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May 13, 2013
Article Co-Authored by Brattle Principal Phil Hanser on Forecasting Normal Temperatures for the Utility Industry Published in Public Utilities Fortnightly

An article co-authored by Brattle principal Phil Hanser that examines the importance of defining “normal” weather and temperatures for resource planning in the utility industry has been published in the May 2013 issue of Public Utilities Fortnightly.

The effects of extreme shifts in temperatures on energy use have been a long-standing issue facing utilities. In the article, “Redefining Normal Temperatures,” Mr. Hanser and co-author Robert Livezey discuss how temperature extremes are likely to pose continual problems for utility operators and planners. The traditional and most commonly used approach for estimating normal temperatures – a 30-year average of surface temperatures observed at geographically appropriate weather stations – can no longer be considered representative of the current climate due to the rapidly changing pace of the U.S. climate.

The authors argue that an empirically objective approach, based on historical data and climate science, can help utilities avoid the effects of inappropriately defining normal weather. The article discusses two alternative statistical models of climate trends: optimum climate normal (OCNs) and hinge-fits. Both models have a basis in climate science and empirical verification, therefore providing better estimates of normal weather than traditional 30-year averages. Adapting to the current trends in climate can help utilities mitigate potential negative outcomes in resource planning, including sales and revenue projections, as well as energy and capacity requirements.