BOSTON, June 24 (Reuters) - The electric grid for Boston

and the surrounding region operated under a precautionary alert

on Tuesday as the surplus of power was expected to narrow to a

razor-thin margin due to soaring temperatures.

New England joined other U.S. regions deploying exigent and

emergency strategies to avoid widespread outages. The U.S.

Department of Energy on Tuesday ordered Duke Energy Carolina

to use specific electric generating units to operate at

their maximum generation output levels in the southeast.

Duke Energy ( DUK ) said it may not have sufficient generation

available to meet unusually high demand and may have to curtail

electric use to avoid outages, according to the DOE order. As a

result, the utility has notified some wholesale customers to

limit their use, which is expected to reduce electricity demand

by up to 1,000 megawatts during peak hours.

In addition to increasing imports from adjoining regions and

asking power plant operators to defer maintenance, grid

operators and utilities are calling on stand-by units to boost

the supply of electricity.

ISO New England, the electric grid operator for the

six-state region, began operating under a precautionary alert

late on Monday as energy supplies tightened.

Wholesale electricity prices over the past 24 hours in New

England have signaled tightening supplies, with the grid

reporting nearly $430 per megawatt hour (MWh), a ten-fold

increase over prices when the system is not stressed.

To prepare for Tuesday's scorching heat, ISO New England

directed power plant operators not to do any testing or

maintenance that would affect electric reliability.

Temperatures in Boston are forecast to approach 100 degrees

Fahrenheit (38 degrees Celsius) on Tuesday afternoon, according

to the National Weather Service.

ISO New England forecast that electricity demand would

approach 26,000 megawatts by late on Tuesday, short of the

record high of 28,130 MW set in August 2006.

Last month, ISO New England predicted electricity demand to

reach 24,803 MW under normal weather conditions, and up to

25,886 MW during any periods of above-average summer weather,

such as an extended heat wave.

The latest forecast predicted that demand would peak on

Tuesday evening at 25,800 MW. Surplus capacity was expected to

fall to 266 MW, a departure from a typical margin of several

thousand megawatts during more temperate weather.