Polar Vortex Weather System Brings Artic Temperatures Across Wide Swath Of U.S.

Near record low temperatures today in New York and Boston are driving up spot gas and power prices, as utilities struggle to obtain power generation fuel amid pipeline constraints caused by surging demand. Some East Coast generators have taken to burning oil in cases where they cannot source natural gas fast enough or in adequate supply.

Some key findings from the EIA alert:

Temperature: Both New York City (NYC) and Boston expect near historic low temperatures on Tuesday as a winter weather pattern spreads from the Midwest to the East Coast.

Natural gas demand: Bentek forecasts that demand will increase significantly on Tuesday in both New England (+8%) and New York (+2%) as the cold weather increases the need for natural gas for space heating.

Natural gas constraints & LNG: All pipelines from the west and south into New England remain constrained today. Flows on the marginal pipeline into NYC (Texas Eastern ‐ Tetco) are constrained at key points. Flows of LNG stored at Canaport and eastern Canadian imports into New England are scheduled to be 858 MMcf/d today, a 75% increase from yesterday.

Natural gas prices: Prices traded yesterday for delivery today are near $40/MMBtu in both New England and NYC. Natural gas at Tetco‐M3 in Pennsylvania and Transco Zone 6 Non‐New York were higher still, indicating some reduced demand for natural gas as electric power plants switch to burning oil in New York and New England.

Electricity prices: Day‐ahead electricity prices are more than $200/MWh in both New York and New England. Power prices in New England were elevated throughout the previous week as cold weather and high natural gas prices led to triple‐digit power prices in the day‐ahead market.

Pipeline notices: Critical notices were declared for today on Algonquin and Tetco which are requiring hourly scheduling from generators. Spectra Energy noted it may issue an operational flow orders (OFOs) for today on Algonquin, restricting unscheduled service as necessary.

Read the full alert here.