Power prices top $1,000 on PJM as DoE issues emergency order to prevent blackouts

An unusual blast of warm weather across the U.S. Midwest and Mid-Atlantic has coincided with the middle of PJM Interconnection's fall maintenance season, which prompted the Department of Energy to issue an emergency order for the October 13-16 period to authorize the regional grid operator to use extra backup generation resources as needed to keep the power running.

Spot power at PJM's Western hub hit $1,021/MWh Tuesday afternoon, more than double the day-ahead average for that hour, and day-ahead prices for Wednesday jumped 28% to $295.83/MWh, the highest daily average since mid-July, Bloomberg reported.

"Increased baseload electricity demand is growing faster than new capacity can come onto the system, and unseasonable weather patterns are providing fewer days to perform important maintenance or construction on the generation and transmission equipment serving our footprint," PJM said.

But the largest U.S. grid operator said it believes its procedures and the DoE order will allow it to keep a reliable flow of power, noting it can redirect data centers and other large loads to backup generation under the order.

PJM said it expected to come within 900 MW of its reserve margin and overall demand totaling 113,312 MW on October 14, with the most "acute" issues anticipated in areas served by Dominion Energy (D) and Exelon's (EXC) Baltimore Gas and Electric and Pepco.

PJM serves 67M people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and Washington, D.C.