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Bloomberg Energy Department

05/29 Bloomberg Daily Power Report

Table

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

                            On-Peak
West Coast                   Index       Change       Low         High
 Mid-Columbia                104.44     +104.44      95.00       110.00
 Ca-Or Border                115.00     +115.00      110.00      115.00
 NP15                        121.85     +121.85      120.00      190.00
 SP15                        116.00     +116.00      109.00      130.00
 Ault Colorado               100.00     +100.00      109.00      130.00
 Mead                        134.50     +134.50      130.00      139.00
 Palo Verde                  127.21     +127.21      110.00      180.00
 Four Corners                120.00     +120.00      110.00      130.00

Mid-Continent
 ECAR                        20.50       +20.50      18.68       23.36
  East                       24.50       +24.50      24.00       25.00
  AEP                        20.30       +20.30      17.50       24.00
  West                       19.00       +19.00      16.00       22.00
  Central                    18.80       +18.80      16.50       24.00
  Cinergy                    18.80       +18.80      16.50       24.00
  South                      19.13       +19.13      18.25       20.50
  North                      23.00       +23.00      22.00       24.00
 Main                        19.77       +19.77      17.25       21.50
  Com-Ed                     19.00       +19.00      16.50       20.00
  Lower                      20.55       +20.55      18.00       23.00
 MAPP                        23.67       +23.67      22.00       27.00
  North                      23.29       +23.29      22.00       27.00
  Lower                      24.05       +24.05      22.00       27.00

Gulf Coast
 SPP                         33.86       +33.86      31.00       36.13
  Northern                   30.71       +30.71      26.00       34.25
 ERCOT                       38.08       +38.08      36.00       39.50
 SERC                        28.38       +28.38      26.85       29.93
  Va Power                   27.00       +27.00      24.00       30.00
  VACAR                      25.83       +25.83      24.00       27.00
  Into TVA                   19.13       +19.13      18.25       20.50
  Out of TVA                 22.12       +22.12      21.21       23.53
  Entergy                    35.08       +35.08      34.50       35.50
  Southern                   31.50       +31.50      28.00       35.00
  Fla/Ga Border              38.00       +38.00      38.00       38.00
 FRCC                        41.00       +41.00      40.00       42.00

East Coast
 NEPOOL                      38.25       +38.25      38.00       38.50
 New York Zone J             51.38       +51.38      50.75       52.00
 New York Zone G             47.50       +47.50      46.50       48.00
 New York Zone A             36.75       +36.75      36.00       37.50
 PJM                         27.95       +27.95      26.25       30.00
  East                       27.95       +27.95      26.25       30.00
  West                       27.95       +27.95      26.25       30.00
  Seller's Choice            27.45       +27.45      25.75       29.50
End Table


Western Power Prices Drop Despite Higher Demand Forecast

     Los Angeles, May 29 (Bloomberg Energy) -- U.S. Western peak
power prices for Wednesday delivery continued lower today,
despite a forecast by the California Independent System Operator
calling for higher electricity demand tomorrow, traders said.
     According to the Cal-ISO, demand in the state is projected
to increase by 16.4 percent tomorrow to 35,119 megawatts, up from
today's 30,166-megawatt estimate.
     Traders said with the potential for strong price spikes in
tomorrow's next-day markets, it was less risky to sell power on a
real-time basis today.
     "We were surprised how depressed the next-day prices were
because the forecast is calling for warm weather pretty much
everywhere," said one western next-day power trader. "With the
next-day markets in the tank, many sellers were taking their
energy into the real-time markets."
     The most severe price declines were seen in the Pacific
Northwest and Rockies next-day markets, where from the Ault,
Colorado, pricing point declined an average of $65 from Friday's
close to $100 a megawatt-hour.
     "We're moving all of our excess energy to other pricing
points such as Mid Columbia, Palo Verde and Four Corners, because
right now, there's very little next day demand in our region,"
one Rockies trader said.
     According to Lexington, Massachusetts-based Weather Services
Corp., projected daily high temperatures in Los Angeles area will
drop by one degree Fahrenheit tomorrow to 73 degrees. In Southern
California, though, hotter weather is expected, with Long Beach
expected to top out at 84 degrees tomorrow, up from today's 78-
degree forecast high.
     Pacific Northwest power pricing at the Mid-Columbia pricing
point declined an average of $46.38 from Friday to a Bloomberg
index of $104.44. Light load power pricing fell $35.86 to an
average $42.00, though trading was thin.
     Traders said that yesterday's $3-$10 real-time pricing in
the West may have carried over into today's next-day market.
     "The next-day market in the Northwest may have been
irrationally priced to the real-time numbers today," said one
Northwest power trader. "It's possible for that to happen."
     Other Northwest traders said that the recent refill at the
Grand Coulee Dam could be seen as a sign that excess power
generation could soon be available once the reservoir is filled
in preparation for winter.
     At last report, the Grand Coulee was at 1,269 feet of water,
or about 98.4 percent of its 1,290 feet maximum water storage
level. On this date in 2000, Grand Coulee was at about 1,244.8
feet of water, or about 96.5 percent of capacity.
     In the Southwest, power pricing declined despite
expectations for hot weather all week. Forecasts for the Phoenix
vicinity call for daily high temperatures to average in the low-
to-mid 100s this week.
     The Bloomberg Palo Verde next-day index price declined an
average of $38.59 to $127.21 amid trades in the $110.00-$180.00
range. Light load Palo Verde power, which began trade at the $35-
$45 level, declined to an average of $23.92, as prices slumped to
$15.00-$18.00 toward the end of daily options expiration.
     "Prices started dropping and then we just didn't do
anything," said one southwest daily utility power trader. "It's
the end of the month and nobody wants to get caught long at this
point."

-Brian Whary


Northeast Spot Power Prices Dip With Low Weather-Related
Demand

     Philadelphia, May 29 (Bloomberg Energy) -- Spot power
prices dropped throughout the Northeast U.S. this morning
amid low weather-related demand and increased generating
capacity, traders said.
     According to Weather Derivatives Corp. of Belton,
Missouri, temperatures in the Northeast will average 5
degrees Fahrenheit below normal over the next seven days,
keeping energy usage for cooling near to below normal
during that period.
     In the Pennsylvania-New Jersey-Maryland
Interconnection, next-day power was assessed $3.30 lower at
a Bloomberg volume-weighted index of $27.95 per megawatt-
hour, the lowest daily index price since Sept. 28, 2000.
     "There's just no support right now in the cash
market," said one PJM-based trader. "You've got risk and
warmer weather helping to prop up the next-week market, but
the dailies are a different story. Who wants to take length
at these prices, when you can just go hourly on an as-
needed basis?"
     Traders said lackluster pool rates, a function of
increased generation, also pulled day-ahead prices lower.
Interconnection data shows locational marginal prices for
the four hours leading up to daily options expiration, or
10 a.m. local time, averaged only $22.37 per megawatt-hour,
with a low and high of $14.00 and $24.84, respectively.
     Nuclear Regulatory Commission data shows the region's
nuclear output at 98 percent of its 13,160-megawatt
capacity, and according to the Interconnection, only 3,049
megawatts are off-line in total.
     Public Service Electric & Gas boosted output at its
1,150-megawatt Salem 1 nuclear reactor to 85 percent this
morning. Company officials told Bloomberg they restarted
the New Jersey-based unit Friday, following an unplanned
unit trip.
     New England day-ahead values also fell with increased
supply and decreased demand. The Bloomberg index price for
peak power delivered Wednesday throughout NEPool was
$39.75, down $6.45 from Friday.
     New York's Zone J was assessed $3.37 lower at an index
price of $51.38, and Zones G and A were valued at $49.00
and $38.25, respectively.



-Karyn Rispoli


Below-Normal Temperatures Pull Mid-Continent Power Prices Down

     Cincinnati, May 29 (Bloomberg Energy) -- Peak day-ahead
power prices dropped in the Mid-Continent U.S. as below-normal
temperatures were forecast to continue through the week amid a
surplus of generation, traders said.
     Belton, Missouri-based Weather Derivatives Inc. predicted
high temperatures would average almost 6 degrees Fahrenheit below
normal in the north-central U.S. over the next seven days.
     The Bloomberg index price for power delivered Wednesday into
the Cincinnati-based Cinergy Corp. transmission system declined
$4.60 to $18.80 a megawatt-hour, with trades ranging from $22.00
when the market opened down to $16.50 after options expired.
     With today's decline, Cinergy day-ahead power prices reached
a new year-low for the fourth time in five days.
     "We're in for another ho-hum week," an East Central Area
Reliability Council trader said. "There's no weather out there
and maintenance is done, so the market's flooded with megawatts."
     However, ECAR traders said an expected return to normal
temperatures next week boosted prices for power delivered then.
Cinergy parcels for delivery from June 4-8 were offered at
$60.50, up from $58.30 Friday.
     "Next week is up; in fact its really overvalued at this
point," one trader said. "We're going to see warmer weather, but
nothing crazy. I have a feeling that price is just going to get
chipped away at day by day as that realization sets in."
     In the Mid-America Interconnected Network, next-day power
prices also fell with mild weather, marketers said. Peak parcels
into the Chicago-based Commonwealth Edison hub sold $4.21 less on
average at $18.00-$20.00, and power in lower MAIN sold $3.85 less
at $18.00-$23.00.
     MAIN traders said short-term forward prices were also
overvalued at ComEd, with power for delivery from June 4-8
offered at $57.75 there although temperatures weren't expected to
be more than 1 degree above normal for the period.
     Mid-Continent Area Power Pool peak Wednesday power prices
fell an average of $2.04 in the northern half of the region to
$22.00-$27.00 and $2.22 in southern areas to $24.00-$26.00.
     MAPP traders said prices there remained higher than in other
areas with continued demand from the Southwest Power Pool, where
day-ahead peak power sold 71 cents higher on average at $25.50-
$34.25.

-Ken Fahnestock


Southeast Spot Power Prices Mixed on Weather Related Demand

     Atlanta, May 29 (Bloomberg Energy) - U.S. Southeast spot
electricity prices for power delivered Wednesday were mixed
today because of scattered pockets of weather-related demand,
traders said.
     The Bloomberg Southeast regional average price declined
$1.10 a megawatt-hour from Friday to $28.14 amid trades in the
$18.25-$38.00 range.
     Belton, Missouri-based Weather Derivatives Inc., forecast
temperatures in the Southeast would average about 1.9 degrees
Fahrenheit below normal over the next seven days
     The Bloomberg index price for power on the New Orleans-
based Entergy Corp. grid for delivery tomorrow fell 55 cents to
$35.08, with sales between $34.50-$35.50.
     "There is no heat and demand is low, causing prices to
decline,'' said one Southeast trader.
     One Tennessee Valley Authority trader said offers were put
out early today in the low $20s, though later volumes moved at
$18.25-$20.50 as demand was no there. The Bloomberg index for
TVA declined $3.50 to $20.50.
     TVA traders said that prices were falling because
generation from maintenance has returned to the grid and demand
was not there because of mild weather.
     According to Lexington, Massachusetts-based Weather
Services Corp., daily high temperatures in Bristol, Tennessee
were expected to reach 75 degrees Fahrenheit today and 77
degrees tomorrow.
     In Texas, traders said day-ahead firm "UB'' in the
Electric Reliability Council of Texas sold at a Bloomberg index
of $39.50, gaining $2.00 from Friday. Trades were completed in
the forward market for June at $50.00.
     Traders said that prices should remain steady to down this
week, as demand for power will depend on the weather.

-Robert Scalabrino


U.K. Month-Ahead Power Prices Slip as Market Re-adjusts Levels

     London, May 29 (Bloomberg Energy) -- U.K. power prices fell
slipped today amid increased selling as participants sold
contracts deemed overvalued, traders said.
     July baseload traded at 17.75 pounds a megawatt-hour, 20
pence lower than Friday. August traded at 17.85 pounds a megawatt-
hour, 10 pence lower than yesterday.
     "There's a lot of selling pressure. When we have day-ahead
trading at 17.30 pounds, it seems only logical that July should be
lower,'' one trader said.
     July baseload has fallen by around 1.55 pounds since the
start of May as participants traded actively in an effort to find
new price levels under the new trading arrangements, traders said.
     The rest of the market remained little changed as activity
continued to be unusually quiet for the third consecutive day.
     Winter 2001 baseload remained unchanged from Friday following
trades at 21.46 pounds a megawatt-hour.

-Amal Halawi


Nordic Power Falls on Wet Weather as Market Awaits New Signals

     Lysaker, Norway, May 29 (Bloomberg Energy) -- Electricity
prices on the Nordic Power Exchange in Lysaker, Norway, closed
lower in limited trade today after wetter weather forecasts
boosted expectations of increased hydro production, traders said.
     With 168.00 megawatts traded, week 23 closed at 204.25
Norwegian kroner a megawatt-hour, down 1.25 kroner. Week 24 fell
1.75 kroner to 207.75 kroner a megawatt-hour.
     Although weather forecasts were "slightly'' wetter today,
there were no "significant'' market signals to move the market
further down or to boost trade volumes, a trader said.
     A total 1,052 gigawatt-hours generation were exchanged today
down from 2,563 gigawatt-hours last Tuesday.
     Wednesday's system area average price was set in line with
expectations at 211.72 kroner a megawatt-hour, 3.44 kroner higher
than today's price.
     Strong winds in Denmark also contributed to falling prices.
Danish wind generators can produce up to 2,000 megawatts, a trader
said earlier today, adding it's difficult to anticipate output.
     Above-average precipitation was forecast across Scandinavia
over the next 5 days by Weather Services Corp. in the U.S.
Increased rainfall in Southern Norway was likely to contribute to
water tank replenishment, an Oslo-based trader said.
     Winter-2, 2001 fell 1.5 kroner to 220.0 kroner a megawatt
hour after 137.0 megawatts traded.
     "There's no reason for producers to sell power any cheaper
than at winter prices,'' a trader said, adding generators would
keep high prices until next winter, except during the Norwegian
industrial holiday season in the last 3 weeks of July.

-Alejandro Barbajosa
-0- (BES) May/29/2001 19:26 GMT



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