Heat wave affects much of the US, driving up cooling demand, power prices

With temperatures expected to exceed 100 degrees Fahrenheit across parts of the US, power demand and prices are well above average, and the US Department of Energy issued an emergency order intended to help Duke Energy Carolinas maintain reliability.

The US National Weather Service said in its daily forecast discussion that extreme heat warnings and/or heat advisories currently extend from the Lower Mississippi Valley and Midwest to the East Coast, affecting nearly 160 million people.

The Storm Prediction Center forecast a slight risk of severe thunderstorms across parts of the Central/Northern High Plains. Storms associated with very large hail and severe wind gusts are likely either the afternoon or evening of June 24.

"The severe threat shifts into the Southeast [June 25] as a mid-level vortex retrogrades into the Florida Peninsula from the western Atlantic," according to the weather service's daily forecast discussion. "SPC issued a pair of slight risk areas, one over the Carolinas and one across southern Alabama/Florida panhandle. Severe wind gusts will be possible for much of the Southeast as a result."

PJM Interconnection's peakload is forecast to reach 161,117 MW June 24. In its preliminary summer analysis, the ISO expected power demand to reach 161 GW under its 50-50 load forecast and 166.6 GW under the 90-10 forecast, which is the more conservative of the two. The 90-10 forecast means there is a 10% chance that peak demand will surpass the forecast.

For comparison, PJM peakload averaged 90.161 GW in May and peakload averaged 104.549 GW in 2024, according to PJM data.

According to the National Oceanic and Atmospheric Administration, Chicago's high temperature is forecast to reach 91 F June 24, before thunderstorms are expected to move through the region and cool things off.

The high temperature in Philadelphia is forecast to reach 101 F June 24, followed by a high of 98 F June 25, according to NOAA.

The elevated power demand has been increasing PJM power prices, with Dominion Zone real-time prices reaching above $575/MWh by the early afternoon of June 24, PJM data showed.

Amid scorching temperatures, PJM West Hub on-peak real-time for June 24 traded above $300/MWh on the Intercontinental Exchange, reflecting a significant increase from the previous day.

Meanwhile, as temperatures were forecast to start receding, the corresponding West Hub on-peak day-ahead package for June 25 fell by more than $25, but still maintained a triple-digit level around $185/MWh.

DOE emergency order

"Duke Energy took additional precautionary measures by requesting an order from [the DOE] that would allow power generating units within Duke Energy Carolina's service territory to operate up to their maximum generation output levels, if needed, and quickly respond if conditions change," Duke Energy spokesperson Jennifer Garber said. "During extreme weather, Duke Energy uses every tool available to keep electricity flowing to our customers. This order is narrowly focused and would only be used if necessary to protect reliability for our customers."

The DOE issued an emergency order, effective June 24-25, to help minimize the risk of power blackouts brought on by high temperatures across the Southeast region, the DOE said in a June 24 statement. The order authorizes Duke Energy Carolina to use specific electric generating units located within the Duke Energy Carolina area to operate at their maximum generation output levels due to ongoing extreme weather conditions and to preserve the reliability of the bulk electric power system.

"As electricity demand reaches its peak, Americans should not be forced to wonder if their power grid can support their homes and businesses," US Energy Secretary Chris Wright said in a DOE statement June 24. "This order ensures Duke Energy Carolinas can supply its customers with consistent and reliable power throughout peak summer demand."

The grid is performing as expected, and Duke currently has adequate power generation to meet customers' needs, Garber said, adding, "We will continue to monitor the system and share energy conservation tips with our customers to help them save energy and money."

In the neighboring Tennessee Valley Authority footprint, officials have been "closely monitoring the extremely hot weather system settling across the Southeast [US]," TVA spokesperson Scott Fiedler said. "For Tennessee Valley, current forecasts indicate temperatures in the low to mid-90s through the end of next week. Hotter temperatures mean we will see loads above 31,000 MW for much of this time."

TVA's all-time power demand record is 35.319 GW, reached Jan. 22.

"Currently, the bulk electric system is stable and secure," Fiedler said. "We have suspended all non-essential maintenance to ensure the reliability and availability of generating assets."

Power prices continued to climb on rising electric cooling demand from the heat wave.

Into Southern on-peak day-ahead was offered at $160/MWh on ICE for June 25 delivery. For comparison, SOCO spot prices have averaged in the low $50s/MWh so far this month, up 21% from the June 2024 average, according to pricing data from Platts, part of S&P Global Commodity Insights.

Prices tripled to $150/MWh June 23 from $49.50/MWh June 20 in response to expected increased cooling demand from rising temperatures.

High temperatures in Columbia, South Carolina, are forecast to reach 101 F June 24, 9 degrees above normal, while in Raleigh, North Carolina, high temperatures are forecast at 103 F, 13 degrees above normal, according to CustomWeather data. In Richmond, Virginia, high temperatures are forecast to reach 101 F, 12 degrees above normal.

US Northeast

The New York Independent System Operator issued an Energy Watch in the late afternoon of June 24, meaning reserve forecasts are expected to remain below 2.62 GW for longer than 60 minutes. NYISO also suggested voluntarily conserving power, if safe to do so. "The grid is operating normally at this time and there are adequate resources to meet [forecast] demand," NYISO said in an email.

The grid operator also said that "Special Case Resources" and "Emergency Demand Response Program" resources would be needed June 24-25.

NYISO on-peak day-ahead locational marginal prices for June 25 at Zone J NYC and Zone G Hudson Valley each dropped by about $40 day over day, settling around $141.50/MWh and $133.75/MWh, respectively, ISO data showed.

But NYISO Zone K Long Island real-time power prices reached $1,080.13/MWh around mid-afternoon June 24, according to NYISO data.

Similarly, in ISO New England, the Mass Hub day-ahead on-peak price for June 25 fell more than $60 from the day before, settling at around $143.50/MWh on ICE.

Looking ahead, prices may continue to decline, as the PJM and Mass Hub on-peak balance-of-the-week contracts for June 26-27 delivery each fell by $30 on ICE, trading around $67/MWh and $42/MWh, respectively.