851 S.W. Sixth Avenue, Suite 1100 Steve Crow 503-222-5161 Portland, Oregon 97204-1348 Executive Director 800-452-5161 www.nwcouncil.org Fax: 503-820-2370
Bill Bradbury Chair
Oregon
Jennifer Anders Vice Chair Montana
Henry Lorenzen Oregon
W. Bill Booth
Idaho
James A. Yost Idaho
Pat Smith Montana
Tom Karier Washington
Phil Rockefeller
Washington
July 2, 2013 MEMORANDUM TO: Power Committee FROM: Massoud Jourabchi SUBJECT: Demographic and Economic Drivers for Seventh Power Plan
Demand for goods and services drives the demand for energy. Demand for energy is also determined by consumers’ choices on energy efficiency of the homes and appliances they choose and how these appliances are used. This presentation discusses the key demographic and economic drivers for the Seventh Plan such as size and mix of regional population, number of new homes, new square footage additions for commercial buildings, and output of industrial sectors, among other drivers. To develop the range of demographic and economic forecast, Council staff consulted with the Demand Forecast Advisory Committee (DFAC). Thirty two members of this advisory group consist of Public, Co-op, Investor Owned Utility forecasters, public interest groups, and State economists as well as general public. During a day-long session on May 23, 2013 Council staff took the DFAC members through all key demographic and economic drivers. The initial assumptions for the forecast were subsequently refined using insight from the committee and state forecasts. The key driver that ultimately drives economic activities and their energy requirement is population growth. Consistent with the growth rate projections at the national level, the population growth in the Seventh Plan’s forecasting horizon is expected to slow-down to about nine-tenth of percent, compared to 1.5% growth experienced since 1985. This slow-down in turn is reflected is slower growth rate in residential household formation, requirement for new commercial floor space requirement and to lesser degree growth in industrial output that has been on a partial rebound. Staff, in consultation with the DFAC, has developed three scenarios to establish a range of demographic and economic drivers. The medium or Base Case, and two alternative scenarios Pessimistic scenario is reflective of a future with slow economic growth, weak demand for fossil fuels, declining fuel prices; slow down in labor productivity. Optimistic scenario on the other hand, assumes faster economic growth, stronger demand, higher prices for fuels, and sustained growth in labor productivity.
7/2/2013
1
Demographic and Economic Drivers forthe Seventh Power Plan
J l 9 2013July 9, 2013
In This Meeting
Discussion of Drivers
Population growing – Population- growing – Residential sector- recovering– Commercial square footage- increasing
slowly– Industrial output (slow recovery)p ( y)– Electric Vehicles (slow and steady)– Next Steps
2
7/2/2013
2
Demand Forecast OverviewToday’s Presentations relate to Box 1 and 2
6 ) Forecast Demand for New Capital(by fuel)
7) Forecast New EnergyRequirements(by fuel)
Start with 1 ) Economic Forecast• New Homes• SQF of com. buildings• Industrial output
Mil t l d
12) ForecastPeak hour load ,Monthly Energy by enduse and state
2 ) Obtain Retail Fuel
Prices History and Forecast
8 ) Forecast Energy Requirements netOf retirements
(by fuel)
10) Produce “Price Effect “ Demand Forecast
4) Determine Consumer Choice on
ffi i
• Miles traveled
3) ChooseEfficiency/Fuel
5) Compare consumer choice to
Codes and Standards
11) Then use Hourly System Load to estimate contribution to system peak by each sector and enduse
slide 3
9) Bring in other variablesfrom calibration To 1985‐2011 Annual Demand ,MarketShare, market efficiencyMonthly System Peak, Average & Min Loads.
Historic Cooling andHeating degree days
Forecast (by fuel, enduse , state)
Energy EfficiencyTrade off point
Calculate total Energy Cost
Input O&MCosts
Input CapitalCosts
Monthly system load and Sales
Major Drivers of Long-term Load Forecast
– Demographic and Economic Factors
E P i– Energy Prices
– Customers choice of fuel
– Customers choice of efficiency
– Trends in socio-economic factors
– Trends in change in temperatureg p
4
7/2/2013
3
Box1- Economic Drivers
Economic and Demographic factorsGrowth in Population – Growth in Population
– Changes in population mix– Stock and Additions to residential units– Stock and additions to Commercial square
footage requirements– Changes in industrial output and mix g p– Change in Agricultural output– Transportation (income, VMT)
5
Source of Information for Economic Drivers
– IHS_Global Insight– In-house analysis– State economic forecasts– Demand Forecast Advisory Committee
Vintage of data: Q1 2013 and Q4 2012
6
7/2/2013
4
Regional Population
8000
9000Regional Population
1985-2015 2015-2035ID 1.7% 1.3%
2000
3000
4000
5000
6000
7000
8000MT 0.8% 0.5%WA 1.6% 0.9%OR 1.4% 0.9%
4 States 1.5% 0.9%USA 1.03% 0.9%
Average Annual Addition to Population (1000) 1985-2015 2015-2035
ID 21 33MT 7 7
0
1000
1990 2000 2010 2020 2030 2035
ID MT OR WA
7
Overall regional population growth projected to slow down.
Northwest population remains about 4% of national population.
WA 89 86OR 44 50
4 States 132 136
What is the impact of declining working age adults?
90%
100%
30%
40%
50%
60%
70%
80%
65-older20-640-19
8
0%
10%
20%
1990 2000 2010 2020 2030 2035
7/2/2013
5
Regional Growth in Residential Building Stock
6,000
Residential Building Stock
‐
1,000
2,000
3,000
4,000
5,000
1000s of units
Single Family
Multi Family
Other Family
1985
1988
1991
1994
1997
2000
2003
2006
2009
2012
2015
2018
2021
2024
2027
2030
2033
9
1985-2011 2012-2035Single Family 1.6% 1.1%Multi Family 2.4% 2.3%Manufactured Homes 2.3% 0.3%
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Numbe
r of U
nits
New single Family Additions
ID_Single Family
MT_Single Family
OR_Single Family
WA_Single Family
1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
0
5000
10000
15000
20000
25000
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Numbe
r of U
nits
New Multi‐Family Residential Additions
ID_Multi Family
MT_Multi Family
OR_Multi Family
WA_Multi Family
0
1000
2000
3000
4000
5000
6000
7000
8000
1985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Numbe
r of U
nits
Number of New Manufactured Homes
ID_Other Family
MT_Other Family
OR_Other Family
WA_Other Family
10
7/2/2013
6
100
120
140
160
National Composition of Housing Stock(Millions)
0
20
40
60
80
Manufactured homes Single‐family Multi‐family
11
Annual Growth Rate All Housing Manufactured homes Single-family Multi-family
1985-2015 0.94% 0.42% 1.19% 0.39%
2015-2035 0.88% -0.34% 0.91% 1.03%
Commercial Sector Drivers
5,000
5,500
6,000
6,500
7,000
7,500
8,000
2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2
Regional Employment (thousands)
Annual Growth Rate2005-2011 2011-2020 2020-2035
Floor Space Stock Req. 0.4% 1.0% 0.5%
-
10
20
30
40
50
60
70
200
5
200
6
200
7
200
8
200
9
201
0
20
11
201
2
201
3
201
4
201
5
201
6
201
7
201
8
201
9
202
0
202
1
202
2
202
3
202
4
202
5
202
6
202
7
202
8
202
9
203
0
203
1
203
2
203
3
203
4
203
5
2012-2035 New Floor Space Requirement in the 4 States (1000 SQF)
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
Stock Req. 0.4% 1.0% 0.5%New SQF Req. -2.7% 3.9% 0.5%Employment 0.8% 1.4% 0.6%
CumulativeAnnual Average
1985-2011Addition 1,406 52
2015-2035Requirement 951 40
Floor space Additions (M SQF)
25002600270028002900300031003200330034003500
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
20
16
20
17
20
18
20
19
20
20
20
21
20
22
20
23
20
24
20
25
20
26
20
27
20
28
20
29
20
30
20
31
20
32
20
33
20
34
20
35
2012-2035 Stock of Floor Space Requirement in the 4 States (1000 SQF)
12
Growth in non‐farm employment is projected to slowdown after initial recovery from recession.
Requirement 951 40
7/2/2013
7
Commercial Sector Slowing Down
3000
4000
Non‐manufacturing Employment (1000s)
0
1000
2000
3000
1990 1995 2000 2005 2010 2015 2020 2025 2030 2035
ID MT OR WA
13
Employment (Non-Manufacturing) 1990-2015 2015-2035
ID 2.36% 1.04%
MT 1.86% 0.91%
OR 1.55% 1.03%
WA 1.70% 0.81%
4 States 1.74% 0.91%
Our current forecast suggest
90 100
Floor Space Additions 1985-2011and Forecast of Floor space Requirements 2012-2035(MSF)
-10 20 30 40 50 60 70 80
985
988
991
994
997
000
003
006
009
012
015
018
021
024
027
030
033
19 19 19 19 19 20 20 20 20 20 20 20 20 20 20 20 20
14
Floor Space Additions (Millions of S.Q.F)Cumulative Annual Average
1985-2011 1,406 52
2015-2035 951 40
7/2/2013
8
Slow down in rate of growth for commercial sector space requirements
Oregon Washington Idaho Montana Region
Business/Building type 1985-20112012-2035
1985-2011
2012-2035 1985-2011 2012-2035
1985-2011 2012-2035 1985-2011 2012-2035
Large Office 1.7% 1.5% 1.2% 1.5% 4.6% 1.9% 0.5% 2.5% 1.4% 1.6%
Medium Office 3.9% 1.5% 3.4% 1.5% 7.0% 1.9% 2.6% 2.5% 3.6% 1.6%
Small Office 2.2% 1.5% 1.6% 1.5% 5.1% 1.9% 0.9% 2.5% 1.8% 1.6%
Big Box-Retail 7.4% 1.1% 7.4% 0.6% 10.8% 0.9% 7.2% 0.7% 7.5% 0.8%
Small Box-Retail 1.0% 1.1% 1.3% 0.6% 3.7% 0.9% 1.0% 0.7% 1.3% 0.8%
High End-Retail 1.0% 1.1% 1.0% 0.6% 3.7% 0.9% 1.0% 0.7% 1.1% 0.8%
Anchor-Retail 0.5% 1.1% 0.5% 0.6% 3.5% 0.9% 0.4% 0.7% 0.6% 0.8%
K-12 3.0% 0.7% 1.6% 0.8% 2.5% 1.4% 1.1% 0.8% 1.8% 0.8%
University 3.3% 1.1% 1.5% 0.8% 2.8% 0.6% 1.5% 1.0% 1.9% 0.9%
Warehouse 2.2% 1.7% 3.8% 0.9% 3.6% 2.1% 1.3% 1.7% 2.9% 1.4%
Supermarket 0.7% 0.6% 1.0% 0.5% 3.1% 0.3% 1.2% 0.4% 1.2% 0.5%
15
Q:\MJ\Demand Forecasting Model\Economic Forecasts\Economic drivers for the model‐March 2013 7th plan update to load forecast.xlsx
p
Mini Mart 5.9% 1.8% 5.5% 0.9% 8.2% 0.7% 6.1% 0.6% 5.9% 1.0%
Restaurant 1.5% 1.1% 1.7% 1.1% 3.5% 1.4% 1.2% 0.9% 1.7% 1.1%
Lodging 1.6% 1.1% 1.9% 0.6% 2.2% 0.6% 0.9% 1.0% 1.6% 0.8%
Hospital 2.9% 1.1% 2.0% 1.9% 3.2% 2.1% 1.9% 1.3% 2.4% 1.7%
Other Health 3.3% 2.0% 2.0% 1.6% 2.2% 1.6% 2.8% 2.1% 2.4% 1.7%
Assembly 3.2% 1.0% 2.0% 1.1% 3.2% 2.5% 1.8% 1.2% 2.3% 1.3%
Other 3.1% 1.6% 1.8% 0.5% 3.2% 1.2% 1.4% 1.3% 2.1% 0.9%
Manufacturing Employment recovers but does not regain 1990s high level
Manufacturing Employment
100
150
200
250
300
350
400
1000s
0
50
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
2020
2022
2024
2026
2028
2030
2032
2034
ID MT OR WA
16
7/2/2013
9
Industrial Sector Output Recovering
60
70
Industrial Output (Billions of $2005)
0
10
20
30
40
50
601985
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Billions of 2005$
Idaho Montana Oregon Washingtong g
17
Industrial 1985-2011 2015-2035Idaho 0.5% 1.2%
Montana 1.0% 1.7%Oregon -0.2% 1.0%
Washington 0.6% 1.8%Region 0.4% 1.6%
Growth in Industrial OutputOregon Washington Idaho Montana Region
Business/Building type 1985-2011
2012-2035
1985-2011
2012-2035 1985-2011
2012-2035
1985-2011 2012-2035 1985-2011 2012-2035
Food & Tobacco 2.0% 3.0% 2.0% 2.5% 2.1% 2.6% 2.8% 2.5% 2.0% 2.7%
Textiles -3 0% 0 6% 7 3% 0 4% 9 4% 4 9% NA 1 7% 4 5% 0 9%Textiles -3.0% 0.6% 7.3% 0.4% 9.4% 4.9% NA 1.7% 4.5% 0.9%
Apparel -2.1% -2.7% -4.3% -0.9% -3.7% 2.7% -5.8% 1.7% -3.7% -1.0%
Lumber -3.9% -3.0% -3.4% -0.2% -2.8% -1.6% -3.7% 1.0% -3.6% -1.5%
Furniture 4.1% 2.5% 3.4% 2.8% 5.8% 5.6% 3.4% 2.0% 3.9% 3.1%
Paper -1.2% 2.5% 0.4% 2.6% 2.1% 1.7% -9.4% NA -0.2% 2.5%
Printing -2.8% 1.6% -4.8% -0.6% -5.0% 2.1% -5.9% -0.3% -4.1% 0.8%
Chemicals 10.1% 4.7% 5.3% 5.6% NA 3.7% -1.9% 3.6% 5.5% 5.1%
Petroleum Products -6.0% 1.2% 2.6% 2.2% -14.8% 4.8% 12.4% 1.5% 2.2% 2.0%
Rubber 4.3% 3.2% 4.6% 3.5% -1.7% 4.2% 5.5% 4.0% 3.3% 3.5%
Leather 2.5% -1.8% -1.3% -3.6% -0.5% 1.6% 1.5% 1.0% 1.1% -1.3%
Stone Clay etc 3 6% 3 1% 2 6% 4 0% 0 3% 4 1% -1 2% 1 9% 2 5% 3 6%
18
Stone, Clay, etc. 3.6% 3.1% 2.6% 4.0% 0.3% 4.1% -1.2% 1.9% 2.5% 3.6%
Aluminum -2.2% -3.5% -3.2% -4.1% NA NA -8.5% NA -3.3% -3.9%
Other Primary Metals 1.3% 1.4% 3.2% -4.0% 10.6% -4.2% 1.8% 1.5% 2.1% -0.4%
Fabricated Metals 2.6% 1.0% 3.4% -2.4% 3.9% -2.9% 5.5% 5.7% 3.1% -0.3%
Machines & Computer 0.3% 1.1% -0.2% -0.5% -1.0% -2.9% -0.6% 1.0% -0.2% 0.3%
Electric Equipment -3.1% 1.0% -3.7% 0.8% 3.1% -0.2% 3.3% 5.5% -3.2% 0.9%
Transport Equipment 2.7% -0.1% 0.3% 1.0% 8.7% -15.6% 4.3% NA 0.5% 0.9%
Other Manufacturing 4.6% 3.9% 4.5% 3.4% 9.0% 4.5% 6.7% 5.4% 4.9% 3.8%
7/2/2013
10
New Auto Sales Rising
700
New Passenger Car & Light Truck Registrations (Thous.)
300
400
500
600
Washington
Orergon
Montana
d h
19
0
100
200
1995
1997
1999
2001
2003
2005
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029
2031
2033
2035
Idaho
Fuel Efficiency increasing
45
Fuel Efficiecny of Passanger Vehicles Miles/Gallon
10
15
20
25
30
35
40
20
1975 1980 1990 2000 2010 2015 2020 2025 2030 2035
Stock 12 14 19 20 20 21 23 26 29 31
New 13 20 21 20 22 26 31 35 38 39
‐
5
7/2/2013
11
Electric Vehicles increasingIdaho, 15 Montana,
42Oregon, 1447
As of Jan 2013, there were about 4700
i t d l t i
Washington, 3225
Idaho Montana Oregon Washington
registered electric vehicles registered with DMV.
Majority of these vehicles are in Oregon and Washington.
21
Idaho Montana Oregon Washington
2012 2011 GrowthTOTAL U.S. CAR 7,473,850 6,339,884 18%Chevy Volt 23,461 7,671 206%
Nissan Leaf 9,819 9,674 1%
EV Project Experience
By the end of 2012– Nearly 60 million miles recorded
– Over 14,100 MWH
– 7379 Nissan Leafs, Chevy Volts & smart ForTwovehicles
– Over 1.9 million gallons of gasoline avoided.
– 6694 Residential 2583 Public 56 fast Chargers 6694 Residential, 2583 Public, 56 fast Chargers installed.
– Daily Travel (Leaf ~30 miles, Volt ~40 miles)
22
7/2/2013
12
Although number of Charging Stations on the rise, so far
Majority of charging events and energy, (86%‐92%) occurs at home.EV increase resident’s electricity consumption by about 22%consumption by about 22%
MWH/Household
Oregon Washington
Average Consumption
12 13
EV consumption 2.9 2.8
23
EV project participants as of end of 2012 Oregon Washington
Number of Nissan Leafs 549 893
Number of Chevy Volts 94 98
Distance Driven (Million Miles) 5.5 8.5
Electricity Consumed (AC GWH) 1.4 2.1
Our current Assumption on market penetration for Electric Vehicles.
40.00%
45.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
Per
cen
t o
f N
ew
car
s
0.00%
5.00%
10.00%
Case 1 Case 2 Case 3
24
7/2/2013
13
2,500
PHEV Vehicles on the Road (1000s)
1,000
1,500
2,000
`
-
500
Case 1Case 2Case 3
25
1.20%
1.40%
1.60%
1.80%
2.00%
Comparison of 6th and 7th Plans Expected Growth Rates by Sector
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
Residential Commercial Industrial
6th Plan 2010‐2030 7th Plan 2015‐2035
26
6th Plan 7th Plan Draft
2010-2030 2015-2035
Residential 1.37% 1.18%
Commercial 1.25% 1.11%
Industrial 1.74% 1.56%
7/2/2013
14
Range of Economic Drivers for Scenarios
2015 2035 A l G h R f O i i i P i i i2015-2035 Annual Growth rate Reference Optimistic Pessimistic
Residential Units 1.18% 2.0% 0.08%
Commercial Floor space 1.11% 2.1% 0.67%
Industrial output 1.56% 2.4% 0.95%
Agricultural output 0.81% 2.0% 0.26%
ReferenceOptimistic Pessimistic
Residential Units Stock by 2035 (1000 of units) 7 629 11 446 4 851
27
Residential Units Stock by 2035 (1000 of units) 7,629 11,446 4,851 Commercial Floor space stock by 2035 (millions SQF) 3,944 4,842 3,562
Industrial output by 2035(billions $2005) 72 89 63
Agricultural output (billions $2005) 10.9 14.0 9.5
Tentative Timeline of the 7th Plan
Draft Economic forecast …June 2013– Incorporate RBSA data Incorporate RBSA data
Draft Load Forecast … …..November 2013 (Tentative)
Final Economic Forecast…June 2014 (Tentative) Incorporate CBSA and Industrial data
Final Load Forecast……….Q3 2014 (Tentative)
Draft 7th Plan... Q1 2015 (Tentative)
Final 7th Plan... Q3 2015 (Tentative)
28
7/2/2013
15
Questions
Average Annual Addition to New Residential Units1985-2001 2002-2007 2008-2011 2012-2035
ID-SNGL 7,132 13,786 4,327 9,923
MT-SNGL 1,706 3,471 2,643 2,695
OR-SNGL 13,674 17,489 13,831 14,649
WA-SNGL 26,952 31,643 24,098 24,140
ID-MULT 1,232 1,539 1,906 2,073
MT-MULT 598 844 1,499 1,606
OR-MULT 6,155 4,503 6,658 6,896
30
WA-MULT 13,435 9,557 13,125 14,206
ID-Manf. Housing 1,818 811 269 269
MT-Manf. Housing 1,161 713 364 365
OR-Manf. Housing 4,983 2,199 662 674
WA-Manf. Housing 5,609 2,567 784 800