The US Northeast has been hit by this year's second heat wave, with forecasts for increased power demand, and temperatures above 90 degrees Fahrenheit, while power and natural gas prices were above recent averages on June 28 in New England, New York and the PJM Interconnection.
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"A bulge northward in the jet stream pattern will allow for a dome of heat to build across the eastern US from the Appalachian Mountains east to the coast," Matt Benz, meteorologist with AccuWeather, said in a June 28 report.
Temperatures are expected to climb five to 10 degrees above normal for the final days of June, according to AccuWeather.
"We are expecting another round of high heat and humidity to impact most of the state and continue through the middle of the week," New York Governor Andrew Cuomo said in a June 27 statement.
Heat indexes could reach up to 95 degrees F or more in some locations during the heatwave, with the highest heat index values occurring during the afternoon hours, the governor's office said.
The New York Independent System Operator forecasts power demand to peak at 29,731 MW on June 29, with peak load averaging 22,640 MW over the past week, according to ISO data.
Peak load in May averaged 17,284 MW compared to 16,216 MW in May 2020, a 6.6% increase.
"The NYISO issued a day-ahead advisory notice that resources in the Targeted Demand Response Program may be needed for part of the day tomorrow (June 29)," Zach Hutchins, NYISO spokesman said in an email.
"Any further notices will be posted on nyiso.com. We are forecasting statewide peak load at or near 30,000 MW through Wednesday," Hutchins said, adding "that is less than our summer readiness peak load projection of 32,327 MW and well below our statewide total summer capacity of 41,071 MW."
Power, gas prices
Regional spot power prices crept up throughout the day as temperatures increased, with ISO-New England real-time prices averaging above $300/MWh across the footprint as of late afternoon. Mass Hub day-ahead on-peak reached its highest level since a mid-February arctic freeze to trade around $81.25/MWh on the Intercontinental Exchange, up about $10 from its previous settlement.
Real-time prices at NYISO Zone K long Island reached $150.96/MWh with real-time load at just above 29,000 MW. Zone G on-peak locational marginal prices rose about $8.25 to trade around $68.75/MWh, and Zone J New York City added about $8.75 to $71.50/MWh.
Real-time prices at PJM's Dayton Zone reached $297.47/MWh by early afternoon, with a few other zones above $150/MWh.
Power prices at PJM West Hub day-ahead on-peak climbed about $13.75 from its previous settlement to trade at $63.50/MWh on the Intercontinental Exchange, up 139.6% from last year levels at the same time, when the contract priced around $26.50/MWh.
"Hot weather will bring about incremental electric cooling demand, which will largely be met with gas-fired generation and imports in the Northeast," Kieran Kemmerer, power market analyst with S&P Global Platts Analytics, said in a June 28 email.
"Upside to power prices is expected to be primarily a function of natural gas basis, with widening spreads between M3 and Dominion South prompted by ongoing TETCO pipeline restrictions," Kemmerer said.
Regional natural gas prices trended significantly higher in June 28 trading, providing support to power contracts.
The cash price at Algonquin city-gates rose about $1 to trade at $4.87/MMBtu, while Transco Zone 6 NY was up 79 cents at $3.93/MMBtu.
In comparison, Algonquin city-gates averaged $2.58/MMBtu month to date and $1.56/MMBtu in June 2020, while Transco Zone 6 NY averaged $2.47/MMBtu month to date and $1.47/MMBtu in June 2020 over the same timeframe, Platts pricing data showed.
"Further congestion between competing flows of power eastward across PJM is likely to push up power prices in demand centers across the East Coast," he said.
New York City's heat wave is expected to last through June 30 with high temperatures expected to reach the lower 90's F each day, making this the second official heat wave of 2021, AccuWeather said. New York City has had five days where temperatures reached 90 F degrees or higher so far this year, according to the weather forecasting firm.