How winter’s weather is impacting the local economy
By Mike Danahey firstname.lastname@example.org @DanaheyECN January 28, 2014 1:16PM
AmeriGas employee Jay Carlson prepares to remove a hose after filling a tank with propane near Galesburg. On Monday, Gov. Pat Quinn declared a propane supply emergency in Illinois. | AP Photo/The Register-Mail
Updated: January 31, 2014 9:39AM
This winter’s woeful weather is impacting the economy from all angles, according to Northern Illinois University Economics Professor Khan Mohabbat.
“There’s no in between,” Mohabbat said in a phone interview from his home in DeKalb as Tuesday’s temperatures remained well below zero with Arctic-like wind chill factors.
NIU — like many schools across the region, and the country, even — had cancelled classes in advance of Tuesday’s weather. Classes were off Monday, too. It was the third time this month the university was closed because of frigid weather.
“I’ve been in Illinois for four decades, and I have worked in Buffalo, Denver, and Kabul. This is the coldest I’ve ever seen, and it’s an amazingly prolonged issue,” Mohabbat said. “It’s cold in so many places. My brother is a psychologist in Tuscaloosa (Ala.), where it hit single digits. They aren’t prepared for weather like that there.”
According to Ball State University Associate Professor David Call, a severe weather expert, most of the Midwest is suffering through the coldest January since the 1980s.
“None of those coldest Januaries have occurred in the last 25 years, so this month is considerably colder than what we have experienced in recent memory,” he said in a release.
“That said, many of the coldest Januaries on record occurred in the 1970s and 1980s, including 1977, 1978 and 1979. Anyone over 35 has experienced weather like this before — just not recently.”
Call noted that the recent weather pattern has consistently featured a ridge of warm air in the western United State and a trough of cold air in the eastern U.S. The jet stream, that great river of air in the sky that separates warm from cold, has been pushed far north into western Canada before plunging far south into the southeastern U.S.
“While we have been cold and snowy, the western U.S., especially California, has been hot and dry,” Call said. “California gets most of its snow and rain in winter, so there could be serious water restrictions and a horrific fire season later this year if the weather pattern does not change soon.”
Reports also have noted in Alaska, town temperatures recently have hit 50 degrees or more — making them warmer than almost all of the continental U.S.
In terms of the local economy, Mohabbat said, “Weather like this stops the educational process. It also impedes workers getting to and from work.”
Those are two big factors in impacting an economy that still is trudging in the aftermath of the recession, according to Mohabbat.
Weather like this hits both large and small businesses, Mohabbat said.
“The only beneficiaries are utilities, and even they can be affected if they can’t work at full capacity,” Mohabbat said.
To that point, PJM Interconnection, the electricity grid operator for more than 61 million people in 13 states — including Illinois — and the District of Columbia, said Monday that it is managing a tight power supply as frigid temperatures braced a good part of the nation.
PJM is asking that consumers conserve especially during peak demand hours, which are weekdays from 6 a.m. to 10 a.m. and from 5 p.m. to 9 p.m. It suggests people set thermostats lower and postpone using major appliances.
As the Citizens Utility Board website notes, “a $340 million ComEd rate hike greeted customers in the new year. The increase was ordered by the Illinois Commerce Commission, under a new state law to pay for about $2.6 billion in upgrades to the power grid over the next decade. It hits the delivery part of our bills — what we pay ComEd to get the electricity to our homes.”
“ComEd has said the rate hike means the average household bill will see an increase of about $5.50 per month,” the site notes.
Of course, low temperatures mean high energy use, and in terms of heating fuel, shortages and price spikes have led to government action.
Gov. Pat Quinn on Monday declared a propane supply emergency in Illinois as wet fall weather and recent cold spells combined to put a pinch on Illinois’ propane supplies, causing distribution problems across the state.
The declaration means regulations will be eased on propane truck drivers so they can drive to other states and fill their tanks. Illinois also has lifted limits on how long truck drivers can work within 24 hours. This will let them travel farther to pick up propane.
Quinn spokesman Dave Blanchette said the shortage means additional drivers are needed to travel to Texas to haul propane back to Illinois.
If cold temperatures persist, people who use propane to heat their homes could experience some negative effects. Nationwide, the blast of winter weather is sapping fuel supplies. Propane users are hit hardest by the fuel shortages, some paying up to $100 to $200 more per fill-up.
The Energy Department says 5.5 million U.S. households heat with propane, mostly in the Midwest and South. Thirty states have declared propane emergencies.
Propane supplies are low for several reasons. Farmers harvested corn late in the year, and much of it was wet, forcing them to buy propane to dry the grain before storage. Then the polar vortex that swept the country in early January pushed up heating demand and drained supplies further.
For those using natural gas, last week, the price in the futures market soared to $5.18 per 1,000 cubic feet, up 10 percent to the highest level in three and a half years. The price of natural gas went up 29 percent in two weeks, and hit 50 percent higher than last year for the same point in time.
Record amounts of natural gas are being burned for heat and electricity. It’s so cold that drillers are struggling to produce enough to keep up with the high demand. So much natural gas is coming out of storage that the Energy Department says supplies have fallen 20 percent below a year ago — before the latest cold spell.
Still, NIU’s Mohabbat pointed to one way the cold spell and its impact on work is different than in past decades: Thanks to the Internet, he was working at home Tuesday and could keep in touch with students for things like giving out assignments and lessons or writing letters of recommendation.
“I’m as busy as I would be on campus,” Mohabbat said.
The Associated Press
contributed to this story