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Extreme Heat Lifts US Power Prices on Thursday as Operators Brace for Record Demand Amid Heat Dome

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Electricity prices across major US wholesale markets climbed by midday Thursday as extreme heat drove electricity demand higher across several regional grids.

The PJM Interconnection's real-time locational marginal price stood at $586.33 per megawatt-hour as of 2:45 p.m. ET on Thursday, while the day-ahead price is $370.91/MWh. Day-ahead LMP prices are expected to peak at $1,219/MWh at 7 p.m. ET.

PJM's generation mix was dominated by natural gas at 69.54 gigawatts, accounting for 45.2% of total generation, followed by nuclear at 31.99 GW or 20.8%, coal at 29.68 GW or 19.3%, and solar at 13.15 GW, representing 8.5%. Wind, oil, hydro and other sources supplied the remainder.

The New York Independent System Operator logged real-time LMP prices at $359.27/MWh as of 2:30 p.m. ET, while day-ahead prices were at $450.2/MWh. Day-ahead prices are expected to peak at about 6 p.m. ET at $808.21/MWh.

Dual-fuel generation led the New York Independent System Operator's fuel mix at 10.13 GW, accounting for 38.9% of total generation, followed by natural gas at 6.04 GW or 23.2%, hydro at 3.69 GW or 14.2%, and nuclear at 3.25 GW, representing 12.5%. Wind and other sources supplied the remainder.

In ISO-New England, the spreads between real-time and day-ahead LMP prices widened sharply around midday. Real-time prices were around $94.56/MWh as of 2:35 p.m. ET, while day-ahead prices were at $594.4/MWh. Day-ahead prices are forecast to peak at around 4 p.m. at $934.98/MWh.

Natural gas led ISO-NE's generation mix at 12.37 GW, accounting for 47.4% of total generation, followed by behind-the-meter solar at 5.88 GW or 22.6%, nuclear at 3.34 GW or 12.8%, and hydro at 1.70 GW, representing 6.5%. Solar, oil and other sources supplied the remainder.

The Midcontinent ISO real-time LMP rose to $344.07/MWh as of 2 p.m. ET, far higher than day-ahead prices, which were at $175.01/MWh. Day-ahead LMP is expected to peak at $839.97/MWh at 7 p.m. ET.

Natural gas led the Midcontinent Independent System Operator's generation mix at 41.43 GW, accounting for 35.4% of total generation, followed by coal at 37.98 GW or 32.4%, solar at 16.11 GW or 13.8%, and nuclear at 11.71 GW, representing 10.0%. Wind and other sources supplied the remainder.

Meanwhile, PJM extended its Hot Weather Alert through at least July 3 and forecast peak electricity demand of 166.241 GW for Thursday, which would surpass its previous summer record of 165.563 GW set in 2006.

PJM recalled generating units from maintenance ahead of the heat wave and secured emergency Department of Energy orders allowing transmission owners to curtail large electricity users with backup generation if needed.

The operator also granted temporary relief from environmental permit restrictions for generating units through July 3.

NYISO also issued a systems condition update on Thursday. "Special Case Resources and Emergency Demand Response Program resources are needed today, July 2, 2026, starting at 15:00 and ending at 22:00," NYISO said.

NYISO has warned that the program may continue until Friday, starting at 3 p.m. ET and ending at 10 p.m ET.

On Wednesday, NYISO also published updates on heatwave preparation and demand on the High Voltage Electric System.

"With extreme heat affecting New York and temperatures expected to remain high through the week, consumer demand on the electric system is rising as homes and businesses rely more heavily on air conditioning," NYISO said.

It added that higher temperatures can strain the grid. "High temperatures, elevated humidity, and sustained air conditioning load can place added pressure on generation and transmission resources across the state," NYISO said.

The operator forecast the baseline peak demand for Thursday during the heatwave of about 32.41 GW. On Friday, peak demand is projected to fall to about 30.68 GW, and on Saturday to 28.250 GW.

ISO-NE also reported expecting additional demand on Thursday evening. "ISO New England is expecting exceptionally tight operating conditions on the regional electric grid over the evening peak today, Thursday, July 2, 2026," the operator said in an update.

ISO-NE has projected peak demand to reach 25.850 GW on Thursday, then drop to 24 GW on Friday and 21.95 GW on Saturday.

MISO said grid conditions remain stable, even though summer heat is pushing prices higher across its hub.

"Ahead of the heat wave, MISO declared Conservative Operations, moving our grid gauge into the yellow Advisory/Warning position. This step helps position every available resource, including generation, transmission, demand response and imports, to support reliability," MISO said in an X post on Wednesday.

The operator added that preparations included rescheduling planned outages, returning transmission lines to service, and recalling generators from maintenance.

"We continue to coordinate closely with our member utilities and neighboring grid operators as conditions evolve," MISO said.

A major heat wave driven by a heat dome is expected over the weekend. A heat dome is an atmospheric phenomenon that causes extreme heat by trapping hot air.

"Dangerous heatwave continues across the central and eastern US through the end of the week," according to the National Weather Service in a Thursday update.

It added that severe weather and heavy rain threats continue across the Plains, Upper Midwest, Southeast, and Northeast over the next few days.

"Numerous daily temperature records are possible, while warm overnight lows in the 70s to 80s will provide little relief, bringing Major to Extreme HeatRisk conditions across the Midwest into the East

Coast," NWS warned.

Weather forecaster AccuWeather forecasts that a heat dome will develop. "A major heat wave will grip close to three dozen states in the days leading up to the Fourth of July and could put millions at risk for heat-related illness," it said.

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