© 2005, Itron Inc.

Updates to 2007 SAE Spreadsheets

Oleg Moskatov

EFG MeetingMay 3-4, 2007

© 2006, Itron Inc. 2

Overview – 2007 Update

The 2007 residential update is based on the following information from the EIA 2007 Annual Energy Outlook (AEO) database:

Equipment efficiency trendsEquipment/appliance energy consumption and unit trendsElectricity pricesDwelling totals, footage and shell efficiency indexOwn and cross-price elasticity estimates (for residential electric)

© 2006, Itron Inc. 3

Residential Electric

Updates:

Equipment efficiency trendsEquipment saturation trendsElectricity pricesBuilding shell efficiency estimatesRegional energy forecasts

© 2006, Itron Inc. 4

Equipment Efficiency Trends

6.8

7.2

7.6

8.0

8.4

2006 2009 2012 2015 2018 2021 2024 2027 2030

HPHeat06 HPHeat07

9

10

11

12

13

14

2006 2009 2012 2015 2018 2021 2024 2027 2030

CAC06 CAC07

9

10

11

12

13

14

2006 2009 2012 2015 2018 2021 2024 2027 2030

HPCool06 HPCool07

8

9

10

11

12

2006 2009 2012 2015 2018 2021 2024 2027 2030

RAC06 RAC07

© 2006, Itron Inc. 5

Equipment Saturations – Cooling

Adjustments have been made to incorporate the most recent data

0%

5%

10%

15%

20%

25%

30%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

CAC06 CAC07NEC

0%

10%

20%

30%

40%

50%

60%

70%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

CAC06 CAC07ESC

0%10%20%30%40%

50%60%70%80%90%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

CAC06 CAC07WNC

0%5%

10%15%20%25%30%35%40%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

CAC06 CAC07PAC

© 2006, Itron Inc. 6

Equipment Saturations – Water Heating

0%

5%

10%

15%

20%

25%

30%

35%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

EWHeat06 EWHeat07NEC

0%

10%

20%

30%

40%

50%

60%

70%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

EWHeat06 EWHeat07ESC

0%

5%

10%

15%

20%

25%

30%

35%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

EWHeat06 EWHeat07WNC

0%

5%

10%

15%

20%

25%

30%

35%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

EWHeat06 EWHeat07PAC

© 2006, Itron Inc. 7

Other Appliances - Dishwashers

0%

10%

20%

30%

40%

50%

60%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Dish06 Dish07NEC

0%

10%

20%

30%

40%

50%

60%

70%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Dish06 Dish07ESC

0%

10%

20%

30%

40%

50%

60%

70%

80%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Dish06 Dish07WNC

0%

10%

20%

30%

40%

50%

60%

70%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Dish06 Dish07PAC

For the most part, there is little change in dishwasher saturation projections from 2006

© 2006, Itron Inc. 8

Equipment Saturations – Resistance Heat

In most regions, electric furnace saturations have been adjusted downward reflecting new data and methodology

0%

2%

4%

6%

8%

10%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

EFurn06 EFurn07NEC

0%5%

10%15%20%25%30%35%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

EFurn06 EFurn07ESC

0%2%4%6%8%

10%12%14%16%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

EFurn06 EFurn07WNC

0%

5%

10%

15%

20%

25%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

EFurn06 EFurn07PAC

© 2006, Itron Inc. 9

Equipment Saturations – Heat Pumps

Decline in resistance heat is partially explained by increased saturation of heat pump, particularly in new construction

0.40%

0.42%

0.44%

0.46%

0.48%

0.50%

0.52%

0.54%

0.56%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

HPHeat06 HPHeat07NEC

0%

5%

10%

15%

20%

25%

30%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

HPHeat06 HPHeat07ESC

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

HPHeat06 HPHeat07WNC

0%

1%

2%

3%

4%

5%

6%

7%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

HPHeat06 HPHeat07PAC

© 2006, Itron Inc. 10

Structural Index

Structural index is a key component in the calculation of heating and cooling indices allowing us to capture effects of changes in housing totals and square footage on energy utilization

The index is calculated as follows:

⎟⎠⎞

⎜⎝⎛

⎟⎟⎠

⎞⎜⎜⎝

⎛

××= ∑Type

Type

Typey

Typey

Type

Typeyy

EffSat

EffSat

WeightIndexStructuralHeatIndex

01

01

0101 aSurfaceArencyIndexellEfficieBuildingShaSurfaceArencyIndexellEfficieBuildingSh

IndexStructural yyy ×

×=

© 2006, Itron Inc. 11

Building Shell Efficiency

Building shell efficiency index captures improvement in thermal shell integrity based on physical size and shell attributes of a residence

0.8

0.9

1.0

1.1

1.2

1980 1984 1988 1992 1996 2000 2004 2008 2012 2016 2020 2024 2028

BSE Index Heat BSE Index Cool BSE Index 2006

© 2006, Itron Inc. 12

Structural Index - Pacific

There is noticeable downward shift in average square footage projections

Combined effects of lower square footage projections and shell improvements result in slight decrease in heating and increase in cooling usage from 2006

0

500

1000

1500

2000

2500

3000

3500

4000

2001 2005 2009 2013 2017 2021 2025 2029

SurfaceArea06 SurfaceArea07

0.9

1.0

1.1

1.2

1.3

2001 2005 2009 2013 2017 2021 2025 2029

StrucVarIndHt StrucVarIndCl StrucVarInd 2006

© 2006, Itron Inc. 13

Regional Total Indices (Heating, Cooling, Other)

0

2,000

4,000

6,000

8,000

10,000

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Total 06 Total 07NEC

0

4,000

8,000

12,000

16,000

20,000

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Total 06 Total 07ESC

0

4,000

8,000

12,000

16,000

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Total 06 Total 07WNC

0

2,000

4,000

6,000

8,000

10,000

12,000

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Total 06 Total 07PAC

© 2006, Itron Inc. 14

Regional Sales Projections

0

2,000

4,000

6,000

8,000

10,000

12,000

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

2006 2007NEC

0

5,000

10,000

15,000

20,000

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

2006 2007ESC

0

3,000

6,000

9,000

12,000

15,000

18,000

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

2006 2007WNC

0

2,000

4,000

6,000

8,000

10,000

12,000

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

2006 2007PAC

© 2006, Itron Inc. 15

Residential Natural Gas

Updates:

Equipment efficiency trendsEquipment saturation trendsNatural gas pricesBuilding shell efficiency estimatesRegional energy forecasts

© 2006, Itron Inc. 16

Equipment Efficiency Trends

Greatest increases in efficiency happen during the first ten years of the forecast

Slightly faster efficiency improvement through 2015 when compared with 2006 projections

0.74

0.76

0.78

0.80

0.82

0.84

0.86

0.88

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGFurn 2006 NGFurn 2007

0.50

0.53

0.55

0.58

0.60

0.63

0.65

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGWHeat 2006 NGWHeat 2007

© 2006, Itron Inc. 17

Other End-Use Efficiency Trends

UEC trend used as a proxy for efficiency trend

UEC projections are smoothed in the 2007 update to better reflect efficiency trend

28

29

30

31

32

33

34

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Dry06 Dry07

10

12

14

16

18

20

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

Misc06 Misc07

© 2006, Itron Inc. 18

Equipment Saturation Trends – Space Heating

0%

10%

20%

30%

40%

50%

60%

70%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGFurn 2006 NGFurn 2007MAC

0%10%20%30%40%

50%60%70%80%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGFurn 2006 NGFurn 2007MTN

0%5%

10%15%20%

25%30%35%40%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGFurn 2006 NGFurn 2007ESC

0%

10%20%

30%

40%

50%60%

70%

80%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGFurn 2006 NGFurn 2007WNC

© 2006, Itron Inc. 19

Equipment Saturation Trends – Water Heating

0%

10%

20%

30%

40%

50%

60%

70%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGWHeat 2006 NGWHeat 2007MAC

0%10%

20%30%

40%50%

60%70%

80%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGWHeat 2006 NGWHeat 2007MTN

0%5%

10%15%20%

25%30%

35%40%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGWHeat 2006 NGWHeat 2007ESC

0%

10%

20%

30%

40%

50%

60%

70%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGWHeat 2006 NGWHeat 2007WNC

© 2006, Itron Inc. 20

Equipment Saturation Trends – Cooking

0%

10%

20%

30%

40%

50%

60%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGCook 2006 NGCook 2007MAC

0%

5%

10%

15%

20%

25%

30%

35%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGCook 2006 NGCook 2007MTN

0%

5%

10%

15%

20%

25%

30%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGCook 2006 NGCook 2007ESC

0%

5%

10%

15%

20%

25%

30%

35%

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGCook 2006 NGCook 2007WNC

© 2006, Itron Inc. 21

Natural Gas Prices

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

MAC06 MAC07

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

ESC06 ESC07

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

WNC06 WNC07

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

MTN06 MTN07

© 2006, Itron Inc. 22

Indices – Middle Atlantic and West North Central

Middle Atlantic Indices - 2006

0100200300400500600700

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGHeat NGWHeat NonHVAC

Middle Atalntic Indices - 2007

0100200300400500600700

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGHeat NGWHeat NonHVAC

West North Central Indices - 2006

0100200300400500600700800

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGHeat NGWHeat NonHVAC

West North Central Indices - 2007

0100200300400500600700800

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGHeat NGWHeat NonHVAC

© 2006, Itron Inc. 23

Indices – Mountain and East South Central

East South Central Indices - 2006

0

100

200300

400

500

600

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGHeat NGWHeat NonHVAC

East South Central Indices - 2007

0

100

200300

400

500

600

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGHeat NGWHeat NonHVAC

Mountain Indices - 2006

0

100

200300

400

500

600

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGHeat NGWHeat NonHVAC

Mountain Indices - 2007

0100200300400500600700

2001 2004 2007 2010 2013 2016 2019 2022 2025 2028

NGHeat NGWHeat NonHVAC

© 2006, Itron Inc. 24

Projected Natural Gas Use Per Customer

0

200

400

600

800

1,000

1,200

2001 2004 2007 2010 2013 2016 2019 2022 2025

MAC06 MAC07

0

200

400

600

800

1,000

2001 2004 2007 2010 2013 2016 2019 2022 2025

WNC06 WNC07

0

100

200

300

400

500

600

700

800

2001 2004 2007 2010 2013 2016 2019 2022 2025

ESC06 ESC07

0

200

400

600

800

1,000

2001 2004 2007 2010 2013 2016 2019 2022 2025

MTN06 MTN07