Power Prices Drop on U.S. Grids on Blackout’s 10th Anniversary
Spot wholesale electricity from Boston to Washington slid on the 10th anniversary of a blackout in the eastern U.S. and Canada that left 50 million people without power, as unusually mild weather reduced the need to run air conditioners.
Prices headed lower for a third day on the PJM Interconnection LLC network, the largest U.S. grid, as the forecasts for the lowest daily peak demand in two months. Usage also slumped on the two Northeast grids.
Spot power at benchmark hubs in the Eastern U.S. are hovering near record lows for this time of the year because of limited cooling demand. The blackout in 2003 started in the Midwest and left cities from Detroit to Toronto to New York in the dark.
“Today is the opposite of that, we don’t have nearly the same load,” said Ray DePillo, vice president of power operations and asset management at Public Service Enterprise Group Inc.’s energy resources and trading division in Newark, New Jersey.
“The cause of the blackout was heavy loads across the transmission system causing a line to sag to touch a tree and causing a cascading effect across the system,” he said. “You have no chance of anything like that happening today.”
Prices at PJM’s Western hub, which includes deliveries to Washington, dropped $22.14, or 43 percent, to $29.16 a megawatt-hour during the hour ended at 3 p.m. from the same time yesterday, grid data compiled by Bloomberg showed.
The spot on-peak average, which covers Monday through Friday from 7 a.m. until 11 p.m., was down 34 percent from yesterday’s full-day average at $28.90, the third straight decline in the longest such streak since April 25.
PJM has been cutting its daily demand forecast throughout the day on the 13-state grid, which serves more than 60 million people from New Jersey to North Carolina and Illinois. Power consumption will reach 99,306 megawatts today, the lowest hourly peak for any weekday since June 14. Demand yesterday peaked at 117,910 megawatts.
The high temperature in Washington today may be 78 degrees Fahrenheit (26 Celsius), 9 below normal, while Manhattan’s reading may be 7 lower than the average at 76 degrees, according to AccuWeather Inc. in State College, Pennsylvania.
New York City power dropped for a fourth day, the longest streak of losses since July 12. Spot prices dropped $12.44, or 35 percent, to $22.92 a megawatt-hour during the hour ended at 3 p.m. Boston prices fell for the third time in four days, sliding $3.69, or 13 percent, to $25.42.
The average price for on-peak power for New York traded at a discount of $1.40 a megawatt-hour versus Boston, compared with a premium of $4.19 yesterday.
Spot prices in Dallas dropped as demand on the state’s main grid operated by the Electric Reliability Council of Texas Inc. slid below the day-ahead forecast. Ercot’s North hub fell $3.92, or 9.1 percent, to $38.94 a megawatt-hour during the hour ended at 2 p.m. local time from a day earlier.
The high temperature in Dallas today will be 5 below normal at 92 degrees after rising to 100 degrees or higher for 14 consecutive days, AccuWeather data show.
California power fell as consumption started to more closely track forecasts after exceeding the day-ahead outlook by as much as 5.8 percent earlier, according to the grid operator’s website. Demand on the state grid was 34,777 megawatts during the hour ended at 12:45 p.m. local time, 2.8 percent higher than the forecast 33,827 megawatts for the hour.
Spot prices at Southern California’s SP15 hub, which includes Los Angeles and San Diego, fell $13.78, or 27 percent, to $37.39 a megawatt-hour during the hour ended at noon while the NP15 hub, which includes San Francisco, slid $10.69, or 23 percent, to $35.99.
On-peak power at SP15 is trading at an average premium of 65 cents to NP15 versus a discount of 8 cents yesterday.
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