20080505Application.pdf

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Ui\l\1\ESSTATE OF IDAHO
OFFICE OF THE ATIORNEY GENERAL
LAWRENCE G. WASDEN
May 5, 2008
Avista Corporation
B lair Strong
Paine, Hamblen, et al
717 W. Sprague Avenue, Suite 1200
Spokane, WA 99201-3505
Clint Kalich
A vista Utilities
141 1 E. Mission
PO Box 3727
Spokane, WA 99220-3727
Michael Andrea
Avista Utilities
i 4 lIE. Mission
PO Box 3727
Spokane, WA 99220-3727
Rocky Mountain Power
Dean Brockbank
PacifiCorp dba Rocky Mountain Power
201 S. Main Street, Suite 2300
Salt Lake City, UT 841 1 1
Greg Duval1
Laren Hale
PacifiCorpdba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR 97232
Mark Moench
General Counsel
201 S. Main Street, Suite 2300
Salt Lake City, UT 84 i i 1
Ted Weston
PacifiCorp dba Rocky Mountain Power
One Utah Center
201 S. Main Street, Suite 2300
Salt Lake City, UT 84111
Idaho Power Company
Barton L. Kline
Idaho Power Company
PO Box 70
Boise, ID 83707-007
Randy Al1phin
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
RE: Case Nos. GNR-E-08-01; PAC-E-08-04
The Idaho Public Utilities Commission in Order No. 28708, Case No. GNR-E-99-1, 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. For those QF contracts with Colstrip~related fuel
Contracts & Administrative Law Division, Idaho Public Utilties Commission
P.O. Box 83720, Boise, Idaho 83720-0074, Telephone: [phone], FAX: [phone], E-mail: Ipuc(Øpuc.state.id.us
Located at 472 West Washington St., Boise, Idaho 83702
May 5, 2008
Page 2
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 av7rage variable O&M cost of
Colstrip plus 20t/MWh for generation taxes plus a five percent (5%) adjustment for line loss). As computed by
Commission Staff the Colstrip related adjustable rate wil change from 11.47 mil/kWh to J2.06 millkWh. The
same calculated rate revision under the avoided cost methodology is used by A vista, PacifiCorp dba Rocky
Mountain Power and Idaho Power Company. This change in the variable rate affects existing contracts under the
previous SAR methodology.
The adjustable portion of the avoided cost rates under the Sumas-based methodology is based on annual average
gas prices indexed at Sumas, Washington. As reported by Avista, the indexed gas prices have increased by
$0.24/MMBtu. The approved gas price of $6.94/MMBtu plus the $0.24/MMBtu increase results in a gas price of
$7.1 8/MMBtu for the 2008-2009 year. This equates to a SAR fuel cost of 52.77 millkWh as used in the modeL.
In accordance with Order No. 29316, th~ adjustable portion of the avoided cost rate for PacifiCorp contracts with
1992 amendments has also been recomputed, Beginning on July 1, 2003, the adjustable portion for these
contracts was ordered to be equal to the average cost of fuel for the Carbon, Hale, Naughton Huntington and
Hunter generating plants, including a variable O&M component of $ 1.51 but exclusive of generation taxes and a
line loss .adjustment. The variable energy rate applicable to deliveries commencing July 1, 2008 extending
through June 30, 2009 has been computed to be $14.1 l/MWh, an increase from $12.1 Tlast year.
Accompanying this letter are worksheets showing the computation of the revised adjustable rates for the various
affected contracts. If after reviewing the revisions, you accept them as accurate please indicate your approval by
letter (or other fiing) directed to the Commission in the reserved case docket numbers identified above. The
case heading for the generic adjustment, Case No. GNR-E-08-0 1, wil1 read as fol1ows:
IN THE MATTER OF THE ANNAL REVISION AND UPDATED CALCULATION OF
THE ADJUSTABLE PORTION OF THE AVOIDED COST RATE(S) FOR EXISTING
PURPA CONTRACTS FOR AVISTA CORPORATION DBA AVISTA UTILITIES, FOR
IDAHO POWER COMPANY, AND FOR PACIFICORP DBA ROCKY MOUNTAIN
POWER.
The case heading in the PacifiCorp case for PacifiCorp QF contracts with 1992 Amendment language, Case No.
PAC-E-08-04, is as fol1ows:
IN THE MA ITER OF THE ANNUAL REVISION OF QF VARIABLE ENERGY PRICES IN
ACCORDANCE WITH TERMS OF THEJ 992 AMENDMENTS TO POWER PURCHASE
AGREEMENTS BETWEEN IDAHO QFS AND PACIFICORP.
Please fie your respective responses with the Commission on or prior to June 3, 2008.
Thank you for your cooperation. Please feel free to contactme, or Rick Sterling, if you have any questions.
Sincerely,
~at~
Scott D. Woodbury
Deputy Attorney General
Enclosures
bls/L:GNR-E-08-0 i _PAC-E-08-04 _sw_avoided cost
COLSTRIP ADJUSTABLE RATE CALCULATION
For Period 7/1/08-6/30/09
Colstrip F.uel Cost from Avista FERC Form 1 for CY 2007
line 12
line 20
Net Generation (kwh)
Fuel
Fuel cost per kwh
Fuel Cost per MWh
Variable O&M, Gen. Tax, 5% line loss per MWh
Total Colstrip Adjustable Rate
Reference GNR-E-99-1 O.N. 28708 4/17/2001
Colstrip _08-09 .xls
..
1,672,761,000
$16,829,966
$0.010061
$10.0612
$2.0000
$12.0612
Average Gas Prices at Sumas, Washington from Inside FERCpublication
($/Mtu)
Calculating the 2008-2009 Avoided Cost Adjustable Rate
2006 2007
Jan $9.66 $6:41
Feb $7.12 $6.98
Mar $6.39 $7.15
Apr $5.81 $6.60
May $5.89 $6.74
Jun $4.91 $6.86
July $5.09 $6.03
Aug $5.91 $5.22
Sep $5.55 $4.81
Oct $3.91 $5.85
Nov $7.30 $7.45
Dec $7.86 $8.12
Average $6.28 $6.52
Actual Anual Adjustment:
$ô.94 :.-($6;28~$6:52t= $7.18
Note:
$2.00IMtu = 1997-98 Approved Rate
$2.35IMtu = 1998-99 Approved Rate
$2.26IMtu = 1999-00 Approved Rate
$2.80IMtu = 2000-01 Approved Rate
$4.82IMtu =2001-02 Approved Rate
$5.23IMtu = 2002-03 Approved Rate
$3.33IMtu = 2003-04 Approved Rate
$5.31IMtu = 2004-05 Approved Rate
$5.92IMtu = 2005-06 Approved Rate
$7.80IMtu = 2006-07 Approved Rate
$6.94/Mtu = 2007-08 Approved Rate
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