Aug. 27 (Bloomberg) -- Spot wholesale electricity gained from Maine to Virginia as hotter-than-normal weather boosted demand for air conditioning.
Consumption on the 13-state PJM Interconnection LLC network, which serves more than 60 million people from the East Coast to the Midwest, was 135,775 megawatts at 3:20 p.m., up 6.6 percent from the same time yesterday, according to its website. Demand was also higher in the Northeast.
The high temperature in Manhattan today may be 88 degrees Fahrenheit (30 Celsius), 7 above normal, while Washington’s reading may be 7 higher than the average at 92 degrees, according to AccuWeather Inc. in State College, Pennsylvania.
“The expectation of the heat was pretty significant,” said Tom Hahn, vice president of U.S. power derivatives at brokerage ICAP Energy LLC in Durham, North Carolina.
Spot power at PJM’s Western hub, which includes deliveries to Washington, rose $22.05, or 43 percent, to average $73.43 a megawatt-hour during the hour ended at 4 p.m. versus the same time yesterday, grid data compiled by Bloomberg showed.
This week may see the last of the summer heat that bolsters prices, Hahn said. Daily power futures for next week and for August in general have been trading in the $40s in recent weeks, down from the low $60s in April and May, he said.
“You never know if there is something unexpected that happens, but I would say the next chance of rally would be cold weather,” he said.
New York City spot prices were up $2.59, or 5.6 percent, to $49.08 a megawatt-hour in the hour ended at 4 p.m. while Boston more than doubled to $89.09.
On-peak power for New York traded at an average discount of $8.44 to Boston, compared with a premium of $29.30 yesterday.
Entergy Corp. said today it will permanently shut its 41- year-old Vermont nuclear plant in the fourth quarter of 2014 because of high costs for maintaining the single-reactor plant and low natural gas prices that have resulted in low energy prices, according to a statement.
The plant, about 5 miles south of Brattleboro, Vermont, has a summer capacity of 604 megawatts and accounted for 4.1 percent of New England’s power output in 2012, according to data from the Energy Information Administration, the statistical arm of the Energy Department.
“It’s a good example of a unit that that wasn’t going to be economic anyway, but it kind of shows the fragility of the underlying grid,” said Julien Dumoulin-Smith, an analyst with UBS AG in New York. The all-in cost for producing power at the plant is about $50 a megawatt-hour, he said.
“You will see power prices move on the back of this, and this will help rebalance the market in some sense,” Dumoulin- Smith said.
The lack of gas infrastructure that strained deliveries to power plants, which contributed to regional power price surges this past winter, means that New England will have to import electricity, such as hydropower from Canada, he said.
California prices fell from a one-week high after capacity increased on high voltage transmission lines, as firefighters fought a blaze near Yosemite National Park.
“Lines are clear of the fire now,” Stephanie McCorkle, a spokeswoman for the California Independent System Operator Inc. in Folsom, said in an e-mail.
Northern California’s NP15 hub, which serves San Francisco, slid $2.43, or 5.6 percent, to $41.21 a megawatt-hour during the hour ended at 1 p.m. local time. SP15 for Los Angeles and San Diego dropped $7.42, or 16 percent, to $38.94.
NP15 on-peak power traded at a discount of $1.41 to SP15, narrower than $7.56 yesterday.
--Editors: Bill Banker, Dan Stets