A brief overview
A longer overview
The weather adjustment feature allows us to calculate a customer’s budget amount based on their electricity usage from the previous year, and also what impact the weather may have had on electricity usage.
The impact of weather on electricity usage is estimated by looking at weather data from the last ten years and then calculating what an average year of weather would look like. Data from that average year is then used to estimate a customer’s electricity usage for the following year.
Using a 10 year weather average will help reduce large budget amount fluctuations from year to year and provide customers with more stable electricity bills.
To illustrate the impact of weather patterns, the graph below shows predicted electricity usage over a four year period for a customer who heats with electricity.
The impact of using past weather patterns on electricity use - the Mr. Brown example
Mr. Brown heats his home with electricity. If a year was particularly warm, Mr. Brown would use less electricity to heat his home. When the following year’s budget amounts are recalculated based on the warm year’s usage, the budget amount would be lowered because less electricity was used than estimated.
However, if the following year was cold, Mr. Brown would use more electricity to heat his home. The budget amount would be set based on the warmer previous year and Mr. Brown would owe money at the end of the year.
The orange line in the graph above shows how Mr. Brown’s predicted energy usage fluctuates due to colder than normal and warmer than normal years. When weather averages are used to calculate energy usage there are fewer ups and downs as shown in the green line. Mr. Brown’s budget amount is now more consistent from year to year.
Looking to learn more? Check out the details below, including the calculation we use to determine the weather factor.
Q: How do you calculate the weather factor?
A: We obtain the weather data from Environment Canada. Heating degree days (HDD) are tracked throughout the year and then the sum of HDD for the year is compared to a 10 year average, for example in 2009 there were 4207.1 HDD compared to the 10 year average of 4010.1 HDD, which meant 2009 was approximately 4% colder than the 10 year average.
Q: What is a Heating Degree Day (HDD)?
A: On any given day, if the temperature drops below 18 degrees Celsius, every degree it deviates counts as one heating degree day.
Example: If today was 11 degrees, HDD would be determined by subtracting 11 from 18, equaling 7 HDD. Add the HDD for each day to determine a year’s worth of HDD.
Q: How does the weather factor get applied to my account?
A: We use previous weather and temperatures to predict how much electricity the customer will use in a year in the same way as companies that provide oil for oil heating.
- First we add your electricity consumption for the whole year
- We apply the weather adjustment factor to the heat load of your total electricity
consumption. Heat load refers to the amount of electricity used for electric heat out of a total electrical load. We calculate the weather adjusted consumption based on the following formula:
Your total electricity consumption + [Your total consumption for the year x 60% (Heat load) x Weather factor (which we will obtain annually in the last week of December)]
| Example 1: Warm year || Example 2: Cold Year|
|Total consumption for the year= 12000 kWh* ||Total consumption for the year = 12000 kWh*|
|Heat load = 60% ||Heat load = 60%|
|Weather Factor = 8% warmer than normal (0.08)* ||Weather Factor = 8% colder than normal (-0.08)*|
|(12000 + (12000 x 0.60 x 0.08)) = 12576 kWh ||(12000 + (12000 x 0.60 x -0.08)) = 11424 kWh|
Equal billing amount is then calculated by multiplying the weather adjusted consumption with current rates + other applicable charges + Tax – Rebate & dividing the total by 12
* 12000 kWh is used only as an example; total annual consumption varies from account to account.
* 8% is used as an example and not reflective on current weather patterns.
Q: Who gets the weather adjustment?
A: Equal billing customers who heat their homes with electricity receive the weather adjustment.
Q: Why do this?
A: We found that many of our equal billing customers noticed very significant changes to their budget amounts from year to year due to changing weather conditions. We cannot control the weather but we realized that we can use the data to ensure that changing weather conditions have less of an impact on customer budget amounts. This enhancement makes budget amounts more consistent.
Have questions about how the weather adjustment works? Contact us today.
Q. What impact does the weather adjustment have on my budget amount in January 2015?
A. In 2015, the weather was 6.8% colder than the past 10 year average (2006-2015). We apply this weather factor of 6.8% to the heat load of customers’ electricity usage. The heat load, or the heat portion of customers’ electricity usage, is about 60% of total electrical usage.
By assuming 2016 will be a “normal” year in comparison to past weather averages and by applying the weather factor to the heat load, customers are less likely to be over or under paying in 2016.