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Subject: Energy Market Report - 1/28/02


Energy Market Report
Monday, January 28, 2002

*See attached pdf file.
__________________________________________________________
Western Pre-Scheduled Firm Electricity Prices($/MWh)
January 28, 2002 for January 29, 2002

Peak(Heavy)
                   Low      Change     High     Change
NW/N. Rockies     18.80     -2.95      22.00    -0.50
Mid-Columbia      18.80     -2.95      22.00    -0.50
COB               21.00     -2.25      22.25    -2.50
N. California     23.50     -1.50      25.00    -1.50
Midway/Sylmar       NA        NA         NA       NA
S. California     23.00     -2.00      25.00    -2.00
Mead              22.75     -2.50      25.75    -1.25
Palo Verde        22.75     -0.75      25.75     0.00
Inland SW         19.50     -4.00      25.75    -1.25
4-Corners         23.00     -1.50      24.50    -1.50
Central Rockies   22.00      0.25      26.00     3.25
__________________________________________________________
Off-Peak(Light)
                   Low      Change     High     Change
NW/N. Rockies     17.25     -3.75      18.50    -3.50
Mid-Columbia      17.25     -3.75      18.50    -3.50
COB               17.00     -2.00      18.00    -4.00
N. California     16.75     -4.75      19.50    -4.00
Midway/Sylmar       NA        NA         NA       NA
S. California     17.00     -4.00      19.00    -4.00
Mead              17.50     -3.50      19.50    -3.50
Palo Verde        14.00     -3.75      16.50    -4.00
Inland SW         13.50     -4.25      16.50    -6.50
4-Corners         14.50     -4.50      16.50    -4.00
Central Rockies   11.50     -4.50      13.50    -6.00
_________________________________________________________
Enron-omic Stimulus?

Despite the continuing grip of a cold snap, and a rash of unit outages over
the weekend, most Western power prices for Tuesday delivery ended slightly
weaker in the first trading session of the new week.  "Flows are up and
hydro's cheap," explained one marketer of the weather's inability to inject
strength into Western markets.  "If the weather weren't as cold as it is,
the market could even be worse for sellers."  As usual over the past few
months, references to Enron were peppered across the mainstream media on
Monday.  UBS Warburg, the Swiss bank that is in the process of purchasing
the now-defunct EnronOnLine, plans to have the trading business in full
operation by the end of February.  To staff the reborn operation, UBS
Warburg has offered contracts to about 625 of EnronOnLine's 800 former
employees.  The transaction is still pending the approval of various federal
agencies.  In another chapter of the Enron saga, Vice Chairman J. Clifford
Baxter's death was ruled a suicide by Harris County Medical Examiner Joye
Carter on Saturday.  Baxter was considered an important potential witness in
the Enron affair after whistle-blower Sherron Watkins cited his discussion
with then-CEO Jeff Skilling about the company's dubious accounting
practices.  A suicide note was found at the scene, but the details of the
note have not yet been released.  Equally serious are allegations made by
Rep. Henry Waxman of California, indicating that the White House had
apparently changed the contents of a draft energy proposal circulated
through Congress in March of last year to add a provision that specifically
aided Enron Corp. in India.  According to Rep. Waxman, "the provision
appears to have been added to the plan during the period in which the White
House directly controlled the drafting."  The Bush Administration has
understandably tried to distance itself from their biggest political
contributor, denying that its energy plan was crafted to help Enron.  In
related news, GAO head David M. Walker will likely sue Vice President Dick
Cheney for refusing to turn over documents relating to the VP's meetings
with Enron representatives last year.  It would mark the first time the
investigative arm of Congress sued another branch of the government for refu
sal to cooperate with an inquiry.  The Vice President insisted that the GAO
was overstepping its bounds. "Their jurisdiction extends to agencies created
by statute. That's not me," asserted Cheney, "I'm a constitutional officer.
And the authority of the GAO does not extend in that case to my office."
Save it for the judge, Dick.  In gas news, NYMEX Henry Hub natural gas
futures fell hard in Monday trading, with the February contract losing 12.9
cents to settle at 1.908$/mmBtu, and the March contract close behind,
plummeting 12 cents to close at 1.984$/mmBtu.

Heavy load energy prices in the Northwest fell almost 2$/MWh on the low end
for Tuesday delivery.  Healthy hydro flows and a cold front that did not
quite live up to its prediction took the brunt of the blame.  Peak goods at
Mid-Columbia changed hands from 18.8 to 22$/MWh on Monday.  Flows at Chief
Joseph remained as strong as ever this year, coming in at 110 kcfs Tuesday,
105 kcfs Wednesday and Thursday, 100 kcfs Friday, 85 kcfs Saturday, 65 kcfs
Sunday, and 110 kcfs next Monday.  Temperatures were predicted to remain
well below normal through Friday, with lows expected to flirt with freezing.
The latest six-to-ten likewise called for temperatures to remain near to
below normal from February 3 to 7.  There were no new unit outages to report
on Monday.

Despite cold weather and a modest rise in natural gas values at the Socal
border, day-ahead electricity prices softened in the Golden State on Monday.
Heavy load goods lost about 2$/MWh everywhere, while light load prices took
a bigger hit, slipping almost 4$/MWH.  Peak power at SP15 traded between 23
and 25$/MWh, with the bulk of deals done closer to the high end, above
24.25$/MWh. In California politicking, the CPUC voted to reject a compromise
put forth by SDG&E parent Sempra Energy.  The proposal would have used $219
million of the $363 million earned selling power from five-year contracts at
wholesale prices last summer to pay down the balancing account, and thus
benefiting SDG&E rate payers, while allocating the remaining $144 million to
shareholders.  The CPUC said they think the courts will award a higher
number to the balancing account. Californians may soon be allowed to choose
their power provider again, if CPUC administrative law judge Robert Barnett
has his way.  The initiative, a cornerstone of the 1996 deregulation bill,
was revoked September 20, 2001.  However, consumers would have to hurry
their selection, as the option would be back in play for a limited time,
through July 1, 2002.  Barnett said competitive choice was essential to keep
utility customers from unfairly footing the bill for last year's energy
crisis.  On the generation front, Morro Bay #4 (336 MW) and Pittsburg #7
(682 MW) returned to service over the weekend.  Helms PGP #1 (407 MW) joined
sister unit #2 (407 MW) in the out of service category on Monday.  Alamitos
#3 (320 MW) exited the grid on January 26.  Hydro Big Creek (1,020 MW) was
derated, operating at 720 MW.  Sutter Plants (546 MW) was generating at 270
MW.  Tuesday forecasts called for temperatures to linger almost 10 degrees
below normal, with highs in the upper-40s to mid-50s across the state.  The
latest six-to-ten predicted below-normal temperatures from February 3 to 7.

The Southwest was a slight exception to the conditions prevalent across the
WSCC on Monday.  While temperatures were lower than on Friday, peak power
prices remained mostly flat.  Heavy load pieces at Palo Verde traded between
22.75 and 25.75$/MWh, a loss of 75 cents on the low end and no change on the
high.  Temperatures were expected to linger well below normal through
Friday, and the latest six-to-ten predicted likewise from February 3 to 7.
In unit news, coal-fired Navajo #3 (750 MW) returned to the grid Monday
morning, while the ETR for Coronado #1 (395 MW) was revised to early morning
Tuesday, January 29.  Fellow coal unit Huntington #2 (455 MW) also climbed
back onto the grid over the weekend after repairing a tube leak.

David Ramberg and Jessie Norris
_________________________________________________________

Western Generating Unit Outages

Current                            Begins          Ends          Reason
CAISO units <250/7145 total          NA             NA
planned/unplanned*
Alamitos #3/320/gas               26-Jan-02         ?            planned*
Alamitos #6/480/gas               20-Jan-02         ?            planned
Big Creek Project/1020/hydro      28-Jan-02         ?        @710MW,
planned*
Colstrip #3/700/coal              11-Jan-02         ?            repairs
Corondado #1/395/coal             25-Jan-02     29-Jan-02        tube leak*
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 @392MW,
maintenance*
Grand Coulee #19/600/hydro        10-Dec-01       March          repairs
Haynes #6/341/gas                 07-Jan-02         ?            planned
Helms PGP #1/407/hydro            28-Jan-02         ?            planned*
Helms PGP #2/407/hydro            01-Oct-01         ?            planned
Hyatt/Thermalito/933/hydro        02-Oct-01         ?      @665 MW,
unplanned*
Moss Landing #7/739/gas           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
Scattergood #3/445/gas            22-Jan-02         ?            maintenance
Sutter Plants/546/gas             28-Jan-02         ?      @270 MW,
unplanned*

Future
Navajo #2/750/coal                02-Feb-02     25-Feb-02        maintenance

For unit owners refer to pdf version.
*Indicates a change from previous EMR.
______________________________________________________________________

Eastern Markets Pre-Scheduled Firm Power Prices ($/MWh)

January 28, 2002 for January 29, 2002

Peak (Heavy) in $/MWh
                 Low     Change   High      Change
Into Cinergy    17.00    -0.20    18.50      0.50
Western PJM     20.95    -1.30    22.10     -0.40
Into Entergy    15.50    -1.40    18.00     -0.25
Into TVA        16.25    -0.50    17.50      0.40
ERCOT           17.00     0.00    17.50      0.25
___________________________________________________________
As unseasonably warm weather continued and traders harbored little hope of
an upside in the gas market, peak power prices remained mostly steady on
Monday across the Eastern Interconnect.  Traders reported light trading
volume and lots of sunshine outside their windows.  NYMEX Henry Hub natural
gas futures reached new contract lows on Monday, a familiar refrain heard
during the past week.  February lost 12.9 cents in its second to last
trading session, ending the day at 1.908$/mmBtu.  March plunged a similar 12
cents to close at 1.984$/mmBtu.

With a healthy generation landscape and temperatures more usual to late
spring blanketing the region, day-ahead peak electricity prices settled
lower in the Mid-Atlantic on Monday.  Western PJM goods for Tuesday delivery
changed hands between 20.95 and 22.1$/MWh, with most deals done in the 21.05
to 21.5$/MWh range.  Balance of the week trades were heard around 21.7$/MWh,
while balance of the month deals went through near 23.4$/MWh.  Despite an
unusual brief spike to 73$/MWh just after 13:00 EST, LMPs were averaging
21.26$/MWh through 15:00 EST.  Traders reported lackluster trading and no
new outages on Monday.  Tuesday forecasts called for high temperatures to
linger in the balmy 63 to 68 degree range across PJM, before cooling about 5
degrees on Wednesday.  The most current six-to-ten predicted normal
temperatures from February 3 to 7.

Despite record highs near 60 degrees and more of the same expected for
Tuesday, heavy load energy costs were flat to slightly higher in the Midwest
on Monday.  Into Cinergy deals for Tuesday delivery were heard between 17
and 18.5$/MWh, with the bulk of transactions from 17.75 to 18$/MWh.  Most
traders were surprised by the relative strength of the Cinergy hub.  "I
suspect there are quite a few coal units turned off, and most maintenance
schedules have been pushed forward, since the generation clearly isn't
needed," commented one ECAR trader.  In unit news, Quad Cities #1 (821 MW)
remained down for pump support maintenance.  Sources said they expected
sister unit #2 (821 MW) to be taken off-line for the same repairs when #1
returned to the grid, possibly as soon as this week.  The south shore of
Lake Erie, a region where January snow is usually measured in feet, enjoyed
high temperatures in the low-60s on Monday and anticipated the same on
Tuesday.  Indeed, all of ECAR expected similar conditions for Tuesday, while
cooling into the upper-40s was forecast for Wednesday.  The latest
six-to-ten called for normal temperatures from February 3 to 7.

As weak weather-related demand dominated SERC and Texas, peak power prices
weakened on Monday.  Into Entergy deals were done between 15.5 and 18$/MWh,
with the low end reached late in the day.  "I don't see any possibility of a
rally for February.  Gas was hammered again today; the market is very soft
right now," commented one SERC realist.  Tuesday was expected to see high
temperatures solidly in the 70s across SERC and Texas, with slight cooling
predicted as the week progresses.  The most current six-to-ten called for
normal temperatures from February 3 to 7.
___________________________________________________________

California ISO Congestion Index in $/MWh

                         Path                 Peak   Off-peak
for 27-Jan-02         NW1 to NP15             0.00     0.00
                      NW3 to SP15             0.00     0.00
                      AZ3 to SP15             1.25     3.75
                      LC1 to SP15             0.00     0.00
                      SP15 to NP15            0.00     0.00

                         Path                 Peak   Off-peak
for 28-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

                         Path                 Peak   Off-peak
for 29-Jan-02         NW1 to NP15             0.00     0.00
                      NW3 to SP15             0.00     0.00
                      AZ3 to SP15             0.00    52.75
                      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            20.00    21.00    22.50    23.50    23.00    24.00
February       17.00    18.50    21.00    22.00    22.50    23.50
March          15.00    16.50    20.75    21.75    21.50    22.50
April          16.00    17.50      NA       NA       NA       NA
Q2 '02         15.75    17.25    24.00    25.00    23.50    24.50
Q3 '02         29.50    31.00    37.00    38.00    36.50    37.50
Q4 '02         27.00    28.50    26.50    27.50    28.25    29.25
Q1 '03         27.50    29.00      NA       NA       NA       NA
Cal '03        28.75    30.25    32.00    33.00    33.50    34.50

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  25-Jan-02       37.57      37.27      16.23      30.95    -3.26
for  26-Jan-02       23.80      22.52      11.86      19.17     0.00
for  27-Jan-02       25.82      24.32      11.45      20.25     0.00



BPA's Offer for 01/30/02.

Hours        Amount          NW delivered        COB/NOB delivered
7-22         200MW           Market Price*          Market Price*

*Market price will be determined at time of request.



NYMEX Henry Hub Gas Futures in $/mmBtu

                 Close        Change
        Feb      1.908        -0.129
        Mar      1.984        -0.120



Natural Gas Spot Prices in $/mmBtu

                  Low          High
Sumas             2.02         2.07
So. Cal Border    2.05         2.10
San Juan          1.92         1.97
__________________________________________________________

Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201,
Telephone (503) 222-2425, Internet e-mail emr@econ.com -
Copyright, Economic Insight, Inc. 2002.