20030630Final Order No 29272.pdf

Office of the Secretary
Service Date
June 30, 2003
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE ANNUAL REVISION)
AND UPDATED CALCULATION OF THE
ADJUSTABLE PORTION OF THE AVOIDED
COST RATE FOR EXISTING PURPA
CONTRACTS FOR A VISTA CORPORATION
DBA A VISTA UTILITIES, FOR IDAHO POWER)
COMPANY, AND PACIFICORP DBA UTAH POWER & LIGHT COMPANY.
CASE NO. GNR-O3-
ORDER NO. 29272
The Idaho Public Utilities Commission in Order No. 28708, Case No. GNR-99-
established a methodology for the annual adjustable rate portion of avoided costs for those QF
contracts using variable costs associated with Colstrip, a coal-fired generating facility in
southeast Montana. The Colstrip adjustments apply only to contracts executed between
September 28, 1990 and January 30, 1995. For those QF contracts with Colstrip-related fuel
costs and variable O&M, future Colstrip variable cost adjustments are to be calculated by using
FERC Form 1 Colstrip Unit Coal Costs per megawatt hour (MWh) and adding $2.00/MWh (the
average variable O&M cost of Colstrip plus 20~/MWh for generation taxes plus a five percent
(5%) adjustment for line loss). As computed by Commission Staff the Colstrip related adjustable
rate for the 2003-2004 year should change from 8.52 mill/kWh to 8.64 mill/kWh. The same
calculated rate revision under the avoided cost methodology is used by Avista, PacifiCorp dba
UP&L and Idaho Power Company. This change in the variable rate affects existing contracts
under the previous coal-based SAR methodology.
The adjustable portion of the avoided cost rates under the Sumas-based (gas-fired
SAR) methodology is based on annual average gas prices indexed at Sumas, Washington.
Reference Order No. 26135, Case Nos. WWP-95-3/IPC-95-7/UPL-95-2. The purpose of
including an adjustable component in the avoided cost rates is to capture annual changes in
natural gas fuel costs. The Sumas adjustments apply to all SAR methodology contracts executed
since January 31 , 1995. As reported by Avista, the indexed gas prices have decreased by
$1.90/mmbtu. The previously approved base gas price of $5.23/mmbtu plus the $1.90/mmbtu
decrease results in a gas price of $3.33/mmbtu for the 2003-2004 year. This by Staffs
calculation equates to a SAR fuel cost of 24.48 mill/kWh as used in the model. Under the
ORDER NO. 29272
Commission-approved Sumas-based SAR methodology, the adjustable portion of avoided cost
rates is the same for all ofIdaho s major electric utilities.
The Commission Staff by letter dated May 29 2003, prepared by Staff Engineer Rick
Sterling, calculated changes to the annual adjustable rate portion of avoided costs for those QF
contracts using variable costs associated with Colstrip and Sumas for review by the respective
utilities.Avista, Idaho Power and PacifiCorp by letter responses indicate that Staff's
calculations are correct.
COMMISSION FINDINGS
The Commission has reviewed and considered the filings of record in Case
No. GNR-03-02. We find that the accuracy of the variable rate methodology figures submitted
by A vista (Sumas) and calculated by Staff (Colstrip) in this case have not been challenged.
The methodology that this Commission has approved for determining the variable
components of the avoided cost rates is a relatively simple arithmetic recalculation. We fmd
based upon our review of the calculations of both Colstrip and Sumas updates, that the resulting
adjustable rates for existing contracts are fair, just and reasonable.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over A vista Corporation dba
Avista Utilities, Idaho Power Company and PacifiCorp dba Utah Power & Light Company,
electric utilities, pursuant to the authority and power granted it under Title 61 of the Idaho Code
and the Public Utility Regulatory Policies Act of 1978 (PURP A).
The Commission has authority under PURP A 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
and to implement FERC rules.
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
HEREBY ORDERED that the Colstrip-related and Sumas-related adjustable portions of the
avoided cost rates for existing PURPA contracts for Avista, Idaho Power and PacifiCorp are
changed effective July 1 , 2003, as detailed above.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally
decided by this Order) may petition for reconsideration within twenty-one (21) days of the
ORDER NO. 29272
service date of this Order with regard to 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.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 30
day of June 2003.
MARSHA H. SMITH, COMMISSIONER
c:-t::- Jt-~i./L-/
ISSIONER
ATTEST:
~t)Je D. Jewell
Commission Secretary
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ORDER NO. 29272