The Cincinnati Gas & Electric Compa

The Cincinnati Gas & Electric Company (CG&E) is a privately owned public utility serving approximately 370,000 gas customers and 600,000 electric customers. The company is service area covers approximately 3000 square miles in and around the Greater Cincinnati area. Forecasting at CG&E offers some unique perspectives compared to forecasting in other industries. Since there are no finished-goods or in process inventories of electricity, this product must be generated on demand to meet the needs of customers. Electrical shortages are not merely lost sales; they are brownouts or blackouts, with all the accompanying implications. This situation places an unusual burden on the forecaster. On the positive side, the demand for, and the sale of, energy is more predictable than for many other products. Also, unlike the situation in a multiproduct firm, a great amount of forecasting effort and expertise can be concentrated on the two products, gas and electricity.