Texans were blasting their heaters to keep warm during an arctic freeze, raising power use to the highest level ever for the season. Prices briefly jumped to more than $2,200 a megawatt-hour as temperatures plunged. At least five coal and natural gas plants increased output to capture higher prices, according to Genscape.
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Data and analytics company Genscape Inc. showed demand averaging 3.18 Bcf/d during the Jan. 22-26 period, down from the Jan. 12-18 average of 3.77 Bcf/d. The following work week should see slightly stronger demand, although not at recent highs. Genscape projected demand averaging 3.334 Bcf/d between Jan. 29 and Feb. 2.
Natural gas prices also are up a bit, but that movement has been mostly driven by weather and is unlikely to continue — especially if oil drilling ramps up, said Eric Fell, senior natural gas analyst with Genscape.
According to Genscape data, early on Jan 17, average wholesale power hit the $2,267 a megawatt-hour mark for a short time.
Genscape Inc. was calling for demand in the Southeast and Mid-Atlantic to drop sharply going into the weekend. Regional demand was forecast to fall to 12.85 Bcf/d by Sunday after surpassing 20 Bcf/d on Tuesday.
Last week, traders said market intelligence firm Genscape reported notable outflows from Cushing on the start-up of a new pipeline from that location to Memphis, Tennessee.
The average wholesale power price in the market operated by the Electric Reliability Council of Texas Inc. briefly surged to $2,267 a megawatt-hour at 6:45 a.m. local time. That’s the highest since March 2014 and more than one-hundred times above the average of $21.97 a megawatt-hour over the past year, according to Genscape. The price has since declined to $127.60 at 11:00 a.m.
Marathon said its 543,000 bpd Garyville, Louisiana, was hit by a power outage on Wednesday morning. Energy industry intelligence service Genscape said multiple units were shut at the refinery 36 miles (58 km) west of New Orleans.
"The system worked the way it was designed to work," said Eric Fell, senior natural gas analyst with Genscape. "There's limited pipeline capacity and very limited storage in that part of the country, so on a very cold day, the way the market balances is by encouraging people to switch to other fuels. So power plants that have the ability to switch fuels have an incentive to switch."
Over the weekend, Northern Border Pipeline Co. concluded a force majeure event related to emergent repairs needed at its St. Anthony Compressor Station in Morton County, ND. The event caused a day/day drop of about 250 MMcf/d through the pipeline's Glen Ulin point, going from 2.6 Bcf/d Thursday to 2.35 Bcf/d Friday, according to Genscape.