PJM TRACKER: Power prices up nearly 200% as gas price rise pushes up forwards
PJM Interconnection wholesale power prices increased by nearly 200% at some hubs in October on year and between 20% and 30% on month due largely to higher natural gas prices, while forward power prices continued to strengthen over the winter months.
PJM East Hub October on-peak day-ahead locational marginal power prices averaged $51.92/MWh in October which was an increase of $34.58/MWh, or 199%, on year. And on-peak day-ahead power prices at the hub were up by $9.32/MWh, or 22%, from September.
PJM West Hub on-peak day-ahead power prices averaged $67.12/MWh in October, an increase of $42.74/MWh, or 175%, from year-ago levels, while prices at the hub increased by $15.40/MWh, or 30%, on month.
AEP-Dayton Hub day-ahead on-peak power prices averaged $65.43/MWh in October, an increase of $40.69/MWh, or 165%, from October 2020, and on-peak day-head prices at the hub were up by $14.92/MWh, or 30%, from September.
PJM’s wholesale power prices have largely been driven higher by natural gas prices that have rebounded from much lower year-ago levels. The fuel supplies much of PJM’s electricity.
“The upward pressure on coal and gas prices alike continues to push power prices higher,” S&P Global Platts Analytics said in a recent research note.
“We forecast October-November on-peak prices to return below $50/MWh on account of lower loads,” Platts Analytics said.
Platts Texas Eastern gas prices averaged $4.58/MMBtu in October which was 277% higher than the October 2020 average of $1.22/MMBtu. Spot gas prices at the hub were 6.5% higher in October on month.
October Chicago city-gates gas prices averaged $5.26/MMBtu which was a 153% increase from the October 2020 average of $2.08/MMBtu. Gas prices at the hub were about 10% higher on month.
PJM’s higher October power and gas prices came amid a 16% decrease in peak load from September, with October power demand averaging 88,951 MW compared with 105,299 MW the previous month when electric cooling demand was higher.