Energy Market Report
Wednesday, December 19, 2001

*See attached pdf file.
__________________________________________________________
Western Pre-Scheduled Firm Electricity Prices($/MWh)
December 19, 2001 for December 20 through 22, 2001

Peak(Heavy)
                   Low     Change     High     Change
NW/N. Rockies     22.50    -4.50      24.00    -4.25
Mid-Columbia      22.50    -4.50      24.00    -4.25
COB               24.50    -5.00      26.00    -4.20
N. California     25.50    -5.00      29.00    -4.00
Midway/Sylmar       NA       NA         NA       NA
S. California     26.00    -4.00      28.50    -3.25
Mead              26.00    -4.00      28.50    -3.50
Palo Verde        26.00    -3.00      31.50     0.75
Inland SW         26.00    -3.00      31.50    -0.50
4-Corners         26.00    -2.00      28.50    -1.50
Central Rockies   24.75    -2.25      28.00    -1.25
__________________________________________________________
Off-Peak(Light)
                   Low     Change     High     Change
NW/N. Rockies     18.50    -3.50     19.75     -3.25
Mid-Columbia      18.50    -3.50     19.75     -3.25
COB               19.00    -4.50     20.00     -4.00
N. California     18.00    -7.00     23.00     -3.50
Midway/Sylmar       NA       NA        NA        NA
S. California     16.00    -4.00     22.00     -2.00
Mead              20.00    -2.00     22.00     -2.00
Palo Verde        15.85    -5.40     21.50     -2.00
Inland SW         15.85    -5.40     22.00     -2.00
4-Corners         18.00    -3.00     22.50      0.00
Central Rockies   16.50    -2.50     19.00     -1.75
_________________________________________________________
FERC Calls for Change

Western peak power prices slid substantially on Wednesday, primarily on
reduced holiday-weekend loads.  Players traded a Thursday-through-Saturday
package on Wednesday to accommodate the Christmas holiday on Tuesday,
December 25.  Players will schedule for Sunday and Monday on Thursday, and
for Tuesday and Wednesday on Friday.  No prescheduling will take place in
the WSCC on Christmas Eve or Christmas Day.  Other factors helping to push
the dailies lower were abundant Northwest hydropower and slightly lower spot
gas prices.  "Between now and the new year many traders will be out of the
office and loads will remain at holiday levels, so we don't expect much
movement or activity until 2002, barring any sustained cold or unit outages,
of course," said one marketer.  While no one can predict the stability of
generating units, forecasters predicted mostly normal and above-normal
temperatures for the entire West through the end of the month.  NYMEX Henry
Hub futures contracts for the front months rose early on end-of-December
forecasts calling for below-normal temperatures in the Midwest and Eastern
U.S., but fell late after another bearish AGA report to finish the day in
negative territory.  January Hub gas shed 4.1 cents to settle at
2.616$/mmBtu, while February fell 6.2 cents to close at 2.65$/mmBtu.
Wednesday's AGA inventory report, delayed more than 20 minutes due to a
computer problem, indicated that U.S. gas stock fell 45 bcf last week, below
most industry estimates, the 158-bcf draw seen a year ago, and the five-year
average decline of 102 bcf.  Total U.S. inventories stood at 3.061 tcf, 948
bcf or 45 percent above last year.  Of the 45 bcf taken out last week, six
were drawn from the Consuming Region West.  Total inventories in the West
were reported at 438 bcf, or 87 percent of full.  According to the National
Resources Conservation Service, precipitation throughout much of the West
was at above-normal levels as of Wednesday.  California, Idaho, Montana,
Nevada, Oregon, Utah and Washington were all sporting Accumulative
Precipitation Averages well above 100 percent of normal.  However, opinions
varied as to whether or not this trend would continue through the winter
months.  In other industry news, FERC on Wednesday raised its wholesale
electricity price cap for the Western states to 108$/MWh, up from the
previous cap of 92$/MWh.  The increase, in effect through April 30, 2002,
was implemented as a precaution in case of strong demand in the Pacific
Northwest this winter.  The cap is tied to the region's natural gas market,
which means it could be recalculated if natural gas prices change
dramatically, FERC said.  Western traders voiced little enthusiasm about the
new order.

With an overabundance of hydro generation and the inclusion of Saturday in
the three-day package, both on peak and off-peak prices across the Golden
State dipped considerably on Wednesday.  "With a rainstorm looming off the
California coast, prices had nowhere to go but down," commented a Western
player.  Peak power at NP15 was heard trading between 25.5 and 29$/MWh,
shedding a whopping 4 and 5$/MWh at the high and low ends, respectively.
According to a CAISO spokesperson, FERC was expected to issue an order on
Wednesday that would, among other things, ask the CAISO to submit by May 1,
2002 a proposal for redesigning the California market, including the
creation of a day-ahead market.  The CAISO day-ahead market would likely be
an extension of their current real-time market, as opposed to a daily
auction such as the one held by the former CalPX.  In other news, FERC
reopened the inquiry into whether or not El Paso Corp., which owns and
operates four pipelines into California, manipulated the California market
during the supply shortages last winter.  Lastly, SCE told the CPUC that
Enron's service to its California customers was deteriorating, and the
utility urged the commission to decide on an alternate supplier if Enron
fails to meet its obligations.  On the generation front, there was an
additional 2,132 MW off-line in the CAISO control area Wednesday, in
comparison to a day ago.  Gas-fired Moss Landing #6 (739MW) was off-line
Wednesday with no available ETR, while Los Medanos (550 MW) was operating at
230MW, or 42% of capacity.  Although an official ETR was unavailable, rumors
circulated that Sutter Plants (546 MW) would not be back until December 22
at the earliest.  SONGS #3 (1,080 MW) was back at full power Wednesday
following a 100 MW reduction for two days due to a mechanical pump problem.
Forecasts called for near-normal temperatures to continue for the rest of
the week in the Golden State, while the latest six-to-ten from the NWS
predicted above-normal temperatures from December 25 to 29.



Patrick O'Neill and Jessie Norris
_________________________________________________________

Western Generating Unit Outages

Current                            Begins          Ends          Reason
CAISO units <250/6501 total          NA             NA
planned/unplanned*
Alamitos #3/320/gas               04-Dec-01         ?            planned
Big Creek Project/1020/hydro      09-Dec-01         ?         @752MW,
planned
El Segundo #3/337/gas             02-Oct-01         ?            unplanned
Encina #5/332/gas                 27-Oct-01         ?            planned
Grand Coulee #19/600/hydro        10-Dec-01       March          repairs
Helms PGP #2/407/hydro            01-Oct-01         ?            planned
Hunter #2/472/coal                11-Dec-01     21-Dec-01        unknown
Hyatt/Thermalito/933/hydro        02-Oct-01         ?      @607 MW,
unplanned
Los Medanos/550/gas               19-Dec-01         ?      @230 MW,
unplanned*
Mohave #1/790/coal                15-Dec-01     20-Dec-01        tube leak
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 19, 2001 for December 20, 2001

Peak (Heavy) in $/MWh
                 Low     Change   High      Change
Into Cinergy    20.00     1.50    22.40      1.40
Western PJM     24.90     1.00    25.15      1.10
Into Entergy    20.50     0.00    22.00      0.25
Into TVA        20.25     1.75    21.50      2.00
___________________________________________________________
With stronger natural gas prices and colder weather finally setting in,
heavy load energy costs gained ground across the Eastern Interconnect on
Wednesday.  "It's cooler and cloudy here so demand picked up, but trade is
thinner since many players are already on vacation," said one Midwestern
player. The AGA weekly report listed a bearish 45-bcf withdrawal for the
previous week, well below expectations.  NYMEX Henry Hub natural gas futures
slipped in very late trade, with the front-month contract losing 4.1 cents
to close at 2.616$/mmBtu.  February edged down 6.2 cents to end at
2.65$/mmBtu.

Peak power prices rose in the Mid-Atlantic on Wednesday, despite a very
healthy generation landscape.  Prices at Western PJM traded in a quarter
spread, up about a buck on both the low and high ends.  Deals were heard in
the 24.9 to 25.15$/MWh range.  The winter contract was trading in a range
from 30.85 to 31.2$/MWh.  Real-time prices were up for the usual morning
peak periods of the day, but after 11:00 EST, they were on a steady decline,
and averaged 17.3$/MWh through 15:00 EST.  In weather news, temperatures
were forecast for the mid-40s on Thursday across the East, a few degrees
above normal for late in December.  Much of the same was predicted for the
next five days, with a slim rise in temperatures by the weekend.  The latest
six-to-ten from the NWS called for below-normal temperatures from December
25 to 29.

Forecasts for Thursday called for slightly cooler temperatures, lending
strength to heavy load electricity prices in the Midwest on Wednesday.  Into
Cinergy pieces changed hands between 20 and 22.4$/MWh, gaining a respectable
1.5$/MWh at both ends.  In political news, FERC approved the MidwestISO as
the East's first RTO, and ordered the competing for-profit entity Alliance
to join it.  FERC has heavily pushed for the formation of RTOs since the
California energy crisis of earlier this year.  FERC hopes the new
organization will boost competition in the region and provide a good example
for the rest of the country.  High temperatures were expected in the 36 to
40 degree range across ECAR on Thursday.  Temperatures were predicted to
linger about five degrees above normal through Sunday.  The latest
six-to-ten from the NWS called for below-normal temperatures from December
25 to 29.

With highs predominantly in the mid-50s through Sunday and little news
otherwise, day-ahead power prices firmed in the Southeast on Wednesday.
Into Entergy goods were bought and sold between 20.5 and 22$/MWh, while Into
TVA deals were heard between 20.25 and 21.5$/MWh, rising about 2 dollars at
both ends.  However, TVA traders said most transactions were completed near
the low end of the range.  Overnight lows for Thursday were expected to be
at or just above freezing across SERC.  The most current six-to-ten called
for below-normal temperatures from December 25 to 29.
___________________________________________________________
California ISO Congestion Index in $/MWh

                         Path                 Peak   Off-peak
for 20-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            28.50    30.50    25.25    26.25    26.50    27.50
January        24.50    26.00    26.50    27.50    28.25    29.25
February       21.50    23.00    25.50    26.50    26.50    27.50
March          18.00    19.50    25.00    26.00    26.50    27.50
Q1 '02         21.00    22.50    25.75    26.75    27.25    28.25
Q2 '02         16.00    17.50    27.75    28.75    27.50    28.50
Q3 '02         33.00    34.50    45.00    46.00    43.00    44.00
Q4 '02         26.50    28.00    29.00    30.00    30.75    31.75
Cal '03        29.50    31.00    33.50    34.50    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  18-Dec-01       48.21      47.62      22.44      40.03     3.75



BPA's Offer for 12/24/01.

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      2.616        -0.041
        Feb      2.650        -0.062



Natural Gas Spot Prices in $/mmBtu

                  Low          High
Sumas             2.48         2.53
So. Cal Border    2.59         2.64
San Juan          2.39         2.44
__________________________________________________________

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