(Reuters) – U.S. natural gas futures jumped 140% over the past seven trading days, and cash gas and power prices hit record highs this week as an Arctic blast sent heating demand soaring and froze oil and gas wells, cutting gas output to a two-year low.
The sharp jump in power prices will ultimately hit consumers who are already facing higher bills as growing demand, especially from power-hungry data centers, pushes up prices. Retail electricity prices have been on an upward trend, increasing at a faster rate than inflation since 2022, and the U.S. Energy Information Administration (EIA) has projected retail residential power prices, which have climbed by an average of 5% per year over the past five years, would gain another 4% to a fresh record high this year.
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This week’s jump in prices quickly hit large industrial and electric power customers, who typically purchase gas on a wholesale basis. Those customers have had to pay exorbitant prices this week in order to keep their facilities running.
“Prices of natural gas and electricity are so high that many manufacturers cannot produce products at a profit and are shutting down,” the Industrial Energy Consumers of America, a lobby group for U.S. manufacturers, said in a statement released on Wednesday amid the surging gas and electricity prices.
PJM Interconnection, the nation’s biggest power grid covering 13 Midwest and Mid-Atlantic states and Washington, D.C., forecast demand could reach a winter record before the weekend. Spot power prices at the PJM West Hub in Pennsylvania and Maryland soared to a record $1,014 per megawatt hour (MWh). That compares with average cash prices of $60.23 in 2025.
In New England, spot gas prices at the Algonquin hub soared to a record $173 per million British thermal units (mmBtu). That compares with average cash prices of $6.08 in 2025.
When power generators buy that gas at steep prices, they include that cost in their electricity prices. That is a big part of why next-day power prices in PJM and New England surged to record highs this week.
In an effort to reduce energy costs and ensure reliability, the IECA on Wednesday urged the U.S. Department of Energy to suspend spot liquefied natural gas exports.
“Curtailing record LNG exports would help deflate high domestic gas prices, and FERC (the U.S. Federal Energy Regulatory Commission) should assert its statutory authority to impose greater price and trading transparency for underregulated gas spot prices,” said Tyson Slocum, director of consumer advocacy group Public Citizen’s energy program. U.S. LNG companies did reduce the amount of gas flowing to their plants – though not necessarily in response to any government directive – to a one-year low on Monday, according to data from financial firm LSEG, and some energy firms took the unusual step of importing LNG into the U.S. this week to meet soaring demand for the fuel and capture some of this week’s sky-high prices.
Reporting by Scott DiSavino; Editing by Nia Williams
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