Energize Weekly, March 6, 2019
Extreme cold at the end of January pushed Midwest natural gas consumption to record levels and near-record levels for electricity demand on Jan. 31—the single coldest day when temperatures dropped to as low as minus 45 degrees Fahrenheit.
Natural gas, the primary heating fuel in the region, hit a record demand of 37.9 billion cubic feet (bcf) on Jan. 31, with 69 percent of that being used by residences and businesses, according to the federal Energy Information Administration (EIA).
In the wake of the cold wave, Midwest natural gas withdrawals from storage for the week ending Feb. 1, 2019—237 bcf—were the largest in the Lower 48 states so far in the 2018-2019 heating season and the 12th largest withdrawal since 2010.
The 2019 polar vortex that gripped the region was colder than the 2018 bomb cyclone or the 2014 polar vortex with temperatures across the Upper Midwest ranging from minus 20 to minus 45 degrees Fahrenheit.
Hourly electric peak load that day was 100.9 gigawatts (GW), compared to 100 GW to 104 GW during the 2018 bomb cyclone. The record for the Midcontinent Independent System Operation (MISO), which serves the region, was 109.3 GW during the 2014 polar vortex.
MISO said that peak loads were lower in 2019 due to the deployment of load-modifying resources such as demand response and behind-the-meter generation. The wide closure of schools and business also “aided in dampening demand below expectations.”
“Emergency procedures were implemented and maintained from early January 30 through the afternoon of January 31 to reliably manage the grid and maintain public safety,” MISO said.
“During times of transmission grid stress, regional transmission organizations such as MISO have a defined set of escalating steps, usually called emergency operating procedures they can take to avoid or minimize the impact of the event,” the EIA said.
During the late January cold snap, MISO suspended non-essential equipment maintenance, implemented emergency energy pricing measures to accurately reflect grid conditions in its markets, curtailed non-firm energy exports out of the MISO grid and implemented load management measures.
Even with the spike in natural gas demand, natural gas prices were lower when compared with 2018 and 2014 cold waves.
Day-ahead natural gas spot prices reached $7.42 per million British thermal units (MMBtu) at Chicago, the main hub in the region, $4.12/MMBtu at the Consumers Energy Citygate hub serving the Michigan area and $6.51/MMBtu at the Northern Natural Gas (NNG) Ventura hub serving the Minnesota area. During the 2018 bomb cyclone, NNG Ventura prices spiked to more than $60/MMBtu.
Power price movements were also more subdued in 2019, with Upper Midwest day-ahead on-peak prices of $95 to $120 a megawatt-hour (MWh) compared with prices that reached $150 a MWh in 2018 and $415 a MWh in 2014.
