Subject: Energy Market Report - 01/24/02


Energy Market Report
Thursday, January 24, 2002

*See attached pdf file.
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Western Pre-Scheduled Firm Electricity Prices($/MWh)
January 24, 2002 for January 25 and 26, 2002

Peak(Heavy)
                   Low      Change     High     Change
NW/N. Rockies     18.50      0.00     19.75      0.75
Mid-Columbia      18.50      0.00     19.75      0.75
COB               20.75     -0.50     21.50      0.00
N. California     22.25     -0.25     23.00     -1.50
Midway/Sylmar       NA        NA        NA        NA
S. California     22.50     -0.05     23.50     -0.90
Mead              21.00      0.00     23.25      0.25
Palo Verde        20.25      1.25     22.25     -0.75
Inland SW         20.25      1.25     23.25     -0.50
4-Corners         20.25     -1.00     23.00      0.00
Central Rockies   20.00      0.50     21.50      0.50
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Off-Peak(Light)
                   Low      Change     High     Change
NW/N. Rockies     16.50      0.25     17.50      0.75
Mid-Columbia      16.50      0.25     17.50      0.75
COB               17.25      0.75     18.50      1.50
N. California     17.75      1.25     20.50      2.50
Midway/Sylmar       NA        NA        NA        NA
S. California     18.75      2.25     20.50      1.65
Mead              17.50      2.00     19.00      0.00
Palo Verde        14.50      0.50     18.75      2.50
Inland SW         14.50      0.50     19.00      0.00
4-Corners         15.00      0.25     17.75      2.25
Central Rockies   14.50      0.50     16.50      0.50
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The Return of Enron?

While some Western hubs saw spot electricity prices for the Friday/Saturday
package that were higher than those seen for Thursday power, the bulk of
transactions took place at lower levels due to reduced weekend demand.
Light load goods on the other hand were the real movers of the day thanks to
below-normal temperatures, with all Western hubs gaining ground, especially
late in the session.  "There were not a lot of off-peak offers out there
today, and we were trying to pick pieces up in order to displace some of our
more expensive gas units," said one utility trader to explain Thursday's
light load rally.  The Andersen accounting firm came under heavy fire as
former partner David Duncan refused to testify in Congress on the shredding
of documents related to the Enron collapse by invoking his Constitutional
right not to incriminate himself.  "Enron robbed the bank, Arthur Andersen
provided the getaway car and they say you were at the wheel," the
subcommittee chairman, Rep. Jim Greenwood, R-Pa., told Duncan.  Meanwhile,
top Andersen executives said that the destruction of documents being sought
by investigators was wrong and largely the fault of Duncan.  UBS-Warburg
took a step towards restarting the acquired North American energy trading
unit of Enron Corp. on Thursday.  UBS management asked all Enron employees
that had accepted offers to attend an impromptu orientation meeting in
Houston.  "Our goal is to reestablish the business," said UBS spokesman
David Walker.  "The buildup will be measured and focused on customer needs."
UBS has no intention of buying any of Enron's current trading positions,
which are in the process of being liquidated following Enron's December 2
bankruptcy filing.

Heavy load energy costs in the Northwest were as much as 75 cents higher
than levels seen for Thursday, though most deals got done at a discount to
the previous day.  Peak power at the Mid-Columbia ranged from 18.5 to
19.75$/MWh, with the weighted average coming in somewhere around 18.75$/MWh.
Light load electricity at the Mid-C gained an average of 50 cents for the
weekend package, with most players citing cold overnight temperatures as the
catalyst.  Light load energy changed hands from 16.5 to 17.5$/MWh, with
unconfirmed trades heard as high as 18.5$/MWh.  In unit news, Colstrip #3
(700 MW) remained off line for generator repairs, with no available ETR.
According to Weather Derivatives, heating demand in the region was forecast
to be 141 percent of normal through the end of the month, with the strongest
demand expected over the first three days of next week.

Heavy load energy prices softened while light load values appreciated in the
Golden State on Thursday.  "The market seemed unresponsive to factors that
normally affect it today.  Light load was really strong in the south, so
maybe someone got caught short," speculated one California player, while
another trader pointed to upcoming outages in the Southwest.  Peak power
prices at NP15 ranged from 22.25 to 23$/MWh, with shaped pieces heard at
23.5$/MWh.  Light load traded between 17.75 and 20.5$/MWh, running up as the
day progressed.  Similarly, Light load at SP15 traded from 18.75 to
20.5$/MWh, with unconfirmed deals heard as low as 16.5$/MWh early.  In
political news, PG&E will face a critical hearing on Friday in bankruptcy
court.  Judge Montali could decide whether the utility can reform into four
separate companies and if key assets like the Diablo Canyon nukes can be
transferred to one of the proposed companies outside the jurisdiction of the
CPUC.  On the generation front, Alamitos #3 (320 MW) was operating at 240 MW
on Thursday, returning to the grid from an outage that began Monday.
Etiwanda #3 (320 MW) was only operating at 20 megawatts Thursday for planned
maintenance.  Mid-state load centers were expecting high temperatures to
remain in the low-50s on Friday, while highs in the mid-60s were anticipated
in L.A.  Slight cooling was projected for the early part of the new week and
the latest six-to-ten called for below-normal temperatures from January 30
to February 3.

Light load energy costs in the Southwest gained as much as 2.5$/MWh for the
Friday/Saturday package, though some players were at a loss to explain why.
"It's cold here, but not that cold, so I'm not really sure why off-peak
prices gained so much momentum late in today's session," said one
Phoenix-based trader.  Light load goods at Palo Verde were seen as low as
14.5$/MWh first thing in the morning, then soared all the way up to
18.75$/MWh by the end of trading.  Peak power at Palo Verde ranged from
20.25 to 22.25$/MWh, with the bulk of trades taking place between 21.25 and
21.5$/MWh.  In unit news, Utah-based Bonanza (425 MW) and Arizona-based
Cholla #4 (380 MW) were off line Thursday morning, but both had returned by
the afternoon.  Utah-based Huntington #2 (455 MW), however, was down with a
tube leak.  While no ETR was available, sources were expecting a 48 to
72-hour turnaround.  Navajo #3 (750 MW) was experiencing vibration problems
on a PA fan.  The Arizona-based unit was scheduled to come down for 24 hours
of repairs beginning after Friday's evening peak.




Patrick O'Neill and Jessie Norris
_________________________________________________________

Western Generating Unit Outages

Current                            Begins          Ends          Reason
CAISO units <250/6764 total          NA             NA
planned/unplanned*
Alamitos #6/480/gas               20-Jan-02         ?            planned
Colstrip #3/700/coal              11-Jan-02         ?            repairs
Encina #4/303/gas                 12-Jan-02         ?            unplanned
Etiwanda #3/320/gas               24-Jan-02         ?      @20 MW, planned*
Etiwanda #4/320/gas               21-Jan-02         ?            planned
Four Corners #5                   09-Jan-02     14-Mar-02        maintenance
Grand Coulee #19/600/hydro        10-Dec-01       March          repairs
Haynes #6/341/gas                 07-Jan-02         ?            planned
Helms PGP #2/407/hydro            01-Oct-01         ?            planned
Huntington #2/455/coal            24-Jan-02     26-Jan-02       tube leak*
Hyatt/Thermalito/933/hydro        02-Oct-01         ?      @506 MW,
unplanned
Morro Bay #4/336/gas              21-Jan-02         ?            planned
Moss Landing #7/739/gas           29-Dec-01         ?            planned
Ormond Beach #1/725/gas           28-Dec-01         ?            planned
Ormond Beach #2/750/gas           05-Oct-01         ?      @350 MW,
unplanned
Pittsburg #6/317/gas              22-Nov-01         ?            planned
Pittsburg #7/682/gas              21-Jan-02         ?            unplanned
Scattergood #3/445/gas            22-Jan-02         ?            maintenance

Future
Navajo #2/750/coal                02-Feb-02     25-Feb-02        maintenance
Navajo #3/750/coal                25-Jan-02     26-Jan-02        repairs*

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

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

January 24, 2002 for January 25, 2002

Peak (Heavy) in $/MWh
                 Low     Change   High      Change
Into Cinergy    17.50     2.00    18.50      0.60
Western PJM     21.85     0.35    22.75      0.85
Into Entergy    17.00    -0.10    17.70     -0.30
Into TVA        16.60     0.60    17.75      0.25
ERCOT           17.50     0.40    18.20      0.30
___________________________________________________________
Amid forecasts calling for cooler weather on Friday and higher gas values
early in the day, peak power prices strengthened across the Eastern
Interconnect on Thursday.  "The front-month picked up about a buck
everywhere, although it came off a little later, but that was the real news
today," commented one SERC player.  NYMEX Henry Hub natural gas futures were
up early, but fell in late trade.  February eased 2.8 cents to end at
2.048$/mmBtu, while March lost 0.1 cent to close at 2.09$/mmBtu.

Heavy load electricity prices climbed higher in the Mid-Atlantic on
Thursday, on cooler forecasts for Friday.  Western PJM pieces were bought
and sold between 21.85 and 22.75$/MWh.  LMPs spent most of the morning well
above 20$/MWh, but were weaker for most of the afternoon, averaging
21.2$/MWh through 15:00 EST.  Daytime highs for Friday were expected in the
cooler, although still above normal, mid-40s.  However, forecasts through
Monday called for temperatures to continue at least 11 degrees above normal
in the PJM region, and the latest six-to-ten called for above-normal
temperatures from January 30 to February 3.

With the mercury expected to drop throughout the Ohio Valley on Friday and
rumors of a unit shut late Wednesday, heavy load energy costs edged higher
in the Midwest on Thursday.  Into Cinergy day-ahead goods changed hands
between 17.5 and 18.5$/WMh.  "Cinergy opened low, but today it climbed
instead of the slow fade we've seen the last few days.  Prices went above
$18 around 8 am, bounced up and down a bit, but stayed up there," said one
relieved trader.  The February contract was heard trading between 19.7 and
20.25$/MWh, also stronger than a day ago.  According to sources, a Wisconsin
Electric unit shut late Wednesday, but information on which unit, the cause,
or ETR were not available.  Daytime highs for Friday were only expected to
reach the mid-40s, with corresponding overnight lows expected to drop into
the upper-20s.  The cold snap was anticipated to be short-lived, with
weekend and Monday forecasts putting high temperatures right back into the
upper-50s.  The most current six-to-ten predicted mostly above-normal
temperatures, with a normal front moving in from the west, from January 30
to February 3.

With continued bearish fundamentals, peak power prices rose incrementally in
the Southeast and Texas on Thursday.  Into Entergy day-ahead deals were done
from 17 t0 17.7$/MWh, while February traded around 19 to 19.1$/MWh for most
of the day, dropping off a little later to 18.9$/MWh.  Into TVA trades
followed a similar pattern, with peak power for Friday delivery averaging
17$/MWh.  SERC forecasts called for highs to fall into the upper-50s on
Friday, before rebounding into the mid-60s for the weekend and upper-60s for
Monday.  Texas temperatures were expected to linger close to normal through
Saturday, before rising into the mid-70s by Monday.  The up to the minute
six-to-ten predicted above-normal temperatures from January 30 to February
3.
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California ISO Congestion Index in $/MWh

                         Path                 Peak   Off-peak
for 25-Jan-02         NW1 to NP15             0.00     0.00
                      NW3 to SP15             0.00     0.00
                      AZ3 to SP15             0.00     0.00
                      LC1 to SP15             0.00     0.00
                      SP15 to NP15            0.00     0.00



OTC Forward Peak Electricity Contracts in $/MWh

                    Mid-C              PV              SP-15
                Bid      Ask      Bid      Ask      Bid      Ask
BOM            21.00    22.00    23.75    24.75    25.00    26.00
February       18.50    20.00    22.00    23.00    23.75    24.75
March          16.00    17.50    21.50    22.50    22.75    23.75
April          16.50    18.00    22.50    23.50    NA       NA
Q2 '02         16.50    18.00    25.00    26.00    25.00    26.00
Q3 '02         30.00    31.50    38.00    39.00    37.50    38.50
Q4 '02         27.00    28.50    26.75    27.75    28.50    29.50
Q1 '03         26.50    28.00    27.50    28.50    30.00    31.00
Cal '03        29.00    30.50    31.75    32.75    33.50    34.50

Represents the most recent bid/ask spread obtainable
by the Energy Market Report.



Alberta Power Pool Index (C$/MWh)

                    Peak(14)   Peak(16)   Off-Peak    Flat     Change
for  23-Jan-02       42.15      41.51      24.51      36.31     3.03



BPA's Offer for 01/27/02 and 01/28/02.

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

*Market price will be determined at time of request.



NYMEX Henry Hub Gas Futures in $/mmBtu

                 Close        Change
        Feb      2.048        -0.028
        Mar      2.090         0.001



Natural Gas Spot Prices in $/mmBtu

                  Low          High
Sumas             2.01         2.06
So. Cal Border    2.09         2.14
San Juan          1.99         2.04
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Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201,
Telephone (503) 222-2425, Internet e-mail emr@econ.com -
Copyright, Economic Insight, Inc. 2002.