In the article "Time-of-Day Electricity Consumption Response to Temperature and the Ownership of Air Conditioning Appliances" by Lee A. Lillard and Dennis J. Aigner (1984), the authors investigate the relationship of air conditioner ownership and electricity consumption by time of day. They examine consumption in conjunction with temperature level and household responsiveness to temperature variation along with other household characteristics, highlighting the implications for "estimated consumption price elasticities" (Lillard & Aigner, 1984, p. 40). Their research examined the phenomenon of weather affecting electrical consumption and found that "the effect of air conditioning on peak period consumption ranges from essentially nothing in cool areas to a large effect in hot areas and hot months." In fact, central air conditioning raises consumption in the peak period by 20% for higher-rate customers and 34% for lower-rate customers (Lillard & Aigner, 1984, p. 50).
Electrical consumption is closely tied to the weather. In hot, muggy weather, for example, use of air conditioning skyrockets, forcing extra consumption of electricity. In frigid weather, electrical consumption likewise skyrockets as people attempt to heat their homes and businesses to a normal temperature. The magnitude of difference between the outdoor temperature and the desired indoor temperature reflects the relative amount of extra electrical consumption needed. Valor, Meneu, and Casselles (2001, p. 1413) state that "Weather has a significant impact on different sectors of the economy," particularly the electricity market, "because power demand is linked to several weather variables, mainly the air temperature." The authors researched electricity load in Spain and its relationship to the daily air temperature and found that "the relationship is nonlinear, showing a 'comfort interval' of ±3°C around 18°C and two saturation points beyond whic...