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Power Prices Rise From Boston to Washington Amid Hotter Weather

By: Naureen S. Malik |

Spot wholesale electricity on the Eastern U.S. grids gained as heat and humidity spurred demand.

Temperatures from New England through the mid-Atlantic states will be above-normal over the next week, according to WSI Corp. in Andover, Massachusetts. Power demand on the 13-state grid operated by PJM Interconnection LLC, from New Jersey into North Carolina and Illinois, was 5.7 percent above estimates at 2:35 p.m. Texas prices jumped as supplies fell below forecasts.

Spot electricity at PJM’s Eastern hub, which includes prices from New Jersey and Virginia, gained $20.26, or 32 percent, to average $82.74 a megawatt-hour during the hour ended at 3 p.m. from the same time yesterday, according to grid data compiled by Bloomberg. Yesterday’s day-ahead outlook was $61.63 for the period. The on-peak average was up 7 percent at $66.74 from yesterday’s full-day average.

The premium for Eastern hub on-peak power versus PJM’s benchmark Western hub narrowed to $14.40 from $22.25 yesterday. On-peak hours are Monday through Friday from 7 a.m. to 11 p.m.

PJM and the grid operators for New York and New England expect demand in their regions to top yesterday’s highs. Power consumption on the PJM grid was 120,735 megawatts at 2:35 p.m. versus the day-ahead outlook of 114,196 megawatts.

The temperature in Richmond, Virginia, will climb to 87 degrees Fahrenheit (31 Celsius) today, 3 below normal, versus 84 degrees yesterday, according to AccuWeather Inc. in State College, Pennsylvania. The high in Manhattan today will be 84 degrees, 1 higher than the usual reading.

New England
Boston power increased $33.46, or 85 percent, to $72.92 a megawatt-hour for the hour ended at 3 p.m. from the same time yesterday. The on-peak average was up 10 percent at $42.21 from yesterday’s full-day average. New York power climbed $12.24, or 26 percent, to $59.59 a megawatt-hour. The on-peak average was up 51 percent at $60.63 a megawatt-hour.

The premium of New York power to Boston widened to $18.42 from $1.95 yesterday, the most since June 27.

Spot electricity more than tripled across Texas in early afternoon trading as demand topped forecasts and supplies dropped below yesterday’s outlook, according to data from the Electric Reliability Council of Texas Inc.

Demand on the main state grid was 51,816 megawatts at 1:54 p.m., above the day-ahead outlook of 51,484 megawatts for the hour. Wind generation plunged to 505 megawatts during the hour ended at 1 p.m. Central time, less than half the estimate of 1,040 megawatts for the period, according to Ercot.

Texas Power
The Ercot North hub, which includes the Dallas-Fort Worth metropolitan area, gained $5.36, or 15 percent, to $41.48 a megawatt-hour during the hour ended at 2 p.m. local time from a day earlier. The on-peak average was up 11 percent at $38.68.

Spot prices surged to $780 for five minutes just before 1 p.m. because of “an increase in generation that was needed when wind power output dropped slightly during that period,” Robbie Searcy, a spokeswoman for Ercot in Austin, said in an e-mail. “There were no overall supply issues or significant loss of generation at that time.”

California prices slumped as extreme heat in the northern part of the state abated and demand fell below the grid operator’s forecasts.

Northern California’s NP15 hub slid $2.32, or 6.2 percent, to $34.95 a megawatt-hour for the hour ended at 11 a.m. local time from a day earlier. Southern California’s SP15 hub dropped $10.83, or 21 percent, to $39.90.

Power at SP15 traded at a premium of $1.67 a megawatt-hour to NP15, compared with a discount of 69 cents yesterday.