SUFG                                                                    ENERGY CENTER

Purpose of the State Utility Forecasting Group

The State Utility Forecasting Group has been in existence since 1985 when the Indiana Regulatory Commission (IURC) contracted with Purdue and Indiana Universities "…to develop and keep current a methodology for forecasting the probable future growth of the use of electricity within Indiana and within this region of the nation…." (Indiana Code 8-1-8.5).Through the years SUFG has provided analytical support to the Indiana Utility Regulatory Commission on various issues, such as those given below:

Early in its history, SUFG's role was to help the IURC determine whether or not the requests the electric utilities made to the Commission to construct new capacity were justified. More recently, SUFG's forecast modeling system has been used to measure the impact of (then) proposed federal clean air legislation on electricity costs here in Indiana relative to the rest of the nation, and to predict the likely impact of electricity utility-sponsored conservation programs - so called demand-side management programs - on the need for new capacity.

Next, as the electric industry faced the prospect of restructuring, SUFG looked at the impact that various options might have on Indiana ratepayers, investors, and other stakeholders. The result was a shift in emphasis from SUFG's forecast of likely consumption of electricity to SUFG's price forecasts under various competitive scenarios, as well as consideration of the impact of excess market power on such prices.

SUFG continues to forecast electricity consumption, prices, and new capacity needs in addition to examining the impacts of competition on the electricity industry. Also, SUFG has constructed a natural gas transportation, storage, and utilization model to determine the impact of large amounts of new natural gasified electricity generators on the overall natural gas system. Additionally, Senate Enrolled Act 29 was signed into law in 2002, which in part tasked SUFG to perform an annual study of renewable energy resources.