ML18017A468

Forwards Nc Utilities Commission 781228 Order Adopting 1978 Rept on Future Electricity Needs for Nc:Load Forecast & Capacity Plan-1978 W/Copy of Rept,Table Showing Util'S Latest Forecast, & Const Schedule Dtd 781220

ML18017A468
Person / Time
Site:	Harris
Issue date:	01/03/1979
From:	JONES J A CAROLINA POWER & LIGHT CO.
To:	DENTON H R Office of Nuclear Reactor Regulation
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ML18003A352	List: ML18003A350 ML18017A468
References
NUDOCS 7901100237
Download: ML18017A468 (164)

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Cite"..5, Carolina PolvQf'.Lght COPi1part>J P.O.Bt)x 1551~Raleigh.N.C.27602'g@~Qg4)AGE J.A.JONES Executive Vice PresiCent Chief Operating Officer Janua~3, 1979>>aa f<a Ia/VS~>>>>'"'b~~v IJa M0 Mr.Harold R.Denton, Director Office of Nuclear Reactor Regulation United States Nuclear Regulatory Commission Washington, D.C.20555 a SHEARON HARRIS NUCLEAR POvKR PLANT UNITS 1-4 DOCYNT NOS.50-400 401 402 403 rt 7 7/7 7 do.'~~

Dear Mr.Denton:

In the interest of keep" ng you informed concerning matters affecting the Harris plant, we are enclosing a copy of the North Carolina Utilitires Commissionrs (NCUC)Order of December 28, 1978, formally adopting a 1978 load forecast and capacity plan for the State of North Carolina.A copy of the report entitled, Future Electricit Needs for North Carolina: Load Forecast and Caf)acit Plan-1978 (NCUC Report), is also enclosed.In addition, copies of each document are being forwarded with a copy oz this letter to the members of the Nuclear Regulatory Commission, the Atomic Safety 6 Licensing Appeal Board, the Atomic Safety 6 Licensing Board, and all parties to the construction permit proceeding. Relying primarily on a 1978 forecast prepared by the Public Staff of the NCUC which was before the Atomic Safety 6 Licensing Board and the Atomic Safety 6 Licensing Appeal Board (as Licensing Board Exhibit 7)when the affirmative finding on the need for power was made in this case, the 1 1See Carolina Power 6 Light Co.(Shearon Harris Nuclear Power Plant Unfaa 1, 2, 3, and 4)7 NRC 92 (1978), affzm'd ALAR-490, 7 NRC (Aug.23, 1978).

Mx.Denton January 3, 1979 NCUC has determined that the probable range of annual peak-load growth for CPEL through 1992 is 4.4%to 6.5%.Within this range the most, probable peak-load growth rate for planning was found to be 5.2%.NCUC Report at 9.In reaching this conclusion the NCUC essentially adopted the NCUC public Stafx's 1978 base case forecast of 6.7%growth and qualitatively adjusted it to account for actual 1978 peaks and to incorporate the Commission's belief that conservation and load management can xeduce the rate of peak load growth.Id.at 19-21.The Commission recognized, however, that the proposed reductions"depend upon increased levels of conservation and load management" (id.at 21)and stated that"significant effort should be emended by the utilities to help effect...changes in usage patterns." Id.at 22.Based upon its expectation of achieving a reduction in the rate of growth to 5.2%, the NCUC concluded that the inservice dates for CPSL units under construction could be extended at least one year, but in no case greater than two years, and still maintain adequate reserves.Id.at 22 and 24.Recognizing, however, the"paucity of concrete data available...concerning actual methods of achieving the expected levels of conservation and load management" (id.at 26)and its"responsibility to ensure that the continued economic growth of the State is not impaired by a lack of adequate utility services" (id.at 27), the Commission deferred any decision to require CPGL or other electric utilities to adjust their construction schedules until after completion of hearings planned for mid-1979.Id.at 26-27.In addition to tne NCUC forecast, I am also enclosing a Table showing CP6L's latest forecast and construction schedule as submitted to the CP&L Board of Directors on December 20, 1978.Like the NCUC forecast, it also ~,'r.Denton january 3~1 979 forecasts slightly slower growth (5.35%through 1992)than the Company's previous forecast (>..).(7/)Although the generating capacity addition schedule eliminates a 1150 HM undesignated nuclear unit formerly projected for 1989 and adds two undesignated 720 EM units fax 1991 and 1992, respectively, no changes xn t e cons h truction schedule or inservice dates are currently P xogected for units under construction. It is clear in any event-consistent with the ASLB's f~nding in a.ts Initial Decision-t at o-h b th the NCUC's and the Company's lowered growth rates still show"a need for Harris power in the 1980's" (7 NRC at 139)and that while the e ect o e o ff f th 1 wexed forecast"could be that the timing of the Harris units might e c ange h b h d the need to schedule... [them]for construction would remain." Id.In the event t ere s an h i y subsequent change in the Haxris schedule, we will inform you.Very txuly yours,/J.A.J es JAJ/gmc Enclosures cc: The Honorable Joseph H.Hendrie, Chairman U.S.Nuclear Regulatory Commission Washington, D.C.20555 The Honorable Victor Gilinsky, Commissioner U.S.Nuclear Regulatory Commission Washington, D.C.20555 The Honorable Richard T.Kennedy, Commissioner U.S.Nuclear Regulatory Commission Washington,'. C.20555 The Honorable Peter A.Bradford, Commissioner U.S.Nuclear Regulatory Commission Washington, D.C.20555 Mr.Denton January 3, 1979 The Honorable John P.Ahearne, Commissioner U.S.Nuclear Regulatory Commission Washington, D.C.20555 Office of the Commission U.S.Nuclear Regulatory Commission Washington, D.C.20555 Mr.Alan S.Rosenthal, Chairman Atomic Safety&Licensing Appeal Board U.S.Nuclear Regulatory Commission Washington, D.C.20555 Dr.John H.Buck, Member Atomic Safety&Licensing Appeal Board U.S.Nuclear Regulatory Comm.'ssion Washington, D.C.20555 Mr.Michael C.Parrar, Member Atomic Safety&Licensing Appeal Board U.S.Nuclear Regulatory Commission Washington, D.C.20555 Ivan W.Smith, Esquire Chairman Atomic Safety&Licensing Board U.S.Nuclear Regulatory Commission Washington, D.C.20555 Mr.Glenn 0.Bright Atomic Safety&Licensing Board U.S.Nuclear Regulatory Commission Washington, D.C.20555 Dr.J.V.Leeds, Jr.10807 Atoll Houston, Texas 77096 Dennis P.ayers, Esquire Associate Attorney General State of North Carolina Post Office Box 629 Raleigh, North Carolina 27602 Charles A.Barth, Esquire Office of the Executive Legal Director U.S.Nuclear Regulatory Commission Washington, D.C.20555 Thomas S.Erwin, Esquire Post Office Box 928 Raleigh, North Carolina 27602 Mr.Denton January 3, 1979 Docketing and Service Section Office of the Secretary U.S.Nuclear Regulatory Commission Washington, D.C.George F.Trowbridge, Esauire Shaw, Pittman, Potts&Trowbridge l800 if Street, N.W.Washington, D.C.20036 NOTE: Copies were also sent to Kudzu Alliance and to Mr.Wells Eddleman, who have a petition for intervention pending in the Harris proceeding on management capability. Table CP&L Load Porecast and Ca acit Addition Schedule 1979 1980 1981 S W 6056 6056 6442 6442 6816 6816 ADDITION~MW 720 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 S W S W S W S W 7223 72,23 7627 7627 8079 8079 8536 8536 8980 8980 9449 , 9449 9911 9911 10389 10389 10859 10859 11400 11400 11930 11930 720 900 720 900 900 900 720 720 Legend: Suamer S Winter W 5.35%1979-1992 STATE OP NORTII CARQLXNA UTXLXTXL'S COl L'"iXSSXON R3)iLEXGH, NORTH CAROLINA DOCKET NO.E-)00, SUB 32 Xn the Hatter of Investigation, Analys's, and Estimation of Future Growth in the Use of Electricity and the Need for Puture Generating Capacity for No th Carolina~(PP II~n.Q t Of J~q p (jg.d BEFORE THI'ORTII CAROLINA UTXLXTXES COIQAXSSXON .)ORDER ADOPTXNG 1978 REPORT)PU URE ELECTRXCXTY NEEDS)FOR NORT!)CAROLI))A: LOM)P)FOHZCAST A))D CAPACITY)PL?Q1-1978)HEARD IN: BEFORE: 'APPEAPMiCES: Commission IIearing Room, Dobbs Building,<)30 North Salisbury Street, Raleigh, North Carolina, Beginning Tuesday, February 7, 1978~Chairman Robert.K.Koger, Presiding; and Comm'sioners Ben E.Roney, Leigh H.Hammond f Sarah Lindsay Tate, Robert Pischbach, John W.Winters, and Edward B.Hipp For the Public Staff: Jerry B.Pruitt, Chief Counsel, Paul L.Lassiter, Staff Attorney, Public Staff-North Carolina Utilit."'es Commission, Post Of ice Box 991, Raleigh, North Carolina 27602 For: The Using and Consuming Public For the Intervenors: Richard E.Jones, Associate General Counsel, Cazolina Power 6 L'ght Company, Post Office Box 1551, Raleigh, North Carolina 27602 Por: Carolina Power 6 Light Company Steve C.Griffith, Jr , General Counsel, Duke Power Company, 022 South Church Street, Charlo te, North Carolina 28202 Por: Duke Power Company George W.Ferguson, Jr., Attorney at Law, Duke Power Company, Post.Office Box 2178, Charlotte, North Carolina 28211 For: Duke Power Company Edgar H.Roach, Jr., Iiunton 6 Williams, Attorneys at Law, 707 East Hain St eetg Richmond, Virg'nia 23219 For: Virginia Electric and Power Company UL h'L~I Jg iUD~I Q~Thomas J.Bolch, Crisp, Bolch, Smith, Cli f ton 6 Davis, Attorneys at Law, Post Office Box 7S1 Raleigh, North Carolina 27602 For: North Carolina Electric Membership Corporation David H.Permar, Hatch, Little, Bunn, Jones, Few 6 Berry, Attorneys at Law, Post Office Box 527, Raleigh, North Carolina 27602 For: The North Carolina Oil Jobbers Association Thomas E.Erwin, Attorney at Law, Post Office Box 928, Raleigh, North Carolina 27602 For: The Carolina Environmental Study Group@the Conservation Council of North Carolina, Inc.<the League of Nomen Voters of North Carolina, Inc., and the Joseph Le Conte Chapter of the Sierra Club Mark E.Sullivan, Attorney at Law, 203 Loft Lane, 508, Raleigh, North Carolina 27609 For: The Carolina Environmental Study Group, the Conservation Council of North.Carolina, Inc.<the League of Nomen Voters of North Ca'rolina, Inc., and the Joseph Le Conte Chapter of the Sierra Club Richard L.Griffin, Associate Attorney General f North Carolina Department of Justice, Post Off'ce Box 609, Raleigh, North Carolina 27602 For: The Using and Consuming Public BY THE COM1ISSION: The General Statutes of North Carolina require that the Commission annually analyze and estimate the probable future growth in the use of electricity and the need for future generating capacity in North Carolina.G.S.62-110.1 provides, in part, as follows: "(c)The Commission shall develop, publicize, and keep current an analysis of the long-range needs for expansion of facilities for the generation of electricity in North Carolina, including its estimate o the probable future growth o f the use o f electricity, the probable needed generating reserves, the extent, size, mix and general location of generating plants and arrangements for pooling power to the extent not regulated by the Federal Power Commission and other arrangemen s with other utilities and energy suppliers to achieve maximum efficiencies for the benefit of the people of North Carolina, and shall consider such analysis in acting upon any petition by any utility for construction. Zn developing such analysis, the Commission shall confer and consul't with the public utilities in North Carolina, the utilities commissions or comparable agencies of neighboring 'states, the Federal 0 DOC1wET NO~I'0 0 I,SUB 32 Commission< the Southern Growth Policies Board, and other agencies having relevant information and may participate as it deem" use f ul in any j oint boards investigating generating plant sites or the probable need for future generating facilities. In addition to such report" as public u ilities may be required by statute or rule of the Commission to file with the Commis ion<any such utility in North Carolina may submit to the Commission its proposals as to the future needs for electricity to serve the people of the State or the area served.by such utility, and insofar as prac"icable, each such utility and the Attorney General may attend or be represented at any formal conference conducted bv the Commission in developing a plan for the future reauirements of electricity for North Carolina or this region.In the course of making the analysis and developing the plan, the Commission hall conduct one or more public hearings.Each year, the Commission shall submit to the Goveinor and to the appropriate committees o f the General Assembly a report of its analysis and plan, the progress to date in carrying out such plan, and the program of the Commission for the ensuinq year in connection with such plan." To assist the Commission in carrying out its responsibilities under G.S.62-110.'1, the Public.Staff developed an independent electric power demand forecast and generating capac ty model for the major elec ric utilities providing.public utility service in North Carolina.The Public Staff s report was filed w'th the Commission on December 15, 1977.On November 29, 1977, the Commission issued its Order setting hearing and inviting participation in this docket.The Order provided that the results of the Public Staff's report would be presented at a public hearing beg'nning on February 7, 1978, and that, at this hearing, the Commission would receive for consideration e>pert testimony from the electric utilities, private groups, and those individuals having a knowledge of electric demand forecasting and electric generat'on. The Order further directed Carolina Power 8 Light Company (CPGL), Duke Power Company (Duke), and Virginia Electric and Power Company (VEPCO)to publish notice of the hearing in newspapers throughout the State for four consecutive weeks.Notices of intervention from the Public Staff and from the Attorney General of North Carolina were received and recognized by the Commission. The Commission also received petitions for intervention from the following parties: CPGL (Duke, VEPCO, the North Carolina Electric hfembership Corporation, the North Carolina Oil Jobbers Association, the League of Nomen Voters of North Carolina, Inc., the Conservation Council of North Carolina, Inc., the Joseph Le Conte Chapter of the Sierra Club, and the Carolina Environmental Study Group, Inc.The Commission granted all 4 DOCKET NO.'-'t00, SUB 32 the petitions for'intervention and made the petitioner thereto parties of record in this proceeding; The matter came on zor hearing as.srheduled on Fe)~ruary 7, 1970.The Public Staff presented the testimony an0 exhibits of the following witnesses: N.Edward Tucker, Jr., Public Stafz Engineer in the Electric Division, who testified on areas of forecasting of future electric prices, developing customer class load factors to be used in estimating future peak demands,.and analyz'ng the effects of alternate growth scenarios on the price of electricity; Thomas H.Kiltie, Public Staff Economist, who testified on his preparation of.peak demand projections by examination of.alternative econometric peak load models and the commercial sector econometric EhVI forecasts for CPGL and Duke;Edwin A.Rosenberg, Public Staff Economist, who testified on the econometric estimation o f the indus trial usage o f electricity; Dennis J.Nightingale, Public Staff Engineer in the Electric Division)who testified on noneconometric load forecasting and supply configuration development; Daniel D.Hahoney, Economist with the Research and Planning Section of the Division of State Budget and Management 'in the North Carolina Department o Administration, who testified in support o the forecasting procedures and methodology utilized in producin g the long-t erm forecast of State economic activity and incorporateQ in the Public Staff's report;Thomas S.Elleman,-Professor and Head of the Nuclear Engineering Department at North Carolina State University, who testified on alternative energy sources and nuclear reactor safety;and Brian H.Flattery, Director of the Energy Division of the Department of Commerce, who test fied concerning actions which State government has taken to promote conservation and alternate energy sources.The Public Staff, by affidav't, submitted the testimony of Dennis H.Goins, formerly a Public Staff Economist, whose testimony described the methodology and re"ults contained in the residential forecast portion of the Public Staff's report.Duke Power Company presenteQ the testimony of the following witnesses: Nilliam S.Lee, Executive.Vice President of Duke Power Company, who testified concerning Duke's planned construction program for 1985 and beyond and why Duke has.'lected not to change the planned in-service dates for the i~1cGuire and Catawba nuclear units;Donald H.Denton, Jr., Vice President-Marketing, who described Duke's load management program and its impact, on future generating requirements; David Rea, 71anager of Forecasting anQ Budgets, who testified on Duke's system peak load and sales forecasts; and Donald H.Sterrett, 1!anager of System Planning, who testified on the generating capacity additions scheduled for the Duke service area in the context of an icipated future growth of the Duke system.The North Carolina L'lectric:1er.ber hip Corporation (El!C)presenteQ the testimony of-the following witnesses: Alton P.Wall, 1'xccutive Vice President and General l1anager of S DOCKET HO.Z-100 g SUB'32 North Carolina Electric Membership Corporation, xrho testi ieQ concerning the EHC's poorer supply plans;Patricia Llovd Nilliams, EIIC, Staff Engineer<whose testimony described the procedures followed in the development of the Z'IC's recent Power Requirements Study and the projec"ion of the EIIC's system demand and energy reauiremants; and Gerald O.Stephens, Supervisory Power Requirements Officer, Poorer Survey Reguiraments Staff, Rural Electrification Administration (REA), United States Department of Agriculture, who testified that the North Carolina Electric Membership Corporation has submitted to the REA the Power Requirements Study as testified to by Patricia Nilliams.Carolina Power 6 Light Company offered the testimony of Nilson N.Horgan, Manager-System Planning and Coordination Department, who testified on CPFL's energy'sales and peak Qamand forecast through 1997 and the methodology used to develop these forecasts. Virginia Electric and Power Company offered the testimony of Gary R.Keeseckar, Manager of Power Supply, who testified on VEPCO's methods of forecasting demand and energy requirements and the planning of new generation for the VEPCO system.'he League of Nomen Voters of EJorth Carolina, Inc., the Conservation Council of North Carolina, Inc , the Sierra Club, and the Carolina Environmental Studv Group, Inc.f offered the testimony and exhibits of Jesse L.Riley, a Senior Research Associate'n the Research and Development, Department of Celanese Fibexs Conpany, who presented a critiaue of various forecasting methodologies and described a new methodology, wi h the results and the applicability of tnat methodology to future generating 'mix.CP"L and Duke jointly sponsored Robert II.Spann, Associate Professor of Economics at Virginia Polytechnic Institute and State University, who test.ified in rebuttal to the forecast methodology propounded by Riley.The following public witnesses appeared and test'ied at the hea ing: (1)John Narran,{2)Brad Stuart, (3)Helen Read<(4)Joseph Reinckens,{5)Arthur Kaufman,{6)Slater><ewmanr{7)Tom Lominac, (8)Dr.Lavon Page, (9)David Springer, (10)Dr.David Hartin, (11)Lloyd Tyler, (12)Stephanie Rodelander, (13)Pam Thornton, (14)Nilliam RicharQson, (15)John Speights, (16)Alvin IIoss<(17)Kathleen Zobel, (18)An Painter, (19)Howard Morland, (20)Karen Nilson, (21)Jack Ashburn, (22)Bonnie Shriver, (23)Dr.Nilliam Nalker, (24)Dr.Constance Kalbach, (25)Jim Darrow, and (26)Thomas Gunter.In addition, John Curry appeared on behalf of Senator bIci4eill Smith and presented to the Commission a statement prepared by Senator Smith.For the purpose.of preparing its 1970 report., the Commission has considered the tcs'tinny and e::hibits presented at the hearing in this docket and the information

DOCILE T ICO.E-100, SUB 32 contained in the files and records of the Commission. The Commissibn has also taken judicial notice of the evidence presented in the July and Septenher 1978 hearings in Docket No.It-100, Sub 78, entitled"Investigation of Cost-Based Hates, Load I1aqagement, and Conservation Oxiented End-Use Activ1ties ~Based upon the evidence presented in Docket No.H-100, Sub 78, the Commission in the ordering paragraphs below will.order CPGL, Duke, and VE'.PCO to file, within 270 days afte the date of this Order, detailed plans for the implementation of two load management programs: the ut'lity contxol of residential water heating and the utility control of specified interruptible indust ial loads.Both programs would be offered on a voluntary basis.The guidelines for these two progxams are set out in the ordering paragraphs; if the filings of the three utilities differ from the recommendations of the Public Staff set out in its proposed orde filed November 20, 1978, in Docket Ho.I}-100, Sub 78)such f'lings should contain appropriate justification. The Commission will also order CPGL, Duke, and VEPCO to file on an experimental basis voluntary rates incorporating tim-of-day pricing to those customers who install thermal storage equipment, when used in connection with solar equipment, or installed separately, or a'combination of the two for the purpose of providing space heatinge In Docket No.II-100, Sub 78, the Public Staff has filed a proposed order and the electric utilities have filed responses thereto.The Com".wssion will issue an order in this docket at an earlv date.Based upon the testimony'nd exhibits presented at the hearings in this docket, and in Docket No.H-100, Sub 78, the information contained in the files and records of the Corivzssion, and the Findings of Fact set out in its Report, the Commission.concludes that it should adopt its repozt ent'tied Future Electricity Heeds for North Carolina: Load Forecast and Capacity Plan-'l978.IT XS F THEREFORE, ORDERED: 1.That the report of the Commission entitled Future~1'h<<~1's hereby adoPted.2.That the as Tables A and B adopted as the conditions stated load forecasts and capacity plans included in the above referenced Report are hereby Plan of the Commission, subject to the in the Report.3.That Virginia Elec"-ic and Power Company'shall present to the Commission in the mid-1979 hearings on load growth and capacity planning a detailed analysis of'VZPCO's load growth and re@quired capacity addition plans.The 'l DOCKET F10.E-100, SUB 32 Public Staff is requested to develop and present a separate analy is of these mattors.That Carolina Power Company,'nd Virginia Electric w'ithin 270 days after the date plans for the implementation programs: Light Company, Duke Power and Power Company shall, of this Order, file detailed of two load management 1.Utility control of resident.ial water heating;and 2.Utility control of specified interruptible indu trial loads.The implementation plans<o be filed shall include: 1.Provisions for voluntary customer participation in these programs, 2.A description of the load management equipment to be used, 3.Detailed time schedules for impler.entation, 4.Proposed rate schedules anQ tariff ,provisions including limitations on interruptions, 5.An implementation date no later than January 1, 1980, in the area of greatest density served by each utility, 6.Plans for extenQing the offerings to other areas, and 7.Rate incentives, implementation plans, and provisions of interruption {maximum length and number of interruptions, etc.), which are to be developed and, filed by each utility;however, if these filings'iffer from those proposed by the Public Staff in Docket No.ll-100, Sub 7D, such filings should include appropriate justification. 5.That Carolina Power F Light Company, Duke Power Company, and Virginia Electric anQ Power Company shall file voluntary rates incorporating time-of-day pricing to those customers who install thermal storage equipment, when used in connection with solar equipment, or installed separately, or a combination of the two for the purpose of providing space heating.The rate schedules shall be cost justified and shall be filed on an experimental basis with appropriate contract time designated, between the utility and the customer, sufficient to allow the customer an incentive to '8, Doci:ET~O.Z-100, SUO 32 adopt such a rate in connection with his solar/thermal storage installation. I SUED BY ORDER OP THE CO?01ISSIOH. This the day of December,'1978.NOPTH CAROLS?7A UTILITIES COMMISSION (SEAL)Sandra J.Webster, Chief Clerk t FUTURE ELECTRICITY NEEDS FOR NORTH CAROLINA: LOAD FORECAST AND CAPACITY PLAN~1978 NORTH CAROLINA UTILITIES COMMISSION RALEIGH'ORTH CAROLINA BECmaER"978 III Sn-~)o/~)g)/~~~L~r I-3-qq t~EZBri EBZI~in~eVJ ()Illa'(~' , TABLE OF CONTENTS Page EXECUTIVE

SUMMARY

~~~~~~~~~1 I~INTRODUCTION ZI.THE 1978 LOAD FORECAST AIR)CAPACITY PLAN...7 ZIZ.A.Introduction .B.Findings of Fact C.Load Forecast and Capacity Plan H FORECAST OF NATIONAL 1QTD'STATE ECONOMIC AND DEMOGRAPHIC GROUP"H A o Introduction ~~~~~~~~.o~.~~~B.The Hational Forecast C.Historical Comparisons Between the Econonu.es of the United States and North Carolina D.The Long-Term Forecast for North Carolina E.Conclusion 7 9 16 34 34 36 39 42 45 V.VZI.LONG-TERM ELECTRIC ENERGY ALOD PE&LOAD FORECAST~~~~~~~~~~~~o~Ao Introduction ~.~~~~i~~i~~~o~B.The Use of Econometric Analysis C.Forecast'f Electricity Sales to Residential Customers D.The Forecast of Electricity Sales to Commercial Customers E.',The Forecast of Electricity Sales to Industrial Customers F.The Peak-Load Forecast.G.Comments by Public Witnesses and Zntervenors RESERVE CRITERIA~GENERATION NIZt AIR)CAPAC ZTY PLANS~~~~o~~~~~~~~~~~A.Resene Criteria B.Generate.on ?Iix C.Generating Capacity Plan OUTLOOK FOR CONSERVATION AiiD LOAD XAHAGEPQRTT; A SURVEY OF ALTERNATIVE ENERGY SOURCES A.Introduction o~o~~~~~~~~~~~D.Legislation C.Utilities Commission and Public Staff Activities on Conservation and Load Management D.The Electric Utilities'onservation and Load Management Programs E.Alternative Energy Sources COHCLUSIONS o i o~~~~~~o o i o~~~47 47 47 60 62 67 71 71 73 83 87 87 88 91 95 102 116 XHDZZ OF TABLES XQ3IZ A Page Commission Load Forecasts.................... 23 Commission Plan for Capacity Additionsi. and Reglement so~o~o>>~o>>o~~~~~o o o~o o~o~~o~~~2~1 TUiKZ Commission Load Forecasts, Capacity Plans and Resultant Reserves o o~~o o o o~.~o~.~~~~~o~o o~25 TABLE 1.Capacity Addition Plans for VEPCO.,.......... 118 TABLE 2 Reserves Which RiLl Result From Capacity Plans if the VEPCO Forecast Occurs....,... 119 TABLE 3~Reserves Reich Hill Result From Capacity Plans if the Puhlic Staff Forecast Occurs...120 TM3LC 6 TABLE 7 Leveks and Growth Rates of Demographic Variables Used in the Public Staff's Energy Forecasts and Load Forecasts......... 121 Puhlic Staff TRES Forecast-of.CPGL-Energy Consumption hy CusNl8r Class e~~~e~~o o e o o~~o 1 22 Puhlic Staff TREHD Forecast of Duke Energy Consumption hy Customer Class.............. 123 Comparisons of Growth Rates of Electricity Pri,ces and Inflation Measures............... 124 TABLE 8~TABLE 9~TABLE 10 CPQL S Energy Forecast>>~o,o~~o~~o o o~~o o o~o~o~1 25 Duke s Energy ForeCasto>>>> o,e o>>.o>>oe o.o.o.o o>>o o oo o 126 VXPCO s Energy Forecaste~o~~o~~o~o~o~o~~o~~~1Z7 22LBLE 11.Pubs.c Staff's Noneconometric Energy Estimates for the Residential Sector.~..~..~12&ThBLIi 12 Public Staff's Honeconometric Energy Esti,mates for Comamrcial Sector........... 129 TABLE 13 TABLE CPCL s Load Forecasto~o~oo~o o~~.~o o~o~~~~~o~o 1 30 Duke's Saner Peak Load Forecast........... 131 TABLE 15 TABLE 16~Duke'Puhli.c Winter Peak Load Forecast.......... 132 Staff's Capacity Addition Schedule..133 TABLE, 17A.Reserve ICargins Based Upon the Public Staff Addition Schedule......... ~...~..~........... 134 TABLE 17B.Loss of Load Probabilities Expected Prom Public Staf Additions..... ~.......... ~...'.134 TABLE 18.Public Staff Projections of Percent of Plant Operated as Base Load>Cycling and Peaking.................................. 133 TABLE 19A.CPGL's Capacity Addition Schedule........... 136 TABLE 19B.CP<L's Projected Sumaer Peak Reserves....... 136 TABLE 20.Duke's Summary of Load, Capacity and Reserves.................................... 137 TABLE 21.Duke's Summary of Pro jected Load I&nagement Goals....................................... 13S , 0 EXECUTEVE SU55ARY The General assembly in 3975 directed the Utilities Commission to develop and keep carrent an analysis of the long-range need for electric power in North CaroLina.This report is submitted to the Governor and to the General.assembly in co<<pliance with that mandate Xn preparing this report, the Commission has considered evidence presented by the Public Staff-Berth Carolina UtiLities Commission, Carolina Power 8 Light Company, Duke Power Compan y, Virginia Electric and Power Company, and other paWies in, Docket Hos.E-t 00 Sub 32, the load forecast docket., and 8-t00, Sab 78, the conservation and load management docket This report makes the falloving findings: The planning period unde r consideration for construction of new generatin9 units is j978-)992. 2.The probable range of annual peak-load growth for Carolina.Pover 8 Light Co<<pany is 4.4$to 6 5%.Rithin this range the most probable peak-load grovth rate for planning is 5.2'%, annually.3..The probable range of annual peak-load growth f or Duke Power Company is 4 6X to 6 7L, Rithin this range the-<<ost probable peak-load growth f or planning is 5.4%, anna ally.4 The generating reserves needed to ensure system reliability for Duke, CPGL, and VZPCO are 20%for both the su<<mer and the vinter peaking seasons.5.The most economical and efficient generation mix for Duke, CPSLand VEPCO for the years)978-I992 consists af approximately one-ha.lf base capacity, one-third ,cycling capacity, and one-sixth peaking capacity 6.The most econo<<ical <<ethod of electric generation for Duke, CPSL, and VEPCO is a combination of hydroelectric genera tion and coal fired a nd nuclear f ueled steam generation: the pro)ected benefits to be derived from the develop<<ent and opera ti on of renewable energy sources including wind.pover and solar energy when added to the combination mix of hydro, coal, and nuclear electric generation are in the public interest 7.VEPCO has cancelled nuclear units Sarry Ho.3 and Surry Ho.4.VEPCO's present constraction schedule vill not neet the required reserve level of 20%-8.Conservation and load management activities by the Commi.ssion, the regulated utilities, and the puh3.i,c can significantly impact future growth rates in peM-load dBIQRztcLe 9.The capacity addition plans, adopted herein, will enable CP"L and Duke to meet the Commission's forecast of peak demand for the years 19'79-1992 'and to have adeauate reserves for contingencies. 10.Superior forecasting of the effects of conservation and Load management is needed The result of the capacity addition plans, adopted herein, wou3.d delay the current consMmcMon schedule of CPSL at least one year.anil would postpone CPCL's proposed units SR1 and SR2 (totaling 2300 RN}beyond this planning period.Zt would also deLay Duke's Later plants sir.months to one year, but would keep Duke's early plants on schedule for economic reasons~The Commission wiLL requ~e that the utilities and the Public Staff present,.in the mid-1979 hearing a full analysis th I~h t1 Ith any, that the utilities should not res chedu3.e their construction according to the capacity p3.ans adopted herein.This report eacnmines the studies Ku.ch underlie-Commission' forecasts and examines conservation and load managaamnt efforts that are underway in t4orth Carolina, as weLL as the prospects for alternative energy sources.Duke, CPPL, and VXPCO will he re~brad to file proposed plans for two valuntary load, management, programs: 1.Utility controL of residentiaL water heating, and 2 Utility control of inteznqptihle industriaL 3.oads.The three utilities wiLL also he required to off er voluntary, experimental rates which incorporate tim~~y pricing to customers who either install so3.ar~pment, thermal storage equipment, or a combination of the two for the purpose of providing space.heating. CHAPTER I INTROMCTXOR In)975 the Sorth Carolina General assembly enacted G.S.62-)j 0 l (c)which directed the Utilities Commission to"develop, publicize, and keep current an analysis of the long-range needs f or expansion of f acili ties f or the generation of electricity in cnorth Carolina, including its es tinate of the probable f uture growth of tho use of electricity, the probable needed generatin g reserve-"., the extent, size, mix and general location of generati~g plant." and arrangements for pooling power..<The statute requires the Comnission to conduct public hearings in the course of making the analysis and developing the plan.'The statute further provides that the Commission submi.to the Governor and to the appropriate committees of the C~nera3.assembly a report of its analysis and plan h u~~In January I 977 the Commission held its f ir~public:hearings pursuant to the statute:and, thereafter, is~no.d its first-report, entitled]\~cert of~tnu Xsns dnd~u: Puture XE:~~-Rl~977'In that Report the Commission concluded that: The probable future annual rate of growth in peak load for both Carolina Power 8 Zi.ght Company (CPF'=)~nB Duke Power Company (Duke)will be approximately 6.9<during tbe years t 976-t 990.2.The probable needed generating reserves will be I 5%to 20%in the summer and no less than 20%in the winter. 3 The econoaically ef Xicient generating aux f or both coipanies eiLL be one-half base~one-third intermediate, and oneMxth peaking capacity.4 The aost econoaicaL type af base load capacity f or CPSX, and Duke vill be nuclear fael generation in aost cases 5 NucLear poser provides acceptable, though not zero, risk to the public 6.Xt is tlute objective af the Conaission to encourage the grolth of industries which a.Xl iaprove the systea, Load factor through the proaotion of interruptibLe rates.7 Ized.aui conservation efforts should be encouraged an June 3,>977, the aeaeral aaaenbLy aaenaed e S.Chapter 62 to prov'ide for a Public Staff within the organimtion of the Utilities Comnissian to represent the using and consuaing pubLic in a11<<ayers affecting pub1i,c utility rates and ser~.Rith respect to the Long-range forecast of'apaci.ty recpzire ants.and the capacity expansion plan~0 S 62-)5<<as asended to state that: (d}Xt shaLX be the banty and responsibility of the pab1ic staff to (5)intervene on behalf of the using and consuaing public in a11 cer~wcate app1ications fiLed pursuant to the provtaions of 6 S 62-f)0 1, and prorLde assistance to the CoaaLssion in a~ng the anaLysis and p1ans required pursuant.to the provi.si.ons of 0 S 62-)I0.)'nd C S 62-F55;.~On Deceaber f 5, f977, the Public Staff filed with this Co~sion its 12K.'>hiked &sufi.2%2e&-hR~jaK Mo~ops i<~ee'k EQX es n o The Pub1ic Staff Report sas cssentia11y an update of the Coanission~s f 977 Report of Aaa1ysis and PLzm, but incorporated new cLata and information that becale available after the CoaaisaLon~ s f 977 Report ls issued The Public Staff'eport also included.refinements in the econometric forecasting models and in the capacity planning"techniques. New features included both long-tera economic forecasts for the United.States a,nd for North Carolina and analyses of the potential beneficial e ff ect s af conserva tion.load mana gement, and peak-load pricing In Pebr uary l 978 the Commission held hearings in preparation for its f 978 report.The public Staff and the three ma)or electric utilities)operating in Iorth Carolina)presented their forecasts for the growth in electricity sales and peak load in North Carolina and the generati ng capacity needed to meet this prospected growth Numerous other parties intervened and participated in the hearings: the Attorney General of Sorth Carolina, the Horth Carolina Electric membership Corporation, the Carolina Environmental Study Group, the Conservation Council of Sorth Camlina, the League af Ronen Voters, the Joseph Le Conte Chapter of the Sierra Club, and the North Carolina Oil, Jobbers Association. Xn addition, a number of public witnesses provided information and comment to the Commission Thereafter, the Commission held eztensive hearings in July and September t 978 in its Docket Bo.5-tDO, Sub 78 The purpose of this docket and the hearings held therein is to investigate the load management programs of the electric utilities and the conservation programs of the electric and gas utilities operating in the State.The publication of the ColmeiaaLoa's,)978 load gorecam report has~ge1ayed ia osier to aaeesg the erMeoce presented~this g~<g a~to 6eteraiae Neat effects t3re Load maaageaeet and coaservatioa proqeaas si3.1 have oa the Kong range growth af e1echeM9.ty ia Scrrth Cazo1ina The Coaaiaaioa's f 97B report, entit1eC g~~I Xl ulR SIR R~II IhRLliM: iBILC 1!RSRsah 4lg is sakiaktted M coapkhaace ei.th the onndate oE the Geaera1 haeeabLy, ae sert cnorth M G S.62-))0 f)e} CHAPTER ll THE l 978 LDAD FORECAST PHD CAPACXTY PLAH General Statute.62-I)0 I{c)requires the North Carolina Utilities Commission to prepare and keep current an analysis of the long-range needs for the expansion of electricity generating f acilities in North Carolina.To comply vith this mandate from the General.hssembly,%he Commission must estimate the probable f uture grovth of the use of electricity, the probable needed generating reserves, and the extent, size, mix, and general location of generating capacity to neet the future grovth of electricity use.The Public Staff performed independent analyses oX the load grovth in CPSL's and Duke's service areas Hoveverg the Public Stiff adopted and recommended the same grovth rates for VEPCO that had been determined by an independent consulting firm for the Virginia Corporation Commission tvo years previously and reaffirmed by the'Virginia Corporation Commission Staff in late)977.The studies made by the Public Staff, the regulated utilities, and other interested parties in the load forecast proceedings presented a vide range of opinion as to the electric generating capacity needed in Forth Carolina over the next 20 years.5ost of these studies vere based on accepted scientific load f orecast methods.'These studies incorporate dif f er ant levels of econoaic activities, conservation and Load saan geasut e f f orts, po p ala tiou movesents, custoaer acceptance of uee appli.ances~ air coudi.tioni.mg auC electric heating saturation, and other factors The Coaaission has e ver,uated these studies in crier to estiaate the probe:hie f uvre growth of elect@9.city use in North Carolina.Xn aekMg its forecasts and evaluations, the Coamieaioi takes 5uC9aial nark.ce oC the ccmservat9;on ami load nanageaent evidence eH.ch eas presented in.its hearings in OecJcet.Qo.I-)00, Sub 78 Ouse Peter Cispany and Carolina Poser 5 Light Coapany provide 95%of the electricity generate.on utiXKxecL W North Carolina Virginia Electr'ic and Poeer Coapany (VZPCa)anil IantahaXa Fever an't Light Company-(Santahala) eizpply the reaaMing SI of electricity generation Mikitional genoratian recpxirod to serve nee Loads of Iantahala axe planned hy the Tennessee Val1ey Luthority (TV1), to shea all of Iantahala~ s generation is contracted VZPCQ c}oes not plan to adit generating faciliMes in 5orth Carolina in the&reseeah1o future The.inf orna'.ou presented to the Coasksakon concerning the expected groat;h on the VEPCQ aystea is inconclmive The.sapor thrust af the Counisaf.onl s)978 report is, there'd'.ore, directed to the service areas of CPI'X, and Duke Xa aakLng its fore~mt, the Coaaiss;I.on has recogaize4 that ths public pokily af the State af Eorth Carolina encourages .the grovth of industry in order to provide gobs for and to ra.ise the living standards of the citimns of the State.The Commission has the duty under the Public Utilities Act I to ensure that adequate electric service is available at all times in Sorth Carolina to provide for grovth in the State'econom y.B.~Pnd~ns+o~act a1IS Rul-RULa'f!K'E~1as JL'k-current plaaning period aust-eztend at least.t 4 years in order 4o allov consideration of future construction of both nuclear and fossil fueled generating units because 14 years aust be alloved for designing, 1icensing,,-and constructing a nuclear unit.Ci~~n Venose 5~i~t~Coa~~~e0'o~6%.a'i~tgn this IL.-Ka-M E=af'-4 P-" XE 2L El ann~~~.The Co<<<<ission has used a grovth rate of 5 2%in developing its load forecast for CPGL as shovn in Table 1 The generating capacity addition plan to meet this grovth rate is shovn in Table B.CPSL's ovn peak-load f orecast is 5.72%f or the years)978-I 992.The Coxxission's use of the 5.2%grovth rate is based upon its conclusion that CPSs conservation and load<<anagexent progra<<s are e<<bryonic and that custoxer acceptance of these prograas vi,11 therefore accelerate Under the Coaaission's forecast the expected f 985 suaner peak load is 7,902 58,.and the f990 suaner peak load is f0, f82 EV For the years f965-f 977 the peak-load growth rates f or CPSL have ranged fz.on-f 0%(>978)to 20 8%{f968};within the past H.ve years the range has baen froa-f 0%(f97&}to 9+3%(f 977)e 3?o~<L$2X j)~~+~ggg.ggg~g~~~0)~<~t~Ng~~~~~e maL aalstll~~EC-Ntll~alaRLaa M 8 H~lUIB11z%h I I wh'~developing its load forecast for Duke as shorn in Tahle L.The generating capacity addition plan to neet thM growth rate is ahoen In TahLe 3 The"'%growth rate reflects the Coaaission' conclusion that Duke'load.aan ageaent and conservation prograas are progressing re11 and si11 continua to gai:a acceptance anong its custoners Duke's om suaaer peak-Load forecast, vh9.ch pro)ected a range of growth rates froa 5 05%to 6 92%for the years f979-f.990, reflects the effects of its ongoing lead aanageaent prograa~Under the Coeaission's forecast the expected f985 suanez peak load f3,5f8 5%;and for the f990 suan'eak load is f7,580 ER Pot the years f965-f 977 the peak-load growth rates for gl Duke have ranged froa-2 f%(f970)to f8 0%()968);within the past Q.ve years the peak-Load grovth rate has ranged froa-2 f%(f 974)to f f 6%(f977) ~say~~d~e~v~e peaki~n seasons.As pointed out by the Public Staff, there is no level of reserve aargin.that vill absolutely guarantee reliability. Although the P ublic Staff recommended reserves of I 5%to 20%for both seasons, Duke vitnesses indicated that 20%reserves are a aininua for reliable service to its customers. The Coaaission concludes that, for this planning period, a-ainiaua 20%reserve aargin for both suaaer and sinter peaking seasons is reasonable-and necessary. Xn so deciding, the Commission has considered, among other things, the difficulties of the three electric utilities in providing service during I977 and t97S and, the recoaaendations of the Eederal Energy Regni,atory Coaaissi.on Staff.~~nut luar~~,~G,~ggPCQ gyp~e ye'~y cps asts+o o aa e RR c~SB H LR Q~<RelM HK'-'*a.pointed out that optiaal generation mix satisfies the deaand f or electricity at miaiau a cost and with acceptable reliability. The studies o the Public Staff concluded that the generation mix adopted herein is the proper one for the three major electric utilities serving the State.naker CPSL, an8 trZPCO~a a COabinatinn Of b anneleotrio Sa(gf~v~8~e~~an8 ge1~;eve~te ada to me ilia JC III&>-SL BSILJKtL'- SSR ill M XdlM~-lh'P hl~Kf the.utilities presents a nusber of studies imiKcating that,, the present planning period,.nuclear generation is o.xpecteC to~more econoeica1 than fossil generation f or acr hase load units The results of the tata1 life studies shoe that nuclear generation is expected'o average a1aost six-tenths of a cent per kilowatt-hour less than fossil generation Seneration aix sill continue to be reviewers by the CoenMad.on on an annaa1 basis H,tnesses at the loni forecast hearings in February 1978 express'oncern about the saf sty ance reliabili.ty of nuc1ear generation We issues za.~C by these witnesses i.ncLuleC the problea of staring spent.nuclear fua4 the Lack oZ assurance oC urn+i.n31 supply, and the cantinui.ag escaXaMon of costs in nuclear pLant construction. There was also eridence that mclaar generation Xs clean, safe, and ava93ah3e In aCMtio~evidence in CicakeC that there puh1ic fr oa nuclear generation nay be than the-hazards Xroa alternative fossil as coal l1t hough it is true that haxax4s to the consiiierahX,y less f uel systeas~such easing costs f or nuclear plant construction anC is increasing opinion aaong the technical coaaunity that the operation have narrowed t,he econoaic advantages of nuclear'ower over coal, it is.also true that nuclear generated electric poorer still'etains a signif ical~economic advantage over coal and all other alternative means of base load generation.in the southeastern region of the United States.oEB!le~ILBllRe lulos!~Et I!..Z M o-!--" oK'.L.2B.M~K!'-'!-o!~ne'e~e~ed~re~ere~1ere~o~0 The Coaaission has conc luded elsewhere in this chapter that, sith the cancellation of Surry No.3 and Surry No.4, VEPCO's present construction schedule is insufficient to prevent its system reserves froa falling below'he Level found necessary by the Coned.ssion f ar adequate and reliable service The Commission vill require V RPCO to present at the)979 hearings a full analysis of the coapany~s expected Loads and required genexation through)993.CMLELia e 1 L~~!!!ea ca%Roe er oe!o-ono1e.5--Elst e-Jap~~e.e-I-deaand The docecast adopted.by the Consission in this zeport is based on the preaise that conservation and load aana geaent ef f orts are no t a tern porary phenoaenon but represent-pezaanent changes in the attitude of society toward the use of energy.As a result of'ncreasing necessity"or funding alternatives to our present enozgy sources, significant energy-related legislation has heeu enacted in the last too years Tbe North Carolina Genem3.1sseahly enacted the important Energy Conservation 1ct of)977~shich eucouxages solar residential and business use ener gy and insulation for Xn addition, the Un9.ted States Congress has recently enacted the National Energy Conservation PoU~bet of)978 Both of these acts substantially af Sect state and local elf orts oa conservation The amor electric utilities have undertaken conservation and.load aanageaent prograas Especially noteworthy is the Load sana geaent Prograa o f Duke: the con pang'Energy EfMci.eat Structure Prograa incorporates' conservation rate eehedale which afIera a aaaetary~ntXve by paaaiag alan@'~M the resultant savings in electric systea costs to those residential custoaers who install insulation in accordance Wth progzaa standards Purt&~the Coaaisaion has catered into coopemMm agreements %or research and experiaentation.eith the United States Departaent of Energy Under these agreeaents, the.Coaaissice is underta)diag pd.3.ot deaonstration pro~ts on conservation and load sana geant, anC is exaaining peak-pricing electricity rates The CoaaLssion has also initiated Docket Io 5-)00 Sub 78, entitled>Investigation of Cost-Based Rates, Xead Sanagesent, and Conservation Oriented End&se 1ctivities Hearings in this docket in July and September f978 established that numerous and diverse conservation and load management programs are underway throughout the State 9, ahe~op~ac'~t sdd~t'~o!~Los,~do ted~hrdh9,~a'~en+e~CSL and~Dn a~t 9eet tha Conn'ss on's~forec st of RRI Ih%alai ca\1 ala C-~a<'p>" subject to'eview by the Commission on an annual basis.Because it is impossible to exactly predict-the future, the companies must maintain flexibility in their construction schedules in order,to economically adjust to changes in peak-load growth as they occur The utilities will be reqnirad in the ajar-$979 hearing to shoe the reasoas, if any, why their construction schedules should not be delayed to natch the Commission's capacity plan.Sew generating facili.ties should be located on mites which are near load centers or major transmission facilities and which have ample water for cooling Because of the long lead times required, site licensing and preparation have already begun for most facilities coming into service during the next I0 to'l5 years and relocation of those facilities would not be economical. ~K~D Jul~a~~ad~od 999afanent js Deeded The Coaaission is directing the utilities an d the Public Staf f to present detailed analyses concerninq these matters in the t979 hearings.To aLL4M slLQKcient tiae those hearings are heing glolred to aid year The forecast of future electrical poser deaands, the geueratica reserve zeqaireaents, and the types of ace generating ca pacity vi3.1 continm to be reriewed hy the Coaaission on an annual basis iu order to adequa tely incorporate chmgWg conditions Axe Coaaission, throagh its Staff aud through the Public Staff, ekXI continae to consider regional interchanges cd.'oser and poser pooling axranqeaentm hy its participation. in the: Southeastern: Rel iah il9.ty C ouacil a,nd the Virg9.nia-Caroktn as Xaterregion pkauniug eff orts C~i+SIIBBLtt Zlaa The qeesticms before the Coaaissi.an are threefold. Ruat are the boost LQc4L17 3.oad gxcNth zktesT 2 Rat Levels of resemble capacities are required?3 Shat types of plant aost econoaicakly, safely, and r efficiently produce thee recpxired capacityT These questions are Mterloahi.ng to a great degree Load groeth raqaires additkoaaX load capacity and corresponding reserve capacity The aacent and types of plant affect the reliability of the systoa and the cest of providing electricity. The cost an d reliability of electricity in-tern affect the rate of load grosth Le a res@3.t of the essence Xn its load forecast and load aanageaent hearings, the Coeaimion has a~1able to it a wide variety of expected.load growths, all dependent upon different levels of econoa9.c activity, conservation and load aanagement efforts, population aoveaent, custoser acceptance of new appliances, air conditioning and elec zic heating saturation, and other factors.This chapter presents the Coaaission~s conclusions regarding he pro)ected future electricity requirements in cnorth Carolina.The chapters which f ollow suaaarize the evidence of the parties in these hearings.Based upon the best evidence a vailable to the Comission today, the electricity growth plan adopted by the Comnission represents a prudent and realistic strategy Xor"eeet9.ng our electricity needs.The plan necessarily demands flexibility in the adopted construction. schedule.Annual-upda tes of%he Coaaission f orecast and ca pacity plan wiLL.enable the Coanission to re fleet both inprov enents in f arecasting techniques and new evidence regarding the utiliration of electricity. kccordingly, the tining of later plants aust be regarded as tentative. The Commission has examined in detail the leve3.of reserve capacity which should be required.Reserve capacity is necessary to neet increased capacity requireaents due to severe weather, planned aaintenance outages, unexpected equipaent outages, unexpected load growth, and other factors.The adequacy of electricity supply directly af fects the ability of our citizens to utilize adequate 18 space cond i tioning to rerain conf ortahle and hea?thy Disruption of electricity service at any tine has the potential for reducing the econcnic output of the State and, thus, the incoae of i.ts citimns Zn recent periods af severe weather,.the utilities serving North Carolina here had d&f iculty, at tines, aeeting consumer domani'~even though high levels of reserves sere in place Seasures are being taken to prevent f atnxe occurr ence of these outnges Homager, it is iaportant to emphasize that reserves aust cover probable loacLs and Likely equipaent outa ges Testiaony by witnesses froa Duke indicates that 20%reserves are the aininua requireamt for reliable operation'Lhasa is si~n the range indicated hy the Federal Energy Regulatory Com6ss9.cn (FKRCj of j5%to 25%and is consistent cith the HNC Staff recoanen6ation that the percent ZQMrvcs should be 05 the high end of the range in fast grcwing areas.111 vKtneases agree that North Carolina is expected to continee to ham rates of econoaic and deaographic growth greater then the national average dnrMg the extant pLanning period Llthough ostiaates of growth are Less reliable for Longer planui.ng periods, the longer planning pexiods also allow sore tiaa to aCf ect conse ration aeasures Because the planning per'iod is tied to the construction ti.ne required to build ncnr generating facile.ties, it Xs 9.apemti,re that the planned constructi.ou schedaie be flexile enough in the l9 later years to be capable of ad g ustaent to neet t he requireaents of unforeseen changes in load grovth Af ter revieving recent experience, the Commission concludes that a ainiaum 20%reserve nargin is reasonable and necessary. Af ter reviev of the evidence presented concerning the probabilities of various occurrences, the aost detailed and supported of vhich vas that.presented by the Public Staff/the Co31missioa concludes that the maximum grovth rates vhich should be util.ized in planning future capacity are.those for.the"base case" presented by the Public Staff,'is is essentially a forecast of future grovth vhich assunes that the factors causing the deaand for electricity, including conservation and load~amgeaent practices,.viU.continue unchanged. Plant additions are not nov scheduled at a rate fast enough to provide adequate reserve aargins for such loads;increased use of conserva tion and load nanageaent techniques can be expected to obviate the need for such large scale construction. Various scenarios of the inpact on grovth rates of different levels of conservation and load nenageaent techniques vere presented by the Public Staff.'Included were the fol3.oving: A)5%reduction in electric energy consumption by)992 (conservation case);2.A I DX improvement in load factor by)992 (load.management case);and 3.Both of the above T'e effects of either f or 2 are to reduce Me average load gzorth approxiaately f%per year gained through increases in Sany benefits can be c onserva~on and load aanageaent. Pox example, by)992, CPS'ould have to provide an additional 10~977 BN under the base case bat only 5, f 77 5%under Scenario 3 Par Ouse, the r~uired canatruction scald faXL froe)7~890 KQ to IO,.TVO ES If these savings could be'ccompli, isbn, the conbined construction reqeixeoents of CPS'nil Ouse maid be reduced by-aore than$~0]~jan during this planning period Significant changes in conservation and load aanagement efforts are occmring and xL11 be cd.'ignificant assistance the)980~s ifter iexas6nation of the assumptions underlying each scenario, the Coaaissi.on concludes that, based'upon the evidence avai1ab&at this togae, it is not reason aM.e to expect that~o~t conservation and load aanageaent eiLL be practiced substantially enough to produce the effects of the coa&.ned 1oad INLnageaent and conservation scenario.Saeever, kt does appear t,hat, vXth ef f ective eMort by utilities, consaser groups and govern sent., coahMed reductions in 1oa4 gxoeth ecpziva3.ent to the level of either the<<ural load aanagement ar fu1L conservation scenario can be realimd<<(i e approxiaately t%reduction in grovth froa the<<base caseI') 2I Since the tihe of the.hearings, the j 977-1978 vinter and f 978 summer peaks have been established at mach lover values than had been predicted. The Commission has taken into account the tvo additional actual peaks ia its adopted load forecast.Although some of this reduction vas obviously weather rela ted, a substantial portion of the remainder must be attributed to conservation and load management measures by customers. The Commission expects that customers vill continue to add such measures in the near term future to existing installations and to design them into f utare expansion and constructione At some point, however, it can be-expected that these measures vill be'ufficiently employed so that normal grovth of the economy and-."popalation in north enroll.na.sill raise.the rate.s of granth again.The Commission concludes that the most reasonable expectation for.the possible redaction in<hase case" grovth rates over the p'lanning period is 60%of the combined load management and conservation scenario reduction. The Commission concludes tha t, f or planning purposes, CPSL ps load can be expec ed to grov at an average annual rate of 5.2%.Duke's load can be expected to grov at an average annual rate of 5.4%These grovth rates are approximately )5%(CPSI)and 1.3%{Duke)less than the Public Staff base case recommendations These reductions depend apon increased levels of conservation and load management. The Commission concludes tha t signif icant effort should be expended by the utilities to help effect such changes in usage patterns The Comaission presents in Tahl e 1 the adopted Load growths used in developing its plan for the capacity additions shoen Xn Table B TabLe C shoes.the percent reserves ekich e&L result if these load f orecasts and capacity ad&tion plans ari act The result'f these capacity addition pleas Xs to delay the complete.construction schedule of CPSX, at least one paar and to delay CPSL~s proposed used.ta SRI and SR2 (totaLing 23DO IR)coapletaly beyond the p3anni.ng period.CPSL provided no evidence, either econoaic or operational.,'o indicate that its present construction scheduLe should, not be deLayed to natch the exyeeteK 1'oal gzoeth nnhe, on the other haaa...~provided evidence that the xatepayers mould benefit froa X.over net operating costs if its early units are coapleted.as previously scheduled The PukU.c Stan%supported this evidence and, the Conaission concurs TABLE A.Commission Load Forecasts (MW)Caro1ina Power a Light Company'oke Power Company LOAD (MW)LOAD (AN>1979 S W 1980 S W 1981 S W 1982 S'I W 1983 S W 1984 S W 1985 S W 1986 S W 1987 S W 1988 S W 1989 S W 1990 S W 1991 S W 1992 S 5830 5930 6133 6238 6452 6563 6788 6904 7141 7263 7512 7641 7902 8038 8313 8456 8746 8896 9200 9358 9679 9845 10182 10357 10712 10895 11269 11462 9860 10070 10392 10614 10954 11187 11545 11791 12169 12428 12826 13099 13518 13806 14248 14552 15018 1533'7 15829 16166 16683 17039 17584 17959 18534 18929 19535 19951 5.2%Per Year 5.O'L Per Year Legend: Summer S Winter W 24 TABLE B.Ccmunission Plan for Capaci.~A66iMons and Rt~eman~Carolina Potter a IStJht Company 1979 1980 1981 1982 1983 19&4 1985 1986 L987 1988 1989 l t St I WI St Wt t S tQ4 720 MW I l Si'W'Mayo S IQ)72D MW Wt I S.,'f'St S 720 MW wt l St Wt I St I t I Barrie 1 900 MR>2 900 Mwtt 4 900 MRt McCuire 1 1180 MW 2 1180 MW 1 1145 MW l 2 1145 MW{69 MW)(22S MR)" Chero)tee QL 1280 MW<261 Mif)(93 MW)2 1280 MW Bttd Creek 1 5DO MW L99D ,1991 1992 WI I Sl Wt Zntertttediate St(g 720 MW Wl t t 3 900 Mwt 3 1280 MW 3 4 500 MW Q2 1280 MW Legend t Retirements ()Unit Number Q Sumttter S Rater W sr TABLE C.Coraaission Load Forecasts, Capacity Plans and Resultant Reserves lina Power ADDZTZON)MW)720 720 900 720 900 900 900 720 Caro-LOAD YEAR (MW)1979 S>5830~W>5930 1980 S', 6133 6238~>1981 S'452 W>6563 1982 SI 6788 Wi 6904'83 S>7141 Wi 7263 i 1984 S>7512 W>7641 1985 S>7902 W>8038 1986 S>8313"~W>8456 1987 S>8746 W>8896 I 1988 S>9200 W>9358 1989 S>9679 W>984S 1990 S,10182 W I 10357 I 1991 S,10712 W>10895 1992 S 11269'11462 7433 7773 7433 7773 8153 8493 83.53 8493 8873 9213 8873 9213 9773 103.13 10493 10833 10493 10833 3.1393 11733 11393 12633 12293 12633 13193 13533 13913 14253 27.5 31'21.2 24.6 26.4 29.4 20.1 23.0 24.3 26.8 18.1 20.6 23.7 25.8 26.2 28.1 20.0 21.8 23.8 25.4 17.7 28.3 20.7 22.0 ,23.2 2a.2 23.5 2a.4 a Light Companv CAPACZTY RESERVES (MW)(%)LOAD (MW)I 9860>10070', 10392>10614'I>>10954 i 11187 ,'11545>11791>>12169 i 12428'2826>13099>>13518>13806>14248>14552 15018 15337 I>'5829>16166 16683 17039 17584 17959 I i 18534>18929 ,'9535 i 19951 1180 1180 1145 114 5-69 228-261 1280 93 1280 500 1280 1280 500 1280 12317 13497 3.3497 13497 14677 15822 15822 15822 16898 16898 16670 16670 16409 17689 17596 17596 18876 18876 18876 19376 20656 20656 21936 21936 22436 22436 23716 23716 24.9 34.0 29.9 27.2 3-'.0 41.4 37.0 34.2 38.9 36.0 30.0 2 I~3 21'28.1 23.5 20.9 25.7 23.1 19'19.9 23.8 21.2 24.7 22.1 21.1 18.5 21.4 18:9 Duke P>>wer Company ADDZTZON CAPAClTY RESERVES)MW))MW))))5.2%Per Year 5.4%Per Year Legend: Saner S Winter M Duke's pLants schedu1ed for)985 and beyond are delayed in the plan by six aonths to one.year, bat its earlier plants reaain oa schedu1e f or ecoaoed.c reasons Boserer, CP6X,~s coaplete schedule is delayed Pith regard to CPSL,'he Coaaission fea1s that the coapany has not provided'atisf actory eri,dence concerning the ecoaoaics af its construction schedule.The Coaaission ei11 require that the utiLities and the PahXic Staff present to the Coeai:Lsion its)979 heazMg a SuXX.analyaLs of the present coael~ction. schedules and the reasons, if any.,-that the uti1ities should not reschedule their construction according to the capacity alXcU.Mon plans adopted herein The forecasts of expected Loads adopted by the Conais@K,oa are.the result of the Coast.san.on's conMderaMom of tho erMence concerning rates of growth, incluMng rates of reduction in grcmth dm to conservation and load aanageaent, ami the Cosaissicm's subsequent finding of the aost probe.e rates of groeth in electric loads The Commission concerned about the.paucity of concrete data aran.ah1e in this docket concerning actual aethods of ac&.ering the expected Lereks of conservation and Load sana geaent Further qaantiHcation of these prograas is expected ia the f 979 hearings In addition, the State Budget aff ice is san.ng-sapor aodifications M its p1aening aode3.and those results shou14 be available in that hearing The Coast.ssion M aware that industry has expanded this year at about tsrice the rate of East year T'e Coaaisaion x9.shes to see nore 27 detailed progections of industrial usage.The Commission has the responsibility to ensure that the continuel economic grovth of the State is not impaired by a 1ack of.adequate utility services.For these zeasans, the Commission holds open the time to require the utilities to delay their construction schedules pending examination of this natter in detail in the f979 hearing.Ef the capacity plan is completed as herein shovn and the reduction in annual load grovth achieved, both CPSL and Duke will meet the 20%reserve requirement which this Comaission concludes is necessary for reliable system operation It is imperative that generating unit construction be so planned'a.as to be economically deferable im the event Chat even aoze significant reductions in load groeth can be Mfected'I In the early years of the adopted capacity addition plan, both companies are expected to have reserve capacities which are above the levels ahich the Commission finds are reasonable anl necessary f or operational purposes only.After examination of Duke's evidence anl the public Staff's supporting coaments concerning the costs of delaying canstraction of the units which are near completion (including the increased inflation costs)anl the benefits vhich can be gained from completing the units on schedule{inc3.uding the reduced overall fuel costs)the Commission concludes that it vill be advantageous to bring Du)ce's early units on line as planned.Bven though this vill result in 2S high reserves unti,1 the aid-1980's the tota1 cost to the consumer than iS the units are delayed.Xn other, less infLationary tf.aes, this decision veuld not be ralid The Coaaissicn concIudes,. hovever, that the Later units should be deLayed and rescheduled in accordance arith the reserve requizenents vhich the Coanission finds necessary. Oae to the Large s9x w of units pxesentIy'I planned for the Later years, occasionaLLy there vt11 he ahnoaaaILy high reserves for short periods of tine However, the reduced construction costs per kiLovat t of installed capacity, reduced operating costs per ki1ovatt-hour, and reduced environlenta1 impact of the Larger units over the 1ong-tera overshadov t~short-tera excesses The Coaaission reitemtes that it Xs absorb.utely iaperative i that the construction of the Later units be p1anned so as to he ecouoeica11y deferrah1e Xn the e~nt that Load aanageaent and conservation efforts can s8.gn9,ficantly reduce the load grovth helot present planning levels The Coaaission vie raguire" that the amor partiea in the)979 hearings present detail ed discussions of the oconoaics cf the%L rious construction poss&i1ities for planned units and the steps being taken to ensure saxi.naa fLexQu.Lity at aKniaua cost Xf i t ap pears that the State'econoaic f orecast is gh revised upvard or that the reduction in peak cbaaands through 1oaiL aanageaent 'n@.conservation viLI not occur as pr+ected, then it is inportant that this infornatioa he provided to the Coaaission as early as possible and uo later than the subsequent yearly hearings so that the capacity plans can be.revised to meet demand reguirenents. Governor Hunt'Adainistration has been extremely successful in at tractiug high wage industry to Horth Carolina;whatever capacity plan that is adopted aust be.flexible enough to assure adequate electr'ic power to potential or expanding industry.This hdninistrationes emphasis on providing aoze and better gobs for Worth Carolinians,must not fail for Lack of adequate planning for electrical power Based on the evidence received in this docket and in the load management and conservation docket, the Commission is of the opinion that the forecasts for electrical power for CPGI and Duke are as accurate as posse.ble under present conditions. The Comaission also concludes that its adopted capacity addition plans are reasonable.and wiI1 result in adequate and economical electrical power in Sorth Carolina for the future period up through t992.With respect to YEPCO, the Commission concludes that the available evidence is conflicting in aany respects The Public Staff adopted and recommended the saae growth rates for VEPCO that had been determined by an in dependent consul tant for the Virginia Corporation C omaission., The rate of peak growth<<as approximately 5 8%.VEPCO recommended that the proper rate of growth for planning purposes was approximate3.y 5.0%Seither'party presented 30 clear evidence of the underlying fictors used to develop these grceth rates The Public Staf f presented a capacity addition plan for VEPCO which sould provide reserves at the tiso of the suaier peak froa)4 8%to 18 SX above the Public Staff forecast'his sas generally consistent <<i.th its stated.design oh/ective of I 5%to 20%reserves YEPCO presented a capacity adiLLtion pLan ahieh mall provide reserves at the tiae of the suaaer peak shah oscillate between)9)X and 7 1 X This plan does not appear to be consistent uith design oh/ective The capaaf.ty plans of VEPCQ and the Public Staff are<<hem M'XabLe)The resulting reserve requirements axe shown in Tables 2.and 3 Xn Docket Io~E 22_{>ard>>ith additional ezaaination of the effects of load reduction ehich it can encourage through its o>>n actions and those>>hich.may he encouraged hy actions of other bodies such as the utilities, the North Carolina Ener gy.Division,. the Sorth Carolina BuiliH.ng Code Council, the schools, the Pedestal Gorernmnt, and others It is imperative that policy makers and electricity consumers understand options open to Nea and the effects of their a~ons on the costs of deMrerinq electricity The f 979 hearings>>i11 consider studies.uc>>under>>ay to furt."her refine the Commission~a forecasts, to define impact of changes in>>cather on electricity deaand, to imprare plant reliability,'nd to quantify the effects upon load and load factor of increased use of solar assistance and other alternate.ve energy sources The Commis&on delayed publication of ignis year'report in order to examine the,essence ohhLined in its consecration and load aanageaent hearings in Socket Io 5-)DO, Sub 78 There is abundant eri8ence.on the posa&ilities of mind energy g biomass conversion, interruptihle rates, radio control1ed >>ater heaters, peak-1oad pricing, and other tools to help Lo>>er future electricity demand Ho>>ever f there is little evidence oa predictions of the magnitude of help the 33 Coaaission can expect and of hov soon that help can reach significant proportions. These are matters vhich must be considered carefully in the)979 hearing.Especially needed is better evidence on the need for generating plants near the end of'the planning period.The f979 hearings are being delayed to mid-year in order to give the Public Staff and other parties time to adequately develop reliable forecasting inforaation on these Watters PORECLST QP NXTIQEiL kHC STATE ECQIOEXC LSD SEEOCRKPHXC 6ROQTH on ton ELectrici.ty is aa essential input to the production of goods and services by f actories, institutions, and.comaercial estab.ishsents Zt is also used in the hose to provide services and entertain sent The dejland for elcictricity is siai1ar to the deaaad for other resources aad depends upon its price aaiL the cost,, availability, and efficiency of the equipaent which utilizes it.The deaand aLso depends upon costs associated sd.th the aIternatives to eleotrioltg root Keporteot lo the lerel of deoeof for the service vhich electri&ty can reader Purther, both the leveL of deIIand for the service aad the costs and avai.LabiXi.ties af elec~i ty and its aIternatives are Knf'luenced by the level of ecoaoeic activity The Public Staf f Report presented the results of the Noveaber I 977 f orecast of ecanoaic conditions in North Caroli.na, vhich vas coapleted hy icoaoa5i.sts in the Office of State Budget and Banagenent of the North Carolina Departaeat of hkainistraMon. This f oracast for the f 4-year period l 977-f 990 utiLiced an econoeetric aode3.of the State'econoay~This aoiiel vas developed by Budget Office econoaists in con)unction arith consultants f roa Data 35 Besources, Inc , a.national consulting firm in Lexington, Massachusetts. h forecast of the national economy to)990, rhich had been made by Data Resources in the fall of)977, served as the foundation of the North Carolina economic forecast.The Public Staff Report on the forecast is in three parts.The first sets forth a description of the national forecast to establish the basic assumptions of the State forecast The second part discusses the historical rela tionship betreen economic grorth in the United States and economic grovth in Horth Carolina.The third part presents a summary of the long-tera forecast for Iorth Carolina.1s vill be explained in.nore detail helot, a decision.vas cade to constrain the econometric aodel results in the last five years of the forecast to reflect an anticipated dampening of the grovth rates of income and employment. Thus~strictly speaking, the State economic model vas folloved only until f 985.The national f orecast from Data Resources vas accepted as given throughout the entire period f 977-)990 The resuLts of these forecasts are significant because the level of national and state economic activity vilL greatly affect the future grovth in the use of electricity in this state.The Commission presents belov a shortened version of the Public Staff Report.t 36 B.The Hational Forecast Real growth in the gross national product ((RG')is expected to occur at a faster rate in the period 1977-1985 than in the period 1985-1990. In the 1977-1985 period, the average annual rate of growth in real GTP is expected to be 4g;in the 1985-1990 period, that rate of growW is expected to average about 3%.The dif f erence reflects the expectation that underlying conditions will be different in the two periods.The forecast assumes that the current levels of plant capacity and unemployment are not at full utilizati.on. Me slack in the economy is assumed to be graduaLLy absorbed so that, by 1986 f We economy will operate at fuLL employment of both, capital and labor and will continue to operate at, that level to the end of the forecast period As increased production absorbs the excess industriaL capacity in the early period 1977-1985, real growth wiLL be higher than Long-term trend levels.In addition, the labor force growW rate and We capital stock growth rate wiLL slow down over the f orecast period and, consequently> the Long-tenn growth rate will decline.The increasing participation of women in the labor force onLy partly offsets the decline in the labor force growW rate.The severity of the 1970-'t 975 recession and the increased uncertainty about business conditions have slowed the growth rate of investment since 1975 and, is expected to continue to dampen investment plans.The rate of increase of the 37 productive capital stock is also expected to slow down in the mid-1980's. Worldwide excess capacitv in some industries, such as the steel industry, is expected to continue to dampen new investment in the foreseeable future.Xn addition>Data Resources predicted that the decline in spending on research and development in the United States will take its toll on future investment. Finally, increased expenditure requirements in the area of pollution abatement are expected to absorb funds that earlier would have gone into investments to expand productive capacity.Prices are forecast to increase at fairly high rates throughout the period, but the forecast shows a pattern of declining rates of increase.From an inflation rate of around 6g as of February 1978, the forecast shows a fairly continuous decline in inflation rates to 1990, at which time the rate of growth of the Consumer Price Xndex (CPX)is expected to be in the neighborhood of 0~.The persistence of inflation in the forecast is predicated on several assumptions, as follows: (a)-Energy prices will continue to increase ahead.of the general price level, averaging 13.6g through 1980, and then will moderate toward the rate of increase for the general caprice level, but will never get below a 6g annual rate;(b)Energy prices will contribute at least an additional percentage point to the inflation rate throughout the forecast;and 38 (c)Mage settlements will continue to be in the range of 7 1/2g to 9 1/2g>>Real per capita income growth rates f ollow the same II pattern as real income in the forecast, inc-easing faster between 1977 and the early 1980's than in the mid-1980's and late-1980's. Through 1982 the expected growth ra~m in real per capita income ranges f rom 3.3%to 4.2S, with the exception of the projected slowdown in 1979 when it bottoms at 1.7%.P om 1983 to 1990 the expected growth rate in real per capita income ranges from 2.4>to 2.9%.As explained above, this pattern reflects the gradual eluaQmtion of the excess capacity in capital and labor.The rate o f growth of total national nonage.cultural employment is expected to stay above its long term trend rate through 19&2 and then is expected to taper of f and settle into a lower long-tean growth t end than that which actually occurred in the 1960's and 1970's.Manufacturing employment should grow at a slower rate than total nonagricultural employment< continuing a Mend which dates back to the 1950's.Growth rates in employment. are expected to drop from around'a 3%annual rate in the early forecast period through 1981 to a 1.7%rate throughout the rest of the f orecast period.%,thin manuf a~xzing<employment growth in the durable goods industries is pro j ected to continue as in the 1960's and early 1970's to.be roughly twice as great as in the nondurable goods industries. Growth in nonmanuf acturing employment is f orecast to be greater than grovth in manufactur'ing employment, but the difference is not expected to be as great.as it has been in the last I5 years.Past trends in the composition of industrial expansion are continued in the forecast vith a few exceptions. Xndustrial production is forecast to grov at an annual average rate of 5 3%through)985 The changing age structure of the popula tion is forecast to boost the rate of household formation ia the)980's, and this trend is strengthened by the trend tovard siagle individuals establishing separate households. The increasing af fluence of these middle-aged households is forecast to result in strong demands for avel, recreation,;medical services, home housing, tr Wrnishings,'nd nona u tomoti ve durab les throu ghout the f980's.The only significant break vith past trends is that the automobile industry is not forecast to grov as strongly as it has in the recent past.alaaiaaa I t"%I kJR~I the/~ted States and/~re C~ro3~na)Ln examination of the)6 years from)96)to)976 gives some perspective on the relationship.hetveen grovth in the national economy and grovth in the North Carolina economy.The economy of North Carolina has been groving more rapidly than the national economy.hanual population grovth has been aarginally higher in North Carolina than in the nation,.having averaged j.)0%in North Carolina as compared vith ))%for the nation Howerer~total, annuaL nonagriculturaL enp1oyaent gro<<th in the 196)-)976 poake4 has average a fuLL percentage point higher in 1erth Carolina than ia the nation: 3.0-%coaparoC to 2 4%The acremmt a<<ay frow a gricu LturaL enpLoysent occurred Later in North Carolina than in the United States This fact, together<<ith the rapi4 growth.in the labor f erce in%orth Carolina,>>speci.ally anong<<osen, accounts for.th>>'inference bet<<>>>>n popula.Mon growth anC employ@eat growth in North-Carolina.and in the nation as a<<hola The Labor force for aaaufncturing in orth Carolina has gro<<n at triplo the rate of that in the Qnite4 States, 2 6%Oo8%o Xn the lorth Carolina average annual.growth coapareC to nonaanuf acturkng cat>>gories of eaployannt, avecageC a f%higher growth rate than i'd@the Cad.tel States: 0%coepare4 to 3%Thus, North Carolina has hecoae increasingly aore Cap>>ale&on aanefacturing in the Last 16 years an@the Qnite4 States.has hecoae Less so%kthM the aanufacturing.sector, growth in noaCnrab3a good@eapd.oyaent.}

increaseC three Maes faster in North Carolina than in the United States: 3 0%coaparel to I f%Annual gro<>as@four factors.First, the shift f row f are eapLoywent, which gaineC aoaentus throughout the)950Is, created a large pool of potential manu facturing employees.

This.movement vas reinforced by the.relatively low employment in the rural areas of the State.Second, the investment in reads in North Carolina in the late I 950's and early t 960's opened up the rural areas for industrial development, creating an abundance of relatively inexpensive open space for nex plant locations. Third, the traditional industries in Iorth Carolina, Lumber and.v ood, f urnituze, and textiles, created a vilely dispersed network of viable smalL towns which have served as nuclei for nev industrial development throughout the State.FinalLy, the central location of North Carolina between the great northeastern markets and the surging southern markets has made it an attractive location for.manufacturers of consumer goods.The rapid growth in employment opportunities in North Carolina, the increasing labor force participation rates, and the grovth of higher wage, consumer goods industries ,have aIL.combined to produce e higher rate of grovth in per capita personal income in North Carolina than that in the nation.Zn real terms, per capita income grev at an average annual rate of 4.0%in North Carolina betveen f96)and f976, vhereas the same measure averaged a 2 9%rate of grovth in the United States.Comparative cata on housing starts, car sales, bank deposits, and.retaiL sales all confirm that grovth in North Carolina has proceeded at a faster pace than in the nation. Ls rapidly as econoaic activiy in sorth carolina has been groving.re?aMve to activity in the nation, the State'level of econoaic veLf are'emains significantly below the national levei.Xn f976 per capita incoae in Sorth Carolina vas 85%of the coapaa.ble national Q.gure;in)960 it was 71%The sane Md of relationship between Berth Carolina and the nation can be observed in other areas frea housing starts per person to expenditures per pupil in education Theref ore,.even if one tzCkes.the conservative position that growth in the Sorth Carolina econoay has proceeded nore rapidly than growth in the national econoay solely because it is Icatchin g up"<<ith national levels of econoaic self are, the f act that there is still considerable differonce input.em that grovel%rates Q econoaic variables for Sorth Carolina sill continue to be higher than those for the nation Qk lKCCSB The long-tarn forecast for Sorth Carolina was divided iato too tiae periods The forecast of the econoaetric aodeX, was accepted by the Public Staff as given through)9SS Borever, in order to reflect the decale ration of the catching up process, loser growth rates than those obtained froa the model vere imposed on economic variables in the period)985-)990 Quite clearly, there is an eleaent of catching up in the recant 5 orth Carolina developaeat experience. Growth has been especially rapid in the areas 43 of durable uaiufactures,.excluding furniture.; in the nondurable areas of cheai cals and rubber;.and ia the nouaanufacturing areas af finance, insurance, real estate, state and local govern<<eats, services, aad trade.Por soae'<<anufacturing industries, initial levels of e<<ploy<<eat in the early f 960's<<ere so very s<<all that.<<odest absolute increases in enploynent in these categories produced very high, and probably unsustainable, annual percentage rates of growth.The node1 equations in these areas picked up these high rates of growth aad pro)ected then into the future.However, there sill al<<ost certainly he a slowing in these rates of grovth in the f uture as the proportion of*employ<<ent in these industries ia Sorth Carolina reaches a balance with the aarket.opportunities in:North Carolina and ad+cent areas.non<<anufacturing 1 sinila r argi<<ent applies in the areas.It ves a<<at ter of iaf orned)udg<<ent to deter<<iae at aha t point in the forecast to override the model results, and a decision<<as aade to<<ake that point the year f985.The Public Staff Report of the Budget Office forecast indicates that population in Xorth Carolina is expected to increase at a f.2%annual a verage rate throughout the forecast period.This co<<pares eith the Data Resources forecast of 0.9%annual grovth in population for the nation.The forecast for e<<ploy<<ent grovth to)985 indicates that past trends vi11 be accelerating. Total aonagricultural a 1 eaployaent is forecast to increase at an annual average cd o f 4 f%f roe f 977 to)985 Continued decLMe in the uneapl oyIaent rate~further shrin)a ge in the agricultural sector, and soae incnumes in labor f orce participa Non rates enables total nona gricultural Labor force groeth to outpace population grerth.Iithin the nonagricul tucal eaployaent category, aanufacturing eaployaant is forecast to gros at an aanual average rate af 3 6%, and aomanufacturing eImpkoyaent, is forecast to gros: at;a 4 3%.avenge annmQ.rate Thus,'North Carolina is he&g.forecast to 1'olios the econ oR'ym treaik tankard baaing a aoro service-oriented H.Qd.u the aanuf acturing eaploynent. category, d urahle goods Lnhastries are f oxecast to increase their Bap}.oyMlt at thrice th grct th rate'f the nosduxahLs goocLs-industries durable goa%s espkoyoent is forecast-to groe.at an average annual rate of 5 6%and nondurable goods at an average annual rate'of?7%Thus, the"burden<of growth is placed on the never indas~ies in North Carolina, e g, eIectrical aachinery, stone clay~glass, fabricated uetaXs, instruxauts, and no uachinery These industries are-f ocecast to gros cps%,y at the national Level, aud North Carolina should continue to increase its share of eaployaent in these industakos because of its continuing locational a4vantagas Real per capiM incaae.is forecast to gro>>at an average annual cate of 3 SS frcaa f 977 to f985 The comparable f otecast for'he United States is.3 3%Fx'oa f 985 to 199D the rate of growth of real per capita income for North Caro1ina is forecast to he an average annual rate of 3.(X, whereas the national forecast is for an average annual rate of 2.7%.Total real personal income is forecast to grov at an annua1 rate of 5.0%through)985 and at an annual rate of f 0.3%during the (985-)990 period.The same forces operating at the national level vill tend to slov North Carolina's growth in the aid-)980's and late-I980's Real retail sales are expected to grow at an annual average rate of 4.7%to)985 and at an annual average rate of 0.1%from)985 to f 990 E Conclusion In summary, the forecast for North Carolina over the period I976 to)990, as set forth.in the Pubs.ic Staff Report, is that the growth trends established in the period)960 to f976 vill continue but not at the same levels.North Carolina vill continue to grov more rapidly than the nation but the dif ferences in growth rates vill diminish.As the levels'of economic welfare in'Horth Carolina approach national levels, some moderating in the State's growth rate is expected.The national forecast of strong growth in industries which are not rav material oriented, such as nonautomotive consumer durables, plastics, and electronics, bodes well for North Carolina.These industries have located in North Carolina in the past to take advantage of the availability of Labor, open lani, tnumportation, anC access to groviag narfcets anl<<tll continie to Locate in Sorth Carols.na in.the future These inilustries aiL1 raise average sage-rates in the State an6 feect the erpansion of the nonranufacturing inlust,ries, such as: services,, tra6e, finance, insurance, real estate, an4 construction Q,l of these forces point to a continuation of past-trellis into the future Table 0 suaaarWs those parts of the Budget CfQ.ce~s econoaic forecast vQ.ch vere used M the puhQ.c Staff forecast ¹7 CHAPTER ZV I OHG-TERS ELECTRXC ENERGY hMD P EAK-LOAD FORECAST K.Introduct on The Public Staff of the Horth Carolina Utilities Commission presented the most complete and detailed set of studies'on the long-tera forecast of electric energy sales and the grovth in peak load in North Carolina.The Commission's om forecasts are derived from the forecasts made by the Public Staff.'ajoz emphasis vas placed on the"hase case" vith significant downward adjustment to reflect the Commission's consideration of the effects of the"load mana ge ment" and>conservati an>scenarios. This chapter examines the studies of the Public Staff, Duke Poser, Company, Carolina Paver 6 Light Company, Yirginia Electric and Paver Company, and the various intervenors and public sritnesses whose testimony influenced the Commission 's decisions. Sapor cansiderations leading to the Commission's conclusion that the"hase case" forecast mould not accur and leading to the Commisa.an's ultimate reduced laad grovth expectations are contained in Chapter VE,<Outlook f or Conservation and Load Hana ge ment;h Survey of Alternative Energy Sources" B.The Use of Bcononettic ~Anal sis The basis of ecanometric forecasting is the formulation of.historical models of electricity consumption Qithin these econonetz9.c sodels, the deaand for electricity is related to a set of ze1evant deaogzaphic and economic factors, such as: population, inco ae, enployaent, industrial activity,.electricity prices, prices>.of alternate fuels, and taaperature Rith the use of historical data, statistical relati ons}d.ps can he dereloped between electrics. ty coasunption and these socia and econoaic factors Given reasonahle progections of the erpected growth in population, Mcoaa,, eeployaent, and the-Like, the estimated historica1 , relationships can be used to forecast the future level of electrics.ty consuaptice The reliability of the forecast is dependent on the follosring: j The adequacy of the econceetric aode1 in explaining the lLLstori cal rate of gr O'Nth in electricity consuaption~ 2 The accuracy o f the pro sections.of econoaic'and deaographic growth;and 3 The degree o f homogeneity between the historical period and the forecast period The Public S taff pzaaented separate eco ooaetric energy gÃ8)aode1s for the residential, caaaercial, and industrial custoaer classes Suaaazi.es of the Long-tern Public Staff IBAD forecast for CPSX, and Duke are prodded in Tables 5 and 6 The MEND forecasts revealed an expected rate of@meth in energy sales of approximately 6 3/0%for both coapanies Peak deaand pm>ctions sere dereloped hy applying average customer class load factors to the forecast energy requirements. hs pointed out by the Public Staff, the TREND f orecast must be consi dered an optimistic projection of energy sales in view of the assumptions upon vhich the forecast was based.These assumptions include the folios ing: Strong economic growth in Horth Carolina and South Carolina in the t976-t990 period as evidenced by rates of growth for such indicators as: Real personal income Heal retail sales Hanufacturing employment I C 4 8%4 5'A 3 2%S C 5 0%4 7%3.5%2.Electricity prices rising slightly above the general level of prices{Table 7): Het substitution of electricity for alternate, fuels;4.Ho dramatic change in energy-related technology; 5 1 continuation of the present form of rate design;and 6~Ho direct consideza tion f or possible ener gy anil peak-load reductions due to conservation programs and policies, system load management, and peak-load pricing.Th e Public Staf f base case f orecast vas gene ra lly (((" L~ 5D p I I978 kill 1 lover than the f977 forecast: the average annual rate of gzovth in peak, lrad for the nation is nov forecast to he only 5 0%until f985, thea d-apping to 4 6%hy f995 Xn each of the energy sales sectors, the tvc Berth Carolina companies ha ve historically groan more rapidly than the iniiustry as a vhoLe This relationship should certain.nay continue f or the I 976-)990 period, given the probable outlook for econoaic grovth ia the Ca;zaXi.nas I'he three aa)or electric utilities presented their forecasts of gzovth in electricity sa3.es CPSI., vhose esti,mates of future electrical load sere based on estimates of custoaez ener~requirements, f orecast an average, coapocnd grovth rate in energy sa3es of approximately 5 7%through I 987, dropping to 5 0%through)997 CPSX,'s forecast of energy sales through)997 Xs set out in Table 8 Duke's forecast of future peak loads and sales inctudecL several aa)or aswunptions Hzst, Duke assuaed that its service area vs,1 contime te gxour 41spec~lly since tbe governaents of%arth and South Carolina aze encouraging 9.ndnstrial grovth Ho ever as Duke v9.tnesses poMteii out, the economy of Du%~'s e.rvice area xQ3.grov at a aoze moderate rate coapazed vith the fast pace of the]960's aniL early f 970's;customers vi?1 contribute to the lover growth by continuing their consezvati.ou eff orts and by adopting Deke's suggestions for Load management programs.Second< Duke~s forecast assumed that there>rill not,be an extraordinary conversion f rom f ossil f nels to electricity Duke made sales projections for a number of different classes of customers and utilized more than one method for each group whenever possible.The methods involved projecting the usage per customer and the number of customers, relationships between sales and economic variables, and historical 'rowth patterns.The projections vere first made including the effect of load management that has already occurred.Adjustments to the sales forecast vere then made for the effects on sales of additional load management. The sum of Duke's sales projections by customer classes yields the forecast of company regular sales that are set forth ie Table-9..-: VEPCO's current energy forecast for the years 1977-1987 is shcnrn on fable)0 The compound annual kilowatt-hour growth rate for this period is 6 6%Little explanation of the underlying methodologies @as given by the company.Blua--~QJLSEE'n its base case, the Public Staff forecasted residential sales for CPSX, and Duke, as follows: 76 GQH Salas%Bate of.growth 6 09)5~5%5 5%j 0,722 j 4 024 j5 sj o IRH Sales%Bate of growth 5 5%5 5%js 237 23 776 26 O38 The ana lytical ap pramch used by the PahLic Staff to forecast the demand for.electricity by residential castoaers ras-.to estiaate econoae tric aodeXs of residential ~elactr~ty deaand using aultiple regression analysis The residential forecast.eas based oa the assnsption that the~----residential deaand f or electricU:y ia basically a fnnction of se veral econoa9.c var&blas, including the naaber af residential customers, the real price of electricity, and the amount of rsaL incoae a.milable to residential ciLst osocsa The~lie S taff used au1tiple regression aodels which describe the deterainants. of residential 'electricity deaand 4'o derive estiaates of the isolated effects that changes in parti calar variables have on the residential demand for e1e ctricity.Xeng-run el asticities of these variables (e g~the real average price of electricity real.personal\incoae, and seasonally ad)aster real retail sales)sere used vXth the forecast greet%rates of the variables to obtain growth rates in residential electricity sales for different time periods.These estimated growth rates vere applied'to historical values of residential electricity sales to obtain forecasts of the expected levels of sales of electricity to residential customers. Xn order to check the reasonableness of the econometric forecast, the Public Staff investigated several noneconametric forecasts Basically, these forecasts consisted of performing linear and exponential trends on historical data, such as: the number of customers, actaal energy sales, actual peak customer, and a ppliance load.~historical average use per saturation Table))shoes the results o f the Public Staff residential noneconome tric energy forecasts These results support the results of the econometric forecasts. ~awol~a~Pnme 8~~ht Caa~n~'To forecast residential energy usage, CPGX.first estimated the total number of customers that mu].d be on its.system in the future Since the total number of residential customers on CPGL's system correlated closely with the total number of housing and mobile home units in the nation, CPGL used progections of the future total national number oX housing and mobile home units to forecast the total system number of I future residential customers. Rithin the residential sector, CNI's largest nuaber of custoaers is in the cLass shich uses eLectric sat.er heaters but does not use electric heat In order to determine the relative proportions of each type of residential customer, CPST.correlated the historical rate of gro>>th cf<vater heated only<residential custoaers to the total nuaber of housing units and aohile hoass Using progections for the'otal nunber of housing units and mobile honas for future years'nd assuR9.$g that the.rate of growth of this class customer>>ould fo11o>>historical patterns, CPSZ,>>as able to forecast the totaL nuaber of residential custoaers>>ith electric rater heaters but rithout electric heat Tt>>as assumed that a large portion of those residential custoaers'presently using natural.gas>>oald continue to.have it alai,lah1e,, even.>>ith the cartailaent of natural gas These custoaers re present a large pro portion o f ainiaua use electric custoaers Theref ore, the total nuaber of custoaers in this cl ass>>es assu aed to decline only s1ight Ly (Subsequent events have sho>>n that prediction to be a good one'the natura1 gas utiLities have enough gas available nod, due to decreased curtMLlents, to actively pursue ne>>residential customers}By subtr actin g t3ae custoaers in these t>>o classes troa'the total expected nuaber o$residential custceers, CPSX, arrived at the forecast for the nuaber of custoaexs>>1th electric heat is a result of these assuaptians, CPSI, no>>expects a saturatiou of electric heating custoaers of 38%by)997 This is an incr ease over the 23%sa tura tion of electric heating customers in I 976.Zn order to estimate the average use per customer for the residential sector, CPGL used historical data to determine the effects of veather, grovth in the residential class, price, abnoraal usage during December (due to the holiday season), and conservation. In order to project future usage, CPGL assumed that normal veather vould occur and assumed a iso that a zeal inczease in the price of electricity (over the inflation rate)of I%per year vould occure puke poses;~Coa a~a Duke's residential sales fozecast@as based on projections I of tvo parameters: customers and kilovatt-hours per customer The customer forecast was based on the historical relationship betveen Duke's total xesidential customers and the population of its service area.Duke used the population estimates by the Bureau of Economic Analysis, United States Department of Commerce, to compute the number of customers. This estimate of total residential customers vas then disaggregated to the individual residential rate schedules. Projections of kilovatt-hours per residential customer vere developed by using multiple regression techniques to analyze monthly usages by rate schedule and to estimate>977 56 teaperature-correc ted sales Pro+ctions

• f ar usage per custoaer sere developed by coahiming eXasticities froa econoxetric aodels with growth rates for the applicable independent variables The resulting pro)ection of usage per customer xultiplied by the nuaber of custoxers yielded estiaatss f or future KRH sales.The progections of usage per castoaer f or each residentiaL rate schedule sere veri@:ed by independent pro$ections uade hy Duke's marketing depart sent Xh~af~Sties~t The coamerciaL energy sector eacoxpasses a&de variety oX custoxers and uses of electricity The coxaezcial classif ication is a.heterogeneous Imiz of wholesale and retaiL---trade o peratio~see ice activities, governxenta1 units.Sany of the coaaercial uses of electricity are siaiLar to residentiaL uses, such as indoor Ligh ting'g ref rigeratiou cooking, air conditi oniug, and space heating Theme axe also specialized coxxercial uses of electricity, such as outdoor Lighting di;splays and busi.ness aachinery The)964-I 973 period mes characterized by a rapid grouch in the coxxerciaL consumption of electricity As pointed out in the Public Staff Report, Duke and CPSL experienced an approziaate I 2%annual growth rate in coaaerciaL sales during the l 960-1973 period The coahined ef ect of aconexic recession, rising rxaL electricity prices, anil 57 voluntary conservation caused a dampening of the annual grovth rate in commercial energy consumption dovn to approximately 3%for both companies during}973-}976.As a degree of stability vas brought to the national economy and to the energy markets, sales to commercial customers achieved a modest grovth z'ate of 5}/2%to 6%during}975-}976 The econometric forecast analysis of the Public Staff'esults in an estimated rate of grovth in commercial KQH sales for CPSI and Duke ot approximately 6 5%for the}976-}992 period.The forecast of commercial GRH sales for CPGL and Duke for selected yeazs is set forth as follovs:~976 J 985~90~992 GRH Sales%Grovth rate 4i0}6 6 4%7~0}8 9~662}0~979 6 6'%976 J9BS J 990~99 GVH Sales%Grovth rate 7i 987}3e959 6 6%f9 2}4 6~6X 2}r 834 As discussed in detail in the Public Staff Report, the commercial econ ometric models used the f olloving as dependent variables:

the zeal average price of electricity, the real retail sales, the real price of 42 fuel oil, and a veather variable.Alternative model specifications vere 58 estimated using a data set for each coapany consisting of acmthly observations orer the period)965 to)976 The statistical nethod of aultiple regress'.ou>>as used to sepaza te the effects.of each of the variables which deterxine coxaerciaL KN desand Tixe Lags>>ere included in the.xodels to estixate the dynaxic response of coaxercial custoners to changes in the price of electricity, the 3eveL of retail sales, and the price of fueL oil ln estLnated rate of gro>>th in coxaerciaL sales>>as generated hy applying Long-run elasticit3.es to assuxed grcnrth rates in the xodel variables The econoxetxie analysis f or CPSL and Dale results in an estinated rate of gro>>th in coxxerciaL KRH sales of approximately 6 5%f or the period f 976-I 992 Although this gro>>th rate is above the expected future-rate af oroath la coeaerrlal sales far the UnfteK states, a"M5%.:-~grorth rate M>>aLL belo>>the historicaI coaxercML gro>>th rates of 9 8%and 10 l%over the period 1964 to)976 for CPSL and Duke, respectire3.y Ls in the case af residentiaL energy sales, the pahkxe Staff per forxed a noneconaaetric inmstigation of coxxerciaL sales to chock the reasonahLeness of the econoxetric forecast The initiaL analysis ass to forecast energy sales vith, si.xple linear and exponential trends of the avai.Lahore historicaL data The exponentiaL trend sho>>n in Table l 2 appears to increase draaat3.caLLy af ter f 982 and was considered to be an upper hound est&ate The second type of, analysis>>as to trend~linearly and expcmential'Ly, the historical av era ge use per customer and multi ply t3xese trends by the linear.trend of commercial customers. Xs shovn in Table)2 this type of analysis resulted in P forecasts vhich lie betveen the af orementioned historical sales trends.Table i2 also includes an average of all commercial energy estimates and the average of the most likely estiaa tes.~aro~Povee 6 g~~t~Cga an In order to estimate commercial customers, CPGL developed a trend vhich tied the grovth in commercial customers to residential customers. This assumed that the tvo grovth rates.vould stay reasonably close in the future as in the case of its residential customers, CPGL estimated the average use per commerciaL customer by using historical data to determine the effects of.veather, grovth in the customer class, price, abnormal usa ge d uring Decem5er, a nd conservation In order to prospect future usage, the occurrences of normal veather and a zeal i.ncxease in the price of electricity of 1%per year vere assumed p~u~ov~e Co~m~n Duke's commercial customers are served under the company's GeneraL Service Schedules (G and 6A).For each schedule, the kilovatt-hours per customer vere analyzed separately to allov ad)ustment for the effects on usage of changes in.ambient temperature and to calculate estimates for 8977. 60 These usage per cnstoaer estiaates, together with.the nmaber of estinated custoaers, vere used to deteraine the temperature-corrected sales f or Sched ales G, and GA Duke then.applied declining growth rates fzoa the historical trend to the I 977 estijaates of General Service saies in order to calculate the long-range pro)ection Balsa foal S4mhcfa1 The Public Staff~s industrial sales.forecast vas the result of the application of tvo methodologies The first vas based on aultipie regression tech.niques The second vas has ed on the hist,orical reia tionship between grovth in manufacturing eap1oynent and growth in industxkai KM sales.The Sinai f orecast.was based on a coaKnation of the two aethodoLogies .The: forecast rates'f eaual--grovth in industrial ~H st'es during the 1976-)985 period are 8 53%for CPSL and 7.59%for Duke Thc)985-)992 forecast annual grovth rates are 7 S9%for CPSX, and 6.98%for Duke The'ain determd.nant of the eipected growth in the industriai use oS, eiectricitZ is the strong rate of growth in uanuf acturing eaployaents in North Carolina and in South Carokina The Public S taff concluded that the rates of growth in industrial sales for CPST, and Duke did not appear unreasonable in vier of the current forecast for growth in aanafacturing eapl~aent i,n the tao states ,The Public Sta&forecast of indusMM.QfH sales for CPSL and Duke for selected years is set forth below: GRH Sales%Grovth rate neo 8t 759 8 5%7 9%7 9%~9&5~90~992 I 8i293 26~738 3)e 1 23 GQH Sales%Growth rate$976 l 8r 4l7 7 6%J 985~990~992 35e570 09r 858 57e067 7 0%7 0%~i~l'a Pokey 6 Q~t C~om a~CPGL's industrial energy f orecast vas basically,a consen sus o f the estimates of its customers, i.e, the company~s industria1 sales manager called upon its large industrial customers to learn their future plans.~ane paver~coa an Duke'textile sales, which a mo unted to 56%of its industrial energy sales in)976, vere forecast using an econometric model.This projection vas supported by two other models, one involring the textile production index and the other using textile mill consumption of fiber.The textile sales forecast va s between the t,vo alternate projections. Sales to other industrial customers vere projected in two parts: man made fiber plants, vhich comprise about 22%of these sales in)976, and the remaining group.The 1978-)979 projections for aan-made fibers vere estimated by Duke's marketing department based on expected 62 KV load and hams use of deaand far each customer The l.ong-range pro/ection vas based on the historical relatianshi p betveen Duke'sales and the national production of sanmade fibers The remainder af the industrial cLass vas pro)ected using a declining grovth ra te trend Duke added to this pro)ection the energy associated vith a 100 51 industrial plant that Duke expected to start serving in l 9S<The forecasts of sales ta other classes vere based on gravth factors fzoe histaricaL trends, except for interdepartmental sales The latter sales vere propcted based upon the experience of the manager in charge of the vater systems.P~e The Pablic Staff aade its esiiaates of hase-ca~peak deaand by uti,kizing three independent hut closely related f arecast aethods FS.rst a peak forecast vas developed fraa the forecast of total system energy production through use af an average p years)system load factor Second, a peak-load forecast vas calculated by using forecasts of future KQE sales for each sapor custoeez clue in con)unction vith average (6-7 years)class caincMentaL peak-Load factors vhich had been obtained f zoa'istorical castoff-service studies The third aethod used a direct ecanoaetric esQ.sation The Public Staff determined that, the second method, the custoier class energy zequireneat -load factor method, vas the most reliable ap proach to developing a 63 f orecast of peak demand.The econonetric peak-load models vere used only as checks on the validity of the results of the load-f actor estimates, due to statistical problems inherent in the econometric models.The strong point of the customer class approach is that it provides a direct linkage between the customer class energy forecast and the system peak-load forecast.The customer class approach recognizes changes in the mix'in energy sales by class of service and directly reflects them in the.peak-load estimates through the coincident peak customer class load factors.The peak demand estimates for CPGi.and Duke resulting from this analysis are shovn belov:~Cool~a Paean D~iciht~Ca~ay-Peak DeeanD Peak Demand (.HQ)Bate of Grovth 6 9%6 4%6 5%5el2)9 t375 12P777 l~r~86~nnk Poaen~Coa an-~eak Deeanl Peak Demand (5$f)%Rate of Grovth 6 7%6 6%6 7%8r 60 I l r 385 2l e 209 20m)27 Using the long-tera TREND forecast as e bench mark, the Public S taf f developed three alternative peak-load pro jec tions which attempt to g ua ntif y the possible grovt h effects of such measures as nev conservation programs and load mana ge men t These alternati ve scenarios reflect 64 reasonable upper liaits of Me irpact of conservation and/or load mana ge ment on capaci t y e xpansion planning These scenarios are: Conservation -a f 5%reduction in estimated systea energy sales by)992 vith a constant 1oad factor;2 T.oad 5anagesent -a l 0%increase in systea load factor (not exceeding a load factor of 75%)by)992;and 3 Coabinati;on Ioad 5anagesent and Conservation -a)5%systea energy sales reduction and a 1 0%-increase in Load factor by f992 Mes construction schedules sere designed for each of these alternatives and nev estiaates of the price of electricity under each scenario sere nade h f ourth scenario vas studied to determine the effect on the pri.ce of e3.ectricity of the overbuilding of eIectric generating facilities I.t vas assuaed that generating f aci.&ties would be constructed under the<base.case<capacity-ex pansion schedule eith Road actuaLLy grosring as shannon under the Combined I.oad Eanagenent and Consecration scenario.The iapact of, this cecurrence vou1d he to simu1taneously raise and Lovm near tera prices because extra plant vould he on Line, but these aore efficient neo plants maid have lover fuel costs Prices cif eLectricity in la ter years mould be reduced because the plant cost included in the rate baaa mould Mc3.ude less inflation.Xt 65 vas found by the Public Staff that such"overbuilding" of genera tin g facilities vould not dramatically increase the price of shovs<hat electricity during the study period.The study*the net effect of the additional plant vould be a)X to 2.5X increase over the nominal price of electricity. gaeo~na Poser I~L'~h C~oe a~n As pointed oat by the company, CPSL's estimate of the future electrical load vhich its customers vill place on the system is to a large eztent based on estilates of customer e nergy requirements. CPSL first estimated total energ y requirements for the system.Then, in order to develop the company's load forecast, CPSL determined coincident peak-load%actors Nor"'each energy c1assif ication and collbined thea into a coaposite annual'system load factor The total pro)ected system energy input and the projected annual systea load factors vere then used to forecast the CPSL system peak load for each year CPSL's current peak-load forecast is set out in Table)3~ate~over~con an Several assumptions underlying Dakets pro)ection of its system future peak loads have been discussed previously, but it is important to reiterate that Duke's projections of peak load take into account the effects of its load management program and the conservation efforts of its customers. 66 Ia aaking its f ozecast af peak Loads, Duke pro)ected separately the suaner and the sinter peak loads These peaks have been gxoeing a t different rates Cue to the degrees of satuxa tion o f air conditioning and electric lf heating The suIIaer and sinter pea3r, loads vere sepaxated into tao coaponents: teapezatuxe-responsive 1oads and hase Loads by using regression anal~sls techniques The company deterained growth factors for both types of Loads Dukees loag-.range forecast of suaaer peaks is shosn on Table)4 Its forecast of printer peaks is shorn on Table 35 Duke'peak-load forecasts are Eceer thm the"hase case<forecast of the Public Staff and axe appzoxiaately the saae as the Public Std%'s conservation scenario Duke'f orecast also shoved that the coapany sci21 reaaim a suaaer peaking coapany through 3990 4IUI~R DIIX VEPCO~s current peak-load progecti.ons seve based on econoaetric aodels, seather sod.aLs, and historical proQecti.on techniques The coapany.used the service af outside consultants to pro<de aa in'dependent forecast for a re<em of the reasonableness of VEPCO's mn forecast ls pointed out hy the coa pan y, VZPCD is a suaaer-peaking company ance~barring unusual growth in ai.neer Load, expects to reaain i.suaaer~ea3cing coapany'or the f oreseeab3m e future VRPCO~s suaaer pea}c-3.oad forecast for the period f978-)987 is shown on Table 2 Growth is expected to renain 67 veil below the long-tera historical growth.rate and will be af fected by i<<pie<<entation of load nanage<<ent techniques beginning in)980 The co<<pound annual growth rate predicted by the co<<pany for the)977-)987 period is 5.3%IIX Rll~~IIEI~The Co<<<<ission encourages participation in its hearings by public witnesses vho have concerns about the<<atters under discussion or saggestions for Coanission consideration. A<<ixt ure of concerns, crit icis<<s, and sa g gestions f or i<<prove<<ent of the forecasting <<ethodologies of the Public Staff and the co<<panies were offered during the Pebruary)978 hearings.Response to concerns reLating to nuclear power,sa'fety will be treated in another section of this reports h novel approach to forecasting, utilizing only residentiaL <<eters as a predictor for total systea growth, was presented to the'o<<aission by the CaroLina Environ<<ental Study Group (CESQ)Zt vas asserted that eLectricity consa<<ers will shortly saturate their usage at 9000 watts.hf ter fitting an integral of the ordinate of the nor<<aL curve of error gOICOE)to recent historical data, CESG asserted that Duke would gradually peak at J),000 HW in a few years.At that ti<<e, the growth rate would be zero. 6B Soae, but'ot aLL, of the Cata users by CZSG vas ad)usted for weather vaa.ance The data vas adjusted by a Ciscretionary incoae ratio (DIR)between 99 anl$02 anC by a rate factor This DZS Level was criticicect because a DXR of f 0 inp1ies that the xeal cLiscretionary inceae, of Horth Carolinians eouLC never increase an6 that aLL progxaas far upgrading/ebs aaC sages ln the Sta te are a coapLete failure.Using a DXR of I 02 iaplies a 2%annuaL growth Q.screCi.onary incoae X f the CESS aethoCology is ascii as corrects in the hsarMg by auld,plying the claiao6 saLturaMon point af 9000 watts per customer by the nuaber of custoaers, by the CESS annuaL custoaer growth factor of t 03, act by a DXR of)02 II I*I I I~SIULJLSI I IS.~~, of 5 06%'per year Xf the average DXR value of CESt's)7 years of kata is useC naaeLyg j 02276@the rate of peak grovth eou1d increase to 5 344%For CeaanC to Level off at)),000 5%as claimed by CESS, the nuabec of custolers. eou14 have to start to decrease in the near f uture Using CESS~s methodology s3.th realistic assuuptions yieMs a f orecast of f uture Loads which=coaparahle to the coapanies'orecasts The apparent deli blate atteapt by CESS to force saturation by choosing the paxaaeters of the XOICOE curve cannot be fulgent to be a creiKhle examination of past history or expectations for the future planning perio4 To 69 i(assu<<e.tha t the per capi ta electricity ase of Horth Carolina's citizens is saturated would i<<ply that (I)all progra<<s to upgrade the standard of living of citizens in this State are not vorking or (2)conservation and load<<anageaent are practiced so effectively that they coapletely offset the additional energy used to upgrade the standard of living.For conservation and load<<anage<<ent to be so practiced is an ad<<irable goal and should be pursaed, bat that does not appear attainable within the planning period of this report.The COG testiaony did, hovever, present a good explanation of the pheno<<ena of peak loads occurring at ti<<es of extre<<e coldness or'ar<<ness of a<<bient ground teaperature as a result of the differences in radiant energy available in different<<onths.This infor<<ation <<ay be of value in future studies atte<<pting Co further define the probability of peaR-inda=ing veather conditions. L~'The"load<<an age<<ent" scenario of the Public Staff utilized a nari<<u<<i<<prove<<eat in load factor of t OL Several'ublic~i tnesses expressed concern that'his i<<prove<<ent vas too lov an expectation. Ho<<ever, it vas pointed out that daily load factors are already over 8D%.Since<<ost of the load<<anage<<ent and conservation aids nov under practical consideration involve i<<proving the daily load factor and do not involve transferring loads betveen seasons, it vould be extre<<ely difficult for these aids to i<<prove the annual load factor beyond approxi<<ately 75%Even if such i<<prove<<ent could he.acco<<plished, the effect 70 eouM not be plLrMcnlarlT'elpful because, ance load factor ezcaels approx'ely 754, the system has LnsaSZic5.ent of&peak time to perform ma)or maintenance and the system aast aCR neo units to carry the 3,oad daring maintenance The expected'imit af f S%an conservation effect Cnring the planning period Mhich ea" aw4 in the conservation< scenario of the PahU.c Staff appears at this time to be reasonable. Stndies by the Tennessee Va23.ey Iuthoaity have indi;ca,tel that even less.consermMon may ho;the practical li,aL t '7I CHAPTER BZSZRVZ CBITZRXL, QEEZRLTIOQ EX7 hHD CXPLCXTY PLLIS I.~e~~e..ve C~~e~a The aa gnitude of a systea's generation reserve requirements depends upon the nature of the systen, the characteristics of the load, and the quality of service required by the system's custoaers. Since these factors change over tine, a reserve>>hich>>as adequate in the past, aay be inadequate in the f uture.Consequently, the Coamission recognims the need for periodic revie>>of the generating re~rve xequirenent ln developing,9.ts future capacity glans, the Public Staff aade several inportant investigations prior to its selection of the set of generating facilities it reconaends that the electric utilities should construct'The first study involved the selection af acceptable reserve criteria to provide f or~De day-to-day variations in operating conditions. These variations include maintenance en genera ting equipment, partial outagas due to physical and aabient condi ions, unexpected (forced)outages of generating facilit'es, changes in load pattern, and errors in projected load estimates. Zt should be noted that an allovance for delays-n the comaercia1 operation of no>>facilities is not generally included in a utility's reserve capacity 72 There are various sethods to determine'eserve recpxireaents These aethods can be broken do<<n into t<<o broad groups: the nonprohahilistic {IOPROB)group and the prohah ilistic (PROB)gr ou p.lcm prohabilistic reserve ca paci ty asquireeents are geeera11y based on aaintaining soae nini.aua level of aiiditioaal capacity above that recpxired to neet the expected annual or seasonal peak lead The sore coaaon EOPROB sethocks are g)the standard percexxt reserve and (2)the Loss of the Largest unit The eeet<<idely use%prebahi listic xeserve zequireeent is Loss of Load Probability (LCLP)It<<as the conclusion of the Public Staff, based upon its detailed analysis of the historieaL peak-Load. conditions for Ouka, CPSL, and VEPCQ~that a reserve criterion of I5%to 20%for boCh summer and<<inter<<onld provide adecpxat,e and reliable electric service to the citimns of North.'Carolina The PuhLic Staff also concluded that a loss of load probability not to excel I 5 days per season (based, upon<<eekday peak hour, Loads)should also he used im the planxxing of North Carolina's future capacity racprirexleets Dcxke<<9.tnesses testified that a 20%reserve<<cmld he the ninx.zR I Mcessa'ry.f or 1orth C4x'olina CuriDg the present planning period This is consistent <<ith Federal Energy ReguLatory Coaaission recoaaenda4ions of f 5%M 25%,<<ith faster gro<<in@areas using the higher reserve srargQxs 0 73 Since the reserve margins have been substantially in excess of these values in recent years and weather conditions have still caused difficulties in maintaining service, the Commission concludes that a minimum of 20%reserves should be maintained until load growths settle down iato a more predictable pattera.B lasaUJ!a I1L Once the general level of reserve.reguiremeat is C established, the next step in developing future generating capacity is to determine the proper aix of the three basic generating capacity types: base, interjlediate {cycling), an d pea king Base units are designed to run most efficiently at continuous full load, aad generally operate over 60X of the time Cycling units are generally designed with greater emphasis on loser investmeat cost and with lesser emphasis oa'obtaining maziaua operating efficiency. {Pith the passage of time, less efficient base units are used for cycling operations.) Cycling units do not operate as many hours a day as hase units and say be stopped aad started more frequently They operate usually about 25%to 60X of the time peaking units, which consist mostly of gas turbine and iateraal combustion engines, are operated only a few hours a day Theoretically, peaking unit investment costs should-be lower and the operation costs higher than those o other types o units.However, hydro units, which are used for peaking, have high iavestnent costs ia daas and 70 resa rvoirs and yet hav~relatively .1am operation costs These units ar~generally limited to peakimg mode in this area, due to water availabiLity. Peaking units, depending on the type and systeN, cam operate as nuch as 30%of the time.The hours of operation for each type of capacity depend upon the costs (capital and energy)of the capacity and the demand To provide the aost economical energy to their co as users, electric utilities should determine whi.ch generating facilities ta operate based upam the relative energy production cost of each.facility (The capital cost of each unit is ignored for operational purposes after.the unit is in service.)he unit with" the lowest energy production cost is assigned t%first increment of load As.each additional increment of load is added to the systea, the unit with the next Lowest energy production cast is placed into service This.process continues until the on-line generation equals the coincident dewand of the consuaces The units td.th the Lowest energy.production. expense would be cansidered hase load units is new units are added.to a systea, same base generation facilities may no Longer have a relatimly Lower energy production cost and may become reclassif=ed. as intermediate units Prope mix is considered to be the optimal mix of genera ion capacities which will satisfy the demand at minimum cast The optimaL mix of generatian caoacities is determined hy the utility 75 load carve, arhich is a graphical display of demand versus t ixe.Xn arriving at the proper ni.x of generating capacities, the Public Staff investigated the typical hours of operation for base and peaking ca pacity of the three North carolina utilities, the standards of opera'tion using a peak xeek hourly load curve, and hours of operation compared to an annual load duration curve.The Public Staff also assumed that peaking units.would operate no xore than f 000 hours and that base units would operate at least 6000 hours.Based upon the above, the Public Staff concluded that the proper genera ting mix f or D uke, CPS', and VEPCO shoal.d be approxixately one-half hase capacity, one-third cycling capaci ty, an d one-sixth peaking capacity.Other witnesses generally supported this mixture, and the Comxission concurs.5agor controversy exists concerning the ase of nuclear versus f ossil.generation. The debate centers~both on economic and safety grounds.whether nuclear is nore cost e ffect ive than fossil generation depends upon the total costs o f c onstr acti on, li f e tine xaintenance, an d f uel consumed.Xn addition to its own studies,, the Public Staff presented the results of a numLber of studies of these matters by the E Xectri c Po ver Research Institute, the Federal Energy Administration, the Nuclear Regulatory Coxnission, the Federal Poser Coxaission, the Energy 76 Besearch aud Develnpaeat Admin~ation, and others.These studies utilized a mage of assumptions about future cost trends All oC the studies pro)ected costs of both nuclear and fossil generation fram the present aid-t 980~s planning period into the tieen~first century%bile some studies only calculated initial costs, others calcul ates the levelixeC total.cost over the useful D.ves of the pLants The results incticaheC that, in the present planning period, nuclear generation is expected to be mare economical than fossil generation The average result of the total life studies.sho<<ed that nuclear generation is expected to be almost six-tenths of a cent (5~86 mills in)978 dollars).per kU.o<<att-hour Lass erpeasive than f ossil generation These estimates range from a Xo<<of 0 264 per kilo<<att-hour to'a high of 0 90'er kilo<<a tt-ho ur k savin g.o J six-tenths o f a cent per kilo<<a tt-hour, the mt difference in capi tal costs, maintenance costs, and tuel costs, wouliL he a cost saving of$6 00 per)000 KRH generatad For systems<<hich are at Least one third nuclear generation, e g, the cnorth Caeolina utilities, this scans a savings of$2 00 per f000 KQH.The studies indi, cate that a consumer<<ho uses an average af)000 KRH per month is expec~to save Moa approzijIately $10 00 to$36 00 per year Por an electric heat customer<<ho averages 2000 KQB per aenth, the savings<<ould be exp~ed to range Moa$25 00 to$86 40 per paar Ta f985 dollars, these savings<<nald be more than douhle 77 The Public Staff analyzed the sensitivity of its studie by calculating the effect vhich voald be produced by ())doubling the nuclear f uel costs and (2)by increasing the I'uclear capital costs by 25%.The results of these studies, as veil as those of the.companies, vere that nuclear generation demonstrated an expected economic advantage over f ossi1 generation f or base loa d additions d uring this planning period.It is emphasized that these results apply to the present planning period.Studies for the generation capacity vhich vill f ollov those units presently in the planning stage may demonstrate that other.methods of prov iding e lectric gene rati on may become pre f er able in future planning periods.)('Questions sere raise6 concerning the availahility or L nuclear.fuel to be used in scheduled reactors.The evidence indicates that sufficient quantities of nuclear fuel vill be available to be used during the lifetime of plants nov being planned.Hovever, vhen-these plants need ta be replaced, there is a definite guestion of vhether there vill be sufficient nuclear fuel to be able to replace these plants vith nuclear generation unless a reprocessing system is started.P Several vitnesses at the Commission' Febr uar y f 978 hearings expressed their concern about the safety and reliability of nuclear fueled generation. The issues raised by these vitnesses included,: 78 The probe,ebs cf storing spent uucleaz fueL, 2 The Lack cf Xi~assurances of uraniaa supply toear4 the end of the centu~, 3 The continuing e~3ation cf costs associated sith nuclear plant construction, 0.The use of~est amount.s of<<ater for coo1ing in nuclear generation, aaC 5 Threats from, terrorist groups against nuclear plants I There eas also testimony, hosever, that nuclear poser is clean, safe, anC available The suety of nuclear poser plants can be illu~xateC hy the observation that there has been almost 2000 reactor-.years of coasercial plant operation I eorLCe ice sithout a'ingle WtaXi.ty as a consecpaence of nuclear>>related'lant malfunction There is continually increasing opinion in the technical coaaunity that the hmarCs to the ge mral public~a nuclear pLants are consiikenahly Less than&e hazard+Mom aany alternate..ve systems, such as coal The."greenhouse effects on our ataosphere causr4 hy carbon CioxMe resulting roa the coabustion of coal a"C%1 aay he a prohlea of even aore viRespread anil potential seriousness than the Localixei pr ah lees of nuclear safety Zn action, nuclear units lo not have the suLfur"aa4 ot3xer eaission problem of fossil units hn increasing segaent of the technical coaeunity is beginning to express the view that nuclear plants are 79 perhaps too conservatively designed, i.e., that the many redundant safety systems axe not)ustified by experience. lith respect to radioactive waste disposal, government efforts are underway to identify tvo high-level waste repository sites for-eventual ultimate disposal of reactor wastes.This'program envisions the'ossible transfer of waste to t'hese repositories during the mid-to-late-3980's Discussions of establishing.interim storage repositories by)983 have~been initiated by TVA with the Pederal Administration suggesting tha t TVA be funded to develop an interim storage system for the southeastern utilities at Oak 8 idge, Tennessee Zt is true.that Xn the past year increasing costs for capital construction, fuel, and safety systems of nuclear plants have narrowed the economic advantage nuclear pover holds over coa3.-fired plants However, the southeastern region of the United States still shovs a significant economic advantage for nuclear pover.over coal.Kdmittedly, the continually inc rea sing capi tal costs of nuclear facilities present a financing problem for utilities and are a deterrent to the construction of nev facilities. The calculation of the changes in future electricity prices used by=the Public Staff to develop the impacts of the"overbuilding> scenario were challenged The basis of the challenge was the expectation of annual increases of 8%in nuclear fuel costs and 6.5%in coal costs.Et vas assartect that the present fuel cost difference>>ould lessen and nake future nuclear units Less econoai.cal and~since nuclear units are the projected units in question, the ne>>units should not he built Hovever, since nuclear fuel is presently a 0 mills per KW and coal at l4.8 mills pez KRH, the relative difference>>celd <<iden, not lessen,<<ithin the lifetime of the plants The public Staff's calculations are Zt was contended that Lar ge nuclear uni ts are aore expensive Co build aniL operate than snaLL coal units It>>as also contended that there>>auld be less financial impact as veil as less environmental impact if generating units vere smaLLer and decentralized The Cahle belo>>shoes that, if units are costed out in the same time frame and>>ith comparable environmental treatment zequixesents, small un'.ts are more expensive Co construct per kilo<<at t of capri;ty than.Large units Since nuclear fuel is so much Less expensive than f ossil f uels, nuclear units are economical In addition., approzimately the same number of peo pie are repaired to run a plant on an around-th~locJc basis, regardless of the sin;doable,ng the number of plants vould double the manpo'ser.rBguirement~ It vould also make higher voLtage transaission lines less econoaicaL and vould increase the use of Land required for transmission and generation facilities Smaller units are Less efficient in vater usa and>>euld be envirenmentaL1y Less desirable 8I Cost Conparison Xllustrating Economies of Scale l Duke's coal plants, with scrubbers Added, I 976 Dollars hllen hllen'5 marshall Cliffside 5 marshall 3 Selects Creek'}Capacity SR}65 275 350 545 650 I}4o~sam 374 348 344 328 283 275 lz.Duuue~sqc'~ea~plant~as Built, f 976 Dollars Oconee HcGuire}860}}80 230 293 The Public Staff Report was criticized because it did not treat cogeneration as an'lternative to separate pover production plants.This natter vill be treated in'epth in future hearings.M study of'this matter has been funded by the 8 orth Carolina Energy Research 1nstitute and the United States Department of Energy Results of that study may be available f or the Commission '}979 hearings Questions sere also raised by intervenors concerning the viability of+sing tower-cooling versus lake cooling, with specific reference to the possibility of moving D uke's proposed Perkins nuclear plant to Lake Norman Perkins and its sister units have been designed to use cooling towers as a result of an EPh mandate in past years.By designing and constructing all the units the same, efficiencies vill be experienced durin g construction and operation. I t is neither econoaical, nor permissable to aove Perkins to Lake Horaan.The lake is reserved for future units;the Environmental protection Agency will allow no units to be aMod until ezperience has been gaiaed with operation of 5cSuire and tests of water quality have been conducted There are benefits other than econoaics associa ted with nuclear generation Nuclear fueL, unlike coal, avoids the problem of toxic stack gases Et is noted that.nuclear plants are required to have lovir routine radioactive eaissions than are currently allowed at aany plants harning law sulphur western coal which contains metall aaounts of 4 uraniua The Likelihood of nuclear plant sabotage reaains unknown, but it is well recognicat-that security controls at nuclear plants have been considerably iucuauced under the new Unied-States Suclmm Begulatory.Comabssion Quidelinas The concerns about nuclear power ex pressed by some witnesses are Xegit9.sate and the Coaai.ssi,on .shares tease concerns The evidence, however, is sore than sufficient to support a finding that the pro/ected benefits to be derived fraa the cLevelopsent and operation of nuclear power ou~igh any associated mists Thexe is little question but t3mt there are economy,c advantages in the use of nuclear poser and, based on the evidence in this case The Coaaission f inds no reason to try to>>wrest away>>the primary responsibility and gurisKction of the United States Suclear ReguLa tory C oaaissi on ia determining or setting safety standards for nuclear p1ants 83 S LL~E In developing its future capacity addition requirements, the'PubU.c Staff made certain major planning assuaptions: No oil or gas burning base generation would be constructed; 2 Only base and peaking capacity would be constructed by the utilities and 3.Retirements of generating facilities reported by.the utilities pursua'nt to Coiaxission Rule RS-43 would be carried out.In deter aining an appropriate gener ating addition l ,schedule, it, is necessary to consider the type of facilities each utility currently has under construction, the proposed retireaent of facilities, and the proposed units on which engineering has been cospleted and licenses have been requested or granted It is also necessary to consider the lead time required.to construct new generating f acilities. If an unplanned additional t 000 llQ of capacity vere required)0 years hence, a coal unit mould have to be constructed because it is impossible to design, construct, and license a nuclear unit within a)0-year period under current federaL rega latory conditions. The f olloving are various estimates of lead tines for neo units made by the three utilities and the Public Staff. Leal Tiaas for Iev Units{5onths)~Ut Suclear Coa1 Lor Sulfur High Su1fur Puaped Storage Coahustion Turhine t31 79 79)l0 37 DUK 54+5QQ j30 30 90 9S)20 24 Public St:~'6 86.I 20 36.+Ccestruction tiie only Based upon a11 of the analyses discussed ahove and upon the<hase case energy anl peak-Load forecast, the Puhlic Staf f developed vhat it considered a prudent construction schedule for additional generating capacity for each of the three aagor electric uti1ities operating in cnorth Carolina based upon supplying the native peak load The schelu1es are sho>>n in Table)6, The expected reserve aargXae, 1oss of 1oal prohahiLity and operational hreaMovn are sho>>n Tah1es)71, 1 7B, and Ia, respectiveIy 1t the time the Puhli,c StudÃdeveloped these tahles, the 1977-)978>>inter peak and the)978 suaaer peak>>ere not known;their estiaates have not been ad/usted for this ne>>infomatioe anl are consequently deeaed overstated The construction progxaa ot CPSZ, is set forth in Tahle I 9 l 1s the table indicates, the coapany no>>has seven generating units either under construction or planned f or service bet>>eon nov anl 1990 CPCI's current construction prograa viLL result in systea reserves as shovn in Table )98.Except for one year, these reserves are above the minimum)5%summer level which the Commission required i;n its}977 Report.Table 20 shows D uke's forecast summer peak loads, its scheduled unit addition, and the reserves at the times of these peaks for the years}978 through)990.The current Duke f orecast is predicated on the successf ul f ature implementation of its comprehensive load management program for which no precedent:has been established to date;consequently, generating capacity additions have been scheduled to provide a degree of with the unknown ef fectiveness fle xibili t y comm ensar ate of the loa d aa na g erne nt programs Duke's scheduled reserves through}983 are higher than design reserve requirements. Duke considered changing the schedules for the in-service dates of NcGuire I and 2 and Catawba}and 2 However, as Du ke witnesses Lee and Sterrett pointed out, the in-service dates for these units I reQ.ect the substantial construction work already completed on those units and the economic benefits derived from following the present construction schedule.Consequently, Duke~s schedule is as follows: HcGuire}will come into service in time for the winter peak of)979-I 980;NcGuire 2, by the summer peak of}98};Catawba}, for the winter peak of}98}-}982;and Catawba 2, for the summer peak of}983. 86 For the yearsl985 and beyond, Duhio plans the construction of a conhinati.an o f base load and peaking capacity~retaining Ilaxinua flexibility in the scheduling af ongoing generating uai.ts These plans include Mz standard&ed nuclear units and four duplicate puaped-storage units, these units iong the most econaaical t~es of hase load aniL peaking generation, respectively Por exaaple, Cherokee 2 is scheduled to coao into'service for the suaaer peak cf j987~but the flexible schedule sault allos this unit to he brought into service for the<<later of I986-t.987 or.delayeiL to the summer of f988\VZPCD's planned generation additions to aeet its forec;Lst peak'loads are set forth in Table 2 VKPCQ's peak load is expected hy the colmpany to gros et a coapound annual groeth rate of 5 3%over thi.s period of tiaa The eQhet of these generating addition plans on VEPCO~s reserve margin during the f978-t 987 period is sheen in Tables 2 and.3, VEPCD's reserve aargin f or p?anni.ng purposes during this t 0-year period ranges froa t700 KQ to 2.f 00 5$.TXPCO'.s current generation ad@.tion plan etll not aeet the Conaission's reserve criteria CahPTBB VX OUTLOOK POR CORSERVATXON hliD LOAD 5ARAGEHENT; A SOB VEY OP ALTERNATIVE ZN ERGY SOU RCES The forecast adopted by the Commission for the future growth in electricity usage in North Carolina is based in part upon the premise that conservation and load management will reduce the rate of'rowth in~1ectricity use As pointed out by Public Staf f witness Taylor H.Bingham, an economist with the Research Triangle Institute, conservation of energy sources should be a matter of concern for North Carolina.'This State imports mora than 95%of its primary fuels.The availabi1ity of these f uel s depends u pon a variety of factors, including price, federal and state regu1ation, international agreements, su pplier contracts, cour t rulings, and the cost and availability of transportation for these frais.The evidence that is available to the Commission makes it clear that present conservation and load management efforts are not a temporary phenomenon b ut represent permanent changes in the attitude of society toward energy use.Because many of the conservation and 1oad managemen programs are in the early stages of development, the total impact of these programs cannot be assessed in this report.The Commissicn recommends that the Public Staff and the electric utilities present additional evideace of the iapact of conservation and load sanageaeat as such evidence bocoaes available This chapter@DE examine soae, of the recent efforts to proaote conservation and load mamgeaent ia North I Caroli na T he cha pter mill also survey the sta tus of alternative energy services B)977 General Asseahly enacted si gnif Scant energy-raLa ted LogMIation .The aost noteworthy enactmment is House Bill l003, the Energy Conservation Act of I 977 Xn this Act~the General lsseably stated that the.lorth CaroU.na economy and the welfare of its eKtimns have been geo pariKxed by shortages of natural.gas, petroleua, and electric power.I'he act coatinues= Xt is therefore declared to be the policy of the State of cnorth Carolina to encourage and proaote the conservation of energy in all foras and to estab1ish requiraaents and enf orceaant aeasures for nandatory conservation of energy in Iorth Carolina, in order to prevent or reduce an adverse iapact upon the econoay of this State and ia order to prevent interruption of~eeplcqraent of the citimns of this State in couaerce and, industry aad in order to prevent, injury to their health and weLfare due to shortage and high cost of energy in their hoaes~The clear pur pose of this le g&Xation is to sake conservation a aatter of State policy by encouraging the residential and business use of sc1ar energy and ia~nzlati.on. The act provides a tax credit to any person or corporation that constructs or installs a solar hot water beating, space heatin g, or space cooling system in any residential or commercial building in Horth Carolina.The tax credit is to be an amount equal to 25%of the installation and equipment cost of the solar hot water, beating, or coo)i ng equipleat but not exceeding$)000.House Bill)003 also allows a tax credit during the period January),)977-December 3),)978, to any person or corporation that, installs new or additional insulation, storm windows, or storm doors in any buildiag in the State which-was constructed and occupied prior to January)~'977 The tax credit is to be an amount, not exceeding 5)000, equal to 25%of the cost of such insulation, storm~indows, or doors.House Bill)003 also provides tha t no-""'Desi.dents.a1 "'building on t I~IL, I cingle f ami 1 y or-multi-unit which construction is begun on or after January),)978~shall be occupied and connected'or electricity until the'building is in compliance with the minimum insulation standards for residential construction as prescribed in the North Carolina State Building Code.House.Bill 607, which was also enacted by the)977 General hssembly, provides that buildings equipped with a solar ener gy heating or cooling system shall be assessed for taxation purposes as if such buildings were equipped with conventional heating or cooling systems The hill makes it clear that no additional value should be assigned to the building for the difference in cost between a solar energy heating or cooling system and a conventional system. 90 House Bill t)7)authoaKxes the Housing finance Agency to guarantee loans to Los incoae persons for obtaining energy conser vation aa teria ls f or their residences the aaxixux aaount to be loaned is$}200 House ALL 650~vhich recognizes that>solar energy is the v orld'most abundant and rene sah le energy resource, appropriated $)25, 000 f or the years j 977-f979 to North Carolina State Uai.versity for the devolopaent of a soLar thermal co~rsion unit.which eiII produce a niniaua of t000 KQH of electricity per month-the uiit is to he designed to operate independent of any outside energy source as auch as possible and sho uLR be reliable and relatively Cree of maintenance The Legislation specificaLly set as a gu&elina for the prospect that the sim and operation of the unit shoul,d be practical for use 2y, a hose or business.The United States Congress has recently enacted the 1ational Energy Conservatica Policy Aet Thi.s Act strongly encourages the states to undertake e a residentiaL energy conservation program, under rules and guidelines proxulgated by the Secretary of the Oepartaent cf Energy Qithin 380 days of the proaulgation of these rules, the Governor af each state or an authorized state.agent may suhait to the Secretary a proposed residential energy conservation pXan ALthough the specific rules are not yet available, Zt is clear that this Act mi11 aaterially affect State and local efforts on conserration The Co~mission is under a continuing mandate from the general Assembly"to promote adeg uate, economical and e f f icient utili ty service to all of the citizens a nd residents of the State" Horth Carolina G.S.62-f55, which vas enacted inl975, declares it to be the policy of the State to conserve energy through the efficient utilization of all resources. Under this statute the Commission was expressly given the responsibility to study the feasibility of charging electricity cestomers by a system of nondiscriminatory peak pricing, with incentive rates for the of f-peak use of electricity. Consequently, the Commission has entered into cooperative agreements with the U nited States Department of Energy which provide that the Commission undertake demonstration projects directed toward the-actual implementation of utility conservation and load management programs and undertake the study of peak-pricing electricity rates.The Commission has entered inta a number of research pro jects with the cooperation of the Public Staf f, the Research'triangle Institute, XCP, Inc., Duke Power Company, Carolina Pover 8 Light Company, Blue Ridge Electric membership Corpora tion, and other organizations. One current program is studying the effects of peak-load pricing on residential electricity consumption; this program is f unded by the United States Department of Energy and involves the cooperation of CPGL and Blue Ridge El!C. 92 as a part of one cooperative agreement, the Coxmissiou iuitiate6 Docket So.5-)00~Sub 78~entitled Mvestigation of Cost-Based Bates~I os management, au4 Conservation Oriented End-Use Activities.< Xn its archer setting public heariu gs iu the Cocket, the Coamissi ou set forth three specific probleas presently conf routing the Coamission iu this area of regulatiou: The neel to conserve scarce resources: 2.Ecprity among rate classes in the structure af electricity (auC g~rates;aud Econoay of opemtiou of the'electric (aul gas)utilities provhiiug service iu North Carolina anil., The The ComaLssion heM public hearings on Load aa.nageetu.t conservation prograas iu J ugly aud Se pteaber f 978 evi6ence presented at these f978 hearings sam saM.cieut to set out in Section D beloe establish that nuaerous and diverse progzaas of conservation and Load'anageaemt are underplay, iu cnorth Carolina The procpaas are being cond mted uot only by.the ut~ty'coapauies r BguLat ed by this Coslmission but also by other organizations an6 3.niKviKuals h suaaary of the electric util9.ties'onservation aul load aanageoent activities are Particular attention is called to the evidence presents by the Public Staff at the July aud Septeaber hearings in Docket 8o 5-IOO, Sub 78 The Public Staff evidence shoved 93 that the State could benefit greatly from a residential energy conservation program.Xt was estimated that, if every homeowner installed conservation measures up to a level that gave him the greatest possible net saving, the average annual residential gas consumption could be reduced by as much as 47 dekatherms (Dth)or 47.4>,.statewide usage could fall by 11,444,000 Dth, which is 175 of total current gas consumption. Further, potential energy savings for an average electrically heated home could be 1,996 1U7H per year or 175 of annual heating consumption; statewide savings could reach 663,500,000 KWH.The Public Staff recommended a residential conservation program for all residential customers. The Public Staff also offered evidence that the use of load management techniques by the electric utilities could reduce the demand on the system at selected times, alter the required generating plant construction program, and result in savings to the utilities in generation plant investment. The testimony offered by witness Spann focussed on programs.First, the utilities could control certain industrial loads by interrupting those loads through the use of radio controlled switches: in exchange, these industrial customers would receive a discount, based on the EGf of controlled load.The second program involves the utility*control of residential water-heating loads: in exchange for a flat monthly discount, the-residential customer would allow the utility to use a radio controlled switch to interrupt residential water-heating service.Both programs mould be voluntary The: Public Staff recoaaended 'that Load nana geaent prograas bamd on the utility control o f residential eater heating and on interruptible industrial loads should be developed by-CPSX, Duke, and VEPCD The Public Staff witnesses testified that CPSL and Duke residential custoners vith electric hot eater heaters emQd fM a controlled ea ter hea ting rate et tractive Er Singhan stated that if the custcners vere offered a credit of about$)50 per Imonth all existing custoaers with heater sizes of 66 gallons or larger mould appear to benefit by accepting the controlled eater heating rate Custoaers vith available space lcluld benefit hy r%placing thcLr sna 11%Lter heaters eith 66-ga11on units New hoae buyers mu14 also find it benefited.al to install a ad~lion or larger aa'i..t,although not all.residential custosers mould be expected to choose the controlled eater heating rate, the Public Staff concluded that, given aonth1y credits in the S)00 4o$2 00 range, the deaand for the rate could be significant The Public Stmtf a?eo found that there are about J 00 large industrial custoaers in the Ounce and CPSL service areas ehich voul 1 have an iasediate interest in interruptible service, if such service cond be extended to noncritical Loads Under the assuaptions and Qdgnents used by witness Spann, the reduction in peat deaand in)990 resulting froa the interruptible industrial rates souid be 5IO 5R for Duke and))0 SR for CKI The residential eater heating rate would reduce the)990 peak demand by)75 5Q for Duke a.ad 75 HR for CPSL The electric utilities are enga ged in a variety of"onservation and load management programs.Each company, is making a serious commitment to the concept of conservation and load mana gement'The a pproac h of the companies, however, has been cautious, consisting of experimental and pilot-scale prospects rather than vide-ranging implementation. The companies have concluded that this approach is necessary to ensure that the benefits of, such programs outweigh the costs vhich vill he incurred by the companies and their customers. There are programs involving little cost, but many of the load management progra ms require costly switching a nd.monitoring equipment. Duke~Pave g o~st~n Duke Power Company, in the load forecast hearings in Docket Ho E>>I 00, Sub 32, and in the conservation aad load management hearings in Docket Ho.5-)00, Sub 78, presented the most detailed evidence of any company on its conservation and load management programs.hccording to Duke witness Donald H.Deaton, Jr., Vice l President of'marketing, Duke's Load Management Program has as its goal the reduction in the growth of the company's 96 kilowatt.peak load and kilowatt<<hour sales This pzoaram encompasses all sectors of Duke'business-residential, connaezcial, indust ia3., agricultural, and resale.Table 21 reflects Duke's projections of its load management goals during the years 1978-1990~By 19&5 the accuxaulative reduction in peak load will have equaled the output of one large generating unit.By 1990 an additional genezating unit will have been saved as a result o f these Loact management eAhxt:s.These figures were incorporated in the company's ovezall forecast.The Load Haziagement Program includes the following activities: the Energy Ef ficient Structure Program (EES)for resijhmtial the improvement of insulation levels in RK (all~ectric) and in non-RA s education of customers in the use of heat pandas and'igh ef f iciency central cooling systems g the reduction o f ZR demand in~LE mil)ciag operations and in large poultry houses g and the reduction of lighting levels in new buildings. Particular attention should be di~ed to Duke's program to reduce the industrial customers'emand at the time of the company's system peak load;Duke estixnates the peak demand savings to be 84 KT in the summer and 24.6 MR in the winter.Xn 1976 Duke launched its EES Program for its residential customers. , This program pzoaetes reduction in residential demand through the use of adcLLtional insulation which meets 97 EES standards The Commission has approved a special conservation rate (Residential Schedule BC)which offers a moneta ry incentive to tho se resideatial customers.who I install insulation in corn pliance with the EES standards. This incentive is equal to the mavin gs in Du}.e'construction cost which result from the lower residential demand of the.Schedule BC customers Duke estimates'hat)2,367 EES units will be added to the system from)975 through the summer of)%SO The air conditioning saturation in these units will approach 90%.EES activity will reduce weather-responsive loads in these structures. The company has also started i ts Energy Efficient A ppliance (EEA)Programs,.which inform Duke's customers through participating appliance dealers of the benefits of purchasing home appliances that are energy efficient. Duke provides its larger industrial customers with electronic information in the form of timed pulses;these customers are therefore able to continually monitor their loads and better control thei r maximum deman ds.Duke presently has I 40 customers with some fora of monitoring system or load control.Duke is undertaking studies of customer load control which include not only reside ntial wa ter heaters but also the interruptihle service to its larger customers. The company" is testing radio control equipment in the homes of employee volunteers to determine the opera ting characteristics of 98 this type of control Duke is a participant in a.solar research prgect with Electric Po~er Research Institute The company is also a subcontr'actor in a pro)~to define for the United States'Department of Energy the hest applications of phctovnLtaics f or commercial an6 industrial customers Duke's customers/who have installed so3.ar assisted, heating and eater systems are placed on the compan j's sclar rate.schedules Du%a$s studying these customers in order to evaluate the benefita.of this form of supplemental energy CLWlLIR~-~lit~In Docket Ee H-)OQ, Sub 78, CPSZ.witness Norris Edge testified regariLing. the ongoing activities of, CPS J.in the area of conservation ance load management CPSL provides support to the Edison Electu.c Institute's program on load management and participates in the national stu6y of rate design In addition~mach work on load management is being per f ormed in-house AccoriLLng to Br Mge, the various activities have groen to tW point that CPSL is establishing a permanent staff eath the technicaL exporttse to make the appropriate analyses and rceomaendations for load management activities and to folloe through vith the implementation of such activities The CPSI load management pzograa currently consists of the f olloving: The Common Sense/%rap Up Program;customer education regarding heat pumps, insulation, and energy e f scient appliances; f ree energy audits;advice to customers in obtaining financing, materials, and contractors for energy conservation activities; and several ezperimental projects.The Common Sense Programs unco urage high levels of insulation and the use of energy efficient appliances in new houses, new apartments, and new business structures. CPGT.estimates that an average I500 sguare-foot house conforming to the programs sill save 4,300 kilovatt-hours on heating and cooling requirements. The Common Sense House Program is also being extended to manufactured homes.represent a substantial proportion.~.aev CPGL These homes connections each year.The Qrap-Up Program is the counterpart of the Common Sense Pr ogzam vhich is applicable to existing buildings. These programs, as ve5.1 as other means of conserving energy, are being promoted through hill inserts, personal ontacts, and media.advertisement. The educational-efforts concerning proper lighting, efficient appliances (in commercial cooking and processing, as me11 as in residential use), use o f hea t pumps, and proper insula tion are applicable to all custome r classes.For customers who desire to install equipment to automatically regulate their load, CPGX.will install (for a monthly facilities charge)equipment to provide the meter pulses needed for such continuous monitoring CPSL~s load aanageaeat prograa also includes various experiaental acti.vities. CP5I, is involved in a tija~&day rate demonstration pro Qct in cooperation vs the Commission and the Blue Bid ge Electric 5emhership C orporation This three-year project, scheduled to be coapleted'n the sunser of)979, should provide substantial evidence on the effectiveness ti e', customer acceptance anii response)of togae-of-day rates in redistributing peak Loacts Other experinentcd activities ized lade.a tao-year pro ject that exaaines the potential of interrupting service to residential custoaers via radio control In addition CPSI.has surveyed the possibility of interruptibLe service to large industrial and coajmercial custoaers Joint efforts arith industrial coapanies are aLsa part of CPSX,~s experiaental activities Cne such prospect i.s testing a 1ine carrier coamunication systea ehich also attaapts to deteraine an optiaaa carrier frequency Xn another prospect, distribution autoaation options which can perfoza nultiplo load nanageaent f unct'ions are berg tested Theme activities are part of the continuing efforts to aake aany of the technically feasible Load aanagesent options econoaically ~+sible as sell.V~ILJI MMK MMHIZ The load managenenc efforts and energy conservation activities of YEPCO rere aLso presented in Docket So 5-)00@ Sub 78.Edmond Iickham, Director of Load management Applications f or VE PCO, testified that an active load management program is bein g undertaken pursuant to a corporate goal of reducing the projected peak load by 500 HQ by)985 The VEPCO load f orecast and resulting construction schedule takes account of this proposed reduction. According to testimony by company sitness Roach, VEPCO's conservation activities include providing energy audits on an informal basis to residential customers at the customer'request Vepco has plans for a pilot program vhich may be expanded to a more formal program.Commercial and industrial customers are currently offered various materials~o aid them in perf oraing their own energy audit.Insulation and lighting recommendations are available to customers. Conservation is encoara ged through educational materials and advertisements VZPCO is revisinq its heat pump program tc encourage heat pump manufacturers to make available efficient, reliable heat pumps.Other programs in planning or in developmental stages include the following: Electric Energy Efficient Home Program (similar to CPGL's Common Sense Program and Duke's Energy Efficient Structure Pro gra m), a~re f erence manual on loa d mana ge ment, experi mental activities on'al terna te experimental projects on load management energy sources, and techniques. The experimental load management activities that VEPCO is currently planning involve both direct and indirect techniques Indirect nanagesent prospects involve timem&usaqe rates.Por purposes o f education and comparison, a selected gxoup of residential custoaers will recai ve hypothetical tin~f-usage bilks in addit9.on to actual hills hnother group o residential. customers consisting only of volunteers vil1 he actually charged by ti JRO 0&ILsage ra test Planned direct load nanageuent activities include several volunteer pro)ec ts t 0 test.the of f Qcts of interrupting service to hot water heaters The expeMaents <<ill allor VEPCO to evaluate the required hardware and custoaer acceptance of such prograas Bocent fuel shortages and escalating prices of conventional fossil fuel or naclear fuel energy systens have encouraged a close exaaination of the practical potential of other enerep sources Zconoaic considerations af,other/alternatives wiLl ultiaately %evolve koth the direct costs associated with oach of the new sources and their effects on the health of the State's econoay The availah9.2i.ty, reliability, and cost of energy, fraa whatever source, will lar gely deteraine the cuba racter and levels of industrial growth and resulting eaployment opportunities in North Caro li.na Thee vulnerability of this State's ecanoay to both national )03 and international actions further encourages development of a range of energy options.The)973 oil embargo adversely affected both the personal and the business operations of P North Carolinians. In addition, the extreme shortages of natural.gas severely crippled the State in the winter of)976 If severe economic and social consequences resulting from such occurrences are to be avoided in the future, a range of options must be available to meet the energy demands of North Carolina awhile the present employment of alternative energy sources appears to be supplemental in nature, the potential of these sources must he examined.Conservation, which the Commission considers to be an extremely important alternative energy source,.has been However, in addition to the examined in an earlier section.conservation efforts of the utilities, other groups are naking contributions The North Carolina Energy Research Institute has several projects dealing with conservation and alternative energy sources The Energy Division of the North Carolina Department o f Commerce has developed a Comprehensive Statewide Energy Conservation Pl.an, which is designed to conserve 8 05Jf of the Sta'te's total projected)980 energy consumption of.),736.08 trillion 3TU~s, a savings of f 39.72 trillion BTU's.The major program for the residential sector is project Conserve, which provides the homeowner with an objective analysis of the costs and savings likely to result from such measures as adding or increasing insulation, installing storm windows and doors, and setting back thexmostats. The Commission reasserts its belief in the potential impact, o f conservation. However, due to its extensive treatment in earlier sections, conserva~mon will be omitted from further discussions of alternative fuel sources.In Docket Zo.K-400, Sub 32, the Public Staf and other interested and co~erzl&d~~ups preseI?ted tes~~Qclny regarding alternat='ve energy sources.Zn addition, the Commission has taken judicial no~me of other avai'ble material.The followinq energy sources have been brought to the attention of~e Cmmu.ssion: 1.nuclear fusion 2.wind 3.geothermal biomass and plant energy 5.fueI calls G.tar sands/oil shale 7.coal gasificationfliquif idion S.solar Electric generation systems which use wave action and tidal energy, both of which werc discussed in last year's Repo~, appear unlikely to be eveloped further during the present planning period.Me technology recnzired to obtain energy from wave action iŽvery corplex and e~ensive Therefore< 305<<ave generation systems vill probably be delayed until less complex alternative sources of generation have been perfected and accepted.Due to tbe nature of the tidal conditions off the mid-Atlantic shores, it appears that there vill be little application for tidal energy generators in this area.Hovever, there has been limited discussion of placing these units in some of the inlets betveen the Outer Banks to take advantage of the concentrated tidal vater flovs at those locations. In addition, some examination is being made of ocean the rmal energy gradient devices, although there is little expectation of any substantial development of this source in the near future.~as on Research on the nuclear fu ion system has progressed to the point, that most plasma physicists accept its technological feasibility The fact that the actual fusion device is presently being designed is certainly a step tovards a pover-producing system.Hovever, the practical utilization of such a source remains uncertain, due primarily to the high costs and tbe'roblems associated vith the very high temperatures involved Hovever, the fact that the supply of fuel.for this source of energy is virtually inexhaustible and that there are no major radioactive vaste disposal prob le ms make nuclear f usion very at tractive.Hevertheless, recent shi f ts cf research a nd development fund ing f rom f usion research to solar research ha ve significantly delayed the progzaa;it now appears that this country vill not see any sapor 9.npact of this souxce daring the tventieth centary Interest in vinil povez continues to focus on the design of devices to be used as vind generators, Hovevez, the problea of land needed for giant vt.nds9Ll installations has yet to be solved Por exaaple a University of California research study estimated that hy the year 2025, 86%of that.state'energy cocK cone from reuseable sources, bat that this effort void recprire 23%of the state's land area for energy fans (f or kd.oaass fuel)and huge vindaill installations Recently, the Calif ornia.Energy Coanission ordered,t 0 experissntaX, etndnills to-fuzt3zez.its studies Xn North Carols.na, a vtnd turbine is to he built near.'Boone for the Blue Ridge Electrical Eeabership Corporation Xt vill be the Laxgest vind turbine ever constructed and vi11 supply 500 hoaes vith r egaired electricity Although van is continuing on this source af energy, fee expect it to have a significant iapact on the supply picture in the next fee year~Qithi.n the last year interest in geothermal energy sources and optini.sa concerning their practi,cal app1icaticm have grovn.However~the optiaisa f or aors extensive 107 application continues to be associated vith the vestern United States and vill probably have little impact on the energy requirements and sources of Horth Carolina.B omass The possibility of using biomass as a fuel source is receiving mach attention f rom national and local groups.The Institute of Gas Technology (IGT)is.involved in several such prospects. Por example,.the design and potential of large advanced digestive systems vhich involve a mixture of vater hyacinth, Bermuda grass, municipal solid vaste, and sevage sludge are being investigated on a pilot plant sca'le.Bar lier laboratory testing indicated that these mixtures I would prodace more methane than vbat many vould designate as puce biomass.In other prospects, IGT examined additives that may accelerate anaerobic sevage sludge digestion vhich may allov up to double the loadings hn anaerobic process I'or converting ocean kelp to synthetic natural gas vas studied, and testing vas conducted on processes. to obtain fuel from the thermochemical conversion of biomass.The North Carolina Bne rgy Division, Duke University, and Duke Pover Company are examining alternative sources of energy, vhich include plant energy and other biomass sources.k recent project funded by the Energy Division investigated the use of vood for small-scale pover generation in the State.Energy production from biomass and vastes is also receiving attention from private industry, )08 Local uni.rersities, and technical groups Champion Papers, Enc p proposed to convert nanicipal garbage into energy to be used for the production of paper at its ni11s in western'north Carol.ina The prospect proposes to use waste-deri.m4 &el and coal to produce 300,000 pounds of steaa and 8~000 ki Iowa tts per hour lm the load aanageaent hearing, a public witness, Thoaas Cuntsr, tcstif ied that waste froa agricu1tural processing, sewage sludge, residues fron feed lots, aad nunicipal wastes are aII potential bioaass sources that are abundant in Sorth Carolina Thus the State~s potential Xor energy production from this alternative source is enornous;the question is the econoaic feasibility SX Mala.~lUIILlm lhlh1~The use of tnr sanda and.ei1 shakes.for processes,~t yield an oil-lihe sa ts rial is both costly and anWronneataLLy questionable The Ear ge anounts of water needed f or the processes and the solid waste disposa1 pr ohleas are pri.aary comoma.Currently, the technoIogy inmlved is in a rery earLy stage ef developaeat and W not expected to contribute to alternate fuel.sources for aany ye arse The work oa coal gasi.f ication continuing .The E n&ronaental aad Liguif ication is Proto~on agency is conducting sovera1 pro+ebs on 1 iavolved;however, the carcinogenic the various processes and nutngenic agents that result froa these procosses.continue to be iaportant )09 concerns.Since no ma)or breakthroughs have occurred recently, it is probable that this technology vill not be accelerated'n the near future PueL Ce3.1s The development of fuel cells has advanced from the first generation phosphoric-aci.d cells to the second generation stage of molten carbonate cells The Department of Energy has funded several prospects to improve the performance and endurance o f these second generat ion eel ls.Prod uc tion methods, se lection of stab le anode m ater ials, and the optimization of the fuel cell electrolyte (mainly through the production of a lithium aluminate electrolyte tile)have been studied in the ongoing efforts to improve the cost effectiveness of this source.Other ezperimental programs have evaluated the feasibility of using heavy fuel oils for producing fuel cell quality fuels through processes of hydrogasif ication, steam re f ormin g, hydrodesul f urization, and hydrocracking. Development has also been initiated for a reversible electrochemical celL, serving both as a fuel t cell and an electrolyzer. The Edison Pov er Besear ch Institute is involved in a multi-year endeavor to develop fuel cell components that can function even if the fuel gas stream contains as much as 200 ppm sulfur by volume.Sulfur tolerant anode catalysts and anode polarization must be studied Zn Iev York City, the Consolidated Edison Povec'ompany recontly received approval for a 0 8 aegaoatt fuel ceIL deaonstration plant shich vtIL evolve EPRX, DOE, United Technologies, and several utilities The Hev York.City Board of Standards and Lppeals uzled that fuel cells are not refinecies and thus approved the plan for Me installation of the plained equip sent This approval is quite significant and aa3ces fuel cells the only poser-generating equipment that can ba installed in the~y Xn addition~the acceptance of this planned deaonstration plant by the manhattan reagents is alloving the scheduio to move ahead, in contrast to other energy related prospects The areas to r be investigated during the progect include verification of eased.on, Load f oILovtng chamcteeLstics, and aesthetic characteristics of the plant Xf the ramalts are favorable, it is anticipated'hat coaIIrcial devetopaent of the plant'il1 begin The interest in solar energy as an aktarnative fuel has been enhanced because of the rising costs of oiL and gas and because aa ny pa rsons consider Xt the aost attractive alternative that is currently available 1 aptness for the Public Staff testified'hat the use of solar energy as a supplement to conventiona1 energy is nov econoaical for some hot eater heating applications Pith the tax credits now available to ulers of solar energy and the increasing prices of conventional fuel, some builders of new homes are finding that solar assisted heating of the structures is becoming aore attractive public witnesses presented information on solar potential in North Carolina.Currently, projects are being conducted hy local universities, private individuals, and other interest groups.There seems to be agreement that the potential of solar energy as an alternative fuel source deserves serious consideration. kn ertensive program.being conducted by'he United States.Department of Energy attempts to identify possible conIIezcial and industrial applications of this technology. This work may zesu1t in an increased aarket and a decreased price In,a report, from a concerned technical group which investigated conceptual designs.and photovoltaics through computer simulation, opportunities for both improved perforaance and reduced cost were identified, hut even ainor market penetration for the residential sector was not projected before the f980's.'The use of solar therjwal energy (above 400oP)to produce energy-intensive chemical products as mell as various types of solar collection and stoza ge has recently been investigated Soae researchezs now believe tha t conventional solar storage may be supplemented with solar-photochemical storage.This procedure would increase both the temperature of the storage unit and its efficiency. Stanford University has reported that the efficiency achievable in their thernophotcvoltaic (TPV)solar cell research has.more than doubled in the last year.This rssearch, sponsored+XPRX, iavaLves coavertiag incandescent Light into eX,catrical energy As iiproved caLL design further increases perforaaaca, the 35%LeveL of afQ.cieacy that coal nake TPV systaas econos6cal ia.Large plants now seeas a indefinite possih9.lit@ TocaIly, lorth CaroLQua State Uaivers!.ty aad the Research Triangle Xnstitute Ire both doing s9.gnif Scant Iork ia photovoltaic aeK appear to he on the frontiers of such research EPRX is aLso spoasoriag projects that invoke.ve the deca?opseat of ace concepts in solar energy, including ths use o f highly concentrated sunlight ia high-eff icieacy phot oxolt 39.c cells Production of Low~st photovoltaic tea film, which could convert sualkyht to energy LQ~tky and e fficientky, is.a1so babag exasiae6~ne>>Elm, which eouXC not reign a sunlkghh~aceatrating spate~appears promLisiag, both in Mrna of costs and ra1aMre e~~cieacT Sone proponents of'oXar eaer~ezpoct Large reductions ia the costs of solar eysteas to result Ema econosiee of scm1e, tecJmoio+cal Xspromseats, end romanced Labor cori as the ease of inst'.iticm, funevitite designs.ao4 coapetition ail f.mreaee Others 4o not'xyect Craamt jc rekuctkena: the cost ef these systems is nestly Ln the netL1, chess, aad pXaatkc pI:rts, the control syetoms and the*Cans anl pumps, the costs of which aiba not myecticL to~cone l l3 The present technologies for solar heating are such that small water heating loads are at or better than a break-even cost;some wat er heating can theref ore be accomplished through solar energy.However, it is not now economical, nor is it pro)ected to be econceical within the present planning period faced by the commission and the power system designers, for heating requirements to be completely served by solar energy captive systems.At present, it is only economical to use active solar systems which provide approximately 50%of the total heating requirements in most cases.This means that the remainder of the requirements on peak days must be provided by an alternate source.Phile the'Commission .is very.supportive of.solar energy-'utilization,'C4 xa concerned.mkoat--solar hea ting.systems with electrical backup Tf the backup to a solar system is electric, it appears that either some design control or some economic incentive shou ld be placed or of fered, respectively, on solar installa tions in order to ensure ())th a t the ener gy available from the solar captive system is used during peak times rather than off-peak times, and{2)that the peak demand on the electric system is reduced and not effectively increased by these systems Because the undersixing of collectors and storage systems required by economics and because of the operational technologies of most of the systems now in place~the available heat in storage will be used in the late evenings and very early morning hours on peale use days The auailfi.ary heating systems vill come on during same of the coldest hours af the morning and remain on into the early day, ehich mill be coincHent eith the normal time of the electric system@inter paar.T'his type of solar system would aaha the load factor of the electzhc ut ilitias deteriorate and vouM thus cause an upvard pressure on the cost of electr9.catty Xn fact, the increased.Cost fYom this effect may be greater than any net energy savings from the contribution of the solar equi.paont T'e matter of<control" of these systens,'hen, is one vhich aust be carefu2Ly analyzed zn the near f uture Thernal storage may be one ansmer if consumers insist cm uaLng backup electric heating or cooling systems In order to encourage installatian and proper s~ing of thermal storage equi pment shere elect@i,c hacknp is usecL eath solar heating installations, the CommimLon concl udes that utilities should ma3ce voluntary experinental time-of-day tates available to such installations ~Saeva~Klternat3.ve emmy sources do exist in varying stages of development Hovever, the composite impact of these sources including conservati.on is difficult to quantify vith the data currently available Xt.is ezpected that some of these sources<<tll be further developed and vill gradually become an integral part of the energy supply, RM.le research and deva lo pment 9.n these potential areas is encouza ged~the Commission aust continue to plan for the State's energy needs in the most realistic manner Thus, the present forecast cannot be reduced as much as some parties vould like.Hovever, the C omaission expects that, in f uture planning periods, some of these areas vill be more quantifiable and, thus, vill play a larger role in supplying Borth Carolina's energy needs CKLPTXB V?I CORI, QSZC IS The forecast plan adopted m this)978 report shoes a decline in the rate of growth of the peak 1oad of both Carolina Poeer 8 Light Corpany and.Duke Power Corpany~Xn its i 977 Report the Coraisaion f ound that the probable annual rate of growth i.n peak load for both CPSX, aniL Duke mould he approxhaately 6 9%luring the years 1976-1990 Ia the 1978 report the Coa&ssion has adopted for its capacity plan an annual peak load growth rate of 5 2%for CP6I and 5.0%for Duke The Coraission's )9'78 forecast.M based in 1azge part upon the pread.so that conserva~n and loan ranageaent eff orts ei31 hans a substantial effect ou the future groeth of slectri.ci,ty usage in North Carolina.The Corrissioa has considered the conservaMou am'oad ranageaent activities presented ia its Docket Io 5-)00, Sub 78 The Public Staff recolaendcd that CPSX,~Duke, and VEPCO develop tao load aanageaeat programs?frat, the utility control of res9lenthQ, rater-]mating 1cads: M ezchange for a f 1at months.y discount, the residential custoser rouliL alla>>the utilities to use a ralio contro11ed mitch to interrupt residential eatx heat9.ng aenrXce Second, the utility contxol of certain iaterruptihle industrial 1cadm in ezchange for a iLi.scount based oa the XR af contro1led load, industrial customers vould allov the utilities to interrupt certain industrial loads thr ough a radio controlled svitch.The Commission vill ord er the three, electric utilities to file proposed plans for these tvo programs vithin 270 days.Furthermore, the three utilities vill be required to file voluntary rates incorporating tile-of-day pricing to those customers vho either install solar equipment, thermal storage equipment, or a combination of the tvo for the purpose of proriding space, heating The rate schedules vill be filed on an experimental basis.Zt is expected that this experimental rate vill offer.sufficient economic incentives to such customers so that the energy available Xaam inch a system vill be used during the peak times of the.electric utilities and that the peak demand.vill not be increased by solar systens. TABLE 1.Capaci~Addison Plans for Virginia Ele~i,o&Power Company EEVER Vepco pLan UNIT I 1979S I North Anna 2 I 1980S I WI 198LS I I W I I 1982S,'ath County 1, 2r 3, 4 W I Bath County 5 6 I 1983S II W I North Anna 3 I 1984S I W I North Anna 4 I I L985S I W I I 19868 I 1987 I Wl I 1988S I meCO eat not W I forecast beyond 1987 I 1989S I W,'1990S I W I I L99LS I I Wl I I I 907.I I I I I I I 15OO ,'50 I I 907 I I I 907 I'1 I 91O I I I I I I I I I I I I I I I I I I I I UNZ North Anna 2+Update peaLsing+Qprate North Anna 3 934 286 Upraise+Bath Ccnmty 1, 2 731 907 Stmy 3 Bath County 5~6 900 700 S~4 900 LLOD 1100 1100 11DO Qprate+Bath County 3, 4 73L NDTZ: There appear to he Ci erences in the vaLnes used for Bath County nnits by the@to parties. l19~~)R TABLE 2.Reserves Which Will Result From Capacity Plans if th'e VEPCO Forecast Occurs VEPCO CAPACITY PLAN PUBLIC STAM CAPACETY PLAN YEAR 1979 S I I 1980 S I I W 1981 s W I I 1982 S W I I 1983 S t W I 1984 S w'I 1985 S I W I I 1 986 S R W I I 1987 S I WI 10,250 10E570 11,200 11,860 12, 550 13,270 9E760 10 R 340 10>930 11,540 12,170 12,820 VEPCO FOREST OF PEAK LOAD (MW 8,760 8,160 9R260 8,670 9,&10 9,210 Installed Capacity (MW)10,432 10,736 10E468 10,773 10 504 10,'773 12E004 12~613 12,344 I 13 006 I I 12,757 14,013 13,795 I 14, 104 I 13,886 14E205 I 14,796 I 15 E 045 13.9 28.2 16.3 22.2 10 6 16.7 ll.5 17'Reserves (0)I I 19 1 31.6 I 13.0 24.3 I 7.1 I 17~0 I 17.1 29.2 16 8 25.8 Installed Capacity (MW)10E483 10,735 10,769 11,021 11,676 11,544 12,035 12,275 12,942 12, 972 13,471 13,703 14,371 14E603 15,071 15E303 15,971'6E203 Reserves (%)19.7 31.6 16.3 27Al 19.0 25.3 17:4 25.8 22.4 25'20.3 25.4 21 2 26.5 20 1 25.7 20.4 26'4 Growth Rate 5.3 5 8 4 5 5.4 ~LE 3.Reserves Which Will Result Pram Capacity Plans if the Public Staff Porecast Occurs PQBLZC STRPF PORECLST OF PEaz Xam Reserves~$%VEPCO CAP~PXAH Reaches~N 19>9 S 1980 S 19&1 S 1982 S 1983 S 1984 S 1985$1986 S TC L987 S 1988 S 1989 S L990 S&)849 9,364 9)409 10,485 11 095 IL)741 L3)148 L3~913 14'23 15)579 16)486 8)280 8'62 9)272 9 812 10)383 10)987 U,~627)304 13)020 13~777 14)579 15)429 LD)483 10,735 10,769 Ll)021 LING 676 11)344 12, 035 12)275 L2,942 12,972 13.471 13)703 14,371 14)603 L5,071 15)3D3 15)971 16,203 17.071 17)303 18)171 18)403 19)271 19)503 18.5 29)6 15 0 25~8~17.&24'14.8 25.1 16 6 24 9 14 7 24)7 15 7 25 6 14 6 24'14~8 24~4 15 8 25 6 16)6 26 2 16~9 26'10)432 IO)736 10 46&10~773 ID,504 ID,773 12)OD4 12)613 12~344 L3)OD6 12,757 14~013 13)795 14,104 13)886 14)205 14~796 15~045 17 9 29 7 8 23 0 6 0 16 2 14 5 28 5 11.3 25 3 8.7 27 5 II 0 M.3 5 6 15 5 6 3 6 1991 S 17,446 N 16,326 20)371 20)603 16 8 26 2 1992 S W 4 Csacred Rata 18,46L 5 8 17)276 5 8 21)471 21,703 5.7 16.3 25 6 4)5 TABLE 4.Levels and G owth Rates of Demographic Variables Used in the Public Staff's En rgy Forecast@and Load Forecasts Population (Hillfons) Real Personal Income (Billions) Real Income Per Canita (OCQ)Hanufacturing Employment (000)Real Retail Sales (Bill!nns) Households (IIillicns) Industrial Production Index CPI Price Oeflator Gasoline 3 Fuel Oil MPI-Fuels 1976 I 5.469 I I 17.349 I I 3.172 I I I I (Qa~o I I 13.657 I I 1.788 I I I I I I I 1.295 I I I 705 I I 1.830 I I 1.644 I I I 2'57 I Growth~R~t (1.2".)(5.0~)(3.8")(-..6"-).(4 7")~(2.3")(5.3")(5.5.')(5.8")(6.3".)('0.4"-)1985 6.084 25.962 4.432 1050.3 20.654 2.198 2.056 2.755 3.032 2.846 6.477 Growth Rate I I I (1.25)(4.3".)I (3.1')(2.6X)(4.1~)I (2.3")I I I I I I I (4.3")I I I (4.4"-)I I (3.9")I I (4.8".)(5.5L)1990 6.465 33,340 c lx7 1183.9 25.250 2.433 2.540 3.415 3.675 3.604 8.455 TABLE 5.Public Staff Tren6 Forecast of CPRL Energy Consumpti.on bp Customer Class (GWH)Custer Class Res)dentl al X CH Coaaerc1al x CH Industrial x cH Mholesale and Other X CH Total Sales x CH Total Energy X CH Peak Oisand x CH Gttnrth 1976 Rate l 6.491 , (5.7x)4,016 I (6.4x)I 8e759 I (8.5X)6,649 I I I (5.7X)25+915 I I (6.8X)I 36 i35 1,492 I I 27,578<(6.9x)Se 121 I (6-9X)l 985 10o722 7s018 18,293 10+958 46,991 61 121 3.302'Q,475 Gecneeh RL'CI I I I (5.5x)I'(6.6x)I (7.9x)I'S.ZX)(6.6x)I I I I I I I I (S.SX)I I I (6.4X)1990 14 024 I I 9,662 I 26,738 I 14,109 I 64,533 I.842 I 121 4~I I 69,270 I I I'12+777 Growth 1S$2 (5.5x)15,614 (S.zx)15,611 (6.6x)952 121 5el48 78e 691 (6.6)14e486 (6.5x)10,979 (6.6x)31,123 (7.9x)Prelhmfnary 1977 Ceapany estfaetes Total sales x.0013 (Total sales+campany use+SEPA)x.070 123 TABM 6.Public Staff TREND rorecast of Duke Eneray Consumption by Customer Class (GWH)Customer Class Residential ~CH Camemi al~CH industrial X CH Mholesale and Other" CH Tctal Sales~CH CoaIoany Usa SEPA Losses Total Energy 0 CH Peak 0Isnand i CH',XcCtua TI I 91,327 I ,'(5.4")79987 I I (&.4'")I'18.41.I (7.6")?9227 I I (7.6~)469~9c R I I I (6.9')I 254 I 3.402 II 48.?59 8.601 I.I (6-,:;)I 18.237 13,959 35,574 13,951 8197219 238 277 b,251 88,&43 15,385 Growth;976 Rate 1995 I I I I I (5~5"-)I I , (e.e".)I I (7.0".)I I (7.6")I I I (6.7".)I 1 I I I I (6.7")9', (e.e".)I 23,776 19,214 499858 2091321 112.980 3302 277 8,648 122,436 21,209 Growth Rate 1999 23.3301 Growth Rate 1992 I I 26,438 I (5'"-)21.634 II (e.6:)I 57.067 I (7.0".)I I!7.6".)92896&9 ,'(&.7.")1~772 I I 277 9,846 I 139,397 I (e.?".)24.127', (e.?)'1976 co~any forecast 2 Total sales x.0029 3-{Total sales+ccopany use~SEPA)x.076 TABLE 7.Comparisons of Growth Rates of Electrici~ Prices and Znflation Measures knxnual 1985 Anaaa1 1990 C??Il?h???fllla?? C?o??ll FJE??!D??? 28 0 29.8 6.3%607%45 7 MSXXa/INH 50 1 4 2%56 5 61?6 Ccmaaner Price ZncLeac 1$1 7 5~3%275+5 4?4%341?6 194'5+7%303+2.3 9%367+5 ABLE 8.Carolina Power 6 Light Company's Energy~Forecast 1978 1979 1480 19S1 1982 1983 198L 1985 1986 1987 1988 1489'990 1991 14)3 1995 1997 28,586,688 30,301,864 32e209,533 34,208,255 36,329,294 38,470,979 40,779'64 43,064.739 45,475.40 47.884,926 50>376,243 52m 943'31 55'51,539 S8,594,868 61 524,611 64.539-317 67,637,204 70~816,153 74+286,144 '77'77'93 TABLZ 9.Puke Pever Company's Energy Porecast IST8 1981 ISED 1988 1985 1985 198T 1989 48, 988 51, 298 54, 830"58, T50 Bl, 881 85, 1ST 88, 428 21, QCL 25, 5Q9 29, 422 88, 430 82, 502 92, 004 59, 915 55, 915 59, IS6 53, 305 55, 525 T0, 089 28, SST TT, 982'1, LN 85, 188 89, 885 98, 298 Q8, 425 127 TABLE 10.Virginia Electric 6 Power Company's En'rgy Forecast Year 197.7 1978 1979 1980 1981 1982 19S3 1984 1985 1986 1957 Annual Output (NGl x 103)38.578'1,500 44,800 48,100 51,400 54,700 58,100 61,650 63,350 69,200 73,200 Increase 7.5'.0 7.4 6'6.2 6~0 9~Actual 12S TM3LE 11.Public Staff's Honeconametric Energy Estimates for the Residential Sector (1000 HRH)Hfstorfcal Sales hxponeh Lineal tfal~Yr Trend'rend I I I I I 1977 I 6980 7152 I 1982 I 8766 1987 I 10522 I 1992 (12338.I 1995 I 134'10 I I" I 1977 I 12250'1982 I 15354 1987 I 18458 1990 I 21562 1995 23425 I 116Z: I 18888 3D696 I 4'l078 I 1&43 10058 I 26635 I I 392S6 I 49604'f storf cal Average Use Trended Avg.Use Expone-ncxpon Linear tial Linear~tiel TtenrP~Tnd 7ren4 Tmn/Carol fna r and a 6991 I 6980 10103 I S766 14411 I 10522 I 20341 I 12338 24907 I 13410 10793 l 24256 I l 30697 12501 17696 Oulce Pcaar Canaanv 12272 I I 17551 I 24768 I I 34'42069 I 12271 I 1225D 17550 I 15354 24768 I 18458 I 32990 I 21562 I 40132 I 23425 21615 30475 Sature Avg.of Avg.of 8594 7265 7549 10770 10076 9748 13137 13749 12503 15538 18735 14505 16832 22575 15977 13936 12553 12945 17408 16873 16SR 20893 22m 20322 24551 28787 243 o3 26727 33694 26876 Hotesc 1 Trend of hfstarfcal residential canaaptfon for the period)965-1976. Trend of historical QN/customer times'.inear trend of custcmers. Trend of sales divided'by trend of customers mlttplfed by 1fnear trend.of aetoomrs.4 Nxlf ffed linear trend (na value above 100.0)for each apolianca multiplied by linear trend of residential customers multi pl fee by estimated annual cansumption per custa-mar per aop'iianca. totaled for each year.5 Average of sales 1fnear trend, average use linear trend and saturation estimate. 129 T~LE 12.Public Staff's Noneconometric Energy Estimates for Commercial Sector (1000 MWH)a a a E Averane Use Per Customer Averaae of All Linear Exnon ntlal Estlmat s Average of stoat Likely>Estimates llistorical Sales Y ar Lancer Exoonentlal Carolina I 1977<4311 4326 19~~I 5456'6270 I I 1937 I 6601 9088.I 1952 I 7746 13172 1995 I 8433 16458 I I I I 1977 I 8574 I 1982 I 10808 I 1987 I 13042 1992 I 15276 I I 1995 I 16616 I Power and Linht Comoanv 4345 4361 I 6128 I 8484 I ilb09 I 13947 4383 I I 5825 7470 I 9318 I 10525 5920 7914 10461 12341 Duke Power Coman 8598 I 8664 I 8685 12430 I 11251 11562 17969 I 14068 14870 25977 I 17118 18663 I 32407 I 19060 21196 8630 I I 11513 I I 15077 I 19259 I 22320 t(otes: 1 Based on historical data for the period 1569-1976. Historical trend (1969-1976) of average use per customer multiplied linear trend of connercial customers. 3 Ave~age of historical linear trend and average use linear trend.4347 5641'036 8532 9479 8619 11030 13555 16197 17838m TABIZ 13.Caro3.i@a Power 6 Light Campany's Load Forecast 1978 1979 IS80 1951 1982 1983 I984 1985 1986 1987 IS88 1989 IS90 199I.1992 1993 1994 1995 1996 1997 5829 6205 6614 7034 7480 7929 8427 8914 9424 9933 IQ463 10983 4%549 12122...13337 ID959 14593 15286 15981 TABLE 14-Duke Power Company's Summer Peak Load Forecast Year 1978 19?9 1980 1981 Peak MW 9,S22 10,036 10,601 11,335 396 514 S65 4.34 5 40 5.63 6 92 Load Factors 63.4%.63.6 63.6 63 8 1982 11,907 572 5.05 63+9 1983 1984 12,"521 13,170 614'16 ,5,18 63.9 63.8 1985 13,857 1986~14,583 726 5 22 5.24 63.7 63.5 1987 1988 1989 1990 15,353 16,175 17,028 17,941 770 S,28 5 3S 5.27'5.36 63,3 63.1 62.9 62.6 Peak loads through 1980 were r educed slightly from"trend" to match hetter with the conservative energy forecast, 132 ALE 15.Duke Power'ompany's NMtar Peak Load Poxecast 1977~78 1978 79 191~1980 81 1981~?SCL~'985~ 19~'98~6 29~7 Peak Klf 9~241 441 9,7%551 10~576 584 11m~~750 598 22~422 12 996 644 15 664 668 14~368 704 15~089 722 15 858 749 16&LL 774 17,415 801 5 00 7+29 5i57 SICL 4i96 Peak.loads through'79-80~r~ere rednced alight'rom"trend'o match hetter~the coneervaSve energy forecaet. l33 TABLE 16.Public Staff's Capacity Addition Schedule (MW)YEAR 1 1978 S 1979 S I Il I 1980 S W I 1981 S V I 1982 S I II I 1983 S M 1984 S M I I 1985 S I M I 1986 S M 1987 S W I 1988 5 I 1989 S H I 1990 S N I"l99'I S'g.II I 1992 5 N I CPt 1 Uprate Roxboro 4 Peaking+Uprates llayo 1 Harris 1 Hayo 2 Peaking Peaking Harris 2 Undesignated Harris 3 Undesignated Harris 4 Peaking Base I I (105)I I (720)(2'2)I I (72C)I I (900)I I ,'720),'150)150)I (90")I I (1150)I I I (gon)I I (1150)I I I (900)I 250 I (115C)I I I DUKE I!cGuire 1 HcGuire 2 Catawba 1 Catawba 2 Cherokee Perkins Cherokee Perkins Peaking Cherokee Perkins Peaking Base Peaking Base Peaking-Base (1180)(1180)(1153)(1153)(1280)(1280)(1280)(IzBo)(z5o)(1280)(1280)(250)(1280)(zso)(1280)Cycling (500)(1280)VEPCO North Anna'898)I North Anna+Uorato (934)I I Peaking+Uprate (286)I North Anna 3 (907)I I Uprate+P.S.(731)I I North Anna 4 (907)I Uprate+P.S.(731)I I Surry 3 (900)I I P.S: (7oo)I Surry 4 (goo)I Base 1100 I Base 1100 I i-Base I 1100 I Base 1100 I Base 1100 I I.'Iotes ()Parentheses '.ndicates H'4 addition P.S.Pumped Storage<odate-Increase HH rating of existing units 13'4~LE 17K.Reserve Margins Based Upon the Pubic ShaM ABdit3.on Schedule~Yar 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 22.7 16.7 ZD.O 15.5 17.6 21.2 21 8 IS.8 19.3 23.0'15 6 15.1 18.1 17.6 20-2 Winter 4 16.3 19.1 14.5 16.2 14,4 15.3 16.9 20.2 K.6 22.4 15.0 16.1 16.7 26.5 18.5 21.6 23.9 16.0 16.7 15.8 15.1 15.2 15.3 16.3 15.5 15.5 15.1 15.3 kfnter 22.5 14.7 17.8 R.O 21.2 21.4 20 8 19.6 19.1 18.8 19.4 18.2 17.&17.D 16.9 S uence r 14.2 18.5 15.0 17.8 14.8 16.5 14.7 15.7 14.6 14.8 15.9 16.6 16.9 16.8 16.3~N)nt r 25.3 29.6 25.8 24.5 2S.I 24.9 24.7 25.6 24.4 24.4 25.6 26.2 26.4 26.2 25.6 T'ABLE 17B.Loss of Load ProbabiLit3.es Expected Prom Pahlic Staff A6d3.ti,ans (days'er season)Year 1978 19T9 1980 1981 1982 1983 1984 1985 1986'1987 1988 1989 1990 1991 1992 33 5.0 4.6 T.2 60 4.3 4.1 7.1 5.1.3 5 7.1 66 5.3 5,4 4.1 5.5 9.8 7,9 12.1 10.7 7.9 T.7'11.9 9.9 7.2 6.7 5.4 11.0'9 9'.1 2.6 6.1 4.5 3.6 8.1 7.6 8.4 9.0 8.8 8.7 T.a 8.4 8.3 9.1&.7 3.7 8.2 6.2 50 4+4 4.3 4.7 5.3 5.4 5.6 5.1 58 5.8 6.2 5.)LS 6.8 9.5 TA 9.8 8.3 9.1 a.3 8.7 9.1 8.2 7.7 7.5 7.6 a.'0 1TICCZ'4.6 4,6 5.9 4.9 5.1 4.6 4.2 4.1 3.6 3.3 3.1 3.-303 l35 t 18.Public Staff Projections of Percent of Plant Operated as Base T.r.ad, Cycling.and Peaking Year 1975 1979 1980 19Sl 1982 1983 1984 1985 1985 1987 1988 1989 1990 1991 1992 Baaa Caw'ina 48.6 48.9 52.8 53 7 50.1'19.4 52.6 5'!.3 54.4 53.1 55.7 54.0~Ccl ino Powe~ard Liaht Cwnanv 27.4 27.5 25.1 24.4 30.0 27.2 32.1 31.7 28.9 31.9 31.9 29.8.32.3 30.5 31.9~Pea kin 24.0 23.6 21.5 22.8 20.9 19.1 17.8 18.9 18.5 16.8 16.8 15.8 14.6 13.8 14.1 Duke Power Cemoan 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 49.7'49.7 a9,a 49.2 49.2 53~1 50.3 54.6 51.9 55.0 55.9 55.6 57.4 55.6 53.5 32.2 32~2 34.1 35.6 35.6~A.9 34.1 32.1 36.1 33.9 31.5 33.5 31.4 32.8 33.8 18.1 18.1 16.5 15.2 15.2 18.0 15.6 13.3 12.0 11~1 11.6 10.9 11.2 11.5 12.7 Vir inia Electric and Power Comoan 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 49,5 54.0 52.9 50.9 49.7 53.2 51.3 48.8 46.5 49.5 48.0 51.1 49.9 52.6 55.0 38.7 35.3 34.3 37.3 35.3 32.9 30.1 33.8 32.2 30.4 33.2 31,2 33.5 31.7 30.0 11.8 10.7 12.8 11.8 15.0 13.9 18.6 17 F 4 21.3 20.0 18.8 17.7 16.6 15.7 15.0 TABLE 3.9A.Caro1iz:c Pcwer a Light Company's Capacity Addition Schedu3.e 5cha}uIa}OOa TRMall]Lcacbooo t4~gl Scyo 42 SaxeLa 41 Hazes 4R I3~f4 72D 72D 900 900 900 900, 1980 1982 1985 1984 l986 1990 1988 SR I SR 2 1989 1991 TABLE 198.(~o1iaa Po~m 6 Light Company's Projected Summer Pea3c Reserves Rea4FII~1978 1979 7380 1981 XSC 1983 1984 1985 I986 1987 1988 1989 1990 1991 19o2 30e4 22 5 25eB 17+8 20o4 13+6, 17o6 19.2 16 I IB 8 23 6 25 4 28+9 22 7 137 ALE 20.Duke Power Company's Summary of Load, Ca13aoity and Reserves (MW)Forecast Scheduled Yaar Summer peak Ca aci Additi.ons Total Ctt Scheduled~$~tV Scheduled~0~tV 1978 1979 1980 1981.,9522 10 036 10 601 11 335 None Hone."~Cuire 1 (1180)12 446 12 446 13 626 JcCuire 2 (1180)14 785 SCE60 Contract Term (-21)2 924 2 410 3 025 3 450 30.7 24.0 28.5 30.4 , 1982 1983 11 907 1.2 521 Catauba 1 (1145)Catauba 2 (1145)Retirements (W9)15 930 17 006 4 023 4 485 33.8 35.8 1984" 1985 19 170 13 857 Retirements (-228)Cherokee 1 (1280)Retirements (-261), 16 778 17 797 3 608 27.4 3 940 28.4 1986 19S7 1988 1989 1990 14 583 15 353 16 175 17 028 17 941 Retirements (93)Cherokee 2 (1280)Perkins 1 (12SO)Chernkee 3 (1280)None 17 704 18 984 20 264 21 544 21 544 3 121 3 631 4 089 4 516 3 603 21+4 23.7 25.3 26.5 20io 138 TABID 22..Duke Power Campany's Summary of P ojected Load Management Goals EHRiCT RKD~iCH~lRNH)1977 1978 1979 1980'83 281 392 511 196 313 416 532 469 838 1130 1458 1981 1982 1983 1904 1985 1986 1987 1988 1989 1990 635 759 884 100$1143 1274 1385 1S41 1615 1721 666 808 960 112$1295 1486 1684 1896 2124 2364 1809 2180 2572 2477 3422 r 3893 4334 4789 5259 5674 NTK t l.S~r and wincer aegawaet re6uctkous are accQRulacLve 2 argy redacticma are auuual values}}