Energy Market Report
Wednesday, January 2, 2002

*See attached pdf file.
__________________________________________________________
Western Pre-Scheduled Firm Electricity Prices($/MWh)
January 2, 2002 for January 3, 2002

Peak(Heavy)
                   Low     Change     High    Change
NW/N. Rockies     22.00     -1.50     24.00    -3.00
Mid-Columbia      22.00     -1.50     24.00    -3.00
COB               23.50     -1.50     25.25    -2.25
N. California     26.00     -0.75     27.50    -2.75
Midway/Sylmar       NA        NA        NA       NA
S. California     26.50     -0.25     28.50    -2.25
Mead              26.75     -0.25     28.00    -2.00
Palo Verde        25.00     -1.00     27.50    -1.75
Inland SW         25.00     -1.00     28.00    -2.00
4-Corners         25.25     -1.75     26.50    -1.50
Central Rockies   22.00     -1.75     37.00    12.75
__________________________________________________________
Off-Peak(Light)
                   Low     Change     High    Change
NW/N. Rockies     18.00     -3.00     19.50    -4.50
Mid-Columbia      18.00     -3.00     19.50    -4.50
COB               18.00     -3.00     19.00    -5.00
N. California     19.50     -2.00     22.50    -2.50
Midway/Sylmar       NA        NA        NA       NA
S. California     19.50     -1.00     23.25    -1.25
Mead              19.00     -1.00     20.50    -3.75
Palo Verde        15.50     -2.50     19.00    -3.00
Inland SW         15.50     -2.50     20.50    -3.75
4-Corners         16.50     -3.50     18.00    -6.25
Central Rockies   18.25      0.25     26.00     3.00
__________________________________________________________
Western Hangover

With one notable exception, peak power prices slackened across the WSCC on
the first day of trading in the New Year.  Mild coastal and southwestern
weather kept a lid on demand at the region's major load centers, while
generation output levels in California strengthened significantly in
comparison to the holiday doldrums.  Combined with the fact that spot gas
prices were weaker than they were on the last full day of trading, peak
power prices fell anywhere from .25 to 3$/MWh across the West on Wednesday.
The only anomaly in the West was the Central Rockies, where prices for peak
goods shot up by as much as 12.75$/MWh, with high end trades going through
at 37$/MWh.  "I'm not sure why it was so expensive here today," responded
one trader to a request for an explanation. "Temperatures are really cold,
and unit outages are up, but other than that, I wouldn't be able to guess."
The low temperature in Denver was a frosty six degrees on Wednesday, though
the five-day forecast called for temperatures to warm into near normal
territory by Sunday.  Meanwhile, on NYMEX, Henry Hub natural gas futures
fell on Wednesday.  The February contract dropped 10.5 cents to settle at
2.465$/mmBtu, while March slid 11.7 cents to close at 2.443$/mmBtu.

Across the Northwest, peak power prices for Thursday delivery softened from
1.5 to 3$/MWh.  Peak goods changed hands from 22 to 24$/MWh.  Temperatures
were mild on Wednesday, and well above average west of the Cascades, with
highs in the low 50s and partly cloudy skies.  East of the Cascades
temperatures were near freezing but still slightly above normal, while the
five-day forecast called for temperatures to heat up slightly through
Sunday.  The latest six-to-ten predicted temperatures near to above normal
from January 8 to 12.  Flow forecasts for Chief Joseph were revised
significantly upward over the long holiday weekend, coming in at 105 kcfs
Thursday and Friday, 75 kcfs Saturday, 60 kcfs Sunday, 110 kcfs Monday, and
105 kcfs Tuesday through next Wednesday.  In unit news, Montana coal-burner
Colstrip #4 (740 MW) returned to the grid Tuesday night after making
unplanned repairs.

As weather too warm to trigger heating demand lingered in the Golden State
and generation became healthier, power prices for Thursday delivery weakened
in the first trading session of 2002.  In a generally quiet, low-offer day,
market players reported trading at NP15 was especially light, as a soft spot
market in the Northwest pulled it down.  "The market had a cautious tenor
today, but besides the new calendar there wasn't a particular reason for
 it," mentioned one undisturbed California marketer.  Peak goods at SP15
changed hands between 26.5 and 28.5$/MWh, with most deals done from 27 to
27.5$/MWh.  Light load pieces traded in a wider range from 19.5 to
23.25$/MWh, with unconfirmed trades heard as low as 18$/MWh.  A proposal for
more than 31 miles of new transmission lines in southern California, running
between the SCE grid and San Diego Gas & Electric, moved forward on
Wednesday.  The new capacity is needed to meet San Diego's swift-approaching
projected power shortfall.  Currently, the U.S. Department of the Interior
is studying the environmental effects of the proposal.  In unit news, a bevy
of returning units boosted generation in California.  Gas-fired Alamitos #6
(480 MW), Alamitos #4 (320 MW), El Segundo #3 (337 MW), and Morro Bay #4
(336 MW) were back in service on December 29, December 31, and the latter
two on January 1, respectively.  New additions to the out of service column
included Moss Landing #7 (739 MW) and Morro Bay #3 (337 MW).  Finally,
Calpine's Sutter Plants (546 MW) tripped off-line December 29, but was back
the following day.  Forecasts for Thursday called for above-normal
temperatures in the middle and northern sections of California, with highs
in the 57-59 degree range and lows around 50 degrees.  Los Angeles expected
highs in the mid-60s.  Little change was expected through the weekend across
the entire state, and the latest six-to-ten predicted above-normal
temperatures from January 8 to 12.

Despite a rash of unit outages, prices for peak goods weakened by up to
2$/MWh in the Southwest on milder weather and falling demand.  Peak pieces
at Palo Verde traded from 25 to 27.5$/MWh.  Temperatures across the region
hovered around normal, though the five-day forecast predicted some slight
cooling through Sunday.  The latest six-to-ten predicted temperatures to
remain near to above normal from January 8 through 12.  On the unit front,
coal unit Mohave #2 (442 MW) tripped off-line on December 27 for unplanned
repairs.  There was no ETR available.  Fellow coal-combustor Cholla #4 (375
MW) came off-line early January 1 for undisclosed reasons and was expected
back in a few days, while Navajo #3 (750 MW) came off line on New Year's Eve
with a tube leak but was back on-line by New Year's Day.  Meanwhile,
Coronado #1 (365 MW) continued to have problems with its main transformer.
It has been off the grid since December 22.

David Ramberg and Jessie Norris
_________________________________________________________

Western Generating Unit Outages

Current                            Begins          Ends          Reason
CAISO units <250/5751 total          NA             NA
planned/unplanned*
Alamitos #3/320/gas               04-Dec-01         ?            planned
Big Creek Project/1020/hydro      09-Dec-01         ?         @752MW,
planned
Cholla #4/375/coal                01-Jan-02         ?           unplanned*
Coronado #1/365/coal              22-Dec-01         ?        main
transformer*
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         ?      @125 MW,
unplanned
Mohave #2/442/coal                29-Dec-01         ?           unplanned*
Morro Bay #3/337/gas              31-Dec-01         ?           unplanned*
Moss Landing #7/739               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
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)

January 2, 2002 for January 3, 2002

Peak (Heavy) in $/MWh
                 Low     Change   High      Change
Into Cinergy    24.00     2.25    30.50      5.50
Western PJM     28.85     4.35    31.00      4.00
Into Entergy    23.25    -0.25    25.25      0.25
Into TVA        24.00     4.10    26.00      5.90
___________________________________________________________
As temperatures plunged and loads climbed in the new year, peak power prices
settled higher across the Eastern Interconnect on Wednesday, breaking the
30$/MWh mark in some places.  "Trading was brisk today, with pricing
following weather and loads up.   Loads were higher than expected, I think,
and some units are still down from the holidays," said one Eastern trader.
"There was a run-up at the end of trading," commented a Midwestern dealer.
NYMEX Henry Hub natural gas futures slipped on Wednesday, with the
front-month contract losing 10.5 cents to close at 2.465$/mmBtu.  March fell
a similar 11.7 cents to end at 2.443$/mmBtu.

Facing a key unit outage and temperatures well below freezing, heavy load
energy costs strengthened in the Mid-Atlantic on Wednesday.  Western PJM
goods changed hands between 28.85 and 31$/MWh, up from Monday trading in the
low 28s.  According to traders, the bulk of transactions went through around
29.5$/MWh, with offers at 31$/MWh accepted late.  In unit news, traders
thought nuke Salem #2 (1,106 MW), down since the weekend, remained out of
service on Wednesday, despite hopes it would be back on-line Tuesday.
However, no official confirmation of the outage was available.  LMPs
fluctuated sharply and remained above 30$/MWh for the first part of the
morning, but were averaging 26.47$/MWh through 15:00 EST.  High temperatures
were expected to stay in the mid-30s on Thursday, with lows in the mid-20s.
Little change was forecast for Friday, and slight warming, with highs
breaking into the 40s, was predicted for the weekend.  The latest six-to-ten
called for normal temperatures from January 8 to 12.

Peak electricity prices rose in the Midwest on Wednesday, as colder weather
drove energy demand up on the first business day after the New Year's
holiday.  Into Cinergy pieces were bought and sold between 24 and 30.5$/MWh,
with the high end reached late in the session, but traders were uncertain as
to why prices jumped.  "New Year, new load," summed up one happy Midwestern
seller.  Cold weather was expected to keep the Midwest firmly locked in its
grip on Thursday, with highs forecast right at freezing and lows in the
mid-teens.  The mercury was expected to rise into the high-30s Saturday.
The most current six-to-ten from the NWS predicted mostly above-normal
temperatures, with normal forecasts for southern ECAR, from January 8 to 12.

After weeks in the price doldrums, day-ahead electricity prices in the
Southeast finally showed some strength on Wednesday, pulled up by the
bullish fundamental of cold weather.  Into Entergy deals were done between
23.25 and 25.25$/MWh, gaining almost 2$/MWh on the high end.  Contrary to
the norm, spot power prices Into TVA carried a premium to the Entergy hub,
with goods trading between 24 and 26$/MWh.  Forecasts called for snow and
cold temperatures across much of the deep South.  Overnight lows in the
mid-20s and highs in the mid-30s were expected on Thursday, with
temperatures expected to remain well below normal through the weekend.  The
latest six-to-ten called for normal and below-normal temperatures from
January 8 to 12.
___________________________________________________________
California ISO Congestion Index in $/MWh

                         Path                 Peak   Off-peak
for 30-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

                         Path                 Peak   Off-peak
for 31-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

                         Path                 Peak   Off-peak
for 01-Jan-02         NW1 to NP15             0.00     0.00
                      NW3 to SP15             0.00     0.00
                      AZ3 to SP15            26.25    11.25
                      LC1 to SP15             0.00     0.00
                      SP15 to NP15            0.00     0.00

                         Path                 Peak   Off-peak
for 02-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

                         Path                 Peak   Off-peak
for 03-Jan-02         NW1 to NP15             0.00     0.26
                      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            22.00    23.50    24.75    25.75    25.75    26.75
February       19.50    21.00    24.25    25.25    24.50    25.50
March          17.00    18.50    23.50    24.50    24.00    25.00
April          16.00    17.50    22.50    23.50    23.00    24.00
Q2 '02         16.00    17.50    26.25    27.25    26.00    27.00
Q3 '02         30.50    32.00    41.50    42.50    40.00    41.00
Q4 '02         25.50    27.00    27.00    28.00    29.00    30.00
Q1 '03         27.00    28.50    26.25    27.25    28.50    29.50
Cal '03        26.00    27.50    31.00    33.00    33.00    34.00

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  28-Dec-01       48.11      47.39      28.22      41.52      3.51
for  29-Dec-01       36.21      35.71      21.07      31.11    -10.41
for  30-Dec-01       34.82      33.62      25.02      30.90     -0.21
for  31-Dec-01       39.55      37.92      20.35      32.47      1.56
for  01-Jan-02       32.90      31.04      21.68      28.02     -4.44



BPA's Offer for 1/04/02 through 1/05/02.

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
        Feb      2.465        -0.105
        Mar      2.443        -0.117



Natural Gas Spot Prices in $/mmBtu

                  Low          High
Sumas             2.15         2.20
So. Cal Border    2.35         2.40
San Juan          2.21         2.26
__________________________________________________________

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