Peak Demand Forecast Review
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1 Peak Demand Forecast Review Document Purpose This document presents the forecast elements to be submitted by Load Serving Entities (LSEs), either directly or, in retail choice states, by their Electric Distribution Companies (EDCs). The document also describes the process by which those elements will be reviewed to determine to what extent the submission satisfies the Tariff requirements found in Module E-1. Forecast submitters should be aware of the underlying goal of the peak demand forecast review: The intent of the forecast review process is to determine whether the approach used and the results obtained are reasonably derived from causal factors employed, using a scientific and reproducible approach, and based on 50/50 conditions. Primary Forecast Elements Given the regulatory structure of most states within the MISO footprint, the general expectation is that load forecasts are routinely submitted by each LSE to its relevant electric retail regulatory authority ( RERRA ). When new capital investment is required for capacity, load forecasts are again routinely provided and carefully scrutinized by a variety of parties. Given this background, MISO s role in the forecast review process will focus primarily on the coincident peak demand calculations and related inputs. Non-Coincident Peak Demand Forecast submitters should provide the non-coincident (maximum) peak demand expected for the load they serve, separately for each Local Balancing Authority (LBA) area, within the MISO footprint. Peak demand forecasts are required for each month of the upcoming Planning Year and the following Planning Year. For the eight (8) Planning Years thereafter, winter and summer peak demand forecasts are required, for a total of forty (40) values. 1 The submitted values should be expressed in MW, rounded to the nearest 0.1 MW, and should exclude transmission losses. Forecast submitters should provide separate non-coincident peak demand forecasts for the load they serve within each LBA. If a given LBA spans more than one state, the forecast should indicate the percentage of the submitted value relevant to each state. Net Energy for Load Forecast submitters should provide the Net Energy for Load expected for the load they serve within the MISO footprint. Net Energy for Load forecasts are required for time periods and geographical areas matching the non-coincident peak demand forecasts described above. The submitted values should be expressed in MWh, rounded to the nearest MWh. 1 Two (2) years at monthly (12) frequency is 24 values; eight (8) years at seasonal (2) frequency is 16 values, for a total of 40 values. Page 1
2 The NERC definition of Net Energy for Load is: Net Balancing Authority Area generation, plus energy received from other Balancing Authority Areas, less energy delivered to Balancing Authority Areas through interchange. It includes Balancing Authority Area losses but excludes energy required for storage at energy storage facilities. Compared to the NERC definition, forecast providers are reminded that forecasts submitted should exclude transmission losses, which MISO will determine and add to the submitted values. Peak Demand, Coincident with MISO s Annual Peak Forecast submitters should provide the peak demand expected (50/50) at the time of MISO s annual peak for the load they serve within the MISO footprint. The submitted value must be less than or equal to the largest monthly non-coincident peak demand value submitted for the Planning Year. This coincident peak demand value is required only for the upcoming Planning Year (i.e. a single value), and should be expressed in MW, rounded to the nearest 0.1 MW. Similar to the non-coincident peak demand and Net Energy for Load submittals, separate coincident peak demand forecasts should be provided for the load served within each LBA, with individual state percentages provided as necessary. Finally, the coincident peak demand value should be measured to exclude transmission losses occurring at peak. Supporting Forecast Elements A variety of documents, calculations, and descriptions can be classified as supporting the primary forecast elements described above. Narrative summary of the coincident peak forecasting methodology Narrative summary of the non-coincident peak forecasting methodology Narrative summary of the Net Energy for Load methodology Each of these narrative summaries should include an executive-level description of how the forecast value is determined. The narration should describe the primary input elements, variables, factors, etc. and the method by which these elements determine the forecast value. Descriptions of all equations used in the forecast process, including example calculations. At a minimum, descriptions should include: o a textual summary of each equation, its purpose, and how it fits into the larger forecast process used; o all of the parameters required to describe each equation; o relevant tables or reports describing the statistical properties of each equation; o supporting citations and descriptions of equations used but not estimated from data specific to the forecast submitter s load An assessment of the reasonability of the forecast from an economic and demographic viewpoint, indicating the response of the forecast to changes in such factors Description of the process used to determine the input (50/50) values used by the equations in the forecasting process Page 2
3 Documents or studies directly relied upon by the forecast process (e.g., end-use studies from which parameters are obtained) List of resources or programs registered with MISO as Load Modifying Resources indicating: o Categorization ( demand resource or behind-the-meter-generation ) o Registered MW o Documents supporting both the registration value and MISO-peak reduction value used in the forecast o For behind-the-meter-generation, a notation regarding whether or not the resource is connected to the network transmission system List of resources or programs registered with MISO as Energy Efficiency Resources, indicating: o Registered MW o Documents supporting both the registration and MISO-peak reduction value used in the forecast List of resources or programs not registered with MISO, but falling under the category of demand response including, but not limited to, demand-side management, direct-control, or other programs through which retail customer load is reduced following notification or based upon special circumstances. For each program, provide the following: o Categorization ( demand resource or behind-the-meter-generation ) o Documents supporting the MISO-peak reduction value used in the forecast o For behind-the-meter-generation, a notation regarding whether or not the resource is connected to the network transmission system List of programs completed during the most recent Planning Year but not registered with MISO, falling under the classification of energy efficiency. For each such program, provide the following: o Documents supporting the registration and MISO-peak reduction value used in the forecast Other Information Required In addition to the values and documents described above, forecast submitters should provide the information shown below in order to assist MISO in its review process. Complete contact information for the primary person having sufficient knowledge of forecast development to be able to assist MISO with any technical or informational questions that might arise during the forecast review process. Contact information should include: o Name o Position / Title o Telephone Number o address Page 3
4 Forecast Review Process The forecast review process will encompass both a review of the specific forecast values provided as well as a review of the methodology and calculations that led to these values. Methodology Review The supporting documents (see list above) will be reviewed to determine whether the forecast values have been prepared using an approach that meets the following criteria: 1. Is the forecast based upon causal relationships between clearly identified and relevant external factors and the values being forecast? 2. Are the numerical values that represent the causal relationships of reasonable magnitude; that is, given a change in the value of the external variable, is the resultant change in the forecast value reasonable? 3. Are the equations underlying the forecast methodology statistically significant and free from econometric defects that would render their results suspect? If not, are the exceptions sufficiently explained and corrected in an appropriate manner? 4. Are all of the required elements (see Primary Forecast Elements and Supporting Forecast Elements, above) provided? Is the forecast documentation clearly organized? Input Review The inputs used to determine the forecast values provided will be examined for reasonableness and accuracy using the following criteria: 1. Are the inputs based on a 50/50 view of the forecast period? 2. Are the inputs developed internally or obtained from external sources? a. If developed internally, is the development process clearly explained, and does that process meet the same general standards as described in the Methodology Review section (above)? b. If obtained from external sources, has the external development process been reviewed by the forecast preparer? If the external development process is not available for review, did the forecast preparer conduct and provide supporting documents of a check of the input values obtained externally that is sufficient to support the presumption of 50/50 conditions? 3. Are the inputs reasonably related to the element being forecast? Forecast Selection Methodology MISO will select twenty (20) Load Serving Entities each Planning Year. For each selected entity, the submitted documents will be reviewed using the criteria set forth above. The number of entities selected and the process used to select them are designed to achieve several goals: A large enough sample of entities should be selected to encourage accurate forecast preparation on the part of all Load Serving Entities; The sample of selected forecasts should represent a large portion of the total load served within the MISO footprint; The probability of an entity being selected should not be discriminatory, exclusive of its relative load size. Page 4
5 MISO will classify each Load Serving Entity, using their coincident peak load value from the most recent summer, 2 with the demarcation at 1000 MW (1 GW). From those LSEs in the large load group, ten (10) LSEs will be selected on the basis of a stratified random sampling without replacement procedure, where the strata is the size of their most recent summer coincident peak. For those LSEs in the small load group, another ten (10) LSEs will be selected on the basis of simple random sampling without replacement. The selection of 1000 MW as the demarcation was based on the factors described above. 2 For those LSEs without a coincident peak demand from the prior summer, their forecast coincident peak demand will be used in this process. Page 5
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