What's your assessment of the sudden surge in sparks prices. Electric generation is picking up very rapidly now, up about 4.43% yoy since mid-Jan. Suggests excess utility plant capacity may be history in many areas of the US, and that the gas fired will be used, perhaps a lot? The theory of Weissman (which I have adopted) is that utilities will have to dip into this "marginal" gas fired for their peaking capacity, pretty much all summer, especially during hot spells like now. Last year's late May, and June power generation, was an outlier, a lucky fluke, extremely low usage because of extended perfect weather.
5-15-03: 66,584
5-22-03: 66,214
5-29-03: 68,063
6-5-03: 72,044
6-12-03: 73,485
We just witnessed 73,541 for the week ending 5-15-2004, and it wasn't even hot yet! We are now getting a test of the real picture with this southern hotter weather on hand through month end. In fact this early summer heatwave in the southern tier seems to really be cranking out big increases in power generation (see my prior posts).
Message 20163559
The next several Edison Institute and NG draw releases may offer us a real clue as to what's ahead. If this is the case, are there any reasonably valued utilities left that Wall Street is asleep on? |
