BIG FREEZE DROVE BIG BUCKS TO NAT GAS

How The Polar Vortex Impacted Energy Prices, Grid Reliability

January 16, 2014 (North American Windpower)

“For the second time in just over three years, a major weather event…generated significant profits for generators, particularly in the eastern and southern U.S. Wholesale power price increases were caused by…high and fluctuating delivered natural gas pricing, generation supply shortages, and differing market structures. Changing weather patterns will accelerate the number and size of these opportunities for investors…[W]eather patterns are also revealing potential reliability risks…Daily average power prices fluctuated wildly from $40/MWh to nearly $800/MWh…Natural gas prices in New England and eastern New York reached record highs on Jan. 7, with midpoint prices ranging from $35/ MMBtu and $40/MMBtu and bids as high as $100/MMBtu…In many markets, the increase in delivered natural gas prices was a key contributor to the increase in power prices…[but in ERCOT] gas prices did not increase while power prices increased dramatically…” click here for more

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