The Council monitors its power planning assumptions on a regular basis to identify any significant changes that might affect the plan or the region. More formally, the action plan also calls for a biennial monitoring report and a mid-term check on conservation savings.
this report reflects the proposed changes in the Council’s long-term fuel price forecast. It is often difficult to distinguish short-term variations in fuel prices, which are expected and modeled in the Council’s planning, from significant long-term changes that can be expected to fundamentally alter the whole range of future expectations. The latter happen only infrequently. However, changes in the outlook for natural gas supplies in the last year appear to qualify as a fundamental shift in expectations about future natural gas supplies. The development of technologies to develop cost-effectively natural gas trapped in shale formations has changed the view of natural gas supplies from declining and constrained as we developed the Sixth Power Plan to plentiful and adequate for many decades to come. Although we recognized the possible potential of shale gas in the sixth plan, the expected cost of developing it has been reduced through technological breakthroughs so that expected future costs and prices are now lower.
After working with the Natural Gas Advisory Committee we have proposed a downward revision of our range of fuel price forecasts. A range of forecasts recognizes continued uncertainty about the development of shale gas and its costs and environmental effects as well as speed of economic recovery. Because several organizations use the Council’s price forecasts it is important that the Council recognize the changes and provide the revised forecast to the region.
