Spot electricity prices across most of the major U.S. hubs were lower today as moderate weather crimped demand.
Temperatures nationwide were more seasonal after trending above normal earlier this week, according to AccuWeather Inc. in State College, Pennsylvania. Forecasts from the operators of the six regional power markets showed demand on their grids will be lower today than yesterday.
“We’re seeing some moderation after it was super-cold in Denver, Chicago and even in the mid-Atlantic last week,” said Stephen Schork, president of Schork Group Inc., a consulting firm in Villanova, Pennsylvania. “We’re starting to see the vestiges of spring.”
Spot on-peak power at PJM Interconnection LLC’s benchmark Western hub, which includes prices from Erie, Pennsylvania, to Washington, slid for a third day, dropping $7.31, or 17 percent, to $36.34 a megawatt-hour at 3:13 p.m. from yesterday’s full-day average, the least since April 5, data from the grid operator compiled by Bloomberg show. On-peak hours are from 7 a.m. to 11 p.m. PJM operates a 13-state grid from New Jersey into North Carolina and Illinois.
New York City power fell $7.69, or 15 percent, to $42.63, the least since April 4. Prices on the main Texas grid declined $1.17, or 3.4 percent, to $33.76 and Southern California’s SP15 hub dropped $55.14, or 58 percent, to $40.18, data from the regional grid operators show.
The high temperature in Washington today may be 64 degrees Fahrenheit (25 Celsius), 6 lower than usual, and Houston may be 9 below normal at 72 degrees, according to AccuWeather. San Franciso may reach 61 degrees, 3 below the norm.
Wholesale electricity prices nationwide are being subdued by a seasonal drop in demand along with increased nuclear generation, especially in the western states, and the lowest level of natural-gas use at power plants for this time of the year since 2010 as prices climb, Schork said.
Output from nuclear reactors rose 0.8 percent today to 78,073 megawatts, or 77 percent of capacity, the most since April 13, according to Nuclear Regulatory Commission data compiled by Bloomberg.
New England, which is heavily reliant on gas-fired generation, bucked the downward trend. Real-time power prices from Connecticut to Maine were up $1.47, or 3.1 percent, at $48.54 from yesterday’s on-peak average, data from ISO New England Inc., the region’s grid operator, show.
New England was producing 60 percent of its electricity from natural gas at 2:48 p.m., and has been close to that level during the daylight hours over the past two weeks, according the grid operator. By comparison, gas accounted for 53 percent of output on March 28.
Spot gas at the Algonquin City Gates, which includes delivery to Boston, rose 4.6 percent today to $5.4078 per million British thermal units on the Intercontinental Exchange, the most since April 11.
The spread between two major Midwestern hubs widened to the most since July 2012 as power use exceeded the day-ahead forecast and wind generation fell below estimates. The on-peak average spot price at the Minnesota hub was averaging $82.58 a megawatt-hour as of 3:13 p.m. Eastern time,a premium of $44.20 a megawatt-hour to the Indiana hub. Indiana prices are averaging $38.38 after topping $160 earlier today.
Generating capacity in the region is down because of seasonal maintenance, said John Typadis, a Boston-based analyst covering the Midwest grid operator for Genscape Inc., which tracks-real time power data.
“The volatility that has ensued is a result of thin spots in the supply stack being exposed and the real-time congestion that has only helped add to the wideness of price swings today,” he said.
Congestion on the Hazleton transformer in eastern Iowa, partly caused by multiple line outages near the 640-megawatt Duane Arnold nuclear station, is limiting power flows into Minnesota from Indiana, Typadis said.
“Demand is coming in stronger than anticipated, which is exacerbating this situation,” he said.