Polar Vortexes in New England: Missing Money, Missing Markets, or Missing Regulation?

The United States has more than 20 years of experience in dealing with a continent-wide, highly competitive gas market and several competitive power markets in various states. Despite such a reasonably lengthy history of energy market competition, these two competitive energy markets sometimes visibly fail to intersect successfully with one another. The periodic experience in New England with its “polar vortex” weather events (when high-pressure in the Pacific displaces a pocket of very cold air that typically circulates around the North Pole, bringing Arctic temperatures to North America) is a case in point. During the last two polar vortex events (in 2014 and 2018), power prices exhibited sustained price spikes seemingly indicative of a lack of useful and efficient infrastructure.