where, y is the load, xi is the affecting factors, i is regression parameters with respect to xi,

and is an error term.

For this model, we always assume that the error term has a mean value equal to zero and
constant variance.
Since parameters i are unknown, they should be estimated from observations of y and xi. Let
bi (i=0,1,2,k) be the estimates in terms of i (i=0,1,2,k). Recall that the error term has a 50%
chance of being positive and negative respectively, we omit this term in calculating parameters,
that means:
y b0 b1 x1 b2 x2 bk xk

(8)

Then, we use the least square estimates method which minimizes the sum of squared
residuals (SSE) [1] to obtain the parameters bi:

B b0 b1 b2 bk ( X X )1 X Y
T

(9)

where Y and X are the following column vector and matrix:

y1
y
Y 2 and


yn

1 x11 x12 x1k

1 x
x22 x2 k
21

1 xn1 xn 2 xnk

(10)

After the parameters are calculated, this model can be used for prediction. It will be accurate
in predicting y values if the standard error s is small.
n
SSE
s
, SSE ( yi yi )2 ,
n (k 1)
i 1

yi : observed,

yi : estimated

(11)

There are also some other ways to check the validity of a regression model [1].
1.1 AR: Auto Regressive
In this model[5][6], the current value X t of the time series is expressed linearly in terms of its
previous values X t 1 , X t 2 , and a white noise series { t } with zero mean and variance 2 .
X t 1 X t 1 2 X t 2 p X t p t

(12)

By introducing the backshift operator B that defines X t 1 BX t , and consequently

X t m B m X t , equation (12) can be written in the form: