US power and natgas prices turn negative in Texas, California and Arizona – By Scott DiSavino (Reuters) / May 7, 2024
(Reuters) – U.S. spot power and natural gas prices turned negative in Texas, California and Arizona for Tuesday as pipeline maintenance trapped gas in the Permian Shale in West Texas amid low demand for energy and ample hydropower in the West.
Negative prices signal there is too much power or gas being produced in a region. Energy firms can either reduce output, pay someone to take their power or gas, or, if they can get a permit, flare the unwanted gas.
Energy traders have been saying for weeks that they expected gas prices at the Waha hub in West Texas to turn negative when U.S. energy company Kinder Morgan started conducting seasonal maintenance on pipelines that move gas from the Permian shale in West Texas to the Gulf Coast.
Kinder Morgan told customers it planned to reduce flows on its Permian Highway Pipeline from May 7-12 and its Gulf Coast Express pipe from May 14-21.
