Economic Outlook

Five-Year Sales Forecast

The Forecast represents total sales that will be realized at the meter incorporating future savings from known energy efficiency technologies and future loads expected to be served by distributed generation. The Forecast does not include changes in sales that may result from emerging technologies. Private enterprise and government are both currently funding new research mainly in the pursuit to slow man-made climate change. For example, the State of California has adopted an ambitious Energy Action Plan that includes four “Big Bold Strategies” for significant energy savings. The Energy Action Plan requires all new residential construction to be zero net energy by 2020; all new commercial construction to be zero net energy by 2030; Heating, Venting and Air
Conditioning (HVAC) industry to be re-shaped to deliver maximum performance HVAC systems; and all eligible low-income customers be provided with all cost-effective energy efficiency measures in their residences by 2020.

The historical accumulated energy efficiency and solar savings reported in the Forecast are from 1999 forward. The 2016 Forecast only included savings from Codes and Standards from 2012 forward; in the 2017 Forecast, historical Codes and Standards savings for the years 1999 through 2011 based on California Energy Commission (CEC) analysis are included. True accumulated energy efficiency would more likely be dated back to 1974 when the Warren-Alquist Act passed in California but accurate records are not available. In the Forecast, projected energy efficiency and solar savings are expected to occur uniformly throughout the year as a simplifying assumption.

The LADWP billing system underwent a conversion in September 2013. It is the opinion of the Load Forecast Group that sales in FYE 2014 and 2015 are under-reported. Estimated sales for FYE 2017 are 255 GWH or 1.1 percent below recorded sales in FYE 2016, and the compounded growth rate for sales is estimated to be -0.4 percent over the five-year budget period. This result is mainly attributed to accelerated incremental savings from LADWP’s energy efficiency and solar distributed generation programs, and expected increases in real electric rates. In the Forecast, electric rate increases are lagged one year to allow for customer behavior to change