The surge in short-term natural gas prices in the Northeast prompted by the cold snap that affected much of the US abated on Wednesday, but many consumers face the prospect of increased bills as utilities seek to pass on added costs to customers, reports the New York Times.
Utilities including Connecticut Light and Power as well as National Grid and NStar have recently announced hikes in their retail electricity prices as the struggle demand in peak periods, the paper reports.
On Tuesday – with the polar vortex in full effect across the country – a few large energy companies in the region spiked to nearly 10 times higher than the national average as demand for heating and electricity soared.
The price of a MWh of electricity, which would normally sell for around $40 or $50 on the wholesale market, jumped Tuesday to around $500 to $1,000 in New Jersey, Delaware and large areas of Pennsylvania and Maryland, the paper reports.
Many power providers compensated by buying gas from Canada, some bought more coal- and oil-fired power, the paper reports.
National gas prices declined “substantially” on Wednesday to just over $4.20 per thousand cubic feet, the paper reports.
Average wholesale prices for natural gas fell significantly throughout the US in 2012 compared to 2011, according to US Energy Information Administration figures released last year.
The agency said the average wholesale price for natural gas at Henry Hub in Erath, La., fell from an average $4.02 per million British thermal units in 2011 to $2.77 per MMBtu in 2012 — the lowest average annual price at this key benchmark location since 1999.
A mild 2011-12 winter, sustained high natural gas inventories and rising natural gas production in the Marcellus and Eagle Ford basins contributed to lower average spot natural gas prices at Henry Hub.
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