There are many variables that affect the costs you pay for natural gas and electricity, including regulations, market conditions, and today’s blog topic, weather patterns. Although weather may not have a large long-term market effect, it can have a short-term effect on your energy bill.
Natural gas and electricity usage can be highly dictated by weather. In the summer, most companies are using more electricity to cool their business and less gas for heat. This seasonality trend can lead to many companies having a seasonal natural gas and electricity spend. This results in their electric bills being higher in the summer and gas bills proving higher during the winter.
Market-Based Variable Rates
Some business owners will opt to float their electric and natural gas supply through monthly variable rates. These rates are determined by market movement, which subsequently is partially influenced by weather trends. The chart below illustrates how cooler winter temperatures can elevate gas pricing, therefore increasing market-based variable rates.
When shopping your electricity and natural gas accounts, it is important to know that weather patterns can influence supply rates. For example, even though electricity prices are currently near seven-year lows, pricing can increase or decrease on a day-to-day basis in response to new weather pattern data.