Spot wholesale electricity across the Eastern U.S. grid operated by PJM Interconnection LLC jumped as freezing weather swept across the region, boosting demand.
Power topped $400 a megawatt-hour in the 13-state grid and rose above $600 in Virginia, compared with prices around $100 estimated yesterday. The low in Charlottesville, Virginia, may drop to 19 degrees Fahrenheit (minus 7 Celsius) today, 8 below the usual reading, according to AccuWeather Inc. in State College, Pennsylvania.
“That’s a big spike for PJM,” said Tom Hahn, vice president of U.S. power derivatives at brokerage ICAP Energy LLC in Durham, North Carolina. “It’s definitely all related to this storm system and it’s coming in a little bit colder than expected.”
Spot electricity at the Dominion Resources Inc. hub in Virginia jumped to $606.66 a megawatt-hour at 10:55 a.m., above the day-ahead price of $75.78 for the hour, PJM data show. Day- ahead prices are determined by the grid the previous day based on estimates for demand and generation capacity. Spot prices can surge when actual demand exceeds the estimates.
The real-time price for on-peak power at the Dominion hub for today climbed $207.35 to $279.21 a megawatt hour as of 11:12 a.m., the highest since May 31, 2011, according to data compiled by Bloomberg.
The benchmark PJM Western hub rose as high as $461.16 at 10:15 a.m., six-times higher than the day-ahead price of $76.71, according to the grid operator. On-peak spot prices at the hub averaged $208.58 at 11:12 a.m., also the highest level since May 31, 2011.
Power consumption across the entire grid was 121,063 megawatts as of 11 a.m., 7.5 percent higher than the day-ahead forecast of 112,147 megawatts for 11:30 a.m.
PJM had expected demand to peak at 117,675 megawatts between 7 a.m. and 8 a.m., but usage climbed to 123,018 megawatts during that hour.
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