20060207PAC response staff requests 11, 12.pdf

825 E. Mu/tnomah St.
Portland, OR 97232
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PACIFIC POWER UTAH POWER
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February 3 , 2006
Scott Woodbury
Deputy Attorney General
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83720-0074
RE:ID PAC-05-
IPUC Staff Production Data Requests (11-12)
Please find enclosed an original and one copy ofPacifiCorp s Response to IPUC Staff
Production Data Requests 11-12. Provided on the enclosed CD is Attachment IPUC Production
11.
If you have any questions, please call Barry Bell at [phone].
Sincerely,
1?b~~ iIt ~I 1\
Bob Lively, Manager
Regulation
Enclosures
cc:Lisa Nordstrom
Dean Brockbank
P AC-05-9/PacifiCorp
February 3 , 2006
IPUC Staff Production Data Request
IPU C Staff Production Data Request
Please provide a detailed narrative description of how the Non-Conforming
Energy Purchase Prices as shown on page 14 of the Amended Agreement were
computed. Include a copy of all spread sheets, computations, analysis, data, or
other information used to derive the prices.
Response to IPUC Staff Production Data Request
The Company and Schwendiman Wind agreed that the non-conforming purchase
price would be the Idaho Commission Approved avoided costs excluding capacity
costs. Capacity costs were defined as the fixed costs, capital and O&M, of the
East Side Greenfield SCCT Frame (2 Frame ") from the Company s 2004 IRP
Update. Using a traditional peak credit calculation, the fixed costs ofthe SCCT
are subtracted from the fixed costs of the SAR CCCT to get capitalized energy.
Capitalized energy plus the running cost of the CCCT is total energy cost.
The requested spreadsheet is provided as Attachment IPUC lIon the enclosed
CD.
Bruce Griswold will sponsor this response at hearing.
IDAHO
P A C- E-O5-
PPA FOR THE SALE AND PURCHASE OF
ENER G Y SCHWEND IMAN WIND
ACIFICORP
IPUC STAFF PRODUCTION
DATA REQUEST
ATTACHMENT IPUC
ON THE ENCLOSED CD
P AC-05-9/PacifiCorp
February 3 , 2006
IPUC Staff Production Data Request 12
IPUC Staff Production Data Request 12
Please discuss how the Non-Conforming Energy Purchase Prices as shown on
page 14 ofthe Amended Agreement provide a reasonable or equivalent substitute
for the 90/110 performance band as addressed by the Commission in Order No.
29880.
Response to IPUC Staff Production Data Request 12
The Schwendiman Amended Agreement retains the 90/110 Bandwidth as
required by Order Nos. 29632 and 29880. However, the Company has proposed a
capacity factor variation of the 90/110 Bandwidth that provides the same rigorous
predictability as the energy-based 90/110 Bandwidth. The following variations
are included in the Amended Agreement:
1. Schwendiman must provide a monthly Capacity Factor projection instead of a
monthly energy delivery projection. Since energy produced by a wind farm is
a function of capacity factor, this variation is an equivalent substitute for
monthly energy delivery. The Company also feels it keeps the QF focus on
maintaining the mechanical availability as high as possible to achieve the
forecast capacity factor.
2. The Company proposes a different price for energy produced that does not
meet the 90/110 Bandwidth thresholds ("Non-conforming Energy ). As
Order No. 29632 requires, the price for Non-conforming Energy should reflect
a non- firm price for the energy that does not meet minimum level of
predictability and reliability. Rather than a market price for the non-firm
energy, the Company proposes a non-levelized fixed energy price that is based
on removing the fixed costs of a simple cycle combustion turbine from the
SAR model. The price provides a reasonable replacement for the non-firm
market index price because it relies on the SAR model as the underlying
methodology consistent with the standard price development. It sets a fixed
price for both the Conforming and Non-Conforming energy which provides
the QF with a project that can be more easily financed.
Bruce Griswold will sponsor this response at hearing.