July 17 (Bloomberg) -- New York City wholesale electricity for delivery tomorrow jumped to the highest price in almost a month as air conditioners use more power during a heat wave.
The high in Manhattan’s Central Park may rise to 96 degrees Fahrenheit (36 Celsius), 12 above normal, from a projected high of 95 today, according to AccuWeather Inc. in State College, Pennsylvania. Cooling demand in the city will be 65 percent above normal tomorrow, according to Weather Derivatives in Belton, Missouri.
The peak hourly price for power in the five boroughs tomorrow gained 81 percent from today’s peak to $325 a megawatt-hour, the highest price since June 21, according to the New York Independent System Operator Inc., which manages the state grid. Prices in the day-ahead market yesterday for delivery today rose as high as $179.67 for the hour ending at 5 p.m.
“Peak demand can spike sharply during extreme summer weather conditions as air conditioning and cooling systems increase electricity consumption,” Kenneth Klapp, a spokesman for the grid operator in Rensselaer, New York, said today in an e-mail.
Outages at power plants or transmission lines “can require more expensive generation to be dispatched in certain areas,” causing day-ahead prices to rise, he said.
Electricity use in New York City will be 5.8 percent higher tomorrow at 11,077 megawatts compared with today’s expected peak, according to the grid operator’s forecasts.
Most power needs for a given day are secured the previous day in what is known the day-ahead market. Spot prices, which represent demand that exceeds the previous day’s estimate or reflect unexpected supply disruptions, can surge hundreds of dollars within minutes.
Spot power was trading at $172.85 a megawatt-hour as of 12:20 p.m., compared with $56.85 for the same time yesterday.
One megawatt of electricity is enough to power between 800 and 1,000 homes, according to the New York ISO.
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