Jan 07, 2022
Power prices were above $200/MWh in New York Independent System Operator, ISO New England and eastern PJM Interconnection territory Jan. 7 as a storm dropped several inches of snow and cooler weather expected over the next week could lead to an extended period of elevated prices.
As of 7 am ET, New York City had recorded 8.4 inches of snow at LaGuardia Airport and 5.5 inches at both John F. Kennedy International Airport and Central Park, according to AccuWeather.
Over a foot of snow had fallen in both Westwood and Norwood, Massachusetts, with Norwood reaching a state-high 12.9 inches. Closer to Boston, 7.1 inches of snow was recorded at Logan International Airport while 9 inches had fallen in the suburb of Chelsea, the weather reporting agency said.
The high temperature in New York City was forecast to reach 36 degrees Fahrenheit, while the high in Boston was expected to reach 32 degrees F and a Winter Storm Warning remained in effect until 4 pm, according to the National Weather Service.
The cold snap was driving peakload forecasts to the highest levels since late summer demand nearly four months ago.
PJM issued a cold weather alert through midnight Jan. 7 as wholesale power prices climbed in reaction. Temperatures are forecast as much as 16 degrees F below seasonal norms in the PJM footprint, according to CustomWeather data.
Peakload was forecast to reach 117.106 GW Jan. 7 and rise to 120.27 GW by Jan. 11, which would be a nearly four-month high, according to PJM data.
Transmission and generation dispatchers are asked to review plans to determine if any maintenance or testing, scheduled or being performed, on any monitoring, control, transmission or generating equipment can be deferred or canceled, according to the alert.
PJM West Hub balance of the day for Jan. 7 was trading in the upper $70s/MWh on the Intercontinental Exchange around 10:40 am ET. PJM West Hub on-peak day-ahead locational marginal prices have averaged in the low $50s/MWh so far this month, 24% higher than the December average and 89% above the January 2021 average, according to PJM data.
West Hub on-peak day-ahead for Jan. 10 traded in the low $70s/MWh on ICE, while the on-peak balance-of-the-week package traded in the upper $80s/MWh.
In eastern PJM, spot power prices in the Rockland Electric Company zone reached $207.20/MWh at 11 am, before falling back to $170.35/MWh by around 1 pm, according to the grid operator’s website. Prices in the zone had receded to $49.52/MWh by 2:30 pm.
NYISO Zone G real-time balance of the day for Jan. 7 traded in the low $140s/MWh on ICE, as on-peak weekend was bid was bid at $115/MWh and offered at $140/MWh.
Zone G on-peak day-ahead for Jan. 10 traded in the low $140s/MWh on ICE, while on-peak balance of the week was bid at $155/MWh and offered at $180/MWh.
ISO New England real-time locational marginal prices spiked near $250/MWh around 10:30am ET Jan. 7 as load surpassed forecast levels, according to ISO New England data. Peakload climbed above the forecast starting in the 8am hour, reaching nearly 16.4 GW by 10:50 am, roughly 3% above the forecast.
Mass Hub on-peak balance of the day was bid at $100/MWh on ICE, while on-peak weekend traded in the low $150s/MWh.
Mass Hub on-peak day-ahead for Jan. 10 traded in the mid-$190s/MWh on ICE, while balance of the week traded at $200/MWh.
With LNG helping fill the gaps when extended periods of very cold weather constrain natural gas pipeline supplies, LNG prices can impact ISO-NE power prices. S&P Global Platts JKM prices have spiked in recent months, with the latest forecast hitting $33.90/MMBtu in February and $36.35/MMBtu in March. The benchmark has averaged $17.85/MMBtu over the past year.
“Immediately behind this system, cold and blustery conditions are expected throughout the Great Lakes, Mid-Atlantic, and Northeast,” the National Weather Service said Jan. 7.
With a high temperature of around 23 degrees Fahrenheit forecast for New York City on Jan. 11, NYISO peakload was forecast to reach 22.3 GW, a nearly four-month high, according to ISO data.
The high temperature in Boston that day is expected to be 19 degrees F with peak load of 20.1 GW.
Peakload in both ISO’s is then forecast to taper off a bit, with NYISO power demand forecast to peak at 21.7 GW on Jan. 12 and 20.6 GW on Jan. 13.
Similarly, ISO-NE peakload is forecast to reach 19.1 GW on Jan. 12 and 17.8 GW on Jan. 13.