WSI: Cool Temperatures to Continue Across Northeastern US in April

 

Summer Appears Mild with Limited Risks for Big Heat Central/Eastern US

ANDOVER, Mass. (March 23, 2015) - WSI (Weather Services International) has issued its latest forecast for the April-June period. The forecast indicates below-normal temperatures across southern and eastern coastal sections, with continued above-normal temperatures expected in the western and most of the northern US. The WSI seasonal outlooks reference a standard 30-year normal (1981-2010).

According to WSI Chief Meteorologist Dr. Todd Crawford,

In April, WSI sees the monthly breakdown as:

Northeast*       - Colder than normal
Southeast*      - Colder than normal
North Central* - Colder than normal
South Central* - Colder than normal
Northwest*       - Warmer than normal
Southwest*      - Warmer than normal

According to Chris Kostas, Senior Power and Gas Analyst at ESAI Power LLC, Weather-related energy demand is typically very soft in April as heating demand begins to fade from the Northeast and as cooling demand remains minimal in the South and West. With colder-than-normal temperatures expected in the Northeast this year, however, a marginal increase in natural gas demand should combine with nuclear outages and coal-fired retirements to support power and gas prices in New York, New England and the Mid-Atlantic region. A significant portion of the nationthan-normal temperatures in the West should keep electrical loads slightly firmer than normal in that region, though loads are not expected to be firm enough to result in a significant impact on power prices. Reduced hydroelectric suppliesin the West, related to below-normal snowpack this winter, will also help to support western power prices slightly as electrical loads begin to increase.

In May, WSI forecasts:

Northeast       - Warmer than normal
Southeast       - Cooler than normal
North Central - Warmer than normal
South Central - Cooler than normal
Northwest       - Warmer than normal
Southwest      - Cooler than normal

Kostas added: “While natural gas prices are expected to be relatively soft in May (due to the year-over-year increase in natural gas production), warmer-than-normal temperatures over the northern half of the country should help to firm implied market heat-rates in MISO, PJM, New York and New England, particularly as electrical loads begin to increase later in the month. Generator maintenance will continue to influence power prices and implied market heat-rates by reducing available baseload generation. The effect of coal-fired generator retirements, related to the EPA’s Mercury and Air Toxic Standards (MATS), should begin to affect power prices and implied market heat-rates in May as electrical demand begins to increase. With considerable coal-fired generation typically offline anyway, due to maintenance during the first half of the month, the full extent of MATS retirements won’t be felt until electrical loads begin to increase this summer. Cooler-than-normal temperatures, centered over Texas and covering the southern half of the country, should help to keep power prices soft in ERCOT as generators return to service from maintenance.”

In June, WSI forecasts:

Northeast        - Warmer than normal
Southeast       - Cooler than normal
North Central  - Warmer than normal
South Central - Cooler than normal
Northwest       - Warmer than normal
Southwest      - Warmer than normal

Kostas noted: “With June temperatures expected to run warmer-than-normal in PJM and MISO, we expect the first real effects of this year’s coal-fired retirements to be felt by early summer. Year-over-year natural gas demand is expected to increase as the gas-fired fleet is called on to replace the lost coal-fired generation. Implied market heat-rates are expected to become quite lofty in these regions as relatively soft natural gas prices combine with increasing cooling demand later in June. With warmer-than-normal temperatures also expected in California and the Northwest, power prices and implied market heat-rates are also likely to be strong considering the diminished hydroelectric potential caused by the below-normal Western snow pack this winter.”

WSI provides customized weather information to global commodity traders via its industry-leading WSI Trader SaaS-based product. WSI willissueits next seasonal outlook, including an updated summer forecast, on April 20.



About WSI Corporation
WSI Corporation is the world's leading provider of weather-driven business solutions for professionals in the aviation, energy, insurance and media markets, as well as multiple federal and state government agencies. WSI is a member of The Weather Company and is headquartered in Andover, Massachusetts with offices in Madison, Wisconsin and Birmingham, England. The Weather Company is owned by a consortium made up of NBC Universal and the private equity firms The Blackstone Group and Bain Capital.

About ESAI

Since its inception in 1984, Energy Security Analysis Inc. (ESAI) has been dedicated to monitoring, analyzing and synthesizing information about world-wide energy markets. Tapping the talents of its senior-level staff, ESAI provides clients with unparalleled insight into where the markets have been and where they are headed. ESAI provides ongoing systematic analysis of energy prices in the oil, natural gas and energy markets. For more information on ESAI services, see www.esai.com.

Media Contacts:
Michelle Boockoff-Bajdek
(978) 983-6637

mbb@wsi.com


Tommy Sutro, Energy Security Analysis, Inc.
(781) 245-2036

tsutro@esai.com