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. 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. 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." 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.
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." 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.
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