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PJM has issued another hot weather alert today across the region. Temperatures are likely to exceed 90°F with high humidity causing a steady rise in electricity demand. The five Coincident Peak (CP) demand days for 2020 in PJM are shown below in Figure 1. There is a strong risk that a new CP is set this afternoon as forecasters expect that today’s load will surpass 144,000 MWs by 5:00 PM EST.

Sometimes, no news is good news. Figure 1 shows how calendar year wholesale electricity has traded for 2021 through 2024 in the eastern part of PJM over the last two years. And while this chart seems to show a significant amount of volatility, consider the scale of the y-axis when assessing market movements.

The coronavirus has not only significantly reduced electricity usage and peak demand across the NYISO and PJM regions, it has also dramatically changed how retail electricity suppliers approach fixed price electricity offers to clients. In order for suppliers to generate fixed price offers, they first gather and review the previous 12 months of historic usage data, including the volume of electricity consumed (MWhs) and the peak demand (MWs).

Today (8/25) and Thursday (8/27) temperatures are expected to exceed 90° throughout the Mid-Atlantic region. There is a risk that a new Coincident Peak (CP) is set sometime this week. To do this, the electricity demand in PJM will need to exceed 141,865 MWs. Forecasters expect that today’s load will peak at 143,832 MWs by 5:00 PM. And on Thursday afternoon, the system-wide electric load could set the new peak demand day for 2020.

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.

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). 

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).

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.