Winter weather and steeply dropping wind output brought quadruple-digit real-time pricing to the Electric Reliability Council of Texas market on Feb. 24, as both ERCOT and the Midcontinent Independent System Operator had severe weather alerts in effect.
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In ERCOT, real-time prices surged from less than $10/MWh for some periods of Feb. 23 to more than $4,040/MWh around 9:15 am CT Feb. 24, as the output from ERCOT's wind fleet plunged from almost 25 GW on Feb. 23 to less than 600 MW around 11 am Feb. 24.
"By [Feb. 24] afternoon, a storm over the South Rockies will move eastward to western Texas," the National Weather Service said in a morning forecast Feb. 24. "Then the storm will redevelop over the Tennessee Valley and move northeastward to the Ohio Valley/Central Appalachians/Mid-Atlantic by Friday."
Freeze covers a wide area
The National Weather Service's forecast map early Feb. 24 showed winter weather advisories extending from south and West Texas to New England, and winter storm warnings for two regions: from northeast Texas to southern Illinois and western Kentucky, and from New York to parts of Maine.
MISO declared a Severe Weather Alert for its Indiana footprint from 4 pm ET Feb. 24 through 4 am CT Feb. 25, with expectations for freezing rain and ice accumulation. MISO also extended a previous severe weather alert for its central and southern regions until 6 pm ET Feb. 24 "due to the forecast of additional ice accumulation through northern Arkansas and southern Missouri."
The only MISO-related trading activity on the Intercontinental Exchange the morning of Feb. 24 involved offers at $50/MWh for off-peak power to be delivered Feb. 25.
Around 10:30 am CT on Feb. 24, MISO real-time prices ranged from a low of $53.69/MWh at the Louisiana Hub to a high of $85.53/MWh at the Michigan Hub.
US Midcontinent natural gas prices edged up Feb. 24 as production weakened and demand was expected to remain strong.
Chicago city-gates rose 8 cents to $4.83/MMBtu Feb. 24, as Midcontinent production fell to 7.8 Bcf/day, down 263 MMcf from Feb. 23 and the lowest levels of the past 20 days. At the Michcon price point, gas rose 25 cents on the day to price at $4.66/MMBtu for Feb. 25 flows.
Texas emergency center activated
Texas Governor Greg Abbott ordered the Texas Division of Emergency Management to increase the readiness of the State Emergency Operations Center to "Level II: Escalated Response for Winter Weather" with impacts expected Feb. 23 through the weekend.
ERCOT issued a market notice the evening of Feb. 23 that it anticipates "tight grid conditions" through Feb. 25, and that it has asked the Texas Commission on Environmental Quality to "exercise its enforcement discretion with respect to generator exceedances of TCEQ air permit limitations." TCEQ has agreed to do so "in order to maximize generation availability during this period of concern."
On Feb. 24 ICE trading, ERCOT North Hub day-ahead on-peak surged $30.50 to $85.50/MWh for delivery Feb. 25.
Houston Ship Channel gas rose 25 cents to trade at $4.60/MMBtu on Feb. 24, as storage levels in the Southeast and Texas totaled 450 Bcf, the lowest for this time of year since 2014 and 40 Bcf below the five-year minimum, and as global LNG prices rocketed higher in response to the Russian attack on Ukraine.