2013 PJM Load Forecast, Past Forecasts Too High, As Usual

PJM’s 2013 load forecast is out.  As usual, PJM’s past forecasts of load growth were too high.  For the last few years, PJM has failed to generate accurate load forecasts, on which they base most of their planning.

What is the result of this over estimating?  More expensive transmission investment to generate reserve margins that are too high, that’s one, plus lots of other planning errors, many of which are embedded in PJM’s annual Regional Transmission Expansion Plan.

I can understand that PJM would be conservative about their projections, but there is clearly something wrong then these projections are always biased toward the high side.  If we were in a poker game, we might begin to think someone was cheating.  PJM doesn’t have to over estimate future load to be careful.  If they want to maintain a conservative reserve margin, then they should increase that margin.  Load forecasts should be accurate.

Here is the latest from the executive summary of the report:

 Compared to the 2012 Load Report, the 2013 PJM RTO (excluding the impact of EKPC) summer peak forecast shows the following changes for three years of interest:
o The next delivery year – 2013 -2,538 MW (-1.6%)
o The next RPM auction year – 2016 -2,515 MW (-1.5%)
o The next RTEP study year – 2018 -2,222 MW (-1.3%)

 Assumptions for future Load Management (LM) have increased modestly from the 2012 Load Report (from approximately 14,200 MW to 14,600 MW). Energy Efficiency (EE) impacts have increased from approximately 800 MW to 1,100MW.  Assumptions for both LM and EE are based on Reliability Pricing Model (RPM) auction results.

The reference to load management refers to the increasing amount of load that demand management programs are shaving off of peak demand.  It is now clear that both efficiency investments and demand management are having a significant impact on reducing PJM’s load, just as many of us have been saying for years.

One thought on “2013 PJM Load Forecast, Past Forecasts Too High, As Usual

  1. Bill:
    What do you expect? It does not suit the purposes of the utility executives to correctly forecast their demand. By over forecasting demand, they seek excessive rates. With those windfalls, they pay exorbitant compensation packages, buy naming rights for stadia, and act the role of shameless self promoters of their perceived value. These people cannot calcu-late a market-clearing price for the fuels they purchase, or for the energy they market to the general public whom they regard as cash cows or sheep for the fleecing.

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