Northeast Electricity Tops $500 as Heat Surge Boosts Demand

Spot wholesale electricity on three East Coast grids surged as unusually hot weather increased air conditioner use.

New York City topped $1,000 a megawatt-hour as the state grid operator said it initiated required and voluntary curtailments from 1 p.m. to 6 p.m. for businesses and large power users participating in demand-response programs. Consolidated Edison Inc. expects power use in its New York City and Westchester County area to reach a record 13,200 megawatts today, according to a statement from the utility.

The temperature in Manhattan rose to 92 degrees Fahrenheit (33 Celsius), 8 above the average high, while Washington reached 95, according to AccuWeather Inc. The Northeast and mid-Atlantic states will see highs in at 90s for most of this week, the forecaster in State College, Pennsylvania, said on its website.

“We got the big spike in power and I have to imagine that’s going to continue, based on this heat,” said Stephen Schork, president of Schork Group Inc., a consulting group in Villanova, Pennsylvania. “This is where the peaker units make their bread and butter this week.”

Spot power for New York City jumped 11-fold to average $544.22 a megawatt-hour during the hour ended at 3 p.m. after surging to $1,085.47, grid data compiled by Bloomberg showed. The on-peak average has gained more than fivefold to $208.41 a megawatt-hour from the July 12 full-day average of $39.80. On-peak hours run from 7 a.m. until 11 p.m. Monday through Friday.

Boston Prices

Boston climbed eightfold to $304.56 a megawatt-hour, causing the on-peak to almost quadruple to $134.79. PJM’s Eastern hub, which includes cities such as Philadelphia, Baltimore and Richmond, Virginia, rose fivefold to $217.311 and the on-peak average has almost tripled to $143.40.

The premium for New York City electricity widened versus New England and PJM as imports from these neighboring grids fell below day-ahead forecasts, said Matt Oatway, a Boston-based analyst with Genscape Inc., which tracks real-time power data.

The premium for New York City on-peak power widened versus Boston to $73.63 a megawatt-hour from $5.32 on July 12. New York’s premium versus Public Service Enterprise Group Inc.’s northern New Jersey territory on the PJM grid widened to $35.48 from $2.60.

Sustained high temperatures expected for this week may push demand on the New York state grid close to an all-time high of 33,939 megawatts, reached in August 2006, the NYISO said in an emailed statement. The grid operator said it may activate demand response programs for its commercial and industrial consumers to cut demand again tomorrow.

New England

Power consumption from Maine to Connecticut may peak at 26,200 megawatts in the hour ending at 5 p.m., heading for the highest hourly average since July 22, 2011, according to ISO New England data. PJM expects demand on its grid, the largest in the U.S., to peak at 151,517 megawatts today, the most since July 18, 2012.

The scorching heat lifted also lifted natural gas, a fuel used to generate electricity, on the spot market to the highest levels in more than three months.

Algonquin City Gates, which includes deliveries to Boston, rose $3.509, or 78 percent, to $8.0104 per million British thermal units on the IntercontinentalExchange, the highest since March 21, data compiled by Bloomberg showed. Transco Zone 6 for New York City increased $1.3523, or 35 percent, to $5.2137, the most since April 2.

The utilities serving New York City and Long Island declared today a minimum oil burn day, requiring oil-fired plants to ramp up to assure sufficient supplies, according to the NYISO’s website. Oil- and coal-fired generators increased output in New England, accounting for 12 percent of the region’s power supply as of 3:44 p.m., according to ISO New England Inc.’s website. That’s up from about 2 percent on July 12. Gas accounted for 53 percent.

Before it's here, it's on the Bloomberg Terminal.