Electricity demand reached record-breaking levels in January 2014

ERC report explains how record-breaking demand affects electricity costs

Salisbury, MD, May 15, 2014—Record-breaking levels of energy demand and consumption were recorded in January 2014. On January 7, PJM—a regional transmission organization (RTO) that coordinates the movement of electricity in 13 states—recorded its highest winter peak ever—141,396 megawatts. Eight of the 10 highest winter demand levels for electricity ever recorded by PJM occurred in January 2014. PJM called an emergency load response event on January 7, and again on January 23. In contrast, PJM called only one emergency load response event in all of 2013, and that event occurred in September during extreme heat. Four other RTOs also reported record-breaking winter peak demand in January 2014.

On January 6, 2014, temperatures in key consuming regions of the U.S. dropped to an average of -10 °F, with a wind chill of -33 °F. On January 7, 2014, record-breaking temperatures in the PJM territory dropped to 4 °F in Philadelphia, 10 °F in Richmond, and -16 °F in Chicago.

During all of 2013, the average cost for PJM to ensure reliable power delivery was $53/MWh; in January 2014, the average cost was $150/MWh. Cold weather burdened all types of power generation, including gas, coal, and nuclear power plants. Some generators experienced extended run times, resulting in unplanned shutdowns. In the Electricity Reliability Council of Texas (ERCOT) territory, two power plants tripped offline on January 6, and wholesale prices reached $5,000/megawatt hour (MWh) for the first time ever. Average electricity prices were greater than $1,300/MWh in ERCOT territory, which is 40 times higher than average.

The Energy Research Council’s (ERC’s) report, “Polar vortex effect on electricity prices,” discusses how peak demand led to increased ancillary costs, and describes how different “change-in-law” provisions are impacting customer electricity bills.

About Energy Research Council
Sponsored by APPI Energy, ConEdison Solutions, Constellation, Direct Energy, Liberty Power, and Washington Gas Energy Services, the ERC provides facts-based thought leadership for the energy industry. The ERC conducts quarterly research to understand the energy needs, practices, and priorities of middle-market companies. Reaching members of more than 100 trade associations and the broader business community, the ERC equips customers to make smart energy decisions. For more information about the ERC, visit http://www.energyresearchcouncil.com or contact James Moore, ERC President, at 410-749-5519.

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