A massive winter storm stretched from Canada to Florida and South Texas Jan. 21, boosting power demand and prices into triple digits in several locations and cutting power to more than 45,000 Texas customers due to ice on power lines.
The National Weather Service showed warnings of “extreme cold,” winter storm and freezing conditions prevailing across most areas in the Rocky Mountains, eastward to the Atlantic and southward to Mexico and the Gulf of Mexico.
CustomWeather forecast population-weighted temperatures in the Southeast to average 33.6 degrees F on Jan. 21 and 33.1 F on Jan. 22, down almost 11 degrees, or 24.6% from the Jan. 14-15, 2024 averages of 45.1 F and 45.4 F, respectively.
CustomWeather forecast population-weighted temperatures in the Electric Reliability Council of Texas to average 28.1 F Jan. 21 and 36.1 F Jan. 22, down by more than 17 degrees, or 40%, from the long-term average of 49.4 F.
CustomWeather forecast Midcontinent Independent System Operator population-weighted temperatures to average 0 degrees F Jan. 21 before rising to 13.1 F Jan. 22, compared with historical average of around 25 F for this time of year.
Loads up sharply
In its 10:30 am CT forecast on Jan. 21, ERCOT forecast load to peak at 77.5 GW Jan 21, just below the January record of 78.1 GW set Jan. 16, 2024, and up 25.2 GW, or 48.3%, from the 2020-24 average of 52.3 GW for that date.
Natural gas demand was up even more dramatically, as S&P Global Commodity Insights forecast ERCOT power burn to approach 7.4 Bcf/d Jan. 21, up 3.2 Bcf/d, or almost 75%, from the 2020-24 average of 4.2 Bcf/d for that date.
MISO forecast peakload at 102 GW Jan. 21 and 102.9 GW Jan. 22, down slightly from roughly 104 GW peakload Jan. 20.
The US Energy Information Administration showed load in the North American Electric Reliability Corporation’s SERC Region peaking at 45.7 GW on Jan. 21, up 7.5 GW, or almost 20%, from the peak of 38.3 GW on Jan. 14. SERC is the North American Electric Reliability Corporation reliability entity formerly known as the Southeast Electric Reliability Council.
The EIA showed NERC’s Florida Reliability Coordinating Council load forecast to peak at 34.4 GW on Jan. 21, up 4.2 GW, or about 13.7% from the peak of 30.2 GW on Jan. 14.
Commodity Insights estimated the Southeast region’s power burn around 9.5 Bcf/d Jan. 21, up more than 2.8 Bcf/d, or almost 43%, from 6.7 Bcf/d on Jan. 21, 2024.
Reliability concerns raised
Around 10 am CT Jan. 21, PowerOutage.us showed 45,574 customers offline across Texas, almost all near the southern tip of the state, with American Electric Power’s Texas customers hardest hit, at 28,579. But by about 3 pm CT, less than 22,000 customers remained offline, including 9,445 AEP Texas customers.
The Freeport LNG export terminal was among those affected by ERCOT’s outages, driving overall utilization of major US LNG facilities to the lowest level in a month.
Freeport spokesperson Heather Browne attributed the shutdown to “intermittent Centerpoint Energy power interruptions beginning early Tuesday morning.” The plant will stay offline “until power transmission conditions stabilize,” Browne said.
At 5 am CT Jan. 21, ERCOT had issued a transmission emergency notice in south and southeast Texas “for loss of transmission from freezing precipitation,” but canceled the notice around 1 pm CT.
ERCOT on Jan. 19 issued a watch for Jan. 20 afternoon through the morning of Jan. 22 “due to the increasing risk of freezing precipitation generally over a large area” of Texas’ eastern half.
Elsewhere, MISO kept its conservative operations advisory in affect for its South, Central and North regions through 11:59 pm ET Jan. 22, while the Southwest Power Pool terminated its resource advisory at 1 pm CT Jan. 21, 10 hours earlier than planned, because of “improving forecast system conditions.”
Power, gas prices surge
MISO’s Indiana Hub on-peak day-ahead power for Jan. 22 delivery rose $4.75 on the Intercontinental Exchange to trade near $104/MWh while the corresponding contract at SPP’s South Hub was down $61.25 to trade near $54/MWh. Indiana Hub real-time for Jan. 23-24 delivery priced at $54.13/MWh, down from the previous settlement near $100/MWh. Likewise, South Hub Jan. 23-24 priced near $51/MWh, down from $115.25/MWh.
For comparison, Indiana Hub on-peak day-ahead has averaged $56.26/MWh so far this month. The South Hub on-peak, day-ahead average for this month has been $51.14/MWh.
ERCOT North Hub averaged $80.80/MWh for Jan. 21 delivery. ICE trading for Jan. 22 delivery averaged just $47.25/MWh, and on-peak Jan. 23-24 traded about $35/MWh.
Power prices followed bearish natural gas in Texas, as Houston Ship Channel natural gas hub dropped $4.80 from its Platts price the previous day to $3.49/MMBtu and Katy Hub slid $4.95 to about $3.44/MMBtu on ICE for next-day flows.
Also, the grid operator forecast strong wind production for Jan. 24, with totals set to reach 534.2 GWh, up more than 62% from Jan. 21 levels.
Price jumps were much more drastic in the Southeast, with Platts-assessed Into Southern day-ahead bilateral indexes averaging $500/MWh for delivery Jan. 20-21, the highest price levels since Platts began assessing this location Dec. 31, 2001. ICE trading on Jan. 21 indicated Into Southern off-peak valued at $400/MWh.
Platts assessed Into GTC at similarly high values, at $501.25/MWh for Jan. 20 delivery and $509 for Jan. 21 delivery. ICE trading on Jan. 21 indicated Into GTC off-peak valued at $450/MWh.
Platts assessed Florida power at $509.25/MWh for Jan. 20 delivery and $513.25/MWh for Jan. 21 delivery, but ICE had no trading on Florida power Jan. 21 for Jan. 22.
Natural gas prices caused much of the Southeast power price strength. Transco Zone 5 South spot topped $32/MMBtu for the long holiday weekend and was trading around $24.47/MMBtu for Jan. 22 delivery. Henry Hub spot topped $10/MMBtu for the weekend but settled back to $4.388/MMBtu for Jan. 22 delivery. Florida Gas Zone 3 spot averaged $9.73/MMBtu for the holiday weekend but slid to $6.078/MMBtu for Jan. 22.
Source: Platts
