US power prices soar as grid operators brace for record-breaking heat wave

US grid operators on Monday directed power plants to maximise their output as wholesale electricity prices skyrocketed during a dangerous heat wave afflicting the eastern half of the country. When homes and businesses crank up energy-intensive air conditioners, the risk of power outages increases in extremely hot temperatures if electricity output fails to meet rising consumption. The surge in real-time prices signaled tight energy supplies across major metropolitan areas.

In Boston, real-time wholesale electricity prices surged to more than $400 per megawatt hour (MWh) at 5:30 p.m. EDT, according to ISO New England, the grid operator for a six-state region. Earlier in the day, the wholesale price was less than $50 per MWh.

Several thousand customers of Con Edison, a major investor-owned electric utility in New York, were without power due to the sweltering temperatures, the company said. Con Edison restored power to some 1,600 customers in the Queens borough of New York City, while over 6,200 homes and businesses were still without electricity. Meteorologists at weather forecaster AccuWeather projected high temperatures in New York, the biggest city in the United States, would tie the 137-year-old record of 96 degrees Fahrenheit (35.6 Celsius) on Monday before breaking that record on Tuesday with an expected 98 F. Temperatures are projected to cool starting on Wednesday. Meanwhile, New York ISO, the state's grid operator, reported wholesale electricity prices topping $600 per MWh on Monday evening in the zone for New York City.

PJM Interconnection, which covers one in five Americans as the largest US power grid operator, and the Midwest's MISO issued alerts to generators to be prepared to run as much as possible during the heat wave.

PJM said it expected power demand to reach 160,000 megawatts on Monday, 158,000 MW on Tuesday and 155,000 MW on Wednesday. One megawatt can power about 800 homes on a normal day but much fewer on a hot summer day when homes and businesses crank up their air conditioners. MISO issued a similar alert aimed at transmission and generation owners who can schedule maintenance work accordingly. PJM's alert also signals to neighboring regions that its power exports may need to be curtailed, the grid operator said.

Next-day power prices at the PJM West hub in Pennsylvania soared by over 430 per cent to around $211 per MWh, their highest since January. That compares with power price averages of $55 per MWh in PJM.