Integrating Energy Efficiency into Utility Load Forecasts

Efficiency Vermont’s efficiency programs are being integrated into Vermont’s utility planning for the first time, and are influencing utility decisions about the need for new generation and transmission investments as a result. Because load forecasts form the foundation for utility investment decisions, the forecast method is an important issue. The industry’s approach to forecasting load has changed little in response to the presence of long-term energy efficiency programs in states such as Vermont. The accepted method for incorporating energy efficiency resources into load forecasts is simply to subtract the efficiency from the load. Although this is a convenient assumption, the reality is more complex. This method over estimates program savings impacts as some of the efficiency impacts are already embedded in the load forecast. Adjusting the load forecast for efficiency savings in this manner can result in a long-term demand forecast that is too low. In states like Vermont, where higher levels of energy efficiency investment are expected to reduce utility loads and avoid future infrastructure investment, an integrated forecasting approach is important to continue making good investment decisions in both efficiency programs and system infrastructure. This paper discusses the roots of the forecasting challenge facing Vermont and the nation and proposes an integrated, collaborative approach to forecasting both utility loads and programmatic efficiency savings.