20220715Final_Order_No_35466.pdf

ORDER NO. 35466 1

Office of the Secretary
Service Date
July 15, 2022
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

On February 22, 2022, Avista Corporation d/b/a Avista Utilities (“Company”) applied to
the Commission for approval of its capacity deficiency period filing (“Filing”) used for its avoided
cost calculations. The Company must make its Filing after the Commission acknowledges its
Integrated Resource Plan (“IRP”). The Company requested its Application be processed by
Modified Procedure.
On March 18, 2022, the Commission issued a Notice of Application and Notice of
Modified Procedure and set public comment and company reply deadlines. Order No. 35347.
Commission Staff (“Staff”) filed comments on May 5, 2022. The Company filed reply
comments on May 12, 2022. No other comments were received.
With this Order, we approve the Company’s filing.
THE FILING
Under the Public Utility Regulatory Policies Act of 1978 (“PURPA”), the Commission
established a surrogate avoided resource (“SAR”) method and an IRP method to calculate avoided
cost rates for qualifying facilities (“QFs”). Under both methods, a QF receives capacity
payments—in addition to payments for energy—beginning after the applicable capacity deficit
date is reached. See Order Nos. 33377, 33159, and 33898. The first deficit date under the IRP
method is adjusted to reflect changes in the QF queue, whereas the first deficit date under the SAR
method does not. Order No. 33933.
The capacity deficiency period is determined through the IRP planning process and is
submitted to the Commission in a proceeding separate from the IRP docket. The capacity deficit
date determined in the IRP process is presumed to be a correct starting point but is subject to the
outcome of the capacity deficiency case. Order No. 32697. The capacity deficiency case must be
filed after the Commission acknowledges a utility’s IRP. Order No. 33917.
IN THE MATTER OF AVISTA
CORPORATION’S COMPLIANCE FILING
TO UPDATE AND ESTABLISH ITS
CAPACITY DEFICIENCY PERIOD TO BE
USED FOR AVOIDED COST
CALCULATIONS
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CASE NO. AVU-E-22-02

ORDER NO. 35466
ORDER NO. 35466 2

The Commission acknowledged the Company’s 2021 electric IRP on December 16, 2021.
Order No. 35257.
The Company’s Filing proposed a first capacity deficiency date of November 1, 2026, due,
primarily, to the expiration of the Lancaster Power Purchase Agreement (“PPA”) on October 31,
2026. Filing at 4.
STAFF COMMENTS
Staff reviewed the Company’s Filing, the associated Load and Existing Resource Balances
(“L&R”) of four scenarios using different Colstrip retirement dates, and the responses to Staff’s
production requests. Staff also reviewed the new method used to produce the L&R. Staff
recommended that, “if the Commission decides to re-evaluate when the capacity deficiency date
case[s] should be filed in Case No. IPC-E-21-09, a generic docket should be opened because the
decision may need to consider factors affecting all three Idaho electric utilities.” 1
1. Load Forecast
The load forecast used in the L&R was developed for the 2021 IRP which was filed on
March 31, 2021. Staff noted the Company’s representation that it planned to have an updated load
forecast in November 2021. Staff recommended the Company update the L&R using the most
recent available load forecast.
Staff noted the Company’s load forecast included a transmission loss adjustment associated
with Colstrip generation. Staff recommended the Company update the adjustment to reflect the
retirements of Colstrip Units 3 and 4 in 2034 and 2036, respectively.
2. Resources in the L&R
Staff focused its evaluation of resources in the L&R based on whether a resource was
“available” and/or “existing” consistent with the Commission’s mandate in Order No. 33425. Staff
focused on the Chelan Public Utility District (“PUD”) hydro contract, Colstrip retirement dates,
and recent PURPA contracts submitted to the Commission.
a. Chelan PUD Hydro Contract
Staff noted the unapproved hydro contract with the Chelan PUD executed in December
2021 was properly excluded in the proposed L&R.

1 On May 25, 2022, the Commission, in Order No. 35415, Case No. IPC-E-21-09, directed Staff and the other three
electric utilities to evaluate the established filing date for capacity deficiency date determinations and, if warranted,
open a new docket to alter the established timing of capacity deficiency case filings. Order No. 35415 at 10-11.
ORDER NO. 35466 3

b. Colstrip Retirement Dates
Staff noted all four scenarios of Colstrip retirement dates and L&Rs show a first annual
deficit year of 2027.
c. Recently Submitted PURPA Contracts
Staff agreed that the Company properly excluded from the proposed L&R the two
unapproved PURPA contracts the Company had with the University of Idaho.
3. L&R Method
Staff noted the Company used the PRiSM model (which does not provide monthly
information) to generate the capacity deficiency date. Staff noted the PRiSM model’s first full
deficit year, 2027, was inconsistent with the Company’s requested deficiency date of November
1, 2026. Staff recommended the Company provide a new L&R that incorporated load and resource
adjustments and the required Colstrip retirement dates at a monthly level—as done in previous
capacity deficiency cases—to ensure the data supported the proposed capacity deficiency date.
STAFF RECOMMENDATIONS
Staff recommended the Company file an updated L&R as a compliance filing that used:
(1) the most recent load forecast; (2) an updated Colstrip Losses Adjustment in the load forecast;
and (3) the Colstrip retirement dates of 2034 and 2036 for Units 3 and 4 in Idaho consistent with
Order No. 34981.
Staff also recommended the Company file the updated L&R showing annual and monthly
deficits instead of just annual deficits so that the L&R data accurately supported the new first
capacity deficiency date.
COMPANY REPLY COMMENTS
The Company replied that the capacity deficiency period had shifted to December 1, 2026,
from November 1, 2026—the original capacity deficiency date in its Filing. The Company further
replied that it supported Staff’s recommendation to open a generic docket to reevaluate when the
capacity deficiency case should be filed. The Company included an updated Confidential L&R
Excel spreadsheet with its comments incorporating the following changes recommended by Staff:
(1) use of the most recent load forecast from February 2022; (2) updated Colstrip Losses
adjustment through 2036 for Idaho’s 35 percent pro rata share; (3) use of 2034 and 2036 for the
respective retirement dates for Colstrip Units 3 and 4; and (4) an updated L&R showing annual
and monthly deficits.
ORDER NO. 35466 4

COMMISSION DISCUSSION AND FINDINGS
The Commission has jurisdiction over this matter under Idaho Code §§ 61-501, -502, and
-503. Idaho Code § 61-501 authorizes the Commission to “supervise and regulate every public
utility in the state and to do all things necessary to carry out the spirit and intent of the [Public
Utilities Law].” Idaho Code §§ 61-502 and -503 empower the Commission to investigate rates,
charges, rules, regulations, practices, and contracts of public utilities and to determine whether
they are just, reasonable, preferential, discriminatory, or in violation of any provision of law, and
to fix the same by order. In addition, the Commission has authority under PURPA and Federal
Energy Regulatory Commission (“FERC”) regulations to set avoided costs, to order electric
utilities to enter fixed-term obligations for the purchase of energy and capacity from QFs, and to
implement FERC rules. The Commission may enter any final order consistent with its authority
under Title 61 and PURPA.
The Commission has reviewed the record, including the Company’s Filing and attachments
and Staff’s comments. We find the Company’s updated Confidential L&R spreadsheet showing a
December 1, 2026, deficiency date is reasonable and consistent with previous Commission orders.
ORDER
IT IS HEREBY ORDERED that the Company’s updated capacity deficit date for use in
the Commission’s PURPA avoided cost methods shall be December 1, 2026.
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 regarding any matter
decided in 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. 35466 5

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 15th day of
July 2022.

ERIC ANDERSON, PRESIDENT

JOHN CHATBURN, COMMISSIONER

JOHN R. HAMMOND JR., COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\AVU-E-22-02 Cap Def\orders\AVUE2202_final_rn.docx