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

Jan 16, 2014 4:10 pm ET

Jan. 16 (Bloomberg) -- Spot wholesale electricity prices in Texas fell as mild weather cut demand below grid forecasts.

Power use on the Electric Reliability Council of Texas Inc. network, grid operator for most of the state, averaged 34,515 megawatts for the hour ended at 1 p.m. local time, a 2.2 percent decline versus the day-ahead estimate of 35,279 megawatts, according to the grid’s website.

The high temperature today in Dallas may reach 65 degrees Fahrenheit (18 Celsius), 8 above average, according to AccuWeather Inc. in State College, Pennsylvania.

Spot prices at the Texas North hub, which includes Dallas, slid $7.15, or 25 percent, to average $21.51 a megawatt-hour for the hour ended at 1 p.m. from the same time yesterday, grid data compiled by Bloomberg show. Houston hub prices declined 24 percent to average $21.84.

Spot power at PJM Interconnection LLC’s benchmark Western hub, which includes deliveries to Washington, advanced $2.80, or 8.9 percent, to average $34.29 a megawatt-hour for the hour ended at 2 p.m. New York time from the same time yesterday. Power at the Eastern hub, which includes New Jersey, fell 1.1 percent to average $32.33.

PJM West on-peak power traded $3.08 above the Eastern hub, compared with a $2.90 discount yesterday and a three-month average discount of $7.07 for PJM West.

Spot prices in New York jumped $5.92, or 16 percent, to average $42.86 a megawatt-hour for the hour ended at 2 p.m. Boston power rose $13.87, or 34 percent, to average $54.44 a megawatt-hour.

New York on-peak power traded $21.80 below Boston, compared with a $12.94 discount yesterday and a three-month average discount of $13.87 for New York.

--Editors: Bill Banker, Dan Stets