20250403APPLICATION.pdf

RECEIVED
April 03, 2025
CHRIS BURDIN IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 9810
Street Address for Express Mail:
11331 W CHINDEN BVLD,BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF COMMISSION STAFF'S ) CASE NO. AVU-E-25-05
APPLICATION TO UPDATE INPUTS TO THE )
SURROGATE AVOIDED RESOURCE ("SAR") ) APPLICATION
MODEL AND SAR-BASED AVOIDED COST )
RATES )
Commission Staff ("Staff'), pursuant to Commission Rule of Procedure 52, the
applicable provisions of the Public Utility Regulatory Policies Act of 1978 ("PURPA"), and as
directed by Order No. 34628, respectfully applies to the Idaho Public Utilities Commission
("Commission") for an order updating inputs to the Surrogate Avoided Resource ("SAR")
Model and approving the SAR-based avoided cost rates attached to this Application.
I. BACKGROUND
The Commission calculates and publishes SAR-based avoided cost rates for qualifying
facilities("QF")that are under the applicable resource type project eligibility cap. In Order No.
32697, the Commission found it was appropriate to annually update the SAR Model with the
most recent gas forecast provided by U.S.Energy Information Administration's("EIA")Annual
Energy Outlook, specifically the Mountain Region Reference Case forecast. Subsequently, the
Commission issued Order Nos. 32737 and 32802 to clarify that the annual update of the EIA
gas forecast should occur on June 1 or within 30 days of the final release of the EIA Annual
Energy Outlook, whichever is later. Order No. 32737 at 7 and Order No. 32802 at 3.
APPLICATION 1

Since then, Staff has used this data source for the annual natural gas forecast update for
the SAR Model. However, EIA did not publish Annual Energy Outlook in 2024, because their
modeling system required substantial updates to better model hydrogen, carbon capture, and
other emerging technologies. Because that information was not published, in Case No. GNR-E-
24-01, Staff proposed using the average of AECO Hub prices, Stanfield Hub prices, Sumas Hub
prices, and Opal Hub prices from the natural gas price forecast published by Northwest Power
and Conservation Council ("NWPCC") for the annual update.
On December 9, 2024, the Commission issued Order No. 36416 approving Staffs
proposal. The Commission explained:
[O]ur approval of Staff s Application should not be interpreted as permanently
modifying the inputs and method for updating the SAR Model. Rather, this
approval shall continue only until the EIA publishes its next Annual Energy
Outlook that can be used to update the SAR Model. Additionally,we direct Staff
to notify the Commission if the EIA does not issue an Annual Energy Outlook
within the next 12 months following the service date of this final order.
Order No. 36416 at 3.
On January 29,2025,Avista Corporation, d/b/a Avista Utilities ("Company")applied to
the Commission for approval of the Company's capacity deficiency period used for calculating
avoided cost rates. Case No. AVU-E-25-02.
On March 20, 2025, Staff recommended that the Company file an updated Load and
Resource Balance("L&R")that included(1)capacity positions for 2025 using the same method
that was used in the proposed L&R, which considers planned maintenance; and(2) an exit date
of 2032 for Northeast. On March 28,2025,the Company filed Reply Comments,which included
an updated L&R based on Staff s recommendations.
II. UPDATED MODELS AND AVOIDED COST RATES
Staff updated the Company's SAR Model and its avoided cost rates based on the
proposed natural gas price forecast and the updated capacity deficiency information as
attachments to this Application:
• Avoided Cost Model Order No.XXXX ver June 1,2025 Annual Gas Update and Capacity
Deficit(AVU).xlsm;
• Attachment A Avista Avoided Cost Rates for New Contracts
• Attachment B Avista Avoided Cost Rates for Renewal Contracts
APPLICATION 2

Natural Gas Price Forecast
The updates to the natural gas price forecast use the same method approved in Case No.
GNR-E-24-01, the results of which are shown in Table No. I below. The method calculates the
average of AECO Hub prices, Stanfield Hub prices, Sumas Hub prices, and Opal Hub prices
from the 2025 natural gas price forecast published by NWPCC for the annual update in this
case.' In Order No. 36416, the Commission authorized the use of this method until the EIA
publishes its next Annual Energy Outlook that can be used to update the SAR Model. As of
April 1, 2025, the EIA has not released the Annual Energy Outlook for 2025.
Table No. 1: Proposed Natural Gas Forecast based on Four Hubs
Year AECO Sumas Opal Stanfield Average
2025 2.38 3.51 3.45 3.38 3.18
2026 2.77 4.05 4.04 3.96 3.70
2027 3.00 5.20 5.05 4.86 4.53
2028 3.21 5.55 5.41 5.21 4.85
2029 3.38 5.81 5.69 5.48 5.09
2030 3.55 5.11 5.21 5.11 4.74
2031 3.55 5.11 5.21 5.11 4.74
2032 3.79 5.44 5.57 5.48 5.07
2033 4.19 5.99 6.18 6.08 5.61
2034 4.27 6.10 6.31 6.20 5.72
2035 4.43 6.33 6.55 6.44 5.94
2036 4.51 6.44 6.67 6.56 6.04
2037 4.68 6.66 6.91 6.80 6.26
2038 5.00 7.10 7.40 7.28 6.70
2039 5.20 7.38 7.71 7.58 6.97
2040 5.42 7.68 8.04 7.91 7.26
2041 5.55 7.86 8.23 8.10 7.43
2042 5.74 8.11 8.51 8.38 7.68
2043 6.02 8.50 8.94 8.80 8.06
2044 6.31 8.90 9.39 9.24 8.46
2045 6.62 9.33 9.85 9.70 8.88
2046 6.89 9.70 10.26 10.10 9.24
2047 7.17 10.08 10.68 10.52 9.61
2048 7.46 10.48 11.12 10.95 10.01
2049 7.77 10.90 11.58 11.40 10.41
2050 1 8.08 1 11.33 12.06 11.87 1 10.83
1 Data source:"Ninth Plan Natural Gas Price Forecast"located at
hgps://www.nwcouncil.oriz/enerlz /�powep2lan/elements-and-inputs/
APPLICATION 3

Capacity Deficiency Information
Although the Commission's final order has not been issued to authorize the new capacity
deficiency date and amounts of deficiency in Case No. AVU-E-25-02, Staff proposes including
the updated capacity deficiency information in the SAR model based on the updated L&R filed
in the Company's Reply Comments in that case. Since the Company agreed with Staff s
recommendations and provided the updated capacity deficiency information in its Reply
Comments aligned with Staffs recommendations, it is likely the Commission will authorize the
updated information. However, if the Commission authorizes something different, Staff will
amend this Application with an updated SAR model and avoided cost rates based on the
approved capacity deficiency information.
III.MODIFIED PROCEDURE
Staff believes that a hearing is not necessary to consider the issues presented herein and
respectfully requests that this Application be processed by Modified Procedure; i.e., by written
submissions rather than by hearing. RP 201, et seq. If, however, the Commission determines
that a technical hearing is required, Staff stands ready to prepare and present its testimony in
such hearing.
IV. COMMUNICATIONS AND SERVICE OF PLEADINGS
Communications and service of pleadings,exhibits,orders,and other documents relating
to this proceeding should be sent to the following:
Chris Burdin Yao Yin
Deputy Attorney General Idaho Public Utilities Commission
P.O. Box 83720 P.O. Box 83720
Boise, Idaho 83702-0074 Boise,ID 83702-0074
chris.burdingpuc.idaho.gov yao. inkpuc.idaho.gov
APPLICATION 4

V. REQUEST FOR RELIEF
Staff respectfully requests the Commission issue an order: (1) authorizing this matter to
be processed by Modified Procedure; (2) approving the updated SAR Model for Avista with an
effective date of June 1, 2025; and(3)approving the avoided cost rates shown in the attachments
to this Application with an effective date of June 1, 2025.
Respectfully submitted this 3rd day of April 2025.
v, I� A-
Chris Burdin
Deputy Attorney General
APPLICATION 5

CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this Yd day of April 2025, I served the foregoing
APPLICATION,in Case No. AVU-E-25-05,via E-Mail to the following:
Clint Kalich
John Lyons
Shawn Bonfield
Michael Andrea
Avista Corporation
P.O. Box 3727
1411 East Mission Avenue
Spokane, WA 99220-3727
clint.kalichO)avistacorp.com
j ohn.lyonsgavistacorp.com
shawn.bonfield(kavistacorp.com
michael.andreakavistacorp.com
avistadockets(ae,avistacorp.com
KERI J. AAWKER
Legal Assistant
APPLICATION 6