 90 while San Diego will enjoy a comfortable range with highs in the 70s.  As would be expected, the load forecasts/actuals are following the temps downward expected loads to be at their lowest level since the first week in June.    Figure 1 | CAISO Dashboard This is a big difference compared to where we were sitting just a week ago in CAISO land, along with the rest of the West.  Everyone ... » read more
Monday Jul 6, 2015   
The Christmas song, '12 days of Christmas' has resonated with me ever since I was watching the news early Friday morning.  The newscaster threw out a stat that Portland averages eleven 90 plus days a year (most summer of course).  At the time she indicated that so far year to date, Portland has had 10 days with a high temperature mark over 90.  Given that Friday, Saturday and Sunday all topped the mark once again, that puts the running total at 13 days and counting.  Considering we are only a couple of weeks into the 'summer' period, this is ... » read more
Thursday Jul 2, 2015   
Is the Trend Is Your Friend? As we enter July and put Q2 in the books one trend is becoming striking clear:  Natural Gas Power Burns have been unseasonably strong through the spring, and there is no reason to believe it will end. Beginning in late February of this year power burns jumped substantially above prior year levels, with the grid burning between 3 and 6 thousand more mmcf/day.  Figure 1 | US Nat. Gas Power Burns – 7 day average The only thing more impressive than the magnitude of YoY variance is the consistency and longevity of the ... » read more
Wednesday Jul 1, 2015   
With both the LA Basin and Northern California warming up today, the CAISO Day Ahead (DA) auction results soared as NP15 cleared $75.34 (roughly $10 higher day on day) while SP15 came in at $65.73. With natural gas sitting around $3.24 up at PGAE CG and $3.04 at SoCal Border, this put the carbon adjusted implied heat rates at 19.45 and 18.06 respectively across the heavy load hours. Listed below are the key drivers to such a move: DA Scheduled Load | with Sacramento showing highs in the 106-108 degree range, this has prompted more scheduled demand across Northern ... » read more
Tuesday Jun 30, 2015   
As June comes to an end, the oxygen is thin as we ascent to the top of the 'Heat Rate Ridge' which is atop the highest mountain in the Pacific Northwest.  Over course of the climb this month, the journey has led us through very little snowpack and below normal water conditions, we have crossed some high temperature zones, stepped over some wind storms that come and go at a moments notice and have been running into stiff competition with other groups trying to climb the same mountain.  All this has led to us extending a lot of energy just to achieve our goal ... » read more
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