Heat wave pushing up US East Coast power demand, prices

New York — A US East Coast heat wave is pushing up power demand and prices in some markets, with the New York Independent System Operator exceeding 2019 peak demand on July 28 and PJM Interconnection extending a hot weather alert through July 29.

PJM on the morning of July 28 issued a hot weather alert for its Mid-Atlantic region from 7 am through 10 pm July 29, citing continued hot and humid weather. The grid operator issues hot weather alerts when temperatures are expected to exceed 90 degrees Fahrenheit with high humidity, which drives up power demand.

High temperatures are expected to remain in the 90s for much of the week, PJM said, after having previously issued hot weather alerts for the Mid-Atlantic and Dominion regions July 26-28.

PJM power prices were a bit lower than neighboring markets to the east as of late afternoon July 28, with PJM West Hub real-time prices averaging just under $60/MWh. PJM West Hub day-ahead prices averaged $25.26/MWh over the past 30 days, according to ISO data.

Moving further into the northeast, the NYISO's preliminary load data showed July 27 peak load during the 6-7 pm hour was at 30,660 MW, which would slightly exceed 2019 peak load of 30,397 MW that occurred on July 20 between 4 pm and 5 pm.

Weather impacting markets

Temperatures topped out 97 degrees F on July 27 at the La Guardia Airport, according to the National Weather Service, and averaged 89.93 degrees F over the past 30 days.

New York's record peak power demand of 33,956 MW was reached in July 2013 at the end of a week-long heat wave, according to the NYISO's summer outlook.

The NYISO forecasts that peak load this summer will reach 32,296 MW, which is a decrease of 86 MW from the 2019 baseline forecast and 1.3% above the 10-year average peak of 31,867 MW, the grid operator said in the outlook.

Temperatures are expected to moderate in the coming week, and the NYISO's short-term load forecast averages 21,809 MW through Aug. 3.

Day-ahead power prices in late afternoon on July 28 were elevated in some NYISO regions, with Millwood Zone H the highest at $125/MWh and Long Island Zone K the next highest at $104.02/MWh.

The NYISO day-ahead price at New York City Zone J averaged $24.80/MWh over the past 30 days, and had moved higher amid the recent hot weather, averaging $28.50/MWh over the week ended July 25.

Power demand in ISO-New England reached a little above 24,000 MW around 3 pm on July 28, and real-time power prices were between $75/MWh and $80/MWh around that time.

Day-ahead prices at ISO-NE Internal Hub were at $66.27/MWh during late afternoon on July 28, according to the grid operator's website.

ISO-NE Internal Hub day-ahead prices averaged $22.73/MWh over the past 30 days and pushed a bit higher amid the recent hot weather, averaging $27.21/MWh over the past week.

The grid operator forecasts summer 2020 peak demand will reach 25,125 MW under normal weather and 27,084 under extreme weather conditions, according to its summer outlook.

Last year's peak power demand reached 24,004 MW on July 30. ISO-NE's all-time peak demand was at 28,130 MW on Aug. 2, 2006.