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SERTP – 2017 1st Quarter Meeting
First RPSG Meeting & Interactive Training Session
March 22nd, 2017
Hyatt Regency Hotel
Louisville, KY
2017 SERTP
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Process Information
• The SERTP process is a transmission planning process.
• Please contact the respective transmission provider for questions related to real-time operations or Open Access Transmission Tariff (OATT) transmission service.
2017 SERTP
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Purposes & Goals of Meeting
• 2017 SERTP Process Overview
• Form the “RPSG” – Regional Planning Stakeholders Group – Committee Structure & Requirements
• Economic Planning Studies – Review Previous Study Selections – Review Requested Sensitivities for 2017 – RPSG to Select the Five Economic Planning Studies
• Interactive Training Session – Load Forecasting
• Public Policy Requirement Stakeholder Requests
• Next Meeting Activities
2017 SERTP
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2017 SERTP Process Overview
SERTP
2017 SERTP
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Upcoming 2017 SERTP Process
• SERTP 1st Quarter – 1st RPSG Meeting & Interactive Training Session
March 2017 – Form RPSG – Select Economic Planning Studies – Interactive Training Session
• SERTP 2nd Quarter – Preliminary Expansion Plan Meeting
June 2017 – Review Modeling Assumptions – Preliminary 10 Year Expansion Plan – Stakeholder Input & Feedback Regarding the Plan
2017 SERTP
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Upcoming 2017 SERTP Process
• SERTP 3rd Quarter – 2nd RPSG Meeting
September 2017 – Preliminary Results of the Economic Studies – Stakeholder Input & Feedback Regarding the Study Results – Discuss Previous Stakeholder Input on the Expansion Plan
• SERTP 4th Quarter – Annual Transmission Planning Summit & Input Assumptions
December 2017 – Final Results of the Economic Studies – Regional Transmission Plan – Regional Analyses – Stakeholder Input on the 2018 Transmission Model Input Assumptions
2017 SERTP
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Regional Planning Stakeholder Group
SERTP
2017 SERTP
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The SERTP Stakeholder Group
• RPSG – Regional Planning Stakeholder Group
• Serves Two Primary Purposes
1) The RPSG is charged with determining and proposing up to five (5) Economic Planning Studies on an annual basis
2) The RPSG serves as stakeholder representatives for the eight (8) industry sectors in interactions with the SERTP Sponsors
2017 SERTP
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RPSG Committee Structure
• RPSG Sector Representation
1) Transmission Owners / Operators
2) Transmission Service Customers
3) Cooperative Utilities
4) Municipal Utilities
5) Power Marketers
6) Generation Owner / Developers
7) Independent System Operators (ISOs) / Regional Transmission Operators (RTOs)
8) Demand Side Management / Demand Side Response
2017 SERTP
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RPSG Committee Structure
• Sector Representation Requirements
– Maximum of two (2) representatives per sector
– Maximum of 16 total sector members
– A single company, and all of its affiliates, subsidiaries, and parent company, is limited to participating in a single sector
2017 SERTP
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RPSG Committee Structure
• Annual Reformation
– Reformed annually at 1st Quarter Meeting
– Sector members elected for a term of approximately one year
– Term ends at start of following year’s 1st Quarter SERTP Meeting
– Sector Members shall be elected by the Stakeholders present at the 1st Quarter Meeting
– Sector Members may serve consecutive, one-year terms if elected
– No limit on the number of terms that a Sector Member may serve
2017 SERTP
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RPSG Committee Structure
• Simple Majority Voting
– RPSG decision-making that will be recognized by the Transmission Provider for purposes of Attachment K shall be those authorized by a simple majority vote by then-current Sector Members
– Voting by written proxy is allowed
2017 SERTP
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RPSG Formation
• 2016 Sector Representatives
• 2017 Sector Representatives
2017 SERTP
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Economic Planning Studies
SERTP
2017 Economic Planning Studies
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SERTP Regional Models
• SERTP Sponsors developed 12 coordinated regional models*
• Models include latest transmission planning model information within the SERTP region
* Available on the secure area of the SERTP website upon satisfying access requirements
2017 Economic Planning Studies
No. Season Year
1
SUMMER
2018
2 2020
3 2022
4 2023
5 2025
6 2027
7
SHOULDER
2020
8 2022
9 2025
10 2027
11 WINTER
2022
12 2027
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Economic Planning Study Process
• SERTP Sponsors identify the transmission requirements needed to move large amounts of power above and beyond existing long-term, firm transmission service commitments
– Analysis is consistent with NERC standards and company-specific planning criteria
• Models used to perform the analysis incorporate the load forecasts and resource decisions as provided by LSEs
– Power flow models are made available to stakeholders to perform additional screens or analysis
• These studies represent analyses of hypothetical scenarios requested by the stakeholders and do not represent an actual transmission need or commitment to build
• Scoping Meeting typically held in April/May
2017 Economic Planning Studies
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Economic Planning Study Requests
• 2016 Economic Planning Studies
• 2017 Economic Planning Study Requests
• Vote on 2017 Economic Planning Studies
2017 Economic Planning Studies
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Interactive Training Session Load Forecasting Stuart Wilson Director - Energy Planning, Analysis & Forecasting LG&E and KU
SERTP
2017 Interactive Training Session
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SERTP Region
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SERTP Cumulative Summer Peak Load Forecast
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US Electricity Demand has Remained Flat From 2010-2015
21
2,100
2,600
3,100
3,600
4,100
4,600
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
Gro
ss D
om
est
ic P
rod
uct
($2009 b
illio
ns)
TW
h
Year
U.S. Gross Domestic Product and Electricity Consumption
US Energy Consumption (TWh) Gross Domestic Product ($2009 dollars billions)
Source: Energy Information Administration and Bureau of Economic Analysis
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End-Use Efficiencies Drive Reductions in PIRA Forecast
• LED Lighting – Costs have fallen 90% since 2008; efficiency expected to double by 2025. – Department of Energy forecasts 48% market share by 2020; 84% in 2030, up from 2% in
2013. This would reduce lighting consumption by 15% in 2020 and 40% in 2030.
• Space Cooling – New standard for commercial rooftop air conditioners in 2018 expected to cut
consumption by 30%.
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Structural Headwinds May Lead to Declining US Electricity Growth
• Morgan Stanley forecasts US electricity consumption to decrease by
~0.3% annually over the next decade
– Forecast uncertainty skewed to the downside given the potential for efficiency
breakthroughs and / or incremental government regulations
– Gross domestic product, population, computing, and electric vehicles provide
the most upside
• Energy Information Administration (EIA) forecasts 0.3% compound
annual growth rate for residential sales (2015-2040)
– Reduced from 0.5% in previous Annual Energy Outlook
• Petroleum Industry Research Associates (PIRA) forecasts 0.54%
compound annual growth rate in electricity sales through 2035
– Reduced from 0.83% in previous forecast
23
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LG&E and KU Energy Expects Slower Load Growth
6,000
6,200
6,400
6,600
6,800
7,000
7,200
7,400
2012 2013 2014 2015 2016 2017 2018 2019
MW
Year
LG&E and KU Peak Forecasts
2013 Forecast 2014 Forecast 2015 Forecast
2016 Forecast 2017 Forecast
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Load Forecasting Process
Macroeconomic Drivers
Weather Other Inputs (e.g., end use data)
Residential
Data Inputs
Forecast Models
Historical Energy and Customer Data
Commercial Industrial Lighting KU Municipals
Billed Energy Forecasts (30-years)
Data Processing
Convert Billed Energy to Calendar Energy
(30-years)
10-Year Calendar Energy Forecasts by Rate and Revenue Class
(Financial Planning)
30-Year Hourly Demand Forecast By Utility
(Generation Planning)
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Summary of Forecast Data Inputs Data
Source
Format
State Macroeconomic and Demographic Drivers (e.g., Employment, Wages, Households, Population)
IHS Global Insight, Kentucky Data Center
Annual or Quarterly by County – History and Forecast
National Macroeconomic Drivers IHS Global Insight Annual or Quarterly – History and Forecast
Personal Income IHS Global Insight Annual by County Weather NOAA Daily HDD/CDD Data by
Weather Station – History
Bill Cycle Schedule Internal Records Monthly Collection Dates – History and Forecast
Appliance Saturations/Efficiencies EIA, 2010 LG&E/KU Residential Customer Survey
Annual – History and Forecast
Structural Variables (e.g., dwelling size, age, and type)
EIA, 2010 LG&E/KU Residential Customer Survey
Annual – History and Forecast
Elasticities of Demand EIA / Historical Trend Annual – History Billed Sales History Billing System LG&E, KU and ODP – Monthly
by Rate Group
Number of Customers History Billing System LG&E, KU and ODP – Monthly by Rate Group
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Models and Methods
• Residential & Small Commercial forecasts utilize a statistically adjusted end-use framework
• Econometric models for all other forecasts
• Industrial forecasts developed as a function of production indices
• Direct input from large customers and major account managers
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Statistically Adjusted End-Use (SAE) Modeling
• SAE models explicitly incorporate trends in equipment efficiencies and saturations, dwelling square footage, and structural characteristics into the monthly sales forecast.
• By explicitly incorporating these trends, SAE model provides framework for estimating changes in usage levels and changes in weather-sensitivity over time.
• SAE model also incorporates price and economic elasticity inputs.
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Residential Use-Per-Customer is Declining
8,000
9,000
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
kW
h /
Year
Residential Use-per-Customer
KU Actual KU Forecast LG&E Actual LG&E Forecast
KU
LG&E
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Energy Efficiency Offsets Residential Customer Growth
-
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
10,000
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
GW
h
Annual Residential Energy Sales
KU/ODP History KU/ODP Forecast LG&E History LG&E Forecast
KU/ODP
LG&E
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Downside Uncertainty likely Outweighs Upside Uncertainty
• Downside Uncertainty – Faster LED adoption – General US recession
• Upside Uncertainty – Rapid Electric Vehicle (EV) expansion – Major economic development
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Summary
• Relationship between US electricity demand and GDP has changed
• Industrial growth appears limited based on history
• Declining residential use-per-customer offsets impact of residential customer growth
• Forecasted growth in total load is limited
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Public Policy Requirements Stakeholder Proposal
SERTP
2017 SERTP
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SERTP Evaluation
Transmission Needs Driven by Public Policy Requirements (PPRs)
• Two (2) stakeholder proposals submitted for the 2017 planning cycle for the following proposed PPRs:
1) North Carolina Renewable Energy and Energy Efficiency Portfolio Standard
2) Hazardous and Solid Waste Management Systems, National Primary Ambient Air Quality Standards for Sulfur Dioxide, National Ambient Air Quality Standards for Ozone, Clean Water Act Effluent Limitations Guidelines and Standards for the Steam Electric Power Generating Point Source Category, Cross-State Air Pollution Rule
• No transmission needs for the proposed Public Policy Requirements have been identified for further evaluation of potential transmission solutions in the 2017 planning cycle.
• Response posted on the SERTP website.
2017 SERTP
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Next Meeting Activities
• 2017 SERTP 2nd Quarter Meeting
– Location: TBD
– Date: June 2017
– Purpose:
o Review Modeling Assumptions
o Discuss Preliminary 10 Year Expansion Plan
o Stakeholder Input & Feedback Regarding the Plan
2017 SERTP