PUCO releases “Ohio Long Term Forecast of Energy Requirements” report

On July 22, 2015, the Public Utilities Commission of Ohio (PUCO) released “Ohio Long Term Forecast of Energy Requirements.” Under Ohio Revised Code (RC) Section 4935.01(A), the PUCO is required to estimate state and regional energy needs over a five-, ten- and twenty-year period. The findings are then submitted in a report to the Governor’s Office and General Assembly, identifying emerging trends related to energy supply and demand and the costs of energy to consumers, specifying anticipated energy needs.

Below are highlights from the report:

Peak load growth in Ohio

• In Ohio, the growth rate of peak load demand has mostly paralleled the growth rate of U.S. peak load demand. Since 1992, the peak load growth rate has been slowly declining. The report’s peak load forecast for Ohio still anticipates slightly positive load growth.

• In 2013, the non-coincident annual peak load for the six investor-owned utilities in Ohio was 27,563 megawatts (MW). It is expected to be 28,836 MW in 2023 and 29,011 MW in 2033.

Demand for electricity in Ohio

• In the latest business cycle, the industrial load growth experienced a sharp decline – beginning in 2008 but lasting only through 2009. – from 51.0 million megawatt hours (MWh) to 42.9 million MWh due to recessionary pressure. Since 2009, the industrial electricity demand in Ohio has experienced modest recovery from the recessionary pressure that occurred in 2008 with demand rising from 42.9 million MWh in 2009 to 46.8 million MWh in 2012. In 2013, the industrial demand in Ohio experienced another decline to 44.0 million MWh due to the loss of a few large industrial consumers. Industrial electricity demand is projected to continue its fluctuation according to projected business cycles (specified in the macroeconomic forecast scenario in section 2.2 of the report).  However, the prevailing trend is anticipated to be a slight increase in industrial electricity consumption through 2033.

  • Industrial sector demand for electricity is expected to be 45.9 million MWh in 2021, 43.8 million MWh in 2024 and 45.3 million MWh in 2033. The standard error of the forecast is 2.4 percent.

• The commercial sector demand for electricity has experienced slow but steady growth since 1995. Electricity consumption in the commercial sector will continue to increase throughout the forecast horizon as the number of commercial enterprises and employment in the commercial section is expected to continue its growth.

  • Commercial sector demand for electricity was 46.8 million MWh in 2013. It is expected to be 47.2 million MWh in 2021, 47.3 million MWh in 2024 and 48.3 million MWh in 2033. The standard error of the forecast is 2.7 percent.

• The trajectory of Ohio’s residential electricity demand has not changed since 1983. PUCO expects the same slow but steady growth to continue throughout the forecast horizon with minor adjustments to the magnitude of the long-term growth, reflecting possible business cycle impacts, as well as the anticipated fluctuations in crude oil price levels.

  • Residential sector demand for electricity was 52.2 million MWh in 2013. It is expected to be 52.9 million MWh in 2021, 53.2 million MWh in 2024 and 54.1 million MWh in 2033. The standard error of the forecast is 2.6 percent.

• Total end use demand for electricity in Ohio was 143.0 million MWh in 2013. It is expected to be 146.0 million MWh in 2021, 144.3 million MWh in 2024 and 147.7 million MWh in 2033. The standard error of the forecast is 1.7 percent.

Demand for energy into the electricity generation sector

• In 2013, the demand for coal was 72.3 percent of the total demand for energy resource inputs into the electricity generation sector. The coal equivalent of nuclear and hydro generation was 13.6 percent, and natural gas and petroleum products were 14.1 percent. In 2033, energy from coal is projected to be 51.2 percent of the total demand for energy inputs into the electricity generation sector, the coal equivalent of nuclear and hydro generation is projected to be 15.0 percent, and natural gas and petroleum products are projected to be 33.8 percent. This notable change in Ohio’s generation resource mix is driven primarily by anticipated generation retirements and new construction of natural gas combined cycle resources.
   
• Forecast adjustments were made in years 2015 through 2020, representing expected new combined cycle power plants coming into operation. PUCO made adjustments in the forecast to account for all additional natural gas combined-cycle power plants that are certificated by the Ohio Power Siting Board and are expected to be in operation by 2020. For the purposes of forecasting natural gas consumption, new combined-cycle plants are assumed to operate at a 70 percent capacity factor. Uncertainty around whether these plants actually progress from certification to completion, and in what year, also represents a significant source of forecast error.