US wholesale power prices reach record highs in winter storm, retail electricity outages continue

Several wholesale power trading hubs hit record high prices Jan. 27 as retail power outages across the US hovered around 550,000 customers and crews worked to restore power in freezing conditions.

Power prices across much of the US remain elevated as freezing temperatures continue to drive up heating demand and weather-related alerts remain active for many grid operators. The majority of the PJM Interconnection footprint and parts of the Midcontinent Independent System Operator region and New York ISO territory are under an extreme cold warning and cold weather advisory, according to the US National Weather Service.

Retail power outages across the US fluctuated Jan. 27 and totaled around 534,226 by 2 pm ET, according to poweroutage.us. Tennessee had the majority of outages at nearly 175,000, followed by Mississippi with almost 144,000 and Louisiana at around 104,000.

"We haven't seen an ice storm of this magnitude probably since 2008," Joe Turk, senior program manager of transmission asset strategy at the Tennessee Valley Authority, said in a Jan. 27 statement. "The biggest issue we're seeing is damage from trees falling across lines. The trees get weighed down with ice and they fall, and they can bend the arms on a structure."

Downed trees create problems for power infrastructure, but they can also complicate the ability to reach affected areas, according to TVA. Over the weekend, crews would get as far as possible by truck, then used UTVs to continue further, and then hiked where needed, Turk said.

Moody's Analytics estimated the storm drove between $7 billion and $10 billion in lost economic output from school and office closures, power outages and snarled traffic. This does not include physical damage or insured losses, which are still being calculated.

"What differentiated this storm was its expanded footprint -- states like Kentucky, Louisiana, Mississippi and Tennessee were hit with significant sleet and ice, causing widespread power outages in areas with fewer resources to restore normalcy," Moody's Analytics said in a Jan. 27 statement.

PJM outlook

PJM West Hub on-peak day-ahead locational marginal prices hit a record high of $890.01/mega-watt hour for Jan. 27 delivery, according to PJM data. The previous record was 2014.

The PJM footprint is under an energy emergency alert Jan. 27 that directs generation dispatchers to provide PJM with an estimate of the amount of time they need to return to service any generator on a planned outage.

"Electricity demand came in lower than expected this morning (Jan. 27) due to slightly warmer temperatures than forecast, coupled with continued school and other closures resulting from Winter Storm Fern," PJM spokesperson Dan Lockwood said. School and business closures mean less demand on the system.

However, the extreme cold is expected to continue through Feb. 1, so PJM is taking additional precautions with its generation and transmission owners to prepare, PJM said in its daily update.

PJM is forecast to set a new winter peakload record of 147.976 GW on Jan. 30, 3.2% higher than the current record of 143.336 gigawatts reached Jan. 22, 2025. The PJM footprint remains under a cold weather alert through Feb. 1.

More record prices

In neighboring MISO, Indiana Hub on-peak day-ahead LMP reached a record high of $289.79/MWh for Jan. 26 delivery, according to MISO data. Looking ahead, Indiana Hub on-peak day-ahead for Jan. 28 delivery traded at $300/MWh on the Intercontinental Exchange.

MISO issued a capacity advisory declaration for Jan. 29, as the footprint remains under a cold weather alert through Jan. 31 and conservative operations through Jan. 29. Renewable generation is forecast to drop 55% day on day to 11 GW Jan. 28 and sink an additional 63% to 4 GW Jan. 29, according to MISO.

The ISO New England continues its master local control center procedure No. 2, or abnormal conditions alert, due to severe weather. Internal Hub on-peak day-ahead LMP reached a record high of $660.37/MWh for Jan. 27 delivery, according to ISO data. Looking ahead, Mass Hub on-peak balance-of-the-week traded at $791.67/MWh on ICE.

Several trading locations across the Southeast also reached record high prices for Jan. 27 delivery.

Platts VACAR on-peak day-ahead set a new record at $828.75/MWh, Into GTC reached $785/MWh, Florida reached $783.50/MWh and Into Southern reached $762/MWh. Platts is part of S&P Global Energy.

Off-peak prices were even higher, as Into GTC reached a record of $1,200/MWh, Florida reached $1192.50/MWh and VACAR reached $1,120/MWh, while Into SOCO and Into TVA both reached $1,177/MWh, according to Platts data.

NYISO price spikes

While New York ISO reports normal grid status, wholesale prices remain elevated. NYISO Zone G on-peak day-ahead LMP reached a record high of $674.66/MWh for Jan. 27 delivery, as Zone J reached a record high of $679.13/MWh, according to NYISO data. Looking ahead, the NYISO Zone G on-peak balance-of-the-week package was bid at $600/MWh and offered at $750/MWh on ICE.

"Extreme cold weather, higher natural gas prices, and reduced generating capacity are contributing to elevated wholesale electricity prices," Kevin Lanahan, NYISO senior vice president of external affairs and corporate communications, said in a statement. "The prolonged period of extreme cold weather has led to a significant spike in natural gas prices. Because natural gas serves as the state's main fuel for generating electricity, higher natural gas prices directly translate into higher wholesale electricity costs - and ultimately higher retail bills for consumers. As the cold snap continues to impact multiple regions of the country, it is likely that high prices for natural gas and wholesale electricity will persist during this weather event."

The unavailability of roughly 3 GW of generating capacity is also contributing to upward pressure on prices, he added. In recent days, multiple fossil fuel plants have experienced forced outages, and solar generation has declined due to weather conditions.

"These supply and demand pressures mirror the system dynamics experienced during last year's June heatwave," Lanahan said. "Several days of high temperatures strained generating units, increased consumer demand, and pushed wholesale electricity prices higher."

Near-record highs

Although the Electric Reliability Council of Texas and Southwest Power Pool were forecast to reach new winter peakload records early this week, demand came in lower than forecast and new records were not set. However, near-record high prices were seen.

The ERCOT North Hub on-peak day-ahead LMP reached a 29-month high of $659.81/MWh for Jan. 25, according to ERCOT data. The all-time LMP record is $8,800/MWh reached Feb. 17, 2021. ERCOT weather water was expected to end Jan. 27. The grid operates under normal conditions during a weather watch.

SPP extended its weather advisory extended through 12 pm Jan. 28 "due to forecasted extreme cold temperatures." SPP North Hub and South Hub on-peak day-ahead LMP high two-year highs of $252.17/MWh and $308.32/MWh, respectively, according to SPP data.