FEATURE: US power demand dropping on tightened restrictions as virus count rises

Power demand across the US is dropping again on regional tightened coronavirus pandemic restrictions after rebounding in Q3 when states lifted stay-home orders, while any substantial changes to the demand profile from the newly approved vaccine will take several months to occur.

"It will likely take some time for the vaccine to be widely distributed enough to revive commercial and industrial loads," said Manan Ahuja, North American power analytics manager at S&P Global Platts Analytics. "So, we are expecting stop-start economic activity in the meantime."

Platts Analytics is forecasting power demand to slowly get back to the pre-COVID-19 trajectory by the end of the first three or four months of 2021.

"The decrease in demand on a national basis is more due to the degree of lockdown occurring in each region and the proportion of commercial/industrial versus residential load," said Matthew Cordaro, a former Midcontinent Independent System Operator president and CEO who now resides in New York. "This goes a long way in explaining for example the differences between what was seen in the [New York Independent System Operator] and [Electric Reliability Council of Texas]."

Texas impact

ERCOT load growth did slow and dipped into loss territory for a brief period in mid-April, Ahuja said. Overall though, ERCOT power demand has recovered and has been showing growth comparable to previous years in recent weeks.

"Each region has a different mix of residential, commercial and industrial demand and therefore the power demand impact from the virus is different," said Eric Smith, Tulane Energy Institute associate director. "For example, Texas and Louisiana have high levels of industrial demand, which is relatively immune to the domestic COVID virus, while NY and Massachusetts have higher shares of domestic residential and commercial demand, which are both affected by the virus."

In the Texas case, the lower levels of reduction and the increased level in December reflect a relatively healthy petrochemical industrial demand, Smith said. New York, by comparison, shows the absence of industrial demand and the continued presence of a virus-induced drag on the dominant residential-commercial demand.

New York hardest hit

NYISO, and specifically the New York City region, has been the most impacted, with loads averaging about 9% below non-COVID models year-to-date, Ahuja said.

New York state was under a stay-home order March 22 through May 28, among the top 10 longest orders in the nation. Although the statewide order has been lifted, regional restrictions have been reinstated as the virus case count climbs. Several states in the Northeast have reinstated modified orders since reopening in April and May.

Observed loads across New York have increased in recent weeks due to colder weather, but New York City demand has remained significantly lower year on year, according to Platts Analytics.

NYISO demand during Dec. 1-20 averaged less than 3% below pre-COVID-19 levels, compared to more than 14.5% in the middle of the stay-home order, according to Platts Analytics data. NYISO Zone J NYC demand so far in December has averaged 7.6% below pre-COVID-19 levels, rebounding from more than 22% below in April.

Demand remains lower than typically expected levels across the New York Control Area, where load reductions peaked at about 9%-10% below expected levels at the end of May, NYISO spokesman Zachary Hutchins said Dec. 22. New York City demand averaged 14-15% below typical demand levels in May.

"The NYISO's forecast team has observed that the reduction in electric demand from commercial customers is a leading driver of overall reduced electricity consumption," according to the ISO's latest COVID-19 update on Dec. 9. "We are also observing an increase in residential energy use, especially during the midday."

Cal-ISO demand patterns

In California, recent loads are trending higher than pre-COVID-19 models but are on the low end of the five-year range, according to Platts Analytics.

Unlike New York, demand patterns in California are a bit disorganized because of exogenous variables, such as the wildfires, and imported power supply disruptions, Smith said.

The statewide stay-home order was in place from March 20 until May 7, but restrictions were reinstated Dec. 6 for Southern California and the San Joaquin Valley as the virus case count spikes, nearing 2 million statewide as of Dec. 23, according to the state's COVID-19 website. In addition, five counties in the San Francisco Bay Area implemented new restrictions until Jan. 4.

"The ISO continues to monitor the load impacts to assist in informing our short-term demand forecasts," Cal-ISO Spokeswoman Anne Gonzales said. "Overall we continue to observe minimal to no impact for the CAISO total demand. There are continued impacts at the regional level that have held true since COVID started impacting the ISO such as reduced loads in some of the coastal regions, such as San Francisco area."