If you thought Wednesday was brutal in the U.S. Midwest, the cold blast that sent demand for power and natural gas soaring is going to be even worse on Thursday.
Low temperatures early Thursday morning were expected to reach minus 23 Fahrenheit (minus 31 Celsius) at Chicago Midway International Airport, with wind-chill values as low as minus 39, according to the National Weather Service.
The agency warned of a life-threatening chill and widespread record lows from the upper Midwest through the Ohio Valley, and the weather has been blamed for at least seven deaths so far. Much farther to the south, Wednesday’s low at at the Amundsen-Scott South Pole Station in Antarctica was a brisk minus 27 degrees.
PJM Interconnection LLC, operator of the grid stretching from Chicago to Philadelphia, expects usage Thursday to exceed a four-year winter record. Generators have been asked to check power-plant equipment and fuel supplies to make sure there are no interruptions.
“We’re asking them to defer maintenance and bring on extra people because we need everyone on board,” Jeff Shields, a spokesman for PJM, said in an interview Wednesday.
Midwest gas demand surged about 50 percent Wednesday over the previous two days to the highest in BloombergNEF data going back to 2014, and nationwide demand was on track to reach an all-time high, according to preliminary data from S&P Global Platts. Power prices in Minnesota jumped Wednesday to the highest in more than a year.
Spot natural gas for next-day delivery at the Michigan Consolidated hub, serving Chicago, jumped 32 percent to $4.05 per million British thermal units Wednesday, a seven-week high, according to data compiled by Bloomberg. Typically sold at a discount to the U.S. benchmark, it fetched the biggest premium in almost a year.
DTE Energy Co. in Detroit and Minneapolis-based Xcel Energy Inc. asked customers Wednesday to turn down their thermostats to take pressure off power systems struggling to meet winter heating demand.
Though power and gas prices are getting a boost, the current freeze-out isn’t like the polar vortex of 2014 or the “bomb cyclone” in January 2018 that dumped snow as far south as Florida and drained fuel supplies, said Adam Jordan, director of power analytics at Genscape. For one, it won’t last as long as those events, and this time grid operators are better prepared to handle temporary freezes.
“This event just won’t last long enough,” Jordan said in an interview. Gas wells and pipelines should continue to deliver supplies and the Northeast has added capacity to import the fuel. “The infrastructure can handle a two- or three-day freeze.”