Retrospective Forecasting Using Provincial Grid Data and a Quota-Based Hybrid Physical-AI Model

The global energy transition and ongoing electricity market reforms require power grid enterprises to balance reliable power supply with increasingly stringent transmission and distribution tariff regulations. Traditional budgeting methods based on historical extrapolation often fail to reflect the physical basis of asset operations, whereas data-driven machine learning models achieve high predictive accuracy but lack the transparency required for regulatory cost verification. To address the trade-off between forecasting accuracy and interpretability, this study proposes a hybrid cost-forecasting model based on cost quotas. The framework uses standardized operating quotas as the physical budgeting baseline and incorporates a dynamic mechanism for quota evolution driven by macroeconomic conditions and technological progress. Extreme Gradient Boosting (XGBoost) is employed to capture nonlinear residuals beyond the quota-based estimates, while SHAP (Shapley Additive exPlanations) is used to interpret the contribution of key cost drivers. The model was evaluated using 16 years of anonymized operational data from a provincial power grid in China. It achieved a mean absolute percentage error (MAPE) of 2.34%, reducing forecasting errors by 61.8%, 46.6%, and 34.1% compared with SARIMAX, standalone XGBoost, and Attention-LSTM models, respectively. The proposed framework integrates engineering cost-quota principles with explainable artificial intelligence, providing both accurate long-term cost forecasts and a transparent decision-support tool for regulatory permitted-cost verification.