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Why Does Your Energy Company Have a Meteorologist On Staff?

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Mark Twain allegedly once said, “Everybody talks about the weather, but nobody does anything about it.”

However, the experts at your energy company are doing something about the weather. While they obviously can’t control the forecast, they can collect and analyze weather data to determine the best energy buying strategy for businesses in any climate. That’s why a meteorologist is a key member of any energy procurement team.

Weather data as market intelligence 

Instead of giving weather forecasts during morning news broadcasts, the meteorologist at your energy company is keeping in touch with energy traders and analysts throughout the day to give up-to-date weather information.

As we’ve noted in the past, weather can directly affect the cost of energy. Heating and cooling during extreme weather events can increase demand for energy, causing market volatility. Fortunately, your energy company’s meteorologist is an expert predictor of when and where to expect market changes.

“Weather data is one of the most critical points of market intelligence today,” says Beau Gjerdingen, Senior Meteorologist at Direct Energy Business. “It’s becoming a much bigger part of the conversation among energy professionals across the country.”

Beau Gjerdingen, Senior Meteorologist at Direct Energy Business

Beau Gjerdingen, Senior Meteorologist at Direct Energy Business

Gjerdingen studies weather data “daily – often by the hour” beginning at 5 a.m. every morning. Before any of the traders or analysts have even hit their snooze buttons, Gjerdingen is at work studying the weather outlook for different markets across the United States.

“Markets trade throughout the day,” Gjerdingen explains, “and since we purchase our energy ahead of time, there’s significant value in knowing the risk of a weather event - like a polar vortex – that would impact pricing.”

Tracking and using weather data 

Gjerdingen tracks and reports to traders and analysts on several weather models that move energy markets throughout the day. While these models are available to other market participants, his analysis of the data can help call out changes even before the weather models shift, which is what sets Direct Energy Business apart from the competition.

“Not every supplier has a meteorologist on their team,” Gjerdingen says. “The vendors who aggregate and produce weather reports may not be able to – or have to take baby steps – to change their forecasts when the weather changes.”

Gjerdingen’s weather reports are also necessary for creating new energy contracts. By taking years of historical data and the real-time forecast information into account, the Direct Energy Business team can consider potentially significant changes in weather patterns ahead of the market. That data is then made available to our customers through a variety of channels, including our online energy management tool, EnergyPortfolio.

With everything that must be considered for an effective, robust energy procurement strategy, your energy company’s meteorologist is there to handle the most unpredictable factor. While we can’t control the weather, we can provide you with the tools and knowledge to lessen its inevitable impact on your energy budget.

Learn how to insulate your energy budget from extreme weather

Posted: May 08, 2019