VERMONT LONG-TERM ENERGY AND DEMAND FOREAST October 8, 2013 Eric Fox and Mike Russo
Dec 15, 2015
VERMONT LONG-TERM ENERGY AND DEMAND FOREASTOctober 8, 2013
Eric Fox and Mike Russo
AGENDA
» Recent Sales and Customer Trends» Preliminary State Sales and Demand Forecast» Building a No DSM Forecast » End-Use Saturation Projections Integrating the New Appliance
Saturation Survey» Estimating Solar Load Impacts
VELCO SYSTEM ENERGY 2003 TO 2013
While sales have been flat over the last ten yearsThere have been two distinct periods – before and after the recession
* 2013 – 7 mo actual /5 mo forecast
Year Energy (GWh) chg Wthr Nrm Energy chg2003 6,285 6,2092004 6,390 1.7% 6,395 3.0%2005 6,523 2.1% 6,426 0.5%2006 6,473 -0.8% 6,544 1.8%2007 6,536 1.0% 6,489 -0.8%2008 6,419 -1.8% 6,424 -1.0%2009 6,143 -4.3% 6,195 -3.6%2010 6,209 1.1% 6,207 0.2%2011 6,204 -0.1% 6,204 0.0%2012 6,175 -0.5% 6,192 -0.2%2013 6,252 1.3% 6,226 0.5%chg2003 - 2007 1.0% 1.1%2007 - 2013 -0.7% -0.7%2003 - 2013 0.0% 0.0%
VELCO SYSTEM PEAK DEMAND
*WNLF_Peak = WN Energy / WN Peak Load Factor
System peak shows a similar patternPositive growth in 2013
Year System Peak chg WN Peak chg WNLF_Peak chg2003 1,000.7 1,034.1 1,033.6 2004 984.9 -1.6% 1,070.8 3.5% 1,064.7 3.0%2005 1,073.6 9.0% 1,063.4 -0.7% 1,069.8 0.5%2006 1,126.5 4.9% 1,108.0 4.2% 1,089.5 1.8%2007 1,072.6 -4.8% 1,077.4 -2.8% 1,080.3 -0.8%2008 1,048.4 -2.3% 1,068.2 -0.9% 1,069.4 -1.0%2009 1,016.5 -3.0% 1,020.2 -4.5% 1,031.4 -3.6%2010 1,068.7 5.1% 1,040.5 2.0% 1,033.4 0.2%2011 1,062.2 -0.6% 1,057.2 1.6% 1,032.9 0.0%2012 1,007.0 -5.2% 999.2 -5.5% 1,030.9 -0.2%2013 1,060.7 5.3% 1,036.5 3.7% 1,036.6 0.5%chg2003 - 2007 1.9% 1.1% 1.1%2007 - 2013 -0.1% -0.6% -0.7%2003 - 2013 0.7% 0.1% 0.0%
PEAK-DAY TEMPERATURES
2013 was the hottest peak day in 11 years. Second hottest day based on a 3-day weighted THI
GMP YEAR TO DATE SALESJanuary through August
YTD 13 YTD 12 DifferenceResidential 1,067,772 1,063,989 0.4%Commercial 1,038,187 1,031,016 0.7%Industrial 502,694 498,188 0.9%Total 2,608,653 2,593,193 0.6%
YTD 13 YTD 12 DifferenceResidential 219,978 218,458 0.7%Commercial 38,145 37,798 0.9%
YTD 13 YTD 12 DifferenceResidential 4,854 4,870 -0.3%Commercial 27,217 27,277 -0.2%
YTD 13 YTD 12 DifferenceHouseholds 259,891 258,731 0.4%Employment 306,140 302,568 1.2%
Weather Normalized GMP Sales
Customers
Avgerage Use
Vermont Economic Growth
Beginning to see some sales and customer growth with improving economy
Sales & Customers
Weather Conditions
Economic Drivers
Electric Prices
Structural Changes
Customer Class and End-Use Energy
Forecast
System Hourly Load
Peak-Day Weather System Energy and Peak Forecast
System Profile
System Hourly Load Forecast
Solar Load and EVs
Demand Response
DSM
SYSTEM FORECAST APPROACH
Residential and Commercial Sales Forecasted using a SAE Modeling
Framework
End-Use CP Factors
SAE MODELING FRAMEWORK
KEY FORECAST DRIVERS» Economic activity and population growth
• Moody Analytics Vermont economic forecast» Weather conditions
• Twenty-year normal HDD and CDD» Price projections » End-Use Intensity Projections
• Saturation forecast – Vermont appliance saturation surveys• Baseline efficiency projections – 2013 AEO
» Intensity adjustments for state efficiency programs» Residential and commercial solar net metering system market
penetration» Electric vehicles» ???
PRELIMINARY VERMONT ENERGY AND DEMAND FORECAST
» Revenue class sales and customer data through March 2013» Moody Analytics June 2013 economic forecast for Vermont» 2012 end-use intensity projections
• Reflects the 2012 VEIC efficiency savings projections» No solar load adjustment» No price impacts
Used as a basis for developing a No DSM Forecast
BASELINE END-USE INTENSITY TRENDS» End-use intensity trends reflect both saturation and average
stock efficiency improvements» Current intensity trends reflect KEMA state saturation survey, EIA
New England forecasts, and past BED appliance saturation surveys
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
kWh
Heating
Cooling
EWHeat
ECook
Ref1
Ref2
Frz
Dish
CWash
EDry
TV
Light
Misc
DSM ADJUSTED END-USE INTENSITIES
» Develop baseline end-use sales forecast from SAE models
» Calculate adjusted end-use sales forecasts for DSM savings projections• Residential: assume 75% is embedded in the baseline forecast• Commercial: assume 50% is embedded in the baseline forecast
» Adjust end-use intensity forecasts to reflect DSM savings adjustments
DSM embedded assumptions based on calibration to actual sales
DSM ADJUSTED WATER HEATING INTENSITY
500
550
600
650
700
750
800
850
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
kWh
Baseline
Adjusted
TOTAL END-USE INTENSITY PROJECTIONS
7,000
7,200
7,400
7,600
7,800
8,000
8,200
8,400
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
kWh
Baseline
Adjusted
8.00
8.50
9.00
9.50
10.00
10.50
11.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
kWh
per s
qft
Baseline
Adjusted
Residential
Commercial
RESIDENTIAL AVERAGE USE COMPARISON
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
kWh
New England
Vermont (with DSM)
New England Vermont2003 - 13 -0.4% -0.9%2013 - 23 0.0% -0.9%
DEVELOPING THE “NO DSM” FORECAST
» Adjust end-use intensities upwards – add back in 100% of projected DSM savings• Assume no future DSM is embedded in the baseline forecast
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
2,600
GW
h
1,000
1,200
1,400
1,600
1,800
2,000
2,200
2,400
GW
h
Residential Commercial
No DSM With DSM2003 - 2013 -0.2% -0.2%2013 - 2032 1.0% -0.1%
No DSM With DSM2003 - 2013 0.3% 0.3%2013 - 2032 1.5% 0.5%
No DSMNo DSM
RESIDENTIAL AVERAGE USE
No DSM
With DSM
No DSM With DSM2003 - 2013 -1.0% -1.0%2013 - 2032 0.4% -0.9%
20,000
25,000
30,000
35,000
40,000
45,000
50,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
kWh
COMMERCIAL AVERAGE USE
No DSM
With DSM
No DSM With DSM2003 - 2013 -1.0% -1.0%2013 - 2032 0.5% -0.5%
VERMONT ENERGY REQUIREMENTS
4,000
4,500
5,000
5,500
6,000
6,500
7,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
GW
h
No DSM
With DSM
No DSM With DSM2003 - 2013 -0.4% -0.4%2013 - 2032 1.0% 0.0%
500
600
700
800
900
1,000
1,100
1,200
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
MW
VERMONT PEAK DEMAND
No DSM
With DSM
No DSM With DSM2003 - 2013 0.4% 0.4%2013 - 2032 1.0% -0.1%
By 2023, DSM programs reduce peak demand by 119 MW (10%)
UPDATING END-USE SATURATION ESTIMATES
» Incorporate new appliance saturation survey information• NMR 2012 Residential Home Survey (Reported February
2013)
» Also have the KEMA 2005 survey, earlier BED survey, and the EIA estimates for New England
» We were hoping to connect the dots between the KEMA and NMR survey• Problem: The two survey points are not all that consistent
ELECTRIC HEAT
KEMANMR
Surveys show consistently lower shares than that implied by the billing data
0
200
400
600
800
1,000
1,200
1,400
1,600
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
kWh/
cust
omer
EH_AvgUse NEH_AvgUse
ELECTRIC HEAT CUSTOMER SHARE AND USE
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
18.0%
20.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
EH_CustShare
There appears to be significant electric heating
SECONDARY ELECTRIC HEAT
NMR
KEMA
Could be people with electric heat consider it a back-up source
CENTRAL AIR CONDITIONING
NMR
KEMA 2 out of 3 sources say CAC saturation is higher
ROOM AIR CONDITIONING
NMRKEMA
Reported RAC saturation is about the same butnot consistent with the BED saturation growth
ELECTRIC WATER HEATING
NMR
KEMA
KEMA and NMR diverge from New England water heating saturation trends
SECOND REFRIGERATORS
NMR
KEMA
NMR saturation is more consistent with New England
FREEZERS
NMR
KEMA
The two surveys imply an unlikely sharp decline in the number of freezers
CLOTHES WASHERS
NMRKEMA
DRYERS
NMR
KEMA
NMR survey closer to that reported by EIA
DISH WASHERS
NMR
KEMA
KEMA survey closer to that reported by EIA
PV MARKET PENETRATION
» Though still relatively small net metering (particular residential and commercial photovoltaic systems) has been growing quickly
Residential
Commercial
Share of customers with PV systems(GMP solar customer data)
Through 2012
FACTORS DRIVING NET METERING PENETRATI0N
» Federal Investment Incentives – Through 2017• 30% of system installed cost
» State Investment Incentives • Was $0.45 per watt now $0.25 per watt• On a 5 kW system incentive drops from $2,250 to $1,250
- But federal absolute dollar credit will offset some of this» High avoided electric rates
• average residential rate $0.16 per kWh» Generous buy-back rate
• Credit equal to $0.20 per kWh (retail rate plus $0.04 per kWh)
SOLAR LOAD IS HAPPENING WHERE STATE INCENTIVES ARE SIGNIFICANT
-
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
SHOULD SEE STRONG PV MARKET GROWTH
$-
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$7.00
$8.00
$9.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022Assumes 10% annual decline in system cost
Simple Payback
Assumes continuation of federal tax credit
RESIDENTIAL SIMPLE PAYBACK MODELVariable Coefficient T-Stat P-ValueCONST 0.0008 1.886 6.66%Payback -0.00005 -1.673 10.22%LagShare 0.97447 36.929 0.00%
Adjusted Observations 44Deg. of Freedom for Error 40R-Squared 0.998Adjusted R-Squared 0.997Mean Abs. % Err. (MAPE) 2.30%Durbin-Watson Statistic 1.758
RESIDENTIAL PV MARKET PENETRATION FCST
Base Case
No Federal Tax Credit
No State or Federal Tax Credit
RESIDENTIAL AND SOLAR CUSTOMER FORECAST
Year ResCusts chg SolarCusts chg Shr Solar2012 308,967 2,023 0.7%2013 312,543 1.2% 2,816 39.2% 0.9%2014 314,006 0.5% 3,530 25.4% 1.1%2015 317,079 1.0% 4,193 18.8% 1.3%2016 320,383 1.0% 4,813 14.8% 1.5%2017 323,462 1.0% 5,386 11.9% 1.7%2018 326,240 0.9% 5,909 9.7% 1.8%2019 328,748 0.8% 6,385 8.1% 1.9%2020 331,226 0.8% 6,819 6.8% 2.1%2021 333,468 0.7% 7,214 5.8% 2.2%2022 335,488 0.6% 7,570 4.9% 2.3%
RESIDENTIAL GENERATION AND USEAverage kWh per month
Generated6,700 kWh per year
Billed Average Use6,680 kWh per year
Own Use5,200 kWh per year
RESIDENTIAL SOLAR LOAD FORECAST
Capacity estimated using a 0.17 load factor, assume average system size = 4.5 Mw
Year Generated (MWh) Used (GWh) Capacity (MW)2012 13,554 10,520 9.1 2013 18,867 14,643 12.7 2014 23,651 18,356 15.9 2015 28,093 21,804 18.9 2016 32,247 25,028 21.7 2017 36,086 28,007 24.2 2018 39,590 30,727 26.6 2019 42,780 33,202 28.7 2020 45,687 35,459 30.7 2021 48,334 37,513 32.5 2022 50,719 39,364 34.1