Power Prices Increase From Washington to Boston on Higher Demand

Feb 05, 2014 4:22 pm ET

Feb. 5 (Bloomberg) -- Spot wholesale electricity prices in the mid-Atlantic region and the Northeast jumped as frigid weather and snow lifted demand.

Power use on the PJM Interconnection LLC network, the largest U.S. grid, averaged 105,989 megawatts at 3:10 p.m., a 6.4 percent increase versus the day-ahead forecast of 99,634 megawatts, according to the grid’s website.

The high temperature today in Washington may reach 44 degrees Fahrenheit (7 Celsius), 1 below the historical average, while in Boston the high may reach 35 degrees, 2 below normal, according to AccuWeather Inc. in State College, Pennsylvania.

Spot power at PJM’s benchmark Western hub, which includes deliveries to Washington, rose $8.83, or 21 percent, to average $50.22 a megawatt-hour during the hour ended at 3 p.m. from the same time yesterday, while prices at the Eastern hub, which includes New Jersey, Maryland, eastern Pennsylvania and Virginia, fell 72 cents, or 1.7 percent, to average $42.38, grid data compiled by Bloomberg showed.

PJM West on-peak power traded $1.04 below the Eastern hub, compared with a discount of 96 cents yesterday and a three-month average discount of $10.99 for PJM West.

New York City prices reversed earlier declines and more than tripled to average $177.36 a megawatt-hour for the hour ended at 3 p.m. from the same time yesterday. Boston prices jumped $222.78 to average $222.80, the highest for that hour since Jan. 28.

Northeast Spread

New York on-peak power traded $122.32 below Boston, compared with a discount of $13.38 yesterday and a three-month average discount of $16.15 for New York.

As the second winter storm of the week swept into the U.S. Northeast, more than a million homes and businesses from Ohio to New York were without power as of about 11 a.m. according to company websites. Exelon Corp.’s Peco utility, based in Philadelphia, reported more than 625,000 customers blacked out.

Boston received 9.3 inches (24 centimeters) of snow by 11:10 a.m., the National Weather Service said, citing a ham radio report. Four inches of snow fell in Manhattan’s Central Park.

In Texas, spot power at the North hub, which includes Dallas rose $4.84, or 14 percent, to average $40.67 a megawatt- hour for the hour ended at 2 p.m. local time from the same time yesterday, while Houston hub prices advanced $4.01, or 11 percent, to average $40.67.

--With assistance from Naureen S. Malik in New York, Brian K. Sullivan in Boston and Lynn Doan in San Francisco. Editors: Bill Banker, Richard Stubbe