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The August natural gas wholesale contract was slightly higher on Friday as the wholesale contract settled at $4.399, $0.004 higher on the day. Energy traders are a little dismayed to say the least, since we have seen some of the hottest weather in the past five years prior to the recession and natural gas prices have not budged. Once this heat moves on, energy traders are wondering what’s in store for us then since it’s becoming the key question. Debt ceiling and debt reduction questions are also looming as folks are wondering how this can impact the economy and natural gas prices as well. Current weather forecasts are calling for continued above normal temperatures through much of the eastern and Midwest U.S. into the early parts of August. So the weather continues to be warm and natural gas prices seem to be unresponsive at the moment.
On the electricity front this morning, PJM Interconnection, the grid operator that manages the high voltage transmission system in all or parts of 13 states and Washington, D.C., set a new record for peak power use on Friday at 5 p.m. by meeting the demand for 158,450 megawatts (MW) of power. One megawatt of power is enough to power about 1,000 homes. The previous record for peak demand was set on August 2, 2006. When adjusted for the June 1, 2011, integration into PJM of FirstEnergy's American Transmission Systems, Inc. and Cleveland Public Power, the all-time peak would have been 158,258 MW. PJM Interconnection, founded in 1927, ensures the reliability of the high-voltage electric power system serving 58 million people in all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. PJM coordinates and directs the operation of the region's transmission grid, which includes 61,000 miles of transmission lines.
In ConEd on Friday, overall electric use peaked at 13,189 megawatts (MW) at 4 p.m. Friday, eclipsing the all-time record of 13,141 MW set on August 2, 2006. The company continued to urge customers to use energy wisely as New Yorkers in the city's five boroughs and Westchester cope with sizzling heat and stifling humidity. Demand response programs, which pay large customers to cut back on power usage during heat waves, were credited with reducing peak demand Friday by approximately 500 MW. The company also saluted its 3.2 million customers who heeded calls to conserve power, and credited them with a key assist in keeping the power flowing reliably.
In the BGE service territory on Friday as well, BG&E activated a power management program to reduce the amount of electricity some residential customers use. BGE representatives also underscored an ongoing request for customers to conserve energy wherever possible and said Friday that the utility was responding to "scattered power outages" that may be associated with the hot weather. The utility's website indicated that 3,164 residential customers were without power as of 2:50 p.m. Friday, including 2,744 in Baltimore County and 355 in Baltimore City. As of 3 p.m. Friday, temperatures reached 107 degrees in Baltimore's Inner Harbor, and an excessive heat warning remained in effect until 10 p.m. BGE took steps to limit about 450,000 residential customers' energy usage at about 11:30 a.m. Friday, when it activated the "PeakRewards" air conditioning and water heater programs. Officials said they expect the program, which is voluntary, to remain in effect until at least late afternoon. BGE customers who enrolled will experience "cycling" of central air conditioning units and water heaters in return for credit on their bills. Those on the air conditioning program, for example, will have their units' compressors cycled at 50, 75 or 100 percent. Those who selected 100 percent cycling for the maximum bill credits will have their compressors off for the duration of the PeakRewards "event." Some customers who enrolled seem to have second thoughts about “cycling” of the air-conditioners since they seem to forget they are on “cycling” and start calling the utility on why their air conditioners are not running during the heat wave. It seems that the perception of receiving the credit out weigh’s the reality of not having maximum air-conditioning when one needs it the most.
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