Traders Lured to Bet on Power Overloads Worth Billions
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Payouts that reached almost $2 billion in the first quarter are attracting traders to the transmission-rights markets run by regional U.S. power-grid operators.
The rights are wagers on where power lines may overload, choking the flow and forcing higher-cost electricity to be substituted. They generated $1.12 billion in profits for traders within PJM Interconnection LLC’s market in the mid-Atlantic and Midwest, more than triple 2013’s total, according to the operator. Payments were $462 million in New York, $109.6 million in California and $103.2 million in Texas, reports from the grids show.