Adapting Load Research Sample Designs to Survive in Our Changing Business Environment

1. Adapting Load Research Sample Designs to Survive in Our Changing Business Environment Roberta Laccetti National Grid AEIC Annual Load Research Conference September 11, 2006

2. Business Environment at National Grid Regulated Utility (through 1997) Budgets always tight, but� Load Research standards were established by commissions for rate cases Samples were replaced every 3-5 years Meter readers� goals were tied to data collection success rate Early Retail Access (1998-2001) Challenges to accuracy of Load Profiles were anticipated New design strategies were considered, but no real interest by market participants Prior standards were maintained

3. Business Environment at National Grid (cont.) Changes Since 2002 Bigger Mergers/Acquisitions T&D Rate Freezes AMR for Basic Meters T&D Rate Consolidation and Simplification Reliability Goals Not Met More Severe Cost-Cutting

4. Reaction of Other Business Groups Once drive-by AMR was implemented: Cost per interval data read increased dramatically. Meter Readers were virtually eliminated. On-site data collection success rates declined. Capital budget is needed for reliability improvements, not data recorders. NY-PSC has no standards for Load Research, and raising NY to NE �best practices� is not justified. Why do we need to continue Load Research when next rate case is years away?

5. Standard Load Research Response Commissions require continuous, comprehensive Load Research in 2 of 4 jurisdictions. Next NY rate case is only 3 years away. Risk of supplier scrutiny/criticism is still a threat. �Best Practice�, �Benchmarking�, etc.

6. Standard Load Research Response (cont.) Load Researchers must uphold statistical standards by following all the rules. We must maintain individual samples after rate consolidation until we can design/install new samples because: There may be data requests regarding customer impacts, and We need to preserve the original selection probabilities.

7. A More Adaptive Approach Provide better information to Operations on our business requirements. Streamline and adjust samples, without total replacement. Hire consultant to �prove� that we have minimized sample size requirements.  Take advantage of new programs and technologies.

8. Sample Design Review: Strategy Consider consolidation across states � Approval not likely. Focus on large, �redundant� samples resulting from previous rate consolidation. Post-stratify and determine required sample sizes. Compare new design to existing sample, by stratum, and adjust. Spend very little money.

9. Sample Design Review: Process Use Analyze-IT with MBSS design option. Require 90/10 accuracy for 75% of hours in year. Allocate existing sample customers to new stratum, and adjust as necessary. For smaller size, randomly select sample customers to remove. For larger size, augment by drawing additional customers from current population. Provide NY data to RLW Analytics for independent review of assumptions and techniques.