(Reuters) - Power and natural gas prices in several U.S. regions jumped to their highest in years on Tuesday as gas use hit an all-time high due to arctic weather blanketing much of the country.
Gas demand in the lower 48 U.S. states is expected to reach an all-time high of 144.0 billion cubic feet per day (bcfd) on Tuesday, according to Reuters data going back to 2008.
That would top the 142.0 bcfd record set on Monday, New Year’s Day, and the previous record of 133.8 bcfd set on Jan. 7, 2017, data showed.
One bcfd represents enough gas to fuel about five million U.S. homes.
In New England, next-day electricity prices jumped to their highest since March 2014 as temperatures across the six-state region were expected to remain below freezing all week.
Temperatures in Boston, New England’s biggest city, were expected to peak at 20 Fahrenheit (minus 11 Celsius) on Tuesday, and after a pair of slightly warmer days, slip further to 17F on Friday and 10F on Saturday, according to AccuWeather. On Monday, the high was 13F.
Last week, next-day gas prices in New England rose to their highest since the winter of 2015.
Gas and electricity prices in New England usually spike on the coldest winter days as homes and businesses use most of the region’s gas supplies for heating, leaving little for utilities to burn in power plants.
To produce electricity during the freeze, New England’s electric grid, ISO New England, expects utilities to increase their use of oil for power generation instead of gas.
With the retirement of several coal, oil and nuclear plants over the past decade, gas has become the biggest fuel for electric production in New England. Gas generated about 49 percent of the region’s power in 2016, while oil accounted for just 1 percent.
Generators in New England usually only burn oil on the coldest winter days.
Elsewhere, next-day power prices in PJM, the power grid covering parts of 13 U.S. mid-Atlantic and Midwest states, rose to their highest since February 2015.
Last week, next-day gas in Chicago rose to the highest since March 2015, while New York hit its highest since December 2016.
Reporting by Scott DiSavino in New York; Editing by Jeffrey Benkoe