Factbox: US power load changes as stay-home orders expire, businesses begin to reopen - S&P Global

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Highlights

Load and prices rebound in several ISOs

FERC wary of potential reliability issues

New York — US power demand is showing some signs of recovery across the country as nearly half the states allowed stay-home orders to expire in recent days. However, many have a phased-in approach in place that still limits activity, while some local jurisdictions decided to extend the orders.

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When states shut down in March in an effort to stop the spread of the virus, power load dropped as the commercial sector closed down. That drop in demand in turn pulled down power prices across the country at a time when prices already were falling in response to milder spring weather. Adding to the market weakness were record-low natural gas prices from oversupply due to strong production and mild winter weather.

Grid operators continue to monitor the ever-evolving situation and maintain there is no threat to grid reliability. However, the market remains in uncharted territory.

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PRICES

• **SP15 day-ahead on-peak locational marginal prices in California reached $27.80/MWh April 27, the highest level since the statewide stay-home order was issued. In the last week, SP15 spot prices have averaged about $20/MWh, up about 25% from the first two weeks of April.

  **Forward packages are trending down with SP15 on-peak May down 20% month on month to average about $17/MWh, the lowest level in at least a year, while on-peak June forwards fell 10% month on month to average nearly $26.75/MWh.

  **Average ISO-New England Internal Hub day-ahead power prices increased 7% from March to April, rising from $17.18/MWh to $18.36/MWh.

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• **Average real-time New York ISO Zone J NYC power prices are down 13% month on month in April, decreasing from $16.98/MWh to $14.79/MWh

  **Average real-time PJM West Hub power prices fell 4% from March to April, decreasing from $18.17/MWh to $17.46/MWh.

  **Southwest Power Pool South Hub on-peak real-time locational marginal prices increased nearly 43% in the second half of April compared to the beginning of the month, after prices fell almost 10% from February to March and dropped 17% between March and April.

• **Southwest region power packages rose over the last few week, driven by above-average temperatures and recovering power demand, as states begin reopening some businesses. Palo Verde on-peak day-ahead rose to $28.42/MWh April 28, its highest level since mid-March.

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TRADE FLOWS

• **Weekday average load reductions of 4.5% and up to 7% during peak hours were observed in the California Independent System Operator since the statewide stay-home order started.

  **But over the last week Cal-ISO demand has averaged 28,643 MWh, jumping nearly 20% from the first few weeks of April.

  **Forecasters continue to see a 3% to 5% decline in overall consumer demand for power in Cal-ISO due to pandemic-related societal changes.

  **Load reduction in the Midcontinent Independent System Operator is about 10% lower than normal the past three weeks. Load was 9.6% lower than normal last week and the percentage of reduction appears to have stabilized.

  **As of April 20, MISO has seen 101, or roughly 16%, of planned transmission outages move, the majority of which are COVID-19 related. This translates into an additional 17 outages that are scheduled/rescheduled since April 13. Half of those have been delated and are expected to impact May and the first part of June. The other half have been cancelled.

• **A total of 19.5 GW of planned MISO generation outages, approximately 35, have been cancelled or rescheduled and are related to COVID-19 impacts. This translates into about 1.5 GW since April 13. About 30% are looking to reschedule to fall, another 30% are still determining plans, and the remainder are trying to accommodate outages prior to June with 1.1 GW tentatively scheduled for early June.

• **New York City hourly power demand from April 20 to April 24 ranged from 5% to about 20% below typical levels. For weekdays, New York City power consumption reductions averaged 20% below expected levels during the 8 am hour.

  **New York Control Area-wide power load peaks averaged 7% to 8% below expected April 20-24.

  **New York Control Area-wide reductions in power consumption compared to typical demand levels ranged from about 3% during the 12 am hour to just under 14% during the 7 am hour.

  **In PJM Interconnection, average load in April was down 11% compared to average March load, as of April 27. Weekday peak loads were down 8% to 10%.

  **PJM has not seen any issues with natural gas pipeline maintenance impacting power generators.

• **In the Southeast region market, Georgia allowed gyms, hair and nail salons, barbershops and bowling alleys to reopen April 24, and some restaurants and movie theaters to reopen April 27, while the "shelter-in-place" order remained in effect through April 30. Despite this action, US Energy Information Administration data shows average daily power usage for the period of April 24-28, at 476 GWh, was down almost 6% compared with the same days of the previous week.

  **South Carolina allowed retail stores to reopen April 20 with social distancing requirements, including allowing no more than 20% of customer capacity at any one time. Public beaches, piers, docks were allowed to reopen April 21. EIA data shows average daily power usage for April 20-28, at 464 GWh, was down 2.8% compared with the previous nine days covering those same days of the week.

  **Tennessee allowed restaurants to reopen April 27 and most retailers to reopen on April 29, with occupancy limited to 50% in both categories. EIA data shows average daily power usage for April 27-28, at 342.8 GWh, was down 2.2% compared with the same period of the previous week.

  **SPP peakload has averaged 4.6% lower month on month in April, and 4.4% from a year ago.

INFRASTRUCTURE

• **Federal Energy Regulatory Commission Chairman Neil Chatterjee said he sees a need to turn attention to grid reliability challenges that could arise when the country reopens following pandemic precautions, particularly if shifting dispatch patterns threaten the viability of some generating resources. If some sources of generation don't survive, Chatterjee called it FERC's obligation to make sure the grid remains reliable and affordable. FERC Commissioner Richard Glick pushed back on the need for FERC to get involved, saying the states and market should assess and determine resource mix needs. He suggested that excess capacity in several regions could blunt any reliability impacts from generation loss.

  **Stay-at-home orders and a boom in telework has shifted energy usage to the distribution system, raising concern as to whether the edge of the grid is equipped to handle the new demand patterns. "This is pushing us to explore options. We'll see what the consumer wants as well and see what will make them more effective in whatever the new normal becomes," Juan Torres, associate laboratory director of energy systems integration at the National Renewable Energy Laboratory, said.

  **Amit Ronen, an advisor to Senator Maria Cantwell, Democrat-Washington, suggested that many of the trends seen in the electricity sector, such as the move toward a cleaner energy system and more distributed generation, would accelerate in response to and in the wake of the pandemic.

  **The likely need for further stimulus to boost the economy once the US has a better grip on the health crisis could provide the impetus and vehicle for lawmakers to use federal dollars and other tools to spur infrastructure development and grid modernization, Ronen asserted.

  **ISO-NE's market administration staff has transitioned to remotely clearing New England's wholesale power markets.

  **MISO operations personnel are split across four locations.

  **On April 11, PJM began sequestering a team of operators for a minimum of 21 days. PJM has retained an epidemiologist to assist with the grid operator's pandemic measures and operator sequestration efforts.

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