1. 2007 Planning Long-Term Hourly Demand and Energy Forecast Board of Directors Meeting May 16, 2007 Bill Bojorquez

2. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 2 Economic history and forecast for Texas –Source is Moody’s Economy.com –Proprietary data Population Income Other economic variables Historic weather data from each ERCOT weather zone –Source is WeatherBank –Not a weather forecast Temperature Humidity Cooling Degree Days (CDD) Heating Degree Days (HDD) Calendar Data –Seasonal Variation –Daily Variation –Weekly Variation –Holidays Forecasting Assumptions and Methodology

3. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 3 Hourly Peak Demand 2007-17 Growth Rate 2.12%

4. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 4 Hourly Peak Demand

5. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 5 Reconciliation Of Forecast Differences The basic methodology used to produced the forecast has remained the same The main sources of differences in the forecasts produced by the 2006 Long-Term Forecast Model (LTFM) and the 2007 LTFM for 2007 are: –More optimistic economic forecasts throughout the ERCOT territory –Adjustments to calibrate the performance and weather sensitivity of the model based on last’s year forecast versus actual data

6. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 6 Energy 2007-17 Growth Rate 2.08%

7. BACKUP MATERIAL

8. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 8 Real Personal Per-Capita Income

9. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 9 Population in ERCOT Territory

10. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 10 Employment in the Financial Services

11. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 11 Non-Farm Employment in ERCOT Territory

12. KD - 2007 Planning Long-Term Hourly Demand and Energy 05/08/2007 12 Total Employed in ERCOT Territory