PJM Interconnection power and natural gas prices climbed across the board year over year in April, with power prices up almost 70% at some hubs, reflecting a nearly 7% peak load increase from April 2020 when power demand was lower due to coronavirus pandemic lockdown impacts. Long-term weather forecasts indicate potentially warmer year-over-year Northeast US summer temperatures, which could support power and gas prices.
Average day-ahead on-peak power prices at the Northern Illinois Hub increased 69.73% in April from the year prior, increasing from $16.36/MWh in April 2020 to $27.77/MWh in April 2021, according to ISO and S&P Global Platts data.NI Hub power prices were up almost 21%, or $4.77/MWh, in April from March 2021.
Similarly, AEP-Dayton Hub average on-peak day-ahead power prices increased 68.46% in April year over year, rising from $18.46/MWh to $31.10/MWh.
PJM Eastern Hub average day-ahead on-peak power prices increased 37.61% year over year in April but declined 35.25% month over month as temperatures moderated after a cooler March.
Platts Chicago city-gate average spot gas prices increased 52.75% year over year in April, rising from $1.66/MMBtu to $2.45/MMBtu, according to Platts data.
PJM average peak load was up 6.94% in April from the year prior, increasing from 78.3 GW to 84.1 GW. However, average peak load declined 8.93% month over month as temperatures warmed in April and power demand decreased from 91.6 GW in March.
Forward marketsPJM forward power prices increased on a month-over-month and year-over-year basis in April.
The PJM West forward on-peak power price package for May averaged $30.26/MWh in April, up 3.86% from the previous month, according to Platts pricing data. The July package traded at an average $36.50/MWh in April, up 1.98% from March.
Average PJM West on-peak forward power prices for May were up 44% from April 2020. And year over year, the AEP-Dayton Hub May forward package was up 45% while the Northern Illinois Hub was up 44%.
Forward gas prices at Transco Zone 6 non-New York for July were up slightly month over month and up by 26.57% year over year in April, trading at an average $2.34/MMBtu.
Power generation fuel mixNatural gas-fired power generation increased slightly in April from March to supply a little over 37% of the PJM fuel mix. Gas-fired generation was down from almost 39% of the fuel mix in April 2020 when gas prices were lower due to demand-related pandemic impacts, which made the fuel attractive to power generators.
With gas prices up year on year, coal-fired power generation in April increased from the prior year to supply 19% of PJM's electricity, an increase from about 14% in April 2020, based on PJM data.
Coal-fired generation was down from March 2021 when it accounted for a little over 20% of PJM's fuel mix.
Long-term weather outlookPhiladelphia and Washington are predicted to experience about the same number of days above 90 degrees Fahrenheit as in 2020, which was an above normal year, according to a recent AccuWeather long-term outlook.
Philadelphia was above the 90-degree mark 36 times in 2020 with the normal being 31 days, and the city could have up to 38 days above 90 degrees F in 2021. Washington may approach 90 F on 50 days in 2021 after 46 days above that level in 2020, with the normal being 45 days, AccuWeather said.
Overall, temperatures may be around 1-3 degrees above normal this summer across the northeast, while temperatures are expected to average close to normal across the Ohio Valley and lower Midwest, weather forecasters said.
EVENTS
