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US Power Tracker: PJM May electricity, gas prices jump nearly 200% on year

Highlights

Forward power prices surge more than 300%

Power prices for July above August

  • Author
  • Jared Anderson
  • Editor
  • Valarie Jackson
  • Commodity
  • Coal Electric Power Energy Transition Natural Gas

PJM Interconnection wholesale power prices in May jumped as much as 40% from April and surged 188% from a year ago as natural gas prices climbed about 21% from April with higher power demand.

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Forward power and gas prices were up more than 300% and 200%, respectively, from year-ago levels.

PJM West Hub on-peak day-ahead power prices averaged $90.48/MWh in May, 188.4% above year-ago levels, and about 27% above April, according to PJM data. West Hub real-time on-peak power prices in May averaged $82.56/MWh in May, about 163% above the May 2021 average of $31.37/MWh and about 18% higher than April.

Northern Illinois Hub on-peak day-ahead power prices were about 180% higher on year in May to average $78.77/MWh, which was around 41% above April. Real-time on-peak power prices at the hub averaged $77.26/MWh in May, about 145% above May 2021 and roughly 50% higher than April.

AEP-Dayton Hub on-peak day-ahead power prices averaged $88.63/MWh in May, about 178% higher on the ear and 26% higher than April.

The lowest annual power price increase among the major PJM hubs in May was the East Hub, where day-ahead on-peak prices were still nearly 162% higher to an average $68.11/MWh. On a monthly basis, PJM East Hub on-peak day-ahead power prices were about 17% higher in May than April.

PJM's monthly on-peak day-ahead power prices, apart from Northern Illinois Hub, tracked spot gas prices that rose by a little over 20% in May. Gas prices at the Texas Eastern Transmission Hub averaged $7.35/MMBtu, 21% higher on month and about 218% higher than the May 2021 average of $2.31/MMBtu, S&P Global Commodity Insights data showed.

Prices at the Chicago city-gate averaged $7.79/MMBtu in May, about 183% higher on year and 22% above April.

PJM power demand rose in May as temperatures increased, with peakload averaging 94,288 MW, or 9.4%, higher than the April average of 86,216 MW, according to PJM data.

The average high temperature in PJM territory in May was 73.6 degrees Fahrenheit, up from an April average high of 60.7 F, according to CustomWeather data.

The average low temperature in May was 52.7 F compared with an April average low of 43.9 F. The warmer weather led to increased indoor cooling demand with cooling degree days averaging 3.4 in May, up from a 0.4 average in April.

Power generation fuel mix

Coal-fired power generation in May gave away some market share to gas. As a share of the PJM total in May, coal-fired generation accounted for 18.8% of the generation fuel mix, down from 20.5% in April, according to PJM data. Gas-fired power generation accounted for 36.4% of the PJM fuel mix in May, up from 35% in April.

Nuclear power accounted for 35.5% of PJM's fuel mix in May, up slightly from 33.5% in April.

Hydropower generation was unchanged at 2.4% and wind power decreased, accounting for 4.3% of PJM's May generation fuel mix, down from 5.8% in April.

Non-wind renewables were largely unchanged, accounting for 1.9% of the fuel mix in May compared with 2% in April.

Forward power, gas prices

PJM forward power prices rose to the triple digits across the board, with July trading above August in May, according to Platts M2MS data.

PJM West Hub on-peak power prices for June averaged $117.42/MWh in May trading, about 266% above year-ago levels and about 33% higher than April. The July contract averaged $169.56/MWh, about 344% higher on year and 46% higher on month, while the August package averaged $149.30/MWh, up 313% on the year and about 37% in April.

AEP-Dayton Hub on-peak power for June averaged $119.70/MWh during May trading, up about 261% on year and 37% in April. Forward power for June averaged $173.41/MWh, up 342% on the year and about 51% from April, and forward power for August averaged $151.95/MWh, up 309% on the year and about 41% from April.

Northern Illinois Hub on-peak power prices for June averaged $112.43/MWh in May trading, up 269% on the year and 82% from April. The July contract averaged $164.02/MWh, up 350% on the year and 50% from April, and forward power prices for August averaged $143.49/MWh, an annual increase of 316% and about 41% from April.

PJM forward gas prices followed a similar trend in May trading with the Platts Transco Zone 6 Non-New York for June averaging $7.34/MMBtu, up 224% on the year and 22% on the month. Forward gas prices for July averaged $7.59/MMBtu, up 212% on the year and 21% on the month, while forward gas for August averaged $7.57/MMBtu, up 219% on the year and about 21% on the month.