California Energy Commission 2015 California Energy Demand Electricity and Natural Gas Demand Forecast: Inputs and Assumptions February 26, 2015 Chris Kavalec Demand Analysis Office Electricity Assessments Division

California Energy Commission Presentation Timeline Scenarios Economic/Demographic Common Cases Preferred Resources: Efficiency and Demand Response Other Supporting Presentations –Distributed Generation –Electrification (including EVs) –Electricity and Natural Gas Rates 2

California Energy Commission CED 2015 E&NG Forecast Timeline Demand Forms requested from LSEs (April 15) Preliminary forecast/workshop (June 2015) Revised forecast/workshop (November/December 2015) Final Forecast and Adoption (December/January) 3

California Energy Commission Baseline Demand Scenarios High economic and demographic growth, lower rates, lower self-generation impacts, strong climate change impacts, more electrification (high demand scenario) Mid econ-demo growth, mid rates, mid self-generation impacts, “likely” climate change impacts, “likely” electrification (mid demand scenario) Lower econ-demo growth, higher rates, higher self- generation impacts, no climate change impacts, less electrification (low demand scenario) 4

California Energy Commission Economic and Demographic Common Cases 5

California Energy Commission Takeaways from Econ-Demo Discussion “Scarring” effect but little chance of short-term slump to mar recovery Housing recovery plus aging of Baby Boomers plus characteristics of Millennials likely to reduce persons per household Migration patterns within state make climate zone analysis important, particularly peak impacts 6

California Energy Commission Econ/Demo Scenarios Available Moody’s Analytics: 6 scenarios –Base Case –S1: Stronger Near-Term Rebound –S2: Slower Near-Term Recovery –S3: Moderate Recession –S4: Protracted Slump –S5: Lower Long-Term Growth Global Insight: 3 Scenarios –Base Case –Optimistic –Pessimistic 7

California Energy Commission Proposed Econ/Demo Common Cases General –High Demand: Global Insight Optimistic –Mid Demand: Moody’s Base Case –Low Demand: Moody’s Lower Long-Term Growth Population and Households –High Demand: Global Insight and Global Insight Optimistic –Mid Demand: Moody’s Base Case –Low Demand: DOF 8

California Energy Commission Proposed Common Cases: Personal Income CED 2015 and CEDU 2014 mid cases almost identical 9

California Energy Commission Proposed Common Cases: Statewide Employment CED 2015 mid case slightly higher than CEDU

California Energy Commission Proposed Common Cases: Statewide Manufacturing Output CED 2015 mid case slightly lower than CEDU

California Energy Commission Proposed Common Cases: Statewide Number of Households CED 2015 low case higher than CEDU 2014 mid case 12

California Energy Commission Preferred Resources: Efficiency and Load-Modifying Demand Response 13

California Energy Commission Efficiency: New for CED Appliance Standards 2015 IOU Programs 2014 and 2015 POU programs New estimates for Additional Achievable Energy Efficiency (AAEE) –For IOUs, from CPUC Goals and Potential Study –Estimates for POUs 14

California Energy Commission CPUC Goals and Potential Study Future T20, T24, and Federal standards Future incentive and behavioral program savings Zero Net Energy, AB 758, EUC, PACE, Proposition 39 Two Stages –Stage 1: Summer/Fall Completion for CED 2015 –Stage 2:

California Energy Commission Load-Modifying Demand Response (Baseline Forecast) Non-event based: time-of-use rates and permanent load shifting Event-based: critical peak pricing and peak time rebates From annual IOU load impact reports Impact on load: MW (IOUs combined) Future LMDR likely to become more significant once CPUC finalizes definition 16

California Energy Commission Additional Analysis: TOU Rates Energy Commission, CPUC and California ISO staff Six scenarios being developed, assuming varying levels of participation and hourly structure Concentrates on residential Two scenarios developed specifically to address “duck curve” issue Current plans are for stand-alone analysis not incorporated into CED 2015 forecast 17