We may be a bit of a broken record on this subject, but it bears repeating.

Winter is the New Summer.

In what respect? Well, the prices that we saw last Winter in NY resemble prices that we had grown accustomed to paying in this market during the Summer Peak Demand months of July and August. Based on current forward curves, that trend could well continue this Winter.

Take a look at day ahead prices through July 2014 (as reported by the NY ISO).

Market Performance Highlights
for July 2014
• LBMP for July is $43.96/MWh; higher than $43.38/MWh in June 2014 and 36% lower
than $68.49/MWh in July 2013.
– Day Ahead Load Weighted LBMPs are slightly higher compared to June.
– Real Time Load Weighted LBMPs are lower compared to June.
• July 2014 average year-to-date monthly cost of $89.43/MWh is a 37% increase from
$65.10/MWh in July 2013

What does this mean for Winter 2015?
The only indication we have for next Winter’s prices is what the forward curve tells us. Jan ’15 forwards have topped $120/MWh. February doesn’t look much better. That’s why we say Winter is the New Summer.

The “black swan” event attributed to the Polar Vortex may not be a one-time event.

What is your plan for dealing with this market shift? We’d love to hear from you.

Bottomline for businesses: You need a plan for Winter. Don’t expect pre-2014 Winter business-as-usual.