1. Energy Analysis Department Electricity Markets and Policy Group Update on SPSC Reference Case State-Adjusted Load Forecasts Galen Barbose and Andy Satchwell Lawrence Berkeley National Laboratory TEPPC DSM Task Force Conference Call August 12, 2010

2. Energy Analysis Department Electricity Markets and Policy Group SPSC State-Adjusted Load Forecast Background/Context Agreement was reached between SPSC and TEPPC that there will be two different 2020 reference cases in the TEPPC study -TEPPC reference case: based directly on LRS load forecast data -State-Adjusted Load Forecast case: adjustments made to LRS data to account for SPSC expectations about energy efficiency and demand response impacts under current policies and utility plans Development of the SPSC State-Adjusted Load Forecasts occurred through SPSCs DSM Working Group A formal approval/vetting process was used, requiring official sign- off by each SPSC member for their state/provinces forecast The final set of SPSC State-Adjusted Load Forecasts was delivered to TEPPC last Friday (August 6 th ) Documentation for each state/province is posted here: http://www.westgov.org/sptsc/site/workgroups/dsmwg.htm 2

3. Energy Analysis Department Electricity Markets and Policy Group 3 SPSC State-Adjusted Load Forecast Review of Basic Analytical Approach For each balancing authority (except BAs in California*): 1.Estimate the energy efficiency savings already embedded within balancing authorities load forecasts Rely on combination of: (a) responses to WECC DSM Survey, (b) recent utility IRPs, (c) direct contact with utility load forecasters 2.Estimate the expected savings from current/ongoing energy efficiency programs and policies Focus on (a) utility ratepayer-funded EE programs and (b) new federal appliance efficiency standards 3.If the results of Step 1 and Step 2 differ substantially, develop a modified load forecast that reflects (reasonably well) the expected load impacts estimated in Step 2. * For all California BAs, we relied on CEC IEPR demand forecast, the Itron Incremental Impacts study (Low Scenario), and POU savings goals

4. Energy Analysis Department Electricity Markets and Policy Group 4 In Graphical Form…

5. Energy Analysis Department Electricity Markets and Policy Group SPSC State-Adjusted Load Forecast Overview of Results Attached Excel file State-Adjusted Load Forecast (annual).xls identifies 2020 annual energy (GWh) and annual peak (MW) for each BA Downward adjustments to LRS load forecasts made for 28 of 32 BAs (no adjustment for AESO, BCHA, CFE, or PSC) In many cases, adjustments solely reflected the impact of new federal standards; ratepayer-funded programs were already fully captured in the LRS data 5 Percent Reduction in LRS 2020 Forecast Across All 32 BAs GWhMW Load-weighted average-3.9%-4.9% Min0.0% 25th percentile-2.6%-3.6% Median-4.1%-4.3% 75th percentile-5.7% Max (TEP)-20.6%-18.3%

6. Energy Analysis Department Electricity Markets and Policy Group SPSC State-Adjusted Load Forecast APS ABCD = A - (B - C)E = (D/A - 1) LRS Forecast SPSC Reference Case Efficiency Savings Savings Embedded in LRS Forecast State-Adjusted Load Forecast Percent Change from BA Forecast 2020 GWh35,9907,6616,18934,518-4.1% 2020 MW8,4071,5151,1608,053-4.2% 6 SPSC Reference Case Efficiency Savings include: -Ratepayer-funded program savings: calculated assuming full compliance with Arizona Energy Efficiency Rule (20% cumulative savings by 2020) -New Federal appliance and lighting efficiency standards LRS Forecast was determined to fully account for ratepayer-funded programs, but not for new federal standards -This determination was made based on discussions with APS Chief Economist and Director of Revenue and Fuel Analysis and Forecasts Thus the only adjustment to the LRS forecast was to deduct the expected savings from standards

7. Energy Analysis Department Electricity Markets and Policy Group SPSC State-Adjusted Load Forecast BPA ABCD = A - (B - C)E = (D/A - 1) LRS Forecast SPSC Reference Case Efficiency Savings Savings Embedded in LRS Forecast State-Adjusted Load Forecast Percent Change from BA Forecast 2020 GWh57,8156,2903,02254,547-5.7% 2020 MW10,3778344019,943-4.2% 7 SPSC Reference Case Efficiency Savings assume full achievement of the conservation targets in the NPCCs 6 th Power Plan -These targets are presumed to more-or-less capture the impacts of both ratepayer-funded programs and new federal standards Based on analysis provided by BPA load forecasting staff, it was determined that the LRS forecast implicitly assumed savings levels consistent with the NPCCs 5 th Power Plan Thus the adjustment to the LRS forecast is equal to the difference between the savings levels in the 6 th and 5 th Power Plans

8. Energy Analysis Department Electricity Markets and Policy Group SPSC State-Adjusted Load Forecast CISO ABC = A - BD = (C/A - 1) LRS Forecast Incremental Reference Case Savings State-Adjusted Load Forecast Percent Change from BA Forecast 2020 GWh265,86915,249250,621-5.7% 2020 MW54,7315,23250,066-8.5% 8 Existing analyses by the CEC allowed us to take a simpler approach for CISO -LRS forecast is based on CECs IEPR demand forecast, which explicitly accounts for committed energy efficiency programs/policies -CEC/Itron Incremental Impacts study estimates the additional savings from a set of uncommitted programs/policies, under three scenarios (Low, Medium, High), for the IOU service territories SPSC representatives decided that the State-Adjusted Load Forecast should assume achievement of the Low Scenario -Incremental Reference Case Savings also include planned ratepayer-funded savings from publicly owned utilities within CISO

9. Energy Analysis Department Electricity Markets and Policy Group WECC LSE DSM Survey Summary and Lessons Learned The TEPPC DSM Task Force developed a survey instrument to collect information from LSEs about the energy efficiency assumptions embedded in the LRS load forecasts Responses received from 14 of the 40 LSEs who received the survey These responses were used in developing the State-Adjusted Load Forecasts (though their usefulness was sometimes limited, due to incompleteness, ambiguity, or tardiness) Future discussion is needed to decide how/whether to collect information about embedded energy efficiency savings next year -Do we continue to administer a separate survey, or do we try to collect this information through the LRS data collection process? 9

10. Energy Analysis Department Electricity Markets and Policy Group Non-Firm Load (Demand Response) Analysis for the State-Adjusted Load Forecast 10

11. Energy Analysis Department Electricity Markets and Policy Group Non-Firm Load Forecasts WECC BAs submit non-firm load forecasts for 2020 by program type -Interruptible load (demand made available by contract or agreement for curtailment) -Direct load control (demand under control of system operator) -Critical peak pricing with control (direct remote control with pre-specified critical peak price) -Load as a capacity resource (can be committed for pre-specified load reductions under certain system conditions) Two-part analysis for the SPSC Reference Case: -Assess whether LRS non-firm load forecasts are consistent with current state DR policies and utility DR plans; make adjustments to LRS data if warranted -Make recommendations on how to model non-firm resources within TEPPC production cost model 11

12. Energy Analysis Department Electricity Markets and Policy Group Validation of Non-Firm Load Forecasts LRS data indicates total non-firm resource of 7,316 MW in 2020 Each BAs forecast of non-firm load was compared to utility IRPs, 2008 FERC Demand Response (DR) Survey Results, and state regulatory filings We identify seven BAs with apparently significant under-reporting of non-firm load 12