Demand for heat pushed wholesale power costs to 400 times the usual amount and. Pipeline operators Energy Transfer LP and Oneok Inc. Texans are on the hook for 3.6 billion in natural gas costs incurred by utilities during one freezing week in February a burden consumers will bear for a decade or longer. The deep freeze caught Texass utilities off-guard, killed more than 100 people and left 4.5 million without power. The Sydney-based investment bank raised its profit forecast last month, implying a windfall of as much as $210 million, as it cited increased demand for gas- and power-supply services. The price swings benefited companies including Macquarie Group Ltd., the second-biggest physical gas supplier in the U.S. In Oklahoma, gas traded at more than 300 times normal levels, while electricity in Texas surged to $9,000 per megawatt-hour. state for the better part of a week.Īs traders and power suppliers struggled to find gas during the height of the disaster, prices skyrocketed. It’s just the latest detail to surface in the slowly emerging picture of financial winners and losers from the crisis that killed 57, left millions in the dark and paralyzed the second-largest U.S. “We ended up shutting in fields, shutting down gas requirements where we’re buying gas and pushing that gas back to the So-Cal border and, yes, we did do some optimization that benefited the bottom line.” Texas lawmakers have set aside 10 billion to help natural gas utilities cover their natural gas costs from the storm through low-interest, state-backed bonds. “We did see an opportunity in the market to capture some of that gas-trading revenue,” Interim Chief Executive Officer Mark McFarland told analysts and investors during a conference call Thursday. Doing could save end-customers around $1.5 billion that otherwise would be passed through to them from electricity providers, Bevins said.īut major power generators that reaped substantial profits from the high prices during the crisis week are likely to push back against any move to do so.(Bloomberg) - California’s largest oil producer emerged as the latest financial winner from last month’s historic Texas freeze that left millions without heat or electricity for days.Ĭalifornia Resources Corp., which drills and produces crude exclusively in the Golden State, said its natural gas trading business generated a profit as a result of the storm, though the magnitude of the bonanza won’t be disclosed until the quarter is out. While Texans froze and natural gas-fired power plants tripped offline during a February cold snap, natural gas traders and pipeline companies made up to 11 billion in just nine days. Malik and Mark Chediak Bloomberg Updated A truck drives down the street. It’s asking the commission to direct Ercot to correct the real-time price of electricity from 12 a.m. 11 billion in 9 daysTexas’ natural gas sellers cashed in on deep freeze State’s gas supplies halved during cold snap, but sellers made record profits. Gas sellers reaped 11 billion windfall during Texas freeze By Kevin Crowley, Naureen S. The market monitor argues that Ercot should have reset prices once rotating blackouts ended because, at the point, the emergency was over. May 6 (Reuters) - Natural gas suppliers, pipeline companies and banks that trade commodities have emerged as the biggest market winners from February’s U.S. The panel, which oversees the state’s power system, ordered Ercot to manually set the price at the maximum to incentivize generators to feed more electricity into the grid during the period of supply scarcity. While prices neared the $9,000 cap on the first day of the blackouts, they soon dipped to $1,200 - a fluctuation that the utility commission later attributed to a computer glitch. 160 While Texans froze and natural gas-fired power plants tripped offline during a February cold snap, natural gas traders and pipeline companies made up to 11 billion in just nine days. The erroneous charges exceed the total cost of power traded in real-time in all of 2020, said Bivens, who spent 14 years at Ercot, where she most recently was director of market operations before becoming its watchdog. Energy Transfer Partners reported record earnings for the first quarter, securing a profit of 3.29 billion compared with an 855 million loss for the same quarter in 2020. “If we don’t act to stabilize things, a worst-case scenario is that people will go under,” said Carrie Bivens, the Ercot independent market monitor director at Potomac Economics. The firms combined stand to reap billions of dollars in profits by selling gas and power during the storm, according to interviews and reviews of public documents. Two major players in the Texas gas pipeline system reaped substantial windfalls from the disaster.
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