VERMONT LONG-TERM ENERGY
AND DEMAND FOREAST
October 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
Year
Energy (GWh)
2003
6,285
2004
6,390
2005
6,523
2006
6,473
2007
6,536
2008
6,419
2009
6,143
2010
6,209
2011
6,204
2012
6,175
2013
6,252
chg
2003 - 2007
2007 - 2013
2003 - 2013
chg Wthr Nrm Energy
6,209
1.7%
6,395
2.1%
6,426
-0.8%
6,544
1.0%
6,489
-1.8%
6,424
-4.3%
6,195
1.1%
6,207
-0.1%
6,204
-0.5%
6,192
1.3%
6,226
chg
3.0%
0.5%
1.8%
-0.8%
-1.0%
-3.6%
0.2%
0.0%
-0.2%
0.5%
1.0%
-0.7%
0.0%
1.1%
-0.7%
0.0%
* 2013 – 7 mo actual /5 mo forecast
While sales have been flat over the last ten years
There have been two distinct periods – before and after the recession
VELCO SYSTEM PEAK DEMAND
Year
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
chg
2003 - 2007
2007 - 2013
2003 - 2013
System Peak
1,000.7
984.9
1,073.6
1,126.5
1,072.6
1,048.4
1,016.5
1,068.7
1,062.2
1,007.0
1,060.7
chg
-1.6%
9.0%
4.9%
-4.8%
-2.3%
-3.0%
5.1%
-0.6%
-5.2%
5.3%
1.9%
-0.1%
0.7%
WN Peak
1,034.1
1,070.8
1,063.4
1,108.0
1,077.4
1,068.2
1,020.2
1,040.5
1,057.2
999.2
1,036.5
chg
3.5%
-0.7%
4.2%
-2.8%
-0.9%
-4.5%
2.0%
1.6%
-5.5%
3.7%
1.1%
-0.6%
0.1%
*WNLF_Peak = WN Energy / WN Peak Load Factor
System peak shows a similar pattern
Positive growth in 2013
WNLF_Peak
1,033.6
1,064.7
1,069.8
1,089.5
1,080.3
1,069.4
1,031.4
1,033.4
1,032.9
1,030.9
1,036.6
chg
3.0%
0.5%
1.8%
-0.8%
-1.0%
-3.6%
0.2%
0.0%
-0.2%
0.5%
1.1%
-0.7%
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 SALES
January through August
Residential
Commercial
Industrial
Total
Weather Normalized GMP Sales
YTD 13
YTD 12
1,067,772
1,063,989
1,038,187
1,031,016
502,694
498,188
2,608,653
2,593,193
Difference
0.4%
0.7%
0.9%
0.6%
Residential
Commercial
Customers
YTD 13
219,978
38,145
YTD 12
218,458
37,798
Difference
0.7%
0.9%
Residential
Commercial
Avgerage Use
YTD 13
4,854
27,217
YTD 12
4,870
27,277
Difference
-0.3%
-0.2%
Vermont Economic Growth
YTD 13
YTD 12
259,891
258,731
306,140
302,568
Difference
0.4%
1.2%
Households
Employment
Beginning to see some sales and customer growth with improving economy
SYSTEM FORECAST APPROACH
Sales & Customers
Weather Conditions
Economic Drivers
Electric Prices
Customer Class and
End-Use Energy
Forecast
Structural Changes
DSM
System Hourly Load
Peak-Day Weather
System Energy and
Peak Forecast
End-Use CP Factors
System Profile
Solar Load and EVs
Demand Response
System Hourly Load
Forecast
Residential and Commercial Sales
Forecasted using a SAE Modeling
Framework
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
2,000
1,800
Heating
1,600
Cooling
EWHeat
1,400
ECook
Ref1
kWh
1,200
Ref2
1,000
Frz
Dish
800
CWash
600
EDry
TV
400
Light
200
Misc
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
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
850
Baseline
800
700
Adjusted
650
600
550
2022
2021
2020
2019
2018
2017
2016
2015
2014
2013
2012
2011
2010
2009
2008
2007
2006
500
2005
kWh
750
TOTAL END-USE INTENSITY PROJECTIONS
8,400
Baseline
8,200
7,800
7,600
Adjusted
7,400
7,200
7,000
Residential
11.00
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Baseline
10.50
10.00
kWh per sqft
kWh
8,000
9.50
Adjusted
9.00
8.50
Commercial
8.00
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
RESIDENTIAL AVERAGE USE COMPARISON
9,500
9,000
New England
8,500
7,500
Vermont (with DSM)
7,000
6,500
6,000
5,500
2003 - 13
2013 - 23
New England
-0.4%
0.0%
Vermont
-0.9%
-0.9%
5,000
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
kWh
8,000
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
No DSM
2,600
2,400
No DSM
2,400
Residential
2,200
2,200
Commercial
2,000
GWh
GWh
2,000
1,800
1,600
1,400
1,200
1,000
2003 - 2013
2013 - 2032
No DSM
-0.2%
1.0%
With DSM
-0.2%
-0.1%
1,800
1,600
1,400
1,200
1,000
2003 - 2013
2013 - 2032
No DSM
0.3%
1.5%
With DSM
0.3%
0.5%
RESIDENTIAL AVERAGE USE
No DSM
With DSM
2003 - 2013
2013 - 2032
No DSM
-1.0%
0.4%
With DSM
-1.0%
-0.9%
COMMERCIAL AVERAGE USE
50,000
45,000
No DSM
kWh
40,000
35,000
With DSM
30,000
25,000
2003 - 2013
2013 - 2032
No DSM
-1.0%
0.5%
With DSM
-1.0%
-0.5%
20,000
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
VERMONT ENERGY REQUIREMENTS
7,000
No DSM
6,500
GWh
6,000
With DSM
5,500
5,000
4,500
4,000
2003 - 2013
2013 - 2032
No DSM
-0.4%
1.0%
With DSM
-0.4%
0.0%
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
VERMONT PEAK DEMAND
1,200
1,100
No DSM
1,000
With DSM
MW
900
800
700
2003 - 2013
2013 - 2032
No DSM
0.4%
1.0%
With DSM
0.4%
-0.1%
600
By 2023, DSM programs reduce peak demand by 119 MW (10%)
500
2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
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
KEMA
NMR
Surveys show consistently lower shares than that implied by the billing data
ELECTRIC HEAT CUSTOMER SHARE AND USE
EH_CustShare
20.0%
18.0%
16.0%
14.0%
12.0%
10.0%
8.0%
There appears to be significant electric heating
6.0%
4.0%
EH_AvgUse
2.0%
NEH_AvgUse
1,600
0.0%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
1,400
kWh/customer
1,200
1,000
800
600
400
200
0
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
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
KEMA
NMR
Reported RAC saturation is about the same but
not consistent with the BED saturation growth
ELECTRIC WATER HEATING
KEMA
NMR
KEMA and NMR diverge from New England water heating saturation trends
SECOND REFRIGERATORS
KEMA
NMR
NMR saturation is more consistent with New England
FREEZERS
KEMA
NMR
The two surveys imply an unlikely sharp decline in the number of freezers
CLOTHES WASHERS
KEMA
NMR
DRYERS
KEMA
NMR
NMR survey closer to that reported by EIA
DISH WASHERS
KEMA
NMR
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
Share of customers with PV systems
(GMP solar customer data)
Residential
Commercial
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
SHOULD SEE STRONG PV MARKET GROWTH
$9.00
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$-
Assumes 10% annual decline in system cost
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
16.0
14.0
12.0
Assumes continuation of federal tax credit
10.0
8.0
6.0
4.0
2.0
-
Simple Payback
RESIDENTIAL SIMPLE PAYBACK MODEL
Variable
CONST
Payback
LagShare
Adjusted Observations
Deg. of Freedom for Error
R-Squared
Adjusted R-Squared
Mean Abs. % Err. (MAPE)
Durbin-Watson Statistic
Coefficient
0.0008
-0.00005
0.97447
44
40
0.998
0.997
2.30%
1.758
T-Stat
1.886
-1.673
36.929
P-Value
6.66%
10.22%
0.00%
RESIDENTIAL PV MARKET PENETRATION FCST
Base Case
No Federal Tax Credit
No State or Federal Tax Credit
RESIDENTIAL AND SOLAR CUSTOMER
FORECAST
Year
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
ResCusts
308,967
312,543
314,006
317,079
320,383
323,462
326,240
328,748
331,226
333,468
335,488
chg
1.2%
0.5%
1.0%
1.0%
1.0%
0.9%
0.8%
0.8%
0.7%
0.6%
SolarCusts
2,023
2,816
3,530
4,193
4,813
5,386
5,909
6,385
6,819
7,214
7,570
chg
39.2%
25.4%
18.8%
14.8%
11.9%
9.7%
8.1%
6.8%
5.8%
4.9%
Shr Solar
0.7%
0.9%
1.1%
1.3%
1.5%
1.7%
1.8%
1.9%
2.1%
2.2%
2.3%
RESIDENTIAL GENERATION AND USE
Average kWh per month
Generated
6,700 kWh per year
Own Use
5,200 kWh per year
Billed Average Use
6,680 kWh per year
RESIDENTIAL SOLAR LOAD FORECAST
Year
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Generated (MWh)
13,554
18,867
23,651
28,093
32,247
36,086
39,590
42,780
45,687
48,334
50,719
Used (GWh)
10,520
14,643
18,356
21,804
25,028
28,007
30,727
33,202
35,459
37,513
39,364
Capacity (MW)
9.1
12.7
15.9
18.9
21.7
24.2
26.6
28.7
30.7
32.5
34.1
Capacity estimated using a 0.17 load factor, assume average system size = 4.5 Mw