Sustained cold in January here in the Northeast resulted in price spikes for electricity and natural gas not seen since 2014. Utility rates are skyrocketing and that’s the beauty of signing fixed rate contracts at the appropriate time, when energy futures are down. Timing and execution is everything.

There are numerous factors causing price spikes however one stands out — limited infrastructure, ongoing for decades. Inability to transport adequate volumes of gas in winter (for heating and additional electricity production) is the main culprit. Supply sources are ample, means to move the gas (from PA north) is not. A minimum of four pipeline projects since 2016 alone have been canceled and assuredly would help current situation.   

Forecasts calling for warmer weather should stabilize pricing near term. Looking ahead, we’ll see what develops with the weather and overall geopolitical unrest with Russia/Ukraine topping the list. 

Regards,
John Thomas