An increase in US power prices and greater fragmentation among regional markets could lead to an upturn in hedging activity, according to power traders, reversing a trend of decline due to falling power prices.

Over the past few years, the need to hedge has become less pressing for both producers and consumers of electricity due to the recent lull in prices. That has hit the bottom line of trading firms, but has been particularly tough for banks, with some firms deciding to exit the market amid