Extreme heat, humidity significantly increase power demand, prices in US Northeast

PJM Interconnection issued two alerts for July 27 associated with the heat wave stretching across the US and PJM forecasted a power demand peak of around 153 GW for July 27 and 154 GW for July 28 while last year's peak demand was approximately 149 GW, with the higher demand pushing power prices higher on July 27.

Neighboring Northeast US power markets were also experiencing extreme heat that was driving up demand and power prices.

"The first, a Maximum Generation Emergency Alert/Load Management Alert, is an early notification that system conditions might require the use of PJM emergency procedures," the grid operator said in a statement.

The second alert, called an EEA-1, is a North American Electric Reliability Corporation alert that is generally issued with the PJM Maximum Generation Alert, and it means that all generating resources are online or have been scheduled, PJM said.

"We are not having any operational issues today," PJM spokesperson Jeff Shields said in an email, adding that the alerts are meant to prepare all generators to be called on if necessary.

"PJM has issued this series of alerts to help prepare generators for the onset of intense heat, acting conservatively in light of recent extreme weather events that have occurred within the region and across the country," PJM said in the statement.

A "dangerous heat wave" will begin July 27 for much of the I-95 corridor as daytime high temperatures approaching 100 degrees Fahrenheit combined with "oppressive humidity" will produce heat index values of 105-plus F through July 29, the National Weather Service said on its website.

Major metropolitan areas such as Washington, Philadelphia, and Boston are under a "Heat Advisory," while an "Excessive Heat Warning" is in effect for the New York City metro area, the weather service said.

Driven by significantly above-normal temperatures, PJM West Hub on-peak balance-of-the-day for July 27 delivery jumped almost $30 compared with its previous settlement on the Intercontinental Exchange to trade near $87/MWh. Moreover, the corresponding contract for July 28 delivery soared almost $80 to price near $146.50/MWh, the highest price since the Christmas 2022 cold snap.

The high temperature in Washington was forecast to reach 99 degrees F on July 27 and 100 degrees F on July 28, according to the National Weather Service.

PJM projected a non-diversified power demand peak this summer of about 156 GW and has conducted reliability studies at loads nearing 163 GW, the grid operator said in May.

PJM has more than 186 GW of installed power generation capacity available to meet customer needs with resources available in reserve to cover historically observed summer generation outage scenarios, the grid operator said in its summer outlook.

NYISO, ISO New England

New York City was under an "Excessive Heat Warning" from July 27 through July 28 with a high temperature of 97 degrees F forecast for the 27th and a high of 96 degrees F on the 28th, according to the National Weather Service.

"New Yorkers should take every precaution they can over these next few days to stay cool and stay safe as the combination of extreme heat and humidity will pose a significant health risk for vulnerable New Yorkers," Governor Kathy Hochul said in a statement.

The heat wave was increasing power demand which the New York Independent System Operator forecasted would peak at 28,141 MW on July 27 and 29,593 MW on July 28.

NYISO Zone J New York City and Zone G Hudson Valley on-peak locational marginal prices on ICE also increased by double digits on July 27 to around $134/MWh and $130.75/MWh, respectively.

NYISO Zone J real-time power prices were $110.18/MWh around midafternoon July 27, with Zone G at $96.77/MWh and Zone K Long Island at $119.66, according to NYISO data.

Peak power demand this summer was forecast to be 32,048 MW, slightly above last year's actual peak of 30,505 MW, according to the New York State Public Service Commission. Combining the installed generation capacity with other resources, such as demand response and imports, provides New York with a total of 41,148 MW worth of capacity resources for 2023, the regulators said.

Boston was under a "Heat Advisory" until the evening of July 29, with high temperatures of 94 degrees F forecasted for July 27 and a high of 92 degrees F on July 28, according to the NWS.

Peak demand was projected to reach 21,850 MW on July 27 and 23,500 MW on July 28, according to ISO New England data.

ISO-NE Mass Hub day-ahead on-peak power prices were trading around $121/MWh on July 27, rising almost $20 on the day.

Under typical weather conditions, power demand in New England was forecast to reach 24,605 MW, and above-average summer temperatures, like an extended heat wave, could push demand up to 26,421 MW, which would tighten supply margins, the grid operator said in its summer outlook.