After a mild start to the winter, the Northeast is bracing for an intense week of cold temperatures. Much of the Northeast is expected to see consistent temperatures in the single digits, with a wind-chill making the outside temperature feel like it is well into the negative digits.
How might this affect the power markets?
Based on historical data, we can likely expect to see some spikes in the costs of wholesale electricity during cold weather. See the chart below highlighting the correlation between weather and electricity pricing from the 2017-2018 winter.
As seen above, electricity wholesale prices typically rise with cold temperatures and then decline when the weather warms up.
While energy wholesale pricing is a complex market with many driving factors, our experts at Stanwich have found certain trends that seem to prove themselves true time and again. Cold weather during the winter is just one of many factors that we look at before advising our clients to lock into an energy contract.
Please contact us to find out if your building could be using data and market insights to purchase power intelligently.