20060712AVU response to staff 1st request.pdf

Avista Corp.
1411 East Mission PO Box3727
Spokane. Washington 9922D-3727
Telephone [phone]
Toll Free 800-727-9170
RECEIVED
200G JUL I 2 AM 9: 41
IDAHO PUBLIC
UTILITIES COMMISSION
~'V'STA.
Corp.
July 11 , 2006
Jean Jewell, Secretary
State of Idaho
Idaho Public Utilities Commission
Statehouse
Boise, ID 83720
Re: Case No. A VU -06-
Avista s "Revised" Application to Incorporate Revisions to the Company s Tariff
Schedule 62, 70, and addition of a new Tariff Schedule 63.
Dear Ms. Jewell:
Enclosed for filing with the Commission pursuant to IDAP 31.01.01.228 and 229 is an
original and three copies of Avista s response to "First Production Request of the
Commission Staff to Avista Utilities" dated June 27, 2006.
Any questions regarding this filing should be directed to Bill Johnson at [phone]
or myself at [phone].
Sincerely,
Linda Gervais
Regulatory Analyst
A vista Utilities
linda. gervaisCfYavistacorp. com
cc: Cecelia Gassner
VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.
Idaho
A VU-06-
IPUC
Data Request
DATE PREPARED:
WITNESS:
RESPONDER:
TITLE:
DEPARTMENT:
TELEPHONE:
07/13/2006
William Johnson
William Johnson
Sr. Power Supply Analyst
Power Supply
[phone]
REQUEST:
Please provide data, analysis or other information to support the proposed amount of$5 per
megawatt-hour as a Daily Shape Adjustment.
RESPONSE:
The proposed amount of $5 per megawatt-hour as a Daily Shape Adjustment is a conservative
estimate of the difference in value between on-peak and off-peak prices (spread). Historically
the spread has been in the $3/Mwh to $6/MWh range. Lately the spreads have increased. The
average spread was $5.311MWh, $10.71IMWh and $9.l0/MWh in 2005 , 2006 and the first 5
months of 2006 respectively. The average spread in Avista s 2005 IRP was $8.97/MWh for the
period 2007 through 2026. The current forward markets show an average spread of
$ 1 2. 99/MWh over the next 10 years.
The proposed Daily Shape Adjustment of $5/MWh provides a measure of protection to the
Company for power purchases that are not evenly delivered across all hours and provides
incentive for power producers to deliver power during more valuable hours. Using a
conservative lower value for the Daily Shape Adjustment prevents the difference in avoided cost
rates between off-peak spring hours and the annual unadjusted rate from becoming excessive.
VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.
Idaho
A VU-O6-
IPUC
Data Request
DATE PREPARED:
WITNESS:
RESPONDER:
TITLE:
DEP ARTMENT:
TELEPHONE:
07/13/2006
William Johnson
William Johnson
Sr. Power Supply Analyst
Power Supply
[phone]
REQUEST:
Please clearly describe and provide an example of how the Daily Shape Adjustment would be
applied. Please provide suggested language that could be added to the proposed tariffs to clarify
how the Daily Shape Adjustment would be applied.
RESPONSE:
The table below shows how avoided cost rates would be calculated to include both the Daily
Shape Adjustment and the Seasonal Adjustment. The Company proposes that the Daily Shape
and Seasonal Adjustment be incorporated in the contract rate in the power purchase agreement
such that each year has four power purchase rates and the contract payments would be based on
the time of power delivery and the applicable rate for the delivery period. (In the following table
HLH means Heavy Load Hours and LLH stands for Light Load Hours.
March - June March - June July - Feb July - Feb
Non-Levelized Seasonal Adj
Avoided Cost 67%33%67%33%
Year Rates HLH LLH HLH LLH
$/MWh Dailv Shape Adi $5.$5.
2007 $53.$46.$41.$59.$54.
2008 $54.$47.$42.$61.$56.
2009 $56.$48.$43.$62.42 $57.42
2010 $57.$50.$45.$63.$58.
2011 $58.$51.$46.$65.$60.
2012 $60.$52.$47.$66.$61.
2013 $61.$53.42 $48.42 $68.$63.
2014 $63.$54.$49.$69.$64.
2015 $64.48 $55.$50.$71.$66.
2016 $65.$57.$52.$72.$67.
2017 $67.48 $58.$53.$74.$69.
2018 $69.$59.$54.$76.$71.
2019 $70.$60.$55.$77.$72.
2020 $72.$62.$57.$79.$74.
2021 $73.$63.$58.$81.49 $76.49
2022 $75.$65.$60.$83.$78.
2023 $77.$66.$61.$85.$80.
2024 $79.$68.$63.$87.$82.
2030 $80.$69.$64.$89.$84.
2031 $82.$71.$66.$91.$86.
2032 $84.$72.$67.$93.$88.
2033 $86.$74.48 $69.48 $95.$90.
2034 $88.$76.$71.$97.44 $92.44