By Andy Price, President & COO
It was an unusual summer in New England. The region set records for highest-monthly-low temperatures (overnight lows were unusually high) but did not experience any sustained heat waves (daytime highs were unusually moderate). As a result, peak electric demand on the grid struggled to get above the 22,300 MW demand level set early in the summer on July 6th. For context, the lowest hour of annual peak demand over the previous 7 years is 23,500 MW in 2017 and the average annual peak demand over this period is about 24,500 MW.
Hot weather finally arrived in New England as the summer was ending. Just after Labor Day the regional electric grid set new year-to-date peaks on Wednesday September 6th and again on Thursday September 7th. CES issued four alerts that week to clients enrolled in our CES Self-Help Demand response program culminating with a strong recommendation that participants plan on “reducing loads starting at 4 pm and lasting until 8 pm today, Thursday September 7th with maximum attention on the 5 pm to 7 pm window.”
The Independent System Operator New England (ISO-NE) has recently published the 5:00 PM to 6:00 PM hour on Thursday September 7th as the peak hour with loads reported at 23,620 MW. This is still preliminary and subject to change as ISO-NE receives and processes data. The next highest load during the year is the 6:00 to 7:00 PM hour, also on September 7th. While we don’t expect ISO-NE to finalize the peak hour determination for 2023 until early 2024, the two hours between 5:00 PM and 7:00 PM on September 7th have much higher loads than any other hour. One of these two hours on September 7th (probably 5:00 PM to 6:00 PM) will almost certainly be the peak hour for 2023.
The following chart shows hourly loads for the three days with the highest electric demands of 2023. September 7th is the clear winner and very unlikely to be surpassed as the final data is processed.
This is the first year that the ISO-NE annual system peak occurred during the month of September since the regional forward capacity market was established close to two decades ago; a fitting outcome given the unusual weather patterns this summer in New England.
As a reminder, the ISO-NE assigns every retail electricity account in New England a capacity tag based on its load during the hour of annual peak the prior year. The capacity tag is the contribution of each electric utility account to system demand during the single annual hour of peak load. This value (measured in MW) divided by the total load in New England during that hour represents that account's share of the roughly $1 to $2 billion in capacity payments ISO-NE makes each year to the region's electricity generators. If you can predict the hour when the annual system peak occurs, and are able to reduce your load that hour, you will have a smaller capacity tag and therefore be responsible for a smaller share of the total amount paid to generators. This is taken into consideration by electricity suppliers in quoting prices to serve your account, so a lower capacity tag will result in lower electricity costs the next year.
Capacity tags set during calendar 2023 will be used to determine capacity costs during the power year running June 2024 through May 2025. Regional utilities typically release customer capacity tags for each utility account in April/May.
Thank you to those that participated in our ISO-NE Self-Help program this year. In many ways it was an ideal summer as we needed to issue only a few program alerts but (knock on wood) appear to have nailed the highest load hours.
The CES Self-Help program is always voluntary and without fees for our clients. There is never any obligation to respond to our notifications and, if you can respond during the hour of the ISO-NE system peak, 100% of any savings are yours to keep. If you wish to enroll (or unenroll) from our program – or have any feedback for us about the program – you can let us know by contacting Nina Callanan @ ncallanan@competitive-energy.com.
Photo by Oleksandr Akulenko