PJM under cold weather alert on cold snap, peakload at highest level of season

The PJM Interconnection is under a cold weather alert through Jan. 27, with temperatures into the single digits as another arctic surge is forecast across the eastern and southern US.

Low temperatures are forecast between minus 1 degree Fahrenheit to 7 F, according to the PJM alert.

PJM West Hub on-peak day-ahead for Jan. 27 traded in the mid-$80s/MWh on the Intercontinental Exchange, 23% higher than the month-to-date locational marginal price average and 200% above the January 2021 LMP average, according to PJM data.

Off-peak day-ahead traded less than $1 below the on-peak package on ICE, 44% above the month-to-date LMP average prices, and 265% above the January 2021 LMP average, according to PJM data.

PJM forecast peakload around 127.26 GW Jan. 27, the highest level of the winter season so far and 14.5% higher than the month-to-date average.

The cold weather alert started Jan. 26 and is in effect through 10 am Jan. 27. Transmission and generator dispatchers are asked to review plans to determine if any maintenance or testing, scheduled or being performed on any monitoring, control, transmission, or generating equipment can be deferred or canceled, according to the alert.

The cold snap also pushed up power forwards. PJM West Hub on-peak February traded in the mid-$60s/MWh on ICE, up nearly $4 day on day.

Neighboring regions

"Caught in between mild air that builds up over the High Plains and a pair of arctic cold fronts forecast to plunge from Canada, the northern tier states will experience large temperature swings through the next couple of days," according to the US National Weather Service short-range forecast. "Frigid conditions across the upper Midwest [Jan. 26] morning will be quickly followed by milder-than-normal conditions by Thursday before another arctic surge reaches the area Thursday night."

Light snow is expected to accompany the arctic front as it sweeps through the Great Lakes Jan. 27, according to the weather service. At the same time, arctic air that settled across the eastern and southern US will moderate slowly during the next couple of days.

The Midcontinent Independent System Operator had a conservative operations declaration Jan. 26 that it canceled early. MISO forecast peakload around 96.78 GW Jan. 26, 9% higher than the month-to-date average, while prices remained near the month-to-date LMP average.

In the New England ISO, peakload was forecast around 19 GW Jan. 26, 9% above the month-to-date average. Mass Hub on-peak traded in the mid-$170s/MWh with off-peak a slight premium in the upper $170s/MWh on ICE. In comparison, the ISO's Internal Hub on-peak day-ahead LMP has averaged near $150/MWh so far this month, while the off-peak LMP has averaged in the mid-$120s/MWh.

In power forwards, Mass Hub on-peak February traded in the mid-$140s/MWh on ICE, up more than $8 day on day on ICE. The February package has average in the upper $60s/MWh so far this month, 117% higher than where the 2021 package averaged in its last month, according to S&P Global Platts data.