Texas Power Prices Drop as Demand Falls Below Day-Ahead Forecast

Jan 14, 2014 3:23 pm ET

Jan. 14 (Bloomberg) -- Spot wholesale electricity prices in Texas fell as mild weather reduced demand below expectations.

Power use on the Electric Reliability Council of Texas Inc. network, grid operator for most of the state, averaged 34,058 megawatts for the hour ended at 1 p.m. local time, a 2.6 percent decline versus the day-ahead forecast of 34,967 megawatts, according to the grid’s website.

The high temperature today in Dallas may reach 64 degrees Fahrenheit (18 Celsius), 8 above the historical average, while in Houston the high may reach 71 degrees, 8 above normal, according to AccuWeather Inc. in State College, Pennsylvania.

Spot prices at the Texas North hub, which includes Dallas, and at the Houston hub slid 12 percent to average $23.21 a megawatt-hour for the hour ended at 1 p.m. from the same time yesterday, grid data compiled by Bloomberg show.

In the mid-Atlantic states, spot prices at PJM’s benchmark Western hub, which includes Washington, reversed earlier declines and rose 72 cents, or 2.3 percent, to average $31.44 a megawatt-hour for the hour ended at 2 p.m. New York time from the same time yesterday. Prices at the Eastern hub, which includes New Jersey, advanced $3.93, or 12 percent, to average $35.72.

PJM West on-peak power traded $3.73 below the Eastern hub, compared with a discount of $11.72 yesterday and a three-month average discount of $7.07 for PJM West.

Power in New York City jumped 38 percent to average $46.41 a megawatt-hour at 2 p.m., while Boston prices gained 27 percent to average $48.06.

New York on-peak power traded $1.65 above Boston, compared with a $9.56 discount yesterday and a three-month average discount of $13.50 for New York.

Spot prices at the Indiana hub, a regional benchmark for the Midwest, fell $1.78, or 7 percent, to average $23.48 a megawatt-hour for the hour ended at 1 p.m. local time from the same time yesterday.

--Editors: Richard Stubbe, Charlotte Porter