It''s Chilly !Baby It's Cold Outside Creates A Need for More Energy: 0 second(s) ago
kleaner.energy
East Power Prices Spike as Temperatures Look to Hit Ground
----------------------------------------------------- ---------------------------
Btu's Daily Power Report - 2/27/08
In the East, many major cities will see cold and blustery conditions today, with more northern locations looking towards some snow as well, which in turn had load forecasts aimed higher across the Eastern Seaboard. Prices bounded sharply up the pricing curve for deals done at all major hubs in the East for Thursday product delivery as the markets contend with cold weather, heavy load and some supply shortages. After a day of disturbances in power generation and delivery in the Southeast customers services were restored and the market was getting back to some semblance of normal. However, weather conditions remain supportive of heavy demand and regional power supply remained depleted as of today as both Turkey Point units remain offline this morning after a grid disturbance forced several units -- a handful of fossil fuel units as well -- offline at 1:09 AM ET Tuesday. With regional power supply modestly cut and demand seen strong into the Thursday session, power deals done at the SOCO Hub and points further into the South were moved higher. SOCO gained $7.42 on average to a spread of $80.50-$82.00. Further north the Mid-Atlantic regional power grid operator will be called upon to answer sharply higher demand in the Thursday session as colder air remains a factor for parts of the region. In the Mid-Atlantic U.S. demand in PJM West is called as high as high as 49,052 MW today and 48,523 MW tomorrow while on the coast demand in the Mid-Atlantic is called as high as 41,000 MW today and 42,706 MW tomorrow. With load support, next day prices at the PJM West Hub for peak Thursday delivery ran to $105.00, up $14.58 in limited trade volume. In the Northeast gains were more substantial and based on higher demand outlooks on the cold weather outlooks to close out the week. According to the ISONE, load in New England is called as high as 19,110 MW today and 19,860 MW tomorrow while in New York demand is called as high as 22,130 MW today and 22,705 MW tomorrow. NEPOOL deals for peak Thursday delivery were supported on the higher load to a range of $108.00 to $115.25, posting a 23.32 average gain on the day while off peak deals were ranged between $78.00 and $82.00, up $17.31 cents. At New York’s Zone A Hub deals for peak product were conducted from $80.00 to $84.00, up $14.24 on the day. The Northeast products got an early boost from a trek higher by natural gas futures to a session high of $9.17 before weather and liquids decline pressed the March NYMEX futures contract to a finish down 25.6 cents rolling off the board at $8.95. Final settlements were not posted at the time of this reporting. In the physical natural gas market, prices were shot higher despite futures decline amid the forecasts for incoming bitter cold. Prices at Transco's Zone 6-New York were seen around $18.00, up more than $6.00 with reports of a spike over $19.00 as frigid cold temperatures prepare to enter the region overnight.
Jodi Shafto, Jodis@btu.net, www.energyinstitution.org