Building scenarios for an electric utility

Abstract

The 1987 Georgia Power Company budget forecast utilized a scenario building process to determine assumptions about the future environment that would influence the Company's load and energy growth. Five broad areas of influence were incorporated into the scenarios: social impacts, political impacts, economic impacts, technological impacts and physical resource impacts. From these broad areas, 15 key factors were isolated for intensive investigation. Consistency and plausibility were maintained among these key factors. The simultaneous existence of rapid real economic growth and high oil prices, for example, was eliminated. The BASICS approach, developed by Battelle Columbus Division was used to develop the scenarios. Consistent with this methodology, panel of experts from within and outside the Company were convened to identify the key influencing factors. Separate panels met to address the five major influencing factors of (1) economics and demographics, (2) raw fuels, (3) technology, (4) political/regulatory, (5) national electricity prices, and Georgia Power rates. Following two separate meetings of each panel, Georgia Power analysts produced descriptor essays which described the history and identified alternative futures for each key factor. The Battelle BASICS-PC software then produced a preliminary set of consistent scenarios. A cross-impact analysis was used to estimate the effect of each factor on the other factors. Finally, Forecasting Section analysts reviewed the BASICS output to guarantee plausibility of the resulting scenarios. This process generated three scenarios. The rate of real GNP growth was the pivotal factor which was used to describe each scenario and to judge the plausibility of interrelationships among the remaining key factors.