Energy Management

Record Heat in the Northeast Sets Peak Demand

4 min read

Chances are, if you vacationed anywhere in the continental U.S. this summer, you experienced moderate to high heat. On a population-weighted cooling degree day (CDD) basis, this summer was the hottest across the Lower 48 in the 66 years of record-keeping (see image below).

The Northeast was no exception. The state of New York registered the second hottest summer since 1950 during the meteorological summer (June 1 – August 31). New England broke 2010 record summer temperatures by 0.5%. As of September 8th, Boston saw 20 days of at least 90 degree temperatures this summer. The 1983 record was an average of 14 days. Meanwhile, Buffalo, which averages about four 90-plus degree days per summer, doubled that number this year.

NE_Sept_image_1.jpgSource: EarthSat

The high frequency of 90-plus degree days also brought a high number of days where the New York and New England ISO regions could have seen peak demand.  However, a pair of consecutive days in August did mark the summer-to-date peaks in each region.

Although the meteorological summer is over, that doesn’t mean the hot days are. A hot day could be realized still, setting a new peak in each region. The peak day/hour in New York can technically be set all the way through April 30th. In New England, the power year runs from June 1st to May 31st, so any day/hour through May 31st is eligible to set the peak. Also, realized peak data are pulled from current, available ISO New England and NYISO data and are subject to change due to settlement changes and other adjustments (see ISOs for details).

New York Peak Days

The peak day and hour for NYISO occurred on August 11th, hour ending 5 p.m. at 32,075 MW. This surpassed last year’s peak of 31,138 MW from July 29, 2015 by 937 MW. This peak was over 1,000 MW lower than the spring NYISO forecast of 33,360 MW, under the assumption of approximately 95-degree conditions.

For the day, Albany topped out at only 90 degrees. New York City hit 93 degrees with a heat index of 104.6 degrees. Real-time hourly energy prices for the day topped out at $672/MWh in Zone J (New York City), but prices swiftly moved back down to under $100/MWh just five hours after topping out. This shows rapid resource response during the day’s dispatch operations. The relatively modest peak demand left 31% of excess generating and demand response resources available system-wide showing the preparedness of the NYISO.

The image below shows the history of system demand peak days in New York. The all-time high was reached in 2013. After a major drop off in 2014, the system has seen marginal gains in demand over the past couple of years. 


New England Peak Days

While the New York peak day occurred on August 11th, one day later in New England on August 12th, the summer-to-date system peak demand was hit at 25,463 MW. This was over 1,200 MW lower than the ISO New England spring forecast under 90-degree conditions. The realized peak came in much lower despite temperatures hitting 97 degrees and a heat index of 104.9 degrees.

ISO New England was also very well-prepared for the summer heat and cooling demand as they were stocked with over 30,000 MW of generating and demand response resources through the summer. Hourly price spikes coincided with the increase in demand. However, New England saw very limited price bumps summiting at $379/MWh and back down in double digits 5 hours later. Although customers never want to see prices get over $100/MWh, this was welcome price reaction after seeing real-time prices hit $1,400/MWh due to an unexpected outage at the Millstone Nuclear Power Plant in Connecticut the preceding day.

The image below also shows the historical trend of system demand peak for the region. Similar to New York, after a significant drop off from 2013 to 2014, the past couple of years have been flat to marginal increases reflecting realized “milder” summers and the effects of demand response and energy efficiency.

NE Sept image 3.1.jpg

As a reminder, the capacity tags for customers in New England and New York are set on these peak system demand day/hours for the following power year. Each account’s capacity tag is set based on that hour’s consumption. The account capacity tag is a key factor in determining the capacity costs along with the capacity rate.

Constellation’s Peak Response

Constellation provides a number of capacity tag management programs to mitigate high capacity rates and lower the overall costs of energy. Through Constellation’s Peak Response program, Constellation’s team of experts monitors grid consumption and weather to predict the peak-setting hours of the year. Our team alerts customers with email notifications on the day before and the day of the predicted peak hours. When peak days and hours occur, businesses can voluntarily curtail their energy use.

This program is available to both fixed price* and index customers. Customers with a fixed price* contract still see greater budget certainty and gain the potential for their capacity costs to decrease. Customers buying power through index pricing may realize additional savings, as peak load hours generally coincide with some of the highest energy price hours of the year. A blended strategy is also available for customers who want to see the potential rewards of both budget stability and purchasing flexibility.

To learn more about how Constellation can help your business achieve your energy management goals, contact us today.

*Product availability varies by state and customer class

Additional Information:

UPDATE: As of October 19, 2016, ISO New England posted a preliminary annual system peak day, hour and load for Capacity Commitment Period (CCP), June 1, 2017 to May 31, 2018 of August 12, 2016 hour beginning 2:00pm and hour ending 3:00pm with a system peak load of 25,094.028 MW. Values are preliminary and subject to change. Official and final peak data is typically determined in the April preceding the CCP (April 2017). Link to the ISO New England source:

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