1. FORECASTED ENERGY CONSUMPTON AND PEAK DEMAND FOR MARYLAND Summer Reliability Status Conference State of Maryland Public Service Commission May 10, 2004 Presented by: Diane H. Brown Power Plant Research Program Maryland Department of Natural Resources PPRP

2. INTRODUCTION Prior to restructuring, PPRP sponsored independent long-term (20- year) forecasts (energy and peak demand) for the service areas of each of the State’s 4 IOUs For each IOU: New forecast every 4 years Update after 2 years Purposes: To evaluate/monitor reliability To aid in the evaluation of need in the CPCN process PPRP

3. INTRODUCTION (Cont’d.) With restructuring, adjustments were made to PPRP’s forecasting program State-wide forecast and regional forecasts rather than service-area forecasts Reflects broader scope of reliability issues Need continues to be an issue in the CPCN process Permits evaluation of Maryland loads relative to generation capabilities PPRP

4. ENERGY PROJECTIONS- GENERAL METHODOLOGY Econometric Forecast (at the State level) Separate equations estimated for residential, commercial, industrial consumption using quarterly data Key independent variables include: Real electricity prices Real per capita income Weather Appliance saturation Manufacturing employment Non-manufacturing employment Forecasting assumptions for future values of independent variables Developed from a variety of sources for a Base Case forecast PPRP

5. ENERGY PROJECTIONS- GENERAL METHODOLOGY (Cont’d.) Three forecast scenarios developed base case high case low case Disaggregated to regions within the State Western Maryland Southern Maryland Eastern Shore Washington Suburban Baltimore region PPRP

6. PEAK DEMAND- GENERAL METHODOLOGY Peak demand data not available by jurisdiction, thus requiring estimating procedures Peak data from distribution utilities was apportioned to jurisdictions based on seasonal energy consumption Estimated individual peak demands for Maryland jurisdictions were summed and adjusted for diversity State-wide peak was allocated to regions based on share of seasonal energy sales PPRP

7. (Preliminary) Maryland Total Energy Consumption Forecasts (2002-2012) PPRP Base CaseLow CaseHigh Case 2002-20120.710.061.36 Growth Rates (Percent)

8. (Preliminary) Maryland and Regional Energy Consumption Base Case Thousands of MWh PPRP

9. (Preliminary) Maryland and Regional Peak Demand Projections 2002-2012 PPRP

10. FORECAST IMPLICATIONS PPRP State-wide electricity consumption in the commercial sector is expected to increase more rapidly than consumption in the residential and industrial sectors. Slowest growth in the industrial sector. The most rapid growth in electric energy consumption and peak demands is projected to occur in the Southern Maryland region. The slowest growth in energy consumption and peak demands is projected to occur in the Western Maryland region. Peak Demand is projected to increase by about 1,000 MW between 2002 and 2012 (base case). Anticipated electric price increases reduce growth in consumption by half.

11. Ratio Energy Generation:Energy Consumption 2002 – 75.1% 2003 – 82.4% 2006 – 83.2% 2008 – 85.3%

12. Projected Electric Generating Capacity and Summer Peak Demand - Maryland PPRP

14. Projected Capacity and Summer Peak Demand – MAAC Region PPRP

15. MAAC Projected Summer Reserve Margins (%) Maryland Projected Summer Capacity Deficits (%) PPRP (17%)