US homes lose power in big freeze
• Despite the cold, spot power and gas prices have not reacted much
A huge winter storm moving across the eastern half of the US on Tuesday knocked out power to about 811,000 homes and businesses in 12 states ahead of a brutal freeze expected to blanket the region starting this weekend.
The hardest hit states so far are New York and Pennsylvania, each with about 182,000 power outages, and New Jersey with more than 127,000 outages.
The biggest power companies in those states are units of Con Edison in New York, FirstEnergy in Pennsylvania and Public Service Electric and Gas, a subsidiary of The Public Service Enterprise Group in New Jersey.
Extreme weather is a reminder of the February freeze in 2021 that left millions in Texas and other US Central states without power, water and heat for days, and a winter storm in December 2022 — known as Elliott in the energy industry — that almost caused the collapse of power and natural gas systems in parts of the eastern half of the country.
The storm is coming ahead of what will probably be the US’s coldest weather since December 2022, according to data from financial firm LSEG.
LSEG projected gas demand, used to heat about half the homes in the country, would reach a daily record of 170.0-billion cubic feet per day (bcfd) on January 15 and 173.7 bcfd on January 16.
Traders noted it would be unusual for gas use to hit a record on January 15 since it is the US’s Martin Luther King Day holiday when many businesses and government offices will be shut for a long weekend. If correct, gas demand, including exports, on January 15 and 16 would top the current daily record of 162.5 bcfd set on December 23 2022, according to federal energy data from S&P Global Commodities Insights.
One-billion cubic feet is enough gas to fuel about 5-million US homes for a day.
GAS FUTURES
Despite the coming cold, spot power and gas prices have not reacted much to the current storm, but gas futures have soared about 30% over the past six days and were trading at a two-month high of about $3.25 per million British thermal units.
The December 2022 storm caused some energy companies, including the Tennessee Valley Authority and Duke, to impose load-shedding to maintain electric reliability after dozens of power plants failed to operate.
Gas flows into pipelines were also reduced during that storm, as output declined due in part to the freezing of gas wells, pipes and other equipment. At the same time, demand for gas for heating and power generation soared, dramatically lowering line pressures.
In New York City, Consolidated Edison was forced to declare an emergency because it faced a gas system collapse that would have taken “many months” to restore service in the middle of the winter.