Common Challenges at the Energy Forecasters Meeting

Turning to her left, then right, Grace finds herself surrounded by strangers – men and women from across the United States; there’s even one from Canada. The prompt is simple, “What are the big issues you are facing?” Hesitantly, the first person begins to share his list. Suddenly, the monologue turns to dialogue with each person commiserating, and then adding insights to the issues.

Each year, Itron’s Annual Energy Forecasters Meeting begins with the “hot” issues round table session. This year’s 15th annual meeting in Chicago was no different. The 60 forecasters laid out classic challenges and emerging issues creating an environment of collaboration.

The major themes from the round table session include disruptive and new technologies, growth challenges, and emerging business issues. Below are some highlights of what was discussed.

Disruptive and New Technologies

As expected, the disruption caused by solar technology led the discussion. However, solar was not the only technology warranting attention. Several companies added electric vehicles, batteries, and combined heat and power to the list. Each technology discussion brought a wave of forecasting concerns ranging from market penetration and modelling techniques to load shape implications.

The advancement of AMI technology emerged as a positive challenge. With enough historical data to begin analysis, companies discussed the potential to improve unbilled calculations, revenue variance analysis, and accuracy, as well as explore end-use metering applications.

Growth Challenges

Since 2008, many companies have experienced slow load growth and/or declining average usage. While some companies struggle to explain the stagnation, others pointed to energy efficiency changes, price effects, and DSM programs. The additional effects of the Clean Power Plan, housing stock changes, and industrial automation also entered the discussion.

Slow growth also renews focus on understanding weather volatility. Growth no longer hides errant budget variance or weather normalization reporting.  Participants weighted the effect of model accuracy and normal weather definitions impact.  Amid the range of concerns, Itron conducted an informal survey of normal weather definitions allowing participants to discuss definitional impacts.

Emerging Business Issues

With 38 companies participating, the range of emerging issues was broad reflecting the changing nature of the electric and gas industries. Four major business issues highlight the discussion. First, pricing changes, including bill complexity and TOU rates, imply future consumption changes.  Second, variations among economic vendor forecasts opens the discussion on the best economic vendors. Third, flat sales are creating budget constraints requiring operating and decision making with limited resources. Finally, retail choice is emerging in some regions changing the nature of forecasting.

With the realization that these people share common challenges, Grace relaxes and finds that she is no longer surrounded by strangers, but colleagues. Fearlessly, she enters the dialogue, listens to ideas, and makes connections.   At the end of the hour, Grace sits back and quietly says to herself, “This is going to be a good conference.”