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It came out of nowhere.

Monsters don’t only sneak up on you in horror movies. In the dark of Monday night, a storm system brewing in the Eastern Pacific still looked as if it would make landfall near Acapulco, Mexico, as nothing greater than a tropical storm. But within just 12 hours on Tuesday, Tropical Storm Otis intensified by 80 mph into a full-blown hurricane; when it made landfall just after midnight on Wednesday morning, it had exploded into an unprecedented Category 5 storm. Eric Blake, a forecaster with the National Hurricane Center, called the event nothing short of a “nightmare scenario.”
Hurricane Otis is not the first storm to sneak up on forecasters this year, and if new hurricane research I recently covered is any indication, it won’t be the last, either. Hurricanes are more than twice as likely to intensify from a Category 1 storm into a Category 3 or greater in a single day than they were between 1970 and 1990, Andra Garner, an assistant professor at Rowan University, found when she looked at historic patterns in the Atlantic. “When storms intensify quickly, they can become more difficult to forecast and to plan for in terms of emergency action plans for coastal residents,” she told me via email last week, adding presciently, “I think these findings should really serve as an urgent warning for us.”
Here’s how five meteorologists have illustrated the unprecedented danger of Hurricane Otis:
Just to emphasize how poorly hurricane & global models performed for Hurricane Otis... here's the intensity forecasts initialized 24 hours ago, with the dotted black line showing verification: pic.twitter.com/DN5pf7lcOS
— Tomer Burg (@burgwx) October 25, 2023
And here’s another fun fact from meteorologist Tomer Burg about hurricanes named Otis doing surprising things.
Not too many storms are this unpredictable. Each colored line represents an intensity forecast from the NHC, made every six hours. The thick black line is the observed intensity. None of the models saw this coming either. pic.twitter.com/ljwxPYnEbV
— Brian McNoldy (@BMcNoldy) October 25, 2023
#Otis took full advantage of a warm patch of ocean last night... passing over 31°C water on its approach to #Acapulco. The extremely rapid intensification from a tropical storm to a Category 5 hurricane took place over this tiny area. pic.twitter.com/f6fpYD1DOk
— Brian McNoldy (@BMcNoldy) October 25, 2023
“Imagine starting your day expecting a stiff breeze and some rain, and overnight you get catastrophic 165 mph winds,” Brian McNoldy, a senior research associate at the University of Miami’s Rosenstiel School, also tweeted.
This is not just a rare & dangerous event for October, but anytime of year in #Acapulco, which has not been directly impacted by a major hurricane like #Otis in the EPAC best-track record (back to 1949).
The last hurricane to affect the area directly was a 75 kt TC in 1951. pic.twitter.com/kBh1QoosGB
— Philippe Papin (@pppapin) October 25, 2023
The last hurricane to hit the Acapulco area directly was a significantly weaker tropical cyclone in 1951. Philippe Papin, with the National Hurricane Center, further explains on Twitter why Hurricane Otis is distinct from Hurricane Pauline in 1997, a Category 4 storm that killed hundreds near Alculpoco due to regional flooding and rainfall, but which actually made landfall further southeast.
#Hurricane #Otis has intensified by 80 mph in the past 12 hours (from 65 mph to 145 mph). That's the fastest 12 hr intensification rate in the eastern North Pacific (to 180°) in the satellite era (since 1966), breaking the old record of 75 mph/12 hr set by Patricia in 2015. pic.twitter.com/O5BrIrUi5X
— Philip Klotzbach (@philklotzbach) October 25, 2023
Colorado State University researcher Philip Klotzbach emphasized why it’s so hard to prepare for a storm like Otis — because with that sort of speed, you just can’t see it coming.
Wow...seeing #HurricaneOtis rapidly strengthen from a Tropical Storm yesterday at noon to a Category 5 Hurricane at midnight is astounding...almost mind boggling. #Acapulco #Hurricane pic.twitter.com/9jgOu1F8Bg
— Meteorologist Zach Maloch (@ZachMalochWX) October 25, 2023
Mind-boggling, indeed.
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The additional clean capacity would represent nearly 3% of North America’s existing total.
North America has about 37.5 gigawatts of total virtual power plant capacity, according to energy consultancy Wood Mackenzie’s latest estimate, published last year. That capacity is spread across roughly 2,000 VPPs, which aggregate distributed energy resources like batteries, smart thermostats, and heat pumps to cut, shift, or supply electricity when the grid is under strain — effectively turning them into a single, coordinated power plant.
On Thursday, Google and VPP operator Voltus announced plans to add another 1 gigawatt of clean capacity over the next three or four years — or nearly 3% of North America’s existing total. Under Voltus’ “bring your own capacity” model, Google will fund the VPP to help meet its booming data center power needs, while Voltus will enroll businesses and households across the PJM Interconnection, the notoriously overstrained grid region spanning parts of the Midwest and Mid-Atlantic, compensating them for their participation either directly or through electricity bill credits.
The announcement expands on a three-year, 100-megawatt deal the two companies signed in June, extending their commitment through 2040. Voltus CEO Dana Guernsey told me that the smaller deal gave the companies a starting point for a much more ambitious partnership. “It’s a lot easier to explain to people how you’re going to 10x if you’ve already 1x, and so we had to start somewhere,” she said. “We always had our eyes set on bigger things.”
Earlier this month, Voltus closed an oversubscribed $225 million Series D round led by Generation Investment Management to scale its VPP portfolio to 20 gigawatts by 2030. The first phase of the Google partnership is also oversubscribed, Guernsey told me. While that flexible power won’t come online until next year, this means Voltus has already lined up over 100 megawatts of accredited capacity that PJM can count on to deliver when needed, much as it would a natural gas plant or solar-plus-storage installation.
In the meantime, the VPP operator says its broader PJM portfolio has already demonstrated what it can do. Last week, an unseasonably warm stretch of fall weather required PJM to activate its Emergency Load Response Program twice. With 46 gigawatts of generation offline for planned maintenance or construction and another 15 gigawatts unexpectedly unavailable, “distributed resources came through,” Guernsey posted on LinkedIn. “This is how a modern grid should work.” Based on preliminary data, she told me that Voltus delivered about 105% of its committed load reduction during the events.
And VPPs can do more than help avert emergencies. Grid operators are increasingly calling on distributed resources for routine grid management too, such as to ease daily price spikes, reduce emissions when the sun or wind isn’t available, or relieve congestion on a local line. “It’s nearly constant. I think soon we’ll be able to say it’s like every hour,” Guernsey told me.
So far this year, Voltus has reduced electricity demand in PJM by more than 200 gigawatt-hours. Now the company plans to lean more heavily on batteries, particularly at commercial and industrial sites, to accelerate its growth. Guernsey told me that with battery costs falling, electricity prices rising, and fixed payments to participants through 2040, the math now works to deploy batteries at scale, without exposure to unpredictable wholesale electricity prices.
She’s betting that other hyperscalers will see the value in large-scale battery deployments too. Most of the buzz today has revolved around hyperscalers bringing their own generation online — both to secure power faster and head off community opposition by paying their own way. Thus far, Google is the only hyperscaler committed to bringing its own distributed capacity through a VPP. But getting the big players to embrace these new “bring your own capacity” contracts, which Voltus launched last September, is central to its growth strategy.
Guernsey has likened these novel capacity contracts to the corporate renewable power purchase agreements that Google also helped pioneer in the early 2010s. Now she sees a similar opportunity for VPPs to move from a promising concept to a mainstream procurement tool.
“There’s been this notion that we’re coming up on an inflection point for a very long time,” she said of the VPP market. “And I want to be able to say we came up on the inflection point, we went past it, and now we are scaling. And this is an awesome proof point.”
The Federal Reserve raised the federal funds rate by a quarter point, the central bank announced Wednesday afternoon, its first rate change since Chairman Kevin Warsh took his seat in May and its first rate hike in over three years.
The federal funds rate will now sit between 3.75% and 4%. According to projections by regional Federal Reserve presidents and members of the Board of Governors, the central bank expects to hike rates one more time this year.
In its now characteristically brief statements, the Federal Open Market Committee said that the hike “will support a timelier return to the Committee's 2 percent goal” for inflation. Inflation is currently running at 3.4% and has been above the Fed’s 2% target since 2021.
The FOMC’s (brief) statement explaining the hike pointed to “resilient” domestic spending and “robust” capital investment. It characterized the economy as “expanding at a solid pace,” albeit with “elevated” uncertainty due to “geopolitical developments.”
This combination of factors — high oil prices due to the partial shutdown of the Strait of Hormuz and high investment in data centers — have helped push up yields on Treasury bonds, which helped maneuver the Federal Reserve into its rate hike. These rising Treasury yields have made raising capital more difficult for sectors besides artificial intelligence, very much including the capital-intensive renewable and clean energy industries.
Warsh attributed higher Treasury yields to “economic strength, competition for capital, and geopolitics,” in his press conference following the rate announcement. The yield on the 10-year treasury bond, often used as a benchmark for the cost of money throughout the economy, rose to over 5% on the news, the highest level since 2007.
The August Electricity Price Hub data is in.
It’s another hot and expensive summer.
Across the country, average household electricity bills are up 2.7% in the first eight months of the year, according to the latest update to Heatmap and MIT’s Electricity Price Hub, tacking on $4 per month to the typical bill. This level of rise is consistent with the pace set in 2024 and 2025, but faster than 2021 and 2023.
As we’ve discussed before, some of the fastest growth in prices comes either in the Atlantic Seaboard — with Washington, D.C., Virginia, and New Jersey all having year over year growth rates of at least 7.5% — thanks largely to increased demand and capacity payments in the PJM Interconnection marketplace. Another standout so far this year is Hawaii, which is uniquely dependent on imported oil to power its grid and has seen its 12-month trailing average prices rise by over 8% so far this year.
California, which is well known for seeing especially sharp price increases in recent years largely due to wildfire-related costs, has seen somewhat restrained bill growth so far this year across the state, with the 12-month-rolling average bill rising just 3% in the past 12 months and prices going up 4%. (That price level is still quite high, however, at almost 32 cents per kilowatt-hour, compared to a national average of around 19.)
Rates charged by Southern California Edison, one of the state’s big three investor-owned utilities, are up almost 15% in the past year, averaged across its baseline regions. The MIT researchers attribute this increase to two major factors: one, a decrease in the California Climate Credit, which is paid out to electricity customers from the state’s emissions cap-and-invest program. This year, the credit for Southern California Edison ratepayers is $72, applied to bills in July and August in tranches of $36. Last year, by contrast, Southern California Edison handed out $112 in two tranches, April and October.
The second factor in Southern California Edison’s inflated bills is an increase in the fixed charge portion of the bills ratepayers receive. Following changes in California state law designed to distribute the cost of the grid more equitably, SCE revamped its rate structure at the end of last year to include a “Base Services Charge” of $24 per month for customers not enrolled in any special rate program. At the same time, SCE instituted a roughly 10% decrease in its per-kilowatt-hour electricity rate in order to protect lower-income ratepayers (who would pay a fixed charge substantially lower than the baseline $24). PG&E moved to a similar system earlier this year.
When it introduced the new rates in November of last year, SCE said that “medium energy users” would likely see little change in their bills. Price Hub data suggests, however, that the typical household has seen a bill increase from the new service charge of 13%, even before accounting for the smaller climate credit.