Power Jumps From Texas to California as Users Asked to Conserve

Feb 06, 2014 6:15 pm ET

Feb. 6 (Bloomberg) -- Spot wholesale electricity soared from Texas to the West Coast as low temperatures lifted demand and triggered natural gas shortages, reducing output at Southern California plants and prompting grid operators to ask users to conserve.

Power consumption on the Electric Reliability Council of Texas Inc. network, grid operator for most of the state, averaged 52,032 megawatts during the hour ended at 4 p.m. local time, a 13 percent jump from the day-ahead forecast, according to the grid’s website.

Ercot called on customers to reduce power use because of “limitations to natural gas supplies,” according to a statement on the website. Demand came close to a winter record earlier today, Ercot said. The grid also asked users in the Rio Grande Valley region to conserve because of a planned outage on a transmission line.

The high temperature today in Houston may reach 39 degrees Fahrenheit (4 Celsius), 26 below the historical average, according to AccuWeather Inc. in State College, Pennsylvania.

Spot power at the Texas North hub, which includes Dallas, more than tripled, advancing $78.83 to $115.64 a megawatt-hour for the hour ended at 4 p.m. local time from the same time yesterday, grid data compiled by Bloomberg show. Houston hub prices rose $75.84 to $112.65.

‘Strong’ Prices

“Prices have been consistently strong, mainly due to the high natural gas prices,” Eric Palmer, a Boston-based analyst with Genscape Inc., said in an electronic message. “There is plenty of generation online today, but all the natural gas units are priced at significantly higher levels as a result of the higher fuel price.”

Palmer said low temperatures also drove the high demand and contributed to some congestion in the power system.

California Independent System Operator Inc. issued a conservation alert for the state until 10 p.m. local time tonight. The grid cited a shortage of natural gas caused by extreme cold weather in much of the U.S. and Canada, according to a statement its website.

Gas storage levels were low in California going into the winter heating season and until this week temperatures were relatively mild there, according to the Federal Energy Regulatory Commission.

Gas demand in California jumped 25 percent today to 9.8 billion cubic feet while deliveries dropped 25 percent, according to FERC.

Spot power in Northern California more than doubled, jumping $65.32 to $117.92 a megawatt-hour at 2 p.m. local time from the same time yesterday, grid data show. Southern California prices advanced $68.65 to $119.60.

--With assistance from Naureen S. Malik in New York and Lynn Doan in San Francisco. Editors: Bill Banker, David Marino