Deep Freeze in U.S. Creates Heating Squeeze for Homeowners and Utilities

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Deep Freeze in U.S. Creates Heating Squeeze for Homeowners and Utilities


2018-01-03 19:47:45

Weather forecasts suggested the chill would stick for a while. As of Wednesday, a “powerful nor’easter” was bearing down on the East Coast, most likely bringing snow, ice, rain and strong winds, according to the National Weather Service. Some forecasters spoke of a potential “bomb cyclone” off the New England coast — essentially, a storm that could feel like a winter hurricane.

Households were paying more to cope with the plunging temperatures. The cost of residential heating oil at the end of December surged 13 percent, to $2.92 a gallon, compared with the same period in 2016, according to federal data; prices in Connecticut and Rhode Island exceeding $3 a gallon.

Consumers were in a “panic,” said John Cardinale, president of Pilgrim Oil Group, a sort of energy co-op that contracts with dozens of heating-oil providers along the Eastern Seaboard. On a normal winter day, Mr. Cardinale said, the Pilgrim network might get 250 calls from homeowners seeking heating oil. On Tuesday, he said, more than 700 calls came in.

“You feel bad for people — this cold snap caught everyone off guard,” he said. “They’ve called almost every other company, and anyone we can help, we’re helping, but we’re so booked ourselves.”

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A Rhoads Energy truck making pre-dawn deliveries on Tuesday.

Credit
Mark Makela for The New York Times

Farther south, thousands of Duke Energy customers in North and South Carolina were without power for parts of the week, according to the utility’s online outage tracker. The South Carolina Electric & Gas Company appealed to customers to scale back their energy use as a precautionary measure “as extreme cold temperatures in the area put a strain on the company’s electricity system.”

For utilities, the shale-drilling boom of recent years made natural gas a primary fuel for generating electricity, as prices dropped and supplies grew. But a limited network of pipelines and an increase in exports has squeezed supplies in some parts of the country.

The roaring demand for the natural gas this winter is driving prices higher than the standard seasonal bump, analysts said. Other fossil fuels are becoming more attractive by comparison.

ISO New England said coal and oil had helped generate nearly 35 percent of the power provided by generators in the region as of Wednesday, with natural gas generating 24 percent. In the past, natural gas has typically accounted for nearly half of the area’s electricity, followed by nuclear power, hydroelectric and other renewables; coal and oil together were responsible for less than 3 percent.

“The mix is changing with this cold weather,” said Jacob Kilstein, an analyst with Argus Research, an investment research firm. “Because natural gas prices are rising, coal and oil are reaching in to take its place.”

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Mr. Rodrigues filling a tank with heating oil. “Demand has just been incredible,” Jennifer Goldbach, Rhoads Engergy’s vice president of business development, said.

Credit
Mark Makela for The New York Times

PJM Interconnection, which oversees the Mid-Atlantic grid, estimated that demand for electricity would reach 135,787 megawatts on Wednesday, nearing its record winter load of 143,129 megawatts, which was recorded in February 2015.

The icy weather is taxing oil supplies to the hilt, Ms. Blomberg, the ISO spokeswoman, said.

Inventories of commercial crude oil slid in recent weeks, falling by more than 50 million barrels year over year in late December, according to federal data. When used to generate power, crude oil is also subject to air emissions caps set by environmental regulations.

“As oil inventories are depleted, replenishment of these fuels will be important given the uncertainty around weather and future fuel demands for the remaining two months of the winter period,” Ms. Blomberg wrote in an email.

The price of gasoline, which is used in generators as well as in vehicles, rose in 41 states over the past week, according to GasBuddy.com. The $2.49-a-gallon price was the highest for the start of a new year since 2014.

The home-supply chain Lowe’s is redistributing products such as pellet fuel, firewood, rock salt and snow shovels from distribution centers in warmer parts of the country to warehouses and stores in the Northeast, said Jennifer Popis, a spokeswoman for the company.

The demand for heating products in particular, she said, was “incredibly strong.”

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