Interact with a portion of a keynote presentation given by Phil Mihlmester, Executive Vice President of Global Energy at ICF International, at the 2015 Energy Efficiency Forum: Shape What’s Next. Review highlighted trends within the oil & gas markets and solar and their impacts on price fluctuations and efficiency. The Forum, an invitation-only event, was held in Scottsdale, Arizona, March 25 - 27, 2015, and brought together utility executives and energy industry leaders from across the United States to discuss strategic issues facing this sector. For more of ICF’s perspectives on energy, we recommend: Collapsing Oil Prices|Strategies & Opportunities: An ICF webinar archive that presents implications, strategies, and opportunities in the oil, natural gas, and natural gas liquids (NGL) markets due to the recent changes in oil prices. http://www.icfi.com/insights/webinars/2015/recording-collapsing-oil-prices-strategies-and-opportunities The True Value of Solar: An ICF white paper that examines the current state of value of solar (VOS) analysis and proposes a more holistic methodology that can be consistently applied across various utility service areas. http://www.icfi.com/insights/white-papers/2014/true-value-of-solar

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Oil and Gas Prices
Affect Avoided Cost
Phil Mihlmester, ICF

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Brent Crude Prices
SOURCE: Financial Times

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Potential Impacts of Lower Oil Prices on Natural
Gas Markets
• Declining oil-directed drilling activity leads to slowing growth of associated gas production.
– Not as much interest in developing liquids-rich plays.
– But, declining E&P costs will offset some of the reductions in CAPEX.
• Potential market growth may not be as significant as it would be in a higher oil price environment.
– Gas-to-oil arbitrage opportunities more limited.
– A pause in LNG export development.
– Some pullback in booming petrochemical activity.
– But, gas use for power generation still likely to grow significantly – environmentally driven and relatively
immune to oil prices.
– Likewise, Mexican exports from the U.S. still likely to experience significant growth.
• Gas prices up, NOT down – counterintuitive trend.
– Impact on associated gas production greater than demand-side impacts.

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Projected Natural Gas Use
Other
Residential
Commercial
Industrial
Power
LNG Exports
Mexican Exports
0
20
40
60
80
100
120
140
2010 2015 2020 2025 2030 2035
U.S. and Canada Gas Demand
Average Annual Billion Cubic Feet per Day
 Near-term gas market
growth comes from
LNG and Mexican
exports.
 Power sector growth
very significant.

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Shale Gas Resource Development
 Increasing demand
pushes gas above $5
per MMBtu after 2020.
 Long-term (2025) prices
are expected to rise to
$6 per MMBtu – prices
are high enough to foster
supply development to
meet growing demand,
but not so high to throttle
the market.
$0
$2
$4
$6
$8
$10
2005 2010 2015 2020 2025 2030 2035
2013$/MMBtu
Annual Average Henry Hub Price
Historical ICF Projected
Perfect Storm
Leads to
Unsustainably
Low Gas
Prices
Demand
Surge &
LNG
Exports
Ramp Up
Stable Prices
– Market
Growth and
Supply
Growth in
Lockstep
Nuclear
Retirements
Supply
Rationalization
Cold Winter
Pops 2014
Gas Price

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Regional Trends – Projected Basis (i.e., Regional
Price Differentials)
• Projected basis at Dominion
South Point continues to
remain in negative territory,
due to robust Marcellus/Utica
production growth.
• Northeast basis trends down
as new pipeline capacity
better connects the markets
with Marcellus production.
• California and Midwest basis
values gradually trend down.
-2.00
-1.00
0.00
1.00
2.00
3.00
4.00
5.00
2010 2014 2020 2025 2030 2035
2013$/MMBtu
Long-term Annual Basis Trends, 2013$/MMBtu
DSP SoCal Transco Z6 (NY) Chicago ALQ
ProjectedHistorical

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Collapsing Oil Prices: Strategies & Opportunities
Thank you for your interest in “Oil Gas Prices Affect Avoided Cost”. As a follow up to this presentation, you might
also be interested in our webinar insight called, “Collapsing Oil Prices: Strategies & Opportunities”.
In this webinar recording, ICF International experts examine implications, strategies, and opportunities in the oil,
natural gas, and natural gas liquids (NGL) markets due to the recent changes in oil prices. Discussion topics are based
on insights from ICF's suite of modeling tools.
Make sure to download your free copy today.
Collapsing Oil Prices: Strategies & Opportunities

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Distributed Solar Can
Create Opportunities
for Energy Efficiency in
a Coordinated Program
Phil Mihlmester, ICF

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Residential PV Growth to Increase Pressure on Net
Metering Programs
 Over 1.8 million
distributed PV
systems by 2018
 Over 25 GW
installed
 96% are residential
systems
 Net metering/value
of solar debates to
intensify
Source: Historical: SEIA | Projections: ICF
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
CumulativeInstalls(thousands#of
installations)
U.S. Distributed PV Installation
Commercial
Residential

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Predictable but not Coincidental with Peak –
Residential Example
Source: CPUC California Solar Initiative 2009 Impact Evaluation Final Report, June 2010.

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 Six categories of values (consistent with those identified by SEIA and the Rocky Mountain Institute) are
commonly used
 Studies often differ in their methodologies and in their selection of which issues fit into which criteria.
Net Value of Solar Cost & Benefit Categories Reviewed
Source: SEIA, Rocky Mountain Institute
Energy and Capacity
• Avoided Energy, Losses and Generation Capacity
• Avoided T&D losses and capacity
Security
• Reliability, Resiliency
Social
• Economic development (jobs, economic activity)
Grid Support Services
• Reactive supply and voltage control, regulation and frequency response, energy and generator imbalance,
synchronized and supplemental operating reserves
Financial
• Fuel Price Hedge & Market Price Response
Environmental
• Air emissions, water, and land

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Categories Included in ICF VOS Methodology
Energy
Avoided/Deferred Generation Capacity
Avoided Transmission and Distribution (T&D) Losses and
Capacity
Grid Support Services
Environment
ICF Value of Solar Methodology Categories
RMI Categories Not Included in ICF VOS Methodology
Financial
Social
Security

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Time Series Analysis (Typical Summer Day) with Solar PV at High
Load Locations – 9 AM (30%)1
No voltage violations are observed at 9:00 AM
Low Voltage Violation (<95%)
High Voltage Violation (>105%)
Normal Voltage (95% - 105%)
Source or Substation
Rooftop Solar PV Arrays
Legend
130% measured at 5pm.
Source: ICF DEEP Analysis.

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Time Series Analysis (Typical Summer Day) with Solar PV at High
Load Locations – 1 PM (30%)1 (Can EE and DR Help Mitigate these Effects?)
DISTRIBUTION SYSTEM IMPACTS
Number of low and high voltage violations are
observed at 1:00 pm
Low Voltage Violation (<95%)
High Voltage Violation (>105%)
Normal Voltage (95% - 105%)
Source or Substation
Rooftop Solar PV Arrays
Legend
130% measured at 5pm.
Source: ICF DEEP Analysis.

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The True Value of Solar
Thank you for your interest in “Distributed Solar Can Create Opportunities for Energy Efficiency in a Coordinated
Program”. As a follow up to this presentation, you might also be interested in our white paper called, “The True
Value of Solar”.
This ICF International white paper examines the current state of value of solar (VOS) analysis and proposes a more
holistic methodology that can be consistently applied across various utility service areas.
Make sure to download your free copy today.
The True Value of Solar

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Questions & Comments
Questions or comments contact:
Phil Mihlmester
Executive Vice President/Global Sector Lead-Energy
Phil.Mihlmester@icfi.com
703.934.3560