Salt River Electric2006 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 28• Methodology and Results 36

– Residential Forecast 41– Small Commercial 46– Large Commercial 48– Other Forecast 50– Peak Day Weather Scenarios 53

• RUS Form 341 56

Page Number

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IntroductionExecutive Summary

Salt River Electric (Salt River) located in Bardstown, Kentucky, is an electric distribution cooperative that serves members in 10 counties. This load forecast report contains Salt River’s long-range forecast of energy and peak demand.

 Salt River 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 Salt River for reasonability. Final projections reflect a rigorous analysis of historical data combined with the experience and judgment of the manager and staff of Salt River. Key assumptions are reported beginning on page 28.

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Executive Summary (continued)

The load forecast is prepared biannually as part of the overall planning cycle at EKPC and Salt River. Cooperation helps to ensure that the forecast meets both parties’ needs. Salt River 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 Salt River 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 308,632 0 62,360 0 75,564 701 447,257 459 4.8 470,3601991 343,245 0 62,283 0 80,421 773 486,722 510 5.5 515,3411992 339,836 0 63,057 0 83,251 855 486,999 527 5.4 515,5131993 384,269 0 68,201 0 87,684 983 541,137 607 5.4 572,7231994 385,987 0 74,450 0 87,631 1,029 549,097 575 4.9 577,7981995 412,408 0 79,511 0 86,091 1,191 579,202 621 6.1 617,3161996 439,369 0 86,147 0 82,779 1,340 609,635 693 4.7 640,3261997 440,254 0 87,357 0 74,233 1,378 603,222 650 5.6 639,8081998 467,565 0 94,441 0 77,109 1,501 640,615 547 4.6 671,9701999 487,171 0 99,964 0 75,601 1,546 664,281 523 5.8 705,6822000 516,989 0 101,468 0 73,484 1,683 693,624 620 6.3 740,8592001 535,450 0 109,950 0 74,431 1,821 721,652 583 4.6 757,1802002 583,590 0 132,542 0 79,382 2,056 797,570 678 5.0 840,0322003 585,189 0 125,823 0 101,781 2,162 814,955 597 5.2 859,8692004 610,138 0 141,129 0 105,742 2,191 859,200 665 4.8 903,2742005 658,744 0 172,165 0 107,048 2,296 940,253 684 4.4 983,8502006 653,304 0 173,975 0 109,396 2,412 939,088 650 4.8 987,1202007 683,650 0 178,380 0 135,755 2,519 1,000,304 650 4.8 1,051,4232008 708,479 0 182,567 0 168,977 2,628 1,062,652 650 4.8 1,116,9142009 734,927 0 186,970 0 186,487 2,738 1,111,123 650 4.8 1,167,8282010 760,481 0 191,150 0 203,728 2,848 1,158,207 650 4.8 1,217,2862011 783,504 0 195,112 0 220,657 2,957 1,202,231 650 4.8 1,263,5302012 809,852 0 199,064 0 221,295 3,067 1,233,278 650 4.8 1,296,1432013 836,719 0 203,125 0 230,278 3,176 1,273,298 650 4.8 1,338,1802014 862,050 0 207,167 0 230,763 3,286 1,303,266 650 4.8 1,369,6602015 887,367 0 211,269 0 231,167 3,395 1,333,199 650 4.8 1,401,1012016 913,632 0 215,449 0 231,589 3,505 1,364,174 650 4.8 1,433,6392017 939,243 0 219,772 0 232,022 3,614 1,394,651 650 4.8 1,465,6522018 966,564 0 224,247 0 232,527 3,724 1,427,061 650 4.8 1,499,6972019 994,584 0 228,803 0 233,018 3,833 1,460,239 650 4.8 1,534,5472020 1,024,944 0 233,332 0 241,868 3,943 1,504,087 650 4.8 1,580,6062021 1,054,836 0 237,930 0 242,522 4,052 1,539,340 650 4.8 1,617,6372022 1,084,708 0 242,533 0 243,075 4,162 1,574,478 650 4.8 1,654,5462023 1,114,611 0 247,112 0 243,547 4,271 1,609,540 650 4.8 1,691,3772024 1,146,452 0 251,701 0 244,024 4,381 1,646,558 650 4.8 1,730,2602025 1,175,966 0 256,286 0 244,450 4,490 1,681,192 650 4.8 1,766,641

2006 Load ForecastSalt River Electric

MWh Summary

Table 1-1

9

Winter Summer

Season

NoncoincidentPeak Demand

(MW) Year

NoncoincidentPeak Demand

(MW) Year

PurchasedPower(MWh)

Load Factor(%)

1989 - 90 132.2 1990 105.0 1990 470,360 40.6%1990 - 91 117.0 1991 113.1 1991 515,341 50.3%1991 - 92 125.4 1992 111.7 1992 515,513 46.9%1992 - 93 133.4 1993 124.2 1993 572,723 49.0%1993 - 94 151.4 1994 125.4 1994 577,798 43.6%1994 - 95 137.0 1995 135.7 1995 617,316 51.4%1995 - 96 158.5 1996 136.9 1996 640,326 46.1%1996 - 97 157.9 1997 145.7 1997 639,808 46.3%1997 - 98 142.5 1998 152.8 1998 671,970 50.2%1998 - 99 163.5 1999 167.2 1999 705,682 48.2%1999 - 00 167.5 2000 165.8 2000 740,859 50.5%2000 - 01 183.0 2001 172.4 2001 757,180 47.2%2001 - 02 169.4 2002 192.3 2002 840,032 49.9%2002 - 03 207.2 2003 189.0 2003 859,869 47.4%2003 - 04 211.6 2004 193.8 2004 903,274 48.7%2004 - 05 212.4 2005 212.4 2005 983,850 52.9%

2005 - 06 213.2 2006 220.2 2006 987,120 51.2%

2006 - 07 242.1 2007 230.6 2007 1,051,423 49.6%2007 - 08 255.5 2008 242.7 2008 1,116,914 49.9%2008 - 09 267.8 2009 253.2 2009 1,167,828 49.8%2009 - 10 279.1 2010 262.7 2010 1,217,286 49.8%2010 - 11 289.6 2011 271.5 2011 1,263,530 49.8%2011 - 12 296.7 2012 276.6 2012 1,296,143 49.9%2012 - 13 307.5 2013 285.2 2013 1,338,180 49.7%2013 - 14 315.3 2014 290.9 2014 1,369,660 49.6%2014 - 15 323.0 2015 296.6 2015 1,401,101 49.5%2015- 16 330.1 2016 301.7 2016 1,433,639 49.6%2016 - 17 338.9 2017 308.4 2017 1,465,652 49.4%2017 - 18 347.2 2018 314.7 2018 1,499,697 49.3%2018 - 19 355.7 2019 321.2 2019 1,534,547 49.3%2019-2020 365.2 2020 328.9 2020 1,580,606 49.4%2020-2021 375.2 2021 336.6 2021 1,617,637 49.2%2021-2022 384.1 2022 343.4 2022 1,654,546 49.2%2022-2023 392.9 2023 350.2 2023 1,691,377 49.1%2023-2024 400.9 2024 356.3 2024 1,730,260 49.3%2024-2025 410.8 2025 364.1 2025 1,766,641 49.1%

Salt River Electric2006 Load Forecast

Peaks Summary

Table 1-1 (continued)

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Executive Summary (continued)

Overall Results

• Total sales are projected to grow by 2.9 percent a year for the period 2005-2025, compared to 3.7 percent which was 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 3.3 and 2.5 percent, respectively. Annual peaks shown in Figure 1-2.

• Load factor remains steady at approximately 50% for the forecast period. See Figure 1-3.

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Executive SummaryOverall Results (continued)

TimePeriod Residential Seasonal

Small Commercial

Large Commercial Other

Total Sales

1995-2000 4.6% 5.0% -3.1% 7.2% 3.7%2000-2005 5.0% 11.2% 7.8% 6.4% 6.3%2005-2010 2.9% 2.1% 13.7% 4.4% 4.3%2010-2015 3.1% 2.0% 2.6% 3.6% 2.9%2015-2020 2.9% 2.0% 0.9% 3.0% 2.4%2020-2025 2.8% 1.9% 0.2% 2.6% 2.3%

1995-2005 4.8% 8.0% 2.2% 6.8% 5.0%2005-2015 3.0% 2.1% 8.0% 4.0% 3.6%2015-2025 2.9% 2.0% 0.6% 2.8% 2.3%

10 Year Growth Rates

5 Year Growth Rates

Table 1-2Salt River Electric

2006 Load ForecastSummary of Sales Growth

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

2.9%

2.0%

4.2%

3.4%

2.9%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

Residential Seasonal Small Commercial

Large Commercial

Other Total Sales

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Figure 1-2Peak Demand Forecast Winter 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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NarrativeTerritory

Salt River ECC headquarters is located in Bardstown, Kentucky. The cooperative furnishes electric service to Anderson, Bullitt, Jefferson, LaRue, Marion, Mercer, Nelson, Shelby, Spencer and Washington Counties. Because Kentucky has certified service boundaries, there is little possibility of a change in service territory. There are no plans for merger, consolidation or reorganization.

 

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Narrative (continued)Counties Served

Salt River provides service to members in 10 counties.

Figure 1-4

0 5,000 10,000 15,000 20,000 25,000

Other Counties (6)

Washington County

Spencer County

Nelson County

Bullitt County

Number of Members

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Narrative (continued)

Interstate 65 has six lanes through Bullitt County, providing a major transportation route through the service area. A total of five interchanges exist in or near our service area. Associated growth activity is expected in these areas. Additional load related to travel and tourism, such as hotels/motels, convenience stores and restaurants will continue to come on line during the upcoming year at the Brooks I-65 interchange in northern Bullitt County.

US 61 is currently being upgraded from two to four lanes from the Jefferson County line into Shepherdsville in Bullitt County. This has opened up residential development in northern Bullitt County along Zoneton and Bells Mill Road.

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Narrative (continued)

Future improvements will extend from the Bullitt/Jefferson County line to a point south of the Mt. Washington City at the Spencer County line during the next three to four years. This will accelerate growth in western Spencer County and northeastern Nelson County. Plans are underway to four lane US 31E from south of Mt. Washington in Bullitt County to Bardstown in Nelson County.

 

The completed acquisition by Louisville Water Company of the facilities in Bullitt County allowed for the extension of water service in central and southern Bullitt County, opening the way for new residential growth and future commercial development south of Shepherdsville.

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Narrative (continued)

An existing rail connector connects Bardstown in Nelson County with the southern line in central Bullitt County.

 

The Southern Rail Line from Nashville penetrates Bullitt County for twenty-plus miles and serves several businesses in and near Shepherdsville and Lebanon Junction.

 

Other than several rock and sand quarries, no mining exists in our service area.

 

No substantial irrigation occurs in our service area.

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Narrative (continued)

The bourbon distillery industry which serves as the region’s industrial base is a mature industry and its rate will probably continue to grow due to the export trade in Europe and the Far East.

 

Several gas transmission pipelines exist in Bullitt County but no new ones are anticipated. Natural gas service continues to expand in Bullitt County. More extensions are expected in the Mt. Washington and Shepherdsville communities as well as the Bardstown area of Nelson County.

 

Dozens of residential subdivisions exist in Bullitt County and with a favorable economic climate dozens more are expected within the next five years.

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Narrative (continued)

Several automobile parts manufacturing plants have located on the municipal electrical system in Nelson County. Several residential subdivisions are slated for continued growth in our service areas as a result of this development.

 

  Several new industrial parks are now operating: (1) Brooks interchange (Bullitt County); (2) Cedar Grove (Bullitt County); (3) Mt. Washington (Bullitt County); (4) Springfield (Washington County); and a new one is planned near the Blue Grass Parkway in northeastern Nelson County.

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Narrative (continued)

Taylorsville Lake, a Corps of Engineers flood control impoundment, was completed in 1984. This 3,000-acre lake has 10,000 acres of associated lakeside public land devoted to wildlife preservation and recreational uses. A small resort, including condominiums and a golf course, was opened in 1984. A new private development for lodging is presently underway at Taylorsville Lake in Spencer County.

 A new state highway system from Jefferson County into Spencer County has created a new corridor of mixed development. This corridor connects a major population center with a major recreation area, Taylorsville Lake. More mixed development is anticipated here. This road is being extended to the interchange at the Blue Grass Parkway in Washington County. Development is expected in this area upon completion.

The major remaining land areas are devoted to farming, mainly tobacco and soybean crops, and dairies; and woodland areas.

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Narrative (continued)

Schools continue to be a steady source of new loads. There are four new schools currently under construction: two in Bullitt County, one in Spencer County and one in Nelson County. Recent development at local boards of education indicated that air-conditioning will be added to schools without it over a period of one to three years.

 

The Hwy. 245 bypass/US 150 area of the City of Bardstown is experiencing a surge in growth. Several potential development sites still exist around these sites which are in our service area.

The increasing importance of tourism in Bardstown continues to fuel development within our service territory.

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Narrative (continued)

Three new residential developments, each of which has over 500 single-family residential lots, have been built since 1994. All three have increased the overall residential community of Nelson County during the last ten (10) years. Two of these developments have 18-hole golf courses with a central clubhouse facility. These same two golf course communities (Maywood and Woodlawn Springs) also have over 200 units of multi-family housing such as condominiums and apartments. These three developments are within the Salt River service area.

Other new residential communities currently in development are (1) Cedar Grove Road in Bullitt County, with over 1,200 lots; (2) Highway 245/Deatsville area in Nelson County, over 600 lots; and (3) over 600 lots in Mt. Washington in Bullitt County near Bullitt East High School.

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Narrative (continued)

Highway 555 is being extended from the Willisburg/Springfield exit of the Bluegrass Parkway to the Taylorsville Lake area southern Spencer County. This route follows the easterly boundary of the Salt River ECC territory and opens up a corridor (over fifteen miles) of new area for residential, commercial and seasonal development relative to the recreational nature of the region. This project is slated for completion within a period of eight to 15 years. Construction of a bypass around Springfield in Washington County will result in development.

 

The US highway from Perryville to Springfield has been upgraded and straightened providing potential for growth.

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Narrative (continued)Salt River MembersDemographic Information

• There is an average of 2.50 people per household.

• 43% of all homes are headed by someone age 55 or greater.

• 16% of homes have farm operations, with beef cattle most prevalent.

• 36% of all homes served are less than 10 years old.

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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.

29

Key Assumptions (continued)Economic

(%) Change

(%) Change

(%) Change

(%) Change

(%) Change

(%) Change

(%) Change

1990 964,002 0.4% 494,930 -2.0% 468,383 3.1% 5.0% -11.5% $29,174 -0.6% $26,677 0.5% $27,673 0.0%

1991 967,773 0.4% 487,991 -1.4% 467,253 -0.2% 6.1% 20.4% $29,239 0.2% $26,826 0.6% $27,719 0.2%

1992 975,464 0.8% 492,143 0.9% 474,695 1.6% 5.5% -9.1% $30,554 4.5% $27,908 4.0% $28,610 3.2%

1993 990,659 1.6% 500,123 1.6% 494,158 4.1% 4.9% -11.4% $30,764 0.7% $28,023 0.4% $28,287 -1.1%

1994 1,000,603 1.0% 507,991 1.6% 506,843 2.6% 4.3% -12.8% $30,164 -2.0% $28,625 2.1% $28,608 1.1%

1995 1,009,902 0.9% 518,420 2.1% 517,747 2.2% 4.5% 4.7% $30,981 2.7% $29,253 2.2% $28,966 1.3%

1996 1,015,901 0.6% 518,000 -0.1% 526,646 1.7% 4.6% 2.8% $31,439 1.5% $29,995 2.5% $29,526 1.9%

1997 1,024,142 0.8% 533,730 3.0% 534,561 1.5% 4.5% -2.7% $32,041 1.9% $30,730 2.4% $30,006 1.6%

1998 1,032,925 0.9% 539,000 1.0% 547,361 2.4% 3.6% -19.1% $33,452 4.4% $32,828 6.8% $31,781 5.9%

1999 1,043,819 1.1% 552,734 2.5% 559,653 2.2% 3.8% 5.6% $34,438 2.9% $33,450 1.9% $32,045 0.8%

2000 1,054,288 1.0% 562,907 1.8% 565,970 1.1% 3.6% -5.9% $34,533 0.3% $34,917 4.4% $33,119 3.4%

2001 1,060,834 0.6% 554,875 -1.4% 556,479 -1.7% 4.7% 31.5% $34,714 0.5% $34,604 -0.9% $32,620 -1.5%

2002 1,067,926 0.7% 545,484 -1.7% 543,802 -2.3% 5.5% 16.5% $35,106 1.1% $35,945 3.9% $33,659 3.2%

2003 1,076,288 0.8% 537,325 -1.5% 540,482 -0.6% 5.9% 8.2% $35,596 1.4% $36,356 1.1% $33,779 0.4%

2004 1,084,605 0.8% 542,116 0.9% 547,046 1.2% 5.1% -14.6% $35,996 1.1% $36,867 1.4% $33,991 0.6%

2005 1,091,625 0.6% 548,273 1.1% 556,333 1.7% 5.1% 0.3% $36,426 1.2% $37,469 1.6% $34,324 1.0%

2006 1,098,806 0.7% 554,161 1.1% 565,105 1.6% 5.1% 0.2% $35,996 -1.2% $38,047 1.5% $34,626 0.9%

2007 1,106,385 0.7% 559,643 1.0% 573,065 1.4% 5.1% 0.5% $36,426 1.2% $38,629 1.5% $34,914 0.8%

2008 1,113,740 0.7% 565,297 1.0% 581,383 1.5% 5.1% -0.6% $36,769 0.9% $39,159 1.4% $35,160 0.7%

2009 1,121,504 0.7% 570,169 0.9% 588,219 1.2% 5.0% -1.0% $37,042 0.7% $39,666 1.3% $35,368 0.6%

2010 1,129,719 0.7% 574,165 0.7% 593,399 0.9% 5.0% 0.1% $37,281 0.6% $40,102 1.1% $35,498 0.4%

2015 1,171,623 0.7% 592,266 0.6% 615,771 0.7% 5.0% -0.1% $38,370 0.6% $42,070 1.0% $35,907 0.2%

2020 1,216,391 0.8% 617,126 0.8% 649,461 1.1% 5.0% -0.2% $38,995 0.3% $44,473 1.1% $36,562 0.4%

2025 1,267,709 0.8% 644,495 0.9% 686,080 1.1% 5.0% 0.2% $39,474 0.2% $46,981 1.1% $37,060 0.3%

2030 1,320,322 0.8% 670,189 0.8% 719,430 1.0% 5.0% -0.1% $39,946 0.2% $49,359 1.0% $37,384 0.2%

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.

Regional SummaryCentral North Economic Region History and Forecast

Unemployment Rate

Regional Income

Population Labor ForceTotal

EmploymentAverage Real

Wages

Forecast

Long-Term Forecast

Actual

Real Per Capita Income

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

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Key Assumptions (continued)Share of Regional Homes Served

Figure 1-5Salt River’s market share will increase for the forecast period.

0%

5%

10%

15%

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2025

Sh

are

(%

)

31

Key Assumptions (continued)Household IncomeMembers’ Greatest Sources

Figure 1-6

Construction9%

Manufacturing21%

Retail & Service16%

Retirement30%

Other15%

Education5%

Agriculture4%

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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.

33

Key Assumptions (continued)Saturation Rates Non HVAC Appliances

• Microwave Oven 97%

• Electric Range 92%

• Dishwasher 70%

• Freezer 58%

• Clothes Dryer 97%

• Personal Computer 66%

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Key Assumptions (continued)Figure 1-7

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

35

Key Assumptions (continued)Weather

• Weather data is from the Louisville weather station.

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

36

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 Salt River as reported on RUS Form 736 and RUS Form 5.

 

A preliminary forecast is prepared during the first quarter depending on when Salt River 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 572,722,698 541,136,594 30,978,737 5.4% 50.2% 26,833 2,892 9.3 $22,980,860 4.0

1994 577,797,720 0.9% 549,097,173 1.5% 28,126,040 4.9% 43.5% 27,950 2,900 9.6 $23,505,725 4.1

1995 617,315,829 6.8% 579,201,518 5.5% 37,493,183 6.1% 52.6% 29,093 2,941 9.9 $21,595,006 3.5

1996 640,326,149 3.7% 609,644,993 5.3% 29,988,383 4.7% 47.0% 30,160 2,990 10.1 $21,452,372 3.4

1997 639,808,257 -0.1% 603,221,889 -1.1% 35,936,259 5.6% 48.2% 31,216 3,146 9.9 $21,173,930 3.3

1998 671,969,662 5.0% 640,615,496 6.2% 30,807,643 4.6% 51.9% 32,614 3,121 10.4 $22,220,805 3.3

1999 705,681,519 5.0% 664,225,361 3.7% 40,932,889 5.8% 49.5% 34,291 3,211 10.7 $24,757,255 3.5

2000 740,858,569 5.0% 693,624,078 4.4% 46,614,075 6.3% 48.7% 35,822 3,300 10.9 $26,819,545 3.6

2001 757,179,899 2.2% 721,552,474 4.0% 35,044,195 4.6% 51.4% 37,154 3,413 11.2 $29,373,125 4.0

2002 840,031,599 10.9% 797,569,712 10.5% 41,783,631 5.0% 52.7% 38,574 3,497 11.0 $32,033,881 3.8

2003 859,868,666 2.4% 814,954,500 2.2% 44,317,220 5.2% 49.1% 39,876 3,572 11.2 $34,225,783 4.0

2004 903,274,223 5.0% 859,200,230 5.4% 43,408,562 4.8% 50.2% 41,458 3,649 11.4 $39,252,829 4.3

2005 983,849,683 8.9% 940,252,707 9.4% 42,913,408 4.4% 54.0% 42,997 3,750 11.5 $50,207,775 5.1

5.1% 3.9

Salt River Electric Comparative Annual Operating DataPeak

Demand

(MW)

130.2

151.5

134.1

151.4

155.4

147.9

Average

162.8

205.4

207.9

173.7

168.1

181.9

199.9

38

Table 1-4

Year kWh Sales%

ChangekWh Sales

%

ChangekWh Sales

%

ChangekWh Sales

%

ChangekWh Sales

%

Change

kWh

Sales

%

Change

1993 383,935,118 333,536 68,200,828 87,683,665 983,447 0

1994 385,676,141 0.5% 311,047 -6.7% 74,450,102 9.2% 87,631,170 -0.1% 1,028,713 4.6% 0

1995 412,118,925 6.9% 288,905 -7.1% 79,511,202 6.8% 86,091,046 -1.8% 1,191,440 15.8% 0

1996 439,100,944 6.5% 268,108 -7.2% 86,157,024 8.4% 82,778,970 -3.8% 1,339,947 12.5% 0

1997 440,066,250 0.2% 187,658 -30.0% 87,356,727 1.4% 74,233,281 -10.3% 1,377,973 2.8% 0

1998 467,390,327 6.2% 174,455 -7.0% 94,440,811 8.1% 77,109,135 3.9% 1,500,768 8.9% 0

1999 487,014,133 4.2% 157,137 -9.9% 99,913,794 5.8% 75,594,667 -2.0% 1,545,630 3.0% 0

2000 516,820,035 6.1% 169,181 7.7% 101,467,801 1.6% 73,483,678 -2.8% 1,683,383 8.9% 0

2001 535,265,552 3.6% 184,818 9.2% 109,950,384 8.4% 74,330,612 1.2% 1,821,108 8.2% 0

2002 583,380,800 9.0% 209,032 13.1% 132,541,977 20.5% 79,382,245 6.8% 2,055,658 12.9% 0

2003 585,020,947 0.3% 168,017 -19.6% 125,822,949 -5.1% 101,780,835 28.2% 2,161,752 5.2% 0

2004 609,982,010 4.3% 156,365 -6.9% 141,129,331 12.2% 105,741,858 3.9% 2,190,666 1.3% 0

2005 658,744,152 8.0% 0 172,164,811 22.0% 107,048,059 1.2% 2,295,685 4.8% 0

2 Year 36,861,603 6.1% 23,170,931 17.0% 2,633,612 2.6% 66,967 3.1%

5 Year 28,384,823 5.0% 14,139,402 11.2% 6,712,876 7.8% 122,460 6.4%

10 Year 24,662,523 4.8% 9,265,361 8.0% 2,095,701 2.2% 110,425 6.8%

Average Annual Change

Salt River Electric Comparative Annual Operating Data

Residential Residential SeasonalCommercial / I ndustrial

(1 MW Or Less)

Commercial / I ndustrial

( Over 1 MW)

Public Street /

Highway Lighting

Public

Authorities

39

Table 1-5

Year Consumerskwh /

Mo.Consumers

kwh /

Mo.Consumers

kwh /

Mo.Consumers kwh / Mo. Consumers

kwh /

Mo.Consumers

kwh /

Mo.

1993 25,184 1,270 65 428 1,447 3,928 6 1,217,829 131 626 0

1994 26,241 1,225 55 471 1,510 4,109 6 1,217,100 138 621 0

1995 27,321 1,257 44 547 1,576 4,204 5 1,434,851 147 675 0

1996 28,322 1,292 40 559 1,643 4,370 5 1,379,650 150 744 0

1997 29,322 1,251 34 460 1,700 4,282 5 1,237,221 155 741 0

1998 30,654 1,271 31 469 1,760 4,472 5 1,285,152 164 763 0

1999 32,205 1,260 29 452 1,875 4,441 5 1,259,911 177 728 0

2000 33,543 1,284 29 486 2,073 4,079 5 1,224,728 172 816 0

2001 34,784 1,282 30 513 2,156 4,250 5 1,238,844 179 848 0

2002 36,092 1,347 30 581 2,254 4,900 5 1,323,037 193 888 0

2003 37,446 1,302 25 560 2,196 4,775 9 942,415 200 901 0

2004 38,957 1,305 22 592 2,268 5,186 9 979,091 202 904 0

2005 40,423 1,358 0 2,355 6,092 9 991,186 210 911 0

10 Year Avg. 1,310 10 78 189 0 -44,367 6 24

5 Year Avg. 1,376 15 56 403 1 -46,708 8 19

2 Year Avg. 1,489 28 80 659 0 24,385 5 5

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

Consumers 1,057 1,080 1,001 1,000 1,332 1,551 1,338 1,241 1,308 1,354 1,511 1,466

kWh/ month -46 32 35 -41 20 -10 24 -2 65 -45 3 53

Annual Changes I n Salt River Electric's Residential Class

Salt River Electric Comparative Annual Operating Data

ResidentialResidential

Seasonal

Commercial /

I ndustrial

(1 MW Or Less)

Commercial / I ndustrial

( Over 1 MW)

Public Street /

Highway LightingPublic Authorities

40

Methodology and Results (continued)

The preliminary forecast was presented to Salt River 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 Salt River staff. Input from EKPC and Salt River results in the best possible forecast.

41

Methodology and Results (continued)Residential Forecast

Residential 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 Salt River’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 Salt River’s energy forecast.

42

Customers Use Per Customer Class Sales

AnnualAverage

AnnualChange

%Change

MonthlyAverage(kWh)

AnnualChange(kWh)

%Change

Total(MWh)

AnnualChange(MWh)

%Change

1990 22,088 1,164 308,6321991 23,085 997 4.5 1,239 75 6.4 343,245 34,613 11.21992 24,017 932 4.0 1,179 -60 -4.8 339,836 -3,410 -1.01993 25,184 1,167 4.9 1,272 92 7.8 384,269 44,433 13.11994 26,241 1,057 4.2 1,226 -46 -3.6 385,987 1,719 0.41995 27,321 1,080 4.1 1,258 32 2.6 412,408 26,421 6.81996 28,322 1,001 3.7 1,293 35 2.8 439,369 26,961 6.51997 29,239 917 3.2 1,255 -38 -2.9 440,254 885 0.21998 30,654 1,415 4.8 1,271 16 1.3 467,565 27,311 6.21999 32,205 1,551 5.1 1,261 -10 -0.8 487,171 19,606 4.22000 33,543 1,338 4.2 1,284 24 1.9 516,989 29,818 6.12001 34,784 1,241 3.7 1,283 -2 -0.1 535,450 18,461 3.62002 36,092 1,308 3.8 1,347 65 5.0 583,590 48,139 9.02003 37,446 1,354 3.8 1,302 -45 -3.4 585,189 1,599 0.32004 38,957 1,511 4.0 1,305 3 0.2 610,138 24,949 4.32005 40,423 1,466 3.8 1,358 53 4.1 658,744 48,606 8.02006 41,731 1,308 3.2 1,305 -53 -3.9 653,304 -5,440 -0.82007 43,033 1,302 3.1 1,324 19 1.5 683,650 30,346 4.62008 44,347 1,314 3.1 1,331 7 0.6 708,479 24,829 3.62009 45,680 1,333 3.0 1,341 9 0.7 734,927 26,448 3.72010 47,029 1,349 3.0 1,348 7 0.5 760,481 25,554 3.52011 48,380 1,351 2.9 1,350 2 0.2 783,504 23,023 3.02012 49,741 1,361 2.8 1,357 7 0.5 809,852 26,348 3.42013 51,131 1,390 2.8 1,364 7 0.5 836,719 26,866 3.32014 52,526 1,395 2.7 1,368 4 0.3 862,050 25,332 3.02015 53,942 1,416 2.7 1,371 3 0.2 887,367 25,316 2.92016 55,355 1,413 2.6 1,375 5 0.3 913,632 26,266 3.02017 56,767 1,412 2.6 1,379 3 0.2 939,243 25,611 2.82018 58,199 1,432 2.5 1,384 5 0.4 966,564 27,321 2.92019 59,632 1,433 2.5 1,390 6 0.4 994,584 28,020 2.92020 61,057 1,425 2.4 1,399 9 0.6 1,024,944 30,360 3.12021 62,485 1,428 2.3 1,407 8 0.6 1,054,836 29,892 2.92022 63,924 1,439 2.3 1,414 7 0.5 1,084,708 29,872 2.82023 65,368 1,444 2.3 1,421 7 0.5 1,114,611 29,903 2.82024 66,817 1,449 2.2 1,430 9 0.6 1,146,452 31,842 2.92025 68,292 1,475 2.2 1,435 5 0.4 1,175,966 29,514 2.6

Salt River Electric2006 Load Forecast

Residential Summary

Table 1-6

43

Figure 1-8Annual Change in Residential Customers

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1991 1996 2001 2006 2011 2016 2021

Nu

mb

er

of

Cu

sto

mers

44

Blank PageBlank Page

45

Figure 1-9

Salt River ElectricResidential MWh Usage, History and Forecast

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

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

46

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.

47

Table 1-7

Customers Use Per Customer Class Sales

AnnualAverage

AnnualChange

%Change

AnnualAverage(MWh)

AnnualChange(MWh)

%Change

Total(MWh)

AnnualChange(MWh)

%Change

1990 1,227 51 62,3601991 1,301 74 6.0 48 -3 -5.8 62,283 -77 -0.11992 1,386 85 6.5 45 -2 -5.0 63,057 774 1.21993 1,447 61 4.4 47 2 3.6 68,201 5,144 8.21994 1,510 63 4.4 49 2 4.6 74,450 6,249 9.21995 1,576 66 4.4 50 1 2.3 79,511 5,061 6.81996 1,643 67 4.3 52 2 3.9 86,147 6,636 8.31997 1,700 57 3.5 51 -1 -2.0 87,357 1,210 1.41998 1,760 60 3.5 54 2 4.4 94,441 7,084 8.11999 1,875 115 6.5 53 0 -0.6 99,964 5,523 5.82000 2,073 198 10.6 49 -4 -8.2 101,468 1,504 1.52001 2,156 83 4.0 51 2 4.2 109,950 8,483 8.42002 2,255 99 4.6 59 8 15.3 132,542 22,592 20.52003 2,196 -59 -2.6 57 -1 -2.5 125,823 -6,719 -5.12004 2,268 72 3.3 62 5 8.6 141,129 15,306 12.22005 2,356 88 3.9 73 11 17.4 172,165 31,035 22.02006 2,441 85 3.6 71 -2 -2.5 173,975 1,811 1.12007 2,519 78 3.2 71 0 -0.6 178,380 4,405 2.52008 2,597 78 3.1 70 -1 -0.7 182,567 4,187 2.32009 2,675 78 3.0 70 0 -0.6 186,970 4,403 2.42010 2,749 74 2.8 70 0 -0.5 191,150 4,180 2.22011 2,820 71 2.6 69 0 -0.5 195,112 3,962 2.12012 2,889 69 2.4 69 0 -0.4 199,064 3,952 2.02013 2,960 71 2.5 69 0 -0.4 203,125 4,060 2.02014 3,032 72 2.4 68 0 -0.4 207,167 4,042 2.02015 3,106 74 2.4 68 0 -0.4 211,269 4,103 2.02016 3,181 75 2.4 68 0 -0.4 215,449 4,179 2.02017 3,257 76 2.4 67 0 -0.4 219,772 4,323 2.02018 3,337 80 2.5 67 0 -0.4 224,247 4,475 2.02019 3,418 81 2.4 67 0 -0.4 228,803 4,556 2.02020 3,499 81 2.4 67 0 -0.4 233,332 4,529 2.02021 3,579 80 2.3 66 0 -0.3 237,930 4,598 2.02022 3,661 82 2.3 66 0 -0.3 242,533 4,603 1.92023 3,743 82 2.2 66 0 -0.3 247,112 4,578 1.92024 3,825 82 2.2 66 0 -0.3 251,701 4,589 1.92025 3,907 82 2.1 66 0 -0.3 256,286 4,585 1.8

Salt River Electric2006 Load Forecast

Small Commercial Summary

48

Methodology and Results (continued)Large Commercial Forecast

Large commercial customers are those with loads 1 MW or greater. Salt River currently has 9 customers in this class and is projected to increase to 26 customers by 2025. Large commercial results are reported in Table 1-8.

49

Customers Use Per Customer Class Sales

AnnualAverage

AnnualChange

%Change

Annual Average(MWh)

AnnualChange(MWh)

%Change

Total(MWh)

AnnualChange(MWh)

%Change

1990 6 12,594 75,5641991 6 0 0.0 13,404 810 6.4 80,421 4,857 6.41992 6 0 0.0 13,875 472 3.5 83,251 2,830 3.51993 6 0 0.0 14,614 739 5.3 87,684 4,433 5.31994 6 0 0.0 14,605 -9 -0.1 87,631 -53 -0.11995 5 -1 -16.7 17,218 2,613 17.9 86,091 -1,540 -1.81996 5 0 0.0 16,556 -662 -3.8 82,779 -3,312 -3.81997 5 0 0.0 14,847 -1,709 -10.3 74,233 -8,546 -10.31998 5 0 0.0 15,422 575 3.9 77,109 2,876 3.91999 5 0 0.0 15,120 -302 -2.0 75,601 -1,508 -2.02000 5 0 0.0 14,697 -423 -2.8 73,484 -2,117 -2.82001 5 0 0.0 14,886 189 1.3 74,431 947 1.32002 5 0 0.0 15,876 990 6.7 79,382 4,952 6.72003 9 4 80.0 11,309 -4,567 -28.8 101,781 22,399 28.22004 9 0 0.0 11,749 440 3.9 105,742 3,961 3.92005 9 0 0.0 11,894 145 1.2 107,048 1,306 1.22006 9 0 0.0 12,155 261 2.2 109,396 2,348 2.22007 12 3 33.3 11,313 -842 -6.9 135,755 26,358 24.12008 15 3 25.0 11,265 -48 -0.4 168,977 33,222 24.52009 18 3 20.0 10,360 -905 -8.0 186,487 17,510 10.42010 21 3 16.7 9,701 -659 -6.4 203,728 17,241 9.22011 24 3 14.3 9,194 -507 -5.2 220,657 16,929 8.32012 24 0 0.0 9,221 27 0.3 221,295 638 0.32013 25 1 4.2 9,211 -9 -0.1 230,278 8,984 4.12014 25 0 0.0 9,231 19 0.2 230,763 485 0.22015 25 0 0.0 9,247 16 0.2 231,167 404 0.22016 25 0 0.0 9,264 17 0.2 231,589 422 0.22017 25 0 0.0 9,281 17 0.2 232,022 433 0.22018 25 0 0.0 9,301 20 0.2 232,527 505 0.22019 25 0 0.0 9,321 20 0.2 233,018 492 0.22020 26 1 4.0 9,303 -18 -0.2 241,868 8,849 3.82021 26 0 0.0 9,328 25 0.3 242,522 655 0.32022 26 0 0.0 9,349 21 0.2 243,075 553 0.22023 26 0 0.0 9,367 18 0.2 243,547 472 0.22024 26 0 0.0 9,386 18 0.2 244,024 477 0.22025 26 0 0.0 9,402 16 0.2 244,450 425 0.2

Salt River Electric2006 Load Forecast

Large Commercial Summary

Table 1-8

50

Methodology and Results (continued)Other Forecast

Salt River serves street light accounts which are classified in the ‘Other’ category. This class is modeled separately. Results are reported in Table 1-9.

51

Customers Use Per Customer Class Sales

AnnualAverage

AnnualChange

%Change

AnnualAverage(MWh)

AnnualChange(MWh)

%Change

Total(MWh)

AnnualChange(MWh)

%Change

1990 125 6 7011991 130 5 4.0 6 0 6.0 773 72 10.31992 134 4 3.1 6 0 7.3 855 82 10.61993 131 -3 -2.2 8 1 17.6 983 128 15.01994 138 7 5.3 7 0 -0.7 1,029 46 4.71995 147 9 6.5 8 1 8.7 1,191 163 15.81996 150 3 2.0 9 1 10.2 1,340 149 12.51997 155 5 3.3 9 0 -0.5 1,378 38 2.81998 164 9 5.8 9 0 2.9 1,501 123 8.91999 177 13 7.9 9 0 -4.6 1,546 45 3.02000 172 -5 -2.8 10 1 12.1 1,683 138 8.92001 179 7 4.1 10 0 4.0 1,821 138 8.22002 193 14 7.8 11 0 4.7 2,056 235 12.92003 200 7 3.6 11 0 1.5 2,162 106 5.22004 202 2 1.0 11 0 0.3 2,191 29 1.32005 210 8 4.0 11 0 0.8 2,296 105 4.82006 215 5 2.4 11 0 2.6 2,412 116 5.12007 221 6 2.8 11 0 1.6 2,519 107 4.42008 227 6 2.7 12 0 1.6 2,628 109 4.32009 233 6 2.6 12 0 1.5 2,738 110 4.22010 238 5 2.1 12 0 1.8 2,848 110 4.02011 244 6 2.5 12 0 1.3 2,957 110 3.82012 250 6 2.5 12 0 1.2 3,067 109 3.72013 256 6 2.4 12 0 1.1 3,176 110 3.62014 262 6 2.3 13 0 1.1 3,286 110 3.42015 267 5 1.9 13 0 1.4 3,395 110 3.32016 273 6 2.2 13 0 1.0 3,505 109 3.22017 279 6 2.2 13 0 0.9 3,614 110 3.12018 285 6 2.2 13 0 0.9 3,724 110 3.02019 291 6 2.1 13 0 0.8 3,833 110 2.92020 296 5 1.7 13 0 1.1 3,943 109 2.92021 302 6 2.0 13 0 0.7 4,052 110 2.82022 308 6 2.0 14 0 0.7 4,162 110 2.72023 314 6 1.9 14 0 0.7 4,271 110 2.62024 320 6 1.9 14 0 0.6 4,381 110 2.62025 325 5 1.6 14 0 0.9 4,490 110 2.5

Salt River Electric2006 Load Forecast

Other Summary

Table 1-9

52

Blank PageBlank Page

53

Methodology and Results (continued)Peak Day Weather Scenarios

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

54

Table 1-10

Winter Peak Day Minimum Temperatures Summer Peak Day Maximum Temperatures

Mild Normal Extreme Normal Extreme

Degrees 10 0 -8 -14 -23 Degrees 96 99 101 104

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 220 236 247 263

2006 - 07 223 242 257 268 285 2007 231 247 258 275

2007 - 08 236 256 271 283 300 2008 243 260 272 289

2008 - 09 248 268 284 296 314 2009 253 271 283 301

2009 - 10 258 279 296 308 327 2010 263 281 293 312

2010 - 11 268 290 307 320 339 2011 271 290 303 322

2011 - 12 275 297 314 328 348 2012 277 296 309 329

2012 - 13 285 307 326 340 360 2013 285 305 319 339

2013 - 14 292 315 334 348 370 2014 291 311 326 346

2014 - 15 299 323 343 357 379 2015 297 318 332 354

2015- 16 305 330 350 365 388 2016 302 323 338 360

2016 - 17 313 339 360 375 399 2017 308 331 346 369

2017 - 18 320 347 369 385 409 2018 315 338 354 377

2018 - 19 328 356 378 394 419 2019 321 345 361 385

2019-2020 337 365 388 405 430 2020 329 353 370 394

2020-2021 346 375 399 416 442 2021 337 362 379 404

2021-2022 354 384 408 426 453 2022 343 369 387 412

2022-2023 362 393 418 436 464 2023 350 376 394 421

2023-2024 369 401 426 445 474 2024 356 383 402 429

2024-2025 378 411 437 456 486 2025 364 392 411 438

Salt River ElectricPeak Day Weather Scenarios

55

Figure 1-10

Salt River Electric - 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

56

RUS Form 341

57

Form 341Form 341