What is driving elevated prices in PJM?

From early July PJM's most liquid hub, West Hub, experienced elevated prices (>$400 on 7/16). The cause, as determined by Wood Mackenzie's PJM analyst team, was in part due to an emergency Conastone 500 transformer outage, located between Baltimore and Harford County, Maryland, driving congestion during some of the hottest days over the past 5 years. 
 
The outage, which began on July 2nd, was initially scheduled to return to service in the evening on July 6th but has now been extended to December 31st. Such a long outage, in a critical area of PJM, likely indicates serious damage to the substation in the form of a fault or fire. With limited information available, Wood Mackenzie analysts question how realistic this timeline will be. Regardless of the exact timing of the return to service, the expectation is for this outage to be a long-term concern for PJM and market stakeholders. 
 
Wood Mackenzie’s proprietary CongestionIQ and Lens Power platforms not only identified this outage, but also pinpointed trading nodes that have seen drastic swings in pricing as a result. 

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