Energy Market Report
Wednesday, December 26, 2001

*See attached pdf file.
__________________________________________________________
Western Pre-Scheduled Firm Electricity Prices($/MWh)
December 26, 2001 for December 27 through 29, 2001

Peak(Heavy)
                   Low     Change     High    Change
NW/N. Rockies     23.00     3.75      25.00    4.00
Mid-Columbia      23.00     3.75      25.00    4.00
COB               23.25     2.25      27.00    4.00
N. California     27.00     3.00      28.00    4.50
Midway/Sylmar       NA       NA         NA      NA
S. California     27.00     5.00      30.50    5.25
Mead              27.00     6.00      29.00    5.50
Palo Verde        26.00     4.50      30.00    6.25
Inland SW         26.00     5.00      30.00    6.25
4-Corners         26.00     4.50      28.00    5.00
Central Rockies   22.00     2.50      26.00    4.75
__________________________________________________________
Off-Peak(Light)
                   Low     Change     High    Change
NW/N. Rockies     19.00     2.00     21.00     3.00
Mid-Columbia      19.00     2.00     21.00     3.00
COB               18.00     2.50     19.00     2.75
N. California     18.50     3.50     19.50     1.00
Midway/Sylmar       NA       NA        NA       NA
S. California     13.60    -0.40     16.75    -0.25
Mead              16.00     1.75     18.00     3.00
Palo Verde        15.25     2.00     18.25     3.50
Inland SW         15.25     2.00     18.25     3.25
4-Corners         15.00     1.50     18.00     3.50
Central Rockies   12.50     -0.50    14.50     0.50
__________________________________________________________
Day-After Doldrums

Western traders lucky enough to be back in the office the day after
Christmas were greeted by rising day-ahead prices for the Thursday through
Saturday package, largely due to anticipated load increases later in the
week.  Most parties, however, described post-holiday electricity trading on
Wednesday as "thin and illiquid," especially for forward goods.  Some
players also attributed a bit of the daily strength to higher spot gas
prices.  Speaking of gas, NYMEX Henry Hub futures contracts rose sharply in
early Wednesday trade amid forecasts calling for colder weather in the
Midwest and Northeast, but fell late on a rash of profit taking.  January
Hub gas rose to a session high of 3.02$/mmBtu, before profit taking caused
prices to tumble, settling at 2.911$/mmBtu, a rise of 1.6 cents from Friday'
s close.  The January contract expires on Thursday.  February contracts
ended the day 4.8 cents higher at 2.937$/mmBtu.  NYMEX said it would extend
Thursday's session by 15 minutes to 14:45 EST due to the late release of the
AGA inventory report.  Because of the Christmas holiday, the AGA will be
releasing its weekly report at 14:00 PST on Thursday.  Early estimates were
calling for a draw of 50 to 75 bcf last week, well above the 175-bcf draw
seen last year, and the five-year average draw of 140 bcf.  Milder weather
this year has kept withdrawls to a minimum and stocks near historically high
levels.

Some Northwest daily dabblers said that Wednesday trading was relatively
active, "for the day after Christmas," while others said that modest loads
and abundant hydro had most parties well covered for the three-day piece.
Nonetheless, peak power prices for the Thursday through Saturday package
rose as much as 4$/MWh on an anticipated increase in loads later in the
week.  Heavy load energy at the Mid-Columbia traded from 23 to 25$/MWh, with
most trades occurring between 23.5 and 24.5$/MWh.  Light load goods rose by
an average of 2.5$/MWh, with confirmed transactions from 19 to 21$/MWh.
Flow forecasts for Chief Joseph remained healthy, coming in at 105 kcfs
Thursday, 95 kcfs Friday, 75 kcfs Saturday, 60 kcfs Sunday, 85 kcfs New Year
's Eve, 50 kcfs New Year's Day, and 100 kcfs next Wednesday.  The latest
six-to-ten from the NWS was calling for above-normal temperatures in the
region's major load centers for the first week of the New Year.

Peak power prices for the Thursday/Friday/Saturday package firmed up across
the Golden State on Wednesday.  An increase in off-line megawatts, a lack of
liquidity in thin trading, and sharply increased spot-gas prices were the
biggest factors in the price jump, according to California market players.
Peak-hour prices at California hubs increased from 2.25 to 5.25$/MWh for the
three-day package, but off-peak hours did not necessarily reflect the
increase.  Bucking the statewide trend, off-peak pieces at SP-15 traded
slightly lower than on Friday, ranging from 13.6 to 16.75$/MWh.  Players at
the hub cited "getting caught with power on our hands that we had no choice
but to sell."  In the news, on Monday a U.S. Bankruptcy Court approved PG&E
Corp.'s agreement to pay off the $265 million in outstanding power bills to
Calpine Corp.  Starting Monday and continuing through November 2002, PG&E
will make monthly payments of principal and interest to Calpine.  As for
unit news, generation was perhaps the most tumultuous factor in the power
market over the long Christmas weekend.  On Saturday, December 22, there
were 4 new outages, three of which were planned.  Etiwanda #3 and #4 (320 MW
each) came off line on Saturday as planned, as did Duke's 336 MW Morrow Bay
#4.  Helms PGP #3 (404 MW) tripped off line with an unplanned outage but
came back a day later. There were two planned outages on Sunday the 23rd:
Alamitos #4 (320 MW) and Morrow Bay #3 (337 MW), the latter of which came
back on line on Wednesday December 26.  On Christmas Day, Los Medanos (550
MW) was curtailed for the second time in less than a month with an unplanned
outage, and was running at 36% of capacity as of this writing.  The Sutter
Plants (546 MW) were ramping up towards full power, and stood at 525 MW at
11:15am PST Wednesday.

Spot electricity prices in the Southwest displayed the largest gains in the
West on Friday, primarily due to rising spot gas prices, and an expected
increase in loads for later in the week.  Peak power at Palo Verde gained as
much as 6.25$/MWh for the three-day combo, with confirmed trades anywhere
between 26 and 30$/MWh.  Most deals were done on the lower end of that
range, with the highest prices seen late, when a few shorts reportedly
entered the market.  Light load goods at the Southwest hub gained an average
of 2.75$/MWh to trade from 15.25 to 18.25$/MWh.  In unit news, Mohave #1
(790 MW) finally returned to the grid over the long weekend, after coming
down for tube leak repairs back on December 15.  "That must have been one
hell of a leak," joked one marketer.  The five-day outlook for the Phoenix
area called for daytime highs in the mid to upper 60s, with overnight lows
in the mid to low 40s.  "Down here 40s seem pretty cold, and they have been
giving us some pretty healthy morning and evening peaks," said one Southwest
trader.  The latest six-to-ten from the NWS was calling for above-normal
temperatures in Arizona and normal conditions in New Mexico from January 1
through 5.




Patrick O'Neill and David Ramberg
_________________________________________________________

Western Generating Unit Outages

Current                            Begins          Ends          Reason
CAISO units <250/5875 total          NA             NA
planned/unplanned*
Alamitos #3/320/gas               04-Dec-01         ?            planned
Alamitos #4/320/gas               23-Dec-01         ?            planned*
Big Creek Project/1020/hydro      09-Dec-01         ?         @752MW,
planned*
El Segundo #3/337/gas             02-Oct-01         ?            unplanned
Etiwanda #3/320/gas               22-Dec-01         ?            planned*
Etiwanda #4/320/gas               22-Dec-01         ?            planned*
Grand Coulee #19/600/hydro        10-Dec-01       March          repairs
Helms PGP #2/407/hydro            01-Oct-01         ?            planned
Hyatt/Thermalito/933/hydro        02-Oct-01         ?      @607 MW,
unplanned
Los Medanos/550/gas               25-Dec-01         ?      @200 MW,
unplanned*
Morro Bay #4/336/gas              22-Dec-01         ?            planned*
Moss Landing #6/739/gas           19-Dec-01         ?            unplanned
Ormond Beach #2/750/gas           05-Oct-01         ?      @350 MW,
unplanned
Pittsburg #6/317/gas              22-Nov-01         ?            planned
Sutter Plants/546/gas             04-Dec-01         ?            planned

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

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

December 26, 2001 for December 27, 2001

Peak (Heavy) in $/MWh
                 Low     Change   High      Change
Into Cinergy    22.00     0.00    27.00      2.00
Western PJM     26.00     1.50    26.50      1.25
Into Entergy    23.50     1.50    25.50      1.50
Into TVA        24.00     2.00    25.50      3.00
___________________________________________________________
With temperatures across the Eastern Interconnect firmly entrenched in
below-normal territory and increasing numbers of businesses reopening for
the post-Christmas pre-New Year's slack period, day-ahead prices at all
major hubs strengthened over prices seen on Friday.  Nevertheless, many
traders were sitting out the year-end market at home or on vacation, and the
traders manning the daily desks reported few trades at any hubs.  Forecasts
for the entire East called for increased heating demand through the New
Year, though continued healthy generation managed to keep a lid on the
market's high end.  On NYMEX, Henry Hub natural gas contracts nudged up
slightly.  The January contract clung to early gains despite late
profit-taking to close up 1.6 cents at 2.911$/mmBtu, while the February
piece gained 4.8 cents, settling at 2.937$/mmBtu.

Traders at Western PJM reported very light trading their first day back at
work after the Christmas holiday, with prices for Thursday goods fluctuating
slightly between 26 and 26.5$/MWh.  LMPs likewise reflected the quiet
atmosphere on the Eastern seaboard, with power averaging 15.58$/MWh over the
course of the day. The high of 24.2$/MWh was reached between 09:30 and 10:30
EST, where actual load exceeded predictions by a sliver.  Still, prices were
around 1.25-2$/MWh higher than they were on Friday, thanks in large part to
the cooling that has gripped the region.  Temperatures were hovering near
freezing through much of Western PJM, with the five-day forecast calling for
temperatures to remain below normal plus a chance of snow through Sunday
December 30.  The latest six-to-ten echoed the prediction, extending
below-normal temperatures through January 5.  There were no reported unit
outages in PJM on Wednesday.

Temperatures were the leading impulse in ECAR markets on Wednesday, with
highs in the region failing to reach even freezing, and the latest five-day
forecast calling for more of the same plus a chance of snow or snow flurries
from Wednesday through Sunday.  As a result, Into Cinergy pieces traded as
high as 27$/MWh, a two-dollar increase on the high end, but flat on the low
at 22$/MWh.  "With so few businesses opening over the holiday slack-time,
there just wasn't enough demand to push up prices, despite the colder
weather," remarked one trader.  "But," he added, "more businesses will be
opening as the week drags on, and if this kind of weather continues into the
New Year, we could see some real strength in the market."  The latest
six-to-ten proved encouraging for such an outcome, calling for temperatures
to remain below normal through January 5.  There were no new unit outages
reported on Wednesday in ECAR.

SERC was no exception to the general condition of the Eastern markets on
Wednesday:  temperatures were well below normal, in many cases below
freezing at night, and demand was light due to the small number of
businesses open between the two big December holidays.  Prices at Into
Entergy showed modest gains, trading between 23.5 and 25.5$/MWh.  "There
wasn't much going on in Entergy today," commented one off-task trader,
"Prices started out at the high end and came down over the course of the day
as some sellers realized they were stuck and had to unload."  Into TVA
prices likewise strengthened, trading from 24 to 25.5$/MWh on Wednesday.
The five-day forecast predicted temperatures significantly below normal
through Sunday, with snow possible on Thursday and Friday.  The latest
six-to-ten likewise mirrored the rest of the East and called for the
below-normal regime to last through January 5.  There were no new units
reported off-line in SERC on Wednesday.
___________________________________________________________
California ISO Congestion Index in $/MWh

                         Path                 Peak   Off-peak
for 23-Dec-01         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

for 24-Dec-01         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

for 25-Dec-01         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

for 26-Dec-01         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

for 27-Dec-01         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              --      --       --        --      --       --
January        25.50    27.00    28.50    29.50    29.50    30.50
February       22.50    24.00    26.00    27.00    27.50    28.50
March          19.00    20.50    26.00    27.00    27.00    28.00
Q1 '02         21.50    23.00    27.00    28.00    29.00    30.00
Q2 '02         17.00    18.50    29.00    30.00    29.25    30.25
Q3 '02         33.50    35.50    45.50    46.50    43.00    44.00
Q4 '02         28.50    30.00    30.00    31.00    32.00    33.00
Cal '03        31.00    32.50    34.50    35.50    35.50    36.50

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  21-Dec-01       49.10      50.10      35.28      45.60   -24.11
for  22-Dec-01       42.69      41.96      26.83      37.22    -8.38
for  23-Dec-01       40.60      37.24      21.42      32.25    -4.97
for  24-Dec-01       33.06      31.20      15.40      26.26    -6.00
for  25-Dec-01       16.07      15.39      14.84      15.22   -11.04




BPA's Offer for 12/27/01 and 12/29/01.

Hours        Amount          NW delivered        COB/NOB delivered

7-22         100MW           Market Price*          Market Price*

*Market price will be determined at time of request.



NYMEX Henry Hub Gas Futures in $/mmBtu

                 Close        Change
        Jan      2.911         0.016
        Feb      2.937         0.181



Natural Gas Spot Prices in $/mmBtu

                  Low          High
Sumas             2.52         2.57
So. Cal Border    2.75         2.80
San Juan          2.69         2.74
__________________________________________________________

Economic Insight, Inc. - 3004 SW First, Portland, Oregon 97201,
Telephone (503) 222-2425, Internet e-mail emr@econ.com -
Copyright, Economic Insight, Inc. 2001.