By Kenya Stump, Executive Director of the Kentucky Office of Energy Policy
What happens when an energy nerd has access to electricity consumption data? She writes an article about the effects of a pandemic on residential energy consumption.
We intuitively know that electricity consumption has shifted more to the residential sectors with more people following Governor Andy Beshear’s urgings to remain Healthy at Home. I wanted to see if my data supported that hypothesis.
You can read more about state and national protocols for limiting the spread of COVID-19 at kycovid19.ky.gov.
Thanks to an advanced meter on my house in Nicholasville, I downloaded my hourly electricity consumption data for March 14 through April 14 for the years 2019 and 2020. If you’re interested in looking at your own electricity consumption, you can contact your utility provider and ask about advanced metering.
There are a couple things we need to consider before diving into the data.
First, let’s talk about temperature normalizing. In order to compare energy consumption year over year, you have to account for the fact that differences in weather will likely produce differences in usage.
That’s why before you look at the numbers, you should calculate the degree days for the time period you’re analyzing. Degree days are a measurement of how cold or warm a location is over a period of time, and it’s based on the assumption that when the outside temperature is 65°F, we don’t need heating or cooling to be comfortable. Degree days are the difference between average temperature (the high temperature plus low temperature, divided by two) and 65°F.
The heating and cooling degree days for Nicholasville from January through March 2020 compared to 2019 are shown below. The table basically shows that for March, Kentucky temperatures were generally milder in 2020, with far fewer heating degree days (periods of cold weather where people would generally turn on the heat) than in 2019.
It’s also important to note that for heating and cooling, my household uses primarily electricity through heat pumps and is supplemented by two natural gas fireplaces. All of this would initially indicate that my household electricity bill for March should be less than in 2019.
What did my data show for March 14–April 14, and how has the pandemic affected energy usage in my household? After aligning the days (because my usage patterns do vary depending on the day of week and if it’s a weekday or weekend), I can say that my household consumed 16% more electricity during this time period, and my usage patterns seemed to begin to shift as my family began to settle into being “healthy at home.”
All of this isn’t that surprising. With schools closed and many Kentuckians working from home, we can expect that electricity consumption has shifted to the residential sector. We also know that consumption is probably less in the commercial sector and in some segments of the industrial sector, depending on whether that business is considered essential. Even with the residential increase, we see that total daily energy usage has decreased, “with an average weekday decrease of about 7 percent, or about 140 GWh,” according to wholesale electricity market operator PJM. “In general terms, the COVID-19 virus has smoothed out peaks compared to traditional hourly load patterns of late winter/early spring,” PJM notes.
This is likely because in Kentucky, commercial and industrial facilities account for far more energy usage than residences. Even if we’re seeing more usage in homes during this pandemic, it’s not so much of an increase that it equals the typical weekday usage of places like manufacturing facilities that are currently closed or operating at reduced capacity.
What we don’t know is if this shift is going to be long term or a short-term blip.
At the household level in the short term, the impacts may be a rearrangement of expenses and savings. Maybe you spend more on electricity while at home, but you save on childcare, gasoline and dining expenses.
Long term, at the sector level, if consumption patterns shift among the residential, commercial and industrial sectors, it could result in the price of electricity changing to keep utility revenues stable.
All of the sectors contribute to an overall revenue requirement for the utility. The revenue requirement, authorized in Kentucky by the Public Service Commission, is the revenue required for the utility to provide adequate service to its customers and a fair return for its shareholders.
Therefore, if one sector under-collects, the regulatory authority may approve prices increases for that sector. If prices are a sensitive issue, the authority may authorize a shift in the revenue burden to another sector. The allocation of the revenue requirement is all based on what it costs the utility to serve that sector. Given the uncertainty surrounding the changes in consumption and potential cost of service changes, it is difficult to predict what impact the pandemic will have on prices. Consumers are encouraged to learn more about your utility’s ratemaking process and follow the Public Service Commission for updates.
As with all things data, there’s more to come on this story. The data is early and there’s a lot of uncertainty around the external circumstances affecting electricity consumption. Do I plan to change my household’s behavior in terms of electricity consumption? I don’t know yet. Being at home does lend itself to taking up some DIY energy efficiency projects, but for my household it’s all about behavior changes and we’ve had quite a lot of changes to deal with, so I’ll pick my battles carefully.
Stay tuned to the Kentucky Office of Energy Policy for future stories related to this topic as more data becomes available and is analyzed.
For coronavirus updates, please visit kycovid19.ky.gov, the official Team Kentucky source for information concerning COVID-19. For more information about Gov. Beshear and his administration, visit governor.ky.gov or follow the Governor’s official social media accounts on Facebook, Twitter and YouTube.