| 1

SEATTLE CITY LIGHTIRP PUBLIC INPUT PROCESS

Top Performing PortfoliosQ1 2016

Rank Top Performing Portfolios

Q2/Q3 2016

IRP Stakeholders IRP Stakeholders

Mayor, City Council

Energy Committee

Mayor, City Council

Energy Committee

Mayor, City Council

Energy Committee

Mayor, City Council

Energy Committee

Public MeetingsDowntown, North &

South Seattle

IRP Stakeholders IRP Stakeholders

Process, Assumptions

Q3 2015

Resource Needs,

Candidate Portfolios Q4

2015

LOAD FORECAST DISCUSSION

City Light Review Panel Meeting

May 17, 2016

| 3

ASSUMPTIONS OVERVIEW

• Economic outlook includes inputs on U.S. growth

in GDP, industrial production, employment,

income, CPI, housing starts & population

• Forecast based on “normal weather”

• Load forecast assumes historic achieved

conservation continues into the future

• Forecast of tunnel boring machine not included

| 4

LOAD FORECAST MODEL STRUCTURE

City Light’s Service Territory

Load Forecast

City Light’s Service Territory

Economy

King County Economy

Boeing & MicrosoftU.S. Economy

| 5

1,000

1,020

1,040

1,060

1,080

1,100

1,120

1,140

1,160

1,180

1,200

Aug

2000

Aug

2001

Aug

2002

Aug

2003

Aug

2004

Aug

2005

Aug

2006

Aug

2007

Aug

2008

Aug

2009

Aug

2010

Aug

2011

Aug

2012

Aug

2013

Aug

2014

Aug

2015

Syst

em

Lo

ad

in

aM

W

dot.com recession

&

>30% real rate increase

record

warmth

Great

RecessionExpansion housing

boom

Current 12-Month Load

≈2.8% LESS THAN

15 Years Ago

CITY LIGHT LOAD HISTORY – ROLLING 12 MONTH

| 6

y = 2.8697x + 1077.8

1030

1040

1050

1060

1070

1080

1090

1100

1110

1120

1130

1140

1150

1160

1170

1180

1190

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Avera

ge M

W

City Light System Load and Weather Adjusted Load

System Load Weather Adj System Load Linear (Weather Adj System Load)

0.25% annual load growth over last 25 years

| 7

“NEW NORMAL” OF ECONOMIC GROWTH?

-4%

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

An

nu

al

Gro

wth

Rate

Real GDP Average Real GDP (Post-War)

| 8

LOCAL LABOR MARKETS

-6%

-4%

-2%

0%

2%

4%

6%

8%

10%1

99

9

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

20

10

20

11

20

12

20

13

20

14

20

15

20

16

20

17

20

18

20

19

20

20

20

21

20

22

20

23

20

24

Em

plo

ym

en

t G

row

th /

Un

em

plo

ym

en

t R

ate

Seattle Employment Growth King County Unemployment Rate

| 9

LOAD, EMPLOYMENT, AND HOUSEHOLDS

200

300

400

500

600

700

800

900

1000

1100

1200

200

300

400

500

600

700

800

900

1000

1100

1200

1999 2001 2003 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023

Em

plo

ym

en

t &

Ho

use

ho

lds

(00

0's

)

Avera

ge M

eg

aw

att

s

Weather-Adjusted System Load (aMW) Wage & Salary Employment Households

| 10

ENERGY EFFICIENCY, CODES, & FUEL SWITCHING.... RESIDENTIAL MWH PER HOUSEHOLD

0

2

4

6

8

10

12

14

19

80

19

82

19

84

19

86

19

88

19

90

19

92

19

94

19

96

19

98

20

00

20

02

20

04

20

06

20

08

20

10

20

12

20

14

20

16

20

18

20

20

20

22

20

24

MW

h p

er

Ho

use

ho

ld

LAND USE

| 12

RESIDENTIAL EXAMPLE NO NET ENERGY CHANGE

• One single family home

and one duplex

• 31,000 kWh total

• ~10,000 kWh per unit

2009 2013

• Six townhomes

• 32,000 kWh total

• ~6,000 kWh per unit

| 13

• Group Health Anhalt

• Historically used as an

office building

• 20,000 Sq ft

• ~220,000 kWh Annually

2011 2015

COMMERCIAL EXAMPLE NET ENERGY DECREASE

• Original building

renovated plus 10K sq ft

modern addition

• 30,000 Sq ft Total

• ~180,000 kWh Annually

| 14

• College Club of Seattle

• 15,000 Sq ft

• ~500,000 kWh Annually

2014 2017

• Madison Center

• 780,000 Sq ft

• ~10 million kWh annually

COMMERCIAL EXAMPLE NET ENERGY INCREASE

ENERGY EFFICIENCY

| 16

EFFICIENCY ECOSYSTEM

Technology

AdoptionUtility

Programs

Codes &

Standards

LIGHTING EXAMPLE

| 18

INC HAL CFL LED2011

65%

1%

33%

1%

| 19

INC HAL CFL LED2015

11% 30% 33% 26%

| 20

EFFICIENT LIGHTING

• Lighting is the most important source of savings

o60% of City Light’s programmatic achievement

• BPA estimates that utility programs touch roughly

one half of all efficient bulbs

• In City Light’s service territory, this could be

~5 aMW annually from lighting alone occurring

outside of programs

oThis is largely due to the rapidly changing LED

market since 2011

| 21

LED EXAMPLE

0

10

20

30

40

2011 2012 2013 2014

Multiple

of average

quarterly

sales in

2011

x

x

x

x

50% of savings occur through

market adoption outside programs

HVAC EXAMPLE

| 23

HVAC EXAMPLE

• HVAC programs are much different

• Slower market with less technology change

• Utility programs only account for 10-12% of

heat pump sales in the region

| 24

2015 SUMMARY

• Economic growth expected to continue, yet does

so below historical trend

• Local labor markets moderating after recovery

from recent downturn

• Rapid growth in residential construction not

expected to be sustainable in long-term

• Large amount of high-rise commercial buildings

not yet completed

• 20-year average annual growth rate ≈ 0.4%

| 25

WHERE IS LOAD GOING IN THE FUTURE?

• City Light’s customers are changing the way they

use electricity

▼ Customers have embraced conservation with large

long lasting effects

▼ Distributed generation is reducing load the utility is

paid for (not consumption)

▲ Plug loads are increasing significantly

▲ Large surge in commercial real estate

▲ Electric vehicles and battery storage will increase

consumption

| 26

0

2000

4000

6000

8000

10000

120001

99

9

20

01

20

03

20

05

20

07

20

09

20

11

20

13

20

15

20

17

20

19

20

21

20

23

20

25

20

27

20

29

20

31

20

33

20

35

Gig

aw

att

-Ho

urs

Total Retail Commercial Residential Industrial

LOAD HISTORY & FORECAST BY CUSTOMER CLASS

Forecasted 20-year Average Growth Rates

Total Retail: 0.4% Commercial: 0.6%

Residential: -0.1% Industrial: 0.5%

| 27

TOTAL SYSTEM SALES FORECAST

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

Adopted 2012 SP 9,648 9,632 9,677 9,746 9,814 9,911 9,945 10,003

2014 Adopted Plan (2013 LF) 9,648 9,615 9,534 9,653 9,567 9,611 9,588 9,596 9,629 9,705

2016 Plan Update (2015 LF) 9,648 9,615 9,534 9,507 9,339 9,441 9,432 9,456 9,501 9,565 9,560 9,604

9,000

9,200

9,400

9,600

9,800

10,000

10,200Syst

em

Sale

s (G

Wh

)

OUR VISIONTo set the standard—to deliver the best customerservice experience of any utility in the nation.

OUR MISSIONSeattle City Light is dedicated to exceeding our customers’expectations in producing and delivering environmentallyresponsible, safe, low-cost and reliable power.

OUR VALUESExcellence, Accountability, Trust and Stewardship.

| 29

KING COUNTY GRID-UTILIZING VEHICLECUMULATIVE REGISTRATIONS

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015

Cu

mu

lati

ve R

eg

istr

ati

on

s

Plug-In Hybrid Electric Vehicles

Battery Electric Vehicles

- King County added 734 plug-in vehicle

registrations for 2015 Q3 resulting in 9,137

total

- Estimated 5.9 aMW demand from plug-ins in

King County

- 50% of this load attributed to City Light

service territory

- Approx. one-half of one percent of City Light's

average system load

| 30

DISTRIBUTED ROOFTOP SOLAR INSTALLATIONSCUMULATIVE TOTAL SYSTEM CAPACITY

-

2.0

4.0

6.0

8.0

10.0

12.0

2006 2008 2010 2012 2014

To

tal C

ap

ac

ity (

MW

)

YEAR

The energy generation

equivalent is about 1.1 aMW

• Installations total

approximately 0.08% of

retail load

• Residential and

community solar

| 31

I-502 COMPLIANT CANNABIS PRODUCERSAVERAGE MONTHLY LOAD

0.0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1.0

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep

Average Monthly Load (MW)

- Estimated 0.84MW from seventeen I-502 compliant cannabis producers in Seattle.

- Due to the infancy of this customer base, current data are very rough estimates.

| 32

COMPARISON OF RECENT LOAD FORECASTS

1,100

1,110

1,120

1,130

1,140

1,150

1,160

1,170

1,180

1,190

1,200

Avera

ge M

eg

aw

att

s

2012 Forecast 2013 Forecast 2014 Forecast 2015 Forecast

| 33

ECONOMIC GROWTH PROJECTIONS FOR THE U.S.FOMC REAL GDP FORECAST

0.0

1.0

2.0

3.0

4.0

2010 2011 2012 2013 2014 2015 2016 Long Run

Q4

/Q4

%

ch

an

ge

Actual June 2010 June 2011 June 2012 June 2013 June 2014

| 34

WHAT’S NEXT?

• Customer loads are changing – We need to

understand why

• This is a regional problem and we are working

with regional players to understand the causes

• Last end-use load study occurred before:

oPersonal computers were popular

oCable and satellite set top boxes were in common

use

oMost common plug loads were not yet invented

| 35

WHAT’S NEXT?

• A bottom up investigation will look at issues

affecting load including:

oBuilding code & appliance standards

oLarge scale construction

oOver-achievement of energy conservation

oReduced usage due to real rate increases

oAppliance loss to natural gas fuel

oWhile small so far effects of DG Solar, EV’s, cannabis

production, etc. need study