A break from the weather
Think of it as Mother Nature's economic stimulus.
Electricity consumption has dropped dramatically this summer because of the mild weather, and it is translating into more manageable electric bills.
PJM Interconnection, the regional grid operator, says electricity demand in the mid-Atlantic states was down 13.5 percent in June compared with last year.
Peco Energy Co. customers used 14.9 percent less power in June than they did a year ago, and sales are off 2.5 percent for the first six months of the year, according to PJM.
Public Service Electric & Gas, the New Jersey utility, sold 17 percent less power in June, and 4.5 percent less for the year.
Though power forecasters expected a slight drop in consumption because of the recession, the dramatic reduction is mostly weather-related, said Michael J. Kormos, PJM's senior vice president of operations. Temperate weather reduces the need for power-hungry air-conditioning and refrigeration.
Exactly how much consumers gain in this equation varies according to the individual. Neither Peco nor PSE&G would release sales figures ahead of their quarterly earnings announcements, scheduled for later this month.
But it is safe to say the mild weather has allowed consumers in Pennsylvania and New Jersey to keep hundreds of millions of dollars in their pockets. According to the Energy Information Administration, customers in the two states spent nearly $2.5 billion on their electric bills in June 2008 - $1 billion of that was residential. So even a 10 percent reduction would translate into a quarter-billion-dollar windfall.
"Obviously, the weather has affected our business," said Bonnie Sheppard, a PSE&G spokeswoman. She said June was the eighth coldest - and second wettest - on record in New Jersey. Light use of air-conditioning is reflected in a 62 percent drop in repair-service calls, she said.
"Definitely customer bills are lower," said Michael Wood, a Peco spokesman.
The windfall is not limited to Philadelphia. PJM says consumption is down about 8.5 percent in the Southern and Midwestern states that are part of its transmission system. PJM operates the grid in parts of 13 states and the District of Columbia.
ISO New England Inc., another regional grid operator, reported last week that consumption was down 12 percent in the six states where it manages the transmission system.
Out West, it's a different story: Temperatures are warmer than normal.
As for the rest of the summer, the best estimates are that the mild weather will continue in the Northeast.
WSI Corp., which supplies forecasts to energy companies, is calling for cool for most of the East. The government's Climate Prediction Center foresees cool weather for the rest of July from the Atlantic to the Northern Plains along a line whose southern boundary is right over Philadelphia.
PJM expects that its record peak demand of 144,644 megawatts - set in August 2006 - will go unchallenged and that the transmission system will not be seriously stressed this summer.
"We can still get storms that can wreak havoc on the system," Kormos said. "But from a capacity side, I don't expect to be pushed to the limit."
Contact staff writer Andrew Maykuth at 215-854-2947 or email@example.com.
Inquirer staff writer Anthony R. Wood contributed to this article.
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