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Bloomberg Energy Department

06/05 Bloomberg Daily Power Report

Table

                      Bloomberg U.S. Regional Electricity Prices
      ($/MWh for 25-50 MWh pre-scheduled packages, excluding transmission c=
osts)

                            On-Peak
West Coast                   Index       Change       Low         High
 Mid-Columbia                60.00       -39.77      55.00       65.00
 Ca-Or Border                68.33       -34.17      60.00       75.00
 NP15                        75.27       -37.79      58.00       90.00
 SP15                        78.73       -28.77      60.00       92.00
 Ault Colorado               55.00       -45.00      60.00       92.00
 Mead                        80.00       -62.50      79.00       81.00
 Palo Verde                  91.68       -37.28      65.00       107.00
 Four Corners                91.00       -34.00      80.00       102.00

Mid-Continent
 ECAR                        24.13       +0.92       23.00       25.68
  East                       25.00       +0.00       24.00       26.00
  AEP                        23.92       +0.92       22.00       26.00
  West                       23.25       +1.25       22.00       24.50
  Central                    23.21       +1.82       22.00       26.00
  Cinergy                    23.21       +1.82       22.00       26.00
  South                      24.85       -0.33       24.00       25.25
  North                      25.50       +1.00       25.00       26.00
 Main                        24.64       +2.80       23.00       27.50
  Com-Ed                     23.27       +1.02       22.00       25.00
  Lower                      26.00       +4.57       24.00       30.00
 MAPP                        21.90       +0.15       19.00       24.50
  North                      20.67       +0.17       18.00       22.00
  Lower                      23.13       +0.13       20.00       27.00

Gulf Coast
 SPP                         25.00       +0.17       24.00       26.00
  Northern                   22.00       +0.83       21.00       23.00
 ERCOT                       38.63       +0.13       38.00       39.50
 SERC                        33.46       +1.42       32.16       35.13
  Va Power                   29.00       +4.00       25.50       35.50
  VACAR                      28.40       +0.40       28.00       30.00
  Into TVA                   24.85       -0.33       24.00       25.25
  Out of TVA                 28.77       -0.19       27.89       29.18
  Entergy                    33.69       +3.04       32.75       35.00
  Southern                   37.50       +1.00       37.00       38.00
  Fla/Ga Border              52.00       +2.00       50.00       53.00
 FRCC                        62.13       +0.13       58.00       65.50

East Coast
 NEPOOL                      34.05       -1.55       33.50       34.25
 New York Zone J             50.00       +2.50       45.50       50.00
 New York Zone G             38.80       -0.45       38.50       39.25
 New York Zone A             27.75       -0.50       27.50       28.00
 PJM                         27.60       +1.80       27.25       28.20
  East                       27.60       +1.80       27.25       28.20
  West                       27.60       +1.80       27.25       28.20
  Seller's Choice            27.10       +1.80       26.75       27.70
End Table


Western Power Prices Fall to Yearly Low on Increased Supply

     Los Angeles, June 5 (Bloomberg Energy) -- Day-ahead power
prices sank to their lowest levels in nearly a year throughout
the Western U.S. today because of increased generation and cooler
weather.
     Spot values at seven delivery points surveyed by the
Bloomberg Energy Service in the Western System Coordinating
Council fell to their lowest levels since July. Last July, prices
were lower because additional supply became available when the
Bonneville Power Administration re-entered the day-ahead market,
traders said.
     The Bloomberg Mid-Columbia day-ahead heavy load index price
slumped $39.77 a megawatt-hour to $60.00 amid trades at $55.00-
$65.00, a decline of 75.9 percent from a month ago.
     "Prices are crashing today as more generation is becoming
available to the grid, with the restart of San Onofre-3 and
Diablo, increased hydroelectricity, and cooler temperatures,''
said one Northwest marketer.
     Traders said continued mountain run-off into the reservoirs
is causing dam operators to generate electricity to prevent
spilling water over the dam.
     Reservoir data from the U.S. Army Corps of Engineers shows
that at 1,277 feet, water levels at the Grand Coulee Dam are
about 98.99 percent of capacity. Last July, water levels were
1,283 feet.
     Pacific Gas & Electric Co.'s 1,100-megawatt Diablo Canyon-2
nuclear plant located in Avila Beach, California, was confirmed
to be operating at 100 percent capacity, company officials said.
     "With Diablo returning to the grid and yesterday San Onofre-
3 returning, that's totaling almost 2,200 megawatts,'' said one
Southwest trader.
     Southern California Edison's San Onofre 3 nuclear plant's
output reached 100 percent yesterday after it restarted June 1.
The plant shut Feb. 3 when an electrical fire damaged a turbine.
     At the SP-15 delivery point in Southern California peak
power declined 65.23 percent from a month ago to Bloomberg index
low for the year at $78.73, with sales completed at $60.00-
$92.00.
     At the NP-15 delivery point in Northern California, peak
power declined 68.6 percent from a month ago with trades
completed at $58.00-$90.00, to a Bloomberg index at $75.27.
     According to Lexington, Massachusetts-based Weather Services
Corp., temperatures in San Francisco were expected to peak today
at 67 degrees Fahrenheit and rise 2 degrees tomorrow.
     Forecasters expect temperatures in the Pacific Northwest
would average 3.9 degrees below normal and 1.1 degrees above
normal in the Southwest over the next 6-10 days.
     In the Southwest, power prices sank an average of $37.28 at
the Palo Verde switchyard to a Bloomberg average of $91.68 amid
trades in the $80.00-$102.00 range.
     Traders said they don't expect prices to remain this low.
Eventually there will be no more snow melt and temperatures will
increase, which will cause demand to out-strip supply and prices
to increase, they said.

-Robert Scalabrino


PJM Spot Power Prices Rise With Elevated Pool Rates, Unit Loss

     Philadelphia, June 5 (Bloomberg Energy) -- For the first time
in three weeks, day-ahead power prices at the Western Hub of the
Pennsylvania-New Jersey-Maryland Interconnection rose in excess of
$1.00, pushed higher by elevated pool rates, traders said.
     Locational marginal prices for the four hours leading up to
daily options expiration, or 10 a.m. local time, averaged $29.28
per megawatt hour today, compared to $20.63 yesterday. While LMPs
peaked at only $46.00 during the four-hour period, they reached as
high as $100.00 during the hour ending 9 p.m. last night.
     Traders speculated the $100.00 spike was prompted by an
unplanned unit outage, though none were confirmed.
     "I suspect PJM lost something unexpectedly," said one PJM-
based trader. "The day-ahead clearing price came in at around
$25.00 yesterday, and the LMPs have been averaging quite a bit
higher than that. I'd be hard pressed to believe that last night's
price spike was caused by a technical glitch."
     One trader said units were indeed brought off-line, but not
unexpectedly. To quell the Minimum Generation Alerts issued by PJM
over the past five days, one generator opted to power down two of
its older coal plants, he said.
     Peak power scheduled for Wednesday delivery was assessed at a
Bloomberg volume-weighted index of $27.60, up $1.80 from yesterday
and near parity with the week-ago price of $27.95.
In the over-the-counter market, balance-of-the-week and next
week packages sold up on revised weather forecasts, which are
calling for higher temperatures than originally anticipated.
Traders reported June 7-8 parcels as high as $27.00, and June 11-
15 parcels up to $40.50.
According to Weather Derivatives Corp. of Belton, Missouri,
temperatures in the Northeast U.S. will average 2.4 degrees
Fahrenhiet below normal over the next seven days, and 1.3 degrees
below normal over the next 6-10 days. Yesterday, the company
predicted temperatures would average 4.0 and 4.1 degrees below
normal for the respective periods.
"It's not exactly a bullish outlook," one trader said of the
forecast. "I'd call it less bearish, at best. The market's so
depressed that less bearish is about all it takes to get things
moving."
     Prices continued to fall in the New York and New England
Power Pools, amid scant demand and excess supply. New York's Zones
A and G fell 50 and 45 cents, respectively, to $40.30 and $29.25
indices. In New England, a 2,706-megawatt capacity surplus caused
spot values there to fall $1.55 to an average price of $35.55, and
the lowest daily index posted since April 2000.

-Karyn Rispoli


ECAR, MAIN Power Prices Climb With Increased Southeast Demand

     Cincinnati, June 5 (Bloomberg Energy) -- Day-ahead peak
power prices rose today in the East Central Area Reliability
Council and Mid-America Interconnected Network regions amid
demand from the Southeast, traders said.
     They said news of an outage at South Carolina Electric & Gas
Co.'s 1,000-megawatt Summer 1 reactor and temperatures forecast
in the mid-80s degrees led ECAR and MAIN marketers to sell excess
power south, pushing prices up in early trading.
     The Bloomberg index price for power delivered Wednesday into
the Cincinnati-based Cinergy Corp. transmission system climbed
$1.82 to $23.21 a megawatt-hour, trading from $22.00-$24.00 for
most of the morning.
     In MAIN, for-Wednesday power at the Chicago-based
Commonwealth Edison hub sold $1.02 higher on average at $22.00-
$23.00 early.
     However, traders said low local demand and recent soft
prices led marketers to oversell, driving spot prices up to
$26.00 at Cinergy and $25.00 at the ComEd hub after options
expiration.
     "We definitely saw a short squeeze late. With the market
being slow for so long, people got a bit excited and oversold
stuff to the south," an ECAR trader said.
     Short-term over-the-counter prices in ECAR and MAIN fell
today, with power for delivery from June 11-15 offered at $38.50
at Cinergy and $39.30 at ComEd. Traders said a reduced
possibility of warmer weather caused the decline and the market
should fall further as forecasts became more certain.
     "If no heat comes in, the market for next week's going to
crash, for sure," one trader said. "Most of the market's been
long and wrong, and is trying to do something about that, but I
don't think it's going to materialize."
     In the Mid-Continent Area Power Pool, peak next-day power
prices were little changed again today as cool weather continued
to blanket the region and there was little demand for power
elsewhere, traders said.
     For-Wednesday parcels sold at $18.00-$22.00 in the northern
half of the region and at $20.00-$27.00 in southern MAPP, up 17
and 13 cents from yesterday on average, respectively.
     Traders said the market could rise next week if warmer
weather arrives as expected.
     In its 6-10 forecast, Belton, Missouri-based Weather
Derivatives Inc. predicted temperatures would average 2 degrees
above normal, up from 1 degree below normal over the next week.

-Ken Fahnestock


Most Southeast Power Prices Rise With Weather-Related Demand

     Atlanta, June 5 (Bloomberg Energy) - Most U.S. Southeast
spot electricity prices for delivery tomorrow rose because of
increased weather-related demand, traders said.
     The Bloomberg Southeast regional average price increased
$1.42 a megawatt-hour from yesterday to a Bloomberg index of
$33.46 amid trades at $24.00-$53.00.
     "Heat is coming in from the Midwest, which is causing prices
to rise,'' said one Southeast trader.
     In the Northern section of the Southwest Power Pool, peak
power increased 83 cents to a Bloomberg index of $22.00, with
sales completed at $21.00-$23.00.
     According to Lexington, Massachusetts-based Weather Services
Corp., temperatures in Dallas were expected to peak today at 91
degrees Fahrenheit and decline two degrees tomorrow to 89
degrees.
     In the Electric Reliability Council of Texas, "UB'' firm
power sold for tomorrow at $38.00-$39.50, gaining 13 cents from
yesterday to a Bloomberg index at $38.63.
     "Rain is expected in Texas, which should cause prices to
decline (tomorrow),'' said one Southeast trader.
     Forecasters predict temperatures in the Southeast will
remain close to normal levels over the next seven days.
     On the New Orleans-based Entergy Corp. grid, peak power for
Wednesday delivery traded at $32.75-$35.00 and averaged $33.69,
$3.04 higher than yesterday.
     The Bloomberg index price for peak next-day parcels at the
Florida-Georgia border increased $2.00 to a Bloomberg index at
$52.00 with trades completed at $50.00-$53.00.
     "Temperatures are high in the Florida markets causing air
conditioning load to increase," said one Southeast marketer.
     ~
-Robert Scalabrino


U.K. Spot Power Prices Climb on Continued Outage Rumors

     London, June 5 (Bloomberg Energy) -- U.K. spot power prices
rose for a second consecutive day amid continued rumors of an
outage at the Connah's Quay power plant, traders said.
     Day-ahead baseload power traded as low as 18.00 pounds a
megawatt-hour, before rising to 18.75 pounds a megawatt-hour, 25
pence higher than yesterday's close.
     This morning, buying interest was high as rumors persisted
that Connah's Quay, Powergen's 1,400-megawatt combined-cycle gas
turbine power plant, closed because of technical problems, traders
said. Unconfirmed reports of the outage yesterday pushed day-ahead
baseload prices up 1.50 pounds to 18.50 pounds.
     One trader said he was skeptical of the rumors of the plant
outage, though.
"I don't think Connah's Quay is down; there were no different
buyers out there today," the trader said. "People bought up this
morning, scared by the rumors and worried there'd be no sellers
left out there but there was actually around 400 megawatts left
today."
By midday, though, activity was scant, traders said.
     "We tried to sell, and there were no bids," another trader
said.
     Week 24 traded 60 pence higher at 17.75 pounds a megawatt-
hour.
     Seasonal contracts remained little changed for the fifth
consecutive day amid lackluster activity, traders said.
     Winter 2001 last traded at 21.58 pounds a megawatt-hour, 1
pence lower than yesterday.

-Amal Halawi


Nordic Electricity Prices Close Mixed on Weather Uncertainty

     Lysaker, Norway, June 5 (Bloomberg Energy) -- Electricity
prices on the Nordic Power Exchange in Lysaker, Norway, closed
mixed today because wetter-than-normal weather forecasts were
offset by concern that actual precipitation would remain around
average levels, traders said.
     Week 24 was the most heavily traded contract today with
385.00 megawatts exchanged between 207.50-210.00 Norwegian kroner
a megawatt-hour, down 0.50 kroner. Week 25 closed down 1.25 kroner
at 205.75 kroner a megawatt-hour.
     "Weather forecasts can't be taken straightforwardly;
adjustments are always necessary to assess prices,'' a trader
said.
     Although Scandinavian precipitation over the last four days
was forecast 2.0 terawatt-hours above normal, actual rainfall was
0.5 terawatt-hours below normal, raising concerns of unexpectedly
low hydro-supply this week, an Oslo-based trader said earlier
today.
     Water supply worries pushed Wednesday's system area average
price 5.35 kroner higher than today's price to 213.87 kroner a
megawatt-hour, in line with expectations.
     While a national holiday in Denmark today kept industrial
demand at a minimum, tomorrow's expected consumption increase
contributed to a higher spot price, another trader said.
     In the longer-term, winter-2, 2001 closed little changed at
220.50 kroner a megawatt-hour with 128.00 megawatts exchanged.
     Limited trade on longer-term structures came after
participants distanced themselves from an uncertain market,
awaiting further weather signals, traders said.
     Nordpool's total trade volumes amounted to 1,317 gigawatt-
hours generation, compared with Friday's 1,292 gigawatt-hours.

-Alejandro Barbajosa
-0- (BES) Jun/05/2001 20:06 GMT
=04


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