Jackson Energy2006 Load Forecast

Prepared by:East Kentucky Power Cooperative, Inc.

Forecasting and Market Analysis Department

July 2006

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Table of Contents

• Introduction and Executive Summary 5• Narrative 16• Key Assumptions 22• Methodology and Results 30

– Residential Forecast 35– Small Commercial 40– Large Commercial 42– Peak Day Weather Scenarios 45

• RUS Form 341 48

Page Number

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IntroductionExecutive Summary

Jackson Energy Cooperative, located in McKee, Kentucky, is an electric distribution cooperative that serves members in 15 counties. This load forecast report contains Jackson Energy Cooperative’s long-range forecast of energy and peak demand.

Jackson Energy Cooperative and its power supplier, East Kentucky Power Cooperative (EKPC), worked jointly to prepare the load forecast. Factors considered in preparing the forecast include the national and local economy, population and housing trends, service area industrial development, electric price, household income, weather, and appliance efficiency changes.

EKPC prepared a preliminary load forecast, which was reviewed by Jackson Energy Cooperative for reasonability. Final projections reflect a rigorous analysis of historical data combined with the experience and judgment of the manager and staff of Jackson Energy Cooperative. Key assumptions are reported beginning on page 22.

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Executive Summary (continued)

The load forecast is prepared biannually as part of the overall planning cycle at EKPC and Jackson Energy Cooperative. Cooperation helps to ensure that the forecast meets both parties’ needs. Jackson Energy Cooperative uses the forecast in developing two-year work plans, long-range work plans, and financial forecasts. EKPC uses the forecast in areas of marketing analysis, transmission planning, generation planning, demand-side planning, and financial forecasting.

The complete load forecast for Jackson Energy Cooperative is reported in Table 1-1. Residential and commercial sales, total purchases, winter and summer peak demands, and load factor are presented for the years 1990 through 2025.

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Year

ResidentialSales

(MWh)

SeasonalSales

(MWh)

SmallComm.Sales

(MWh)Public Buildings

(MWh)

LargeComm.Sales

(MWh)

OtherSales

(MWh)

TotalSales

(MWh)

OfficeUse

(MWh)%

Loss

PurchasedPower(MWh)

1990 388,916 0 74,902 0 24,292 149 488,259 633 7.2 526,5451991 418,072 0 83,202 0 27,534 149 528,957 682 7.6 573,1691992 431,769 0 92,911 0 30,602 123 555,405 659 7.4 600,6121993 475,433 0 100,344 0 38,376 124 614,277 711 7.2 662,9741994 478,875 0 98,341 0 45,729 126 623,070 737 6.7 668,4991995 541,520 0 110,672 0 51,184 125 703,501 800 2.7 723,6801996 548,608 0 110,410 0 62,597 153 721,767 872 6.6 773,6451997 556,134 0 111,998 0 69,721 170 738,023 701 6.4 789,6341998 571,015 0 109,195 0 85,005 180 765,395 700 4.9 805,6891999 584,289 0 122,594 0 82,520 198 789,601 759 6.9 848,6252000 637,470 0 127,949 0 86,014 0 851,433 824 5.6 902,4152001 630,098 0 126,957 0 95,270 0 852,325 940 5.8 906,2292002 663,872 0 133,386 0 98,107 0 895,366 1,340 5.0 943,9202003 666,452 0 135,464 0 77,740 0 879,657 1,319 6.3 939,7432004 673,845 0 139,063 0 80,978 0 893,886 1,203 5.8 949,9062005 712,080 0 149,912 0 75,640 0 937,633 1,159 5.4 992,7382006 706,024 0 150,704 0 77,933 0 934,662 1,250 5.3 988,2912007 713,389 0 154,534 0 88,664 0 956,588 1,250 5.3 1,011,4452008 726,778 0 158,241 0 99,283 0 984,302 1,250 5.3 1,040,7102009 742,598 0 161,951 0 101,623 0 1,006,173 1,250 5.3 1,063,8042010 757,078 0 165,522 0 103,977 0 1,026,578 1,250 5.3 1,085,3522011 768,532 0 168,964 0 106,356 0 1,043,852 1,250 5.3 1,103,5922012 783,942 0 172,475 0 117,026 0 1,073,443 1,250 5.3 1,134,8392013 799,681 0 176,013 0 119,460 0 1,095,155 1,250 5.3 1,157,7662014 813,382 0 179,462 0 121,923 0 1,114,767 1,250 5.3 1,178,4762015 826,614 0 182,878 0 124,416 0 1,133,908 1,250 5.3 1,198,6882016 840,948 0 186,319 0 135,204 0 1,162,470 1,250 5.3 1,228,8492017 854,774 0 189,804 0 137,757 0 1,182,335 1,250 5.3 1,249,8252018 870,125 0 193,308 0 140,342 0 1,203,775 1,250 5.3 1,272,4662019 886,217 0 196,808 0 142,959 0 1,225,984 1,250 5.3 1,295,9182020 905,033 0 200,323 0 145,607 0 1,250,963 1,250 5.3 1,322,2942021 923,947 0 203,879 0 156,551 0 1,284,378 1,250 5.3 1,357,5792022 942,377 0 207,391 0 159,265 0 1,309,034 1,250 5.3 1,383,6152023 960,597 0 210,861 0 162,011 0 1,333,470 1,250 5.3 1,409,4202024 980,649 0 214,320 0 164,792 0 1,359,761 1,250 5.3 1,437,1812025 998,294 0 217,746 0 175,871 0 1,391,911 1,250 5.3 1,471,131

2006 Load ForecastJackson Energy

MWh Summary

Table 1-1

9

Winter Summer

Season

NoncoincidentPeak Demand

(MW) Year

NoncoincidentPeak Demand

(MW) Year

PurchasedPower(MWh)

Load Factor(%)

1989 - 90 154.7 1990 102.8 1990 526,545 38.9%1990 - 91 138.0 1991 109.5 1991 573,169 47.4%1991 - 92 143.2 1992 109.4 1992 600,612 47.9%1992 - 93 160.4 1993 126.7 1993 662,974 47.2%1993 - 94 205.2 1994 120.9 1994 668,499 37.2%1994 - 95 178.8 1995 140.2 1995 723,680 46.2%1995 - 96 220.0 1996 137.2 1996 773,645 40.1%1996 - 97 207.0 1997 150.8 1997 789,634 43.5%1997 - 98 188.6 1998 156.0 1998 805,689 48.8%1998 - 99 223.7 1999 171.4 1999 848,625 43.3%1999 - 00 225.7 2000 172.0 2000 902,415 45.6%2000 - 01 244.1 2001 180.5 2001 906,229 42.4%2001 - 02 229.2 2002 179.6 2002 943,920 47.0%2002 - 03 260.5 2003 174.7 2003 939,743 41.2%2003 - 04 257.5 2004 169.6 2004 949,906 42.1%2004 - 05 267.0 2005 186.6 2005 992,738 42.5%2005 - 06 249.8 2006 185.0 2006 988,291 45.2%2006 - 07 274.9 2007 188.9 2007 1,011,445 42.0%2007 - 08 281.3 2008 193.3 2008 1,040,710 42.2%2008 - 09 288.5 2009 197.4 2009 1,063,804 42.1%2009 - 10 294.5 2010 200.7 2010 1,085,352 42.1%2010 - 11 299.5 2011 203.6 2011 1,103,592 42.1%2011 - 12 306.4 2012 208.2 2012 1,134,839 42.3%2012 - 13 313.7 2013 212.3 2013 1,157,766 42.1%2013 - 14 319.3 2014 215.6 2014 1,178,476 42.1%2014 - 15 324.8 2015 218.8 2015 1,198,688 42.1%2015- 16 331.4 2016 223.3 2016 1,228,849 42.3%2016 - 17 338.1 2017 227.4 2017 1,249,825 42.2%2017 - 18 344.3 2018 231.0 2018 1,272,466 42.2%2018 - 19 350.7 2019 234.9 2019 1,295,918 42.2%2019-2020 356.8 2020 238.4 2020 1,322,294 42.3%2020-2021 366.8 2021 245.0 2021 1,357,579 42.2%2021-2022 373.9 2022 249.2 2022 1,383,615 42.2%2022-2023 380.8 2023 253.4 2023 1,409,420 42.2%2023-2024 387.1 2024 257.2 2024 1,437,181 42.4%2024-2025 396.8 2025 263.7 2025 1,471,131 42.3%

Jackson Energy2006 Load Forecast

Peaks Summary

Table 1-1 (continued)

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Executive Summary (continued)

Overall Results

• Total sales are projected to grow by 2.0 percent a year for the period 2005-2025, compared to a 3.0 percent growth projected in the 2004 load forecast for the period 2004-2024. Results shown in Table 1-2 and Figure 1-1.

• Winter and summer peak demands for the same period indicate annual growth of 2.3 and 1.8 percent, respectively. Annual peaks shown in Figure 1-2.

• Load factor remains steady at approximately 42% through the study period. See Figure 1-3.

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Executive SummaryOverall Results (continued)

TimePeriod Residential

Small Commercial

Large Commercial

Total Sales

1995-2000 3.3% 2.9% ## 10.9% 3.9%2000-2005 2.2% 3.2% ## -2.5% 1.9%2005-2010 1.2% 2.0% ## 6.6% 1.8%2010-2015 1.8% 2.0% ## 3.7% 2.0%2015-2020 1.8% 1.8% ## 3.2% 2.0%2020-2025 2.0% 1.7% ## 3.8% 2.2%

1995-2005 2.8% 3.1% ## 4.0% 2.9%2005-2015 1.5% 2.0% ## 5.1% 1.9%2015-2025 1.9% 1.8% ## 3.5% 2.1%

5 Year Growth Rates

10 Year Growth Rates

Table 1-2Jackson Energy

2006 Load ForecastSummary of Sales Growth

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Figure 1-1 Average Annual Growth in Sales 2005-2025

1.7%

1.9%2.0%

4.3%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

Residential Sales Small Commercial Sales Large Commercial Sales Total Sales

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Figure 1-2Peak Demand ForecastWinter and Summer

0

50

100

150

200

250

300

350

400

450

1990 1995 2000 2005 2010 2015 2020 2025

Su

m O

f S

ub

sta

tio

ns

Pe

ak

De

ma

nd

(M

W)

Winter History Winter Forecast Summer History Summer Forecast

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Figure 1-3Annual System Load Factor

0%

10%

20%

30%

40%

50%

60%

1990 1995 2000 2005 2010 2015 2020 2025

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Narrative

Jackson Energy Cooperative is located in McKee, Kentucky. It serves members in the rural areas of Jackson, Rockcastle, Laurel, Clay, Owsley, Lee, and Estill counties. It also serves small sections of Madison, Pulaski, Wolfe, Powell, Lincoln, Leslie, Breathitt, and Garrard counties. Jackson Energy Cooperative serves the major part of the rural areas, with Kentucky Utilities serving most of the towns and small rural sections along certain roads. Jackson Energy Cooperative’s service area boundaries are fixed, and are filed with Kentucky’s Public Service Commission. This service area is located in the heart of the Daniel Boone National Forest and also lies partly in Kentucky’s eastern coal fields.

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Narrative (continued)Counties Served

• Jackson provides service to members in 15 counties.• Most of the customers are in the following counties:

Figure 1-4

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000

Rockcastle County

Owsley County

Lee County

Laurel County

Jackson County

Estill County

Clay County

Number of Members

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Narrative (continued)

Jackson Energy Cooperative’s largest area of growth continues to be in Laurel County. London is in the center of the county and Corbin is at its southern tip. These two cities, combined with I-75 running through the area, have acted to make Laurel County a crossroads area. The Daniel Boone Parkway begins at London and goes east to Hazard. The Cumberland Parkway, which runs from Somerset to Bowling Green, is linked to the Daniel Boone Parkway via a four-lane section of Kentucky Highway 80 between Somerset and London. The London-Corbin Airport serves the region.

A bio-diesel facility, Green Earth, will be located in Estill County in the near future. In 1995, Jackson County was approved by the federal government to be included in the Empowerment Zones and Enterprise Communities, a pilot program designed to help revitalize distressed urban and rural areas. The effort of this Empowerment Zone has proven to be a vital growth initiative and has been one of the most successful Empowerment Zones in the country.

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Narrative (continued)

Jackson Energy Cooperative primarily services residential load. In 2005, residential customers accounted for 94 percent of total customers, and residential sales accounted for 75 percent of total retail kWh sales. Residential sales are expected to continue to grow due to the high percentage of all-electric homes and the decreasing use of wood stoves. Future customer growth should be steady. Historical growth in residential customers has generally been between 400 to 1400 customers, and growth of around 600 is expected in the long run.

 Small commercial sales have historically tracked residential sales. Small commercial customers provide goods and services for the residences in the region; as the population of an area grows, both residential and small commercial sales will increase.

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Narrative (continued)Jackson Energy MembersDemographic Information

• There is an average of 2.27 people per household.

• 51% of all homes are headed by someone age 55 or greater.

• 14% of homes have farm operations, with beef cattle most popular.

• 27% of all homes served are less than 10 years old.

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Narrative (continued)

Jackson Energy Cooperative has active Industrial Development Authorities in each of the seven primary counties being served. There have been many success stories resulting from their efforts in the past five years.

 

In summary, Jackson Energy Cooperative has experienced good growth over the past five years. This has been due to good customer growth, increased electric heat penetrations, and strong large power sales. These factors are not expected to appreciably change.

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Key AssumptionsPower Cost and Rates

• EKPC’s wholesale power cost forecast used in this load forecast comes from the following report: “Twenty-Year Financial Forecast, Equity Development Plan, 2006-2025”, dated January 2006.

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Key Assumptions (continued)Economic

(%) Change

(%) Change

(%) Change

(%) Change

(%) Change

(%) Change

(%) Change

1990 540,824 -0.5% 190,058 2.5% 144,054 3.4% 9.0% -3.5% $25,743 -1.6% $8,910 1.1% $16,475 1.7%

1991 544,407 0.7% 192,903 1.5% 144,936 0.6% 12.0% 33.8% $25,411 -1.3% $9,096 2.1% $16,707 1.4%

1992 547,802 0.6% 193,612 0.4% 145,141 0.1% 11.3% -5.4% $25,828 1.6% $9,402 3.4% $17,163 2.7%

1993 551,087 0.6% 195,843 1.2% 148,381 2.2% 10.0% -12.1% $25,735 -0.4% $9,416 0.2% $17,087 -0.4%

1994 553,065 0.4% 196,987 0.6% 150,867 1.7% 8.9% -10.8% $25,741 0.0% $9,522 1.1% $17,217 0.8%

1995 555,088 0.4% 201,264 2.2% 155,081 2.8% 9.1% 2.0% $25,511 -0.9% $9,584 0.6% $17,265 0.3%

1996 554,460 -0.1% 199,145 -1.1% 154,776 -0.2% 9.5% 4.7% $25,641 0.5% $9,674 0.9% $17,447 1.1%

1997 554,363 0.0% 202,287 1.6% 157,169 1.5% 8.2% -13.5% $26,087 1.7% $10,069 4.1% $18,163 4.1%

1998 554,044 -0.1% 201,723 -0.3% 159,377 1.4% 6.8% -17.7% $26,377 1.1% $10,284 2.1% $18,562 2.2%

1999 553,832 0.0% 204,002 1.1% 159,825 0.3% 6.9% 2.2% $26,516 0.5% $10,479 1.9% $18,921 1.9%

2000 552,926 -0.2% 202,132 -0.9% 158,377 -0.9% 6.4% -7.6% $26,390 -0.5% $10,737 2.5% $19,418 2.6%

2001 551,463 -0.3% 202,586 0.2% 159,095 0.5% 6.6% 3.9% $26,200 -0.7% $11,012 2.6% $19,968 2.8%

2002 554,005 0.5% 201,554 -0.5% 157,185 -1.2% 7.2% 8.3% $26,520 1.2% $11,137 1.1% $20,102 0.7%

2003 554,238 0.0% 203,166 0.8% 155,124 -1.3% 8.3% 15.7% $26,624 0.4% $11,109 -0.2% $20,044 -0.3%

2004 555,666 0.3% 205,488 1.1% 159,456 2.8% 8.7% 4.2% $26,654 0.1% $11,237 1.2% $20,223 0.9%

2005 557,768 0.4% 207,099 0.8% 162,464 1.9% 8.1% -6.6% $26,767 0.4% $11,330 0.8% $20,312 0.4%

2006 559,879 0.4% 208,737 0.8% 165,519 1.9% 7.7% -4.1% $26,654 -0.4% $11,434 0.9% $20,422 0.5%

2007 560,254 0.1% 209,187 0.2% 166,360 0.5% 7.8% 0.3% $26,767 0.4% $11,562 1.1% $20,638 1.1%

2008 559,983 0.0% 209,116 0.0% 166,228 -0.1% 7.6% -2.2% $26,831 0.2% $11,694 1.1% $20,882 1.2%

2009 559,782 0.0% 208,980 -0.1% 165,972 -0.2% 7.5% -1.4% $26,870 0.1% $11,829 1.2% $21,132 1.2%

2010 559,699 0.0% 208,770 -0.1% 165,581 -0.2% 7.6% 1.6% $26,899 0.1% $11,969 1.2% $21,385 1.2%

2015 560,660 0.0% 208,498 0.0% 165,074 -0.1% 7.8% 0.5% $26,970 0.1% $12,716 1.2% $22,680 1.2%

2020 562,110 0.1% 210,100 0.2% 168,064 0.4% 7.4% -1.1% $26,993 0.0% $13,601 1.4% $24,196 1.3%

2025 564,514 0.1% 212,857 0.3% 173,208 0.6% 7.4% 0.1% $26,999 0.0% $14,557 1.4% $25,786 1.3%

2030 567,274 0.1% 215,400 0.2% 177,954 0.5% 7.4% 0.0% $27,001 0.0% $15,500 1.3% $27,324 1.2%

Notes: Wages & Per Capita Income are in constant 2006 dollars; Income is in millions of constant 2005 dollars.

Growth rates are average annual changes. Data for 2004 and 2005 are simulated.

Forecast

Long-Term Forecast

Actual

Real Per Capita Income

Regional SummaryEast Economic Region History and Forecast

Unemployment Rate

Regional Income

Population Labor ForceTotal

EmploymentAverage Real

Wages

EKPC’s source for economic forecasts is DRI-WEFA.

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Key Assumptions (continued)Share of Regional Homes Served

Figure 1-5

0%

5%

10%

15%

20%

25%

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

Shar

e (%

)

Jackson Energy’s market share will increase for the forecast period.

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Key Assumptions (continued)Household IncomeMembers’ Greatest Sources

Figure 1-6

Mining2%

Construction8%

Manufacturing8%

Retail & Service11%

Retirement47%

Education4%

Other18%

Agriculture2%

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Key Assumptions (continued)Appliance Saturations

• Room air conditioner saturation is declining due to customers choosing central air conditioning systems.

• Appliance efficiency trends are accounted for in the model. The data is collected from Energy Information Administration (EIA). See Figure 1-7.

27

Key Assumptions (continued)Saturation Rates Non HVAC Appliances

• Microwave Oven 97%

• Electric Range 93%

• Dishwasher 40%

• Freezer 44%

• Clothes Dryer 94%

• Personal Computer 45%

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Key Assumptions (continued)Residential Appliance Efficiency Trends

East South Central Region

0

2

4

6

8

10

12

14

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Eff

icie

ncy

Rat

ing

Heat Pump Heating (HSPF)

Heat Pump Cooling (SEER)

Central Air (SEER)

Room Air (EER)

Water Heating (EF)

All of the projections are very similar to what was used in the 2004 Load Forecast. However, the 2004 Load Forecast assumption was just below 8 by 2024 whereas this update shows the trend continuing above 8.

Source: Energy Information Administration (EIA) Efficiency Trend Update, 2005

Figure 1-7

29

Key Assumptions (continued)Weather

• Weather data is from the Jackson weather station.

• Normal weather, a 30-year average of historical hourly temperatures, is assumed for the forecast years.

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Methodology and ResultsIntroduction

This section briefly describes the methodology used to develop the load forecast and presents results in tabular and graphical form for residential and commercial classifications. Table 1-3 through Table 1-5 shows historical data for Jackson Energy Cooperative as reported on RUS Form 736 and RUS Form 5.

 

A preliminary forecast is prepared during the first quarter depending on when Jackson Energy Cooperative experiences its winter peak. The first step is modeling the regional economy. Population, income, and employment are among the areas analyzed. The regional model results are used in combination with the historical billing information, appliance saturation data, appliance efficiency data, and weather data to develop the long range forecast.

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Table 1-3

YearkWh Purchased

And GeneratedChange kWh Sold Change kWh Loss % Loss

Annual

Load

Factor

Average

Number Of

Consumers

Miles

Of

Line

Consumers

Per Mile

Cost Of

Purchased Power

Cents

/ kWh

1993 662,974,402 614,277,060 47,986,198 7.2% 47.4% 39,414 4,850 8.1 $26,693,262 4.0

1994 668,498,735 0.8% 623,023,325 1.4% 44,738,711 6.7% 37.1% 40,372 4,915 8.2 $27,344,330 4.1

1995 723,680,288 8.3% 703,501,395 12.9% 19,378,595 2.7% 45.9% 40,988 4,996 8.2 $25,453,302 3.5

1996 773,645,090 6.9% 721,767,243 2.6% 51,005,658 6.6% 56.9% 42,447 5,081 8.4 $25,880,650 3.3

1997 789,633,557 2.1% 738,022,715 2.3% 50,909,685 6.4% 44.4% 43,999 5,151 8.5 $26,078,371 3.3

1998 805,688,989 2.0% 765,394,272 3.7% 39,595,053 4.9% 52.7% 45,051 5,221 8.6 $26,396,134 3.3

1999 848,625,202 5.3% 789,601,263 3.2% 58,264,865 6.9% 45.9% 46,160 5,287 8.7 $29,672,370 3.5

2000 902,415,277 6.3% 851,643,786 7.9% 49,947,106 5.5% 45.4% 47,208 5,345 8.8 $32,810,819 3.6

2001 906,228,915 0.4% 852,397,198 0.1% 52,891,462 5.8% 43.1% 48,109 5,392 9.0 $35,141,010 4.0

2002 943,920,211 4.2% 895,367,321 5.0% 47,213,083 5.0% 48.8% 48,989 5,436 9.0 $35,881,380 3.8

2003 939,743,221 -0.4% 879,656,524 -1.8% 58,767,333 6.3% 44.0% 49,336 5,486 9.0 $37,475,927 4.0

2004 949,906,253 1.1% 893,886,152 1.6% 54,817,511 5.8% 42.2% 49,926 5,552 9.0 $41,671,038 4.4

2005 992,737,728 4.5% 937,632,572 4.9% 53,945,948 5.4% 43.8% 50,448 5,597 9.0 $51,379,764 5.2

5.8% 3.9Average

211.2

257.1

258.7

226.7

240.2

220.7

243.9

180.0

202.9

155.3

174.5

J ackson Energy Comparative Annual Operating DataPeak

Demand

(MW)

159.6

205.7

32

Table 1-4

Year kWh Sales%

Change

kWh

Sales

%

ChangekWh Sales

%

ChangekWh Sales

%

ChangekWh Sales

%

Change

kWh

Sales

%

Change

1993 475,433,122 0 100,344,099 38,375,809 124,030 0

1994 478,827,916 0.7% 0 98,340,962 -2.0% 45,728,729 19.2% 125,718 1.4% 0

1995 541,520,035 13.1% 0 110,672,146 12.5% 51,184,172 11.9% 125,042 -0.5% 0

1996 548,607,638 1.3% 0 110,410,353 -0.2% 62,596,748 22.3% 152,504 22.0% 0

1997 556,134,178 1.4% 0 111,997,900 1.4% 69,720,751 11.4% 169,886 11.4% 0

1998 571,015,190 2.7% 0 109,194,752 -2.5% 85,004,590 21.9% 179,740 5.8% 0

1999 584,289,266 2.3% 0 122,593,937 12.3% 82,520,048 -2.9% 198,012 10.2% 0

2000 637,469,641 9.1% 0 127,948,805 4.4% 86,014,200 4.2% 211,140 6.6% 0

2001 630,098,168 -1.2% 0 126,957,847 -0.8% 95,269,620 10.8% 71,563 -66.1% 0

2002 663,872,999 5.4% 0 133,386,964 5.1% 98,107,358 3.0% 0 0

2003 666,452,413 0.4% 0 135,464,327 1.6% 77,739,784 -20.8% 0 0

2004 673,845,080 1.1% 0 139,062,946 2.7% 80,978,126 4.2% 0 0

2005 712,080,461 5.7% 0 149,912,225 7.8% 75,639,886 -6.6% 0 0

2 Year 22,814,024 3.4% 7,223,949 5.2% -1,049,949 -1.4%

5 Year 14,922,164 2.2% 4,392,684 3.2% -2,074,863 -2.5%

10 Year 17,056,043 2.8% 3,924,008 3.1% 2,445,571 4.0%

Average Annual Change

J ackson Energy Comparative Annual Operating Data

ResidentialResidential

Seasonal

Commercial /

I ndustrial

(1 MW Or Less)

Commercial /

I ndustrial

( Over 1 MW)

Public Street /

Highway Lighting

Public

Authorities

33

Table 1-5

Year Consumerskwh /

Mo.Consumers

kwh /

Mo.Consumers

kwh /

Mo.Consumers kwh / Mo. Consumers

kwh /

Mo.Consumers

kwh /

Mo.

1993 37,204 1,065 0 2,201 3,799 2 1,598,992 7 1,477 0

1994 38,096 1,047 0 2,267 3,615 2 1,905,364 7 1,497 0

1995 38,679 1,167 0 2,300 4,010 2 2,132,674 7 1,489 0

1996 39,998 1,143 0 2,438 3,774 3 1,738,799 8 1,589 0

1997 41,433 1,119 0 2,553 3,656 5 1,162,013 8 1,770 0

1998 42,432 1,121 0 2,602 3,497 9 787,080 8 1,872 0

1999 43,497 1,119 0 2,647 3,860 7 982,382 9 1,833 0

2000 44,470 1,195 0 2,721 3,919 8 895,981 9 1,955 0

2001 45,228 1,161 0 2,869 3,688 9 882,126 3 1,988 0

2002 45,109 1,226 0 3,872 2,871 8 1,021,952 0 0 0

2003 46,199 1,202 0 3,129 3,608 8 809,789 0 0 0

2004 46,760 1,201 0 3,158 3,670 8 843,522 0 0 0

2005 47,221 1,257 0 3,219 3,881 8 787,915 0 0 0

10 Year Avg. 854 9 92 -13 1 -134,476

5 Year Avg. 550 12 100 -8 0 -21,613

2 Year Avg. 511 27 45 137 0 -10,937

1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Consumers 892 583 1,319 1,435 999 1,065 973 758 -119 1,090 561 461

kWh/ month -18 119 -24 -24 3 -2 75 -34 65 -24 -1 56

Annual Changes I n J ackson Energy's Residential Class

J ackson Energy Comparative Annual Operating Data

ResidentialResidential

Seasonal

Commercial /

I ndustrial

(1 MW Or Less)

Commercial /

I ndustrial

( Over 1 MW)

Public Street /

Highway LightingPublic Authorities

34

Methodology and Results (continued)

The preliminary forecast was presented to Jackson Energy Cooperative staff, and reviewed by the Rural Utilities Services (RUS) Field Representative. Changes were made to the forecast as needed based on new information, such as new large loads or subdivisions. In some instances, other assumptions were changed based on insights from Jackson Energy Cooperative staff. Input from EKPC and Jackson Energy Cooperative results in the best possible forecast.

35

Methodology and Results (continued)Residential ForecastResidential customers are analyzed by means of regression analysis with resulting coefficients used to prepare customer projections. Regressions for residential customers are typically a function of regional economic and demographic variables. Two variables that are very significant are the numbers of households by county in each member system's economic region and the percent of total households served by the member system. Table 1-6 and Figure 1-8 report Jackson Energy Cooperative’s customer forecast.

The residential energy sales were projected using a statistically adjusted end-use (SAE) approach. This method of modeling incorporates end-use forecasts and can be used to allocate the monthly and annual forecasts into end-use components. This method, like end-use modeling, requires detailed information about appliance saturation, appliance use, appliance efficiencies, household characteristics, weather characteristics, and demographic and economic information. The SAE approach segments the average household use into heating, cooling, and water heating end-use components. See Figure 1-9. This model accounts for appliance efficiency improvements. Table 1-6 reports Jackson Energy Cooperative’s energy forecast.

36

Customers Use Per Customer Class Sales

AnnualAverage

AnnualChange

%Change

MonthlyAverage(kWh)

AnnualChange(kWh)

%Change

Total(MWh)

AnnualChange(MWh)

%Change

1990 34,430 941 388,9161991 35,216 786 2.3 989 48 5.1 418,072 29,155 7.51992 36,135 919 2.6 996 6 0.6 431,769 13,697 3.31993 37,204 1,069 3.0 1,065 69 6.9 475,433 43,664 10.11994 38,108 904 2.4 1,047 -18 -1.7 478,875 3,442 0.71995 38,646 538 1.4 1,168 121 11.5 541,520 62,645 13.11996 39,998 1,352 3.5 1,143 -25 -2.1 548,608 7,088 1.31997 41,433 1,435 3.6 1,119 -24 -2.1 556,134 7,527 1.41998 42,431 998 2.4 1,121 3 0.3 571,015 14,881 2.71999 43,487 1,056 2.5 1,120 -2 -0.2 584,289 13,274 2.32000 44,821 1,334 3.1 1,185 66 5.9 637,470 53,180 9.12001 45,229 408 0.9 1,161 -24 -2.0 630,098 -7,371 -1.22002 45,843 614 1.4 1,207 46 3.9 663,872 33,774 5.42003 46,199 356 0.8 1,202 -5 -0.4 666,452 2,580 0.42004 46,762 563 1.2 1,201 -1 -0.1 673,845 7,393 1.12005 47,211 449 1.0 1,257 56 4.7 712,080 38,235 5.72006 47,709 498 1.1 1,233 -24 -1.9 706,024 -6,056 -0.92007 48,203 494 1.0 1,233 0 0.0 713,389 7,365 1.02008 48,705 502 1.0 1,244 10 0.8 726,778 13,388 1.92009 49,214 509 1.0 1,257 14 1.1 742,598 15,821 2.22010 49,730 516 1.0 1,269 11 0.9 757,078 14,480 1.92011 50,253 523 1.1 1,274 6 0.5 768,532 11,454 1.52012 50,784 531 1.1 1,286 12 0.9 783,942 15,410 2.02013 51,323 539 1.1 1,298 12 0.9 799,681 15,739 2.02014 51,869 546 1.1 1,307 8 0.6 813,382 13,700 1.72015 52,423 554 1.1 1,314 7 0.6 826,614 13,232 1.62016 52,985 562 1.1 1,323 9 0.7 840,948 14,334 1.72017 53,555 570 1.1 1,330 7 0.6 854,774 13,826 1.62018 54,134 579 1.1 1,339 9 0.7 870,125 15,351 1.82019 54,720 586 1.1 1,350 10 0.8 886,217 16,092 1.82020 55,315 595 1.1 1,363 14 1.0 905,033 18,816 2.12021 55,918 603 1.1 1,377 13 1.0 923,947 18,914 2.12022 56,530 612 1.1 1,389 12 0.9 942,377 18,430 2.02023 57,151 621 1.1 1,401 11 0.8 960,597 18,220 1.92024 57,780 629 1.1 1,414 14 1.0 980,649 20,052 2.12025 58,419 639 1.1 1,424 10 0.7 998,294 17,645 1.8

Jackson Energy2006 Load Forecast

Residential and Public Buildings Combined

Table 1-6

37

Figure 1-8Annual Change in Residential Customers

0

200

400

600

800

1,000

1,200

1,400

1,600

1991 1996 2001 2006 2011 2016 2021

Nu

mb

er o

f C

ust

om

ers

38

Blank PageBlank Page

39

Figure 1-9Jackson Energy

Residential MWh Usage, History and Forecast

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

80,000.00

90,000.00

100,000.00

Jan-99

Jul-99

Jan-00

Jul-00

Jan-01

Jul-01

Jan-02

Jul-02

Jan-03

Jul-03

Jan-04

Jul-04

Jan-05

Jul-05

Jan-06

Jul-06

Jan-07

Jul-07

Jan-08

Jul-08

Jan-09

Jul-09

Jan-10

Jul-10

MW

h

Other Usage Heating, Cooling and Water Heating Usage

40

Methodology and Results (continued)Small Commercial Forecast

Small commercial sales are projected using two equations, a customer equation and a small commercial sales equation. Both are determined through regression analysis and utilize inputs relating to the economy, electric price, and the residential customer forecast. Small commercial projections are reported in Table 1-7.

41

Customers Use Per Customer Class Sales

AnnualAverage

AnnualChange

%Change

AnnualAverage(MWh)

AnnualChange(MWh)

%Change

Total(MWh)

AnnualChange(MWh)

%Change

1990 2,063 36 74,9021991 2,099 36 1.7 40 3 9.2 83,202 8,300 11.11992 2,131 32 1.5 44 4 10.0 92,911 9,709 11.71993 2,201 70 3.3 46 2 4.6 100,344 7,433 8.01994 2,267 66 3.0 43 -2 -4.8 98,341 -2,003 -2.01995 2,300 33 1.5 48 5 10.9 110,672 12,331 12.51996 2,438 138 6.0 45 -3 -5.9 110,410 -262 -0.21997 2,553 115 4.7 44 -1 -3.1 111,998 1,588 1.41998 2,602 49 1.9 42 -2 -4.3 109,195 -2,803 -2.51999 2,647 45 1.7 46 4 10.4 122,594 13,399 12.32000 2,721 74 2.8 47 1 1.5 127,949 5,355 4.42001 2,869 148 5.4 44 -3 -5.9 126,957 -992 -0.82002 3,138 269 9.4 43 -2 -3.9 133,386 6,429 5.12003 3,129 -9 -0.3 43 1 1.9 135,464 2,078 1.62004 3,158 29 0.9 44 1 1.7 139,063 3,599 2.72005 3,219 61 1.9 47 3 5.8 149,912 10,849 7.82006 3,262 43 1.3 46 0 -0.8 150,704 792 0.52007 3,326 64 2.0 46 0 0.6 154,534 3,830 2.52008 3,390 64 1.9 47 0 0.5 158,241 3,707 2.42009 3,454 64 1.9 47 0 0.4 161,951 3,710 2.32010 3,518 64 1.9 47 0 0.3 165,522 3,571 2.22011 3,581 63 1.8 47 0 0.3 168,964 3,442 2.12012 3,644 63 1.8 47 0 0.3 172,475 3,511 2.12013 3,708 64 1.8 47 0 0.3 176,013 3,538 2.12014 3,771 63 1.7 48 0 0.3 179,462 3,449 2.02015 3,834 63 1.7 48 0 0.2 182,878 3,416 1.92016 3,897 63 1.6 48 0 0.2 186,319 3,441 1.92017 3,959 62 1.6 48 0 0.3 189,804 3,485 1.92018 4,022 63 1.6 48 0 0.3 193,308 3,505 1.82019 4,084 62 1.5 48 0 0.3 196,808 3,500 1.82020 4,146 62 1.5 48 0 0.3 200,323 3,515 1.82021 4,208 62 1.5 48 0 0.3 203,879 3,556 1.82022 4,270 62 1.5 49 0 0.2 207,391 3,513 1.72023 4,332 62 1.5 49 0 0.2 210,861 3,470 1.72024 4,394 62 1.4 49 0 0.2 214,320 3,458 1.62025 4,455 61 1.4 49 0 0.2 217,746 3,426 1.6

Jackson Energy2006 Load Forecast

Small Commercial Summary

Table 1-7

42

Methodology and Results (continued)Large Commercial Forecast

Large commercial customers are those with loads 1 MW or greater. Jackson Energy Cooperative currently has eight customers in this class and is projected to increase to 12 customers by 2025. Large commercial results are reported in Table 1-8.

43

Customers Use Per Customer Class Sales

AnnualAverage

AnnualChange

%Change

Annual Average(MWh)

AnnualChange(MWh)

%Change

Total(MWh)

AnnualChange(MWh)

%Change

1990 1 24,292 24,2921991 1 0 0.0 27,534 3,242 13.3 27,534 3,242 13.31992 1 0 0.0 30,602 3,068 11.1 30,602 3,068 11.11993 2 1 100.0 19,188 -11,414 -37.3 38,376 7,774 25.41994 2 0 0.0 22,864 3,676 19.2 45,729 7,353 19.21995 2 0 0.0 25,592 2,728 11.9 51,184 5,455 11.91996 3 1 50.0 20,866 -4,727 -18.5 62,597 11,413 22.31997 5 2 66.7 13,944 -6,921 -33.2 69,721 7,124 11.41998 9 4 80.0 9,445 -4,499 -32.3 85,005 15,284 21.91999 7 -2 -22.2 11,789 2,344 24.8 82,520 -2,485 -2.92000 8 1 14.3 10,752 -1,037 -8.8 86,014 3,494 4.22001 9 1 12.5 10,586 -166 -1.5 95,270 9,255 10.82002 8 -1 -11.1 12,263 1,678 15.9 98,107 2,838 3.02003 8 0 0.0 9,717 -2,546 -20.8 77,740 -20,368 -20.82004 8 0 0.0 10,122 405 4.2 80,978 3,238 4.22005 8 0 0.0 9,455 -667 -6.6 75,640 -5,338 -6.62006 6 -2 -25.0 12,989 3,534 37.4 77,933 2,293 3.02007 7 1 16.7 12,666 -323 -2.5 88,664 10,731 13.82008 8 1 14.3 12,410 -256 -2.0 99,283 10,619 12.02009 8 0 0.0 12,703 292 2.4 101,623 2,340 2.42010 8 0 0.0 12,997 294 2.3 103,977 2,354 2.32011 8 0 0.0 13,294 297 2.3 106,356 2,378 2.32012 9 1 12.5 13,003 -292 -2.2 117,026 10,670 10.02013 9 0 0.0 13,273 270 2.1 119,460 2,434 2.12014 9 0 0.0 13,547 274 2.1 121,923 2,463 2.12015 9 0 0.0 13,824 277 2.0 124,416 2,493 2.02016 10 1 11.1 13,520 -304 -2.2 135,204 10,787 8.72017 10 0 0.0 13,776 255 1.9 137,757 2,554 1.92018 10 0 0.0 14,034 258 1.9 140,342 2,585 1.92019 10 0 0.0 14,296 262 1.9 142,959 2,616 1.92020 10 0 0.0 14,561 265 1.9 145,607 2,648 1.92021 11 1 10.0 14,232 -329 -2.3 156,551 10,945 7.52022 11 0 0.0 14,479 247 1.7 159,265 2,713 1.72023 11 0 0.0 14,728 250 1.7 162,011 2,747 1.72024 11 0 0.0 14,981 253 1.7 164,792 2,780 1.72025 12 1 9.1 14,656 -325 -2.2 175,871 11,079 6.7

Jackson Energy2006 Load Forecast

Large Commercial Summary

Table 1-8

44

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45

Methodology and Results (continued)Peak Day Weather Scenarios

Extreme temperatures can dramatically influence Jackson Energy Cooperative’s peak demands. Table 1-9 and Figure 1-10 reports the impact of extreme weather on system demands.

46

Table 1-9

Winter Peak Day Minimum Temperatures Summer Peak Day Maximum Temperatures

Mild Normal Extreme Normal Extreme

Degrees 10 -3 -12 -17 -25 Degrees 94 98 100 104

Probability 99% 50% 20% 10% 3% Probability 50% 20% 10% 3%

Occurs Once Every 2 Years 5 Years 10 Years 30 Years 2 Years 5 Years 10 Years 30 Years

Noncoincident Winter Peak Demand - MW Noncoincident Summer Peak Demand - MW

Season Mild Normal Extreme Year Normal Extreme

2006 185 212 226 253

2006 - 07 234 275 304 319 345 2007 189 216 231 258

2007 - 08 239 281 310 327 353 2008 193 221 235 263

2008 - 09 246 289 318 335 361 2009 197 226 240 269

2009 - 10 251 294 325 342 368 2010 201 229 244 273

2010 - 11 255 299 330 347 375 2011 204 233 247 277

2011 - 12 261 306 338 355 383 2012 208 237 253 282

2012 - 13 267 314 346 363 392 2013 212 242 257 287

2013 - 14 272 319 352 370 399 2014 216 246 261 292

2014 - 15 277 325 358 376 406 2015 219 249 265 296

2015- 16 282 331 365 384 414 2016 223 254 270 302

2016 - 17 288 338 373 392 422 2017 227 259 275 307

2017 - 18 294 344 379 399 430 2018 231 263 279 311

2018 - 19 299 351 387 406 438 2019 235 267 284 316

2019-2020 304 357 393 414 446 2020 238 271 288 321

2020-2021 313 367 404 425 458 2021 245 278 295 329

2021-2022 319 374 412 433 466 2022 249 283 300 334

2022-2023 325 381 419 441 475 2023 253 287 305 340

2023-2024 330 387 426 448 483 2024 257 292 310 345

2024-2025 339 397 437 459 495 2025 264 299 317 352

Jackson EnergyPeak Day Weather Scenarios

47

Figure 1-10

Jackson Energy - Normal Peaks And T&D Planning Peaks

0

50

100

150

200

250

300

350

400

450

500

1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023

Pea

k M

W

Actual Winter Normal Winter 10% Case - Winter Actual Summer Normal Summer 10% Case - Summer

48

RUS Form 341

49

Form 341Form 341