Wholesale electricity prices from Maine to the mid-Atlantic states advanced as forecasts for colder weather signaled stronger heating demand.
Winter on-peak power at PJM Interconnection LLC’s West Hub, the benchmark for the 13-state eastern U.S. grid, rose $1.20, or 2.5 percent, to $49.25 a megawatt-hour at 1:38 p.m., the highest price since Oct. 24, 2011. The winter power price covers January and February. The grid delivers power to 60 million people from New Jersey to North Carolina and Illinois.
Prices on the grid operated by ISO New England Inc. climbed 12 percent to $76.25 a megawatt-hour for the same winter months, said Tom Hahn, vice president of U.S. power derivatives at brokerage ICAP Energy LLC in Durham, North Carolina.
“The leg up here today is all weather,” following above-normal temperatures early this week, Hahn said. “There is a cold front coming across the East Coast and it looks like it’s going to be cold for a while.”
Temperatures will normal or lower along the East Coast over the next 15 days, according to Commodity Weather Group LLC.
The low in Boston will drop to 25 degrees Fahrenheit (minus 4 Celsius), 10 below normal, on Nov. 26, compared with 47 degrees yesterday, 8 above normal, according to AccuWeather Inc. in State College, Pennsylvania. Washington’s low will be 11 below the usual reading at 27 degrees on Nov. 27 versus 49 yesterday, 7 above the norm.
Gains in costs for natural gas, a power-plant fuel, are also boosting electricity prices, Hahn said.
Gas for December delivery rose 15.8 cents, or 4.4 percent, to $3.728 per million British thermal units at 1:39 p.m. on the New York Mercantile Exchange.
About 39 percent of U.S. households rely on electricity as their primary heating fuel while about 50 percent use natural gas, according to the Energy Department.