Record heat, measured by people-first metric
Air conditioners have barely had a break, and the numbers back it up. Matt Rogers at Commodity Weather Group reported that August reached 376 population-weighted cooling degree days, the most in records spanning 76 years. Cooling degree days, weighted toward where people actually live, show how much energy it takes to keep homes and businesses at 65F (18C). The weighting gives more prominence to population centers than to sparsely inhabited areas.
Heat keeping demand high and gas generation busy
"Fall has arrived on the calendar, but summer heat remains entrenched across the central US, keeping cooling demand and gas-fired generation elevated," BloombergNEF analyst Ryan Ward wrote in his biweekly weather note. He said the persistent heat will keep pressure on grid operators including the Electric Reliability Council of Texas, the Midcontinent Independent System Operator and the Southwest Power Pool. PJM, which runs the largest US grid, extended a hot weather alert through Sept. 4.
September heat and a shifting seasonal line
Summer in meteorological terms runs from June 1 to August 31, but the calendar still feels out of sync as the autumnal equinox does not arrive until the 22nd this year. Rogers said, "Now September is on track for the hottest on record replacing 2019," and added, "We are expecting a very warm to record warm autumn." In a blog post, Judah Cohen of the Atmospheric and Environmental Research JANUS Research Group, who is the director of seasonal forecast, went further, writing, "September should be promoted to a summer month and no longer a shoulder month given the strong warming trends," and, "I don't expect summer warmth to fade for the foreseeable future; warm temperatures will reign supreme."
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Why investors should care
Population-weighted cooling degree days are a go-to gauge for energy traders, power grids, industrial users, and the markets for weather-linked derivatives and insurance because they quantify cooling demand where people actually consume energy. With late-season heat persisting, the same metric that set August's record is shaping September and guiding how the energy system prepares and prices risk.
