20131218final_order_no_32952.pdf

Office of the Secretary
Service Date
December 18,2013
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT )
APPLICATION OF AVISTA CORPORATION )CASE NO.AVU-E-12-Ol
AND KOOTENAI ELECTRIC )
COOPERATIVE FOR APPROVAL OF A )ORDER NO.32952
POWER PURCHASE AGREEMENT.)
On November 20,2013,Avista Corporation and Kootenai Electric Cooperative
(Kootenai Electric)(collectively “the Parties”)filed a Joint Petition with the Commission
requesting approval of an amendment to the existing Power Purchase Agreement (Agreement)
between Avista and Kootenai Electric.The Parties request that the Agreement be extended
through December 31,2014.
Kootenai Electric is an electric cooperative that owns and operates a landfill gas
electric power generating facility (the Project)located at the Kootenai County Solid Waste
Facility near Beligrove,Idaho.The Project is a qualifying facility under the applicable
provisions of the Public Utility Regulatory Policies Act of 1978 (PURPA)and is capable of
generating up to 3.2 megawatts (maximum capacity,nameplate)of energy.By this Order,the
Commission approves the amendment to the Agreement between Avista and Kootenai Electric
for the sale and purchase of electric energy.
THE AMENDMENT
Pursuant to the Power Purchase Agreement,Kootenai generates and delivers the net
output of its facility to Avista’s electric system on an as-available basis.The Agreement was
originally approved by the Commission in Case No.AVU-E-12-01 on February 15,2012.Order
No.32459.The term of the original Agreement was due to expire on December 31,2012.The
parties requested,and the Commission approved,an amendment to the Agreement which
extended the term through December 31,2013.This second amendment requests an extension
for an additional year,through December 31,2014.
For the term of the Agreement,Avista will purchase the net output of the facility that
is delivered to the point of delivery.Avista will purchase such net output (up to a maximum of
10 aMW)at a rate equal to the lesser of (i)85 percent of the weighted average of the daily on
peak and off-peak Powerdex Mid-Columbia Hourly Index,or (ii)the applicable rate based upon
ORDER NO.32952 1
the on-Peak or off-Peak avoided cost rates for non-fueled projects smaller than 10 average
megawatts (non-levelized)in effect on the effective date (“avoided cost rates”).
The Parties request that the Commission approve the second amendment to the
Agreement without change or condition,with an effective date of January 1,2014,and declare
that all payments made by Avista for purchases of energy under the Agreement be allowed as
prudently incurred expenses for ratemaking purposes.
Staff reviewed the second amendment and confirmed that the rates contained in the
Agreement have been properly updated to include the Commission-approved published avoided
cost rates for 2014.Consequently,Staff recommended that the second amendment be approved
by the Commission without further process.
DISCUSSION AND CONCLUSIONS
The Idaho Public Utilities Commission has jurisdiction over Avista Corporation,an
electric utility,and the issues raised in this matter pursuant to the authority and power granted it
under Title 61 of the Idaho Code and the Public Utility Regulatory Policies Act of 1978
(PURPA).The Commission has authority under PURPA 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.
The Commission has reviewed the record in this case,including the Joint Petition,
the Agreement,and the recommendation of Commission Staff.Avista will purchase the
Project’s net output at the lesser of(i)85%of the weighted average of the daily on-peak and off-
peak Powerdex Mid-Columbia Hourly Index,or (ii)the applicable rate based upon the on-peak
or off-peak avoided cost rates for non-fueled projects smaller than ten average megawatts —non
levelized —in effect on the effective date.We find that the amendments and avoided cost rates
set out in the Agreement arc just and reasonable.Therefore,we approve the amendment to
continue the Agreement between Avista and Kootenai through December 31,2014,or until such
time as Kootenai provides Avista 30 days’written notice of termination.We further approve use
of the Powerdex index for pricing.We find it reasonable to allow payments made under the
Agreement as prudently incurred expenses for ratemaking puiposes.
ORDER NO.32952 2
ORDER
IT IS HEREBY ORDERED that the second amendment to the Power Purchase
Agreement executed by Kootenai on November 7,2013,between Avista Corporation and
Kootenai Electric Cooperative is approved without change or condition.
IT IS FURTHER ORDERED that the Agreement shall be effective January 1,2014.
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 §6 1-626.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of December 2013.
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PAUL KJELLANIR,PRESIDENT
MACK A.REDFORD,COMMISSIONER
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MARSHA H.SMITH,COMMISSIONER
ATTEST:
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Jan D.JeweJ
C6mmission Secretary
O:AVU-E-I 2-0 Iks3
ORDER NO.32952 3