Spot wholesale power on U.S. mid- Atlantic and New England grids rose to six-day highs as lower temperatures boosted demand to run heaters.
Below-normal temperatures across the PJM Interconnection LLC territory, which stretches from New Jersey into North Carolina and Illinois, will persist over the next seven days while a New England cold snap will moderate at the end of this week, according to WSI Corp. in Andover, Massachusetts. Spot prices for natural gas, a fuel used to produce power, gained at some major Northeast and mid-Atlantic hubs yesterday.
PJM’s benchmark Western Hub, which includes prices from Pennsylvania to Washington, climbed $10.21, or 33 percent, to average $40.99 a megawatt-hour from 7 a.m. to 10 a.m. from yesterday’s on-peak average, according to the grid operator. Spot power on the six-state grid from Connecticut to Maine gained $17.91, or 39 percent, to $63.29 a megawatt-hour, ISO New England Inc. data showed. The average prices for both grids were the highest since March 25.
“The weather has been pretty bullish,” said Kyle Cooper, managing partner at IAF Advisors in Houston. “Cooler weather is driving higher natural gas prices. Your incremental electrons still come from natural gas so higher gas spot prices are contributing on the margin to higher power prices.”
The high temperature in Washington today will drop to 53 degrees Fahrenheit (12 Celsius), 9 below normal, after rising to 68 degrees yesterday, 6 above normal, according to AccuWeather Inc. in State College, Pennsylvania. Boston’s high will be 8 below normal at 43 degrees after rising to 62 yesterday, 12 higher than the usual reading.
Electricity usage across PJM has been coming in above yesterday’s forecast. The grid operator predicted peak demand would be 97,097 megawatts at 7:30 a.m. Demand rose as high as 99,461 megawatts 20 minutes later.
The cost of natural gas typically set the price for power across the U.S.
Spot gas at the Algonquin City Gates, which includes delivery to Boston, rose $2.27, or 47 percent, to $7.09 per million British thermal units yesterday on the Intercontinental Exchange, the highest price since March 21. Prices for Transcontinental Gas Pipeline’s Zone 6, which runs from the Virginia-Maryland border to Linden, New Jersey, gained 6.94 cents, or 1.6 percent, to $4.36.
Gas accounted for 50 percent of the generation in New England as of 9:53 a.m., with 31 percent from nuclear and 9 percent each from hydro and renewable sources, data from the grid operator show. Coal generated 1 percent.
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