SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
Subject: Feb.4, 2008 SoCalGas Direct Testimony of Herbert S. Emmrich
(Demand Forecasts)
QUESTION 1:
In prior BCAP proceedings SoCalGas and SDG&E relied upon econometric models to
forecast gas demand. Please explain why in this BCAP SoCalGas and SDG&E are
relying upon end-use models to forecast gas demand.
RESPONSE 1:
End use models with an equipment choice module are a more effective forecasting tool
in today’s energy efficiency oriented world. Also, we had been maintaining two sets of
models for forecasting purposes, econometric and end-use models. To save resources,
we decided to use end use models exclusively to be more in line with the CEC and the
use of our end use models in the CGR forecasts.
1
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 2:
How does SoCalGas and SDG&E propose to allow DRA access to the EUForecaster
software discussed in the gas demand forecasting workpapers.
RESPONSE 2:
We have contacted Quantec to assure that the EUForecaster model will be made
available to DRA. DRA will however have to have a SAS license in order to use the
model.
2
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 3:
On page 159 of Mr. Emmrich’s gas demand forecasting workpapers he lists a set of
price elasticities by sector. Were these elasticities based on econometrically estimated
models ?
RESPONSE 3:
The price elasticities on page 159 reference the SoCalGas Core Commercial price
elasticities. The price elasticities are based on econometrically estimated models.
3
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 4:
If the answer to question (3), is yes please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP, GAUSS etc
RESPONSE 4:
(A ) For a description of the model used to generate core commercial price
elasticities, please see the attached pdf document called Data Request_Core
Commercial Price Elasticity Data and Estimation Writeup
Adobe Acrobat
Document
(B)
The data for the estimation of the price elasticity model are contained within
the attached Zip folder called Commercial Core Price Elasticity Data Files.Zip.
(C)
The SAS software was utilized to develop the price elasticities. A copy of the
program is contained in the above Data Zip folder.
4
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 5:
If the answer to question (3) is no, please explain how these price elasticities were
derived.
RESPONSE 5:
Not applicable.
5
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 6:
On page 159 of Mr. Emmrich’s gas demand forecasting workpapers he lists a set of
employment elasticities by sector. Were these elasticities based on econometrically
estimated models?
RESPONSE 6:
The employment elasticities on page 159 reference the SoCalGas Core Commercial
price elasticities. The employment elasticities are based on econometrically estimated
models.
6
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 7:
If the answer to question (5) is yes, please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP,
GAUSS etc.
RESPONSE 7:
(A ) For a description of the model used to generate core commercial
employment elasticities, please see the attached pdf document called Data
Request_Core Comm Employment Elasticity Writeup.
Adobe Acrobat
Document
(B) The data for the estimation of the core commercial employment elasticity model
are contained within the attached Zip folder called Core Commercial
Employment Elasticity SAS Folder.Zip.
(C) The SAS software was utilized to develop the core commercial employment
elasticities. A copy of the program is contained in the above Data Zip folder.
7
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 8:
If the answer to question (6) is no, please explain how these employment elasticities
were derived.
RESPONSE 8:
Not applicable.
8
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 9:
On page 203 of Mr. Emmrich’s gas demand forecasting workpapers he lists a set of
price elasticities by sector. Were these elasticities based on econometrically estimated
models ?
RESPONSE 9:
Yes.
9
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 10:
If the answer to question (9) is yes, please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP,
GAUSS etc.
RESPONSE 10:
(a) See the attached file below:
D:\Data\BCAP2009\
Data Request\DRA-TMR1\Q10.doc
(b) See the attached file below:
D:\Data\BCAP2009\
Data Request\DRA-TMR1\Q10_Historica Data.xls
(c) SAS was used.
10
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 11:
If the answer to question (9) is no, please explain how these price elasticities were
derived.
RESPONSE 11:
Not applicable.
11
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 12:
On page 203 of Mr. Emmrich’s gas demand forecasting workpapers he lists a set of
employment elasticities by sector. Were these elasticities based econometrically
estimated models ?
RESPONSE 12:
Yes.
12
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 13:
If the answer to question (12) is yes, please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP,
GAUSS etc.
RESPONSE 13:
Please see Response 10.
13
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 14:
If the answer to question (12) is no, please explain how these employment elasticities
were derived.
RESPONSE 14:
Not applicable.
14
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 15:
On page 245 of Mr. Emmrich’s gas demand workpapers he lists a set of price
elasticities by sector. Were these elastcities based on econometrically estimated
models?
RESPONSE 15:
Yes.
15
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 16:
If the answer to question (15) is yes, please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP,
GAUSS etc.
RESPONSE 16:
Please refer to Response 4 and the attached Excel file for the weighted price elasticities
for the noncore commercial and industrial markets.
2002-2005 Noncore
Price Elasticities.xls
16
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 17:
If the answer to question (15) is no, please explain how these price elasticities were
derived.
RESPONSE 17:
Not applicable.
17
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 18:
On page 245 of Mr. Emmrich’s gas demand workpapers he lists a set of employment
elasticities by sector. Were these elasticities based on econometrically estimated
models?
RESPONSE 18:
Yes.
18
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 19:
If the answer to question (18) is yes, please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP,
GAUSS etc.
RESPONSE 19:
a) The description of the model is in attached. This document was prepared in 2003 for
the (unfiled) 2005 BCAP.
NonCoreEconModel2
005BCAP
b) See part a).
c) The software used in the estimation is SAS.
19
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 20:
If the answer to question (18) is no, please explain how these employment elasticities
were derived.
RESPONSE 20:
Not applicable.
20
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 21:
Please explain how SoCalGas forecasted average year, cold-year, and hot-year heating
degree days.
RESPONSE 21:
Please see Herb Emmrich’s work papers for SoCalGas Demand Forecasts, beginning
on page #383. In particular see pages 387-388. There are detailed examples for the
two cold-year cases for a 1-in-10 and 1-in-35 likelihood.
The calculations for the hot-year cases are similar to the cold-year cases except that
rather than “adding standard deviations” to the average-year Hdd total of 1,379 Hdd, we
would “subtract standard deviations” from this average.
Hot-year HDD (1-in-35 likelihood) = 1,093 which equals approximately
1,379 average-year HDDs – 2.025 * 141.25;
and, for the
Hot-year HDD (1-in-10 likelihood) = 1,191 which equals approximately
1,379 average-year HDDs – 1.328 * 141.25
21
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 22:
For the commercial core, industrial core, and commercial and industrial non-core
sectors please explain how SoCalGas arrived at the sector employment forecasts show
in Mr. Emmrich’s gas demand workpapers. If these employment forecasts were derived
from econometric models please provide a detailed description of the models used
along with the complete historic and forecast data used to generate the employment
forecasts.
RESPONSE 22:
SoCalGas used recorded data through December 2006 by employment sector from the
California Employment Development Department. SoCalGas aggregated available
employment data by each sector for the total of the 12 counties served wholly or
partially by SoCalGas (Fresno, Imperial, Kern, Kings, Los Angeles, Orange, Riverside,
San Bernardino, San Luis Obispo, Santa Barbara, Tulare, and Ventura). To the
recorded 2006 data, SoCalGas then applied forecasted growth rates by sector to derive
its sectoral employment forecast. The forecasted employment growth rates were not
from a SoCalGas econometric model; they were from Global Insight’s Spring 2007
Regional forecast (released in May 2007) for the “big 6” Metropolitan Statistical Area
counties in SoCalGas’ service area: Kern, Los Angeles, Orange, Riverside, San
Bernardino, and Ventura. Together these “big 6” counties account for well over 80% of
the economic activity in SoCalGas’ service area; as such, the growth rates of their
aggregate data serve as an excellent proxy for the total service area.
22
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 23:
On page 65 of Mr. Emmrich’s SDG&E gas demand forecast workpapers he lists a
series of price elasticities by sector. Were these elastcities based on econometrically
estimated models?
RESPONSE 23:
Page 65 of Mr. Emmrich’s workpapers describe SDG&E’s price elasticities by market
segment. The SDG&E price elasticities were based on econometric estimates derived
from the study of SoCalGas.
23
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 24:
If the answer to question (23) is yes, please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP,
GAUSS etc.
RESPONSE 24:
The SDG&E price elasticities were obtained from the SoCalGas model described in
detail within the above section under Question 4A-B-C.
24
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 25:
If the answer to question (24) is no, please explain how these price elasticities were
derived.
RESPONSE 25:
Not applicable.
25
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 26:
On page 65 of Mr. Emmrich’s SDG&E gas demand forecast workpapers he lists a
series of employment elasticities by sector. Were these elasticties based on
econometrically estimated models?
RESPONSE 26:
Page 65 of Mr. Emmrich’s workpapers describe SDG&E’s employment elasticities by
market segment. The SDG&E employment elasticities were derived by applying an
adjustment factor to the econometric estimates derived from the study for SoCalGas.
26
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 27:
If the answer to question (26) is yes, please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP,
GAUSS etc.
RESPONSE 27:
The SDG&E employment elasticities were derived from the SoCalGas model
employment elasticity estimates described in detail within the above section under
Question 7A-B-C. The attached Excel formatted file called Data Request_SDGE
Employment Elasticities.xls contains the mathematical derivation of the SDG&E
employment elasticities and a description of the adjustment factors utilized.
Microsoft Office
Excel Worksheet
27
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 28:
If the answer to question (26) is no, please how these employment elasticities were
derived.
RESPONSE 28:
Not applicable.
28
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 29:
On page 111 of Mr.Emmrich’s SDG&E demand forecasting workpapers he lists a series
of price elasticities by sector. Were these elasticities based on econometrically
estimated models?
RESPONSE 29:
Yes.
29
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 30:
If the answer to question (29) is yes, please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP,
GAUSS etc.
RESPONSE 30:
The sectoral price elasticities for SDG&E’s industrial demand forecast use elasticities
from SolCalGas' econometric model based on the information shown in Response 10.
30
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 31:
If the answer to question (29) is no, please explain how these price elasticities were
derived.
RESPONSE 31:
Not applicable.
31
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 32:
On page 111 of Mr.Emmrich’s SDG&E demand forecasting workpapers he lists a series
of employment elasticities by sector. Were these elasticities based on econometrically
estimated models?
RESPONSE 32:
Yes.
32
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 33:
If the answer to question (32) is yes, please provide the following:
(a) A complete description of the model including all variable definitions.
(b) The complete historical data set used to generate the estimates.
(c) A description of the software used in the estimation, i.e. SAS, TSP,
GAUSS etc.
RESPONSE 33:
The sectoral employment elasticities for SDG&E’s industrial demand
forecast use elasticities from SolCalGas' econometric model based on the information
shown in Response 10.
33
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 34:
If the answer to question (32) is no, please explain how these employment elasticities
were derived.
RESPONSE 34:
Not applicable.
34
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 35:
Please explain how SDG&E forecasted average year, cold-year, and hot-year heating
degree days.
RESPONSE 35:
Please see Herb Emmrich’s work papers for SDG&E Demand Forecasts, beginning on
page #150. In particular see pages 154-155. There are detailed examples for the two
cold-year cases for a 1-in-10 and 1-in-35 likelihood.
The calculations for the hot-year cases are similar to the cold-year cases except that
rather than “adding standard deviations” to the average-year Hdd total of 1,306 Hdd, we
would “subtract standard deviations” from this average.
Hot-year HDD (1-in-35 likelihood) = 958 which equals approximately
1,306 average-year HDDs – 2.025 * 171.78;
and, for the
Hot-year HDD (1-in-10 likelihood) = 1,078 which equals approximately
1,306 average-year HDDs – 1.328 * 171.78
35
SAN DIEGO GAS AND ELECTRIC COMPANY
SOUTHERN CALIFORNIA GAS COMPANY
2009 BIENNIAL COST ALLOCATION PROCEEDING (A.08-02-001)
DRA DATA REQUEST NO. DRA-TMR1
______________________________________________________________________
QUESTION 36:
For the commercial core, industrial core, and commercial and industrial non-core
sectors please explain how SDG&E arrived at the sector employment forecasts show in
Mr. Emmrich’s gas demand workpapers. If these employment forecasts were derived
from econometric models please provide a detailed description of the models used
along with the complete historic and forecast data used to generate the employment
forecasts.
RESPONSE 36:
SDG&E used recorded data through December 2006 by employment sector for San
Diego County, from the California Employment Development Department. To the
recorded 2006 data, SDG&E then applied forecasted growth rates by sector to derive its
sectoral employment forecast. The forecasted employment growth rates were not from
a SDG&E econometric model; they were from Global Insight’s Spring 2007 Regional
forecast (released in May 2007) for the San Diego Metropolitan Statistical Area (San
Diego County).
36