Rising electricity prices and growing electricity demand from power-hungry data centers are putting a growing financial strain on Americans in the lead-up to the November midterms, when affordability is set to remain a key issue for voters.
Some relief may come, at least for some consumers, from an unlikely source: the incoming "Super" El Niño, which also threatens to expose millions of properties to severe flood risks and likely costly damages.
What Does El Niño Have to Do with Your Electricity Bills?
Fueled by exceptionally warm temperatures in the Pacific Ocean, El Niño, a recurring climate pattern which occurs every two to seven years, is set to become "very strong" this fall and winter, according to the National Oceanic and Atmospheric Administration (NOAA), to the point that some have renamed it "Godzilla" El Niño.
While experts say that the impact of El Niño is never guaranteed, and it can be hard to predict what exactly will happen in the coming months, we know that the phenomenon historically increases the odds of a warmer and drier winter across the northern part of the country and a cooler, wetter winter across the southern regions.
Normally, the milder the winter, the less the need for electricity to heat up a home—and this is where electricity demand comes into play.
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Warmer winters in colder regions would decrease demand for heating "and thus put downward pressure on natural gas prices, because natural gas is a primary means of both heating and electricity generation across many U.S. regions," J. Isaac Miller, professor and department chair of the Department of Economics at the University of Missouri, told Newsweek.
That would be true for households living across the Pacific Northwest, the Northern Plains, and as far east as the Great Lakes, Miller said.
It is a whole different story for Southern states, even though many might be also affected by El Niño. "Southern regions of the U.S. may be wetter, but the effect of precipitation is less clear on electricity demand. Extreme precipitation could cause disruptions to supply," Miller said. "You could certainly envision that extreme precipitation might cause outages and things like that, but that’s less certain."
Which Regions Will Be Most Affected?
The Upper Midwest and Northern Plains are likely to see the largest reduction in heating load, Erik Smith, technical leader of climate data analysis at the Electric Power Research Institute, an independent, nonprofit energy R&D institute, explained, "since the warm response is most consistent there and heating demand is high."
While the Pacific Northwest may see lower heating load this winter as well, the region generates about half of U.S. hydropower, and El Niño winters can reduce snowpack and ultimately reservoir storage, Smith told Newsweek.
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That reduced snowpack could lower the region’s hydropower supply the following spring and summer—undermining whatever relief obtained by consumers this winter.
The Southeast and Gulf Coast, on the other hand, may see slight increases in electric heating load under cooler, wetter conditions, though not relevant enough to shift the cost of utility significantly.
"For most homes, the effect appears as a change in how much energy is used during the season rather than a change in the price of energy, and the size of that change scales with how much of the home’s energy goes to heating," Smith said.
Miller agrees that the difference in consumers’ electricity bills in affected regions "may be noticeable from last season," he said, "but I would not expect it to be large enough for the typical consumer to feel relief from price increases across other goods."
What Can We Learn from Previous El Niño Events?
The U.S. has previously experienced Super El Niño episodes in 1991-1992, 1997-98, and 2015-16. In studies Miller has co-authorized with colleagues, he found that these episodes resulted in savings of 3.6 percent, 3.5 percent, and 2.1 percent respectively across both residential and commercial sectors in Washington State.
It is harder to estimate the impact on a national scale, but data from the latest Super El Niño gives us an idea of how warmer temperatures can impact energy demands.
The 2015-16 winter season, between October 2015 and March 2016, was 15 percent warmer than the previous winter, according to EIA data. During this period, propane and heating oil demand decreased 16 percent and 18 percent, respectively, residential electricity demand decreased 6 percent, and gas in storage in April was 69 percent higher than a year earlier.
"This winter’s event may be stronger than 2015-16, and the climate system has warmed since then, so the example is best read as an illustration of scale rather than a forecast," Smith said.
During the 2015-2016 El Niño, national HDD were 18 percent lower than the previous winter and 12 percent lower than NOAA’s September 2015 forecast, and residential electricity demand decreased by 6 percent, according to Smith.
"That winter was warm across most of the country, including the South, so it likely represents the upper end of what a strong El Niño delivers nationally," he said.
"A winter that follows the more typical pattern—mild North, cool South—may reduce national heating demand by less. The effect in any one region depends on its heating fuel mix, and a single cold outbreak, like Winter Storm Uri that impacted Texas in February of 2021, can offset a month of reduced demand," he added.
What Changes Can Consumers Expect This Winter?
"Electricity demand follows temperature through heating degree days (HDD) and cooling degree days (CDD)," Smith said.
"Historically, El Niño winters reduce HDD most where heating demand is largest—for example, the Upper Midwest and Northeast, mainly in December—, while any increase in the South is small in HDD terms because the baseline there is low," he added.
Then there are some regional differences to take into consideration, depending on the way homes are heated across the nation.
"Most U.S. Midwestern homes heat with natural gas, while in the U.S South, electricity heats the majority of homes," Smith said. "A mild North therefore lowers heating fuel demand more than electric demand, and a cool, cloudy South may raise electric heating load," he added.
A 2016 study by the Energy Information Administration (EIA) concluded that electricity prices change more slowly than heating fuel prices, because rates in many areas are set through regulatory mechanisms with long time lags.
Overall, national heating demand tends to fall in El Niño winters, even when the South is cooler than normal.
The average residential electricity bill in the United States is about $158 per month as of October, according to SaveOnEnergy.com. Assuming a saving of around 2 percent, given as an example by Miller, the average consumer in the Northern states affected by El Niño could save about $3.16 a month.
Contact Newsweek editor on this story: Mike Hirst.