With a relentless heat wave locked over much of the eastern United States, near-record electricity demand was recorded in New York state and PJM Interconnection's 13-state and District of Columbia service area Tuesday, and temperatures Wednesday once again pushed demand to near-record levels. Despite the most recent heat wave, natural gas prices both in the cash and futures markets trailed lower Wednesday.

Triple-digit temperatures were reported from Georgia to New Jersey Wednesday, with temperatures in the 90s across much of the Northeast, according to Accuweather.com. Temperatures in the Mid-Atlantic are expected to ebb Thursday, with 94 degrees the forecasted high for Washington, DC, and could be a more seasonal 90 degrees by Friday, the forecaster said.

PJM's preliminary peak demand on Tuesday was 136,398 MW at 5 p.m. EDT, which exceeded the 135,750 MW forecast demand for the summer. It was PJM's third highest demand ever and the highest demand in PJM since 2007, when the peak demand was 139,568 MW. With temperatures reaching similar highs across much of the region Wednesday, PJM reported peak demand of 135,071 MW at 5 p.m. EDT.

During times of peak electricity demand, peaking power generation units, which are normally natural gas-fired, are called into service. However, according to recent natural gas market activity, demand has not spiked. While natural gas cash point averages increased across the board on Tuesday with double-digit-cent gains leading the way in the Northeast, those same cash points retreated on Wednesday for Thursday delivery by the same or larger margins (see related story).

Natural gas futures traders were equally unimpressed. After the August contract declined by a half penny on Tuesday, the front-month contract dropped another 11.7 cents on Wednesday (see related story).

On Wednesday afternoon PJM asked customers in the service territories of Atlantic City Electric, Baltimore Gas and Electric Co., Delmarva Power, Dominion, Jersey Central Power & Light Co., PECO, Pepco and Public Service Electric & Gas Co. to conserve energy.

"Demand for electricity is expected to increase as the excessive heat and humidity continue...utility customers in load management programs in the affected service territories have been told to reduce their electricity use," according to the spokesman. PJM may take additional steps, including reducing voltage, if necessary, he said. Those calls for load management reduced demand, ensuring sufficient power reserves, PJM said.

Because power reserves in the Mid-Atlantic Region were tight on Tuesday -- peak demand in the region was 60,166 MW at 5 p.m. EDT, compared with the record demand of 62,017 MW -- PJM issued a voltage reduction warning for the region. The voltage reduction warning was canceled Tuesday evening as demand decreased, and an actual voltage reduction did not occur, a PJM spokesman said. Preliminary peak demand in the Mid-Atlantic was 58,807 Wednesday.

Thursday's forecast peak demand is 130,000 MW for PJM and 58,800 MW for the Mid-Atlantic, PJM said.

Demand in New York hit the third highest total ever on Tuesday (33,452 MW), according to the New York Independent System Operator (NYISO). The grid operator said there are sufficient power reserves to handle the excessive demand, noting that the reserve standard calls for nearly 39,000 MW being available.

New York's all-time record power demand of 33,939 MW was reached Aug. 2, 2006, and its second highest was set the day before that year at 33,879 MW.

New York has never experienced demand in July at the levels reached Tuesday. Previous all-time highs for the month were at 32,624 MW, experienced July 17, 2006. NYISO officials said Tuesday's demand also was more than 2,600 MW higher than the highest peak demand experienced during all of last year when a peak-demand level of 30,844 MW was recorded Aug. 17, 2009.

Noting that the state grid operator works with producers, transmission providers, energy service companies and government officials to maintain reliable electric service in peak-demand periods and year-round, NYISO CEO Stephen Whitley said even with the near-record levels of demand, "New York's power system performed well and there were sufficient resources to reliably serve the needs of consumers."

For New York, peak-demand summer loads can reach 60% higher than the year-round average load, which in 2009 was 18,126 MW, NYISO said. "Power demand can spike sharply during extreme summer weather conditions as air conditioning and cooling systems increase electricity consumption," a NYISO spokesperson said.

Consolidated Edison Co. of New York Inc. (Con Edison), which delivers electricity to New York City and Westchester County, NY, said its peak demand was 12,963 MW at 5 p.m. Tuesday. "Usage would have been even higher if not for the efforts of Con Edison's customers, who responded to the company's request for conservation," a Con Edison spokesman said.

Con Edison has restored power to about 18,700 customers who lost power due to the heat wave and was working to restore power to about 6,300 others on Wednesday, the spokesman said. The company imposed voltage reductions of 5-8% in parts of Brooklyn and Queens Tuesday and in the early morning hours of Wednesday due to problems with overheated cables. Con Edison asked customers in the affected areas to turn off electrical appliances until the equipment problems are resolved.

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