Market Commentary

Welcome to Ansergy’s WECC Market Commentary. Once a day, our clients receive timely (pre-market) updates on the major drivers of price. We are sharing those posts with you, on a two-week delayed basis. If you would like to access the live commentary, please register for a trial. …. Team Ansergy


Product Update – Sep 17

Greetings,We at Ansergy believe in continuous improvement and are constantly seeking better ways to display our data/forecasts. As we make these changes we will update our users in the blog. This week we made several changes which are itemized below. We encourage our clients to submit suggestions of their own.

Changes Effective Sep 17

  • WECC Totals added to Dispatch Forecasts. Each of the three forecast types (hourly, daily, and monthly) have been aggregated into "WECC". Most items are summed (Demand, Hydro, Gas Burn, etc); some are load-weighted averages (Power Price, Heat Rate, Reserve Margins) and transmission is aggregated by taking the Max Value which will reflect the loading from the sending hub's perspective.
 
  • Nuclear Status Report. This report shows the daily NRC status for the last 90 days; the existing NRC report displays the Ansergy refuel forecast for the next two years.
 
  • ICE Settle Backcast Reports. We have included two reports: Daily and Monthly. The daily compares the Ansergy daily forecast across time against the ICE settle for that day. The monthly compares both the Forward Market price and the Ansergy Forecast price to the average of the ICE settle for that month.
   
  • Actual Loads. Puget Area Loads (from BPA Oasis) has been added to the Current Loads report; we will be adding three more later this week: Pac East; Pac West; and Nevada Power
 
  • Utility-Level Forecasts. We are now publishing hourly load, hydro, and wind forecasts by control area. The data can be viewed as absolutes or as changes from today and can be useful for identifying which utilities are getting longer/shorter; in a fashion these reports act as dynamic L&R summaries. Later this week we will be adding two more reports to this group: Daily and Monthly L&Rs.

Mike’s Take – Sep 15

Good Morning,Mid-C loads continue looking bearish ....to real bearish; add a rain event (almost a 1/2" at Boise in next few days).  Actual loads reflect a slight drop but what is remarkable about this chart is how little those loads rallied in the heat wave:000_NWloadsBy the way, we recently added Puget Area Loads to this report.  The south gets a slight reprieve with Diablo #2 going down for its refuel (10 days prior to Ansergy's forecasted refuel date).  NOTE: Ansergy will be adding this report to its Fundamental Group this week.000_NRCcurA reprieve that will be sorely needed as loads down yonder have fallen off a veritable cliff:000_CalLoadsYet what goes down "must" go up, at least temperatures will go up in Burbank .... back to the mid-90s and back to putting more pressure on the Oct spread.000_BurbankMaybe there is a shimmer of bullishness today ... maybe BC  will quit dumping its energy into the over-sold Mid-C ... there is a hint of this in the latest flows from our neighbors to the north:000_BCflowsMaybe its just another head fake, buying on weakness, or maybe they are finally trying to true up their account?  It couldn't come at a more opportune time ... after the NWRFC exorcised the final bullish demon from BOM yesterday ....000_MIdCdailyl

STP Update – Sep 14

STP Update - Sep 14Greetings,The RFC released this week’s STP today; the changes are reflected in the daily energy chart:STP_DailyWe are not surprised by the increase in energy; the government tipped its hand last week when it jacked up its 10 day forecasts; this report is just confirmation of what we already knew.  And what we already know/knew is that BOM Mid-C is going to  bomb on no loads and reasonably stout water.   STP_MonthlyNote that this new water is mostly front-end loaded and is coincidental to the transmission derates; we’ve hated the Oct for a while, now we hate it more.  So does the market as is so plainly evident in the following plot of market and forecasts:000_OctMidC Wait, is that the market chasing the forecast?  By golly it is, again … and as they say, sometimes, better late than never.   In conclusion a whole lot of SLICE customers just got themselves longer and should be hitting bids tomorrow morning.  Watch for an overreaction and cover your shorts … at these levels we are thinking of going long for no other reason than the market has now embraced the forecast and that is a no-no.Speaking of a no-no, a few weeks back I faded our forecasts and suggested going long the Oct SP-MidC; seems I was right on that sentiment:000_OctSPMC For the record I'd take my $2.00 gain and go flat; the ever-widening deltas keep me from further owning that fade.Cheers,Mike 

Product Update – Sep 14

Greetings,Ansergy has made a few changes over the weekend that we believe will enhance the value you receive from the service.  This post will outline those changes:Control Area ForecastsWe have changed the name of what was once "Control Area Load Forecasts" to "Control Area Forecast" and moved this as a separate sub-menu under Forecasts.   We have also added three new items to the report: Change in net load acts as a proxy for a utility's hourly imbalance.  If you assume thermal generation and long-term contracts are constant and unchanging then the only difference between a utility's position will be in load and hydro (and wind and solar, soon to be added).  By comparing today's forecast to the future forecast (Change in Net Load) one can approximate the net imbalance which will need to be covered in either the day ahead or real-time markets.ExampleAvista000_UTeload_AVA Note the current forecast (Today) shows the utility swinging long and short intra-day driven by both hydro and loads:000_UTeHydro_AVA 000_UTeChg_AVAKeep in mind this calculation is relative to today - loads are up in the forecast versus today; hydro energy is up because the RFC has jacked all stations, probably in light of the rain.Later this week we will add in the Daily and Monthly imbalance reports which will have increasing value during the coming water year as they will identify the affect of the water year on a company's position.  We are also looking into adding each utility's Slice component to their L&R report.Added WECC to the Dispatch Forecasts:Each of the three dispatch reports now has a 7th hub - "WECC" that can be viewed. Examples:000_WECCdemand 000_WECCgasburn 000_WECCheatrate 000_WECCwindWECC is created by aggregating three unique ways, depending upon the item:
  • SUM - items expressed in MW or special items like gas burn or emissions
  • Max - all transmission flows which reflects the sending hub's line loading
  • Load Weighted Average - power price, heat rate, wind speed, and degree days

Mike’s Take – Sep 14

Good Morning,WeatherA bearish good morning to you all as the northwest sees temperatures plunge 20-30 degrees and a material rain event hits the region.  001_MidCwxEven the east side gets wet, Boise looks to pick up over a 1/2 inch, a lot for Idaho in September.  The south shares in this bearish change with both NP and SP seeing cooler temperatures and rain ... well rain in southern Cal as our forecast shows no precip at San Jose (I find this strange and suspect a bad forecast ...hard to see how you can have rain in LA and rain in Portland and no rain in the bay area).HydroToday is STP day and we are anxious to view their handiwork and suspect a bump in Sep-Oct over last week's numbers.  They have already jacked up their 10 day, for the last three forecasts, and given the rain, the dearth of demand et al we see bigger STP #s:001_RFC10dayThe Mid-C bulls were bitterly disappointed over last week's failed "heat wave" - it just wasn't hot enough and the evening temps were too low.  Proof of this is how BPA managed the Coulee pond:001_GCLFlows through the turbines rallied ... up maybe 30k average ... but look what happened to the reservoir ... nothing.  Sure, they pulled a foot but nothing more.  Truth is BPA didn't need the energy though California did:001_Caloads 001_NWloadsCalifornia realized a 10,000 MW peak rally while the northwest was barely able to muster 2,000.  All that heat wave did for the Mid-C was remind everyone of the summer that could have been, but wasn't.Powerex enjoyed selling into the Mid-C mini-rally and really enjoyed the Cal rally by nearly filling the line southbound last week:001_NWflows And then there is wind, that hapless resource which always seems to rear its clean head when you least need it.  Now that the "heat wave" is over we are comforted to see wind energy spike back to 4000 MW in the northwest:001_MCwind  

Mike’s Take – Sep 11 (911 …hard to believe its been 14 years) – Updated

Good Morning,A couple things jump out today beginning with the collapse in temperatures in the south:  000_BurbankTemp 000_SCEloadFC The north, we already know, cools down considerably and collects another precip event:000_MidCTemp_Precip It's not the trace (.1-.2 inches) of rain that is relevant, it's the confirmation that the long-standing high pressure blocking system has finally broken down...seasonal storms can and should be expected.While we are on the Mid-C it is worth noting the RFC 10 Day forecast has materially changed:000_RFC10day This is Thursday's, we will be watching for confirmation in today's (9-10 am pst);  Today's is out and on the site:000_RFC10dayNewNot only did the RFC confirm yesterday's forecast - they INCREASED the flows.  We were leaning bearish for BOM, if we leaned any harder we'd be lying horizontal in the muddy waters of RFC bearishness.note the material change in energy not only versus previous forecasts but, more importantly, the departure from the STP from just three days earlier.  The Mid-C is getting longer while the south finds itself longer and maybe, finally, Powerex will start soaking up these surplus MWH, but we doubt it as they continue to sell as if their run of river plants will never run out of river:000_BCflows On the modeling note we have added a new piece of data, Puget Area Loads, to our historical actuals.  These types of changes (additions) are the norm and we will continue to enhance our library of data:000_PugetAreaLooking ahead we will be enhancing our Control Area reports by adding hydro and renewables to the load forecast.  I think this will be a valuable report, especially when you view the data from a "Delta" perspective as it will show a reasonably accurate forecast of that utility's net  position.   We'll be shooting to roll out this enhancement next week.Enjoy your weekend, Mike

Mike’s Take – Sep 10

Good Morning,It is a good morning here in Seattle, the weather is about as ideal as one could script: mid 70s with just a mild breeze.  Perfect weather for those with budgets on their mind .... no need for the AC, just open your window. That sentiment is justified by looking at Puget Sound Energy's load forecast:  001_PugetLoadFC; the effect of the "heat wave" adds about 200 MW to peak demand (yawn).  Portland is a different story as Portland General adds nearly 600 MW to its peak as does BPA as well.  The Mid-C adds about 2500 MW peak, no yawns here, but its just a 3-4 hour event that lasts two more days: 001_MidCDemand and that incremental demand is easily "washed" away by the incremental hydro energy at the Mid-C.  Seems BPA doesn't need to do much to meet this demand: GCL & TDA; just turn a dial and load met.The south, well that is a different story, check out SoCal Edison's load forecast - up nearly 5,000 MW at the peak which drives the Ansergy price forecast up $8.00.   Actuals show this too - deltas up 19,000 on the peak from the end of August: 001_ActualDemand_Delta  But most of this change, is coming from the south:  001_ActualDemand_Delta_southAll of this is less interesting with near full transmission capacity; should it happen in a few weeks - when the south-bound derates take place -  that sentiment would be quite different.Also relevant in today's cash outlook is the dearth of wind001_Renewables On a administrative note we are pleased to announce a couple of new reports that we added to the site:1) Control Area load forecasts - our hub-level is comprised of 37 control areas; we are now publishing these.  The data can be a gold mine of useful information about how each utility is affected by changes of load.  We are also exploring expanding the scope of this report to include the utilities non-thermal resources (Hydro, Wind, Solar) and create a non-thermal Load and Resource report./ Fundamentals / Demand / Control Area Forecasts2) Natural Gas Burn Forecasts - the model outputs many things one of which is the gas burned by hour by hub.  We have added three gas burn reports:a) Gas Burn Forecast - this is our baseline forecast extending out two years and incorporates all of the known drivers at the time of the forecast - this, like the power, is updated three times a day.  Each of our forecasts is aggregated three ways:i) Weekly - where the week ending corresponds to the EIA gas storage week endingii) Monthlyiii) Storage Season - total gas burn aggregated into the Injection Season (April 1 to Oct 31) and Withdrawal Season (Nov 1 to March 31).b) Gas Burn Scenarios - The last 27 years of actual hydro flows and temperatures run against current conditions.  This report is broken into three charts:  El Nino years; La Nina years; and Normal years.c) Gas Burn Sensitivities - Same as the power; 10 cases run against the base line and the gas burn (in BCF) is returned.