Power Prices in U.S. West Topped Price Cap During Texas Freeze

Electricity prices in the U.S. West briefly topped the soft price cap of $1,000 a megawatt-hour last week after natural gas prices soared during extreme weather, according to a trading group.

Several real-time trades through bilateral contracts surpassed that level in parts of Montana, Colorado and New Mexico, Scott Miller, executive director of Western Power Trading Forum, said in an e-mailed statement. The states are members of the Western Electric Coordinating Council and any power sold above the price cap must be reported in a filing to the Federal Energy Regulatory Commission.

The power price increases were “driven by really high gas prices related to last week’s event” that crippled the Texas grid and affected surrounding areas, Miller said.

It’s unclear how much power traded above $1,000 or the number of instances because it’s a “very opaque, illiquid part of the wholesale power market,” he said.

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