Integrated Resource Plan Technical Advisory Committee Meeting – October 3, 2016
Recap from Last Meeting • We met on March 30, 2016, after the interim RRA filing, but before the final update on the load forecast, and before the release of the Climate Leadership Plan • Discussed the review of the 2013 IRP: o A commitment in the 2013 IRP – Clean Energy Strategy o Intention – to consider if new acquisitions are needed before 2018 IRP o Not to address actions in the RRA F2017 – F2019 period • Pending any surprises – expected no new acquisitions needed in advance of what will be determined in the 2018 IRP • Discussed/gathered initial thoughts on issues looking ahead to 2018 • Today, we will be completing the review of the 2013 IRP 2
Meeting Agenda Time Item Presenter 9:00 – 9:15 Welcome Anne Wilson / Randy Reimann 9:15 – 10:15 Load Forecast John Rich • What’s changed? 10:15 – 10:30 Break 10:30 – 11:15 Load Resource Balance – completing the Kathy Lee review of the 2013 IRP • What’s changed? • Status of IRP actions • Climate Leadership Plan 11:15 – 11:45 2018 IRP Kathy Lee • Key considerations and activities 11:45 – 12:00 Close and next steps Anne Wilson 3
Load Forecast John Rich
LOAD FORECAST Summary • May 2016 Load Forecast (published in F17 to F19 RRA) – reflects information up to April 2016 • Forecast continues to see growth across all three sectors, however, growth rate is lower relative to the 2013 Integrated Resource Plan (IRP) • May 2016 Load Forecast before demand-side management (DSM) with losses, is lower by about 4,100 GWh or about 5% relative to the IRP forecast (by F2033), mostly due to a decline in the transmission sector • Core methodology remains unchanged – May 2016 LNG forecast is based on public information on loads and timing for service • After consideration of DSM savings, the forecast of load growth is similar to other North American utilities 5
May 2016 (RRA) vs. 2013 IRP Load Forecast Before DSM Total Integrated Requirements w ith LNG 100,000 95,000 90,000 85,000 80,000 GWh 75,000 70,000 65,000 60,000 55,000 50,000 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 IRP Mid May 2016 Mid IRP Mid Uncertainty Range May 2016 Mid Uncertainty Range • The solid lines shown in the graph are the mid forecasts • The drop in the two forecasts is mainly due to a change in commodity prices and its impact on industrial loads *The IRP Mid Forecast, shown in the graph, reflects estimates of the DSM savings prior to F2016, and the associated persistence over the forecast period. This applies to all graphs . 6
Forecast Difference Breakdow n Total Firm Sales May 2016 vs. 2013 IRP Before DSM 80,000 75,000 70,000 65,000 GWh 60,000 55,000 50,000 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 IRP Mid May 2016 Mid Distribution & Other Utilities Other Transmission Forestry Mining Oil & Gas LNG • Transmission sector accounts for most the change • In the long term, LNG load forecast is about the same 7
Residential Forecast May 2016 vs IRP Before DSM 26,000 25,000 24,000 23,000 22,000 GWh 21,000 20,000 Forecast = Use per Account X Accounts 19,000 18,000 17,000 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 May 2016 Mid Mid IRP • Both drivers of the forecast (use per account) and accounts are lower relative to the previous forecast 8
Use Per Account and Accounts Forecasts May 2016 vs IRP 11,600 2,300,000 11,400 kWh per Account Accounts 2,200,000 11,200 11,000 2,100,000 10,800 2,000,000 10,600 10,400 1,900,000 10,200 1,800,000 10,000 9,800 1,700,000 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 F2017 F2019 F2021 F2023 F2025 F2027 F2029 F2031 F2033 May 2016 Mid IRP Mid May 2016 Mid IRP Mid Changes between forecast mainly due to: Changes between forecast mainly due to: • Current forecast starts from a lower point as growth • Revised economic projection in use per account has slowed and population projections • Revised assumption on average efficiency of appliances – enhanced efficiency projection • Replacement of home computers with tablets 9
General Sales Forecast May 2016 vs IRP Before DSM 26,000 25,000 24,000 23,000 22,000 GWh 21,000 Load forecast is 80% commercial distribution sales developed by SAE 20,000 model, and 20% industrial distribution 19,000 sales developed by regression and production estimates 18,000 17,000 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 May 2016 Mid Mid IRP Changes between forecast due to: • Forecast starts from a lower point; slower growth than anticipated • Revised economic forecast: slower projected growth in drivers • Projected increase in average efficiency in commercial end use of electricity 10
Real GDP Forecast Grow th Projections 6.0% 5.0% Annual Rate Growth 4.0% 3.0% 2.0% 1.0% 0.0% 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 Use in May 2016 Fcst Used in Dec 2012 Fcst • IRP forecast anticipated early development of LNG industry and investment relative to the May 2016 forecast • Increase in real GDP growth is due an increase in capital investment in northern B.C. – this is not a driver of sales in the Lower Mainland 11
Transmission Sales* May 2016 vs IRP Before DSM 20,000 19,000 18,000 17,000 GWh 16,000 15,000 14,000 13,000 12,000 F2004 F2005 F2006 F2007 F2008 F2009 F2010 F2011 F2012 F2013 F2014 F2015 F2016 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 May 2016 Mid IRP Mid Over the 20 year forecast period, the average differences is: • Oil and Gas: Lower by 1,000 or 28% due to delays in gas projects, LNG developments, reduced expectations on oil pipeline projects • Mining: Lower by about 950 or 26% due to lower commodities prices and delays in projects requesting electricity service • Forestry: Lower by 1,500 or 41% due to loss in base load, lower commodity expectations, and reduced out look for major mills • Other: Lower by 200 or 4% due to push back in expansion at major ports * LNG load not included in comparison
Commodity prices reduced forecasts 13
Oil and Gas* May 2016 vs IRP Before DSM Gas Sector 5,500 5,000 • Domestic gas markets currently over 4,500 supplied, and LNG plants deferred in service 4,000 3,500 GWh • Both of these has led to delays and 3,000 reductions in upstream gas projects 2,500 2,000 Pipeline Sector 1,500 • Removed proposed Enbridge pipeline 1,000 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 project from the forecast; project is not in interconnection queue May 2016 Mid IRP Mid * LNG not included in comparison
Natural Gas price North American Natural Gas (2008-2016) The supply situation: a US gas basin perspective • US gas production slowing due to oversupply 15
Mining May 2016 vs IRP Before DSM 6,000 Forecast difference: • Lower commodity price outlooks for 5,500 metals and coal 5,000 • Deferrals of new project in-service dates • Deferred restarts of currently idled GWh 4,500 production (Endako) 4,000 • Recent announced shutdowns (including Huckleberry and Coal Mountain) 3,500 3,000 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 May 2016 Mid IRP Mid
Commodity Price History 17
Pulp & Paper, Wood, and Chemicals 8,000 Key points: 7,500 • Loss of base load; closure of TMP facilities at Howe Sound 7,000 GWh 6,500 • Continued weakness, especially in pulp sector due to continued decline in demand 6,000 for newsprint and competition from other parts of the world ( Eucalyptus Kraft Pulp 5,500 Capacity in Latin America) 5,000 F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 • Reduced outlook on other TMP mills May 2016 Mid IRP Mid
Liquefied Natural Gas (LNG) May 2016 vs IRP 3,500 Key points: 3,000 • LNG industry is high profiled 2,500 2,000 GWh • LNG industry is in a dynamic development stage 1,500 • May 2016 forecast reflects public information on 1,000 load and in service dates, from three major LNG 500 proponents which have requested electricity 0 service from BC Hydro F2017 F2018 F2019 F2020 F2021 F2022 F2023 F2024 F2025 F2026 F2027 F2028 F2029 F2030 F2031 F2032 F2033 May 2016 LNG IRP LNG 19
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