Skip to comments.Northeast and Mid-Atlantic power prices react to winter freeze and natural gas constraints
Posted on 01/21/2014 9:59:24 AM PST by thackney
A record-setting bout of bitter cold weather swept down through the Midwest and across most of the country in early January. The Northeast region reacted with upward spikes in wholesale natural gas and power prices as generators and other customers struggled to procure natural gas supplies. In the Mid-Atlantic region, record-high winter peak demand along with unexpected outages of power plants and natural gas equipment drove peak electricity prices even higher than in New York and New England. The sharp rise in Northeast and Mid-Atlantic natural gas and power demand also spurred record-high natural gas storage withdrawals.
The PJM Interconnection's (PJM's) electric system, which covers the broader Mid-Atlantic region and parts of the Midwest, broke its previous record winter peak demand (136,675 MW in 2007) two times on January 7, hitting a new peak of 141,312 MW. This level was about 7% higher than PJM's forecasted peak.
The extremely cold temperatures, combined with unexpected outages of power plants and a natural gas compressor station in western Pennsylvania, pushed day-ahead, average on-peak power prices up to $268.84/MWh and natural gas spot prices to $33.53/MMBtu. Real-time, hourly prices during January 7-8 reached as high as the $800/MWh range with 15-minute periods of more than $2,000/MWh.
Unlike in New York and New England, these price movements went far above prices seen in PJM last winter. PJM relies to a lesser extent on natural gas for power than the Northeast, and the atypical weather and unexpected power plant outages likely played a bigger role in the price spikes than persistent natural gas supply constraints. According to PJM's preliminary report, there were nearly 40,000 MW of forced outages on the evening of January 7 and morning of January 8, far more than encountered during the top six winter peak demand days of the past five years, which saw, at most, about 16,000 MW of forced outages. PJM estimates around 6,000 to 9,000 MW of the January 7-8 outages were due to natural gas curtailments.
In response to the extreme weather conditions, the Federal Energy Regulatory Commission (FERC) granted PJM a temporary emergency waiver to allow it to exchange nonpublic information with interstate natural gas pipelines about gas availability for power generators and generation schedules. FERC had ruled in November 2013 to allow interstate natural gas pipeline and electric system operators to share nonpublic operational information to facilitate natural gas and power reliability. However, PJM had not completed implementation of the ruling by the time the January weather hit.
Odumbo’s war on coal is going pretty well eh?
SkyROCKET baby! SkyRocket!!!!!!
As an owner of the mineral rights for three producing wells, I’m (against my will of course) finding the war on coal increasingly compelling.....
I was thinking along the same lines... how are the solar panels and wind mills doing ,they could be producing the lost electric power, and helping with the ppl charging their electric cars...
Yepper, “global warming” alright............
lol for sure! ;-)
I hope everyone who has voted for LIBs/DIMs at any level is warm and toasty, staring at their high utility bills. Bwahahahahahahahahahahahahaaaaaaaaaaaaaaaaaaaaaaaaaaaa!