Low temperatures push up US Northeast power, gas prices

Some of the coldest weather in the US Northeast this winter season has pushed up power and natural gas prices in ISO New England and New York Independent System Operator territory over the past week, with another bout of low temperatures expected early next week.

ISO-NE Internal Hub on-peak day-ahead power prices averaged $63.77/MWh in November while during the week ending Dec. 5 power prices at the liquid trading hub averaged $161.97/MWh, according to ISO data compiled by Platts, part of S&P Global Energy.

Internal Hub on-peak day-ahead daily average power prices reached as high as $212.24/MWh on Dec. 5 when the high temperature in Boston was forecast to reach 27 degrees Fahrenheit, according to the National Weather Service.

A similar trend was observed with natural gas prices. The fuel accounted for 55.3% of the region's power generation fuel mix in November.

Algonquin city-gates gas prices averaged $4.69/MMBtu in November and jumped to an average of $17.58/MMBtu during the week ending Dec. 5.

Algonquin city-gates gas prices saw a 182.17% week-to-date increase, moving from $7.29/MMBtu Nov. 28 to $20.57/MMBtu Dec. 5, spiking Dec. 4 to a high of $24.51/MMBtu.

The gas price reached Dec. 4 was the highest since Jan. 21, when the generation fuel traded at $33.52/MMBtu, which was also the highest price reached so far during the year.

The prompt-month forward gas price at the hub averaged $18.55/MMBtu, according to Platts M2MS data.

The rise in the Algonquin city-gates gas price comes as Boston temperatures decreased significantly during the week, moving from 43 F Nov. 28 to the forecast of 27 F Dec. 5. Temperatures were expected to remain at Dec. 5 levels, with highs expected at 29 F Dec. 9, 14 F below Boston's five-day norm, according to CustomWeather data.

The overnight low in Boston on Dec. 8 is forecast to reach 13 F.

ISO-NE peakload averaged 15,086 MW in November, compared to an average of 17,425 MW from Dec. 1 to Dec. 4, according to ISO data.

Similar dynamics in NYISO

Zone J New York City on-peak day-ahead power prices averaged $62.00/MWh in November before jumping to an average of $125.36/MWh for the week ending Dec. 5.

Zone J on-peak day-ahead power prices reached a daily average of $138.77/MWh Dec. 4. when the average daily temperature across the NYISO footprint was 29.4 F, according to CustomWeather data. The temperature was forecast to average 21.9 F Dec. 5.

The low temperatures also pushed up regional gas prices, though not to the levels observed in New England.

Transco Zone 6 gas prices averaged $3.48/MMBtu in November before jumping to an average of $5.73/MMBtu for the week ending Dec. 5.

Prompt-month forward gas prices at the hub are forecast to average $12.37/MMBtu.

However, NYISO power and gas prices could increase slightly during the week ending Dec. 12 when temperatures across the ISO are forecast to average 24.7 F Dec. 8 before rising back above freezing to average 35.4 F Dec. 12, according to CustomWeather data.

Temperatures are forecast to average 34.3 F during the week ending Dec. 19.

NYISO peakload averaged 18,605 MW in November, compared to an average of 20,969 MW from Dec. 1 to Dec. 4, according to ISO data.