New York Power Prices Drop as Cool Front Tests 73-Year Record

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New York City wholesale electricity prices slid as weather forecasts signal this may be the coolest June 2 ever in the city, threatening a 73-year-old record.

Spot daily prices are also headed for a record low as unusually cool weather cuts consumption, according to data from the New York Independent System Operator Inc. The cost of natural gas, a power-plant fuel, fell to a six-week low.

The high temperature in Central Park may peak at 56 degrees Fahrenheit (13 Celsius), 20 below average, according to AccuWeather Inc.’s website. The lowest high for the date is 60, set in 1942, according to Commodity Weather Group LLC.

“We have a shot to beat that record” in data going back to 1871, Matt Rogers, president of Commodity Weather in Bethesda, Maryland, said in an e-mail. “There will be zero cooling degree days today.”

Spot power for New York City dropped $8.59, or 60 percent, to $5.68 a megawatt-hour in the hour ended at 4 p.m. from the same time Monday, according to grid data compiled by Bloomberg. The average spot on-peak price, which covers weekday hours from 7 a.m. until 11 p.m., is $10.54 so far Tuesday, heading for the lowest daily average in records going back to 2005. Electricity demand in the city was 6,242 megawatts at 4:55 p.m., 8.2 percent lower than the day-ahead forecast for that hour, the New York ISO said on its website.

Air Conditioners

The lack of heat in New York means that no more energy is needed to run air conditioners, Rogers said. Cooling needs are limited across the East Coast and Midwest because of mild weather, he said. Nationwide, the number of cooling degree days, a proxy for weather-driven energy demand factoring in population, will be 3 to 4 Tuesday, versus 7 a year earlier and the norm of 6, Rogers said.

Spot gas prices at Transco Zone 6 deliveries for New York City dropped 23 percent to $1.83 per million British thermal units on the Intercontinental Exchange, the least since April 17. Tetco M3 gas, which includes deliveries from western Pennsylvania to northern New Jersey, fell 1.4 percent to $1.283, the lowest level since Dec. 24.

Power prices also slumped across the 13-state grid managed by PJM Interconnection LLC, which serves more than 61 million people from Washington to Chicago, with the drop in demand and fuel costs.

PJM’s benchmark Western hub, which includes prices from Washington to western Pennsylvania, fell $33.93, or 57 percent, to $25.17 a megawatt-hour in the hour ended at 4 p.m. from a day earlier. The Eastern hub, including Philadelphia, Baltimore and Jersey City, declined $14.38, or 51 percent, to $13.76.

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