Are Load Forecasts Predictable? An Analysis of Electricity Load Forecasts Issued by the New York Independent System Operator

Open Access
Author:
Wertz, Eric Eberle
Graduate Program:
Meteorology
Degree:
Master of Science
Document Type:
Master Thesis
Date of Defense:
March 06, 2009
Committee Members:
  • Arthur Small, Thesis Advisor
Keywords:
  • load forecasts
Abstract:
A statistical evaluation was conducted of electricity demand (load) forecasts for New York City issued by the New York Independent System Operator (NYISO). Analysis focused on how the NYISO refines its initial predictions progressively as the interval between forecast and observation closes. Analysis reveals that forecast adjustments exhibit a high degree of positive serial correlation: a forecast adjustment in a given direction (e.g., upward) tends to be followed the next day by a subsequent adjustment in the same direction. The NYISO's forecast refinements are thus substantially predictable, a pattern inconsistent with efficient forecasting. Load forecasters may rationally be seeking to minimize not a standard statistical measure of error, but a financial cost of error.