Predators and Prey 1995 through 2010 in the WSCC Robert McCullough Managing Partner McCullough Research
Opening the Crystal Ball Fundamentals Replacing Plants With Wires Firm Price forecasts Spot Price Forecasts Woolly Mammoths
Fundamentals The WSCC is in vast surplus by any traditional measurements Interregional transfers are a major source of generation cost reductions Our marginal fuel -- natural gas -- is also plummeting in price.
WSCC Bulk Power Report WSCC 3A Reported Load Resource Balance MW 1994 1995 SUMMER WINTER SUMMER WINTER Internal Demand 113596 110452 116357 112922 Standby Demand 0 0 0 0 Total Internal 113596 110452 116357 112922 Direct Control 1795 4 1804 4 Interruptible 2239 2337 2645 2735 Net Internal 109562 108111 111908 110183 Total Capacity 138200 141097 139542 142252 Inoperable 104 855 104 855 Net Operable 138096 140242 139438 141397 NUGs 9865 9912 10488 10340 Scheduled Imports 256 236 366 346 Full Responsibility Imports 256 236 366 346 Scheduled Exports 205 172 205 172 Full Responsibility Exports 205 172 205 172 Adjustment 0 0 0 0 Net Capacity 148012 150218 150087 151911 Planned Outage 6850 7700 5927 7131 Net Capacity 141162 142518 144160 144780 Balance: Net Capacity Less Net Internal 31600 34407 32252 34597
Typical West Coast Prices 30.00 20.00 10.00 0.00 Offer 1 Offer 2 Offer 3 Offer 4 Offer 5 August May
West Coast Spot Prices Spot Prices in 1995 25.00 20.00 15.00 10.00 5.00 0.00 3-Dec-94 12-Dec-94 21-Dec-94 30-Dec-94 8-Jan-95 17-Jan-95 26-Jan-95 4-Feb-95 13-Feb-95 22-Feb-95 3-Mar-95 12-Mar-95 21-Mar-95 30-Mar-95 8-Apr-95 17-Apr-95 26-Apr-95 5-May-95 14-May-95 23-May-95 1-Jun-95 10-Jun-95 19-Jun-95 28-Jun-95 7-Jul-95 16-Jul-95 25-Jul-95 3-Aug-95 12-Aug-95 21-Aug-95 30-Aug-95 Sumas Mid-Columbia Central Rockies NW/N. Rockies COB/NOB N. California Midway S. California Mead Palo Verde Inland SW Four Corners Canada
COB Versus Spot Prices
Daily Spot Versus Sumas Gas
Plants and Wires The WSCC splits naturally into winter peaking and summer peaking regions Although both subregions currently are surplus, full utilization of diversity eliminates plant construction through to 2010
Seasonal Diversity Northwest Southwest 20,000.00 30,000.00 20,000.00 10,000.00 10,000.00 0.00 0.00-10,000.00-10,000.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Long Run Forecasts We use the Energy Information Administrations long run forecasting data base as a departure point Our competitive forecasts adjust the EIA data for more competitive spot markets and plant availabilities These forecasts do not assume any general asset write downs or disallowances -- they only reflect competitive efficiencies
WSCC Long Run Rates 10.00 8.00 6.00 4.00 2.00 0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Northwest Rates 6.00 5.00 4.00 3.00 2.00 1.00 0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Four Industrial Rates 6.00 5.00 4.00 3.00 2.00 1.00 0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Spot Plus Competitive Competitive Status Quo
Short Term Rates Short term rates basically reflect alternative fuels -- usually gas Departures from gas will continue in the Northwest until interregional transmission can carry the fish flush Increasing interregional access will dampen weather related market responses
Spot Prices By Month 30.00 1989 1990 20.00 1991 1992 10.00 1993 1994 0.00 1995 January February March April May June July August September October November December
Pacific Northwest Spot Rates 1.50 1.00 0.50 0.00 October July April January 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
1995 Woolly Mammoth Awards
Woolly Mammoth Awards The Woolly Mammoth Award is presented annually to the utilities facing the most immediate threat of extinction The awards this year are awarded to California's three IOUs -- PG&E, SCE, and SDG&E -- for their high rates in contradiction of market fundamentals and their own rhetoric BPA is honored for offering rates massively inconsistent with their revenue requirements
California IOU Industrial Rates 10.00 8.00 6.00 4.00 2.00 0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Spot Plus Competitive Competitive Status Quo
BPA Rates 30.00 20.00 10.00 0.00 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Block Contract 1995 Rate Forecast 1993 Rate Forecast
Runner-Up Awards The Giant Three Toed Sloth Awards go to Pacific Power and British Columbia Hydro Pacific get its Sloth for having its major industrial customers give speeches entitled "Where is Fred Buckman?" British Columbia Hydro gets their for pegging the price of non-firm higher than the markets for months at a time