ISO New England Inc., the region”™s power grid operator, is warning that lower-than-normal reserves of natural gas could result in rolling blackouts this winter.
According to a Wall Street Journal report, New England relies on imports of natural gas to fill the volume gaps in its winter supply. But this winter, New England power producers are competing for shipments of liquefied natural gas sought by European countries that found themselves cut off from their traditional Russian suppliers. As a result, any severe cold spell could strain the power grid, thus requiring rolling blackouts to preserve the balance of electricity supply and demand.
The potential for blackouts during the winter will certainly displease New England residents who are dealing with the largest electricity bills in years and will likely to pay more this winter because of higher gas prices. Utilities purchase electricity from generators on the wholesale market and recoup those costs from customers, and power producers have a limited ability to store fuel on site.
“The most challenging aspect of this winter is what”™s happening around the world and the extreme volatility in the markets,” said Vamsi Chadalavada, chief operating officer for ISO New England. “If you are in the commercial sector, at what point do you buy fuel?”
