Spot wholesale electricity prices for New York City surged as air conditioner use increased during a heat wave and supplies fell.
Hot and humid weather on the East Coast buoyed power prices for a third day, topping $2,000 a megawatt-hour in afternoon trading as imports from Ontario slowed. The supply drop came as demand in the city headed toward a two-year high. The high temperature in Manhattan rose to 95 degrees Fahrenheit (35 Celsius), 11 above normal, according to AccuWeather Inc.
Consolidated Edison Inc., which owns the New York City utility, put crews and spare transformers on standby to brace for possible power failures this week. The state grid operator activated demand-curtailment programs for a third day for New York City and nearby regions.
“The air conditioners are cranked up high, and Con Ed in New York has participating customers on reduced electrical supplies due to near-record demand,” John Kilduff, partner at Again Capital LLC and editor of the Energy OverView newsletter in New York, wrote today. “So far, so good on the grid holding up.”
Spot electricity for New York surged to $2,327.96 a megawatt-hour after the hourly average had more than doubled to $668.64 a megawatt-hour during the hour ended at 4 p.m. from a day earlier, and traded at $518.06 in the 5 p.m. hour, grid data compiled by Bloomberg showed. The day-ahead price for the hour was $205. The on-peak average is up 91 percent at $324.96 from yesterday’s full-day average, the most since Jan. 23.
The state grid became a net exporter to Ontario as demand ramped up with the afternoon heat, according to data from the New York Independent System Operator Inc. The state grid was exporting a net 84 megawatts of power to the Canadian province at 3:50 p.m. after importing more than 1,000 megawatts from the region at the start of the day.
New York City households and businesses may consume as much as 11,178 megawatts during the 4 p.m. hour, the highest hourly average since July 22, 2011. The New York ISO expects demand statewide to peak at 33,400 megawatts, topping the 2013 high of 32,703 megawatts, according to an e-mailed statement.
The New York Power Authority, the largest U.S. public power organization, activated a demand-reduction program for the second straight day, asking the Metropolitan Transportation Authority and other public units to reduce usage.
“We can’t do anything about the weather, but we can all do something on the demand side to alleviate stress on the power grid during these hot summer days,” Gil Quiniones, chief executive officer of NYPA, said in an e-mailed statement.
Spot power on the PJM Interconnection LLC network, from New Jersey into North Carolina and Illinois, and the six-state New England grid reversed earlier losses as demand climbed. Supply shortfalls in some areas and transmission bottlenecks had contributed to higher prices at times yesterday.
PJM’s benchmark Western hub, which includes deliveries to Washington, gained $38.26, or 45 percent, to $123.72 a megawatt-hour during the hour ended at 4 p.m. from the same hour yesterday. Power in the 5 p.m. hour rose 39 percent to $161.80. Boston prices rose $30.74, or 21 percent, to $178.06 a megawatt-hour in the hour ended at 5 p.m..
The premium for New York City on-peak power versus the Boston average widened to $204.10 a megawatt-hour from $66.23 yesterday. New York’s premium to Public Service Enterprise Group Inc.’s northern New Jersey territory on the neighboring PJM grid, widened to $190.67 from $73 yesterday.
ISO New England Inc. issued an alert for a third day, warning of existing or potential abnormal conditions on the grid. The grid operator predicted peak demand will increase to 27,000 megawatts from yesterday’s high of 26,210 megawatts.
PJM cut its peak-demand outlook for today to 154,187 megawatts for the hour ended at 4 p.m. from the previous estimate of 155,743 megawatts during the 5 p.m. hour. Demand rose to 152,761 yesterday.
Spot electricity in Texas slumped for the fourth time in five days as demand fell below yesterday’s forecasts. Houston power dropped $11.71, or 24 percent, to $37.30 a megawatt-hour during the hour ended at 4 p.m. local time.