US Northeast power, gas prices surge as above-average temperatures return

US Northeast power and gas prices saw significant rises in Aug. 24-25 trading amid the ongoing heat wave.

In New York Independent System Operator, real-time locational marginal prices topped $1,000/MWh across the board at 6.05 pm ET Aug. 24.

In ISO New England, the ISO internal Hub real-time locational marginal price was trading around $300/MWh at the same time. Prices receded shortly after that to trade closer to their normal levels.

In both ISOs, real-time prices also were elevated Aug. 25, with NYISO prices reaching the $600s/MWh at 3:05 pm ET, and ISO New England prices hovering in the lower $200s/MWh, grid operator data showed.

On the Intercontinental Exchange, Mass Hub on-peak for Aug. 26 delivery jumped double digits to trade at $110.75/MWh, up from its previous settlement of $83.50/MWh. This was the highest price since June 30, when the region saw above-average temperatures.

High temperatures through Aug. 26

High temperatures in New York and Boston were forecast in the lower 90s Fahrenheit through Aug. 26, averaging about 7 degrees above normal for New York and 11 degrees above normal for Boston, according to CustomWeather.

The US National Weather Service expected heat advisories to remain in effect for the New York City area until 8 pm ET Aug. 26.

Mirroring the above-average temperatures, NYISO peakload demand for Aug. 26 was forecast at 29.05 GW, up 2% day on day, while ISO New England demand was forecast to peak at 24.06 GW, up about 6%, the highest demand levels in nearly two weeks, ISO data showed.

Natural gas prices climb

Algonquin city-gates rose to a near two-week high of $4.43/MMBtu Aug. 24 for next-day flows, up 15.5 cents on the day, while Transco Zone 6 NY prices increased 0.5 cent to $3.965/MMBtu. Similarly, in the production region, Columbia Gas climbed 1.5 cents on the day to $3.72/MMBtu.

According to S&P Global Platts Analytics, demand was estimated to rise to a near two-month high of 18.61 Bcf/d Aug. 25, up from 18.48 Bcf/d the prior day and the highest since 19.08 Bcf/d June 29.

With regional temperatures forecast significantly above average, gas demand in the power sector was estimated to rise 484 MMcf/d on the day to 12.31 Bcf/d Aug. 25, which would be the second-highest level in the last 12 months, below only 12.75 Bcf/d June 29.

Further ahead, the most recent six- to 10-day NWS outlook showed moderate chances of above-average temperatures for much of the Northeast.