PJM Price Spikes As Winter Storm Strains U.S. Grids

PJM Interconnection reported spot wholesale electricity prices briefly topped $3,000 per megawatt-hour early Saturday as a more than 2,300-mile winter storm pushed demand across its territory serving 67 million people.

Didi Caldwell, founder and CEO of Global Location Strategies, said natural gas now fuels roughly 40% of U.S. electricity generation and that limited storage and pipeline capacity in Transcontinental Gas Pipe Line Co. Zone 5 heightened the risk of fuel shortfalls.

The Midcontinent Independent System Operator issued an all-hands emergency action and imported up to several thousand megawatts from PJM, while ISO New England's operations display showed oil-fired generation accounted for about 35% of the region's output early Saturday, according to operators' reports.

Spot electricity prices varied sharply across regions, with MISO's Minnesota hub near $500 per MWh and PJM prices swinging from under $200 per MWh to more than $3,000 per MWh, operations reports and market displays show.

Grid operators staged repair crews and asked coal and gas-fired plants to maximize output, and analysts at ICF International warned that continued pipeline constraints and cold weather could force further reliance on oil-fired units and heighten price volatility.