20120319Staff 1-10 to Avista.pdf

KRISTINE A. SASSER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 6618
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
RECEIVED
ion MAR 19 AM 9: 51
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'S
REVIEW OF PURP A QF CONTRACT
PROVISIONS INCLUDING THE SURROGATE
AVOIDED RESOURCE (SAR) AND
INTEGRATED RESOURCE PLANNING (IRP)
METHODOLOGIES FOR CALCULATING
PUBLISHED AVOIDED COST RATES.
)
) CASE NO. GNRrE-ll-03
)
) FIRST PRODUCTION
) REQUEST OF THE
) COMMISSION STAFF TO
) A VISTA CORPORATION
)
)
The Staff of the Idaho Public Utilities Commission, by and through its attorney of record,
Kristine A. Sasser, Deputy Attorney General, requests that A vista Corporation (A vista;
Company) provide the following documents and information on or before MONDAY,
APRIL 9, 2012.
This Production Request is to be considered as continuing, and A vista is requested to
provide, by way of supplementary responses, additional documents that it or any person acting
on its behalf may later obtain that wil augment the documents produced.
Please provide answers to each question and any supporting workpapers that provide
detail or are the source of information used in calculations. The Company is reminded that
responses pursuant to Commission Rules of Procedure must include the name and phone number
of the person preparing the document, and the name, location and phone number of the record
FIRST PRODUCTION REQUEST
TO AVISTA i MARCH 19,2012
holder and if different the witness who can sponsor the answer at hearing if need be. Reference
IDAP A 31.01.01.228.
In addition to the written copies provided as response to the questions, please provide all
Excel and electronic files on CD with formulas activated.
REQUEST NO.1: In his direct testimony at page 10, lines 10-15, Mr. Kalich states,
When the utility is in a surplus position, it wil not avoid any costs as a
result of the QF purchase; at most, the actual value of the QF purchase
to the utility is only the avoided fuel costs at existing facilities. A
more generous interpretation of the PURP A obligation is to
compensate a QF developer in times of system surplus at the market
price received for the sale of the energy net of delivery costs to a
market trading hub.
In addition, he states the following at page 16 at lines 7-11:
Where no costs are avoided by the utility with the addition of a QF, the
QF does not reduce the utilty's system costs. In the most basic
interpretation, the utility would pay nothing for QF power where no
costs were avoided; however, another policy position could be that
where a market exists for sellng surplus energy from the QF, the QF is
paid the market value for its energy.
Finally, on page 27, lines 22-24, he states the following:
Q. What is the net value of the QF energy wnen the utility is surlus
and does not avoid any costs by its purchase?
A. The value should reflect the market.
Based on the testimony above, it does not appear that A vista has taken a firm position on
whether a QF should be compensated for energy delivered when the utilty is energy surlus and
when a market exists for selling surplus energy. What is A vista's position in this circumstance?
REQUEST NO.2: In reference to the surlus energy condition described in Request
No.1, Idaho Power witness Bokenkamp, at page 14 line 21 through page 15, line 14 of his direct
FIRST PRODUCTION REQUEST
TO AVISTA 2 MARCH 19,2012
testimony maintains that there are times when the incremental cost with Idaho Power's proposed
methodology goes to zero. Does Avista believe there may be times when QF power delivered to
its own system would have zero value? Does A vista agree with the methodology proposed by
Idaho Power for determining the energy value of power delivered by QFs, paricularly during
surlus energy periods? If not, please explain why.
REQUEST NO.3: Avista proposes to continue limiting published rate eligibility for
wind and solar generation to 100 kW, and to 10 aMW for all other resource types. Please
compute the avoided cost rates for the solar, wind, geothermal, and hydro sample projects
analyzed previously in this proceeding using both the IRP methodology and the SAR
methodology as proposed by Avista for project sizes of 100 kW for wind and solar and 10 aMW
for the other project types. Please compare the rates computed under each methodology for each
corresponding resource type. Discuss the reasonableness of any substantial price differences that
may be attributable to differences in the methodologies. To the extent possible, use comparable
assumptions for the analysis under each methodology (fuel prices, plant costs, O&M costs, etc.).
REQUEST NO.4: Mr. Kalich's direct testimony does not explain the details of how
A vista proposes to compute the energy component of avoided cost rates under the IRP
methodology, however, based on its presentation at the December 15,2011 meeting to discuss
and present IRP models, Staff understands that A vista's proposed method uses both the Aurora
model and A vista's PRiSM modeL. If A vista's proposed methodology is accepted by the
Commission, please explain whether and how Commission Staff and developers would have
access to the PRiSM model to review A vista's assumptions and computations. Please identify
any additional software needed to run the PRiSM modeL.
REQUEST NO.5: In his direct testimony at page 22, Table 3, and also at page 25,
Table 4, Mr. Kalich computes the anual capacity payment that would be made under his
proposed method for various resource types. In his example, the anual capacity payment for
geothermal and canal hydro would be equal to the anual capacity cost of the SAR
($206,000/MW). Does A vista believe that one MW of capacity from a geothermal or canal
hydro QF would have the same value as one MW of capacity from a CCCT, considering that a
FIRST PRODUCTION REQUEST
TO AVISTA 3 MARCH 19,2012
CCCT is fully dispatchable while a geothermal or canal hydro QF would not be dispatchable?
If A vista agrees that dispatchabilty has some value, is the value of it (or lack of value in this
case) reflected in A vista's proposed method for determining avoided cost rates?
REQUEST NO.6: In his direct testimony beginning on page 27, line 9 and continuing
to page 30, line 12, Mr. Kalich recommends that QF developers receive lower energy payments
during utilty surlus periods to reflect the costs of transmitting surplus power to market. When
A vista builds a new generation resource or acquires new generation through a PP A, does it
reserve transmission for the purose of moving surplus generation from the plant to market?
Once the Palouse Wind project is completed and Avista begins taking power under a PPA, does
A vista anticipate that there will be times when A vista wil be forced to take power from the
project when A vista is surlus, and consequently be forced to move the surplus generation to
market?
REQUEST NO.7: In his direct testimony beginning on page 30, line 13 and continuing
to page 31, line 9, Mr. Kalich recommends that PURP A contracts not be executed earlier than
five years before commercial operation and that rates should not be set more than two years prior
to commercial operation. Does A vista believe that these criteria can be utilzed without violating
PURP A, FERC rules or orders, or case law? Please provide legal citations to support your
answer.
REQUEST NO.8: In his direct testimony at page 33, lines 15-19, Mr. Kalich suggests
the following:
The best way to ensure a level playing field is to require the QF
developer to post the liquidated damages deposit at the time that the
legally enforceable obligation arises-i.e., when the utility has
tendered a contract and the QF developer executes and returns the
tendered contract obligating the utility to purchase contract output.
Does A vista believe that in imposing these requirements there would be no restrictions or legal
impediments due to PURP A, FERC rules or orders, or case law? Please provide legal citations
to support your answer.
FIRST PRODUCTION REQUEST
TO AVISTA 4 MARCH 19,2012
REQUEST NO.9: In his direct testimony at page 34, lines 1-19, Mr. Kalich
recommends that SAR gas prices should be updated anually using the Energy Information
Administration's Anual Energy Outlook. Using the 2011 Anual Energy Outlook (or the 2012
AEO ifit becomes available before the response to this request is due), please identify exactly
which prices A vista proposes be used. Please specify the AEO table and page number where the
data can be found. Please also include the data description and the actual data values for each
year of the forecast.
REQUEST NO. 10: For the gas forecast data provided in response to request No.9,
please describe, quantify, and apply any adjustments, interpolations or extrapolations Avista
believes may be appropriate or necessary to obtain delivered, nominal forecast prices
representative of those that would be experienced by an SAR located in Avista's, Idaho Power's,
and PacifiCorp's service territories and therefore appropriate for direct use in the SAR modeL.
Dated at Boise, Idaho, this / q ..day of March 2012.
~;, ri, â-AA-
. stine A. Sasser
Deputy Attorney General
Technical Staff: Rick Sterling
i:umisc:prodreq/gnre J J .3ksrps prJ avista.doc
FIRST PRODUCTION REQUEST
TO AVISTA 5 MARCH 19,2012
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 8TH DAY OF MARCH 2012,
SERVED THE FOREGOING FIRST PRODUCTION REQUEST OF THE
COMMISSION STAFF TO A VISTA CORPORATION, IN CASE NO. GNR-E-II-03,
BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO THE FOLLOWING:
DONOV AN E WALKER
JASON B WILLIAMS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
DANIEL E SOLANDER
TED WESTON
ROCKY MOUNTAIN POWER
201 S MAIN ST STE 2300
SALT LAKE CITY UT 84111
MICHAEL G ANDREA
AVISTA CORPORATION
1411 E MISSION AVE
SPOKANE W A 99202
PETER J RICHARDSON
GREGORY MADAMS
RICHARDSON & O'LEARY
515 N 27TH STREET
BOISE ID 83702
ROBERT D KAHN
NW & INTERMOUNTAIN POWER
PRODUCERS COALITION
1117 MINOR AVE STE 300
SEATTLEWA 98101
DON STURTEVANT
ENERGY DIRECTOR
J R SIMPLOT COMPANY
PO BOX 27
BOISE ID 83707-0027
ROBERT A PAUL
GRAND VIEW SOLAR II
15690 VISTA CIRCLE
DESERT HOT SPRINGS CA 92241
JAMES CARKULIS
EXERGY DEVELOPMENT GROUP OF
IDAHOLLC
802 W BANNOCK ST STE 1200
BOISE ID 83702
THOMAS H NELSON
RENEWABLE ENERGY COALITION
PO BOX 1211
WELCHES OR 97067
JOHNRLOWE
RENEWABLE ENERGY COALITION
12050 SW TREMONT ST
PORTLAND OR 97225
R GREG FERNEY
MIMURA LAW OFFICES PLLC
2176 E FRANKLIN RD
STE 120
MERIDIAN ID 83642
BILL PISKE MGR
INTERCONNECT SOLAR
DEVELOPMENT LLC
1303 E CARTER
BOISE ID 83706
CERTIFICATE OF SERVICE
RONALD L WILLIAMS
WILLIAMS BRADBURY
1015 W HAYS ST
BOISE ID 83702
BRAIN OLMSTEAD
GENERAL MANAGER
TWIN FALLS CANAL CO
PO BOX 326
TWIN FALLS ID 83303
TED DIEHL
GENERAL MANAGER
NORTH SIDE CANAL CO
921 N LINCOLN ST
JEROME ID 83338
TED S SORENSON P E
BIRCH POWER COMPANY
5203 SOUTH 11 TH EAST
IDAHO FALLS ID 83404
M J HUMPHRIES
BLUE RIBBON ENERGY LLC
3470 RICH LANE
AMMON ID 83406
DEAN J MILLER
McDEVITT & MILLER LLP
POBOX 2564
BOISE ID 83701
KEN MILLER
SNAKE RIVER ALLIANCE
BOX 1731
BOISE ID 83701
WADE THOMAS
DYNAMIS ENERGY LLC
776 E RIVERSIDE DR
STE 15
EAGLE ID 83616
MEGAN WALSETH DECKER
SR STAFF COUNSEL
RENEWABLE NW PROJECT
917 SW OAK ST STE 303
PORTLAND OR 97205
BILL BROWN CHAIR
BOARD OF COMMISSIONERS
OF ADAMS COUNTY ID
PO BOX 48
COUNCIL ID 83612
GLENN IKEMOTO
MARGARET RUEGER
IDAHO WINDF ARMS LLC
672 BLAIR AVE
PIEDMONT CA 94611
ARRON F JEPSON
BLUE RIBBON ENERGY LLC
10660 SOUTH 540 EAST
SANDY UT 84070
BENJAMIN J OTTO
ID CONSERVATION LEAGUE
POBOX 844
BOISE ID 83702
MARV LEWALLEN
CLEARWATER PAPER CORP
STE 1100
601 W RIVERSIDE AVE
SPOKANE WA 99201
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SECRETARY
CERTIFICATE OF SERVICE