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Winter Storm Wreaks Havoc On Supply Chain, Power Grid

A winter storm caused by a polar vortex is spreading snow, ice and icy-winds across the Northeast, Mid West and South of the United States. Nicknamed Winter Storm Uri, it has already claimed its first victims in a 133 car pile up leaving 6 people dead. Winter Storm Uri is also wreaking havoc on the supply chain and power grids across the Southern United States. Icy roads and low visibility conditions are making it difficult for trucks to reach their destination.

Winter Storm Uri has also frozen up to 12000MW of wind turbines, half of the states wind power supply, cutting power supply to thousands of homes across the South. Texas state electric grid operators has already warned consumers that they should conserve energy and expect cuts to energy supply. Demand for natural gas, used to heat homes, skyrocketed in prices up almost 19900% on the ICE OGT Physical Gas Daily at one point further aggravating the situation. Public Utilities Commision and other regulators are monitoring the situation as it might create an insolvency crisis for short sellers. ERCOT (Electricity Reliability Council of Texas) has instructed generators that are able to operate to increase their production capacity in order to meet the spike in demand for energy.

Consumers can expect significant increases to their energy bills for the next few days, in some cases more than 10x their daily average is likely. Real time prices for energy at one stage was trading at maximum cap of $9,000 per megawatt hour. These prices will eventually be passed down to the consumer either through a one off charge or over time.  Winter Storm Uri is expected to create severe stress on the electricity grids in some counties that operators are expected to use a rolling blackout method in order to meet the demand. Freezing temperatures like this are potentially life threatening and losing power to heat homes or run emergency services could worsen the situation.