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The record-shattering heatwave in the U.S. Pacific Northwest has already caused the first rolling outages in Washington State, while California’s power system operator issued a heat warning that electricity supply could be tighter than normal.
The heatwave is driving record demand for air conditioning and electricity, pushing power and natural gas prices higher.
This week, U.S. natural gas prices jumped amid a tight natural gas market and expectations of high demand for electricity in hotter than usual weather in many parts of the United States. As of Tuesday morning, the Henry Hub benchmark price was rallying by 4 percent at $3.738 per million British thermal units (MMBtu)—a fresh 30-month high after touching a 29-month high on Monday.
Meanwhile, electricity prices at a hub in the Pacific Northwest soared by 435 percent on Monday, according to data compiled by Bloomberg. Prices jumped in California, and even in the East in New England and Pennsylvania.
Utilities in the Pacific Northwest are struggling to keep up with soaring power demand as temperatures in Portland and Seattle hit record-highs of 116 degrees Fahrenheit and 108 F on Monday.
Spokane-based Avista asked customers to conserve electricity but said there were outages on Monday. The company started rolling blackouts on Monday and warned that outages were expected on Tuesday, too, as record-breaking heat in Spokane strained the power systems.
“We saw much more significant loads than we expected,” Heather Rosentrater, Avista’s senior vice president for energy delivery, said at a news conference late on Monday, as carried by The Spokesman-Review.
In California, which is also baking in the heatwave, the California Independent System Operator issued a heat bulletin on Monday, saying that “temperatures came in hotter across CA than previously expected. Coupled with historic heat hitting the Pacific Northwest, supplies on our system may be tighter than normal.”
Electricity prices for Californians are spiking, and so is the danger of blackouts—both planned and unplanned, due to the extreme heat coupled with drought this summer.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.