Karen Chiang Diane Cunningham Southern Company Load Research 1 When Normal Weather Is Not Normal AEIC Load Research Workshop April 2006

Southern Company 2 One of the largest producers of electricity in the United States Service area 120,000 square miles in 4 states Nearly 4.1 million customers Population of 12 million More than 27,000 miles of transmission lines 79 generating stations Nearly 39,000 megawatts of generating capacity Sources of generation: 69% coal; 16% nuclear; 3% hydro; and 12% oil and gas.

Southern Company 3 Southern Company Subsidiaries Alabama Power Georgia Power Gulf Power Mississippi Power Savannah Electric Southern Nuclear Southern Power Southern Company Services Southern LINK

Southern Company 4 Southern Company Service Area Georgia Power Alabama Power Gulf Power Georgia Power Alabama Power Gulf Power Mississippi Power Savannah Electric

Southern Company 5 Applications for Normal Weather Energy & Demand Forecasts. Energy & Demand Growth Rates. Flat Rate Pricing. Demand Side Management Program Evaluation/Assessment.

Southern Company 6 Defining Normal Weather NOAA 30-year Average Self-Defined Historical Period Average NOAA Typical Meteorological Year (TMY) Rank & Average Method Pros & Cons: Averaging methods good for energy forecasting, but lack temperature extremes necessary for demand forecasting. TMY provides temperature variations day to day, but still may not contain the extremes.

Southern Company 7 Rank and Average Method

Southern Company 8 Analysis of Ranking Methods Choices of Ranking Methods Monthly Seasonally Annually Based on the method selected, you can effect which (when) the peak will occur.

Southern Company 9 Comparison of Ranking Methods

Southern Company 10 Selecting a Reference Year

Southern Company 11 Selecting a Reference Year Randomly select any year Select a year based on minimum variance

Southern Company 12 Calculation of Variance Before and After the Ranking

Southern Company 13 Reference Year based on Minimum Variance

Southern Company 14 Selecting a Reference Year Randomly select any year Select a year based on minimum variance Use the period average as the reference year

Southern Company 15 Reference Year based on Period Average

Southern Company 16 Reference Year based on Period Average

Southern Company 17 Conclusion Rank and average method produces a normal profile appropriate for capturing extreme weather conditions. Seasonal or Annual ranking is preferable than monthly ranking to determine typical extreme temperatures. Using the period average as reference year is preferable over other selection methods. it captures the peak temperature on the same day as period average. It reduces the volatility from day to day across the year.