NEW YORK: The heat wave that has roasted the US East Coast may be slowing down US stock trading and foiling July 4 road trips. But it’s the best friend of power market bulls.
Electricity demand across the eastern power market run by PJM Interconnection LLC reached 144,557 megawatts Tuesday afternoon — the highest since Aug. 12, 2016 — as people blasted their air conditioners and fans to keep cool. In New York, which is suffering through a fourth consecutive day of temperatures above 90 degrees Fahrenheit (32 degrees Celsius), power use surged to the highest levels since 2013.
The spike in demand sent wholesale electricity prices at PJM’s Western hub surging 19% to US$103.51 a megawatt-hour in the hour ended 1 pm local time Tuesday. That’s the highest average for that time of day since March 12, according to Genscape Inc. data compiled by Bloomberg. PJM issued a hot-weather alert through late Tuesday. Average prices in New York City hit the highest since April for the hour ended 11 am.
New York has cracked 90 degrees Fahrenheit or above every day since Saturday and could get there again as summer’s first heat wave keeps a grip on the Northeast. Temperatures could slip a few degrees in New York and New England Wednesday, but that probably won’t bring much relief as humidity will remain high, said Richard Bann, a forecaster at the US Weather Prediction Center in College Park, Maryland. Washington will notice even less of a change.
“This whole pattern that supports heat is pretty much in place, and we’re just talking about some fluctuations,” Bann said by phone Tuesday. “The temperature may come down a little, but the idea is if we can get rid of the humidity, it will feel better.”
While heat advisories and excessive-heat warnings stretch across the US from Kansas to the Atlantic, they’re densely packed across northeastern states and will be back again Wednesday, he said.
“A ridge is anchored over the US, and its deflecting any cool air well north of the international border,” Bann said.