Feb. 4 (Bloomberg) -- Spot wholesale electricity prices rose in the Midwest as low temperatures boosted demand above expectations.
Power use on the Midcontinent Independent System Operator Inc. network, which stretches from Canada to the Gulf Coast, averaged 89,020 megawatts at 3:25 p.m. New York time, up 6.4 percent from the day-ahead forecast of 83,697 megawatts, according to the grid’s website.
The low temperature today in Indianapolis may drop to 18 degrees Fahrenheit (minus 4 Celsius), 3 below the day’s average low, while readings in Minneapolis fell to minus 2, 11 below normal, according to AccuWeather Inc. in State College, Pennsylvania.
Spot power at the Indiana hub, a regional benchmark, advanced $2.14, or 4.7 percent, to average $47.22 a megawatt- hour for the hour ended at 2 p.m. local time from the same time yesterday, grid data compiled by Bloomberg show. Prices at the Minnesota hub rose $5.87, or 13 percent, to average $52.75.
Boston prices reversed earlier gains and slid $105.19 to average 2 cents at 3 p.m., the lowest price for the hour since Aug. 28, 2011, as demand fell below expectations.
“We had $400 pricing this morning and then 2 cent pricing this afternoon,” said Jesse Fitzmaurice, a Boston-based analyst with Genscape Inc. “We had excess generation step into the supply stack this morning in response to the high pricing. That generation lingered even as load decreased into the afternoon valley.”
Power use on ISO New England Inc. network averaged 16,085 megawatts at 3:40 p.m., down from the day-ahead forecast of 16,120 megawatts, according to the grid’s website.
“It’s a prime example of the volatility we see in power markets on a daily basis,” Fitzmaurice said.
Spot prices in New York City fell $19.65, or 27 percent, to average $53.99 a megawatt-hour at 3 p.m.
New York on-peak power traded $45.62 below Boston, compared with a discount of $17.65 yesterday and a three-month average discount of $14.73 for New York.
Power at PJM Interconnection LLC’s benchmark Western hub, which includes Washington, slid $56.62, or 58 percent, to average $41.38 at 3 p.m., while prices at the Eastern hub, which includes New Jersey, declined $60.13, or 58 percent, to average $43.09.
PJM West on-peak power traded $1.24 above the Eastern hub, compared with a discount of 76 cents yesterday and a three-month average discount of $10.97 for PJM West.
In Texas, spot power prices at the North hub, which includes Dallas, fell $6.43, or 15 percent, to average $37.54 at 1 p.m. local time, while Houston hub prices slid $6.07, or 14 percent, to average $37.90.
Snow fell in parts of the Midwest as the second winter storm of the week moved toward the Northeast. Snow will start falling across Boston and New York later today, the National Weather Service said. Freezing rain and sleet will join the mix tomorrow, Tom Kline, a meteorologist with AccuWeather, said by telephone.
--With assistance from Lynn Doan in San Francisco, Anna Shiryaevskaya in London and Naureen S. Malik in New York. Editors: Bill Banker, Charlotte Porter