Power Prices Jump From California to Washington Amid Chill

Spot wholesale electricity prices for California advanced as demand exceeded expectations, while Texas and mid-Atlantic prices also jumped amid a wintry chill that spread across the regions. Northeast prices fell.

Power use on the grid operated by California Independent System Operator Corp. averaged 28,237 megawatts at noon local time, a 3.6 percent increase versus the day-ahead forecast of 27,244 megawatts, according to the grid’s website.

Northern California prices rose $8.78, or 18 percent, to average $57.42 a megawatt-hour during the period ended at noon from the same time Dec. 6, grid data compiled by Bloomberg show. Southern California prices advanced 5.2 percent to average $49.95.

The high temperature today in San Francisco may reach 51 degrees Fahrenheit (11 Celsius), 7 below the historical average, according to AccuWeather Inc. in State College, Pennsylvania.

The increase in power prices in California can be attributed to a combination of higher prices for natural gas, which is used to produce electricity, and continued cold weather leading to an increase in demand, Chris DaCosta, a Boston-based analyst for Genscape Inc., said today in an electronic message.

Cold weather extended across large swaths of the country, affecting power prices in those areas.

Spot prices for the Texas North Hub, which includes Dallas, rose 24 percent to average $37.74 a megawatt-hour for the hour ended at 2 p.m. local time from the same time Dec. 6, while Houston Hub prices increased 26 percent to average $37.74, the grid data show.

Texas Forecast

The high temperature today in Dallas, where ice is just beginning to thaw, may reach 37 degrees, 21 below normal.

Prices at PJM Interconnection LLC’s benchmark Western hub, which includes Washington, rose 3.9 percent to average $37.08 a megawatt-hour for the hour ended at 3 p.m. New York time from the same time Dec. 6. Eastern hub prices advanced 8.5 percent to $39.61.

New York City prices slid 6.3 percent to average $40.47 a megawatt-hour at 3 p.m. from the same time Dec. 6, the grid data show.

“Transmission work on a line connecting New York and New England is preventing flows between the two regions, depressing New York prices,” Matthew Oatway, a Genscape analyst in Boston, said today in an electronic message.

Natural gas futures climbed to a six-month high in New York as the chilly weather created more demand for the heating fuel. New York City may get snow late tomorrow before it changes over to sleet, according to the National Weather Service and AccuWeather.

The high temperature today in Washington may reach 40 degrees, 8 below normal, while the high in Manhattan may reach 44 degrees, 1 below normal.

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