20090826final_order_no_30887.pdf

Office of the Secretary
Service Date
August 26, 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AN ADJUSTMENT TO
THE PUBLISHED AVOIDED COST RATES
OF A VISTA UTILITIES TO REFLECT A
CHANGE IN THE COMPANY'S COST OF
CAPITAL
ORDER NO. 30887
CASE NO. A VU-09-
Pursuant to the Public Utility Regulatory Policies Act of 1978 (PURPA) and the
implementing regulations of the Federal Energy Regulatory Commission (FERC), the Idaho
Public Utilities Commission (Commission) has approved a surrogate avoidable resource (SAR)
methodology for calculation of the published avoided cost rates paid to PURP A qualifying
cogeneration and small power production facilities (QFs). Avoided cost rates are the purchase
price paid to QFs for purchases of QF capacity and energy.
One of the input variables in the avoided cost computations for PURP A rates is a
utility s weighted cost of capital. The conclusion of a general rate case triggers a revision and
updated calculation of new PURPA avoided cost rates. On July 17 2009, the Commission
issued final Order No. 30856 approving a Settlement Stipulation in Avista Corporation dba
Avista Utilities (Avista; Company) general rate case No. AVU-09-01. The Company s cost of
capital was adjusted in that case from 8.451 % to 8.550%. Avista s carrying charge rate, in turn
changes from 11.850% to 12.074%. When these new variables are input into the avoided cost
model, Avista s avoided cost rates increase slightly. Commission Staff has computed the revised
avoided cost rates for A vista using the new cost of capital figures. The revised rates are shown
in the attached tables. The effect of A vista s new cost of capital is an increase in avoided cost
rates of less than $1.00 per megawatt-hour for a 20-year levelized contract.
COMMISSION FINDINGS
The Commission has reviewed the methodology for calculating published rates for
PURPA QFs, the Commission s Order changing Avista s cost of capital in Case No. A VU-09-
Oland Staff's revised avoided cost rates for A vista using the new cost of capital figures. We
find that a change in A vista s cost of capital triggers a revision and updated calculation of the
Company s published avoided cost rates. We find Staff's proposed revision to be correct and
find it reasonable to approve same for an implementation date of September 1 , 2009. We further
find it reasonable to implement said change without further notice or procedure.
ORDER NO. 30887
. \
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over A vista Corporation dba
Avista Utilities, an electric utility, pursuant to the authority and power granted it under Title
of the Idaho Code and the Public Utility Regulatory Policies Act of 1978 (PURPA).
The Commission has authority under PURP A and the implementing regulations of
the Federal Energy Regulatory Commission (FERC) to set avoided costs, to order electric
utilities to enter into fixed-term obligations for the purchase of energy from qualified facilities
(QFs) and to implement FERC rules.
ORDER
In consideration of the foregoing, IT IS HEREBY ORDERED and the Commission
does hereby approve modification of Avista s published avoided cost rates as depicted in the
attached tables to reflect the change in the Company s cost of capital approved in Order No.
30856, Case No. A VU-09-01.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 30887
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ,;'ltR fJ..
day of August 2009.
QI ~(JD. KEMP TO , P SIDENT
MARSHA H. SMITH, COMMISSIONER
MACK A.);DFORD OMMISSIONER
ATTEST:
ORDER NO. 30887
AVISTA
AVOIDED COST RATES FOR NON-FUELED PROJECTS
SMALLER THAN TEN MEGAWATTS
September 2009
$/MWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2009 2010 2011 2012 2013 2014 YEAR RATES
76.75.78.80.82.84.2009 76.
76.76.79.81.83.85.2010 75.
76.77.97 80.82.84.86.2011 78.
77.65 78.80.83.85.87.2012 80.
78.42 79.81.83.85.88.2013 82.
79.80.82.84.86.88.2014 84.
79.81.83.85.87.89.2015 86.
80.82.84.42 86.88.90.2016 88.
81.83.85.87.89.45 91.2017 90.43
82.83.86.88.90.92.45 2018 92.
82.84.86.88.91.93.2019 94.
83.85.45 87.89.91.94.2020 97.
84.42 86.88.90.92.94.2021 99.46
85.86.89.91.93.46 95.2022 101.
85.87.89.92.94.96.2023 104.
86.44 88.90.49 92.95.97.2024 106.
87.88.91.93.48 95.98.2025 109.
87.89.91.94.96.98.2026 112.40
88.90,92.94.97.99.2027 115.
88.90.93.95.97.100.44 2028 118.
2029 122.
2030 125.
2031 128.
2032 132.
2033 135.
2034 139.
Note: The rates shown in this table have been computed using the Northwest Power and Conservation Council's December 29, 2008
Fuel Price Forecast. (See Order No. 30480).
ATTACHMENT
ORDER NO. 30887
CASE NO. A VU-09-
PAGE I OF 2
AVISTA
AVOIDED COST RATES FOR FUELED PROJECTS
SMALLER THAN TEN MEGAWATTS
September 2009
$/MWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2009 2010 2011 2012 2013 2014 YEAR RATES
21.21.22.22.22.23.28 2009 21.
21.22.22.42 22.23.23.45 2010 21.
21.22.24 22.22.23.23.2011 22.
22.22.40 22.23.23.42 23.2012 22.
22.22.22.23.23.23.2013 22.
22.22.23.23.23.24.2014 23.
22.22.23.23.23.24.2015 23.
22.22.23.23.24.24.2016 23.
22.23.23.46 23.24.24.2017 24.
22.23.23.23.24.24.2018 24.
23.23.23.24.24.44 24.2019 25.
23.23.23.24.24.24.2020 25.46
23.23.23.24.24.25.2021 25.
23.23.24.24.46 24.25.2022 26.
23.23.24.24.24.25.2023 26.
23.23.24.24.25.25.45 2024 27.
23.24.24.44 24.25.25.2025 27.45
23.24.24.24.25.25.2026 27.
23.24.24.25.25.40 25.2027 28.28
24.24.24.25.25.25.2028 28.
2029 29.
2030 29.
2031 30.
2032 30.49
2033 30.
2034 31.42
EFFECTIVE DATE ADJUSTABLE COMPONENT
9/1/2009 55.
The total avoided cost rate in each year is the sum of the adjustable component and the fixed component from either of the tables
above.
Example 1. A 20-year levelized contract with a 2009 on-line date would receive the following rates:
Years Rate
23.66 + 55.
23.66 + Adjustable component in each year
Example 2. A 4-year non-Ievelized contract with a 2009 on-line date would receive the following rates:
Years Rate
21.26 + 55.
21.58 + Adjustable component in year 2010
21.91 + Adjustable component in year 2011
22.23 + Adjustable component in year 2012
Note: The rates shown in this table have been computed using the Northwest Power and Conservation Council's December 29, 2008
Fuel Price Forecast. (See Order No. 30480).
A TT ACHMENT
ORDER NO. 30887
CASE NO. A VU-09-
PAGE 2 OF 2