What Winter Storms Mean for Procurement Strategy

While some of the country is still digging out from under the massive winter storm that swept the nation over the weekend of January 17th, continued winter weather is effecting the southeast. These major, and increasingly frequent, winter storms don’t only bring snow, ice and frigid wind chills; they also cause energy prices to spike. Expensive energy prices leave customers wondering how they will be financially impacted and how they can prepare to protect themselves in the future. 

As almost every region of the United States becomes more vulnerable to frigid temperatures, snow and ice, large energy users will face higher prices if they don’t have a procurement strategy in place. With increased winter volatility, customers must pivot from looking at energy purchasing through an annual lens and move towards a structure that safeguards their budget from future winter storms and unpredictability. 

Grid Impact Due to Winter Storms 

As temperatures drop, natural gas and electricity demand rises to heat buildings and combat frigid temperatures. When extreme temperatures are prolonged, the demand becomes even higher. 

Grid strain is a concern during winter storms due to the freezing temperatures. If the grid fails, it could have dire results. Texas experienced blackouts during Winter Storm Uri in 2021 due to the grid becoming overwhelmed by the demand for power. The blackouts had a devastating impact on the state, leading to hundreds of deaths related to exposure. Texas has since diversified the state’s energy grid to prevent future blackouts. Now their grid is supported by battery storage and an increase in solar farms, which helped prevent blackouts during the latest winter storms in 2026. 

Markets that rely primarily on natural gas also face challenges when demand spikes. As long as there is enough gas in storage, the grid will be able to support itself through increased demand. For example, even during the cold snap that affected most of the U.S. in late January, there was still 7.9% more gas in storage than there was around the same time in 2025. Additionally, there was 5.3% more gas in storage than the 5-year average; this increase in storage is likely to combat growing volatility and colder winter temperatures. 

What Winter Storms Mean for Your Energy Bill 

Like a snowflake, no two energy bills are the same, however, all energy bills will be affected by the recent and upcoming winter storms that have swept the country. Due to the increased strain on the energy system, demand for natural gas and electricity grows causing rates to shoot up and customers to pay the price. 

Even customers who are in contract could be affected by Operational Flow Orders (OFOs), which utilities call to require customers to reduce consumption and help relieve grid strain. During these events, suppliers may curtail customers and break contract terms, charging at the local spot price and exposing customers to soaring energy prices. Customers who are on non-interruptible supply are less likely to be impacted by curtailing as opposed to customers who are on interruptible supply.  Customers who are unsure of their supply type should reach out to their supplier or energy broker to see what risk they could face during one of these events. 

Impact is felt differently based on the type of contract a customer has. When temperatures drop, the index spikes, meaning customers who are floating on the index are exposed to high prices with little protection to offset them. Customers will also see higher bills due to increased usage that is required to maintain a building's heat.

How to Manage Seasonal Risk 

Although customers cannot avoid higher prices altogether, there are several ways customers can plan to reduce their exposure to volatile winter markets. With seasonal spikes not expected to calm, customers need to take winter into account when planning their energy procurement strategy. 

The most effective way to avoid these high prices is to reduce consumption during peak hours, especially during the morning and evening. This will help offset high prices by switching energy usage to a time when rates will be less elevated. 

In addition to reducing consumption, customers who use a layered hedging strategy can help balance price certainty with flexibility to adjust when prices spike or dip. Historically, there has been a drop in gas prices after winter storms due to an excess of gas supply. Layered hedging strategies allow customers to seize opportunities while staying proactive as prices rise. 

Working with a third party supplier or trusted broker can help large energy users find the procurement strategy that works best for them. Ultimately, you cannot predict the future but historical numbers can be a great indicator of what is to come and what to expect.