By Avi Salzman
Winter Storm Fern walloped more than 100 million Americans over the weekend, bringing snow, ice, and punishing winds.
It was not a knockout punch. At first blush, the storm did less damage to the electric grid than feared. What distinguishes Fern is its potential staying power. Impacts on electricity markets look like they're sticking around, and prices of commodities like natural gas could stay elevated. Residents in areas like New England and New York that use a lot of natural gas could see elevated power prices for an extended period.
Natural gas futures were up 29% on Monday to $6.80 per million British thermal units, the highest level since 2022.
First, the good news: The overall electricity system proved resilient. There was still enough reserve capacity in most regions to keep the lights on. At the storm's peak, more than 1 million people lost power. That number had dwindled to about 800,000 on Monday morning.
"Given the magnitude of the storm and how much area it covered, it seems the system held up pretty well," said Alex Kania, an analyst covering utilities at BTIG.
Other winter storms have been much more severe. During Winter Storm Uri in 2021, at least 4.5 million households lost power in Texas alone.
The South got hit the hardest, with more than 200,000 households losing power in Tennessee. Nonprofit municipal electricity company Nashville Electric Service said on Sunday that ice had caused tree branches to snap and fall on electric lines. A longer period of freezing weather could cause continued problems. "This will be a longer outage which could span over days or longer," the company said on social media.
Public utilities impacted by power outages include AEP and Entergy, though the outages did not appear to be widespread. Kania said that states generally allow utilities to cover their full costs from the storm through customer bills.
But even though the snow has slowed, the weather emergency is still very present in much of the U.S., and grid operators are on edge. PJM, the nation's largest electric grid, spanning the mid-Atlantic and parts of the Midwest, is anticipating that power demand will hit record winter levels over the next seven days. It issued an emergency order for power plants to stay in service. About 20 gigawatts worth of power plant capacity in the area -- roughly the equivalent of 20 nuclear reactors -- had been forced offline as of Monday.
Fern knocked power plants and natural gas generation in several parts of the country off line, causing spot natural gas prices to hit 25-year highs at the main natural gas trading hub in Louisiana. U.S. natural gas production was down about 9% because of the storm.
The market for natural gas, which is the largest source of U.S. electricity generation, has been particularly volatile before, during, and after the storm.
Natural gas futures are up 114% in a five-day stretch. And spot prices at the hub hit a 25-year high, averaging $28.20 per million British thermal units over the weekend because the storm knocked out more than 10% of production capacity, according to EBW Analytics Group, an energy research firm. The pressure shows no sign of abating.
"We expect significant outages to persist throughout the first half of the week followed by a swift recovery Sunday," said Rystad Energy's Matthew Bernstein.
Given that much of the U.S. will be gripped by freezing temperatures for the next several days, natural gas prices are likely to stay elevated. Natural gas is used for heating and electricity, and demand is spiking. So even if Fern's direct impact on electricity wasn't awful, its longer-term impact on prices could be more severe. It already looks like it will be more persistent than during Uri in 2021. And it's hitting different areas than prior storms. Next-day natural gas prices in the Northeast are trading at $135 per million BTUs for Tuesday, seven times as high as the peak during Uri.
The increase in natural gas prices during Fern was not as dramatic as it was during Uri in 2021, but it's been more persistent, according to pricing data from S&P Global Energy.
"We are still seeing robust demand," said Matthew Palmer, head of Americas gas research at S&P Global Energy. "As the storm moves out, the cold that's gonna linger over the next 5 days is gonna be some of the coldest weather we've had in a very long time, 30%-ish below the 10 year average."
Weather, of course, is temporary. Natural gas futures contracts expiring in March are trading around $3.90, 43% below current prices. But the impacts of the current shortage may linger. Right now, natural gas distributors are taking gas out of storage, depleting the nation's reserves. S&P Global Energy projects that natural gas storage levels will be 9% below the five-year average by the end of March.
If natural gas supplies are depleted, prices could stay higher for longer. That could be painful for consumers -- but would help natural gas producers like EQT and Expand Energy.
Write to Avi Salzman at avi.salzman@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
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January 26, 2026 15:27 ET (20:27 GMT)
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