(Bloomberg) -- Benchmark natural gas futures traded Friday at about $2.80 in New York. But in a corner of the U.S. Northwest, spot prices rocketed to more than 70 times that level as frigid temperatures sent traders scrambling for extra supplies.
Gas for delivery this weekend in Sumas, Washington, near the Canadian border, surged to $200, the highest spot price recorded in the U.S., according Intercontinental Exchange Inc.
Settling at that level would easily mark a record high, based on data compiled by Bloomberg. Historically, the regional price has trading within a matter of cents of the futures on the New York Mercantile Exchange. But it blew out in October, after a Canadian pipeline operated by Enbridge Inc. that feeds the Huntingdon/Sumas hub at the border with Washington was hit by a rupture. It’s still not fully operational.
This surge in gas, a key fuel for power generation, combined with the cold snap also boosted power prices. The average price for peak electricity for delivery on March 6 at the Mid-Columbia hub in Washington, the benchmark for the region, traded as high as $1,000 a megawatt-hour and was averaging $894 on the Intercontinental Exchange, said David Hoy, an energy trader with Dynasty Power in Calgary. If prices settle anywhere near those levels, that would eclipse the May 2001 record of $450, according to data compiled by Bloomberg.
“This is unprecedented” in the region, and even in the transmission-constrained eastern U.S., the only time power traded that high was during the polar vortex in 2014, Hoy said. “Something is very broken.”
(Updates with latest gas price in the first paragraph.)
