Heating and cooling degree days are calculated by using the average temperature for the day, the high + low, and subtracting the average or mean temperature from the number 65 for heating degree days or subtracting 65 from the average for cooling degree days. The number 65 is used as the base number because most buildings and homes would be most comfortable and energy efficient at our around 65 degrees.
Example: On a summer day the high was 90 and the low 70. The average is 80. 80 (average) - 65 (base) = 15 cooling degree-days. It reflects how much power people should be using on the average to cool, in this case their homes/businesses. Take those daily cooling degree days and you can have daily/monthly or annual averages