Power Prices Surge Amid Air-Conditioning Binge in U.S. Northeast
Power Prices Surge Amid Air-Conditioning Binge in U.S. Northeast
(Bloomberg) -- Americans in the northeastern U.S. are cranking up the air conditioning amid an early season heat wave, and it’s causing an unusual spike in power prices.
The cost of electricity in New England has nearly tripled from a year ago. Temperatures are touching record highs everywhere from Washington to as far north as Burlington, Vermont, said Frank Pereira, a forecaster at the U.S. Weather Prediction Center. Relief won’t come until the weekend, with the extreme heat lingering through Wednesday.
“Demands are so far above normal” for electricity due to air-conditioning use, said Gary Cunningham, director of market research at Tradition Energy. New England’s grid operator may actually reach its summer peak in June instead of July or August, typically the hottest parts of summer.
The National Weather Service has issued heat advisories in five of the six New England states, as well as in upstate New York. Monday’s high is expected to reach 95 degrees Fahrenheit (35 Celsius) in Boston and in Washington.
Grid operator PJM Interconnection LLC also issued a hot weather alert Monday. To minimize disruptions in service during the heat wave, it asks owners of transmission lines and power plants to delay maintenance, submit details about their fuel supply and estimates for any outages.
On-peak electricity prices for New England, which is getting the worst of the heat, leaped 84% on Monday to average $51.90 a megawatt-hour in the day-ahead market from Friday, the most since March 17, according to Genscape data compiled by Bloomberg. Prices were up 190% from a year earlier.
The heat will break by this weekend, with temperatures potentially falling below normal in some areas.
“It is not until we get into Thursday, we have a pretty good cold front coming down and then things are going to back off in the Northeast,” Pereira said.
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