Eastern U.S. electricity prices surge as heat to stoke demand

Electricity prices in the
Eastern U.S. had their biggest gain in almost a month because
above-normal temperatures probably will boost demand for power to
run air conditioners.

Use of air conditioners on Monday in the Northeast will be
more than double normal levels for this time of year, as
temperatures climb above 90 degrees Fahrenheit (32 Celsius) from
Washington to Boston, according to Weather Derivatives Inc. of
Belton, Missouri.

“September is turning out to be a lot warmer than normal,”
said Patrick McCullar, president of Delaware Municipal Electric
Corp. in Dover, Delaware, which supplies power to nine municipal
utilities. Delaware doesn’t normally run plants set aside for peak-
demand periods at this time of year, McCullar said, “but prices
are strong enough to make money.”

Wholesale electricity for delivery Monday in Pennsylvania,
New Jersey and Maryland was up $22.77, or 70 percent, at $55.40 a
megawatt-hour at 10:04 a.m. local time, according to Bloomberg
data. That’s the highest price since Aug. 15, which was at the
tail end of an extended heat wave that brought record power
demand, and the biggest gain since Aug. 9.

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Power demand in the Pennsylvania-New Jersey-Maryland region
is forecast to reach 51,261 megawatts on Monday, up from 38,000
megawatts today. The region’s electricity-network operator this
morning asked power-plant operators to avoid shutdowns for
maintenance.

Temperatures in Philadelphia will top out at 92 degrees on
Monday, up from 81 today, according to the Weather Channel. That’s
15 degrees above normal for September.

Electricity demand in New England will jump by a quarter on
Monday, to 20,650 megawatts, according to the region’s power-
network operator.

Peak-period power for delivery Monday was up $32.50, or 71
percent, at $78.50 a megawatt-hour. Prices there have more than
doubled since Wednesday.

Bloomberg News

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