Polar Vortex Impacts Electricity Costs

May 15, 2014

The polar vortex triggered two extreme weather events in the U.S. in January 2014, which caused many electricity customers to experience increased costs. Although winter 2014 is over, the collateral economics will be felt for months to come.

To ensure grid and transmission reliability during extreme temperatures, many regional transmission organizations (RTOs) incurred dramatically high “ancillary” costs. PJM—a RTO that coordinates the transmission of electricity in 13 states—passed these costs to electricity suppliers. Suppliers serving the PJM territory are now faced with the decision to either absorb the ancillary costs or pass through the costs to customers on a future electricity bill.

A new report by the Energy Research Council (ERC), “Polar vortex effect on electricity prices,” discusses how peak demand led to increased ancillary costs, and describes how different “change-in-law” provisions could impact customer electricity bills.

If you notice a substantial increase on your electricity bill, then your bill and supply contract should be evaluated immediately. Take advantage of APPI Energy’s consulting services. Our unbiased, independent team of energy experts can provide a complimentary evaluation and recommend cost-reducing supply solutions. Contact Carrie Shepard at APPI Energy at 800-520-6685.