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Tuesday, November 22, 2016

MEGAWATT DAILY

www.platts.com www.twitter.com/PlattsPower ELECTRIC POWER

News HeadliNes

Platts & iCe natural gas agreement subscriber note�� Deal adds anonymized ICE gas transactions to Platts assessments�� It boosts trading volumes, counterparties behind Platts benchmarks

ePa head sees ongoing clean energy transition �� Confident EPA’s work, mission will endure�� Carbon emissions reflect CPP targets despite stay

NRG to repower west N.Y. plant after suit ends �� Entergy drops lawsuit to stop Dunkirk repowering�� Clears way for NRG to convert plant from coal to gas

sunZia lands Pattern energy for anchor tenant �� Pattern replaces SunEdison, which filed for bankruptcy�� Sunzia needs agreement before it can finance $2.1 billion project

iOUs seek to grow microgrid market: deloitte �� Mixed ownership is eyed as new business model�� Two-thirds of installed microgrids owned by single entities

PJM Capacity Performance penalty reform halts 6Cal-ISO, PG&E challenge Dynegy’s RMR proposal 7

iNside tHis issUe

Key Drivers/MarKet HigHligHts

�� Northeast spot prices fall amid frigid conditions�� Central spot falls on more seasonal weather�� eRCOt dailies rise on stronger gas, less wind�� western dailies, forwards rally on colder weather

regional Day-aHeaD price cHanges day-ahead peak prices Regional weather trends

daily Prior daily 7-day 22-Nov chg 7-day avg 22-Nov chg forecast

isO Price locations

CAISO NP 15 36.39 4.68 ▲ 32.32 57.0 -1.6 ▼ 56.4ERCOT North Hub 19.96 -1.00 ▼ 19.97 64.9 7.1 ▲ 58.3ISONE Internal Hub 36.29 4.76 ▲ 25.23 37.1 0.7 ▲ 39.7MISO Indiana Hub 35.20 -2.96 ▼ 33.65 37.8 3.3 ▲ 39.8NYISO Zone G 33.43 -2.05 ▼ 27.19 37.2 1.1 ▲ 41.2PJM West Hub 31.66 -2.98 ▼ 29.37 38.3 1.5 ▲ 44.0SPP South Hub 24.91 -3.28 ▼ 25.65 53.5 6.6 ▲ 45.7

Bilateral indexes

Into Southern 27.25 1.25 ▲ 23.32 53.3 3.5 ▲ 58.9Palo Verde 19.00 0.75 ▲ 17.82 56.4 -2.0 ▼ 55.6COB 25.00 5.75 ▲ 21.21 46.4 -1.1 ▼ 43.8Mid-C 20.20 3.10 ▲ 18.79 46.4 -1.1 ▼ 43.8

Source: Platts

platts peaK Daily DeManD (Gw) daily change Five day forecast season season average

iso 18-nov 19-nov 20-nov 21-nov 22-nov chg % chg 23-nov 24-nov 25-nov 26-nov 27-nov Min Max 2016 2015 chg % chgBPA-Puget 7.57 6.62 6.72 7.47 7.52 0.05 0.67 7.68 7.69 7.80 7.43 7.34 5.15 7.57 6.32 6.69 -0.37 -5.53IESO 19.00 19.37 20.57 21.75 21.36 -0.39 -1.79 21.58 20.77 20.73 19.11 19.50 16.94 25.09 19.45 19.38 0.07 0.36CAISO 27.96 26.14 26.45 29.20 29.26 0.06 0.21 29.22 29.47 29.27 26.69 26.65 21.44 42.81 31.05 33.04 -1.99 -6.02ERCOT 38.87 34.57 35.07 37.87 38.03 0.16 0.42 37.20 37.27 37.14 34.55 34.98 30.31 66.89 49.54 46.64 2.90 6.22SPP 27.08 27.53 27.42 25.59 25.67 0.08 0.31 25.65 25.69 25.63 23.45 23.43 25.99 44.08 31.57 30.86 0.71 2.30MISO 75.72 74.10 76.16 80.60 79.98 -0.62 -0.77 79.65 79.84 79.99 72.65 72.66 68.58 114.75 82.86 82.39 0.47 0.57PJM 89.87 88.47 97.84 106.72 104.85 -1.87 -1.75 102.20 96.78 97.89 89.31 91.59 78.92 143.07 97.40 95.81 1.59 1.66NYISO 19.11 18.07 19.86 21.14 20.83 -0.31 -1.47 20.47 19.93 19.83 17.97 18.28 15.79 29.71 20.22 20.49 -0.27 -1.32NEISO 15.22 14.38 15.76 17.17 16.87 -0.30 -1.75 16.71 16.67 16.35 14.92 15.21 11.69 23.03 15.66 16.28 -0.62 -3.81AESO 10.46 10.30 10.31 9.96 10.13 0.17 1.71 10.09 10.02 10.12 9.75 9.92 8.86 10.56 9.65 9.67 -0.02 -0.21

Seasons are defined as: Summer (June – August), Fall (September – November), Winter (December – February), and Spring (March – May).

Source: Platts

COAL-VS-GAS $/MWH FUEL COST RATIOS

The Platts coal-vs-gas fuel cost ratios indicate the regional competitiveness of gas versus coal for power generation. The ratio is calculated by dividing the $/MWh fuel cost for coal by that of gas. Gas generation is cheaper than coal generation when the ratio is greater than one. All price data re�ects prompt month fuel contracts.

Source: Platts daily OTC coal prices and M2MS gas prices

0

1

2

3

4

18-Nov21-Oct23-Sep25-Aug01-Aug01-Jul03-Jun

Into SouthernPJM WestMISO Indiana

SPP SouthERCOT NorthThreshold

sUBsCRiBeR NOte iNside

Details at www.platts.com/ice

(continued on page 3)





http://www.platts.com/ice

Tuesday, November 22, 2016megawaTT daily

2© 2016 S&P Global Platts, a division of S&P Global. All rights reserved.

NEWS / PRICING COMMENTARY / MARkET FuNdAMENTAls

Officers of the Corporation: Harold McGraw III, Chairman; doug Peterson, President and Chief Executive Officer; david Goldenberg, Acting General Counsel; Rob Mackay, Interim Chief Financial Officer; Elizabeth O’Melia, senior Vice President, Treasury Operations.

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EditorsJeff Ryser, +1-713-658-3225Mark Watson, +1-713-658-3214

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Director, Global Gas & Power PricingMark Callahan

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Volume 21 / Issue 226 / Tuesday, November 22, 2016

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News

ePa head sees ongoing clean energy transitionAcknowledging anxieties in the environmental community over the fate of the US climate agenda and the future leadership of the Environmental Protection Agency under President-elect Donald Trump, EPA Administrator Gina McCarthy said she was very hopeful for the future and saw the transition to a low carbon economy continuing.

Speaking at a National Press Club luncheon Monday, McCarthy commended the work the EPA has done over the past eight years, saying the agency has made the environmental enterprise more inclusive and more effective than it has ever been.

"We have energized the American people who will demand not only clean air and clean water for their children, [but] they will demand a stable planet as well," she said. "We have created the kind of resonance that motivates a generation of young people, a familiar movement that resembles times past when millions of voices were standing up and speaking out. That is what changed the country's trajectory and that is what's going to keep us moving towards a low carbon future."

She noted the "unsung heroes," including regulators, scientists, businesses, innovators and others, who placed "science and service above partisanship," and were behind her certainty that the "future will be brighter and healthier and more just for us all."

Confident ePa's work, mission will endureWhen asked about the prospect that much of the agency's work in

recent years could be overturned, McCarthy said she remained

confident in the regulations crafted by the agency and the "sound, reasonable" actions pursued to protect public health and natural resources.

As for the potential that a Republican-led Congress with a Republican president could chip away at some of the bedrock environmental laws that shape EPA's work, McCarthy said the agency has been "very successful over five decades in avoiding partisan politics as much as possible." Regardless of whether you're a Republican or a Democrat, she said, "you still want your kids to be healthy and their future to be sound" so the mission of the EPA will persevere.

The mood among career staff, she said, was also one of confidence that the mission of the EPA would endure. "Most of them have been through transitions before. They are continuing to hunker down and do their job," she added.

Although Republican leadership in Congress has pushed for government agencies to not move forward with new regulations during the transition to a new administration, McCarthy said the EPA would be continuing ahead with its agenda. She contended: There is "one president at a time, and I'm working for this one and going to continue that work."

That work includes completing the agency's final report on hydraulic fracturing and drinking water and clarifying its previous conclusion that there is no systemic link between fracking and water contamination as well as work tied to regulating methane emissions from existing infrastructure. McCarthy provided no specific timelines other than they are trying to wrap up the fracking report "soon" and




sUBsCRiBeR NOte

s&P Global Platts and iCe Natural Gas agreement

�� S&P Global Platts (Platts), the leading independent provider of information and benchmark prices for the commodities and energy markets, and Intercontinental Exchange (ICE), a leading operator of global exchanges and clearing houses, announced they have entered into a strategic agreement to strengthen North America's natural gas benchmarks, streamline the reporting process, and further improve transparency in over-the-counter (OTC) pricing. Under this agreement, ICE data regarding daily and monthly physical natural gas transactions will be anonymized and included as inputs into the Platts physical market price assessment processes. Not only will the addition of ICE data increase the volumes of natural gas underpinning the Platts natural gas benchmarks, it will expand the number of trades and market participants reflected in the Platts price assessment processes. After a transitional period, Platts will grant ICE exclusive rights to use Platts North American physical natural gas benchmarks in the settling and clearing of natural gas derivatives contracts. A key benefit of this agreement is that market participants will be able to use ICE exchange transactions and ICE eConfirm, an industry-leading electronic trade confirmation service, as a means of having their transactions data used in the Platts price assessment process. This brings additional data and efficiency to the assessment process, which traditionally comprises emailing trades to Platts. A transition period will apply before Platts incorporates the ICE data into its assessments and before ICE eConfirm can be used for submitting trades, and is targeted for mid-first half 2017. Visit the online resource www.platts.com/ice or contact Mark Callahan, Editorial Director Global Natural Gas and Power Pricing, at [email protected] or 713-658-3211 for additional information

those that have described the CPP as the driving force behind the country's transition to clean energy have been giving the EPA too much credit, she said.

Rather, "the global transition to a low carbon economy is much more than any one regulation," McCarthy said. "The energy market and the commitment of the private sector are what is driving and what will continue to drive this inevitable journey. And that journey is consistent with virtually every nation's understanding of climate science and our obligation to protect our children's futures."

The question remains whether the US, under the Trump administration, "will turn its back on science and be left behind," she said.

states may fill gap in Us climate leadershipBut McCarthy said the states would fill the gap left in US climate

leadership if they felt their environmental goals or energy sector interests were not being met by the new administration.

At the state and local level, she said, decisions are not based on politics. They are based "on what your people are demanding of you," or you will not have a long career as a municipal servant.

"People really are worried about the impacts of climate they're already feeling," and thousands of mayors signed climate pledges as they look to avoid wildfires, floods, running out of drinking water and other adverse impacts of a changing climate, McCarthy said.

"Mayors will continue to speak up, and cities will continue to be some of our best and loyal allies," she said.

Citing a report from the Georgetown Climate Center, McCarthy added that 19 states are continuing to make significant progress consistent with the CPP. "That's because this is all about the energy transition that's already happening," in which renewables are cheaper than ever, the technologies behind them are more efficient, and energy efficiency has caught on as a money-saver.

"So whether or not states want to go under the heading that they're taking climate action or simply doing what's best for their consumers and their energy systems, I'm fine that, and that's going to continue," McCarthy said. When it comes to the clean energy economy, "that train has left the station."

— Jasmin Melvin

NRG to repower west N.Y. plant after suit endsEntergy on Friday dropped its lawsuit to stop the repowering of NRG Energy's Dunkirk plant in far western New York, which clears the way for NRG to convert the plant from coal to natural gas.

NRG spokesman David Gaier on Monday said, "NRG is prepared and pleased to move forward with the Dunkirk repowering, if the other parties involved, including the New York State Public Service Commission, National Grid, National Fuel Gas — which was building the relevant natural gas pipeline — and Empire State Development are prepared to meet their commitments."

NRG Energy had determined as early as March 2012 that the then-coal-fired Dunkirk plant, which is west of Buffalo on Lake Erie, was uneconomic under existing market conditions and should be mothballed beginning September 2012.

However, after several studies and technical conferences, New

that crafting such a rule on methane emissions would be a lengthy process done in phases.

McCarthy said she was not focusing on what regulations may come under scrutiny or be subject to reversal under the next administration. Instead, she was heeding President Obama's direction to ensure a smooth transition.

Trump's transition team, she said, has yet to be in contact with the agency.

Carbon emissions reflect CPP targets despite stayAs for the Clean Power Plan, McCarthy defended the regulation as

"a turning point in American climate leadership, a point where our country stepped up to the plate and delivered and the rest of the world followed us."

She asserted that the rule, which sought to cut carbon emissions from existing power plants by 32% from 2005 levels by 2030, with interim CO2 reduction goals to be met by 2022, "was designed to follow the clean energy transition that was already underway — the one that the energy market depends on and the one that the energy market will continue to demand."

She noted that US power plant CO2 emissions in 2015 were about 24% below 2005 levels, in line with the CPP's 2022 targets a full seven years ahead of schedule and well on their way to the 2030 targets.

"Twenty-four states had lower emissions in 2015 than their 2022 annual goal, the first year of compliance in the CPP, including states like Ohio, North Carolina, Pennsylvania and South Dakota," she added.

This has all occurred while implementation of the CPP has been stayed pending a judicial decision on the legality of the rule. Thus,

mailto:[email protected]




OUTAGES

York Gov. Andrew Cuomo announced on December 15, 2013, that NRG and National Grid, the transmission utility that serves the Dunkirk area "had developed a framework for an agreement that would permit NRK to repower the Dunkirk station," according to an order in the relevant New York State Public Service Commission Case (No. 12-E-0577).

Utility to pay $20.4 million per year for 10 yearsUnder the terms of the agreement, National Grid would pay $20.4

million per year for 10 years to the Dunkirk plant, where NRG would add about 435 MW of natural gas-fired capability to the plant's units 2, 3 and 4, with commercial operation starting September 1, 2015. The agreement also required a one-time payment to Dunkirk of $15 million from the state of New York.

NRG agreed to keep the plant operating through the end of 2015 to maintain reliability, after receiving more than $110 million from National Grid to defray costs, but the plant was mothballed this January.

The New York State PSC ordered in June 2014 that the project to repower the plant under the terms of the agreement be implemented.

After the Federal Energy Regulatory Commission ruled in February that reliability-must-run contracts on the bulk power system are a matter of federal jurisdiction, Entergy filed suit in federal court against the members of the New York State PSC, to declare that their Dunkirk plant order "is pre-empted by federal law and thus invalid" and to establish "a permanent injunction" requiring the withdrawal of the order or preventing the PSC from treating the order "as valid and binding."

But on Friday, Entergy submitted a "stipulation of dismissal" of its lawsuit "with prejudice," which means that the plaintiffs have forfeited the opportunity to make the same petition at a later date.

On Monday, Jerry Nappi, an Entergy spokesman, said, "Entergy has withdrawn its lawsuit related to the Dunkirk power plant because the company is focusing on other business priorities."

area's community favored project: NRG spokesmanNRG's Gaier said his company "appreciates the continued support

of the people of Dunkirk" and the surrounding area for the idea of keeping the power generation site operational.

The project should become operational about 24 months after all permits are approved, Gaier said.

Matthew Cordaro, a former Midcontinent Independent System Operator president and CEO who now resides in New York, said clearing the way for the Dunkirk plant "is a good development because it will provide a source of nonintermittent energy upstate to support the electric system during critical periods."

"In view of the state's recent decision to subsidize upstate operating nuclear units partly because of the economic impact their abandonment would have on surrounding communities, the state agencies originally supporting the repowering proposal should continue to support it now that it may be going forward," Cordaro said in an email Monday. "The decision to move forward can be expected to be opposed by environmental groups just as it was when it originally was proposed."

— Mark Watson

tHaNksGiviNG HOlidaY NOtiCe

�� Megawatt Daily will not be published and Platts' US offices will be closed on Thursday and Friday due to the Thanksgiving holiday. No price data will be collected on those days. Flow dates for wholesale power traded on Wednesday vary among markets and will be specified in published tables.

Bu�alo

Rochester

Cheektowaga

Niagara Falls

Dunkirk

Fredonia

Hamburg

DUNKIRK POWER PLANT

New York

CANADA

Source: NRG

GeNeRatiON UNit OUtaGe RePORtPlant/Operator Cap Fuel state status Return shut

Northeast

Atikokan-1/OPG 205 bio Ont. MO Unk 11/16/16Beck-2 PGS/OPG 103 h Ont. MO Unk 04/11/16Bruce-7/Bruce Power 823 n Ont. MO Unk 11/18/16Darlington-2/OPG 887 n Ont. MO Unk 10/14/16Darlington-3/OPG 876 n Ont. MO Unk 11/14/16Greenfield-1/Calpine 212 g Ont. MO Unk 11/14/16Greenfield-2/Calpine 212 g Ont. MO Unk 11/14/16Greenfield-3/Calpine 212 g Ont. MO Unk 11/14/16Greenfield-4/Calpine 517 g Ont. MO Unk 11/14/16Harmon/OPG 149 h Ont. MO Unk 11/21/16Lake Superior/Brookfield 120 g Ont. PMO Unk 11/04/14Lennox-3/OPG 525 g Ont. MO Unk 11/17/16Lennox-4/OPG 525 g Ont. MO Unk 11/15/16Pickering-7/OPG 520 n Ont. MO Unk 09/02/16Thunderbay CTS/Resolute 116 bio Ont. MO Unk 11/16/16

pJM & Miso

Cook 2/AEP 1081 n Mich. MO Unk 10/06/16Oyster Creek/Exelon 670 n N.J. MO Unk 11/20/16

southeast & Central

Ark. Nuclear-1/Entergy 858 n Ark. MO Unk 09/26/16Grand Gulf/Entergy 1443 n Miss. MO Unk 09/08/16Oconee-1/Duke 934 n S.C. MO Unk 11/05/16Wolf Creek/Wolf Creek 1184 n Kan. MO Unk 09/02/16

west

Belden/PG&E 119 h Calif. PMO Unk 10/24/16Calif.Flats/FirstSolar 130 s Calif. MO Unk 11/01/16Crocket/CG 240 g Calif. PMO Unk 11/20/16Haas-1/PG&E 144 h Calif. PMO Unk 10/23/16Haas-2/PG&E 144 h Calif. PMO Unk 10/23/16Harbor/Southwest 109 g Calif. MO Unk 11/10/16Kerckhoff-2/PG&E 154 h Calif. PMO Unk 10/17/16La Pamola-3/La Pamola 256 g Calif. MO Unk 11/18/16Pine Flat/KRCD 210 h Calif. MO Unk 10/10/16Pio Pico-3/Apex 103 g Calif. MO Unk 11/18/16Sutter/Calpine 525 g Calif. MO Unk 06/06/16Tracy/AltaGas 332 g Calif. PMO Unk 11/03/16

Daily generation outage references: MO=unplanned maintenance outage; RF=refueling outage; PMO=planned maintenance outage; Unk=unknown; OA=offline/available. Fuels: Nuclear=n; Coal=c; Natural gas=g; Hydro=h ; Wind=w; Solar=s

Sources: Generation owners, public information and other market sources.





sunZia lands Pattern energy for anchor tenantThe developers of the SunZia transmission project in the Southwest have landed Pattern Energy Group as an anchor tenant replacing the project’s first main tenant, SunEdison, which filed for bankruptcy in April, according to a filing at the US Federal Energy Regulatory Commission.

After SunEdison filed for bankruptcy, SunZia Transmission started a solicitation process in May for the project’s first 1,500-MW phase, the company told FERC in the filing Friday (ER17-388).

Pattern won out over three undisclosed bidders, according to the solicitation report. SunZia also filed an application to revise its negotiated rate authority for the project through a fast-track process. SunZia needs a transmission service agreement before it can finance its roughly $2.1 billion project.

Pattern is developing 1,500 MW of wind projects in New Mexico with expected in-service dates by late 2020, which will meet the deadline to qualify for 100% of the federal production tax credit, SunZia told FERC.

SunZia expects to start building the project’s first 500-kV, alternating current phase in early 2018, with an online date slated for late 2020. Depending on market interest, the second phase could be another 1,500-MW line or a 500-kV direct current 3,00-MW line, according to the FERC filing.

The project will run about 515 miles from the planned SunZia East substation in Lincoln County, New Mexico, to the existing Pinal Central substation in Pinal County, Arizona. The bi-directional project includes substations in New Mexico and Arizona where renewable and natural gas-fired generators could gain access to the project's two single-circuit lines. The project is mainly designed to serve markets in California.

The SunZia project is spearheaded by SouthWestern Power Group II, a merchant developer based in Phoenix. SouthWestern Power Group and co-owner ECP SunZia are owned by MMR Group, a construction firm based in Baton Rouge, Louisiana. Minority project owners include: Shell WindEnergy (1.8%), which is developing wind projects in central New Mexico, Salt River Project (4.3%), Tri-State Generation & Transmission Association (0.8%) and Tucson Electric Power (0.4%).

Pattern may take an ownership stake in the transmission project and SunZia may acquire part of a Pattern wind farm, according to the FERC filing.

SunZia asked FERC to approve its report and application for negotiated rates in January so the company could meet project deadlines.

— Ethan Howland

iOUs seek to grow microgrid market: deloitteInvestor-owned utilities are aiming at growing their share of the renewable microgrid market through mixed ownership models where utilities partner with those who provide and consume distributed energy resources, the consulting firm Deloitte said in a report released Monday.

While roughly two-thirds of installed microgrids are still owned by single entities such as military bases, universities and research facilities, Deloitte said that value streams within an IOU's distribution

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network is driving the growth of utility-led microgrid systems.“When strategically placed, microgrids can reduce peak demand at

substations and relieve congestion, and thus defer grid upgrades. When equipped with storage technologies, they can also provide distribution-level ancillary services, including load shaping, load following, frequency regulation, reactive power, voltage control, and other services.”

The Deloitte report, titled “Reinventing resilience: Defining the model for utility-led renewable microgrids,” said that extreme weather events have focused almost as much attention on the electric grid’s resilience as it has on its reliability. The consulting firm said seven of the ten costliest storms that occurred between 1980 and 2014 took place during the past decade, “and caused over $1 billion in damages per event.”

The consultants estimated that the largest regulated electric and gas investor-owned utilities in the US collectively invested an average of $35 billion per year from 2008-2016 in upgrading and hardening the electric transmission and distribution infrastructure.

“While hardening measures may continue to be an effective way to enhance the resilience of the grid, utilities are beginning to demonstrate how distributed, renewable generation in a microgrid setting can be a cost-effective alternative to traditional T&D investments.”

The Deloitte report cited an August 29 report issued by Greentech Media that said that installed microgrid capacity was estimated to be 1,648 MW, with the projection of it reaching 4,300 MW over the next five years.

GTM defined microgrids as independently operated parts of the distribution network that include distributed energy sources, loads, and network assets that are controlled within a clearly defined geographical boundaries.

GTM said in its report that the operational microgrid capacities, by region, put the Northeast on top with 567 MW, the Southwest second with 399 MW and the West Coast third with 237 MW. Ranked fourth was the Southeast with 239 MW, Alaska 99 MW, Hawaii 64 MW and the Midwest 43 MW.

Deloitte acknowledged that microgrids that are integrated into the distribution systems are still rare in IOU services and therefore stuck in what it called a “'holding pattern via perpetual piloting and demonstration phases, aided by funding from the Department of Energy or other public grants."

Nonetheless, Deloitte argued that microgrid benefits include the ability to defer upgrades of transmission assets and to generate revenue in wholesale markets where ancillary services are compensated, such as in the PJM Interconnection, the California Independent System Operator and the New York Independent System Operator.

“Due to strong, existing customer relationships, utilities may be uniquely positioned to engage end-users—particularly those with distributed generation — when developing mixed ownership microgrids.”

According to GTM, recent growth of the multi-stakeholder ownership model arose from a surge in regulated utility interest to co-develop microgrids as a “non-wires” alternative to capital infrastructure investments.

“These new models can significantly reduce the capex and O&M burden on end customers,” GTM’s report said.

A key hurdle slowing a greater turn to the multi-stakeholder ownership model, Deloitte said in its report, is the difficulty obtaining authorization for cost recovery of investments.

soCal ed seeks $2.1 billion for modernizationSouthern California Edison filed with the California Public Utilities

Commission in September its General Rate Case for 2018 to 2020 which seeks approval for $2.1 billion in capital expenditures over three years for grid modernization that would benefit distributed energy resources, or DERs.

SoCal Ed said in its filing that California is home to 50% of the nation’s private solar systems—more than half a million businesses and homes—and it boasts more than 200,000 plug-in electric vehicles—40% of the nation’s total—with a goal of 1.5 million by 2025.

As a distribution system operator, or DSO, the utility told the CPUC that its aim is to modernize and reinforce its grid to integrate distributed resources and to connect DERs to markets that provide new revenue.

It said that the goal is to transition to customer rate designs and DER programs "that reflect the benefits and costs of DERs."

“Coupled with declining prices of DERs, these markets could eventually eliminate the need for subsidies and administratively-determined tariffs,” SoCal Ed said. “DSOs will need to work with resource providers and other stakeholders to shape markets and distributed solutions that support the grid.”

CPUC hearings on SoCal Ed’s request are slated for April and May, the company said Monday.

— Jeffrey Ryser

pJM capacity performance penalty reform haltsA PJM Interconnection panel working to mitigate risk in PJM's Capacity Performance Auction has given up on efforts to address stakeholder concerns about the magnitude of penalties resources might face if they fail to provide energy when called upon.

On Monday, the Underperformance Risk Management Senior Task Force discussed Friday's rejection by the PJM Markets and Reliability Committee of a proposal that had received support by 55% of the task force's membership.

Proposed changes included changing the basis for the nonperformance assessment rate from the net cost of new entry in a local deliverability area to the highest Base Residual Auction clearing price for any LDA.

Other changes would have allowed certain transactions to be submitted retroactively, energy in excess of requirements to offset shortfalls in the same performance hour, and the calculation of a monthly stop-loss provision in addition to an annual stop-loss for nonperformance charges.

But a representative of Monitoring Analytics, PJM's independent market monitor, said Friday that the proposed changes would undermine the Capacity Performance market construct's purpose, which is to use markets to enhance reliability.

Friday's vote on the proposal, which was conducted by market segment, was 2.4 in favor to 2.6 against, and the threshold for passage was 3.34.





'Market is flawed': stakeholderOn Monday, when Rebecca Carroll, who facilitates the task force's

activity, asked whether stakeholders wanted to revisit the issue to make a new proposal that might survive a Markets and Reliability Committee vote, a man who was not clearly identified for conference call listeners said, "On behalf of the sponsors [of the proposal] ... we don't feel as though there are any changes we'd like to make."

"We think the market is flawed," he said, explaining that under current Capacity Performance rules, an entity that clears in the capacity market has "45 times" the value received at risk, which prompts potential market participants to stay out of that market.

Another speaker at Monday's meeting, who said he "had clients on both sides of the vote," said he does not "see an easy way to narrow the differences such that we would reach a consensus."

Carroll said stakeholders who have more ideas about how to address the concerns in a way that might win approval should "reach out" to PJM staff who have been working on the capacity market design.

— Mark Watson

cal-iso, pg&e challenge Dynegy’s rMr proposalThe California Independent System Operator and Pacific Gas & Electric are challenging proposed changes to a reliability must-run service agreement for Dynegy’s 165-MW oil-fired power plant in Oakland, California.

Dynegy late last month asked the Federal Energy Regulatory Commission to approve changes to its existing RMR agreement in

response to a notice from the Cal-ISO that the grid operator wanted to extend the contract for another year. Dynegy asked that the RMR rates take effect January 1.

The Cal-ISO and PG&E in a joint filing Friday at FERC contend that Dynegy failed to provide enough information to show that its proposed rate increase is just and reasonable. The grid operator and utility said they were especially concerned with Dynegy’s proposed annual fixed revenue requirement of $2.9 million.

The grid operator and PG&E raised similar concerns about Dynegy’s proposed RMR contract last year (ER16-207). The dispute was resolved through a settlement agreement that FERC approved in May.

The Cal-ISO and PG&E expect to have informal talks in the “near term” to try to resolve the dispute. “The CAISO and PG&E are hopeful these discussions will lead to a mutually agreeable resolution of the issues in this docket,” the grid operator and utility said.

The Cal-ISO and PG&E asked FERC to give them until the end of January to resolve the issue before starting hearings in the case.

The Dynegy plant includes three combustion turbine units that can start up in five minutes, according to the company’s application at FERC.

The Cal-ISO uses RMR contracts when there are no other options to ensure grid reliability. In the wake of the California Public Utilities Commission’s resource adequacy program, the number of RMR contracts in the state have been whittled down to the Dynegy contract and one for AES Huntington Beach’s synchronous condensers, which provide voltage support to the Los Angeles basin and the San Diego-Imperial Valley area.

— Ethan Howland





NEWS / PRICING COMMENTARY / MARkET FuNdAMENTAlsNEWs / PRICING COMMENTARY / MARkET FuNdAMENTAls

NORtHeast daY aHead POweR PRiCes ($/Mwh)

Marginal spark spread price change prior 7-day Month Month yearly changeHub/index symbol 22-nov heat rate @7K @12K chg % chg average Min Max nov-16 nov-15 chg % chg

On-Peak

ISONE Internal Hub IINIM00 36.29 9654 9.98 -8.82 4.76 15.1 25.23 19.71 36.29 25.12 33.26 -8.14 -24.5ISONE NE Mass-Boston IINNM00 36.43 9691 10.12 -8.68 4.72 14.9 26.33 19.75 36.43 25.97 34.27 -8.30 -24.2ISONE Connecticut IINCM00 35.85 10193 11.23 -6.36 4.61 14.8 25.13 19.61 35.85 25.02 31.59 -6.57 -20.8NYISO Zone G INYHM00 33.43 10715 11.59 -4.01 -2.05 -5.8 27.19 20.34 35.48 26.86 26.09 0.77 3.0NYISO Zone J INYNM00 34.34 11006 12.50 -3.10 -2.54 -6.9 28.03 20.79 36.88 27.57 26.76 0.81 3.0NYISO Zone A INYWM00 29.40 11219 11.06 -2.05 -1.22 -4.0 23.17 14.16 30.62 22.79 29.71 -6.92 -23.3NYISO Zone F INYCM00 29.88 9990 8.94 -6.01 0.44 1.5 25.09 19.44 30.14 24.92 26.15 -1.23 -4.7

Off-Peak

ISONE Internal Hub IINIP00 33.06 10048 10.03 -6.42 9.58 40.8 17.92 10.93 33.06 18.68 21.72 -3.04 -14.0ISONE NE Mass-Boston IINNP00 33.26 10110 10.23 -6.22 9.55 40.3 18.03 10.98 33.26 18.88 22.60 -3.72 -16.5ISONE Connecticut IINCP00 32.53 10358 10.55 -5.16 9.40 40.6 17.68 10.92 32.53 18.44 20.24 -1.80 -8.9NYISO Zone G INYHP00 22.30 8264 3.41 -10.08 -0.87 -3.8 17.47 11.93 23.17 17.28 16.16 1.12 6.9NYISO NYC Zone INYNP00 22.47 8325 3.58 -9.92 -0.89 -3.8 17.66 12.13 23.36 17.46 16.53 0.93 5.6NYISO West Zone INYWP00 18.27 7710 1.68 -10.17 -0.20 -1.1 14.46 9.94 19.19 14.11 9.39 4.72 50.2NYISO Capital Zone INYCP00 23.34 8797 4.77 -8.50 -1.10 -4.5 18.03 12.10 24.44 17.78 17.86 -0.08 -0.4

NORTHEAST AVG. DAY-AHEAD/REAL-TIME PEAK PRICE SPREAD

Source: Platts

($/MWh)

-8

-4

0

4

8

12

20-Nov18-Nov16-Nov14-Nov12-Nov10-Nov08-Nov

NYISO Zone J NYISO Zone G NYISO Zone A NEPOOL Mass Hub

NORTHEAST PLATTS M2MS FORWARD CURVE: ON-PEAK

Source: Platts

($/MWh)

10

30

50

70

90

Dec-18Sep-18Jun-18Mar-18Dec-17Sep-17Jun-17Mar-17Dec-16

East NY ZnJ East NY ZnG West NY ZnA Mass Hub

NORTHEAST PLATTS M2MS LOCATIONAL SPREADS: ON-PEAK

Source: Platts

($/MWh)

-20

-10

0

10

20

30


NYISO ZnJ/NYISO ZnGNYISO ZnG/PJM WestNYISO ZnG/NEPOOL Mass Hub

NEPOOL Mass Hub/PJM WestNYISO G/NYISO A

Northeast spot prices fall amid frigid conditionsNortheast day-ahead power prices fell Monday on flat to lower demand projections, despite forecasts of continued frigid weather, with wind gusts up to 33-35 mph in New York City and Boston.

Strong northwesterly winds are expected to usher in cold weather and lake-effect snow from northern Michigan to upstate New York, according to the National Weather Service.

In New England, Mass Hub day-ahead on-peak for Tuesday delivery traded in the mid-$30s/MWh on the Intercontinental Exchange, about 15 cents below Friday's day-ahead price.

ISO New England predicted peakload of 17,400 MW Monday, with net capacity deliveries from NYISO of 764 MW. Tuesday peakload is planned at 17,300 MW.

Algonquin Gas Transmission city-gate spot gas traded at $4.030/MMBtu on ICE, up 88 cents from Friday. Gas flow data for the broader Northeast showed gas-fired power demand at 5 Bcf/d Monday, up from 4.9 Bcf/d Sunday. Residential and commercial demand rose to 13.9 Bcf/d from 13.3 Bcf/d over the same period.

West of the New England region, New York ISO day-ahead on-peak locational marginal prices fell.

NYISO New York City Zone J on-peak fell $2.50 to the mid-$30s/MWh for Tuesday delivery and West Zone A on-peak was down $1.25 to the high $20s/MWh.

The New York ISO expected peak demand of 20,648 MW Tuesday, nearly flat from 20,634 MW Monday.

In the Mid-Atlantic region, PJM West Hub day-ahead on-peak traded in the mid-$30s/MWh for Tuesday delivery on ICE, about $4 below Friday's day-ahead price.

The Mid-Atlantic region of the PJM Interconnection forecast peakload at 37,249 MW Monday and 36,222 MW Tuesday.

Texas Eastern M-3 day-ahead natural gas was trading about 24 cents higher at a WAP of $2.547/MMBtu on ICE.

In the forward power markets, Mass Hub mini on-peak December traded in the low $40s/MWh on ICE.

NYISO Zone G mini on-peak December also traded in the high $30s/MWh.

PJM West Hub mini on-peak December traded in the mid-$30s/MWh.

Northeast PoWer MarKets




pJM/Miso Day aHeaD power prices ($/Mwh)


On-Peak

PJM AEP Dayton Hub IPADM00 30.43 11520 11.94 -1.27 -2.36 -7.2 28.63 23.31 36.41 28.74 29.81 -1.07 -3.6PJM Dominion Hub IPDMM00 31.94 11595 12.66 -1.12 -2.83 -8.1 31.03 26.36 41.04 31.40 32.21 -0.81 -2.5PJM Eastern Hub IPEHM00 29.35 10885 10.48 -3.01 -0.68 -2.3 22.46 18.88 30.03 24.11 32.19 -8.08 -25.1PJM Northern Illinois Hub IPNIM00 29.61 10641 10.13 -3.78 -1.85 -5.9 26.67 22.21 34.25 27.59 28.83 -1.24 -4.3PJM Western Hub IPWHM00 31.66 12873 14.44 2.15 -2.98 -8.6 29.37 24.92 36.66 29.47 30.64 -1.17 -3.8MISO Indiana Hub IMIDM00 35.20 13879 17.45 4.77 -2.96 -7.8 33.65 23.43 39.07 30.83 27.52 3.31 12.0MISO Minnesota Hub IMINM00 24.24 9086 5.57 -7.77 -1.03 -4.1 19.86 11.68 30.69 21.80 19.19 2.61 13.6

Off-Peak

PJM AEP Dayton Hub IPADP00 26.14 10641 8.94 -3.34 -0.54 -2.0 23.02 19.40 26.68 22.73 21.67 1.06 4.9PJM Dominion Hub IPDMP00 29.02 11258 10.98 -1.91 -0.51 -1.7 25.02 20.59 29.53 24.73 23.10 1.63 7.1PJM Eastern Hub IPEHP00 21.78 9006 4.85 -7.24 2.10 10.7 16.54 14.02 21.78 18.09 25.68 -7.59 -29.6PJM Northern Illinois Hub IPNIP00 24.21 9355 6.09 -6.85 -0.87 -3.5 17.95 4.56 25.08 20.21 19.73 0.48 2.4PJM Western Hub IPWHP00 27.45 12046 11.50 0.10 -0.55 -2.0 23.69 19.75 28.00 23.24 21.89 1.35 6.2MISO Indiana Hub IMIDP00 24.01 9972 7.16 -4.88 -0.44 -1.8 22.92 17.24 24.45 21.60 21.08 0.52 2.5MISO Minnesota Hub IMINP00 14.86 5930 -2.68 -15.21 -3.87 -20.7 14.25 7.85 19.93 13.52 10.76 2.76 25.6

PJM/MISO AVG. DAY-AHEAD/REAL-TIME PEAK PRICE SPREAD

Source: Platts

($/MWh)

-12

-8

-4

0

4

8


MISO IndianaMISO Minnesota

PJM AD HubPJM NI HubPJM West Hub

PJM/MISO PLATTS M2MS FORWARD CURVE: ON-PEAK

Source: Platts

($/MWh)

20

30

40

50

60


PJM AEP/Dayton PJM NI Hub MISO Ind. Hub PJM West

PJM/MISO PLATTS M2MS LOCATIONAL SPREADS: ON-PEAK

Source: Platts

($/MWh)

-12

-8

-4

0

4

8

12


PJM West/MISO Ind. HubPJM West/PJM AD Hub

PJM West/PJM NI HubPJM West/NYISO ZnA

Central spot falls on more seasonal weatherCentral day-ahead on-peak power prices fell as more seasonal weather is expected Tuesday in Chicago and St. Louis.

Widespread showers and storms — some possibly severe — are likely to develop from the Gulf Coast to Illinois ahead of a cold front, according to the National Weather Service.

Farther to the north, across the Dakotas, Minnesota and Wisconsin, wintry weather is likely with mixed precipitation, the weather service said.

The Midcontinent ISO projected peakload of 82,220 MW Monday and 81,590 MW Tuesday.

Northern Natural Gas demarcation spot gas traded at $2.802/MMBtu on the Intercontinental Exchange, at a premium to the Henry Hub spot price of $2.799/MMBtu for the first time this month.

In the power market, Indiana Hub day-ahead on-peak was framed in the mid-$30s/MWh on ICE, about $1 below Friday's day-ahead price.

In the physical OTC coal market, Powder River Basin 8,400-Btu/lb coal was heard trading at $8.75/st for three trains.

In the nearby PJM Western region, peakload was estimated at 55,049 MW Monday and 55,838 MW Tuesday.

Chicago city-gates spot gas prices were trading around $2.819/MMBtu on ICE, up 26 cents from Friday.

NI Hub day-ahead on-peak was framed in the low $30s/MWh on ICE, about $4 below Friday's day-ahead price.

Farther east, AD Hub day-ahead on-peak traded in the mid-$30s/MWh for Tuesday delivery, down nearly $3.

West of the MISO footprint, Southwest Power Pool predicted peak demand of 29,877 MW at 8 am Monday and 28,512 MW at 7 pm Tuesday.

Wind generation in the SPP footprint is expected at 3,579 MW at 8 am Monday, and at 8,758 MW at 7 pm Tuesday.

The SPP generation mix as of 3:30 pm CST Monday was 48.1% coal, 19.1% natural gas and 24.4% wind.

In the forward power markets, December prices were flat to higher as NYMEX prompt gas futures settled 10.7 cents higher near $2.950/MMBtu.

Indiana Hub on-peak December was framed in the mid-$30s/MWh.AD Hub on-peak December traded in the mid-$30s/MWh, while NI

Hub on-peak December was framed in the low $30s/MWh.

PJM/MISO POWER MARKETS




SOUTHEAST POWER MARKETS

NEWs / PRICING COMMENTARY / MARkET FuNdAMENTAls

soutHeast & central Day-aHeaD power prices ($/Mwh)


On-PeakMISO Texas Hub IMTXM00 31.53 11504 12.34 -1.36 0.36 1.2 28.88 20.80 36.41 28.12 29.71 -1.59 -5.4MISO Louisiana IMLAM00 34.09 12730 15.34 1.95 -1.95 -5.4 30.30 22.34 40.24 29.60 25.62 3.98 15.5SPP North Hub ISNOM00 21.03 7613 1.69 -12.12 -1.46 -6.5 20.72 16.75 34.99 24.34 18.71 5.63 30.1SPP South Hub ISSOM00 24.91 9677 6.89 -5.98 -3.28 -11.6 25.65 20.54 32.03 26.09 23.92 2.17 9.1ERCOT Houston Hub IERHM00 29.36 10648 10.06 -3.73 6.37 27.7 22.69 16.46 29.92 23.72 22.39 1.33 5.9ERCOT North Hub IERNM00 19.96 7456 1.22 -12.16 -1.00 -4.8 19.97 16.04 26.12 20.98 21.90 -0.92 -4.2ERCOT South Hub IERSM00 24.68 9182 5.86 -7.57 2.12 9.4 22.37 16.40 28.10 22.92 22.47 0.45 2.0ERCOT West Hub IERWM00 20.82 8001 2.60 -10.41 -0.35 -1.7 20.01 16.11 26.67 21.16 21.32 -0.16 -0.8

Off-PeakMISO Texas Hub IMTXP00 24.65 9503 6.49 -6.48 0.64 2.7 21.62 16.59 24.65 20.44 19.54 0.90 4.6MISO Louisiana IMLAP00 23.75 9172 5.62 -7.32 -0.90 -3.7 21.90 17.54 24.65 20.80 19.73 1.07 5.4SPP North Hub ISNOP00 12.41 4827 -5.59 -18.44 -5.05 -28.9 13.47 7.14 21.21 15.43 12.38 3.05 24.6SPP South Hub ISSOP00 22.56 9452 5.85 -6.08 0.10 0.4 19.54 14.37 24.22 20.19 18.47 1.72 9.3ERCOT Houston Hub IERHP00 10.78 4156 -7.38 -20.35 -3.34 -23.7 13.31 8.85 17.51 13.83 14.21 -0.38 -2.7ERCOT North Hub IERNP00 10.45 4076 -7.50 -20.32 -2.96 -22.1 12.57 7.05 17.01 13.29 13.81 -0.52 -3.8ERCOT South Hub IERSP00 10.79 4242 -7.02 -19.73 -3.81 -26.1 13.23 8.45 17.75 13.80 14.19 -0.39 -2.7ERCOT West Hub IERWP00 10.50 4423 -6.12 -17.99 -3.00 -22.2 12.42 6.23 17.08 13.19 12.77 0.42 3.3

ERCOT AVG. DAY-AHEAD/REAL-TIME PEAK PRICE SPREAD

Source: Platts

($/MWh)

-30

-20

-10

0

10


Houston HubSouth Hub

West HubNorth Hub

ERCOT PLATTS M2MS FORWARD CURVE: ON-PEAK

Source: Platts

($/MWh)

20

30

40

50

60

70

80


ERCOT - HoustonERCOT - West

ERCOT - SouthERCOT - North

ERCOT PLATTS M2MS LOCATIONAL SPREADS: ON-PEAK

Source: Platts

($/MWh)

-4

-2

0

2

4

6

8


North Hub/West HubNorth Hub/South HubHouston Hub/South HubHouston Hub/North Hub

eRCOt dailies rise on stronger gas, less windElectric Reliability Council of Texas day-ahead dailies were higher Monday on stronger gas and lower wind generation.

ERCOT North Hub day-ahead on-peak climbed around $1.25 to the high $10s/MWh for Tuesday delivery on the Intercontinental Exchange. Next-day real-time on-peak climbed around $1.50 to the low $20s/MWh, with 550 MW changing hands.

Both balance-of-the-week and next-week real-time on-peak bid/offer midpoints were at the low $20s/MWh.

High temperatures across Texas are forecast at 73-76 degrees Tuesday, while Monday's are forecast at 71-73 degrees.

ERCOT forecast peakload was expected at around 38,575 MW Monday and 39,950 MW Tuesday.

Wind penetration during peakload is expected to drop from 11,400 MW Monday to 9,075 MW Tuesday.

Gas power burn demand across Texas is expected to rise from 3.70 Bcf/d Monday to 3.89 Bcf/d Tuesday, according to Platts Analytics' Bentek Energy.

Spot natural gas at Houston Ship Channel for Tuesday delivery jumped 27.7 cents to $2.817/MMBtu on ICE.

In the Southeast, day-ahead markets were trending lower despite the rising spot natural gas prices across the region.

Spot gas at Florida Gas Transmission Zone-3 advanced 19 cents to $2.760/MMBtu on ICE.

High temperatures in Atlanta are expected to rise from 61 degrees on Monday to 63 degrees Tuesday.

On ICE, GTC day-ahead on-peak traded at the high $20s/MWh, down from the prior assessment of $30.50/MWh.

In the term markets, ERCOT North Hub contracts were higher Monday as the NYMEX natural gas futures strip strengthened on the revised eight- to 14-day weather forecast by National Weather Service, showing below-average temperatures for Western areas.

On ICE, ERCOT North Hub December jumped around $1 to the mid-$20s/MWh as the on-peak heat rate was bid at 8.40 MMBtu/MWh and offered at 8.90 MMBtu/MWh.

In 2017 action, the North Hub July-August on-peak package advanced about $1.75 to the low $50s/MWh as the on-peak heat rate was bid at 16.10 MMBtu/MWh and offered at 17 MMBtu/MWh.




WEST POWER MARKETS


western Day-aHeaD power prices ($/Mwh)


On-Peak

NP15 ICNGM00 36.39 11068 13.38 -3.06 4.68 14.8 32.32 23.59 36.53 31.88 30.61 1.27 4.1SP15 ICSGM00 34.33 12284 14.77 0.79 6.91 25.2 29.28 20.93 37.48 29.73 29.81 -0.08 -0.3ZP26 ICZGM00 34.70 12416 15.14 1.16 6.86 24.6 29.31 22.49 36.16 29.55 29.31 0.24 0.8COB WEABE20 25.00 9225 6.03 -7.52 5.75 29.9 21.21 18.75 25.00 21.67 24.07 -2.40 -10.0MEAD AAMBW20 21.75 7782 2.19 -11.79 1.75 8.8 20.54 19.50 24.50 21.49 24.10 -2.61 -10.8MID-C WEABF20 20.20 7868 2.23 -10.61 3.10 18.1 18.79 15.11 21.85 18.40 21.18 -2.78 -13.1Palo Verde WEACC20 19.00 6992 -0.02 -13.61 0.75 4.1 17.82 17.07 23.50 19.60 22.71 -3.11 -13.7

Off-Peak

NP15 ICNGP00 26.61 9020 5.96 -8.79 4.95 22.9 25.00 20.71 29.36 24.40 27.02 -2.62 -9.7SP15 ICSGP00 25.74 10515 8.60 -3.64 4.82 23.0 24.05 20.59 27.64 23.75 26.97 -3.22 -11.9ZP26 ICZGP00 25.62 10465 8.48 -3.76 4.83 23.2 23.97 20.27 27.75 23.63 26.60 -2.97 -11.2COB WEACJ20 20.00 7380 1.03 -12.52 1.75 9.6 17.36 15.00 20.00 16.77 20.87 -4.10 -19.6MEAD AAMBQ20 19.00 6798 -0.56 -14.54 2.00 11.8 18.21 17.00 23.50 18.52 21.30 -2.78 -13.1MID-C WEACL20 15.94 6208 -2.03 -14.87 1.67 11.7 14.56 10.13 15.94 13.49 19.80 -6.31 -31.9Palo Verde WEACT20 17.81 6554 -1.21 -14.80 1.31 7.9 16.93 16.50 22.25 17.88 20.58 -2.70 -13.1

CAISO AVG. DAY-AHEAD/REAL-TIME PEAK PRICE SPREAD

Source: Platts

($/MWh)

-80

-60

-40

-20

0

20


NP15 SP15 ZP26

WESTERN PLATTS M2MS FORWARD CURVE: ON-PEAK

Source: Platts

($/MWh)

10

20

30

40

50


SP15 NP15Mid-C Palo Verde

WESTERN PLATTS M2MS LOCATIONAL SPREADS: ON-PEAK

Source: Platts

($/MWh)

-6

0

6

12

18


SP15/Palo Verde SP15/NP15 SP15/Mid-C

western dailies, forwards rally on colder weatherWestern power dailies and forward packages strengthened across the board Monday, as colder weather across the region drove up gas prices.

SP15 on-peak and off-peak day-ahead ended their decent, with each rising more than $3/MWh to $32.50/MWh and $24/MWh, respectively, for Tuesday-Wednesday delivery on the Intercontinental Exchange.

Southern California Gas city-gates day-ahead rose 30 cents Monday to about $3/MMBtu on weather forecasts predicting below-average temperatures across California.

Sources familiar with Western gas markets attributed stronger power dailies to this strengthening gas.

The Northwest saw similar price strengthening, with Mid-Columbia on-peak day-ahead rising over $2.75/MWh against Monday's index to roughly $19.75/MWh, for Tuesday-Wednesday delivery. Off-peak gained slightly less, rising about $1.75/MWh to $16/MWh.

Colder weather has also driven gains in local day-ahead gas at Sumas-Huntington, which rose 34 cents to just above $2.55/MMBtu.

The Pacific Northwest is expected to continue to see rain through Friday, according to the National Oceanic and Atmospheric Administration. NOAA predicts rain moving eastward starting Monday and continuing through the week, dropping up to 1.5 inches of rain on the coast Thursday alone.Meanwhile, the 0.25 to 1 inch of rain the region saw Saturday-Monday caused hydro generation to surge to 222 GWh/d Sunday, its highest level since June 7, according to the BPA.

Relatedly, NOAA forecasts that pool elevation levels at the Grand Coulee Dam on the Columbia River will fall over half a foot from Monday to Friday despite the expectation of rain.

Southwest power dailies moved similarily, with Palo Verde day-ahead for delivery Tuesday-Wednesday gaining just below 75 cents to slightly above $19/MWh. Off-peak day-ahead for delivery Tuesday-Wednesday also rose, strengthening nearly $1.25 to $17.75/MWh.

NYMEX December gas futures continued their rally, up 10.7 cents to $2.95/MMBtu, as traders reacted to colder weather encompassing much of the northern tier of the nation for the week ahead.

Mid-Columbia on-peak December gained nearly $1.50/MWh to $28.50/MWh, SP15 on-peak December rose nearly $1.75/MWh to $38.25/MWh, and Palo Verde on-peak December gained around 75 cents/MWh to nearly $27/MWh.




Bilaterals


soutHeast & central Day-aHeaD bilateral inDexes ($/Mwh)


On-Peak

Florida AAMAV20 28.00 10163 8.71 -5.06 1.50 5.7 24.14 23.00 34.25 26.81 30.26 -3.45 -11.4GTC, Into WAMCJ20 27.50 9964 8.18 -5.62 -3.00 -9.8 24.54 23.00 34.25 26.56 27.14 -0.58 -2.1Southern, Into AAMBJ20 27.25 9873 7.93 -5.87 1.25 4.8 23.32 21.25 33.75 25.22 25.51 -0.29 -1.1TVA, Into WEBAB20 29.75 10644 10.18 -3.79 1.00 3.5 25.82 23.50 35.25 27.22 26.28 0.94 3.6VACAR AAMCI20 28.75 9897 8.42 -6.11 -0.25 -0.9 25.11 23.25 34.00 26.69 27.41 -0.72 -2.6

Off-Peak

Florida AAMAO20 25.50 9256 6.22 -7.56 1.25 5.2 22.89 18.50 26.00 22.32 19.13 3.20 16.7GTC, Into WAMCC20 23.25 8424 3.93 -9.87 1.25 5.7 20.82 15.75 23.25 19.93 18.38 1.55 8.4Southern, Into AAMBC20 22.25 8062 2.93 -10.87 1.25 6.0 19.57 15.00 22.50 18.84 16.09 2.75 17.1TVA, Into AAJER20 23.50 8408 3.94 -10.04 1.75 8.0 20.71 16.50 23.50 19.88 17.57 2.31 13.1VACAR AAMCB20 24.00 8262 3.67 -10.86 1.75 7.9 20.86 16.50 24.00 20.13 18.27 1.86 10.2

western Day-aHeaD bilateral inDexes ($/Mwh)


On-Peak

Mid-C WEABF20 20.20 – – – 3.10 18.1 19.25 15.11 21.85 18.49 21.18 -2.69 -12.7John Day WEAHF20 21.25 – – – 3.25 18.1 20.18 16.00 22.75 19.46 22.19 -2.73 -12.3COB WEABE20 25.00 – – – 5.75 29.9 21.64 18.75 25.00 21.84 24.07 -2.23 -9.3NOB WEAIF20 22.75 – – – 2.75 13.8 21.86 18.50 24.00 20.98 24.09 -3.12 -12.9Palo Verde WEACC20 19.00 – – – 0.75 4.1 17.64 17.07 23.50 19.57 22.71 -3.14 -13.8Mona AARLQ20 22.00 – – – 2.75 14.3 20.21 19.25 23.75 20.68 23.26 -2.59 -11.1Four Corners WEABI20 19.50 – – – 0.00 0.0 19.46 18.50 23.75 20.14 22.85 -2.72 -11.9Pinnacle Peak WEAKF20 20.25 – – – 0.75 3.8 18.54 17.75 25.50 20.05 23.21 -3.16 -13.6Westwing WEAJF20 19.25 – – – 0.75 4.1 17.39 14.00 24.25 19.89 23.27 -3.38 -14.5MEAD AAMBW20 21.75 – – – 1.75 8.8 20.50 19.50 24.50 21.50 24.10 -2.60 -10.8

Off-Peak

Mid-C WEACL20 15.94 – – – 1.67 11.7 15.01 10.13 15.94 13.60 19.80 -6.20 -31.3John Day WEAHL20 16.00 – – – 0.75 4.9 15.86 11.25 16.75 14.50 20.80 -6.30 -30.3COB WEACJ20 20.00 – – – 1.75 9.6 18.00 15.00 20.00 16.91 20.87 -3.95 -19.0NOB WEAIL20 17.25 – – – 0.50 3.0 17.36 13.00 18.50 16.20 21.36 -5.16 -24.2Palo Verde WEACT20 17.81 – – – 1.31 7.9 17.12 16.50 22.25 17.88 20.58 -2.71 -13.1Mona AARLO20 21.00 – – – 3.25 18.3 18.54 16.50 21.00 17.97 21.27 -3.30 -15.5Four Corners WEACR20 17.50 – – – 0.00 0.0 17.75 16.00 20.00 17.54 20.63 -3.09 -15.0Pinnacle Peak WEAKL20 18.00 – – – 1.25 7.46 17.46 16.75 20.00 18.03 20.92 -2.88 -13.8Westwing WEAJL20 18.25 – – – 1.25 7.35 17.18 16.25 22.50 18.27 21.10 -2.83 -13.4MEAD AAMBQ20 19.00 – – – 2.00 11.76 18.39 17.00 23.50 18.54 21.30 -2.76 -12.9

Note: Western bilateral indexes reflect Tuesday-Wednesday delivery.

western near-terM bilateral MarKets ($/Mwh)

Package trade date Range

Mid-c

Bal-month 11/21 22.25-22.75Bal-month 11/18 15.50-16.00Bal-month 11/17 20.75-21.25Bal-month 11/16 21.00-21.50Bal-month 11/15 20.75-21.25Bal-month (off-peak) 11/21 17.25-17.75Bal-month (off-peak) 11/18 15.50-16.00Bal-month (off-peak) 11/15 17.00-17.50




platts M2Ms ForwarD curve, nov 21 ($/Mwh)Prompt month: dec 16

On-peak Off-peak On-peak Off-peak

Northeast

Mass Hub 39.65 30.55

N.Y. Zone G 38.75 28.20

N.Y. Zone J 40.10 29.15

N.Y. Zone A 32.85 20.35

Ontario* 18.75 10.55

*Ontario prices are in Canadian dollars

pJM & Miso

PJM West 35.65 28.60

AD Hub 33.65 27.20

NI Hub 32.05 23.90

Indiana Hub 34.75 26.15

southeast & Central

Southern Into 32.60 26.00

ERCOT North 26.20 20.20

ERCOT Houston 26.95 19.90

ERCOT West 24.20 17.60

ERCOT South 29.45 19.30

western

Mid-C 28.55 22.55

Palo Verde 26.90 22.75

Mead 28.85 24.15

NP15 38.80 31.15

SP15 38.05 30.60

iso Day-aHeaD lMp breaKDown For nov 22 ($/Mwh) avg Marginal avg MarginalHub/Zone average cong loss change $/Mo heat rate average cong loss change $/Mo heat rate

Northeast

On-peak

ISONE Internal Hub 36.29 0.00 0.25 4.76 25.12 9654

ISONE Connecticut 35.85 0.00 -0.19 4.61 25.02 10193

ISONE NE Mass-Boston 36.43 0.00 0.39 4.72 25.97 9691

NYISO Capital Zone 29.88 -0.54 2.06 0.44 24.92 9990

NYISO Hudson Valley Zone 33.43 -2.83 3.32 -2.05 26.86 10715

NYISO N.Y.C. Zone 34.34 -3.32 3.74 -2.54 27.57 11006

NYISO West Zone 29.40 -1.10 1.03 -1.22 22.79 11219

Off-Peak

ISONE Internal Hub 33.06 0.01 0.23 9.58 18.68 10048

ISONE Connecticut 32.53 0.01 -0.29 9.40 18.44 10358

ISONE NE Mass-Boston 33.26 0.01 0.44 9.55 18.88 10110

NYISO Capital Zone 23.34 -4.47 1.36 -1.10 17.78 8797

NYISO Hudson Valley Zone 22.30 -3.03 1.76 -0.87 17.28 8264

NYISO N.Y.C. Zone 22.47 -3.04 1.92 -0.89 17.46 8325

NYISO West Zone 18.27 -0.49 0.28 -0.20 14.11 7710

pJM & Miso

On-peak

PJM AEP-Dayton Hub 30.43 0.47 -0.58 -2.36 28.74 11520

PJM Dominion Hub 31.94 1.22 0.17 -2.83 31.40 11595

PJM Eastern Hub 29.35 -2.18 0.98 -0.68 24.11 10885

PJM Northern Illinois Hub 29.61 0.37 -1.31 -1.85 27.59 10641

PJM Western Hub 31.66 0.91 0.20 -2.98 29.47 12873

MISO Indiana Hub 35.20 4.16 0.54 -2.96 30.83 13879

MISO Minnesota Hub 24.24 -4.14 -2.12 -1.03 21.80 9086

MISO Louisiana Hub 34.09 3.35 0.24 -1.95 29.60 12730

MISO Texas Hub 31.53 1.00 0.03 0.36 28.12 11504

Off-Peak

PJM AEP-Dayton Hub 26.14 0.63 -0.35 -0.54 22.73 10641

PJM Dominion Hub 29.02 2.92 0.24 -0.51 24.73 11258

PJM Eastern Hub 21.78 -4.79 0.71 2.10 18.09 9006

PJM Northern Illinois Hub 24.21 -0.52 -1.14 -0.87 20.21 9355

PJM Western Hub 27.45 1.30 0.30 -0.55 23.24 12046

MISO Indiana Hub 24.01 1.43 0.59 -0.44 21.60 9972

MISO Minnesota Hub 14.86 -5.66 -1.48 -3.87 13.52 5930

MISO Louisiana Hub 23.75 1.66 0.09 -0.90 20.80 9172

MISO Texas Hub 24.65 2.65 0.01 0.64 20.44 9503

southeast & Central

On-peak

SPP North Hub 21.03 -1.65 -0.36 -1.46 24.34 7613

SPP South Hub 24.91 2.09 -0.21 -3.28 26.09 9677

ERCOT Houston Hub 29.36 – – 6.37 23.72 10648

ERCOT North Hub 19.96 – – -1.00 20.98 7456

ERCOT South Hub 24.68 – – 2.12 22.92 9182

ERCOT West Hub 20.82 – – -0.35 21.16 8001

Off-Peak

SPP North Hub 12.41 -2.76 -0.45 -5.05 15.43 4827

SPP South Hub 22.56 7.08 -0.14 0.10 20.19 9452

ERCOT Houston Hub 10.78 – – -3.34 13.83 4156

ERCOT North Hub 10.45 – – -2.96 13.29 4076

ERCOT South Hub 10.79 – – -3.81 13.80 4242

ERCOT West Hub 10.50 – – -3.00 13.19 4423

western

On-peak

CAISO NP15 Gen Hub 36.39 -0.08 -0.08 4.68 31.88 11068

CAISO SP15 Gen Hub 34.33 -0.72 -1.49 6.91 29.73 12284

CAISO ZP26 Gen Hub 34.70 0.00 -1.84 6.86 29.55 12416

Off-Peak

CAISO NP15 Gen Hub 26.61 0.00 -0.04 4.95 24.40 9020

CAISO SP15 Gen Hub 25.74 0.00 -0.91 4.82 23.75 10515

CAISO ZP26 Gen Hub 25.62 0.00 -1.03 4.83 23.63 10465

MEGAWATT DAILY NEWS / PRICING COMMENTARY / MARKET FUNDAMENTALSTUESDAY, NOVEMBER 22, 2016


NORTHEAST POWER MARKETS

NYISO SUPPLY MIX (GWh/d)Daily change Season Season average

Category 16-Nov 17-Nov 18-Nov 19-Nov 20-Nov % Share Chg % Chg Min Max 2016 2015 Chg % Chg

Total Generation 342.39 338.06 325.08 318.58 341.52 85% 22.94 7.0% 296.99 526.39 357.33 379.9 -22.57 -6.0%

Gas 104.9 106.75 113.29 101 102.13 25% 1.13 1.0% 70.03 255.76 126.23 152.98 -26.75 -17.0%

Coal 10.29 9.99 9.99 8.46 16.55 4% 8.09 96.0% 2.02 19.07 8.99 13.17 -4.18 -32.0%

Nuclear 127.47 127.47 127.47 127.56 127.56 32% 0 0.0% 120.31 132.34 129.12 128.24 0.88 1.0%

Other 159.19 156.18 146.13 135.79 155.88 39% 20.09 15.0% 107.55 199.75 151.61 124.29 27.32 22.0%

ISONE SUPPLY MIX (GWh/d)Daily change Season Season average


Total Generation 272.61 271.64 267.61 248.13 254.34 84% 6.21 3.0% 238.5 386.59 275.77 282.34 -6.57 -2.0%

Gas 93.43 94.68 91.21 78.48 94.98 31% 16.5 21.0% 69.55 175.8 100.52 143.99 -43.47 -30.0%

Nuclear 97.8 97.8 97.8 97.8 97.8 32% 0 0.0% 79.06 100.2 93.64 71.4 22.24 31.0%

Coal 17.18 17.15 16.95 16.16 17.28 6% 1.12 7.0% 5.85 39.4 18.52 10.43 8.09 78.0%

Wind 10.13 7.67 5.43 3.6 10.2 3% 6.6 183.0% 0.97 20.06 6.5 6.7 -0.2 -3.0%

Other 99.66 100.96 101.69 94.21 82.07 27% -12.14 -13.0% 54.44 147.86 101.17 96.84 4.33 4.0%

ISONE-NYISO INTERTIE TRANSMISSION E-W

ISONE & NYISO LOAD PER DEGREE

NYISO TEMPERATURE

ISONE & NYISO NUCLEAR GENERATION OUTAGES

ISONE TEMPERATURE

Source: Platts (Average daily temp 0F)

Source: Platts

NYISO POWER BURN VS. GAS BASIS

Seasons are defined as: Summer (June - August), Fall (September - November), Winter (December - February), and Spring (March - May). Source: Platts

Source: NRC

Source: ISONE

Source: Custom WeatherSource: Custom Weather



PJM/MISO POWER MARKETS

PJM SUPPLY MIX (GWh/d)Daily change Season Season average


Total Generation 1,994.18 1,974.76 1,946.16 1,845.97 1,985.77 100% 139.8 8.0% 1,724.93 2,806.89 2,063.37 1,974.42 88.95 5.0%

Gas 406.45 387.4 387.62 375.4 431.72 22% 56.32 15.0% 330.38 806.36 500.52 480.75 19.77 4.0%

Coal 739.27 750.33 732.69 663.43 715.82 36% 52.39 8.0% 466.53 1,053.64 715.26 665.73 49.53 7.0%

Nuclear 747.37 740.73 764.51 744.2 744.2 38% 0 0.0% 634.82 773.25 699.75 704.51 -4.76 -1.0%

Other 91.53 84.12 46.37 46.56 86.78 4% 40.22 86.0% -86.39 185.71 72.18 116.48 -44.3 -38.0%

MISO SUPPLY MIX (GWh/d)Daily change Season Season average


Total Generation 1,716.57 1,732.58 1,707.59 1,660.81 1,714.63 103% 53.82 3.0% 1,577.22 2,307.97 1,811.51 1,804.57 6.94 0.0%

Gas 358.22 360.4 310.1 301.58 342.34 21% 40.76 14.0% 197.51 562.63 323.33 315.24 8.09 3.0%

Coal 707.23 675.53 616.23 632.29 688.44 41% 56.15 9.0% 495.32 1,102.81 813.15 881.07 -67.92 -8.0%

Nuclear 242.58 239.91 240.66 250.34 251.3 15% 0.96 0.0% 159.39 318.67 241.21 239.11 2.1 1.0%

Wind 171.75 209.25 270.36 210.62 122.75 7% -87.87 -42.0% 33.07 270.36 134.17 129.22 4.95 4.0%

Other 187.26 187.91 215.03 207.8 259.01 16% 51.21 25.0% 175.43 338.55 245.75 188.36 57.39 30.0%

PJM/MISO COAL-VS-GAS $/MWh FUEL COST RATIO

PJM & MISO LOAD PER DEGREE

PJM TEMPERATURE

MISO POWER BURN VS. GAS BASIS

MISO GENERATION MARKET SHARE - GAS VS. WIND

MISO TEMPERATURE

Source: Platts

Source: Platts Source: Platts

(Average daily temp 0F)


Source: Platts




SOUTHEAST POWER MARKETS

ERCOT SUPPLY MIX (GWh/d)Daily change Season Season average


Total Generation 835.67 853.03 830.62 755.4 830.12 100% 74.72 10.0% 731.03 1,257.87 972.14 919.01 53.13 6.0%

Gas 300.38 297.08 285.11 291.44 253.8 31% -37.64 -13.0% 253.8 620.08 425.02 388.03 36.99 10.0%

Coal 312.73 327.95 304.28 281.33 350.06 42% 68.73 24.0% 157.81 424.4 294.33 294.24 0.09 0.0%

Nuclear 123.33 123.33 123.33 122.29 122.29 15% 0 0.0% 90.82 123.33 109.58 94.12 15.46 16.0%

Wind 205.74 302.03 233.63 110.35 225.43 27% 115.08 104.0% 25.99 302.03 135.33 117.59 17.74 15.0%

Other -106.51 -197.36 -115.73 -50 -121.47 -15% -71.47 143.0% -197.36 138.8 7.88 25.02 -17.14 -69.0%

SOUTHEAST COAL-VS-GAS $/MWh FUEL COST RATIO

ERCOT LOAD PER DEGREE

ERCOT TEMPERATURE

ERCOT POWER BURN VS. GAS BASIS

ERCOT GENERATION MARKET SHARE - GAS VS. WIND

SOUTHEAST TEMPERATURE

Source: Platts

Source: PlattsSource: Platts

(Average daily temp °F)


Source: Platts

Source: Custom Weather Source: Custom Weather



SPP POWER MARKETS

SPP GENERATION MIX (GWh/d)Daily change Season Season average


Total Generation 627.38 638.58 646.85 640.81 647.61 -- 6.8 1.0% 50.06 859.06 660.34 646.88 13.46 2.0%

Coal 242.92 230.49 235.7 304.27 289.76 45% -14.51 -5.0% 25.36 464.24 335.42 338.09 -2.67 -1.0%

Natural Gas 152.29 124.14 130.84 176.6 140.09 22% -36.51 -21.0% 11.06 264.1 155.48 129.3 26.18 20.0%

Wind 188.82 240.84 236.59 117.51 176.65 27% 59.14 50.0% 10.98 240.84 127.96 101.59 26.37 26.0%

Nuclear Power 20.99 21 21 21.01 21.02 3% 0.01 0.0% 0 59.22 16.06 61.26 -45.2 -74.0%

Hydro 21.36 21.15 21.73 20.47 19.14 3% -1.33 -6.0% 0.83 32.43 23.68 16.51 7.17 43.0%

Diesel 1.01 0.96 1 0.96 0.96 -- 0 0.0% 0.08 3.8 1.74 0.13 1.61 1238.0%

SPP COAL-VS-GAS $/MWh FUEL COST RATIO

SPP TEMPERATURE

SPP POWER BURN VS. GAS BASIS

SPP GENERATION MARKET SHARE - GAS VS. WINDSPP LOAD PER DEGREE

Source: Platts

Source: Platts Source: Platts

SPP ACTUAL WIND GENERATION VS. FORECAST

(Average daily temp °F)

Seasons are defined as: Summer (June - August), Fall (September - November), Winter (December - February), and Spring (March - May). Source: SPP

Source: Platts

Source: SPPSource: Custom Weather



WEST POWER MARKETS

CAISO GENERATION MIX (GWh/d)Daily change Season Season average


Total Generation 583.73 582.39 575.8 542.08 532.05 -- -10.03 -2.0% 532.05 782.57 628.6 652.51 -23.91 -4.0%

Thermal Power 175.02 194.39 192.91 154.42 155.88 29% 1.46 1.0% 122.34 343.71 222.89 298.26 -75.37 -25.0%

Nuclear Power 54.46 54.6 54.54 54.53 54.48 10% -0.05 0.0% 38.71 54.66 53.3 41.9 11.4 27.0%

Hydro 57.06 60.52 56.37 62.63 64.6 12% 1.97 3.0% 42.56 77.86 58.22 34.04 24.18 71.0%

Power Imports 171.43 174.48 176.36 184.89 193.32 36% 8.43 5.0% 120.76 219.68 175.34 176.43 -1.09 -1.0%

Solar PV 30.55 51.78 52.62 43.41 20.94 4% -22.47 -52.0% 20.94 72.29 55.78 38.47 17.31 45.0%

Solar Thermal 0.06 3.34 3.75 2.46 0 -- -2.46 -100.0% 0 6.92 3.81 3.18 0.63 20.0%

Wind 64.08 11.69 7.59 7.75 10.37 2% 2.62 34.0% 1.76 71.75 27.58 24.02 3.56 15.0%

Bio + Geo 31.07 31.59 31.67 31.98 32.46 6% 0.48 2.0% 28.87 33.95 31.67 36.2 -4.53 -13.0%

BPA GENERATION, LOAD, and TRANSMISSION (GWh/d)Daily change Season Season average


Total Generation 311.31 303.76 317.15 277.88 286.51 -- 8.63 3.0% 40.48 317.15 256.65 257.97 -1.32 -1.0%

Hydro 196.86 212.53 217.5 206.05 222.33 78% 16.28 8.0% 28.96 222.33 156.37 145.76 10.61 7.0%

Thermal Power 68.82 81.35 75.51 65.12 53.31 19% -11.81 -18.0% 8.65 98.93 75.31 85.4 -10.09 -12.0%

Wind power 45.63 9.88 24.14 6.71 10.87 4% 4.16 62.0% 0.34 78.38 24.97 26.81 -1.84 -7.0%

Load 149.82 151.88 157.69 142.8 140.89 -- -1.91 -1.0% 19.94 157.69 132.67 140.51 -7.84 -6.0%

Net Exports 161.2 151.1 159.48 135.1 145.63 -- 10.53 8.0% 20.55 171.94 124.01 117.58 6.43 5.0%

YEAR-TO-DATE WEST POWER BURN

WESTERN NUCLEAR GENERATION OUTAGES

CAISO TEMPERATURE

BPA AC LINE TRANSMISSION FLOWS N-S

BPA DC LINE TRANSMISSION FLOWS N-S

BPA TEMPERATURE

Seasons are defined as: Summer (June - August), Fall (September - November), Winter (December - February), and Spring (March - May). Source: CAISO & BPA

Source: NRC

Source: Platts

Source: BPA

Source: BPA


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