ENSO, weather regimes, and U.S. heating degree days

Michael K. Tippett, Emily Becker, Simon Lee, Michelle L. L'Heureux

Heating degree days (HDDs; the number of degrees by which average daily temperature falls below 65°F) quantify heating demand and are used to manage weather-related financial risk. Here we examined the relation of El Niño–Southern Oscillation (ENSO) with U.S. cold-season HDDs over the period 1979–2026 in NOAA Climate Division data and observations from stations that are used to settle publicly traded HDD weather derivatives. We focused on monthly resolution to match weather-derivative applications. The strongest ENSO signal is the December decrease in HDDs and HDD variability in the Midwest and Northeast during El Niño. El Niño HDD anomalies are modest in January and reverse sign in November. La Niña signals are weaker overall and consist of HDD increases during late winter and early spring in the Northwest and northern California. These signals are consistent with ENSO modulation of North American weather regime frequency. Pacific Trough frequency increases in December during El Niño, and Pacific Ridge frequency increases in late winter during La Niña, with each weather regime composite resembling the corresponding ENSO one. The station data confirm statistically significant December HDD decreases in Chicago, Cincinnati, and Minneapolis–St. Paul during El Niño and February–March HDD increases in Portland and Sacramento during La Niña. We further quantified these ENSO signals as fair value prices of HDD put options. While the El Niño–La Niña HDD asymmetries are notable, the only statistically significant asymmetry detected here is the December–February variability reduction.