By: Naureen S. Malik |
Spot wholesale electricity rose for a third day in Texas amid projections that unusually hot weather will boost demand to the highest level in three weeks.
Power consumption on the main state grid operated by the Electric Reliability Council of Texas Inc. will peak at 65,178 megawatts today, the highest since Aug. 8, according to its website. The temperature in Dallas may reach 102 degrees Fahrenheit (39 Celsius), 8 above normal, also the most in three weeks, according to forecaster AccuWeather Inc. in State College, Pennsylvania.
“If any day is going to be interesting pricewise, it could be today,” Beth Garza, deputy independent market monitor for Ercot with Potomac Economics in Austin. “We have loads coming in higher than day-ahead forecasts, we are on a Thursday before a long weekend and we’ve been mild all year.”
Spot prices at Ercot’s North Hub, which includes deliveries to the Dallas-Fort Worth metropolitan area, rose $9.84, or 26 percent, to average $47.34 a megawatt-hour during the hour ended at 3 p.m. local time from the same hour yesterday, grid data compiled by Bloomberg show.
Electricity output from wind turbines was 1,143 megawatts at 3:49 p.m., 17 percent lower than the day-ahead forecast of 1,376 megawatts for the hour, according to Ercot.
Wind generation in Ercot’s territory may slump at times heading into the weekend because of a high pressure weather system over the central third of the U.S. WSI Corp. in Andover, Massachusetts, said. Conditions look favorable for solar generation.
The addition of new transmission lines from wind farms concentrated in West Texas is making the renewable electricity source more accessible to the state’s biggest cities, Garza said. Net generating capacity is 600 megawatts higher this summer than it was a year earlier, which is subduing price gains on the hottest days, she said.
“The loads this year have been marginally higher than last year but we also had some additional resources available to us this year,” Garza said. “We’ve been able to maintain our operating reserves.”
The state has more than 20 gigawatts of the more efficient combined cycle gas plants and prices may not surge until the state needs to use less-efficient generators, she said.
Prices also gained on the PJM Interconnection LLC network, the largest in the U.S. with more than 60 million people in 13 states, as hotter weather drove demand above forecasts. Power on its benchmark Western hub, serving Washington, climbed $31.77, or 87 percent, to $68.51 a megawatt-hour during the hour ended at 4 p.m. Eastern time.
Northeast power prices slumped amid lower demand. New York City electricity tumbled $12.35, or 20 percent, to $50.50 a megawatt-hour as Boston slid $22.41, or 41 percent, to $32.46.
New York on-peak power fetched a premium versus Boston for the first time in three days, rising to $10.83 compared with a discount yesterday of $5.97.
Higher demand also boosted spot prices across California amid lower transmission capacity because fires near Yosemite National Park have reduced access to lower cost hydroelectric power. The San Francisco Public Utilities Commission has spent $783,000 to purchase power on the open market since Aug. 19 to replace power from two of its three hydropower plants, Jean Walsh, a spokeswoman for the commission, said in an e-mail.
Spot power at the NP15 hub, serving northern California, was up $3.41, or 7.4 percent, at $49.44 during the hour ended at 2 p.m. local time.