U.S. West Electricity Prices Rise Amid Hot Weather, Plant Shutdowns

Wholesale electricity prices gained in the Western U.S. amid forecasts for higher-than-normal temperatures in the Southwest and the shutdown of two generators in Northern California.

Cooling demand will be 6 percent above normal tomorrow in Phoenix, and double the average in Reno, Nevada, according to forecaster Weather Derivatives. The high temperature in Phoenix will be 110 degrees Fahrenheit (43 Celsius) tomorrow, six degrees above average, the Weather Channel said.

At the Mead substation, near Hoover Dam at the border of Nevada and Arizona, wholesale power surged $11.04, or 17 percent, to $76.67 a megawatt-hour at 7:59 a.m. local time, according to Bloomberg data. It was the region's biggest gain in more than two weeks and the highest price since May 30.

"It looks like a little weather, staying kind of the same as yesterday," is boosting power prices, said Saul Lopez, an electricity trader at Silicon Valley Power, the municipal utility in Santa Clara, California. Power demand tends to increase during a heat wave because it takes more and more air conditioning to keep buildings cool.

In Southern California, the price for electricity gained for a second day, rising $9.86, or 17 percent, to $69.23 a megawatt- hour. The price in Northern California increased $5.58, or 10 percent, to $59.38. Northern California power traded as high as $64 a megawatt-hour this morning on the Bloomberg PowerMatch trading system.

The California Independent System Operator, the agency that manages the state's power grid, had asked generators to postpone maintenance work on their power plants for a second straight day because "resources may be inadequate" today. The request was canceled at 9 a.m.

Duke Energy Corp.'s Moss Landing Unit 6 and Unit 7 generators, located about 12 miles northwest of Salinas, California, are expected to be back online either late today or early tomorrow, Duke spokesman Pat Mullen said. The generators can produce 1,510 megawatts.

Wholesale electricity at the California-Oregon border gained $3.75, or 7.6 percent, to $53 a megawatt-hour. At Washington's Mid-Columbia trading point, a benchmark for the Northwest, the price increased $4.05, or 8.9 percent, to $49.45 a megawatt-hour.

One megawatt-hour can power 800 typical U.S. homes for an hour, according to the U.S. Energy Department.

In the Four Corners region, where Colorado, New Mexico, Arizona and Utah meet, the price for power rose for a third session, increasing $12.08, or 18 percent, to $78.33 a megawatt- hour. It was the region's highest price since March 5. At the Palo Verde switchyard in Arizona, the price gained $9.41, or 14 percent, to $74.56.