PJM:

Temperatures throughout the northeastern U.S. are expected to approach or exceed 90°F this afternoon, driving electric demand close to 2020 summer highs.

New York City’s Local Law 33/95 will require building owners to post their Energy Efficiency Rating Label in the next 90 days. In December 2017, the New York City Council passed Local Law 33/95, requiring building owners to post this label in a conspicuous location near each public entrance. This is required for all buildings over 25,000 square feet that are listed on the 2020 Covered Buildings List for benchmarking compliance. The intent of this law is to provide transparency into a building’s energy usage and efficiency.

The past 12 months have been a wild ride for natural gas producers. Going into last winter, storage was near the 5-year average. And while prices were not great, they were at least near most producer’s costs and most natural gas producers were focused on how to continue to increase production. Recently, those ideas have dramatically changed. A mild winter put significant downward pressure on prices as production was strong, demand was moderate and storage inventory levels were high.

One might expect significant variations in price movements in an electricity market that spans half the continental United States, from Chicago to New Jersey. However, there is a remarkable degree of consistency in spot (index) prices and in the forward electricity curves across the PJM Interconnection (PJM). 

A few weeks ago, on July 4^th weekend, it was close to 100º in many places across Texas. Some were concerned about how hot it might get as we approached the dreaded last two weeks of July and first two weeks of August. As it turns out, the summer of 2020 has been mild, and the weather has actually been quite nice!

NYISO:

Temperatures in New York City are expected to remain in the mid-90s throughout Monday. Even though precipitation is likely in the 7-10 day range, it is expected that Monday (7/27) will approach the year-to-date system peak of 29,979 MW which was set last Monday (7/20).

While aggregation programs like The Texas Coalition for Affordable Power (TCAP) made sense for some cities in the early days of deregulation, these purchasing groups have not been producing the best results for cities for a long time. Cities are now being courted by TCAP to participate in a strategic hedging program that lacks clarity and competition while ultimately removing a city’s ability to reduce and control many aspects of their energy spend.

A high-pressure system has settled over the Midwest and Mid-Atlantic which will keep temperatures elevated today and tomorrow. These high temperatures will result in PJM and NYISO electric grids being pushed to the max. In NYISO, peak load of more than 29,933 MW is expected beginning at 4:00 PM today. Between 3:00 -5:00 PM, load is forecast at or above 29,700 MW, vs the current 2020 peak of 28,867 MW.

It is important to note that load this morning is coming in ~600 MW higher than yesterday’s projections, which reflects how warm it is in the New York region today. Temperatures in New York City are expected to exceed 95 degrees. 

It appears the fireworks have come early this year as several markets are facing medium to high threats for Coincident Peaks (“CPs”) today and into the early part of next week.

With temperatures climbing nationwide, we are predicting some Coincident Peak (“CP”) alert activity this week. For clients looking to save on next year’s Transmission costs and Capacity costs (PJM market only), it will be important to monitor the situation (especially real-time weather conditions) and reduce energy consumption in the late afternoon hours, to the extent possible.