20110114AVU to NIPPC 23-54.pdf

Avista Corp.
1411 East Mission P.O. Box 3727
Spokane. Washington 99220-0500
Telephone [phone]
Toll Free 800-727-9170
.JIVISTAO
Corp.~~~e-o,~
i;()
',"\1-
Januar 13,2011 ~õ.,
Richardson & O'Lear, PLLC
515 N. 27th St.
Boise, ID. 83702
""N
Re: Production Request of the Nortwest and Interountan Power Producers Coalition
(NPC) in Case No. GNR-E-1O-04
Dear Mr. Richardson and Mr. Adams,
Enclosed are an original of Avista's responses to NIPC production requests in the above
referenced docket. Included in this mailing are Avista's responses to production requests 23
through 54.
Also included is Avista's CONFIDENTIA response to PR 23C. This response contan
TRAE SECRET, PROPRIETARY or CONFIENTIA information and is separately fied
under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code, and pursuant to the
Protective Agreement between Avista and IPUC Staff dated Januar 5, 2011. It is being
provided under a sealed separate envelope, marked CONFIDENTIA.
If there are any questions regarding the enclosed information, please contact Michael Andrea at
[phone] or via e-mail atmichaei.andrea~avistacorp.coms~
Paul Kimball
Reguatory Analyst
Enclosures
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AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR-E-I0-04
NIPC
Production Request
NIPC-23
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Reference Avista's Initial Comments, page 9 (stating "Proposals for larger utility-scale projects,
where the developers have both the mean and sophistication to negotiate a QF rate, should be
subjected to a negotiated rate").
(a) Please provide, in electronic format, the economic model Avista proposes to use to
negotiate with developers of larger projects.
(b) Please provide a. copy of the gudclincs A vist proposes to use in said negotiations.
(c) Please explain what safeguds Avista will employ to insure tht all QFsare trated in a
non discrimnatory maner.
RESPONSE:
Please see A vista's response 23C, which contains TRAE SECRET , PROPRIETARY or
CONFIDENTIAL information and exempt from public view and is separately filed under
IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code, and pursuant to the
Protective Agreement between Avista and IPUC Staff dated Januar 5, 2011.
a. Under its IR methodology, Avista would likely propose to use its AURORA and/or
PRiSM models. Under its licensing agreements for these models, A vista canot provide the
models. A vista is wiling to work with NIPC to find a mutually acceptable way to provide the
information that it is seeking though this request. A vista notes that it can provide some curent
inputs to these models, but for any specific project the inputs to both models would be updated to
consider the latest market prices for natual gas and other assumptions being used in the IR
process. Confidential copies of final 2009 IR models are attached to this request. The fie names
are AURORA model files are "NIPC PR23C IR 2009 BaseCase Finai.mdb" and- - - - -
"NIPPC PR23C WECC Default 20081013 09AV AIBC". The PRiSM model is- - - - -
titled''NPC _PR23C _PRiSM _2.2_031309_ BaseCase.xls".
b. A vista does not have any wrtten guidelines that A vista would propose to use to negotiate
with developers oflarger QF projects. However, Avista likely would begin any such negotiation
with an "IR-based" evaluation of the project once the specifics of the project are known.
c. Such safeguards include use of Avista's IR methodology as a basis for its negotiations
with QFs. In addition, any PUR A PP A wil ultimately be subject to approval by the IPUC.
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A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01/07/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
IDAHO
GNR-E-I0-04
NIPC
Production Request
NIPC-24
REQUEST:
Referece Avista's Initial Commts, page 4 (stating "utility customers are paying developers
too much under the published rates"). Reference Rocky Mountan Power's Initial Conunents.
page 5 (stating "Roc Mountai Power is primarly concerned with the increase in power
supply costs, an the resulting increa in rates to its customers that the currnt published
avoided cost using the 8AR methodology causes...") Reference Idaho Power's initial
Comments, page 7 (stating "Idao Power is deeply concerned with the increase il power supply
costs due to these contracts, and the resulting increase in rates to its cuomers, that the curent
published avoided cost, SAR methodology, causes.")
(a) Please admit or deny tht eah utility is rered to pay QFs its full avoided cost.
(b) Plcase adit or deny th each utility is required to pay QFs its full avoided cost - even if
joing so places upwar pressue on its retal rates.
~c) If yom response in (a) is to deny, please explai the circumces under which your
utility is excused from paying QFs your ful avoided cost.
:d) If your response in (b) is to deny, please explain the circumstaces under which )OUI
itilty is excused from payig QFs full avoided eost.
RESPONSE:
a) The Federal Energy Regulatory Commission ("FERC") and has promulgated regulations
and the Idaho Public Utilties Commission ("Commission") has issued orders that implement
PUR A. A vista is an electrc utility that is subject to FERC' s regulations, including the PUR A
purchase obligation under Par 292 of the Federal Energy Regulatory Commission's regulations,
18 C.F.R. Par 292, and the Commission's orders.
b) See response to subpart a of this request above.
c) Under FERC's regulations, the rate paid for output from a QF may be less than avoided
cost under some circumstances "if the State regulatory authority (with respect to any electrc utility
over which it has ratemaking authority) or the nonregulated electrc utility determines that a lower
rate is consistent with paragraph (a) of this section, and is sufficient to encourage cogeneration and
small power productionJ" 18 C.F.R. § 292.304(b)(3). Avista further notes that, under limited
circumstances, a utilty may not be required to purchase QF output. E.g., 18 C.F.R. § 292.304(f).
d)See response to subpart c of this request.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTACORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR- E-l 0-04
NIPC
Production Request
NIPC-25
DATE PREPARD:WISS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kaich
Energy Resources
[phone]
Reference Rocky Mountan Power's Initial Comments, page 8 (stating "The Commission should
balance the desire to stimulate QF development with the mandate that customers not pay more
for QF power than for other resources."
(a) What is Rocky Mountain Power's understding of the phr "desir to stimulate QF
Development"?
(b) Pleas identify the source of that understanding in Commssion orders or otherwse.
(c) Please admt or deny tht the Commssion has a mandate to stimulate QF development.
(d) If you deny that the Commission has a mandate to stimulate QF development please
explain the source of your denial in Commssion orders or otherwse.
RESPONSE:
Ths request is directed at Rocky Mountain Power; therefore A vista canot speak for that utility.
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A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR- E-1O-04
NIPPC
Production Request
NIPC-26
DATE PREPARD:WISS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
0111012011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Reference Rocky Mountain Power's Initial Comments, page 8 (stating "The rationale for
stadard rates is to minize tranaction cost for small projects."). Reference Avista's Initial
Comments, page 8 (stating "Published rates are intended for smaller projects, in large par to
ease the administative burden of the developer in negotiating the economic component of the
QF contract.") Reference Idaho Power's Intial Comments, page 9 (stating "The more
prescriptive SAR-based published avoided cost methodology was developed and intended for
smaller projects and the more unsopmsticated developers in par to eae the adinstrtive
burden on the developer and to 'level the playig field' in negotiatig the economic components
of a QF contract.")
(a) Please explain the basis for th sttements and provide support documentation.
(b) Are you aware of any other rationale or intent for stadard rates? Ifso, pleae provide
documentation for that understanding.
(c) Please document, by category (e.g. legal, engineering, accounting) the traction costs
associated with negotiating a power purchase agreement with your utilty.
(d) Please quantify and document the difference in cost to a developer to negotiate a power
purchase agreement with your utility for a 100 kw power purchase agreement and the following:
(i) a 150 kw power purchase agreement
(ii) a 500 kwpower purchase agreement
(üi) a 1,000 kw power purchas agement
(iv) a 5,000 kw power purchase agreement
(v) a 10,000 kw power purchase agreement
(d) Pleae provide copies of all internal company manuals, guides, correspondences, policy
statements of whatever form that instrcts company personnel in how to negotiate a power
purchase agreement with a QF. Identify the company personnel who are assigned to such
negotiations.
(e) Please identify and document all efforts (if any) your utility has taken to steamline
and/?r make the QF contract negotiation process as inexpensive, tranparent and efficient as
possible.
RESPONSE:
In responding to ths data request, A vista canot and does not provide a response for any entity
other than A vista.
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a) With regard to the statement made by Avista referenced in ths data request, the
Commission has indicated that a purose of the published rate is to reduce the administrative
burden of negotiating a QF contract. E.g., Order No. 22636.
b) No.
c) A vista does not have the transaction cost data requested. The transaction costs associated
with negotiating any paricular power purchase agreement wil var depending on the
circumstances presented.
d) Please see response c) above.
d) Avista's integrated resource plan provides the basis for the "IR Methodology" for
projects too large to qualify for published avoided cost rates. Individuals involved in such
negotiations var, but generally include personnel from Avista's Power Supply Deparent. Such
personnel may include, among others, one or more of the following personnel: Bob Lafferty,
Director of Power Supply, Steve Silkworth, Manager, Wholesale Marketing and Contracts, Bil
Johnson, Wholesale Marketing Manager, Dave Miler, Wholesale Marketing Manager, and Clint
Kalich, Manager, Resource Planng and Analysis.
e) A vista has developed a standardized Project Information Request list of data requirements
for any QF request. After receiving a PUR A request, Avista sends ths standardized list to the
developer. Upon receipt of the information, Avista wil send out a draft contract to the QF
developer. Contract negotiations would ensue upon an expression of interest in finalizing a
contract by the QF developer. A vista believes that these efforts provide a streamined and efficient
PUR A contracting process. The standardized data list is attached under the fie name
''NPC _ PR_ 26 _ QF _Project_Information _ Request_ List.docx." Example draft contracts are
attched under the file names "NIPC _PR _ 26_6-24-10_ OfC System_Wind _PUR A.pdf' and
''NPC _PR _ 26_6-24-10_ On_System _ Wind _ PUR A.docx". Due to the volumous natue of these
reports, they are being provided in electronic formt only.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR-E-IO-04
NIPPC
Production Request
NIPC-27
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
01/10/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Reference Idaho Power's Initial Comments, page 9 (stating, ''hstorical 'unsophisticated' QP
project developers... ")
(a) Please identify the source of the quotation.
(b) Please define how Idaho Power uses the term "unsophisticated."
(c) Please provide a list of the QP projects with which Idaho Power has an executed power
purchase agreement that it views as being ''uophistcated.''
RESPONSE:
This request is directed at Idaho Power; therefore A vista canot speak for that utilty.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR-E-I0-04
NIPC
Production Request
NIPC-28
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01/10/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Reference RM'g Initial Comments, page 5 (referencing QF acquisition though a competitive
bidding process).
(a) Please admt or deny that the Idao PUC ha~ never promulgated competitive bidding
rules or guidelines applicable to utilty resource acquisitions.
RESPONSE:
This request is directed at Rocky Mountain Power; therefore A vista canot speak for that utilty.
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AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR-E-I0-04
NIPC
Production Request
NIPC-29
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Reference Idaho Power's Initial Comments, page 7 (stating "The additional 678 MW of signed
QF wid contracts that have been submitted to the Commssion represent a tota payment amount
of over $3.9 bì1ion over the 20-year term ofthe agreements. . . . For comparison, Idaho Power's
tota approved rate base is just over $2 bilion.")
(a) Please explain the relationship between Idaho Power's rate base and payments to wind
QFs.
(b) Pleae admit or deny that a more logical comparson would be between Idaho Power's
revenue requirement over the same period?
(c) What is Idaho Power's curent anua revenue requirement? Please compare Idaho
Power's estimated revenue requirement over the next twenty years, assumg a 1.5% rate òf
infation with the $3.9 bilion number referenced above.
(d) Pleae identiy the dollar amount Idaho Power will have avoided paying the identied
QFs due to the wind integration discount from its full avoided cost rate, over the 20 year life the
agreements.
(e) Please explain whether Idaho Power's revenue requirement over the 20 year period may
increase or decrease with changcs in market factors, such as gas prices and future envionmental
regulation. Please explain whether the rates owed to the wind QF developers may change over
the 20 year life the ageements due to market factors.
RESPONSE:
This request is directed at Idaho Power; therefore Avista canot speak for that utility.
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION.JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR- E-l 0-04
NIPC
Production Request
NIPPC-30
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Reference Idao Power's Initial Comments, page 10 (stating "A system specific analysis, such as
the IR-based methodology, that considers the characteristcs of the specific resource under
question is necessa to determe a more accurte assessment of the costs avoided as a result of
adding a specific PURP A resource. A tre avoided cost determnation which would be
appropriate for renewable project that generate renewable energy certificates ("RECs"), would
consider the cost to the utility to develop and opeate a similar project over a 20-year perod.
Tbis would take into account the RECs, governent ta incentives, accelerated depreciation
allowances, and other similar cost incentives that the utility, and its cusomers. would have the
advantage of if the utility were to build the resource, and that curently generate a double
recovery vándfall for the QF develope,").
(a) Please reconcile the first sentece's asserton that the IRP methodology considers the
"chaacteristics of a specific resource" using a "system specific analysis" with the apparnt
assumption in the second and third sentences that a "tre avoided cost determination" assumes
that the utility itself is the developer of the project..(b) Is it Idaho Power's position that its "true avoided costs" are the costs to it to construct a
renewable project taing into account the RECs, etc.?
(c) Under the scenaro posited under the "tre avoided" cost asserton, woiild the power
purhase agrement discount from payments to the developer the value of the RECs, governent
ta incentives, accelerated depreciation and other similar cost incentives?
(d) Please explain what is meant by the phrase "double recovery windfalL." Please provide
documentation of the windfall and quantify it.
(e) Is it Idaho Power's position that federal and state authorized ta incentives ar
inappropriate? If not, then please explain the use of the phre "double recovery widfall"?
(t) If RECs were provided by a QF and RECs wer neeed by the utility, would the utility be
avoiding the cost of acquiring the RECs elsewhere? Would it be appropriate to set the PUR A
avoided cost rate at a level that reflected the avoided cost of the RECs delivered to the utlity?
Reference California Public Utilities Commission, 133 FERC 1161,059, , 26 (Oct. 21,2010)
(order denying rehearng).
(g) Is the curent SAR methodology (including the discount for wid integrtion) designed to
compensate wind QFs for the value of the RECs, or just the value of the energy and capacity
provided?
(h) Admit or deny that the value of the avoided cost rate generated in Stas strawman wind
SAR was higher than the curent published avoided cost rates authorize in Order No. 31025.
RESPONSE:
. This request is directed at Idaho Power; therefore A vista canot speak for that utility.
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AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR-E-I0-04
NIPPC
Production Request
NIPPC-31
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Reference Idaho Power's Initial Comments, page 10 (stating that a "Problem" with the SAR
methodology is that it is .'essentially static" and that "The published avoided cost rates are
updated inequently at best... ").
(a) Please identify the constraints preventing Idaho Power from seeking more frequent
updates of the SAR.
(b) Admit or deny that any Idao utility may fie a petition to update the avoided cost rates at
any tie.
(c) Pleae explain why Idaho Power, Avista and RMP are seeking to overhall the
Commission's PURP A implementation methodology rather than seeking an update of the SAR
rates?
RESPONSE:
Subpars a and b are directed at Idaho Power; therefore A vista canot speak for that utility.
c) A vista in fact does support an update to SAR rates to align them better with avoided costs.
The unique characteristics of varng QF projects make it ver diffcult to have a single rate
applicable to all QF projects. It might be acceptable for small projects to have a single rate, as the
burden of developing tre avoided costs could outweigh the benefits from more accurate rates.
However, for larger projects the discrepancies are larger and the effort of a negotiated rate is
waranted. By lowering the threshold for eligibilty to published rates customers are protected
from paying more than avoided costs for PUR A power.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO
GNR- E-l 0-04
NIPC
Production Request
NIPPC-32
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Reference Idao Power's Initial Comments, page 12 (stting "The curnt state ofPURPA
development in Idaho has created a situation where the IR planing process is being
circumvented in order to benefit independent developers wantig to build generation projects in
Idao Power's service territory.").
(a) Please explain why Idaho Power's IRP process is not robust enough to adopt to changing
circumstaces.
(b) Wht is Idaho Power's policy on incorporating potential futue PURP A projects into its
IRP load and resource planning process? Please document.
(b) Is it Idaho Power's position that the IRP is a mandate from the Commission as to how it
will develop future resources? Please explan.
RESPONSE:
Ths request is directed at Idaho Power; therefore A vista canot speak for that utility.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR-E-I0-04
NIPPC
Production Request
NIPPC-33
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Reference Idaho Power's Initial Comments, page 13 (stating "Actual performance of the wind
projects under contract to Idaho Power during the summer of 20 1 0 suggests that a 5 percent
capacity expectation is accurate.")
(a) Please provide documentation, including workpapers supporting that assertion.
RESPONSE:
This request is directed at Idaho Power; therefore Avista canot speak for that utilty.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO
GNR- E-l 0-04
NIPPC
Production Request
NIPC-34
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Reference Idaho Power's Initial Comments, page 13 (stating "However, the quatity ofPURPA
development currently heing seen in Idaho was never contemplated when the PUR A rules were
established by the Commission")
(a) What was the quantily ofPURPA development contemplated by the Commission when
the PURP A rules were established by the Commission'? Please provide supporting
documentation.
RESPONSE:
This request is directed at Idaho Power; therefore Avista canot speak for that utility.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR- E-l 0-04
NIPPC
Production Request
NIPPC-35
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
Reference Idaho Power's Intial Comments, page 14.
(a) Please provide a copy of the Operating Plan for the entire year.
RESPONSE:
01/10/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
This request is directed at Idaho Power; therefore A vista canot speak for that utility.
.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR- E-l 0-04
NIPC
Production Request
NIPC-36
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
Reference Idaho Power's Initial Comments, page 15.
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
(a) Please provide aU supportng documentation and workpapers used to prepar Figure 2.
RESPONSE:
Ths request is directed at Idaho Power; therefore Avista cannot speak for that utilty.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR- E-l 0-04
NIPC
Production Request
NIPC-37
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
Reference Idaho Power's Intial Comments, page 16.
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
(a) Please provide al supportng documentation and workpapers usd to prepare the table on
that page.
RESPONSE:
This request is directed at Idaho Power; therefore Avista canot speak for that utilty.
.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR- E-l 0-04
NIPC
Production Request
NIPPC-38
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
Reference Idaho Power's Intial Comments, page 17.
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
(a) What is the expecte impact of the planed Hemmingway to Boardman transmission
project on the transfer rights identified on that page. Please provide documentation and
workpapers supportg your response.
RESPONSE:
Ths request is directed at Idaho Power; therefore A vista canot speak for that utilty.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
IDAHO
GNR- E-l 0-04
NIPPC
Production Request
NIPC-39
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
Reference Idaho Power's Intial Comments, page 18.
01/10/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
(a) Please provide copies of the heavy and light load hour forward market forecas for the
time frame referenced in Figue 3.
RESPONSE:
This request is directed at Idaho Power; therefore A vista canot speak for that utilty.
.
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JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR-E-I0-04
NIPPC
Production Request
NIPC-40
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01/10/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Reference RMP's Attacluent to NIPPC Request 3(b), at p. 2 of 12 (stating that Mr. Bruce
Griswold stated that he "wish(ed) we (pnvate developers) would all just go away").
(a) Please adit or deny that Mr. Grswold made the statement, or a substatially similar
statement.
(b) Has Mr. Grswold ever made such a sttement, or a substatially simlar statement?
(c) Does Mr. Griswold wish private developers would just go away?
(d) Would Mr. Griswold prefer that Rocky Mountain Power build all of its own generating
resources, rather than contract with private developers?
(e) Please provide Mr. Griswold's job description and describe Mr. Grswold's
responsibilties \\'Íth regard to PURP A contracts and developments.
(f) Was Mr. Griswold speakig on behalf of Rocky Mounta Power when he made that
statement?
(g) If Rocky Mountan Power objects to (a) of ths question on grounds of hearay or denies
the statement. please provide the name, address, and phone number of the person who sent the
emaiL.
RESPONSE:
This request is directed at Rocky Mountain Power; therefore A vista canot speak for that utility.
.
.
.
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR-E-I0-04
NIPC
Production Request
NIPC-41
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Reference Idao Power':dnitial Comments, at page 19 (statig transmission upgrades for
PURA wind projects "may actually increase the cost to customers even more").
( a) Admit or deny that PURP A developer pay for interconnection costs.
(b) Admit or deny that PURPA developers in the past have paid for 75% of up front network
upgrades. and receive no refud for 25% of the costs. Reference Order No. 32136.
(c) If the response to (b) is to admit, admit or deny that under ths approved framework
ratepayers never pay for 25% of the network upgrades caused by a PUR A development. Admt
or deny that ratepayers defer payment of 50% of such Network Upgrades.
(d) Admit or deny that ratepayers pay for 100% of interconnect facilties and network
upgrades necessa to bring a Company-owned generation to load.
RESPONSE:
This request is directed at Idaho Power; therefore A vista canot speak for that utility.
.
.
.
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR-E-1O-04
NIPPC
Production Request
NIPC-42
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Rt=ference Idao Power's Initial Comments, at page 23 (stating that the average bid into the 2012
RFP was between $85/MWh and $150/MWh, compared to the curent $82.38/MWh rate being
"put" to Idao Power by wid QFs).
(a) Admt or deny that the $82.38/MWh figue does not include a reduction for the
$6.50/M\\b wind integration rate.
(b) Provide the 20-year levelized rate contag an adjustment for the wind intergration
charge curently approved by the Commission.
(c) Admit or deny that the published rates being "put" to Idaho Power hy QFs is lower than
any bids made into the RFP. If the response is to deny, please provide your estimate for value of
the RECs that may have been included, and supporting documentation for that REC value
estimate. and the rcdactcd bid.
RESPONSE:
Ths request is directed at Idaho Power; therefore A vista canot speak for that utility.
.
.
.
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR-E-I0-04
NIPC
Production Request
NIPPC-43
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Reference the wesbsite for IdaWest Energy, describing the company's 50% ownership of several
hydropower resources, available online at http:f.02e5106.netsolhost.comltablehyd.htm .
(a) Admit or deny that ldaWest Energy is a subsidiar of Idaho Power's parent company,
IdaCorp. Admit or deny the Idaho Power and Ida West Energy are affiiates.
(b) Are any of the eight hydropower projects listed currently sellng their electrcal output
under PURPA contracts? If so, identify which project and the purchasing utility. Please provide
the contracts.
(c) Does Idao Power believe that these QF projects are among the QF projects for whch
ratepayers are overpaying?
(d) Are the rates in these contracts above or below the Mid-C rates as projected on Idao
Power's graph on page 18 of its Intial Comments.
RESPONSE:
This request is directed at Idaho Power; therefore A vista canot speak for that utility.
.
.
.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR - E-l 0-04
NIPC
Production Request
NIPPC-44
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01/10/2011
Clint Kalich
Clint Kaich
Energy Resources
[phone]
REQUEST:
Reference Idaho Power's investment relations presentation dated April I, 2010, at slide 30
(stating Langley Gulch will be "Capable of integrating intermittent, alternative
resources such as wind and solar"), avalable online at
htt://ww.idacorpinc.com/pdfs/presentationsIW _Analyst_Pres _3 _10_ III.pdf.
(a) Admit or deny that Langley Gulch increases the level ofwiiid penetration the Company
can safely integrate.
(b) Admit or deny that the Company's gas peakng plants (Bennet Mountan and Oanskin)
can be used to integrate wind. Has the Company used Bennet Mountan or Danski to integrate
wid?
(c) Admit or deny that Idaho Power believed in its 2007 Wind Study that it could safely
integrate 600 10 900 MW of wind.
(d) Which of the following resources did Idaho Power consider in its 2007 Wind Study in its
determination that it could safely integrte 600 to 900 MW of wind:
(i) Langley Gulch.
(ii) Bennet Mountan.
(iii) Danskin.
(e) Considering al of the resources in (ù), what level of wind penetration does Idaho Power
believe it can safely integrate?
RESPONSE:
This request is directed at Idaho Power; therefore A vista cannot speak for that utility.
.
.
.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR-E-1O-04
NIPPC
Production Request
NIPC-45
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01/10/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Reference Idaho Power's Intial Comments at page 18 (containing a graph of Mid C prices and
light load PURPA rates).
(a) Did Idao Power adjust the amount of wind onlie for the online dates set in the contrcts
before the Commssion, many of which are not projected to come online until 2013 or 2014?
Provide supportng documentation.
(b) Explain how Idaho Power generated the Mid-C price profie. Can Idao Powcr entcr into
a 20-year contract today for energy and capacity at the rates contaned for Mid-C prices?
(c) Admit or deny that Idaho Power concluded in its most recent wind integrdtion study that
wid integration charges decrease as market prices decrease.
(d) Please explain why in Idaho Power's 2007 wind integration study, Idaho Power proposed
to use "historic" Mid-C prices, including average prices from 2000 at i 32/Wh, but in the grph
in Idaho Power's Initial Comments it uses the Mid-C prices from 2010. Reference Enernex 2007
Idao Power Wind Study, at p. 5.
(e) Admit or deny that Mid-C prices between now and 2020, or 2031, are unpredictable, and
could be signficantly higher than those in Idao Power's graph.
(f) Please generate the same graph with a Mid-C price cure from the dates used in Idao
Power's 2007 wind study -- 1998,2000, and 2005. Reference Enemex 2007 Idaho Power Wind
Study, at p. 5. Please also adjust the PURA rate to include the wid integration charge.
RESPONSE:
This request is directed at Idaho Power; therefore A vista canot speak for that utilty.
.
.
.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR-E-I0-04
NIPC
Production Request
NIPPC-46
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01/10/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Reference Order No. 30892, p. 6 (estimating tht Langley Gulch will cost $126/M); see also
Comments a/the Commission Staff Case No. IPC-E-09-34, p. 9 (May 3, 2010) (stating Langley
Gulch's levelized cost wil be $1 1 l.13/MWh).
(a) Provide updated levelized price estimates for Langley Gulch in $/MWh ratepayers wil
pay for its output. If the estimate is substatially different from those quoted above, please
explain why.
(b) Please explain whether the estimate in (a) is greater or less th the curent, published
avoided cost rates.
(c) Please explain whether the estimate in (a) is greater or less th the rates that would be
generated for a QF project in the IRP method.
(d) Please use the inputs fur the Langley Gulch plat into the IR methodology, and provide
the avoided cost rate that the IRP methodology would generate for Langley Gulch.
(e) If the rates customers will pay for Langley Gulch are higher than the rates generated in
either (or both) of the two PURP A methodologies approved by the Idaho Commission, is it fai
to say that ratepayers are payig a premium for a Company-owned resource? Pleae explain.
(f) Why would the rates generated in a surogate model for a CCCT be different from the
rates charged to ratepayers for Idaho Power's own CCCT it is curently building?
(g) With regard to A vista why are the rates different in the SAR th for the Lancaster
Plant? Are the Lancaster rates greater or lower than the SAR rates? Please explain.
RESPONSE:
Sub-pars a-fare directed at Idaho Power; therefore A vista canot speak for that utility.
g. Avista notes that Order 30892 has no reference to its Lacaster Plant. However, the rates
for the SAR are different than for the Lancaster plant for varous reasons. The Lancaster
acquisition is a good example of the importance of acquiring larger projects at market-competitive
rates. As explained in Avista's testimony in Case No. A VU-E-09-01, the Lancaster acquisition
was made at a cost of approximately $550 per kW. This value is approximately half of the SAR
assumption for capacity cost. Due to this significantly lower purchase price, the Lancaster rates
are lower than the SAR rates.
.
.
.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
IDAHO
GNR-E-I0-04
NIPC
Production Request
NIPC-47
REQUEST:
(a) Admit or deny that QF contracts impose no fuel cost risk on the utility or its ratepayers.
(b) Admt or deny that the ful cost for Bridger increased in the 2010 NPSE and peA filings;
and that the Commission authorized recovery for that increase from ratepayers.
(c) Admit or deny that PGE estimated that the Boardman coal plant will need $510 milion in
upgrades to operate in environmenta compliance unti12040.
(d) Please provide the cost to Idaho Power for upgrdes to Boardman PGE has proosed under
Bar III, for operation though 2020. Admt or deny that Boardman could shut down before 2020
if the Sierra Club lawsuit in federal cour is successfu.
(e) Wil Idao Power ratepayers pay for Boardman expenses and pollution control upgrades
necessar to operate until 2020? Wil Idaho Power ratepayers pay for any capitaized expenses
associated with Boardman regardless of whether the plant closes in 2020, or some earlier date?
RESPONSE:
a) QF contracts might or might not impose fuel cost risk on the utilty and its ratepayer,
depending upon which rate strctue the QF selects.
Sub-pars b-e are directed at Idaho Power; therefore Avista canot speak for that utility.
.
.
.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
IDAHO
GNR- E-l 0-04
NIPC
Production Request
NIPPC-48
REQUEST:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
Is it possible that Boardman, Bridger, Valey, or any ofRMP's coal plants could experience
increased costs as a result of ongoing EPA ruemang proceedings regarding coal waste, or
hazdous ai pollutts, or any other new environmenta reguations? Wil your utilty pass any
increased costs onto ratepayers? Provide all internal studies regardig risk analysis for suh
futue regulations.
RESPONSE:
Ths request is directed at Idaho Power; therefore A vista canot speak for that utility.
.
.
.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
IDAHO
GNR-E-I0-04
NIPC
Production Request
NIPPC-49
REQUEST:
If a wind QF were forced to face increased costs. or cease or curtil operation for environmenta
compliance reasons. do the wind QF contracts allow for wind QFs to increase the rates collected
from the utility and Its ratepayers? Please explain how ths compares to the Company-owned
thermal, hydro, and renewable resources of each utilty.
RESPONSE:
No. To the extent a QF faces increasing or falling prices the rate collected from the utility and its
customers wil remain the same. To the extent that costs rise to a point where the contract rate is
not high enough to support continued QF operations, there are options available to the QF that are
not available to the utility. For example, the QF may have the option to declare banptcy and
discontinue providing power to the utility at its option.
As a utility, our obligation to serve remains and we wil be required to do whatever the most
prudent action is at that time to miniize customer costs. Where actual costs are lower than
expected costs, a utility's rates generally decrease to reflect ths benefit to customers. Where a
utility's actual costs are higher than expected the utilty's rates wil general increase to reflect this
cost. Any decrease or increase in a utility's rates is subject to Commssion authorization. Unlike
QFs , utility power costs are biled based on actual expenses.
.
.
.
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR- E-l 0-04
NIPPC
Production Request
NIPPC-50
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01/10/2011
Clint Kaich
Clint Kalich
Energy Resources
[phone]
Please explain how the avoided cost rate relates to the cost of new resources built by the utlity.
Is it reasonable and prudent for the utilitiy to build a new resource when the cost of that resource
wil exceed the avoided cost it would pay to a QF? Should the Commission ever approve a non-
PUR A resource tht has a higher cost than the avoided cost at the time of approval of CPCN?
Please explain.
RESPONSE:
Resources built or acquired by the utility may be instrctive on the avoided cost to be paid by the
utilty. It is, however, possible that the rate paid for the output of a QF wil be different than the
costs associated with a utilty purchase or build option. For example, the rate paid to a wind QF for
its output without any renewable energy credits (RECs) should be lower than that of a utility-built
wind project where the utility receives the full output, including RECs. Similarly, rates paid to a
wind QF should be different than the rates paid to a gas-fired generator QF, because the costs
avoided are different and the gas-fired generator provides energy and capacity whereas a wind
project generally provides only energy.
Avista canot comment specifically on CPCN, as ths term has not been defined in this request.
.
.
.
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR- E-l 0-04
NIPC
Production Request
NIPC-51
DATE PREPARD:WISS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01/10/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
When your utility anlyzes new resources in its IRP proccss, does it compar the cost to the
PUR A avoided costs? Does it use the published avoided cost rate schedule, or does it ru the
"IR method" for the utilty's proposed resource to determe if the resource is cost-effective?
Please explain and provide supportng documents of instances where the utility has compared the
cost of its proposed resources to the avoided cost provided to QFs under and above 10 aMW in
size.
RESPONSE:
The IR process provides information that is instrctive in establishing an avoided cost rate.
A vista does not generally compare any of its proposed resources to the avoided costs provided to
QFs.
.
.
.
A VISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR- E-l 0-04
NIPPC
Production Request
NIPPC-52
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Considering all applicable Commission Orders, what were the published avoided cost rates in
effect for the time period from December 14, 2010, to the date of ths production request? What
is the eligibility cap for availability of those rates dunng the same time period - 10 aMW, 100
kw, or some other amount? Is the response different for different QF resource tyes? Please
explain.
RESPONSE:
Avista's avoided cost rates are provided in Avista's Schedule 62 (attached) and in Commission
Order 31025. Avista, in a joint motion filed with Idaho Power Company and PacifiCorp dba
Rocky Mountain Power in ths docket, requested that the Commission reduce the published
avoided cost rate eligibility from 10 aM to 100 kW effective immediately. The Commission
Staff has submitted comments in this docket in which it has recommended that, while its
investigation is underway, the Commission lower the published avoided cost rate eligibility cap
from 10 aM to 100 kWto be effective as of December 14, 2010. Accordingly, the actual level of
the published avoided cost rate eligibility cap during the time frames referenced in this data request
as well as the resource types for which a reduced eligibility cap wil apply are curently open issues
to be decided by the Commission in ths proceeding.
.
.
.
I.P.U.C. No.28
Second Revision Sheet 62
Replacing
First Sheet 62 62
AVISTA CORPORATION
d/b/a Avista Utilties
SCHEDULE 62
COGENERATION AND SMALL POWER PRODUCTION SCHEDULE - IDAHO
AVAILABLE:
In all the electric territory served by the Company in the State of Idaho.
APPLICABLE:
To any Customer who installs and owns facilties on property owned by the
Customer for the purposes of generating electric energy in parallel with the Company's
system. To be eligible under this tariff the facilty must qualify as a cogeneration
facilty or a small power production facilty pursuant to Section 201 of the Public Utilty
Regulatory Policies Act of 1978, or be eligible for the net metering option defined on
Sheet 62B. For output from qualifying facilities, this tariff wil be limited to qualifying
facilties with a generation capacity no more than 10 average megawatts in any given
month. Customers sellng electric energy from a qualifying facility to the Company
under this tariff wil be required to enter into a written agreement with the Company which
may be subject to the approval of the Idaho Public Utilties Commission and the
Washington Utilities and Transportation Commission. In addition, any such written
agreement relying upon the rates in this tariff shall contain language providing for security,
if applicable, against the potential overpayment existing should the Customer's generating
facilities fail to perform as contracted.
DEFINITIONS:
"Customer" as used herein means any individual, partnership, corporation,
association, governmental agency, political subdivision, municipality or other entity.
"Cogeneration facility" means equipment used to produce electric energy and forms
of useful thermal energy (such as heat or steam), used for industrial, commercial,
heating, or cooling purposes, through the sequential use of energy.
"Daily Shape Adjustment" means an adjustment to rates based on a difference
between on-peak (6 am to 10pm) rates and off-peak (10 pm to 6 am) rates of $5 per
megawatt hour. The Daily Shape Adjustment increases the on-peak rate and decreases
the off-peak rate such that the difference between the on-peak and off-peak rate is
$5/MWh and the average rate weighted by the number of on-peak and off-peak hours is
equal to the unadjusted avoided cost.
"Facility," also referred to as Electrical Generating System (EGS), means the source
of electricity owned by the Customer that is located on the Customer's side of the PCC,
and all facilities ancillary and appurtenant thereto, including interconnection equipment,
which the Customer requests to interconnect to the Company's distribution system.
"In-Service Date" means the date on which the Facility and System Modifications (if
applicable) are complete and ready for service, even if the Facilty is not placed in service
on or by that date.
"Interconnection Service Agreement" is an agreement for interconnection service,
between the Customer and the Company. The agreement also includes any
amendments or supplements thereto entered into by the Customer and the Company.
Issued June 16, 2006 Effective August 10, 2006
Issued by Avista Utilities
By Kelly O. Norwood VP, State & Federal Regulation
.I.P.U.C. No. 28
Second Revision Sheet 62A
Replacing
First Sheet 62A 62A
AVISTA CORPORATION
dba Avista Utilties
.
SCHEDULE 62 - continued
"Market Energy Rate" means an energy price that shall be 85 percent (85%) of the
weighted average of the daily on-peak and off-peak Dow Jones Mid-Columbia Non-Firm
Index (Dow Jones Mid-C Non-Firm Index) prices for non-firm energy.
"Net metering" means measuring the difference between the electricity supplied by an
electric utility and the electricity generated by a customer-generator that is fed back to the
electric utilty over the applicable billng period.
"Network Distribution System (Area or Spot)" means the electrical service from a
distribution system consisting of one or more primary circuits from one or more
substations or transmission supply points arranged such that they collectively feed
secondary circuits serving one (a spot network) or more (an area network) Avista Utilties
customers.
"Point Of Common Coupling (PCC)" means the point where the Customer's local
electric power system connects to the Company's distribution system, such as the
electric power revenue meter or at the location of the equipment designated to interrupt,
separate or disconnect the connection between the Customer and the Company.
"Qualifying Facilty" is a cogeneration facility or a small power production facilty
which meets the PURPA criteria from qualification set forth in Subpart B of Part 292,
Subchapter K, Chapter 1, Title 18, of the Code of Federal Regulations.
"Seasonal Factors" means a seasonal weighting of .84 for the period March through
June, and 1.08 for the period July through February.
"Small power production facility" means the equipment used to produce electric
energy solely by the use of biomass, waste, solar power, wind, water or any other
renewable resource.
POWER RATES:
The Company agrees to pay the following rates for the purchase of power from
Customers to whom this tariff applies. The following rates are for power delivered to the
Company's system. These rates are adjusted periodically and are on file with the Idaho
Public Utilities Commission.
(1) Standard Fueled Firm Energy Rate - The rates shall apply to natural gas fueledprojects depending upon the on-line operation date and term of the agreement
when the Customer agrees to supply firm energy deliveries under contract. The
fixed component rate shall be fixed for the term of the agreement. The adjustable
component rate shall be changed periodically subject to Idaho Public Utilty
Commission orders. Both the fixed and adjustable rate components are subject to
Seasonal Factors and Daily Shape Adjustment. The resultant rate shall be applied
to the project output for all kilowatt-hours up to 10 average megawatts in any given
month.
Issued June 16, 2006 Effective August 10, 2006.
Issued by Avista Utilities
By Kelly O. Norwood VP, State & Federal Regulation
.
.
.
I.P.U.C. No. 28
Third Revision Sheet 628
Replacing
Second Sheets 628 628
AVISTA CORPORATION
dba Avista Utilities
SCHEDULE 62 Continued
(2) Optional Fueled Firm Energy Rates for Non-Levelized Contracts - These average
rates shall apply to natural gas fueled projects when the Customer agrees to
supply firm energy deliveries in each year as specified under a non-Ievelized
contract. The fixed component rate shall be fixed for the term of the agreement.
The adjustable component rate shall be changed periodically subject to Idaho
Public Utilty Commission orders. Both the fixed and adjustable rate components
are subject to Seasonal Factors and Daily Shape Adjustment. The resultant rate
shall be applied to the project output for all kilowatt-hours up to 10 average
megawatts in any given month.
(3) Nonfirm Energy Rate - The Nonfirm Energy Rate shall be applicable when the
Customer agrees to provide energy deliveries on a nonfirm, contracted basis.
The Nonfirm Energy Rate shall be the lower of the Firm Energy Rate for Non-
Levelized Contracts or the Market Energy Rate. The rate is subject to a
Seasonal Factor and Daily Shape Adjustment.
(4) Standard Non-Fueled Firm Energy Rates - These rates shall apply depending
upon the on-line operation date and term of the agreement when the Customer
agrees to supply firm energy deliveries under contract. These rates shall only
apply to non-natural gas fueled projects, (e.g., wind, solar, hydro). The rates
shall be fixed for the term of the agreement. The rate is subject to a Seasonal
Factor and Daily Shape Adjustment. The resultant rate shall be applied to the
project output, for all kilowatt-hours up to 10 average megawatts in any given
month.
(5) Optional Non-Fueled Firm Energy Rates for Non-Levelized Contracts - Theseaverage rates shall apply when the Customer agrees to supply firm energy
deliveries in each year as specified under a non-Ievelized contract. These rates
shall only apply to non-natural gas fueled projects, (e.g., wind, solar, hydro). The
rates shall be fixed for the term of the agreement. The rate is subject to a Seasonal
Factor and Daily Shape Adjustment. The resultant rate shall be applied to the
project output, for all kilowatt-hours up to 10 average megawatts in any given
month.
Issued June 16. 2006 Effective August 10, 2006
Issued by
8y
Avista Utilities
Kelly O. Norwood VP, State & Federal Regulation
\.
.
.
.
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
REQUEST:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
IDAHO
GNR-E-I0-04
NIPPC
Production Request
NIPPC-53
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMENT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
What is the curently filed rate for published avoided cost rates curently in effect, as
contemplated in 18 CFR 292.304( c) (1) & (2)? What is the eligibilty cap for that rate for your
utilty?
RESPONSE:
Avista's avoided cost rates are provided in Avista's Schedule 62 (attached) and in Commission
Order 31025. Avista, in a joint motion filed with Idaho Power Company and PacifiCorp dba
Rocky Mountain Power in this docket, requested that the Commission reduce the published
avoided cost rate eligibilty from 10 aM to 100 kW effective immediately. The Commission
Staffhas submitted comments in this docket in which it has recommended that, while its
investigation is underway, the Commission lower the published avoided cost rate eligibility cap
from 10 aM to 100 kW to be effective as of December 14, 2010. Accordingly, the actual level of
the published avoided cost rate eligibility cap is currently an open issue to be decided by the
Commission in this proceeding.
.
.
.
I.P.U.C. NO.28
Second Revision Sheet 62
Replacing
First Sheet 62 62
AVISTA CORPORATION
d/b/a Avista Utilties
SCHEDULE 62
COGENERATION AND SMALL POWER PRODUCTION SCHEDULE - IDAHO
AVAILABLE:
In all the electric territory served by the Company in the State of Idaho.
APPLICABLE:
To any Customer who installs and owns facilities on property owned by the
Customer for the purposes of generating electric energy in parallel with the Company's
system. To be eligible under this tariff the facilty must qualify as a cogeneration
facilty or a small power production facility pursuant to Section 201 of the Public Utilty
Regulatory Policies Act of 1978, or be eligible for the net metering option defined on
Sheet 62B. For output from qualifying facilties, this tariff wil be limited to qualifying
facilities with a generation capacity no more than 10 average megawatts in any given
month. Customers sellng electric energy from a qualifying facility to the Company
under this tariff wil be required to enter into a written agreement with the Company which
may be subject to the approval of the Idaho Public Utilities Commission and the
Washington Utilties and Transportation Commission. In addition, any such written
agreement relying upon the rates in this tariff shall contain language providing for security,
if applicable, against the potential overpayment existing should the Customer's generating
facilities fail to perform as contracted.
DEFINITIONS:
"Customer" as used herein means any individual, partnership, corporation,
association, governmental agency, political subdivision, municipality or other entity.
"Cogeneration facility" means equipment used to produce electric energy and forms
of useful thermal energy (such as heat or steam), used for industrial, commercial,
heating, or cooling purposes, through the sequential use of energy.
"Daily Shape Adjustment" means an adjustment to rates based on a difference
between on-peak (6 am to 10pm) rates and off-peak (10 pm to 6 am) rates of $5 per
megawatt hour. The Daily Shape Adjustment increases the on-peak rate and decreases
the off-peak rate such that the difference between the on-peak and off-peak rate is
$5/MWh and the average rate weighted by the number of on-peak and off-peak hours is
equal to the unadjusted avoided cost.
"Facilty," also referred to as Electrical Generating System (EGS), means the source
of electricity owned by the Customer that is located on the Customer's side of the PCC,
and all facilities ancilary and appurtenant thereto, including interconnection equipment,
which the Customer requests to interconnect to the Company's distribution system.
"In-Service Date" means the date on which the Facility and System Modifications (if
applicable) are complete and ready for service, even if the Facility is not placed in service
on or by that date.
"Interconnection Service Agreement" is an agreement for interconnection service,
between the Customer and the Company. The agreement also includes any
amendments or supplements thereto entered into by the Customer and the Company.
Issued June 16, 2006 Effective August 10, 2006
Issued by Avista Utilities
By Kelly O. Norwood VP, State & Federal Regulation
.
.
.
I.P.U.C. No. 28
Second Revision Sheet 62A
Replacing
First Sheet 62A 62A
AVISTA CORPORATION
dba Avista Utilties
SCHEDULE 62 - continued
"Market Energy Rate" means an energy price that shall be 85 percent (85%) of the
weighted average of the daily on-peak and off-peak Dow Jones Mid-Columbia Non-Firm
Index (Dow Jones Mid-C Non-Firm Index) prices for non-firm energy.
"Net metering" means measuring the difference between the electricity supplied by an
electric utilty and the electricity generated by a customer-generator that is fed back to the
electric utility over the applicable billing period.
"Network Distribution System (Area or Spot)" means the electrical service from a
distribution system consisting of one or more primary circuits from one or more
substations or transmission supply points arranged such that they collectively feed
secondary circuits serving one (a spot network) or more (an area network) Avista Utilities
customers.
"Point Of Common Coupling (pCC)" means the point where the Customer's local
electric power system connects to the Company's distribution system, such as the
electric power revenue meter or at the location of the equipment designated to interrupt,
separate or disconnect the connection between the Customer and the Company.
"Qualifying Facility" is a cogeneration facilty or a small power production facility
which meets the PURPA criteria from qualification set forth in Subpart B of Part 292,
Subchapter K, Chapter 1, Title 18, of the Code of Federal Regulations.
"Seasonal Factors" means a seasonal weighting of .84 for the period March through
June, and 1.08 for the period July through February.
"Small power production facility" means the equipment used to produce electric
energy solely by the use of biomass, waste, solar power, wind, water or any other
renewable resource.
POWER RATES:
The Company agrees to pay the following rates for the purchase of power from
Customers to whom this tariff applies. The following rates are for power delivered to the
Company's system. These rates are adjusted periodically and are on file with the Idaho
Public Utilities Commission.
(1) Standard Fueled Firm Energy Rate - The rates shall apply to natural gas fueledprojects depending upon the on-line operation date and term of the agreement
when the Customer agrees to supply firm energy deliveries under contract. The
fixed component rate shall be fixed for the term of the agreement. The adjustable
component rate shall be changed periodically subject to Idaho Public Utilty
Commission orders. Both the fixed and adjustable rate components are subject to
Seasonal Factors and Daily Shape Adjustment. The resultant rate shall be applied
to the project output for all kilowatt-hours up to 10 average megawatts in any given
month.
Issued June 16, 2006 Effective August 10, 2006
Issued by
By
Avista Utiities
Kelly O. Norwood VP, State & Federal Regulation
1
.
.
.
I.P.U.C. No. 28
Third Revision Sheet 628
Replacing
Second Sheets 628 628
AVISTA CORPORATION
dba Avista Utilties
SCHEDULE 62 Continued
(2) Optional Fueled Firm Energy Rates for Non-Levelized Contracts - These averagerates shall apply to natural gas fueled projects when the Customer agrees to
supply firm energy deliveries in each year as specified under a non-Ievelized
contract. The fixed component rate shall be fixed for the term of the agreement.
The adjustable component rate shall be changed periodically subject to Idaho
Public Utility Commission orders. Both the fixed and adjustable rate components
are subject to Seasonal Factors and Daily Shape Adjustment. The resultant rate
shall be applied to the project output for all kilowatt-hours up to 10 average
megawatts in any given month.
(3) Nonfirm Energy Rate - The Nonfirm Energy Rate shall be applicable when the
Customer agrees to provide energy deliveries on a nonfirm, contracted basis.
The Nonfirm Energy Rate shall be the lower of the Firm Energy Rate for Non-
Levelized Contracts or the Market Energy Rate. The rate is subject to a
Seasonal Factor and Daily Shape Adjustment.
(4) Standard Non-Fueled Firm Energy Rates - These rates shall apply depending
upon the on-line operation date and term of the agreement when the Customer
agrees to supply firm energy deliveries under contract. These rates shall only
apply to non-natural gas fueled projects, (e.g., wind, solar, hydro). The rates
shall be fixed for the term of the agreement. The rate is subject to a Seasonal
Factor and Daily Shape Adjustment. The resultant rate shall be applied to the
project output, for all kilowatt-hours up to 10 average megawatts in any given
month.
(5) Optional Non-Fueled Firm Energy Rates for Non-Levelized Contracts - These
average rates shall apply when the Customer agrees to supply firm energy
deliveries in each year as specified under a non-Ievelized contract. These rates
shall only apply to non-natural gas fueled projects, (e.g., wind, solar, hydro). The
rates shall be fixed for the term of the agreement. The rate is subject to a Seasonal
Factor and Daily Shape Adjustment. The resultant rate shall be applied to the
project output, for all kilowatt-hours up to 10 average megawatts in any given
month.
Issued June 16, 2006 Effective August 10, 2006
Issued by Avista Utilties
8y Kelly O. Norwood VP, State & Federal Regulation
.
.
.
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMTION
JUSDICTION:
CASE NO:
REQUESTER:
TYE:
REQUEST NO.:
IDAHO
GNR - E-l 0-04
NIPPC
Production Request
NIPPC-54
DATE PREPARD:
WITSS:
RESPONDER:
DEPARTMNT:
TELEPHONE:
01110/2011
Clint Kalich
Clint Kalich
Energy Resources
[phone]
REQUEST:
Reference Avista (Initial Comments page passim) RMP (Iitial Comments passIm) Idaho Power
(Initial Comments passim) to the effect that the curnt SAR methodology and rate eligibilty cap
requiement is causing the utilties to incur higher power supply costs that they otherwse would
incur.
(a) Pleas explain why it is reasonable for your utility to insist on a $45 delay liquid securty
deposit that is designed to prevent developers from delaying the on line date in their power
purchase agreements.
(b) Please provide all workpapers, studies, notes memorada or any other documents that
were used; (i) to calculate the $45 delay liquid securty number and (ii) in the decision makng
process to insert it in your draf power purchase agreemenis with developers.
(c) Pleae identify damages your utility would incur per MW were the QFs referenced in
your Initial Comments were to delay their on line date by one yea, by two years and by thee
years.
RESPONSE:
a) A vista could suffer substantial costs if a PUR A resource that it has a contract with does
not achieve commercial operation within the time provided in the contract. A vista canot
accurately anticipate in advance what all of the costs that it wil incur may be. However, for
example, anytime a PUR A contract is executed, Avista reflects the contract in its Loads and
Resources tabulations and IR work. A vista relies on the PUR A resource to be operational and
available within the time provided in the PUR A contract. Accordingly, Avista does not make
efforts to procure resources to fill the need that Avista expects the PURA resource to fulfill. To
the extent a PUR A contract is not honored, A vista will have to replace the generation with
another resource on short notice and potentially at higher cost.
b) A vista notes that the $45 delayed liquidated damages provision has been accepted by the
Commission in previous PUR A contracts. In support of its 2009 Request for Proposals for
renewable energy, Avista asked its independent evaluator to provide a market assessment of
damage provisions for inclusion in Avista's RFP contracts. The independent evaluator's results,
as well as other contracts approved by the Commission, were relied upon in developing the $45
number. The memorandum from the independent evaluator is attached to this response.
c)See response to subpars a and b above.
.
.
.
Security Requirements - Industry Examples
Merrmack Energy has attempted to identify the level and approaches used by other
utilities for establishing security levels in renewable energy procurement and contracts.
The utilties reviewed include the following:
. PG&E
. Southern Californa Edison
. San Diego Gas and Electric
. Hawaiian Electrc
. Public Service Company of Colorado
. Sierra Pacific
. Public Servce of Oklahoma/Southwestern Electrc Power Company (AEP)
. Southwester Public Servce Company
. Delmara Power
. Arzona Public Service Company
The strctue and level of security differs widely between utility. For example, utilties
have used four different strctues for operating perod security requirements:
. Months of revenues
. Securty based on nameplate or maximum capacity as a $/kW level
. Securty based on a $/M figue based on the amount of anual generation
. Fixed dollar amount determned though negotiations
We have also reviewed Decision 07-02-011, Opinion Conditionally Accepting
Procurement Plans for 2007 RPS Solicitations. In that decision, the Commission
declined to accept CalWEA's proposal to limit the delivery term securty requirement in
renewable RFO's to two months of revenues. The Commission stated that "absent
compellng evidence, operating collateral of5% (of revenues, i.e., 12 months of revenues
for a 20-year power purchase agreement) does not appear uneasonable" and that it was
inclined to allow the utilities reasonable flexibilty regarding collateral.
1 The
Commission also expressed interest in further information on "the equitable and efficient
package of contract elements to address risk and risk-sharng concerns" and the potential
impact on the utilities' ability to meet the RPS program's requirements.2
Ou objective is to identify a range of industr practices on securty. Since the ways in
which levels of security are calculated differ substantially, we have taken the standard
form security of varous utilties and have calculated the total amount of security that
would be required based on a common example of a renewable energy power purchase
agreement. For purposes of comparson we are assuming the following parameters:
i Decision 07-02-011 at 21.
2 ¡d.
NIPPC PR 54 Attachment 1
.
.
.
. 100MWbid
. 30% capacity factor
. Bid price equals $90/M
. Total anual generation is 262,800 MW
The results are ilustrated below. As noted the required amount of securty vares
significantly by utilty.
Exhibit 1: Sample Operatig Period Security Levels by Utity
Utity Security Level Security Security
and Structure Requirements Requirements
Based on One (S/kWequivalent)
Year or
Revenues, if
applicable
PG&E 2007 RFO Development $23,652,000 $236.52/kW
period securty is
$20/kW times the
greater of the
capacity factor or
.5. The Operating
period securty is
six months of
revenue for a 10
year contract; Nine
months of revenue
for a 15 year
contract and One
year of revenue for
a 20 year contract.
PG&E 2009RFO Development
period securty is
$15/kWupon
contract execution.
Development
securty is
$100/kW times the
capacity factor
(minimum of
$50/kW) once the
contract is
approved by the
CPUC
NIPPC PR 54 Attachment 2
.
.
.
Delivery term
securty is equal to
12 months of
revenue for a 20
year contract.
Southern Californa Bidders asked to Same as PG&E for Same as PG&E for
Edison 2007 RFP bid a price based 12 months; (half as 12 months; (half as
on thee levels of much for 6 much for 6
securty: (1) $0;months)months)
(2) six months of
contract payments
based on
maximum contract
capacity or (3) 12
months of contract
payments based on
maximum contract
capacity.
Southern Californa Development
Edison 2009 RFP perod securty is
equal to $30/kW
for interittent
resources.
Delivery term
securty is equal to
5% of the value of
the total energy
payments in the
contract.
San Diego Gas and Two times $7,884,000 $78.84/kW
Electrc 2007 RFP estimated anual
production times
$15/M in place
for the entire term
of the contract
San Diego Gas and Both development
Electrc 2009 RFP period and
operating or
delivery perod
securty is equal to
2 times the
estimated anual
MWtimes
$5/M.
Public Service of $75/kW of design $7,500,000 $75/kW
NIPPC PR 54 Attachment 3
.
.
.
Colorado (2003)maximum output
Sierra Pacific (2003)$4.09/M for $1,074,852 $ 10. 75/kW
one full contract
year
Public Service of $75/kW of design $7,500,000 $75/kW
Oklahoma/Southwestern maximum output
Electrc Power
Company
Southwestern Public Fixed amount of $3,965,000 (or $49.57/kW
Serice Company and $3,965,500 for 80 $4,957,000 per 100
Llano Estacado Wind MW contract MW)
LP contract (12/2001)
Arzona Public Service $75/kW for both $7,500,000 $75/kW
Company development
period and
operating perod
securty
Delmara Power $80/kW $8,000,000 $80/kW
(second lien also
required) (2007)
Wind Energy Supply $1,050,000 for 21 $1,050,000 $50/kW
Agreement between MW
Rock Creek Power
Parners and Cheyenne
Light, Fuel and Power,
7/2001
Hawaiian Electrc Development $40/kW
Company 2008 period securty is
Renewable RFP $30/kWand
Operating Perod
Securty is
$40/kW
NIPPC PR 54 Attachment 4