20200206Final_Order_No_34547.pdf

Office of the Secretary
Service Date
February 6,2020
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF COMMISSION )CASE NO.AVU-E-19-14
STAFF'S APPLICATION TO UPDATE )AVISTA CORPORATION'S AVOIDED COST )
RATES TO INCORPORATE NEW COST OF )ORDER NO.34547
DEBT )
On November 29,2019,the Commission issued Order No.34499,the final Order in
the recent general rate case for Avista Corporation ("Avista"or "Company"),Case No.AVU-E-
19-04.Avista's general rate case impacted the Company's weighted cost of capital and triggered
recalculation of the Company's published avoided cost rates in the Surrogate Avoided Resource
("SAR")model.
On December 26,2019,Commission Staff applied for Commission approval of its
proposed update to the weighted cost of capital for Avista's SAR model,which will update the
published avoided cost rates for the Company.
On January 8,2020,the Commission issued a Notice of Application and Notice of
Modified Procedure,setting a January 20,2020 comment deadline and a January 27,2020 reply
comment deadline.On January 2,2020,the Commission received a letter from Avista,stating it
had reviewed Staff's proposed update to the Company's published avoided cost rates and agreed
they were calculated correctly.No additional comments were received.Staff did not file reply
comments.
Having reviewed the record,we approve Staff's Application.
BACKGROUND
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 approvedthe SAR methodology for calculation
of the published avoided cost rates at which PURPA qualifying cogeneration and small power
production facilities ("QFs")are paid by Avista,Idaho Power Company,and PacifiCorp.Avoided
cost rates are the purchase price paid to QFs for purchases of QF capacity and energy.
ORDER NO.34547 1
THE APPLICATION
The conclusion of Avista's general rate case triggered recalculation of the Company's
published avoidedcost rates to reflect the change of cost of debt from 5.72%to 5.20%.As a result,
Staff stated the Company's weighted cost of capital,which depends on debt and equity,has
changed from 7.61%to 7.35%.Weighted cost of capital impacts avoided cost rates in the SAR
model.Staff noted past practice has been to incorporate changes to a utility's SAR model
immediately followinga general rate case.
Staff sent a letter to Avista explaining the proposed update to Avista's avoided cost
rates and included a copy of the proposed published avoided cost rates.Staff's letter served as an
Application in this docket.See Order No.34523.
THE COMMENTS
The only comment received was a letter from Avista stating it had reviewed Staff's
proposed update to the Company's published avoided cost rates and agreed they were calculated
correctly.
DISCUSSION
The Idaho Public Utilities Commission has jurisdiction over Avista and the matter
considered in this case pursuant to the authorityand power granted it under Title 61 of the Idaho
Code and PURPA.The Commission has authority under PURPA and the implementing
regulations of the FERC to set avoided costs,to order electric utilities to enter into fixed-term
obligations for the purchase of energy from QFs,and to implement FERC rules.
Pursuant to its authority,the Commission has reviewed and considered the filings of
record.We find the rates disseminated by Staff,which account for Avista's new weighted cost of
capital,were correctly calculated pursuant to Commission-approved methodology.We find the
updated published avoided cost rates are fair,just,and reasonable.
ORDER
IT IS HEREBY ORDERED that the updated published avoided cost rates,attached to
this Order,for Avista are approved,effective February 7,2020.
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.34547 2
DONE by Order of the Idaho Public Utilities Commission at Boise,Idaho this
day of February 2020.
PAUI JÉLL ,PRESIDENT
KRISTINE RAPER,COMMISSIONER
ERIC ANDERSON,COMMISSIONER
A
Diane M.Hanian
Commission Secretary
I:\LegalkELECTRIC\AVU-E-19-14\Orders\AVUEl914final.doex
ORDER NO.34547 3
AVISTA
AVOIDED COST RATES FOR WIND PROJECTS
February 7,2020
$/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)2020 2021 2022 2023 2024 2025 YEAR RATES
1 28.78 29.07 30.48 32.84 35.76 38.62 2020 28.78
2 28.92 29.75 31.62 34.25 37.14 40.98 2021 29.07
3 29.40 30.71 32.90 35.61 39.12 42.08 2022 30.48
4 30.17 31.84 34.19 37.38 40.33 43.06 2023 32.84
5 31.14 33.01 35.80 38.61 41.39 43.81 2024 35.76
6 32.18 34.47 37.00 39.70 42.22 44.51 2025 38.62
7 33.47 35.62 38.09 40.58 42.98 45.12 2026 43.52
8 34.53 36.66 38.98 41.37 43.64 45.83 2027 44.51
9 35.52 37.55 39.79 42.08 44.37 46.52 2028 46.48
10 36.36 38.35 40.51 42.81 45.07 47.20 2029 47.41
11 37.14 39.07 41.26 43,53 45.76 47.86 2030 48.82
12 37.84 39.80 41.97 44.21 46.42 48.51 2031 49.91
13 38.55 40.50 42.65 44.87 47.06 49.13 2032 52.43
14 39.23 41.18 43.31 45.52 47.68 49.72 2033 54.27
15 39.88 41.82 43.95 46.13 48.26 50.29 2034 56.07
16 40.50 42.45 44.55 46.71 48.83 50.87 2035 57.79
17 41.11 43.04 45.12 47.27 49.40 51.42 2036 59.79
18 41.68 43.60 45.67 47.83 49.94 51.95 2037 61.23
19 42.23 44.14 46.22 48.35 50.45 52.48 2038 62.80
20 42.75 44.67 46.74 48.86 50.97 53.02 2039 64.49
2040 66.95
2041 68.30
2042 69.88
2043 72.52
2044 75.66
2045 78.53
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
2019,released January 2019.See Annual Energy Outlook 2019,Table 3.8 Energy Prices by Sector-Mountainat
https://www.eia.govloutlooks/aeo/tables_ref.php
AVISTA Page 1
AVISTA
AVOIDED COST RATES FOR SOLAR PROJECTS
February 7,2020
$/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
I ICONTRACTON-LINE YEARLENGTH CONTRACT NON-LEVELIZED
(YEARS)2020 2021 2022 2023 2024 2025 YEAR RATES
1 28.78 29.07 30.48 32.84 35.76 38.62 2020 28.78
2 28.92 29.75 31.62 34.25 37.14 41.64 2021 29.07
3 29.40 30.71 32.90 35.61 39.54 42.96 2022 30.48
4 30.17 31.84 34.19 37.68 40.96 44.06 2023 32.84
5 31.14 33.01 36.03 39.10 42.16 49.58 2024 35.76
6 32.18 34.66 37.40 40.32 46.85 53.49 2025 38.62
7 33.63 35.94 38.60 44.40 50.39 53.25 2026 44.88
8 34.81 37.09 42.20 47.62 50.49 53.32 2027 45.90
9 35.89 40.29 45.13 47.93 50.77 53.52 2028 47.89
10 38.74 42.97 45.58 48.35 51.13 53.81 2029 76.01
11 41.17 43.49 46.09 48.82 51.53 54.16 2030 77.84
12 41.73 44.06 46.63 49.30 51.96 54.55 2031 51.381342.32 44.63 47.16 49.79 52.42 54.95 2032 53.92
14 42.91 45.19 47.69 50.29 52.87 55.36 2033 55.79
15 43.48 45.74 48.22 50.77 53.31 55.78 2034 57.61
16 44.03 46.28 48.73 51.25 53.76 57.34 2035 59.35
17 44.57 46.80 49.22 51.72 55.23 57.74 2036 61.37
18 45.09 47.31 49.70 53.10 55.65 58.13 2037 62.84
19 45.59 47.79 51.01 53.54 56.06 58.55 2038 64.43
20 46.07 49.03 51.46 53.96 56.49 58.99 2039 66.14
2040 100.55
2041 70.00
2042 71.61
2043 74.27
2044 77.44
2045 80.33
Note:Theserates will be further adjusted with the applicableintegration charge.
Note:The rates shown in this table have been computed using the U.S.Energy Information Administration (EIA)'s Annual Energy Outlook
2019,released January 2019.See Annual Energy Outlook 2019,Table 3.8 Energy Prices by Sector-Mountainathttps://www.eia.govloutlooks/aeoltables_ref.php
AVISTA Page 2
AVISTA
AVOIDED COST RATES FOR NON-SEASONAL HYDRO PROJECTS
February 7,2020
$/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)2020 2021 2022 2023 2024 2025 YEAR RATES
1 28.78 29.07 30.48 32.84 35.76 38.62 2020 28.78
2 28.92 29.75 31.62 34.25 37.14 44.69 2021 29.07
3 29.40 30.71 32.90 35.61 41.50 47.05 2022 30.48
4 30.17 31.84 34.19 39.10 43.92 48.69 2023 32.84
5 31.14 33.01 37.12 41.38 45.73 52.93 2024 35.76
6 32.18 35.53 39.23 43.18 49.54 55.99 2025 38.62
7 34.35 37.45 40.96 46.62 52.45 56.24 2026 51.19
8 36.08 39.08 44.06 49.35 53.00 56.68 2027 52.30
9 37.58 41.89 46.61 50.08 53.64 57.18 2028 54.39
10 40.12 44.25 47.43 50.84 54.29 57.72 2029 73.23
11 42.29 45.11 48.27 51.58 54.94 58.27 2030 75.02
12 43.16 45.97 49.06 52.30 55.58 58.84 2031 58.18
13 44.02 46.79 49.82 52.99 56.21 59.39 2032 60.81
14 44.83 47.56 50.54 53.67 56.82 59.93 2033 62.78
15 45.60 48.30 51.25 54.31 57.41 60.47 2034 64.71
16 46.33 49.01 51.91 54.93 57.98 61.75 2035 66.55
17 47.03 49.68 52.54 55.52 59.21 62.26 2036 68.67
18 47.69 50.31 53.14 56.71 59.74 62.75 2037 70.25
19 48.32 50.92 54.28 57.25 60.25 63.26 2038 71.95
20 48.92 52.00 54.84 57.78 60.77 63.78 2039 73.78
2040 97.28
2041 77.87
2042 79.59
2043 82.37
2044 85.66
2045 88.67
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
2019,released January 2019.See Annual Energy Outlook 2019,Table 3.8 Energy Prices by Sector-Mountainat
https://www.eia.govloutlooks/aeo/tables_ref.php
AVISTA Page 3
AVISTA
AVOIDED COST RATES FORSEASONAL HYDRO PROJECTS
February 7,2020
$/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)2020 2021 2022 2023 2024 2025 YEAR RATES
1 28.78 29.07 30.48 32.84 35.76 38.62 2020 28.78
2 28.92 29.75 31.62 34.25 37.14 39.55 2021 29.07
3 29.40 30.71 32.90 35.61 38.20 40.15 2022 30.48
4 30.17 31.84 34.19 36.71 38.94 40.89 2023 32.84
5 31.14 33.01 35.28 37.54 39.71 49.83 2024 35.76
6 32.18 34.06 36.15 38.35 47.05 56.06 2025 38.62
7 33.13 34.91 36.98 44.57 52.51 54.99 2026 40.55
8 33.94 35.73 42.34 49.40 51.95 54.43 2027 41.50
9 34.72 40.41 46.65 49.18 51.72 54.15 2028 43.42
10 38.85 44.28 46.66 49.18 51.67 54.05 2029 92.69
11 42.32 44.43 46.81 49.29 51.74 54.07 2030 94.76
12 42.56 44.70 47.04 49.48 51.88 54.20 2031 46.72
13 42.89 45.00 47.32 49.72 52.10 54.37 2032 49.19
14 43.24 45.34 47.63 50.01 52.34 54.58 2033 50.99
15 43.60 45.69 47.96 50.30 52.61 54.82 2034 52.74
16 43.98 46.06 48.30 50.62 52.90 57.10 2035 54.41
17 44.37 46.43 48.65 50.94 55.01 57.33 2036 56.35
18 44.75 46.79 49.00 52.91 55.29 57.58 2037 57.75
19 45.12 47.15 50.83 53.21 55.57 57.87 2038 59.26
20 45.49 48.87 51.16 53.51 55.87 58.20 2039 60.90
2040 120.14
2041 64.61
2042 66.13
2043 68.72
2044 71.80
2045 74.61
Note:A "seasonalhydro project"is defined as a generationfacility which produces at least 55%of its annual generationduring the
months of June,July,and August.Order 32802.
Note:Theserates 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 AnnualEnergy Outlook
2019,released January 2019.See Annual Energy Outlook 2019,Table 3.8 Energy Prices by Sector-Mountainathttps://www.eia.gov/outlookslaeoltables_ref.php
AVISTA Page 4
AVISTA
AVOlDED COST RATES FOR OTHER PROJECTS
February 7,2020
$/MWh
New Contracts and Replacement Contracts without Full Capacity Payments
Eligibility for these rates is limited to projects smaller than 10 aMW.
1.EVELIZED NOV-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED(YEARS)2020 2021 2022 2023 2024 2025 YEAR RATES
1 28.78 29.07 30.48 32.84 35.76 38.62 2020 28.78
2 28.92 29.75 31.62 34.25 37.14 49.42 2021 29.07
3 29.40 30.71 32.90 35.61 44.54 53.40 2022 30.48
4 30.17 31.84 34.19 41.30 48.51 55.89 2023 32.84
5 31.14 33.01 38.82 44.92 51.27 57.58 2024 35.76
6 32.18 36.89 42.07 47.63 53.27 58.94 2025 38.62
7 35.47 39.79 44.63 49.70 54.88 60.06 2026 61.02
8 38.05 42.17 46.66 51.40 56.22 61.17 2027 62.27
9 40.23 44.11 48.36 52.83 57.48 62.19 2028 64.50
10 42.04 45.76 49.82 54.16 58.63 63.16 2029 65.70
11 43.62 47.19 51.17 55.37 59.70 64.07 2030 67.37
12 44.99 48.53 52.40 56,49 60.68 64.94 2031 68.74
13 46.28 49.75 53.53 57.52 61.62 65.76 2032 71.54
14 47.47 50.87 54.58 58.49 62.50 66.53 2033 73.66
15 48.56 51.91 55.57 59.40 63.32 67.27 2034 75.75
16 49.58 52.89 56.48 60.24 64.09 68.01 2035 77.76
17 50.54 53.80 57.33 61.04 64.86 68.71 2036 80.05
18 51.42 54.65 58.14 61.82 65.58 69.37 2037 81.79
19 52.26 55.45 58.92 62.55 66.26 70.03 2038 83.66
20 53.04 56.22 59.65 63.24 66.93 70.70 2039 85.66
2040 88.43
2041 90.10
2042 92.01
2043 94.97
2044 98.45
2045 101.65
Note:"Other projects"refers to projects other than wind,solar,non-seasonalhydro,and seasonal hydro projects.These "Otherprojects"
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
2019,released January 2019.See Annual Energy Outlook 2019,Table 3.8 Energy Prices by Sector-Mountainathttps://www.eia.gov/outlookslaeoltables_ref.php
AVISTA Page 5