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Winter's Impact on Energy Prices & How To Decrease Risk

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Weather events like dropping temperatures and extreme cold often influence energy prices, so it’s important to be prepared.

Learn how fluctuating winter conditions can spike prices and how to mitigate your exposure to risk.

Published in: Business
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Winter's Impact on Energy Prices & How To Decrease Risk

  1. 1. IT’S TIME TO POLAR PROOF YOUR BUSINESS
  2. 2. Weather events like dropping temperatures and extreme cold often influence energy prices, so it’s important to be prepared. Learn how fluctuating winter conditions can spike prices and how to mitigate your exposure to risk. HOW TO PREPARE FOR THE UNEXPECTED
  3. 3. During colder months, your business’s furnace may work overtime to keep your buildings heated. That means many customers use more energy during cold months, racking up higher monthly costs–and increasing the overall demand for power. WHY CAN DEMAND INCREASE DURING WINTER?
  4. 4. Cold temperatures can cause power plants to go offline, sharply reducing the available energy supply. To keep up with demand, less efficient ones may be brought online at an increased cost. In 2014, a polar vortex caused power prices to soar and reduced capacity by almost 22%. HOW SENSITIVE ARE ENERGY PRICES? 1
  5. 5. RISK EXPOSURE CONTRACT TYPE Know your energy product. 49% of managers at midsized businesses don’t know the parts that make up the pricing for their supply contracts. 1 2 WHAT CAN I DO TO PROTECT MY BUSINESS FROM UNEXPECTED SPIKES Consider your risk exposure. Choose a contract that gives your business appropriate protection in case of cold weather energy price spikes. Fixed-price Managed products Index-priced LIMITED MODERATE ELEVATED 2
  6. 6. The Direct Energy Business Advisory Services team is here to help you confidently understand your energy plan and prepare your energy management strategy for the future. MEET THE TEAM DON’T GO IT ALONE.
  7. 7. © 2016 Direct Energy. All Rights Reserved. Direct Energy and the Lightning Bolt design are registered trademarks of Direct Energy. (DC PSC License No. EA-04-4-4; EA-13-12; GA-13-03-1; NJ BPU License Nos. ESL-0165, ESL-142, GSL-0145, GSL-0128; MD PSC License Nos. IR-437; IR-2697; IR-3123; IR-3108; PUCT Cert. No. 10011; Direct Energy Business, LLC CT PURA License Nos. 12-03; 00-05-14RE01; MA DPU License Nos. CS-021; GS-052; CS-108; GS-051). Products and services vary depending on region or market. Sources: 1.  Reuters, “PJM grid sees power plants returning after cold-weather problems.” January 8, 2014. Monitoring Analytics, “2013 State of the Market Report for PJM.” March 13, 2013. 2. Energy Research Council, “Polar vortex effect on electricity prices.” Retrieved October 3, 2016. DEB-0646-2016

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