Electric prices spike amid hot weather in US Midwest
XLU•Wholesale electricity prices surge in the U.S. Midwest
Wholesale electricity prices spiked on Tuesday to more than $500 per megawatt hour in the U.S. Midwest as wind generation came in below forecasts and hot weather taxed fossil fuel power plants.
The price spikes were most severe along the Nebraska-Iowa border near coal plants operated by MidAmerican Energy, a utility owned by Berkshire Hathaway. The elevated prices — about five times higher than farther south — reflected heavy congestion on power lines in the region.
Southwest Power Pool, the grid operator for a territory that is home to 20 million people and stretches from North Dakota to Louisiana, reported the spikes as temperatures in the region rose above 90 degrees Fahrenheit (32 degrees Celsius). Farther south, in Kansas and Oklahoma, prices were less than $100 per MWh, according to SPP data.
Power plants fired by natural gas and coal accounted for about 80% of SPP generation output. Electricity from wind generation was about 7%, falling off sharply from earlier in the day, according to SPP.
On Sunday, the U.S. Energy Department issued an emergency order authorizing SPP to deploy idle power sources to help prevent heat wave blackouts.
The DOE's order came shortly after SPP warned that emergency conditions are likely to persist during peak-demand periods, underscoring the region's vulnerability to power plant outages, declines in wind generation and disruptions in imported electricity.
