WSI: Summer Heat to Persist in the Western U.S., with Near to Slightly Above-Normal Temperatures into the Northeast

Copious Recent Rains to Limit Magnitude and Duration of Heat in East

ANDOVER, Mass. (June 25, 2013) — WSI (Weather Services International) expects the upcoming period (July-September) to be cooler than normal across the Ohio Valley and Southeast, with above-normal temperatures common elsewhere, especially in the western United States. The WSI seasonal outlooks reference a standard 30-year normal (1981-2010).

According to WSI Chief Meteorologist Dr. Todd Crawford: “The summer has gone as expected so far, with the most significant heat focused across the western United States, and only occasional bursts of heat across into the eastern U.S. In general, we expect this pattern to continue through the remainder of summer, with the more persistent below-normal temperatures confined to the Southeast U.S. The polar vortex has been stronger this summer than in recent years, which is allowing warmer temperatures to spread across the northern U.S. this week. This recent development, along with the usual statistical and dynamical model guidance, has resulted in some changes to our July forecast across the northern U.S. We are now favoring slightly above-normal temperatures across key population centers of the north-central and northeastern U.S., as opposed to our previous forecast which favored slightly below-normal temperatures. Further, the western drought will reinforce the pattern of warm-west, mild-east going forward. Heading into early fall, we are keeping an eye on a potential trend towards a weak El Nino event. If this occurs, the tropical forcing will be more likely to favor a cool fall across the eastern U.S. Stay tuned to next month’s forecast for more details on the early part of the upcoming heating season.”

In July, WSI sees the monthly breakdown as:
Northeast* – Warmer than normal
Southeast* – Cooler than normal
North Central * – Warmer than normal
South Central* – Warmer than normal
Northwest* – Warmer than normal
Southwest* – Warmer than normal, except AZ/NM

According to Chris Kostas, Senior Power and Gas Analyst at ESAI Power LLC: “With warmer-than-normal temperatures expected in the West, the Northeast, and Texas in July, power prices and implied market heat-rates should experience mid-summer strength. Northern California in particular should see seasonal strength considering the much warmer than normal temperatures expected in that region, while ERCOT, eastern PJM, NYISO, and ISONE should also see relatively firm power prices and implied market heat rates in July. The Southeast by contrast is expecting cooler-than-normal temperatures which should help to keep power prices relatively subdued in Florida. With natural gas prices expected to run significantly higher this summer compared to last summer, coal-fired generators throughout the country should experience increased year-over-year capacity factors and profit margins. Increased coal-fired generation and higher natural-gas prices should also help to keep implied market heat-rates from reaching the very high monthly averages seen last summer. Natural gas prices can be expected to remain firm due to above-normal aggregate cooling demand and increased year-over-year storage injection demand. Firm gas demand and prices should be partially offset, however, by increased coal-fired generation.”

In August, WSI forecasts:
Northeast – Warmer than normal
Southeast – Cooler than normal
North Central – Warmer than normal
South Central – Warmer than normal
Northwest – Warmer than normal
Southwest – Warmer than normal

Kostas added: “Power prices and implied market heat-rates could find significant strength in CAISO in August considering the widespread warmer-than-normal temperatures expected between the Pacific Coast and the Rockies. Northeast hydro generation will also begin to taper in August providing an additional boost to power prices and implied market heat-rates in the West. ERCOT, PJM, NYISO, and ISONE power prices should also see strength in August, considering the warmer-than-normal temperatures expected in those regions. Firm gas prices in July and August should help to boost coal-fired generation throughout the country this summer and will help to moderate the upward pressure on implied market heat-rates, however. Mild August temperatures in the Southeast should help to moderate power prices in that region.”

In September, WSI forecasts:
Northeast – Warmer than normal
Southeast – Warmer than normal
North Central – Cooler than normal
South Central – Warmer than normal
Northwest – Warmer than normal
Southwest – Warmer than normal

Kostas continued: “Firm power prices this summer could extend into September, particularly in California and Texas. While electrical loads begin to decline in September as average temperatures decrease, above-normal temperatures and electrical loads in California and Texas should help to extend the firm summer power prices into September. Cooling loads in PJM, NY, and New England generally begin to decline precipitously in September. However, warmer-than-normal September temperatures expected in those regions should help to support power prices, particularly as the generation maintenance season begins. Western PJM (i.e. Northern Illinois) could see price weakness, however, as temperatures are expected to run below normal in that region. Florida, which should be spared from warmer-than-normal temperatures in July/August, could see some late summer price strength as temperatures move above normal in September.”

WSI provides customized weather information to global commodity traders via its industry-leading WSI Trader Web site. WSI will issue its next seasonal outlook on July 23.

*To view the map defining WSI’s US regions, click here.

About WSI Corporation
WSI (Weather Services International) and Weather Central are the world's leading providers of weather-driven business solutions for professionals in the energy, aviation, insurance and media markets, as well as multiple federal and state government agencies. Together they comprise the professional division of The Weather Company and are 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:
Linda Maynard, WSI
(978) 983-6715, lmaynard@wsi.com

Tommy Sutro, Energy Security Analysis, Inc.
(781) 245-2036, tsutro@esai.com