Extreme winter weather impacts electricity market

ERC examines how polar vortex weather events are impacting consumer electricity bills

Salisbury, MD, April 9, 2014—The polar vortex triggered two extreme weather events in the U.S. in January 2014, which caused many electricity customers to experience increased costs. Although winter 2014 is officially over, the collateral economics will be felt for months to come.

To ensure grid and transmission reliability during extreme temperatures, many regional transmission organizations (RTOs) incurred dramatically high “ancillary” costs. PJM—a RTO that coordinates the movement of electricity in 13 states—passed these costs to electricity suppliers. Suppliers serving the PJM territory are now faced with the decision to either absorb the ancillary costs or pass through the costs to customers as a one-time-only line item on a future electricity bill.

The Energy Research Council’s (ERC’s) new report, “Polar vortex effect on electricity prices,” discusses how peak demand led to increased ancillary costs, and describes how different “change-in-law” provisions could impact customer electricity bills. Read the entire ERC research brief at http://energyresearchcouncil.com/Polar-vortex-effect-on-electricity-prices.html.

About Energy Research Council
Sponsored by APPI Energy, ConEdison Solutions, Constellation, Direct Energy, Liberty Power, and Washington Gas Energy Services, the ERC provides facts-based thought leadership for the energy industry. The ERC conducts quarterly research to understand the energy needs, practices, and priorities of middle-market companies. Reaching members of more than 100 trade associations and the broader business community, the ERC equips customers to make smart energy decisions. For more information about the ERC, visit http://www.energyresearchcouncil.com or contact James Moore, ERC President, at 410-749-5519.

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