PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE July 26 – 27, 2007 STATE OF MARYLAND Public Service Commission PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE July 26 – 27, 2007 LOAD FORECASTING PANEL MARYLAND PUBLIC SERVICE COMMISSION STAFF CARLOS CANDELARIO, Ph.D. TARESA LAWRENCE, Ph.D.

PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE LOAD FORECASTING PANEL Conclusions and Recommendations: The Commission, utilities and other stakeholders must ensure that sufficient resources are in place to meet the forecasted demand 2. Stakeholders should rely on prudently conservative forecasts given the uncertainty inherent in even the best forecast 3. Stakeholders should be guided by peak load and sales forecasts produced by utilities for their own service territories. Those forecasts appear to be the most reliable, conservative, and are consistent with forecasts produced by an independent third party

PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE LOAD FORECASTING PANEL Pursuant to PSC Planning Conference Notice, June 8, 2007, participants were asked to address specific issues pertaining to load forecasting techniques and methodology. Evaluation Criteria Adherence to Economic Theory How is the forecasted load estimated? What are the input assumptions? How are the impacts from demand response, conservation and energy efficiency programs modeled? How is weather/climate factored into the forecast? How are the impacts of federal Base Realignment and Closure process factored into the forecast? What assumptions are made regarding demand elasticity to rising prices? Adherence to Econometric Principles Estimation Technique Model Specification Forecast Accuracy How has the accuracy of the model been measured? Forecast Comparison Compare and contrast with other publicly available forecasts.

PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE LOAD FORECASTING PANEL PEAK LOAD FORECAST MODELS Company/ Organization Adherence to Economic Theory1 Econometric Theory1 Forecast Accuracy Checks PJM No price variable, no market size variable. No DSM or BRAC effects included in the model. No autocorrelation correction term included in model Mean Absolute Percent Error (MAPE): 3.87% PPRP Model accounted for BRAC effects but not future DSM programs Included autocorrelation correction term in model 2006 Percent difference: -7.3% BGE Accounted for BRAC effects, but not DSM effects. BGE reports on DSM impacts in separate schedule Included autorcorrelation correction term in model In-sample percent variance: 1.5% PEPCO_MD PHI works with PJM to determine peak load No results reported DELMARVA_MD 1. Assumption: The model and methodology have met all other evaluation standards indicated in previous slide

PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE LOAD FORECASTING PANEL Source: PJM 7/11/07, Table B-1, p. 29

PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE LOAD FORECASTING PANEL PJM Peak Load Forecasts (MW) Change from 2007 BGE_pjm DPL_pjm Pepco_pjm APS_pjm Total PJM 2007 7,303 4,076 6,972 8,630 26,981 2008 7,425 4,166 7,126 8,762 27,479 498 2009 7,548 4,256 7,238 8,858 27,900 919 2010 7,655 4,344 7,341 8,938 28,278 1,297 2011 7,745 4,432 7,439 9,014 28,630 1,649 2012 7,807 4,490 7,515 9,078 28,890 1,909 2013 7,895 4,577 7,641 9,142 29,255 2,274 2014 7,973 4,658 7,748 9,214 29,593 2,612 2015 8,054 4,742 7,853 9,290 29,939 2,958 2016 8,115 4,844 7,937 9,350 30,246 3,265 2017 8,198 4,919 8,032 9,427 30,576 3,595 2018 8,272 5,004 8,123 9,496 30,895 3,914 2019 8,370 5,096 8,224 9,564 31,254 4,273 2020 8,471 5,199 8,361 9,666 31,697 4,716 2021 8,551 5,303 8,458 9,746 32,058 5,077 2022 8,642 5,414 8,560 9,817 32,433 5,452 Source: PJM 7/11/07, Table B-1, p. 29

PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE LOAD FORECASTING PANEL PPRP Forecast (MW) Change from 2007 Utility Forecasts (MW) Utility Specific Changes MD-Low MD-Base MD-High MD_Utilities BGE Pepco DPL APS 2008 (190) (44) 108 238 97 80 24 37 2009 (170) 206 607 470 208 139 47 76 2010 (186) 484 1,216 695 330 193 69 103 2011 (251) 676 1,709 922 450 244 92 136 2012 (295) 867 2,180 1114 554 284 107 169 Source: PPRP 7/11/07, p. A-5 Utility Filings: BGE, Pino p. 18; Pepco, 7/18/07; DPL, 7/18/07; APS 7/11/07

PLANNING CONFERENCE ON MARYLAND’S ENERGY FUTURE LOAD FORECASTING PANEL BGE_bge Pepco-MD DC Sub_H_pprp l E Shore_H_pprp So. MD_H_pprp APS MD_aps Balt Region_H_pprp DPL-MD_dpl W. MD_H_pprp Source: Utility Filings: BGE, (Residential Sales) PPRP, 5/15/07, p. A-7 (High Case)