Record Heat Stresses Northeast Power Grid

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By Douglas A. McIntyre Updated Published
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Temperatures near, and above, 100 degrees have put some severe stresses on the electricity power grid in the northeastern United States. The New York Independent System Operator reported near-record peak demand of 33,452 megawatts yesterday, just 487 megawatts short of the record set four years ago.

Meeting that demand wasn’t particularly easy, nor was it cheap. Customers who pay a lower rate for interruptible supply were asked to cut 400 megawatts of demand at about 4:30 in the afternoon. Without that cut, a record was well within reach.

The price for wholesale electricity in New York City jumped to $185.94/megawatt-hour, compared with an average price of about $100.85/megawatt-hour.

Remarkably, only a relatively few customers suffered from power outages. In New York City, more than 4,000 customers lost power, while about 3,700 suffered the same fate in Long Island. In Connecticut, some 19,382 customers lost power, mostly in Stamford.

The New York ISO delivers about 18,000 megawatts on an average day, enough to power 800-1,000 homes. The peak demand on days like yesterday is met by a combination of so-called peaking plants, typically natural gas-fired, that can come on-line quickly to meet demand surges.

A one- or two-day power demand spike can usually be managed by system operators, who can get power from distant points on the national grid. Provided, of course, that the grid can handle it. Generally, it can, with some care and with the invocation of interruptible service to large customers.

When the grid fails, though, it’s not a pretty scene. In 2003, a power failure darkened around 55 million people in Canada and the northeast when the grid failed. A power plant in Ohio went off-line at a time of high-demand, placing an unusual strain on power lines which failed when tree limbs struck the lines. The effect cascaded throughout the system and forced the closure of 256 power plants.

Power was restored the next day to areas near the generating plants, but more remote locations took more than 4 days to get back on the grid. New York City was without power for 2 days.

Eleven people died as a result of the blackout and the estimated economic loss totaled $6 billion according to the US Department of Energy. Other analyses have put the cost at as much as double that estimate.

The electricity grid is in better shape than it was in 2003. PJM Interconnection says that it has spent nearly $15 billion since 2000 to improve transmission lines and add new transformers and other components.

State and federal regulators have imposed new rules aimed at avoiding cascading blackouts such as occurred in 2003. These efforts have been only moderately successful.

According to a study at Carnegie Mellon University, from 1984 to 2006 there are about 12 blackouts every year that affect more than 50,000 people each. Another study suggests that a 2003-type blackout will occur every 25 years.

Growing demand for electricity to power air conditioners, computers, and a host of rechargeable devices (soon to include cars perhaps) can be pretty easily met in generation growth. Upgrading the grid, including more high-voltage lines, is much more difficult and expensive. Advanced monitoring equipment and smart metering devices have been installed in some areas and these do help solve grid transmission problems, but these solutions are still incomplete or remain as pilot programs.

Because yesterday’s high temperatures and near-record demand didn’t cause a major power outage the story will quickly fall out of the 24-hour news cycle. Until the next big one hits.

Paul Ausick

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.

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