20140408final_order_no_33014.pdf

Office of the Secretary
Service Date
April 8,2014
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION’S APPLICATION FOR )CASE NO.AVU-E-13-10
APPROVAL OF ITS CAPACITY )
DEFICIENCY PERIOD TO BE UTILIZED IN )
THE COMPANY’S SAR METHODOLOGY.)ORDER NO.33014
________________________________________________________________________________
)
In Order No.32697,the Commission directed that a case be initiated outside of each
utility’s Integrated Resource Plan (IRP)filing for the establishment of the capacity deficiency
period to be utilized in the utility’s SAR methodology.On October 16,2013,Avista Corporation
filed its proposal for updated capacity deficiency periods to be utilized in Avista’s SAR avoided
cost methodology.
On November 27,2013,the Commission issued a Notice of Application and set a
deadline for intervention.Order No.32930.No person or party petitioned to intervene in this
matter.On January 28,2014,the Commission issued a Notice of Modified Procedure setting a
comment deadline of February 28,2014,and a reply deadline of March 7,2014.Order No.
32971.Staff was the oniy party to file comments.
By this Order,we approve Avista’s proposed capacity deficiency period to be
utilized in the Company’s SAR methodology.
THE APPLICATION
Avista’s filing is based on an update to the Company’s 2013 Integrated Resource
Plan (IRP)Loads and Resources,taking into account a new load forecast and new long-term
contracts.Within its 2013 Electric IRP,Avista had identified a long-term capacity deficit
beginning in January 2020 (summer deficits in 2024 and energy deficits in 2026).Avista
reported that while short-term deficits occur before these dates,those deficits would be met with
short-term market purchases as described in its 2013 IRP.
Based on updated load forecasts,the Company’s net positions changed.Avista states
that winter deficits continue to begin in January 2020.However,summer deficits begin in 2023
and energy deficits begin in 2027.
ORDER NO.33014 1
COMMENTS
Staff observed that,compared to its 2013 IRP,Avista’s updated capacity load
forecasts are generally higher in winter and lower in summer.This results in larger winter
capacity deficits than were identified in the 2013 IRP.The current forecasts show capacity
deficits of 123 MW and 139 MW in the winters of 2015 and 2016,and show a summer deficit of
36 MW in the summer of 2016.Staff noted that Avista intends to meet its summer and winter
capacity deficits in 2015 and 2016 with short-term market purchases.Staff believes that relying
on short-term purchases to meet short-term capacity deficits is prudent.
Staff recommended the Commission approve the capacity and energy positions as
proposed by Avista in its Application.Staff further maintained that capacity provided during a
utilitys surplus period has no value.Consequently,Staff computed Avista’s avoided cost rates
so that capacity value is paid only in those years when the capacity has value to the utility.
FINDINGS AND CONCLUSION
The Idaho Public Utilities Commission has jurisdiction over Avista,an electric and
gas 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 Order No.32697,
Avista’s Application and the comments of Commission Staff In Case No.GNR-E-l 1-03,the
Commission found it fair and reasonable to subject each utility’s IRP determination of capacity
deficiency to further scrutiny for purposes of use within the SAR methodology.Order No.
32697 at 23.We stated that “capacity deficiency determined through the IRP planning process
will be the starting point,and will be presumed to be correct subject to the outcome of the
[separate capacity deficiency]proceeding.”
The Commission accepted Avista’s 2013 IRP on March 20,2014.The 2013 IRP
identifies winter capacity deficits in 2015 and 2016.These deficits disappear from 2017 through
2019 due to the addition of long-term contracts.Consequently,Avista updated its capacity and
energy load forecasts for purposes of this case in order to account for its new long-term
ORDERNO.33014 2
contracts.Winter deficits reappear in 2020 and persist for the remainder of the 20-year planning
period.Staff identified that an annual energy deficit is not expected to begin until 2026.Staff
Comments at 2.
We find it fair and reasonable to approve Avista’s capacity deficiency proposal to be
used in the Company’s SAR methodology.Although Avista experiences some short-term
deficits in 2015 and 2016,the Company is again surplus until 2020.We find it reasonable for
Avista to only pay for capacity when that capacity has value to the utility.Capacity provided
when a utility is surplus has no value.Consistent with these findings,we approve the SAR
methodology avoided cost rates as computed by Staff and included as Attachment A to this
Order.
ORDER
IT IS HEREBY ORDERED that Avista’s capacity deficiency period as used in the
Company’s SAR methodology be approved,as more fully described herein.
IT IS FURTHER ORDERED that the updated SAR avoided cost rates become
effective upon issuance of this Order.
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.
ORDERNO.33014 3
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of April 2014.
L K/ELLA ER,PRESIDENT
MACK A.RED RD,CO4MJSSIONER
MARSHA H.SMITH,COMMISSIONER
ATTEST:
Jean D JewelP
Cbmmission Secretary
O:AVU-E-13-1 Oks3
ORDERNO.33014 4
AVISTA
AVOIDED COST RATES FOR WIND PROJECTS
April 8,2014
$/MWh
New Contracts and Replacement Contracts without Full Capacity Payments
Eligibility for these rates is limited to projects 100 kW or smaller.
LEVELIZED NON-LEVELIZED
CONTRACT ON LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2014 2015 2016 2017 2018 2019 YEAR RATES
1 29.08 33.15 38.09 37.86 41.25 43.64 2014 29.08
2 31.03 35.52 37.98 39.49 42.40 46.00 2015 33.15
3 33.21 36.24 38.99 40.77 44.29 47.72 2016 38.09
4 34.24 37.36 40.02 42.50 45.91 49.36 2017 37.86
5 35.44 38.43 41.48 44.05 47.48 50.85 2018 41.25
6 36.56 39.81 42.86 45.56 48.93 52.02 2019 43.64
7 37.91 41.13 44.23 46.96 50.11 53.01 2020 48.54
8 39.20 42.45 45.54 48.14 51.12 53.88 2021 51.58
9 40.48 43.71 46.65 49.16 52.01 54.63 2022 55.11
10 41.69 44.80 47.64 50,06 52.79 55.34 2023 58.06
11 42.76 45.76 48.52 50.86 53.52 56.04 2024 59.41
12 43.72 46.64 49.29 51.61 54.23 56.73 2025 60.84
13 44.59 47.41 50.03 52.32 54.92 57,41 2026 62.22
14 45.36 48.14 50.73 53.01 55.61 58.11 2027 63.20
15 46.09 48.84 51.41 53.70 56.30 58.83 2028 64.97
16 46.78 49.51 52.07 54.38 57.00 59.57 2029 66.93
17 47.44 50.16 52.73 55.06 57.72 60.37 2030 68.93
18 48.09 50.81 53.40 55.77 58.49 61.21 2031 71.41
19 48.73 51.45 54.08 56.51 59.30 62.08 2032 74,29
20 49.36 52.11 54.79 57.29 60.13 62.99 2033 77.30
2034 81.30
2035 86.32
2036 91.58
2037 97.02
2038 103.23
2039 106.92
Note;These rates will be further adjusted with the applicable integration charge.
Note;The rates shown in this table have been computed using the U.S.Energy Information Administration (EIA)s Annual Energy
Outlook 2013 released May 2,2013.See ‘Annual Energy Outlook 2013,All Tables,Energy Prices by Sector and Source,Mountain,
Reference case”at http;//www.eia.gov/oiaflaeo/tablebrowser/.
AVISTA Page 1
Attachment A
Order No.33014
Case No.AVU-E43-10
AVISTA
AVOIDED COST RATES FOR SOLAR PROJECTS
April 8,2014
$/MWh
New Contracts and Replacement Contracts without Full Capacity Payments
Eligibility for these rates is limited to projects 100 kW or smaller.
LEVELIZED NON-LEVELIZED
CONTRACT ON LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2014 2015 2016 2017 2018 2019 YEAR RATES
1 2908 3442 3938 37.86 41.25 43.64 2014 29.08
2 31,65 36.81 38.65 39.49 42.40 46.66 2015 34.42
3 34.03 37.13 39.45 40.77 44.72 48.61 2016 39.38
4 34.88 38.05 40.38 42.80 46.55 50.37 2017 37.86
5 35.97 39.00 42.01 44.54 48.25 51.92 2018 41.25
6 37.02 40.49 43.51 46.18 49.79 53.15 2019 43,64
7 38.47 41.90 44.97 47.67 51.03 54.18 2020 49.91
8 39,84 43.28 46.34 48.92 52.10 55.08 2021 52.98
9 41.18 44.58 47.51 49.99 53.03 55.85 2022 56.52
10 42.45 45.71 48.54 50.95 53.84 56.59 2023 59.49
11 43.56 46.71 49.45 51.78 54.61 57.31 2024 60.86
12 44.55 47.61 50.26 52.56 55.34 58.01 2025 62.32
13 45.45 48.41 51.02 53.30 56.05 58.71 2026 63.72
14 46.25 49.17 51.75 54.02 56.76 59.43 2027 64.72
15 47.00 49.88 52.44 54.72 57.47 60.15 2028 66.51
16 47.72 50.57 53.13 55.43 58.18 60.91 2029 68.50
17 48.40 51.24 53.81 56.13 58.92 61.72 2030 70.52
18 49.06 51.90 54.49 56.86 59.71 62.57 2031 73.03
19 49.72 52.56 55.18 57.61 60.53 63.45 2032 75.92
20 50.36 53.23 55.91 58.40 61.37 64.37 2033 78.96
2034 82.98
2035 88.03
2036 93.31
2037 98.78
2038 105.02
2039 108.73
Note:These rates will be further adjusted with the applicable integration charge.
Note:The rates shown in this table have been computed using the U.S.Energy Information Administration (EIA)’s Annual Energy
Outlook 2013 released May 2,2013.See ‘Annual Energy Outlook 2013,All Tables,Energy Prices by Sector and Source,Mountain,
Reference case”at http://ww.eia.gov/oiaf/aeo/tablebrowserf.
AVISTA Page 2
AVISTA
AVOIDED COST RATES FOR NON-SEASONAL HYDRO PROJECTS
April 8,2014
$/MWh
New Contracts and Replacement Contracts without Full Capacity Payments
Eligibility for these rates is limited to projects smaller than 10 aMW.
LEVELIZED NON LEVELIZED
CONTRACT ON lINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2014 2015 2016 2017 2018 2019 YEAR RATES
1 29,08 40.33 45.37 37.86 41.25 43.64 2014 29.08
2 34.49 42.75 41.76 39.49 42.40 49.71 2015 40.33
3 37.84 41.25 41.60 40.77 46.67 52.70 2016 45.37
4 37.85 41.25 42.06 44.21 49.51 55.01 2017 37.86
5 38.43 41.66 44.48 46.81 51.82 56.90 2018 41.25
6 39.14 43.65 46.52 49.03 53.77 58.36 2019 43.64
7 41.07 45.42 48.38 50.95 55.33 59.58 2020 56.26
8 42.80 47.09 50.05 52.52 56.63 60.62 2021 59.42
9 44.43 48.62 51.46 53.86 57.76 61.52 2022 63.06
10 45.93 49.93 52.69 55.02 58.73 62.36 2023 66.12
11 47.24 51.09 53.77 56.03 59.63 63.16 2024 67.59
12 48.40 52.13 54.73 56.96 60.48 63.94 2025 69.14
13 49.44 53.05 55.61 57.84 61.29 64.72 2026 70.65
14 50.37 53.90 56.45 58.67 62.09 65.50 2027 71.75
15 51.23 54.71 57.24 59.48 62.89 66.28 2028 73.64
16 52.04 55.48 58.01 60.28 63.67 67.09 2029 75.73
17 52.82 56.23 58.78 61.07 64.48 67.95 2030 77.87
18 53.56 56.96 59.53 61.87 65.33 68.85 2031 80.48
19 54.29 57.69 60.29 62.70 66.21 69.78 2032 83.48
20 55.00 58.42 61.07 63.55 67.11 70.74 2033 86.63
2034 90.77
2035 95.93
2036 101.32
2037 106.91
2038 113.27
2039 117.11
Note:The rates shown in this table have been computed using the U.S.Energy Information Administration (EIA)’s Annual Energy
Outlook 2013 released May 2,2013.See “Annual Energy Outlook 2013,All Tables,Energy Prices by Sector and Source,Mountain,
Reference case”at http://www.eia.gov/oiaf/aeo/tablebrowser/.
AVISTA Page 3
AVISTA
AVOIDED COST RATES FOR SEASONAL HYDRO PROJECTS
April 8,2014
S/MWh
New Contracts and Replacement Contracts without Full Capacity Payments
Eligibility for these rates is limited to projects smaller than 10 aMW.
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2014 2015 2016 2017 2018 2019 YEAR RATES
1 2908 3037 3527 3786 41 25 4364 2014 2908
2 2970 3273 3652 39.49 4240 4456 2015 3037
3 3142 3431 3798 4077 4337 45.79 2016 3527
4 3285 3585 3924 4183 44.52 47.18 2017 37.86
5 34.28 37.18 40.31 42.98 45.81 48.51 2018 41.25
6 35.56 38.33 41.44 44,22 47.05 49.56 2019 43.64
7 36.69 39.48 42.63 45.42 48.09 50.47 2020 45.55
8 37.80 40.66 43.79 46.44 48.99 51.27 2021 48.56
9 38.95 41.81 44.79 47.34 49.79 51.96 2022 52.04
10 40,06 42.81 45.68 48.15 50.49 52.63 2023 54.94
11 41.03 43.70 46.48 48.86 51,16 53.29 2024 56.24
12 41,91 4451 47.19 49.53 51.82 53.94 2025 57.63
13 42.71 45.23 47.87 50.19 52.46 54.59 2026 58.96
14 43,43 4591 48.52 50.82 53.10 55.26 2027 59.90
15 44,10 46.57 49.15 51.46 53.75 5594 2028 6161
16 44.75 4719 49.77 52.10 5441 56.67 2029 63.53
17 4537 47.81 50.40 52.74 5511 57.44 2030 65.48
18 45,97 48.43 51 03 53.41 55.85 58.26 2031 67.91
19 46.58 49.05 51.67 54.12 56.63 5911 2032 70.73
20 47.17 49.68 52,36 54.87 57.43 60.00 2033 73.69
2034 77,64
2035 82.60
2036 87,81
2037 93.20
2038 99.35
2039 102.98
Note:A seasonal hydro project”is defined as a generation facility which produces at least 55%of its annual generation during the
months of June,July,and August.Order 32802.
Note:The rates shown in this table have been computed using the U.S.Energy Information Administration (EIA)s Annual Energy
Outlook 2013 released May 2,2013.See Annual Energy Outlook 2013,All Tables,Energy Prices by Sector and Source,Mountain,
Reference case’at http.//ww.eia.gov/oiafIaeo/tabiebrowser/.
AVISTA Page 4
AVISTA
AVOIDED COST RATES FOR OTHER PROJECTS
April 8,2014
$/MWh
New Contracts and Replacement Contracts without Full Capacity Payments
Eligibility for these rates is limited to projects smaller than 10 aMW.
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2014 2015 2016 2017 2018 2019 YEAR RATES
1 29.08 49.52 54.70 37.86 41.25 43.64 2014 29.08
2 38.91 52.01 46,60 39,49 42,40 54.46 2015 49 52
3 43.77 47.65 44.95 40 77 49.72 59.08 2016 54.70
4 42.46 46.22 44.66 46.41 54.10 62.23 2017 37.86
5 42.25 45.78 48.33 50.34 57.37 64.65 2018 41.25
6 42,44 48.57 51.21 53.47 59.98 66.49 2019 43.64
7 45.11 50.91 53.69 56.05 62.01 67.98 2020 66.14
8 47.40 53.02 55 83 58.13 63.68 69.25 2021 6944
9 49.48 5490 57.62 59.87 65.11 70.33 2022 73.23
10 51.35 56.51 59.16 61.36 66.33 71.33 2023 76.44
11 52 96 57.91 60.50 6265 67.44 72.27 2024 78.06
12 5438 59 16 61 68 6382 68.48 73.17 2025 7977
13 55.65 60.26 6276 6490 69.45 74.06 2026 81.43
14 56.77 61.27 6376 65.92 70.39 74.94 2027 8269
15 57.81 62,23 64.71 66,89 71.31 75.82 2028 8474
16 58.78 63.13 65.62 67.83 72.22 76.72 2029 87.00
17 59.69 63.99 66.50 68.75 73.13 77.66 2030 89.29
18 60,56 64.83 67.37 69.67 74.08 78.63 2031 9207
19 61.41 65.66 6823 70.61 75.05 79.63 2032 9525
20 6223 6648 69 11 71 56 7603 80.65 2033 98.57
2034 10288
2035 108.22
2036 113.80
2037 119.57
2038 126 11
2039 130.14
Note:“Other projects”refers to projects other than wind,solar,non-seasonal hydro,and seasonal hydro projects.These “Other projects”
may include (but are not limited to):cogeneration,biomass,biogas,landfill gas,or geothermal projects.
Note:The rates shown in this table have been computed using the U.S.Energy Information Administration (EIA)’s Annual Energy
Outlook 2013 released May 2,2013.See “Annual Energy Outlook 2013,All Tables,Energy Prices by Sector and Source,Mountain,
Reference case”at http://wNw.eia.gov/oiaf/aeoftablebrowser/.
AVISTA Page 5