Power Prices Climb in Eastern U.S. as Cold Weather Boosts Demand

Spot wholesale electricity climbed from Boston to Chicago and Dallas as temperatures dropped and a winter storm moved into the Northeast.

New York City posted the biggest gains as electricity demand jumped to 7,182 megawatts at 4 p.m., 5.2 percent higher than the state grid operator’s estimate for the hour. Use also surpassed forecasts in the mid-Atlantic states and Texas.

Winter storm warnings and weather advisories stretched from Illinois to Maine. Blizzard conditions may bring more than a foot of snow to New England and New York’s Long Island starting later today, according to the National Weather Service.

Spot power for New York City surged more than 11-fold, climbing $412.47 to average $450.31 a megawatt-hour during the hour ended at 4 p.m. from the same time yesterday, grid data compiled by Bloomberg showed.

New York’s on-peak price flipped to an average premium of $68.18 over Boston, the most since July 18, after trading at a discount of $104.62 yesterday. The hub for Boston and northeastern Massachusetts more than tripled, rising $140.07 to $189.89.

Boston may get as much as 14 inches (36 centimeters) of snow, while 6 to 8 inches are forecast for New York and 3 to 7 for Philadelphia, according to the weather service.

Northeastern grid operators expect a cold front to push demand even higher tomorrow.

Colder Weather

The low temperature in Boston today may be 8 degrees Fahrenheit (minus 13 Celsius), 15 below normal, before dropping to minus 1 tomorrow, said AccuWeather Inc. in State College, Pennsylvania. New York City’s low will go from 14 degrees, 14 lower than usual, today to 5 tomorrow.

The New York Independent System Operator Inc. forecast that power use in Manhattan and its four neighboring boroughs would peak at 7,059 megawatts today, and then climb 7.2 percent tomorrow to 7,567. Consumption has already surpassed today’s peak projection.

Demand on the six-state grid from Connecticut to Maine will peak at 21,230 megawatts today before rising 3.6 percent tomorrow to 22,000, said ISO New England Inc.

Prices on PJM Interconnection LLC’s 13-state network, which stretches from the mid-Atlantic states to the Midwest, and the Texas grid gained as use topped forecasts.

PJM’s benchmark Western hub, which includes Washington, rose $16.94, or 56 percent, to average $47.13 a megawatt-hour during the hour ended at 3 p.m.

Chicago Cold

The low in Chicago today will be 2 degrees, 17 below normal, while the cold front will push temperatures in Dallas to 26 degrees, 11 lower than average, AccuWeather said.

Power demand on the grid operated by the Electric Reliability Council of Texas climbed to 40,175 megawatts in the hour ended at 2 p.m. local time, 2.9 percent higher than the projection for the hour.

Spot electricity at the Ercot North hub, which includes the Dallas-Fort Worth metropolitan area, rose $6.57, or 29 percent, to average $29.38 a megawatt-hour versus the hour ended at 3 p.m. yesterday.

Prices advanced in California as demand jumped by 18 percent to average 25,917 megawatts during the hour ended at 1 p.m. local time from the same time yesterday, grid data compiled by Bloomberg showed. Northern California’s NP15 hub, which includes San Francisco, rose $4, or 1 percent, to $40.20 a megawatt-hour during the same period.

To contact the reporter on this story: Naureen S. Malik in New York at nmalik28@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net

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