For power traders, electrical load forecasting isn’t just about knowing when demand will rise – it’s about anticipating where demand is becoming more sensitive to temperature.
In historically mild regions, such as the Pacific Northwest, Northern Rockies, and New England, air-conditioning adoption has traditionally been low. But as summers grow hotter, electrical load patterns are shifting sensitivity to heat in measurable ways.
This is because builders are installing new air-conditioners in homes and businesses in regions where they haven’t previously been needed, and existing units are running more often, for longer stretches, and during peak afternoon hours. This increased usage is making these regions more temperature-sensitive, especially during extreme heat events.
As demand profiles evolve, power markets that once exhibited minimal summer volatility are beginning to show new patterns – and new opportunities.
We used Yes Energy’s Temperature Sensitivity tool in our Demand Forecasts to explore how electricity load is evolving in historically temperate zones and how you can use these insights to get ahead of the trend in trading.
The relationship between temperature and electric load is highly nonlinear, primarily driven by how customers respond to discomfort with heating and cooling systems.
A key threshold is 65° Fahrenheit, the standard “base temperature” used to calculate heating and cooling degree days. Below 65° F, power demand generally rises with electric heating use. Above it, demand increases as air-conditioners come on. The result is a U-shaped curve, with relatively low demand near 65° F and steeper slopes on either side.
In the winter, demand sensitivity depends on the prevalence of electric heat compared to other sources, such as gas or oil. In the summer, it’s a function of both air-conditioning penetration and runtime.
Regions such as the Pacific Northwest have historically exhibited limited summer load sensitivity. With relatively mild climates and lower air-conditioning adoption rates – 53% in Washington, 65% in Montana, and 70% in Maine – these areas haven’t typically seen the sharp electricity load spikes that define hotter markets.
But climate trends are disrupting this.
In 2024, the US experienced its fourth-warmest summer on record, with average temperatures across the lower 48 states rising 2.5° F above normal, according to the National Oceanic and Atmospheric Administration (NOAA). New Hampshire and Maine both recorded their hottest summers ever, and even the Pacific Northwest’s coastal climate is no longer the buffer it once was.
Source: NOAA September 2024 Regional Climate Impacts and Outlook
To assess how this has translated into demand shifts for Seattle City Light, a utility in the Pacific Northwest, we used our Demand Forecasts’ Temperature Sensitivity Tool, which shows how electrical load forecasting responds when temperatures are adjusted by one-degree increments up to ±10° F.
We began by measuring cooling degree days in July – historically the most heat-sensitive month – relative to the 65° F threshold. As shown in the chart below, there’s been a steady increase each year since 2010.
Then, we employed Yes Energy’s Temperature Sensitivity tool to measure changes in regional monthly power demand patterns over time. We compared archived versions of our model: one updated through May 2023, and one updated through May 2025. We generated Temperature Sensitivity data for the full 2026 calendar year using normal weather assumptions as the baseline.
The differences are telling.
Source: Yes Energy’s Demand Forecasts
Looking across the calendar year, winter months continue to show strong temperature sensitivity due to electric heating. However, the shape and scale of that sensitivity remain relatively stable between the two model vintages.
In contrast, a 5° F temperature increase in July and August drove over 15 MW and 20 MW of additional load, respectively, in the 2025 model compared to its 2023 predecessor, as shown in the chart below.
Source: Yes Energy’s Demand Forecasts
Drilling deeper into July, the 2025 model projected a lower baseline load under normal weather conditions, likely reflecting efficiency improvements or reduced base load overall. Yet, in scenarios where temperatures rise 10° F above normal, the 2025 model projects sharper afternoon and evening peaks, indicating more intense AC-driven demand.
Source: Yes Energy’s Demand Forecasts
Hourly sensitivity charts confirm this trend. When temperatures rose 5° to 10° F above normal, the delta between the 2023 and 2025 models widened significantly, particularly in peak afternoon hours.
Source: Yes Energy’s Demand Forecasts
Source: Yes Energy’s Demand Forecasts
As summer load profiles evolve in historically thermally stable regions, power traders who understand – and act on – shifting temperature sensitivities can gain a critical edge. With climate change driving more demand during the afternoon peak and air-conditioning usage increasing, especially in regions like the Pacific Northwest or New England, this sensitivity directly translates into market opportunity.
Yes Energy’s Temperature Sensitivity tool allows you to turn these trends into actionable strategies.
Here’s how:
Rising temperatures are transforming demand sensitivity in regions once considered thermally stable. This marks a strategic inflection point. Rising summer peaks, deeper afternoon ramps, and year-over-year shifts in baseline load all point to a new set of trading dynamics.
By using tools like Yes Energy’s Temperature Sensitivity analysis, you can convert climate volatility into tactical insight – and gain a decisive advantage in markets where heat is becoming the new normal.
Want to see how you can gain an edge?