A record-setting bout of bitter cold weather swept down through the Midwest and across most of the country in early January. The Northeast region reacted with upward spikes in wholesale natural gas and power prices as generators and other customers struggled to procure natural gas supplies. In the Mid-Atlantic region, record-high winter peak demand along with unexpected outages of power plants and natural gas equipment drove peak electricity prices even higher than in New York and New England. The sharp rise in Northeast and Mid-Atlantic natural gas and power demand also spurred record-high natural gas storage withdrawals. (click graphs below to enlarge)
|New England||New York City||Mid-Atlantic|
Natural gas supply into New York City remained constrained during colder-than-normal temperatures as evidenced by the price spikes in mid-December and early January. Spot natural gas prices reached as high as $47.80/MMBtu, higher than in New England—likely because New England was able to meet part of its natural gas demand with imported supplies of liquefied natural gas (LNG) and Canadian offshore natural gas production. Power prices hit $233.59/MWh on January 8.
Several major natural gas pipeline projects came in service ahead of the 2013-14 winter, including the New Jersey to New York expansion of the Texas Eastern Transmission and the Algonquin Gas Transmission pipelines, which will deliver additional natural gas supplies, particularly from the Marcellus region, into the New York City area, the main demand center of the New York electric system. Despite these developments, natural gas supply into the New York region remains constrained during high demand periods.
An additional strain on the New York system came from the unplanned outage of Entergy's Indian Point Unit 3 nuclear reactor located near New York City, which went offline on the evening of Monday, January 6. The loss of the 1,044-megawatt (MW) capacity baseload unit required additional higher-cost generators to be brought on line, which put further pressure on power prices.
In preparation for potential natural gas supply shortages this winter, the New York Independent System Operator (NYISO), New York's grid operator, is requiring dual-fuel generators (for more information on dual-fueled generators see EIA's Form EIA-860) to share fuel-related information with NYISO, including on-site fuel inventory levels and time requirements for fuel switching and fuel resupply. NYISO has also implemented a new extreme cold weather event procedure to request information on gas and alternate fuel supplies throughout the operating day when needed.