Weather Risk Analysis for Individual Electric Customers

Competition in competitive retail markets is greater than ever reducing profit margins and increasing weather risk. While nearly all retail electric providers hedge against weather risk at aggregate sales levels, individual customer weather risk analysis provides an opportunity to assess individual customer profitability and to improve aggregate hedging information.

Customers with greater weather sensitivity can easily cost more to serve than they produce in revenue depending on weather conditions. Quantifying individual customer weather risk provides information to:

  • Develop less costly supply and hedging options for your existing customer base
  • Update individual customer rates and pricing strategies to increase profits and reduce risk and hedging costs
  • Apply individual customer weather model parameters to forecast customer and regional hour-ahead, day-ahead and month-ahead energy use, hourly and peak kW

Hourly weather risk analysis is available for customers using either monthly billing data or interval meter data. Customer monthly data analysis results are extended to hourly results applying information from MAISY Utility Customer Databases including the new ZIP level databases. If available, customer interval meter data is applied directly in the hourly statistical analysis.

Jackson Associates (JA) applies a unique software process using historical billing and hourly weather data to quantify weather responsiveness of all customers in your customer base. 30+ years of historical weather are applied to estimate deviations of monthly and hourly electric and natural gas forecasts at different probability levels for each customer. Results are provided in an Excel workbook providing easy in-house applications of profitability and other analysis. Individual and aggregate hourly loads can be exported for analysis with other software. Pricing is based on number of customer records processed.

An illustration of monthly and hourly expected and extreme weather presentations is provided below. Standard hourly load data is provided as three day types (average week day, average weekend day and peak day) for each of 12 months. Additional load detail including 8760 hourly loads is also available.

Monthly Energy Use, Expected and Extreme Weather Hourly Energy Use, Expected and Extreme Weather  

Jackson Associate can provide weather parameters for hour-ahead, day-head, month-ahead and multiple-months-ahead if you would like to appy our weather models in-house. We can provide forecast weather data based on 1-week previous, 2-weeks previous and other weather patterns to assist you in improving your energy, peak demand and hourly load forecasts.

Contact us to learn more about our weather risk analysis service.

Jerry Jackson, President
Jackson Associates
37 N. Orange Avenue, Suite 500
Orlando, Fl 32801
cell:979-204-7821 office:407-926-4048