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By Tim McLaughlin and Laila Kearney
- Transmission congestion leads to soaring electricity prices
- Natural gas supply issues contribute to generator outages and price spikes
- PJM high-voltage line restrictions expected to average nearly 13 hours on Thursday
BOSTON/NEW YORK, Jan 28 (Reuters) – Transmission line congestion on the largest U.S. power grid is expected to soar on Thursday as the PJM Interconnection forecasts record winter power demand ahead of the weekend, boosting electricity prices and raising the chances for rolling blackouts.
Congestion prevents the cheapest electricity being delivered to homes and businesses, forcing PJM and other grid operators to dispatch less efficient and more expensive power plants to meet demand. As a result, PJM’s spot wholesale electricity prices have soared past $1,000 per megawatt hour this week in areas where power line congestion has constrained the flow of electricity.
Turbulence on power lines and related equipment also can lead to small, controlled blackouts, which can spread if the issues are not addressed. This week, PJM issued five warnings to utilities about potential small power cuts related to transmission line problems. No power cuts have been ordered by PJM yet though.
Restricted natural gas supplies to power plants have also been a major factor in causing generator outages and boosting spot prices, according to analysts and PJM data.
PJM, which manages the flow of electricity for 67 million people in 13 Midwest and Mid-Atlantic states and Washington D.C., forecasts more than 1,400 high-voltage lines would have restrictions on Thursday with disruptions averaging nearly 13 hours.
About 64% of the constraints will last 1-3 hours and about 30% will have a duration of 4-12 hours. The turmoil extends a pattern that began to take shape late last week, PJM data shows.
For example, power lines and transmission equipment serving the Fort Martin Power Station, a West Virginia coal plant near the Pennsylvania border, had constraint issues on Wednesday morning, according to PJM reports.
Before heavy snow and frigid temperatures hit the eastern U.S. this week, congestion on PJM’s transmission network affected only about 60 power lines with constraints lasting an average of about 4 hours, PJM data show.
PJM, along with electric grids in New York and New England, are reporting that high-voltage lines throughout their territories are being overloaded from a surge in electricity demand or they have equipment issues caused by temperatures hovering above 0 degrees Fahrenheit (-18 Celsius).
PJM predicts electricity demand will rise to 148 gigawatts on Friday, setting an all-time record for winter.
On Wednesday morning, PJM’s average spot electricity price was about $730 per MWh, with prices more than double in the zone operated by Dominion Energy (D.N), opens new tab at about $1,600 MWh.
Financial firm LSEG said average gas output in the Lower 48 states dropped to 106.1 billion cubic feet per day so far in January, down from a monthly record high of 109.7 bcfd in December.
On a daily basis, output was on track to rise for a third day in a row to 97.5 bcfd on Wednesday after falling to a two-year low of 92.5 bcfd on Sunday, due mostly to freezing wells in Texas, Louisiana and Oklahoma, according to LSEG data.
(This story has been refiled to say ‘forecast record’ demand in the headline)
Reporting by Tim McLaughlin in Boston and Laila Kearney in New York; Editing by Chris Reese
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