Power Prices Drop Across Eastern U.S. as Milder Weather Cuts Use

Jan 09, 2014 3:14 pm ET

Jan. 9 (Bloomberg) -- Spot wholesale electricity slid across the Eastern half of the U.S. as warmer weather cut demand after bitter cold earlier in the week.

Power consumption on the PJM Interconnection LLC network, the largest U.S. grid, declined 9.6 percent to average 106,462 megawatts for the hour ended at 2 p.m. versus the same time yesterday, grid data compiled by Bloomberg show.

The high temperature today in Washington may reach 41 degrees Fahrenheit (5 Celsius), 10 above yesterday, while in Boston, the high may reach 30 degrees, 8 above yesterday, according to AccuWeather Inc. in State College, Pennsylvania.

Spot prices at PJM’s benchmark Western hub, which includes deliveries to Washington, fell 72 percent to average $37.69 a megawatt hour for the hour ended at 2 p.m. from the same time yesterday, the grid data show. Prices at the Eastern hub, which includes New Jersey, slid 76 percent to average $34.58.

PJM West on-peak power traded $14.70 below the Eastern hub, compared with $51.31 discount yesterday and a three-month average discount of $6.87 for PJM West.

New York City spot prices declined 58 percent to average $75.64 a megawatt-hour at 2 p.m. versus the same time yesterday, while Boston prices fell 30 percent to $156.11.

New York on-peak power traded $36.37 below Boston, compared with a $30.78 premium yesterday and a three-month average discount of $12.12 for New York.

In the Midwest, spot prices at the benchmark Indiana hub fell 44 percent to average $32.52 a megawatt-hour for the hour ended at 1 p.m. local time from the same time yesterday, while in Texas prices at the North hub, which includes Dallas, declined 29 percent to average $29.54 at 1 p.m.

--Editors: Bill Banker, Richard Stubbe