Northeast Power Prices Rise Due to Hot Weather, Supply Volatility
Hot weather across the Northeast led to high air-conditioning use and spiking power prices last week, according to Bloomberg. The prices below reflect data from the Retail Energy Buyer Electricity Spot Prices charts.
- New York saw the highest overall prices, with an average of $60 per MWh on Tuesday and Wednesday. Hydro Quebec cut its deliveries to the state from about 1,300 MW to 700 MW, causing the state to rely on more expensive generation sources.
- New England saw prices increase to a peak of $159 per MWh at 3 pm on Wednesday, though the spike was short-lived as prices averaged just $43 per MWh. The region relied on oil to meet 3 percent of demand, driving up hourly pricing.
- PJM, which spans the region from New Jersey to Washington, DC, as far west as Chicago, believes demand hit a 12-week high. Mid-Atlantic prices saw average daily spot market prices fall from $53 per MWh on Tuesday to $37 per MWh by Friday.
Temperatures in the region usually peak in July to August, according to weather data Current Results. Spring months tend to see the lowest demand of the year in the Northeast, as there is limited demand for either heating or cooling. Thus, power producers often schedule outages for plant maintenance at this time of year. Hot weather spells during the spring can lead to price spikes in these cases. This underscores the value of demand response as a means of controlling price volatility. Facilities that are able to reduce their electricity use during these events can receive payments for doing so by signing up to participate in demand response programs.
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