Webinar Analysts: A Cold Winter, ISO Preparedness and Record Natural Gas Storage
During Constellation’s November Energy Market Intelligence Webinar, the Commodities Management Group (CMG) provided comprehensive coverage of current and future factors that could affect the energy landscape, including an outlook on winter weather, grid reliability, impact of electrification, capacity auctions, natural gas fundamentals and an assessment of regional ISOs.
Weather Outlook
The upcoming winter is expected to be shaped by a weak La Niña, which is characterized by neutral Pacific water temperature conditions. Historically, these conditions favor colder-than-normal winters across North America, especially if atmospheric “blocking” occurs, which can drive cold air southward. The unpredictability of blocking has already appeared early in the season, and its recurrence could lead to even colder conditions, especially in the Northern and Eastern U.S. By region, the East Coast is expected to see decent winter precipitation, potentially alleviating drought, Southern states may remain dry and the West, especially California, may see below-normal precipitation this year.
All Things Economic
A recent report from Lawrence Berkeley National Labs and the Brattle Group found that while nominal electricity prices have increased, inflation-adjusted prices have remained flat or even declined in some markets over the past 15–20 years. A major driver for this trend is the transition from incandescent lighting to fluorescent and LED bulbs, and the shift from coal generation to natural gas and renewable sources.
The team also discussed the recent PJM auction where price signals are now incentivizing new generation to meet growing demand, especially from data centers. The key challenges faced by PJM include maintaining resource adequacy as demand for electricity rises and various states are expressing concerns about capacity prices.
Natural Gas Fundamentals
Looking at the natural gas market, U.S. natural gas storage has reached near all-time highs, however increased system demand and an early start to winter may impact any power prices as natural gas fired power plants burn through storage in the colder months. December 2025 contracts traded between $3.63 and $5.43/MMBtu, and expired on November 25th at $4.42—close to the average and near the cost of production. The current January contract is trading $4.86/MMBtu, driven by the cold weather forecasts for December. U.S. natural gas production, which initial estimates for the last week of November now show production approaching 110 Bcf/d, has more than doubled since 2008, thanks to the shale revolution and advances in horizontal drilling. The number of gas rigs has dropped dramatically (from 1,500+ in 2008 to 129 in 2025), but output per rig has increased thirtyfold.
The U.S. has become the dominant force in liquified natural gas (LNG) exports, with export capacity projected to double by 2029. In 2026, LNG exports are expected to surpass industrial demand for natural gas in the U.S. Several new terminals are under construction or approaching final investment decisions, and total export capacity could reach 40 billion cubic feet per day within five years.
Regional ISO Winter Preparedness
PJM expects to have 180–181 gigawatts of operational capacity available for winter, with expected peak load around 145–150 gigawatts. They have added 4.8 GW of nameplate capacity since last winter, mostly solar, which contributes only about 1 GW towards peak demand due to lower output in winter. Stress scenarios such as low wind or pipeline issues could reduce reserves, but PJM believes there are adequate reserves for this winter.
NYISO estimates nearly 30 GW of resources for winter, with peak demand expected at just over 24 GW. The ISO relies on dual-fuel units (especially in NYC) and has a reserve margin of about 3 GW under normal conditions, but stress scenarios could reduce reserves to just 1 GW.
ISO-NE expects a peak demand of just over 20 GW, with healthy reserve margins under normal conditions. However, in an extreme cold 90/10 stress case, load could reach 21 GW, and reserves could drop to negative values, meaning potential shortfalls.
Market Trends and Temperature
The webinar concluded with a look at forward power charts, including conversations about “the right time to buy,” the “Market Temperature” and other factors affecting the energy market.
We invite you to join us for our next Energy Market Intel Webinar on Wednesday, December 17 at 2 pm ET. Constellation will offer detailed and timely updates on factors affecting the energy landscape such as weather, natural gas storage and production, and domestic and global economic conditions. Register by visiting www.constellation.com/marketintelwebinar.
© 2025 Constellation. The offerings described herein, if applicable, are those of either Constellation NewEnergy, Inc. or Constellation NewEnergy-Gas Division, LLC, affiliates of each other. Brand names and product names are trademarks or service marks of their respective holders. All rights reserved. The Webinar, and this written recap, reflect the views, thoughts and opinions of each speaker and not necessarily the speaker’s employer (including Constellation Energy Corporation or any of its affiliates), organization, committee or other group or individual. Constellation does not make and expressly disclaims any express or implied guaranty, representation or warranty regarding any opinions or statements set forth herein or in the webcast. Constellation shall not be responsible for any reliance upon any information, opinions, or statements contained in the webcast or for any omission or error of fact.