20181108notice_of_application_order_no_34188.pdf

Office of the Secretary
Service Date
November 8,2018
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE ANNUAL )CASE NO.AVU-E-18-11
COMPLIANCE FILING OF AVISTA TO )UPDATE INPUTS IN THE INCREMENTAL )NOTICE OF APPLICATION
COST INTEGRATED RESOURCE PLAN )AVOIDED COST MODEL )NOTICE OF
)MODIFIED PROCEDURE
)ORDER NO.34188
On October 25,2018,Avista Corporation ("Company")filed its annual update to
certain components of its Integrated Resource Plan ("IRP")methodology for calculating avoided
cost rates for qualifying facilities ("QFs")under the Public Utility Regulatory Policies Act of 1978
("PURPA").Specifically,the Company proposes updates to its load forecast,natural gas forecast,
and contract information components of its IRP avoided cost methodology.Application at 1.With
this Order,the Commission provides notice of the Company's Application and notice that
interested persons may file written comments about the Application.
BACKGROUND
Under PURPA,state utilities are given broad discretion to determine the avoided cost
rates that utilities must pay for the energy or capacity generated by QFs.See Rosebud Enterprises
v.Idaho PUC,128 Idaho 624,627,917 P.2d 781,784 (1996).The Commission has established
two methods of calculating avoided cost,dependingon the size ofthe QF project:(1)the surrogate
avoided resource ("SAR")methodology,and (2)the IRP methodology.See Order No.32697 at
7-8.The Commission uses the SAR methodology to establish what is commonlyreferred to as
"published"avoided cost rates.Id.Published rates are available for wind and solar QFs with a
design capacity of up to 100 kW and for QFs of all other resource types with a design capacity of
up to 10 average megawatts.For QFs with a design capacity above the published rate eligibility
caps,avoided cost rates are "individuallynegotiated by the QF and the utility using the [IRP
methodology]."Id at 2.
The IRP methodology "takes into account many different variables and produces a
result based on each individual utility's need for energy.More specifically,the IRP method
assesses the value of each QF project in terms of its capability to deliver resources in relation to
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34188 1
the timing and magnitude of the utility's need of such resources."Id.at 17.The Commission has
directed electric utilities to submit annual updates to specific variables used in the IRP
methodology."We find that,in order to maintain the most accurate and up-to-date reflection of a
utility's true avoided cost,utilities must update fuel price forecasts and load forecasts annually -
between IRP filings....In addition,it is appropriate to consider long-term contract commitments
because of the potential effect that such commitments have on a utility's load and resource
balance."Id.at 22.
NOTICE OF APPLICATION
YOU ARE HEREBY NOTIFIED that the proposed updates are submitted to comply
with avoided cost methodology established in Order Nos.32697 and 32802.Application at 1.
YOU ARE FURTHER NOTIFIED that the Application proposes to update the
Company's load forecast to escalate at 0.43 percent annual average growth rate and the peak
forecast rate to escalate at 0.33 percent annual average growth rate.Id.at 2.
YOU ARE FURTHER NOTIFIED that the Application proposes to update the
Company's natural gas forecast using a blend of two national price forecasts and forward market
prices.Id.at 3.
YOU ARE FURTHER NOTIFIED that the Application proposes to include three
PURPA contracts,a Power Purchase Agreement,and an energy exchange in its updated forecasts.
Id.at 4.
YOU ARE FURTHER NOTIFIED that the Company requests the Commission issue
an Order accepting its updated forecasts and contract information for purposes of setting the
Company's IRP methodology avoided cost rates.Id.
YOU ARE FURTHER NOTIFIED that the Company requests the Application to be
processed by Modified Procedure.Id.
YOU ARE FURTHER NOTIFIED that the Application is available for public
inspection during regular business hours at the Commission offices.These documents are also
available on the Commission's web site at Click on the "File Room"tab at
the top of the page,then select "Electric Cases"and click on the case number as shown on the
front of this document.
NOTICE OF APPLICATION
NOTICE OF MODIFIED PROCEDURE
ORDER NO.34188 2
YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held
pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code and specifically Idaho
i le to L-502 and 61-503.
YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted
pursuant to the Commission's Rules of Procedure,IDAPA 31.01.01.000et seq.
NOTICE OF MODIFIED PROCEDURE
YOU ARE FURTHER NOTIFIED that the Commission has determinedthat the public
interest may not require a formal hearing in this matter,and that it will proceed under Modified
Procedure pursuant to Rules 201 through 204 of the Commission's Rules of Procedure,IDAPA
31.01.01.201 through .204.The Commission notes that Modified Procedure and written comments
have proven to be an effective means for obtaining public input and participation.
YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this
Application may file a written comment in supportor opposition with the Commission by no
later than November 28,2018.The comment must contain a statement of reasons supporting the
comment.Persons desiring a hearing must specifically request a hearing in their written comments.
Written comments concerning this Application shall be mailed to the Commission and the
Company at the addresses reflected below:
For the Idaho Public Utilities For Avista Corporation
Commission
Commission Secretary David J.Meyer,Esq.
Idaho Public Utilities Commission Vice President and Chief Counsel for
PO Box 83720 Regulatory and Governmental Affairs
Boise,ID 83720-0074 Avista Corporation
P.O.Box 3727
Street Address for Express Mail:1411 E.Mission Ave.,MSC-13
Spokane,WA 99220-3727
472 W.Washington Street [e-mail]
Boise,ID 83702-5918
Linda Gervais
Sr.Manager,Regulatory Policy
Avista Corporation
P.O.Box 3727
1411 E.Mission Ave.,MSC-27
Spokane,WA 99220-3727
linda.gervais@ avistacorp.com
NOTICE OF APPLICATION
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ORDER NO.34188 3
These comments should contain the case caption and case number shown on the first page of this
document.Persons desiring to submit comments via e-mail may do so by accessing the
Commission's home page located at Click the "Consumers"tab then click
the "Case Comment or Question Form"and complete the comment form using the case number as
it appears on the front of this document.
YOU ARE FURTHER NOTIFIED that the Company shall file reply comments,if
necessary,by no later than December 5,2018.
YOU ARE FURTHER NOTIFIED that if no written comments or protests are received
within the time limit set,the Commission will consider this matter on its merits and enter its Order
without a formal hearing.If written comments are received within the time limit set,the
Commission will consider them and,in its discretion,may set the same for formal hearing.
NOTICE OF APPLICATION
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ORDER NO.34188 4
ORDER
IT IS HEREBY ORDERED that the Application of the Company be processed by
Modified Procedure,Rule 201-204 (IDAPA 31.01.01 201-.204).Persons interested in submitting
written comments must do so by November 28,2018.The Company may file reply comments by
no later than December 5,2018.
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this *
day of November,2018.
PAUL KJELLAND ,PRESIDENT
KRISTINE RAPER,COMMISSIONER
ERIC ANDERSON,COMMISSIONER
ATTEST:
Diane M.Hanian
Commission Secretary
I:\bgal\ELECTRICiAVU-E-18-I l\AVUEl8l l_nte app mod proc_ej
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