1. Reliable Power Reliable Markets Reliable People Future Demand and Energy Outlook (2008 – 2028) Assumptions, Methodology and Processes April 2, 2009 9 am – 11am

2. 2 Agenda Introduction Doyle Sullivan Director, Regulatory Long-Term Load Forecast Future Demand and Energy Outlook (2008 – 2028) Area Studies Recent Economic Events – Impact on long term load forecast? 2009 Forecast Schedule LaRhonda Papworth Supervisor, Long-Term Load Forecasting Confidence Bands Steven Everett Economic Analyst Forecasting Group Rob Baker Manager, Forecasting Questions Doyle Sullivan Rob Baker LaRhonda Papworth Steven Everett Closing Remarks Rob Baker

3. 3 What is the AESO? Established in 2003 through the EUA to integrate Power Pool of Alberta and Transmission Administrator Performs “Independent System Operator” function Non-profit organization independent of all other electricity market participants Governed by independent board appointed by the Minister of Energy Regulated by Alberta Utilities Commission  Transmission Tariff  Transmission Development  AESO Rules Operation of the AESO funded through Pool Trading Charge and Transmission Tariff

4. 4 Our Core Business  Markets: develop and operate Alberta’s real-time wholesale energy market to facilitate fair, efficient and open competition  Transmission System Development: plan and develop the transmission system to ensure continued reliability and facilitate the competitive market and investment in new supply  Transmission System Access: provide system access for both generation and load customers  System Operations: direct the reliable operation of Alberta’s power grid

5. 5 AESO Forecasting Group Introduction Rob Baker, Manager Forecasting LaRhonda Papworth, Supervisor Long Term Forecasting –Steven Everett, Economic Analyst –Jenni Fontaine, Forecast Analyst Ashikur Bhuyia, Supervisor Mid Term Forecasting –Mike Wu, Senior Forecasting Engineer All can be contacted at forecast@aeso.ca

6. Reliable Power Reliable Markets Reliable People Long-Term Load Forecast – FC2008 LaRhonda Papworth Supervisor, Long-Term Load Forecasting

7. 7 Long-Term Load Forecast Topics  How long-term load forecast is used  Future Demand and Energy Outlook (2008 – 2028) Why? How?  Recent Economic Events – impact on long-term load forecast  2009 Forecast Schedule

8. 8 How: Example of How Long Term Load Forecast Is Used  Transmission Planning  Long-Term Adequacy assessments  Tariff Billing Determinants  Loss Forecasting  Input into WECC studies  Area Studies –Area or region of interest is identified –Work with DFOs, TFOs, Transmission Planning, industry and mapping consultants, customers to evaluate current long-term load forecast and adjust for recent and detailed information –Identify possible long-term load expectations

9. 9 Why does the AESO produce a Long Term Load Forecast? Electric Utilities Act Transmission Regulation Part 2 Transmission System Planning Transmission planning ‑ forecasting need 8 In forecasting the needs of Alberta under section 33 of the Act, the ISO a)Must anticipate future demand for electricity, generation capacity, and appropriate reserves required to meet the forecast load so that transmission facilities can be planned to be available in a timely manner to accommodate the forecast load and new generation facilities, b)Must make assumptions about future load growth, the timing and location of future generation additions and other related assumptions to support transmission planning, k)to collect, store and disseminate information relating to the current and future electricity needs of Alberta and the capacity of the interconnected electric system to meet those needs, and make information available to the public, Electric Utilities Act Duties of Independent System Operator Emphasis added

10. 10 How Long-Term Load Forecast is Created Source:ERCB Table 11: Electric Energy Distribution Sales and Number of Customers, 2008 AESO metered volumes AESO estimation of load served by on-site generation (behind-the-fence load)

11. 11 Industrial (without Oilsands) Oilsands Commercial Residential Farm Customer Sector Energy Forecast Methodology Residential* Customer Sector Industrial* Customer Sector Commercial* Customer Sector Farm* Customer Sector A Picture of Alberta Internal Load (without Losses) by Following Customer Sectors:  Load Served by On-Site Generation (Behind-the-Fence)**  Transmission Connected Customer Load** *Source: ERCB **Source: AESO

12. 12 Economic Inputs – Alberta GDP  Long-term load forecast based on economic inputs from March 2008 Source: Conference Board of Canada

13. 13 Industrial (w/o Oilsands) Sector Energy Forecast Model Inputs:Alberta Mining GDP Lagged Sector Sales Source: Conference Board of Canada, AESO

14. 14 Oilsands Sector Energy Model Oilsands Energy = Annual Mining Production * Mining kWh/barrel + Annual In-Situ Production * In-Situ kWh/barrel Source:Canadian Association of Petroleum Producers – Crude Oil Forecast, Markets & Pipeline Expansions – June 2008 AESO adjustments included

15. 15 Oilsands Sector Energy Forecast Source: AESO

16. 16 Commercial Sector Energy Forecast Model Inputs:Alberta GDP Lagged Sector Sales (one-year) Constant Source: Conference Board of Canada, AESO

17. 17 Residential & Farm Sectors Energy Forecast Models Model for Residential: Model for Farm: Model Inputs:Alberta Agricultural GDP Heating Degree Days Constant Model Inputs:Average Use Per Customer multiplied by # Customers (function of Population)

18. 18 FC2008 Sector Totals

19. 19 Past Forecast Results - Energy YearActuals (GWh) Year over year change FC2005FC2006FC2007FC2008 200669,370--1.6%+1.2%-- 200769,660+290-3.4%-1.5%-1.2%- 200869,946+286-7.7%-4.9%-4.8%-1.3% Source: AESO

20. 20 Past Forecast Results – Winter Peak YearActuals (MW) Year over year change FC2005FC2006FC2007FC2008 2005/069,580-+0.5%--- 2006/079,661+81-4.0%-3.8%-- 2007/089,710+49-5.6%-5.4%-3.2%- 2008/099,806+96-8.1%-8.0%-6.2%-0.3% Source: AESO

21. 21 How: Energy to Individual Metering Points Oilsands Industrial (w/o Oilsands) Commercial Residential Farm Project Information Load Forecast Assumptions DFO Information Project Information Load Forecast Assumptions DFO Information Historical Growth Rates Project Information ~500 Metering Points Annual Energy Forecast DFO Information Historical Growth Rates

22. 22 Recent Economic Events... What do the economic events of the last 6 months mean to the results of the 2008 Future Demand and Energy Outlook? The economic models used for the customer sector forecasts are based on 20+ years of historical data – containing an number of past economic downturns Numerous opinions exist regarding severity and time length of this economic downturn Important to remember that the scope of this report is long- term …5 …10... 15…20 years. BUT it is prudent for the AESO to perform analysis to quantify what the impact could be, short-term and/or long-term

23. 23 Forecasted AIL Winter Peak Source: AESO

24. 24 2009 Forecast Schedule DFO substation level information to the AESO – April 2009 Customer Sector Models completed – May 2009 Reconciliation of Long-term forecast with Mid-Term Forecast – May 2009 Conference Board of Canada Provincial Outlook 2009 – delayed 2 months to May 2009 Publication of Long-term load forecast - September 2009 Stakeholder Presentation of 2009 Report – Sep/Oct 2009

25. Reliable Power Reliable Markets Reliable People Confidence Bands Steven Everett Economic Analyst

26. 26 Confidence Intervals Alberta Internal Load (AIL) Energy Confidence Intervals Source: AESO

27. 27 Confidence Intervals Alberta Internal Load (AIL) Winter Peak Demand Confidence Intervals Source: AESO

28. 28 Confidence Intervals FC2008 (MW) P97.5 (MW) P2.5 (MW) Actual (MW) 20089,83310,2199,4609,806 +386-373-27 201814,65915,66813,505 +1,009-1,154 202819,27121,06317,396 +1,791-1,875 Alberta Internal Load (AIL) Peak Demand Confidence Intervals Source: AESO

29. Reliable Power Reliable Markets Reliable People Closing Remarks

30. 30 AESO Forecasting AESO has consolidated some forecasting into one group: –Mid term load forecasting (0 – 26 months) –Long term load forecasting (0 – 20 years) –Ancillary Services Forecasting –Losses Forecasting More integration in 2009: –Mid and long term forecasts – coordination/optimization continues –Forecasting products - gathered to one area of our web site –Updates will be posted Formal enquiries through forecast@aeso.caforecast@aeso.ca –Allows for a complete response and high standard of service

31. 31 Questions?

32. Reliable Power Reliable Markets Reliable People Conclusion

33. 33 Conclusion Thank you for attending – please forward to us any ideas not addressed or further questions: –forecast@aeso.caforecast@aeso.ca Please remember to complete exit survey. Presentation will be posted in about a week on AESO website Limited number of hard copies of the Future Demand and Energy Outlook (2008 – 2028) are available