George Mason University
Fall 2016


NOVEC stands for Northern Virginia Electric Cooperative and is one of the largest electric distribution cooperatives in the country. It is a locally based and owned electric distribution system located in Manassas, Virginia. Currently, NOVEC services about 651 square miles of area with more than 6,880 miles of power lines and provides electricity to more than 155,000 home and businesses in multiple counties such as Fairfax, Loudoun, Prince William, Stafford, and Fauquier. Some of its bigger and well-known clients include Potomac Mills Outlet Mall, Verizon, and AT&T. Reliable electricity distribution is important for all these businesses to run their daily operations. As NOVEC is in the process of building a new service center in Loudoun County, a model that can predict electric usage will greatly benefit NOVEC as they start expanding their customer size in new areas.

Electricity plays an important part in running the daily lives of Americans. It is used to power schools, office buildings, and small to large corporations. Although it is seemingly an unlimited supply of energy, it actually takes careful planning ahead of time in order for suppliers to purchase electricity in advance for its customers. Many companies like NOVEC that provide electricity have to purchase enough energy a day in advance in order to meet all the demands of customers that will be using it the next day. This requires knowledge of daily and seasonal trends, but also in depth knowledge about customer's behavior patterns. It is especially difficult to predict electric usage when these companies have no information on how its customers will behave in terms of energy usage. Over predicting electric usage and buying too much energy will lead Electric Companies to incur a sunk cost that will reduce the profit it makes and waste resources while under predicting will lead to unhappy customers who will have no access to electricity in their buildings and homes. This presents a great problem for Operations Research Analyst. If there is a way to predict electricity usage for NOVEC's customers, the company will be able to purchase an efficient amount of energy to distribute to its clients.

GMU Team NOVEC's Objective:

Our objective is to analysze NOVEC's sample customer data set from a stratified survey of all of its customers and determine if this stratified sample can be used to segment its customers by their contribution towards NOVEC's peak energy usage.This can be achieved by driving variables to reflect customers' coincident usage with respect to the system peak usage. Finally, to come up with the recommended number of customer segments and the characterize the validity of those segments.