A “Super El Niño” is building in the Pacific Ocean ahead of June and July, and the warm water signature is already showing up in the National Oceanic and Atmospheric Administration’s (NOAA) latest sea-surface temperature readings. NOAA currently puts the odds of this El Niño strengthening into a “strong” event around 50%, with roughly a 1-in-4 chance it crosses into Super El Niño territory by fall, when ocean anomalies sit at or above 2°C warmer than normal.
That matters far beyond the weather forecast. El Niño changes how power gets made in the U.S., and that has a direct effect on how it shows up on your energy bill. When that much heat sits in the Pacific, it reshapes summer weather patterns across North America, including the two regions where commercial energy spend is most concentrated: the West Coast and the Northeast.
California and the Pacific Northwest run heavily on hydroelectric generation. Hydro depends on snowpack, and a warm Pacific tends to deliver thinner, earlier-melting snowpack across the Sierra and Cascade ranges. Less snow plus drought conditions means dams generate less power, especially as you move into the back half of summer.
When hydro pulls back, gas and oil plants have to run harder all summer to keep up with cooling demand. The chain reaction is straightforward: hydro down, gas up, prices up. For West Coast buyers who haven’t accounted for the possibility of a low-hydro summer, the exposure is on the variable, market-cleared portion of their power costs.
The Northeast picture is different but the outcome echoes that on the West Coast. 2026 outlooks call for 90-degree days at or above normal in NYC, Boston and Philadelphia, with humid air driving heavier cooling demand. The Northeast grid is gas-dominant, so any spike in cooling load runs through gas plants.
On top of that, The Regional Greenhouse Gas Initiative’s (RGGI) carbon permit prices are setting record highs, with the front-December 2026 contract trading near $47/ton, up roughly 26% year-over-year. RGGI is the cap-and-trade program covering power-sector CO2 emissions across the Northeast and Mid-Atlantic, so when permit prices climb, gas-fired generators pass that cost layer through to wholesale power. More cooling demand plus record RGGI equals higher prices.
El Niño changes the weather. The weather changes how power gets made. And how power gets made is what determines what it costs. The chain runs in four steps:
None of these are speculative. Each one is already in motion. The only question is how strong the El Niño gets and how hot the summer runs.
If this plays out as the forecasts suggest, summer prices push up on both coasts. The effect is regional, but the direction is the same. West Coast buyers are looking at less hydro and more gas-fired generation filling in. Northeast buyers are looking at hotter, more humid summers, heavier cooling demand running through gas plants and record-high RGGI permits stacked on top.
This is also the kind of structural pressure we’ve been writing about as part of the new age of energy volatility. Weather, geopolitics and grid strain don’t move on the same calendar your contract does. Buyers who treat procurement as a once-a-year decision tend to find out about exposure after the fact, on the invoice.
The question worth asking right now is simple: does your current strategy account for these signals, and do you have a plan in place to protect against volatility?