20081106Joint Petition.pdf

BARTON L. KLINE
Lead Counsel
esIDA~POR~
An IDACORP Company
ie
November 5, 2008
VIA HAND DELIVERY
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
P.O. Box 83720
Boise, Idaho 83720-0074
Re: Case No. GNR-E-08-02
IN THE MA TIER OF THE JOINT PETITION TO APPROVE A STIPULATION
TO ADJUST PUBLISHED IDAHO AVOIDED COST RATES FOR IDAHO
POWER COMPANY, PACIFICORP, AND AVISTA CORPORATION
Dear Ms. Jewell:
Enclosed for filing please find an original and seven (7) copies of the Joint Petition
in the above matter.
I would appreciate it if you would return a stamped copy of this letter for my file in
the enclosed stamped, self-addressed envelope.very~(~
Barton L. Kline
BLK:csb
Enclosures
P.O. Box 70 (83707)
1221 W. Idaho St.
Boise, 10 83702
DONOVAN E. WALKER, ISB No. 5921
BARTON L. KLINE, ISB No. 1526
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: 208-338-6936
dwalker(âidahopower.com
bkline(âidahopower.com
RECEIVËO
2008 NOV -S PH 4: 55"
IDAHO PUB! V'UTILITIES COMMIŠS/ON'
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT )
PETITION TO APPROVE A )
STIPULATION TO ADJUST ) CASE NO. GNR-E-08-02
PUBLISHED IDAHO AVOIDED COST )
RATES FOR IDAHO POWER ) PETITION
COMPANY, PACIFICORP, AND AVISTA )CORPORATION )
)
COMES NOW, Idaho Power Company ("Idaho Powet' or the "Company"), on
behalf of. itself, the Staff of the Idaho Public Utilities Commission ("Staff'), Avista
Corporation ("Avista"), PacifiCorp ("PacifiCorp"), U.S. Geothermal Inc. ("U.S.
Geothermal"), Exergy Development Group of Idaho, LLC ("Exergy"), Tuana Springs
Energy LLC ("Tuana"), Idaho Windfarms, LLC ("IWF"), and those other entities signing
the Stipulation, which is presented herewith, and, in accordance with IDAPA
31.01.01.272-276, hereby requests that the Commission issue its order approving the
PETITION -1
Stipulation for the purpose of determining new published avoided cost rates. This
Petition is based on the following:
i. BACKGROUND
1. On September 10, 2007, Idaho Power filed a Petition with the Idaho Public
Utilities Commission ("Commission") to modify the methodology for determining fuel
costs used to establish published rates for PURPA qualifying facilities ("QFs"). On
December 28,2007, the Commission, in Order No. 30480, stated as follows:
. . . we find it reasonable, based on the written record
developed in this case, to adopt Staffs proposed change for
calculating the fuel cost component and published avoided
cost rates. We further find that the proposed change in the
methodology to calculate the fuel cost component and
published avoided cost rates can be made independently
(and in advance) of a review of the entire list of non-fuel
methodology variables.
The Commission agrees that a periodic review of the other
methodology variables is advisable, and accepts and
encourages Idaho Power's offer to conduct a 2008 workshop
to review the other non-fuel methodology variables. We also
deem it advisable that PacifiCorp and Avista participate. We
direct the Company to report its workshop findings to the
Commission. (Order No. 30480, p. 11.)
2. Non-fuel variables consist of two general categories - utility-specific
variables and generic variables. Utility-specific variables relate to each utility's cost of
capitaL. Because they are a direct outcome of general rate cases, the Parties agree that
they are not an issue in this case. Generic variables relate to the Surrogate Avoided
Resource ("SAR"), whose costs set the basis from which Idaho's published avoided
costs rates are determined. Adjustment of the non-fuel related generic variables is the
subject of this case and the Stipulation.
PETITION -2
3. In accordance with Order No. 30480, Idaho Power hosted workshops on
April 4, 2008, and July 23, 2008. At the conclusion of the July 23 workshop, the parties
agreed to continue their discussions bye-mail with the goal of reaching a consensus on
changes that should be made to the non-fuel related costs of the SAR.
4. As a result of those continuing settlement discussions, the Parties have
agreed on interim values which are based on using a "base year" of 2008 in the model
for the non-fuel related costs of the SAR. Those values are set out in the Stipulation
which is enclosed with this Petition as Attachment NO.1.
5. As noted in the Stipulation, Parties accept the non-fuel related SAR costs
contained in the column labeled "Proposed" on pag.e three of the Stipulation. Parties
note in Attachment No. 1 their understanding that the Northwest Power and
Conservation Council ("Council") expects to issue new forecasts of fuel-related SAR
costs in the near future. Because the fuel-related SAR costs have a much greater
impact on the published rates than the non-fuel related costs, the Parties hereby
request that the Commission issue its order approving the non-fuel related values
contained in the Stipulation at the same time it approves fuel related cost components
based on the Council's median forecast of natural gas prices. This wil allow the
Commission to make a single avoided cost rate change. The Parties further noted in
the Stipulation that proposals for new forecasts and/or methods of forecasting non-fuel
related SAR costs can be made in appropriate future Commission proceedings.
NOW, THEREFORE, the Parties hereby request that the Commission issue its
order: (1) approving Attachment NO.1 without material change or condition and (2)
accepting the non-fuel cost related values set out in the Stipulation for the purpose of
PETITION -3
revising the published avoided cost rates at the same time that the fuel-related cost
variables are adjusted for purposes for setting new published avoided costs rates in
Idaho.
Respectfully submitted this 5th day of November 2008.
~ÓVM~ wÆ~
DONOVAN E. WALKER
Attorney for Idaho Power Company ,~~f~
PETITION -4
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 5th day of November 2008 I served a true and
correct copy of the within and foregoing PETITION upon the following named parties by
the method indicated below, and addressed to the following:
Commission Staff
Scott D. Woodbury
Deputy Attorney General
Idaho Public Utilties Commission
472 West Washington
P.O. Box 83720
Boise, Idaho 83720-0074
-2 Hand Delivered
U.S. Mail
_ Overnight Mail
FAX
-2 Email Weldon.stutzman(âpuc.idaho.gov
Avista Corporation
David J. Meyer
Clint Kalich
Avista Corporation - MSC-7
P.O. Box 3727
1411 East Mission Street
Spokane, Washington 99220-3727
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email clint.kalich(âavistacorp.com
PacifiCorp
Mark Moench
Daniel Solander
Rocky Mountain Power
One Utah Center
201 South Main Street, Suite 2300
Salt Lake City, Utah 84111
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email Daniel.Solander(âPacifiCorp.com
Exergy Development Group
of Idåho, LLC
Peter J. Richardson, Esq.
RICHARDSON & O'LEARY PLLC
515 North 27th Street
P.O. Box 7218
Boise, Idaho 83702
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email peter(ârichardsonandoleary.com
Tuana Springs Energy LLC
Dean J. Miler
McDEVITT & MILLER, LLP
420 West Bannock Street
P.O. Box 2564
Boise, Idaho 83701
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email joe(âmcdevitt-miler.com
PETITION - 5
Idaho Windfarms, LLC
Glennlkemoto
672 Blair Avenue
Piedmont, California 94611
Hand Delivered
-2 U.S. Mail
_ Overnight Mail
FAX
-2 Email glennicæpacbell.net
~Barton L. Kline
PETITION -6
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
CASE NO. GNR-E-08-02
IDAHO POWER COMPANY
ATTACHMENT NO.1
DONOVAN E. WALKER, ISB No. 5921
BARTON L. KLINE, ISB No. 1526
Idaho Power Company
P.O. Box 70
Boise, Idaho 83707
Telephone: [phone]
Facsimile: 208-338-6936
dwalker(âidahopower.com
bkline(âidahopower.com
Idaho PU~/ic Utilties Commission
Office ot the Secretary
RECEIVED
NOV - 5 2008
Boise, Idao
Attorneys for Idaho Power Company
Street Address for Express Mail:
1221 West Idaho Street
Boise, Idaho 83702
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE JOINT )
PETITION TO APPROVE A ) CASE NO. GNR-E-08-02
STIPULATION TO ADJUST )
PUBLISHED IDAHO AVOIDED COST ) STIPULATION
RATES FOR IDAHO POWER )
COMPANY, PACIFICORP, AND AVISTA )CORPORATION )
)
This Stipulation ("Stipulation") is entered into by and among Idaho Power
Company ("Idaho Power"), the Staff of the Idaho Public Utilities Commission ("Staff'),
Avista Corporation ("Avista"), PacifiCorp ("PacifiCorp"), U.S. Geothermal Inc. ("U.S.
Geothermal") , Exergy Development Group of Idaho, LLC ("Exergy"), Tuana Springs
Energy LLC (UTuana"), Idaho Windfarms, LLC ("IWF"), and those other entities signing
this Stipulation. These entities are collectively referred to as the "Parties."
STIPULATION -1
e e
I. BACKGROUND
1. On September 10, 2007, Idaho Power filed a Petition with the Idaho Public
Utilities Commission ("Commission") to modify the methodology for determining fuel
costs used to establish published rates for PURPA qualifying facilities ("QFs"). On
December 28, 2007, the Commission, in Order No. 30480, stated as follows:
. . . we find it reasonable, based on the written record
developed in this case, to adopt Staffs proposed change for
calculating the fuel cost component and published avoided
cost rates. We further find that the proposed change in the
methodology to calculate the fuel cost component and
published avoided cost rates can be made independently
(and in advance) of a review of the entire list of non-fuel
methodology variables.
The Commission agrees that a periodic review of the other
methodology variables is advisable, and accepts and
encourages Idaho Power's offer to conduct a 2008 workshop
to review the other non-fuel methodology variables. We also
deem it advisable that PacifiCorp and Avista participate. We
direct the Company to report its workshop findings to the
Commission. (Order No. 30480, p. 11.)
2. Non-fuel variables consist of two general categories - utility-specific
variables and generic variables. Utility-specific variables relate to each utility's cost of
capitaL. Because they are a direct outcome of general rate cases, the Parties agree that
they are not an issue in this case. Generic variables relate to the Surrogate Avoided
Resource ("SAR"), whose costs set the basis from which Idaho's published avoided
costs rates are determined. Adjustment of the non-fuel related generic variables is the
subject of this case and the Stipulation.
3. In accordance with Order No. 30480, Idaho Power hosted workshops on
April 4, 2008, and July 23, 2008. At the conclusion of the July 23 workshop, the parties
STIPULATION - 2
e e
agreed to continue their discussions bye-mail with the goal of reaching a consensus on
changes that should be made to the non-fuel related costs of the SAR.
II. AGREEMENT
4. The Parties have agreed on interim values for the non-fuel related costs of
the SAR. The following chart shows a comparison between the current values and the
Parties proposed values:
Non-Fuel Related SAR Costs Current Proposed
Heat Rate
Equivalent Availabilty Factor
Capital Cost
Variable O&M
O&M Escalation Rate
SAR Escalation Rate
Fixed O&M
General Inflation
7,100
92%
$802/kW
$3.47/MWh
2.7%
2.1%
$13.24
2.7%
7,100
86.5%
$1,100/kW
$3. 86/MWh
2.0%
1.4%
$14.71
2.0%
5. The Parties are wiling to accept the above-referenced proposed costs for
setting avoided cost rates, with the understanding that revised SAR values wil be
adopted as they become available from the Northwest Power and Conservation Council
("Council") or the Council's general advisory committees. The Parties have been
advised that revised values for non-fuel related SAR costs should become available in
the next several months if the Council remains on schedule for completion of its Sixth
Power Plan.
6. In reviewing the current avoided cost model used to set published avoided
cost rates, the Parties have found two minor mathematical formula. errors. The result of
correcting these mathematical errors is dependant upon the values of the various
inputs, but a representative estimate of the impact would be an approximate increase of
$.024 per MWh in the published avoided cost energy rates. The Parties agree that
STIPULATION - 3
e e
these mathematical corrections wil be used in the avoided cost model at the time the
published rates are recalculated. The corrections to be made are more specifically
describes as follows:
a. The formula used to de-escalate the Carrying Charge for years
earlier than the SAR Base Year is incorrect. The current formula of the Base Year
value multiplied by (1 minus the escalation rate) should be revised to be the Base Year
value multiplied by (1 divided by (1 minus the escalation rate)).
b. The initial year has not been included in the Titled Capital
calculation, thus one additional year needs to be included in this present value
calculation.
7. The Parties also expect the Council to issue new forecasts of fuel-related
SAR costs this year. Because the fuel-related SAR costs have a much greater impact
on the published rates, than do the non-fuel related costs, the Parties recommend that
the Commission issue its Order approving the non-fuel related values contained in this
Stipulation at the same time it approves new fuel-related avoided cost components
based on the Council's median forecast of natural gas prices. This wil allow the
Commission to make a single avoided costs rate change. The Parties recognize and
agree that proposals for new forecasts and/or methods of forecasting non-fuel related
SAR costs wil be made in appropriate future Commission proceedings.
8. The Parties agree that this Stipulation represents a settlement and
compromise of the positions of the Parties in this case. As provided in RP 272 of the
Commission's Rules of Practice and Procedure concerning settlements (IDAPA
31.01.01.272-276), other than any testimony filed in support of the approval of this
STIPULATION - 4
e e
Stipulation, and except to the extent necessary for a Part to explain before the
Commission its own statements and positions with respect to the Stipulation, all
statements made and positions taken in negotiations relating to this Stipulation shall be
confidential and wil not be admissible as evidence in this or any other proceeding.
9. The Parties submit this Stipulation to the Commission and recommend its
approval, without material change or condition, in its entirety pursuant to RP 274.
Parties shall support this Stipulation before the Commission, and no Part shall appeal
a Commission Order approving the Stipulation or an issue resolved by the Stipulation.
If this Stipulation is challenged by any person not a part to the Stipulation, the Parties
to this Stipulation reserve the right to file testimony, cross-examine witnesses, and put
on such case as they deem appropriate to respond fully to the issues presented,
including the right to raise issues that are incorporated in the settlements embodied .in
this Stipulation. Notwithstanding this reservation of rights, the Parties to this Stipulation
agree that they wil continue to support the Commission's adoption of the terms of this
Stipulation.
10. If the Commission rejects any part or all of this Stipulation, or imposes any
additional material conditions on approval of this Stipulation, each Part reserves the
right, upon written notice to the Commission and the other Parties to this proceeding,
within 14 days of the date of such action by the Commission, to withdraw from this
Stipulation. In such case, no Part shall be bound or prejudiced by the terms of this
Stipulation, and each Part shall be entitled to seek reconsideration of the
Commission's order, file testimony as it chooses, cross-examine witnesses, and do all
other things necessary to put on such case as it deems appropriate.
STIPULATION - 5
e e
11. The Parties agree that this Stipulation is in the public interest and that all
of its terms and conditions are fair, justand reasonable.
12. No Party shall be bound, benefited or prejudiced by any position asserted
in the negotiation of this Stipulation, except to the extent expressly stated herein, nor
shall this Stipulation be construed as a waiver of the rights of any Part unless such
rights are expressly waived herein. Execution of this Stipulation shall not be deemed to
constitute an acknowledgment by any Part of the validity or invalidity of any particular
method, theory or principle of setting avoided cost rates. No Party shall be deemed to
have agreed that any method, theory or principle of setting avoided cost rates in arriving
at this Stipulation is appropriate for setting avoided cost rates in any other proceeding in
the future. No findings of fact or conclusions of law other than those stated herein shall
be deemed to be implicit in this Stipulation.
13. The obligations of the Parties under this Stipulation are subject to the
Commission's approval of this Stipulation in accordance with its terms and conditions
and upon such approval being upheld on appeal, if any, by a court of competent
jurisdiction.
14. This Stipulation may be executed in counterparts and each signed
counterpart shall constitute an original document.
DATED this 5th day of November 2008.
Idaho Power Company Idaho Public Utilities Commission Staff
By 1)~w~
Donovan Walker
Attorney for Idaho Power Company~ ~ Øl
By
(PRINT NAME)
(TITLE)
STIPULATION - 6
e e
11. The Parties agree that this Stipulation is in the public interest and that all
of its terms and conditions are fair, just and reasonable.
12. No Part shall be bound, benefited or prejudiced by any position asserted
in the negotiation of this Stipulation, except to the extent expressly stated herein, nor
shall this Stipulation be construed as a waiver of the rights of any Part unless such
rights are expressly waived herein. Execution of this Stipulation shall not be deemed to
constitute an acknowledgment by any Part of the validity or invalidity of any particular
method, theory or principle of setting avoided cost rates. No Part shall be deemed to
have agreed that any method, theory or principle of setting avoided cost rates in arriving
at this Stipulation is appropriate for setting avoided cost rates in any other proceeding in
the future. No findings of fact or conclusions of law other than those stated herein shall
be deemed to be implicit in this Stipulation.
13. The obligations of the Parties under this Stipulation are subject to the
Commission's approval of this Stipulation in accordance with its terms and conditions
and upon such approval being upheld on appeal, if any, by a court of competent
jurisdiction.
14. This Stipulation may be executed in counterparts and each signed
counterpart shall constitute an original document.
DATED this _ day of 2008.
Idaho Power Company Idaho Public Utilities Commission Staff
~~~By /'
Scott D. Woodbury
Deputy Attorney General
By
Donovan Walker
Attorney for Idaho Power Company
STIPULATION - 6
e
Avista Corporation
Energy
Exergy
Glen Ikemoto
7
e
PacifiCorp
By
e
Avista Corporation
By
(PRINT NAME)
(TITLE)
The United States Department of Energy
By
(PRINT NAME)
(TITLE)
Exergy
By
(PRINT NAE)
(TTLE)
Glen Ikemoto
STIPULATION -7
e
PacifiCorp
By
Ad4ßJi //""" ,,jot (PRINT NA
:5 V"P Ef G" i; UlEJt (æMELLTITLE)
U.S. Geothermal Inc.
By
(PRINT NAME)
(TITLE)
Tuana Springs Energy LLC
By
(PRINT NAE)
(TITLE)
e e
Avista Corporation PacifiCorp
By By
(PRINT NAME) (PRINT NAME)(TITLE) (TITLE)
The United States Department of Energy U.S. Geothermal Inc.
(PRINT NAME)
(TITLE)
By~c£~~~1
ceo (TITLE)
By
Exergy Tuana Spnngs Energy LLC
By By
(PRINT NAME) (PRINT NAME)(TITLE) (TITLE)
Glen Ikemoto
STIPULATION -7
e e
Avista Corpration PacifCorp
By By
(PRINT NAE) (PRINT NAE)(T) (TIT)
The United StatešDe.partentot Energy U.S. Geotherrallnc.
ßy By(PRINT NAE) (PRINT NA(TITLE) (TIT
EXergy TuanaSprtngs Energy LLC
By 6~O~
fe~.. Ri'(WdkJ", (PRINT NAME)(Ok a (p ( (TTLE)
By
(PRINT NAME)
(TITLE)
Gln Ikemoto
STIPULATION - 7
e e
Avista Corporation PacifiCorp
By By
(PRINT NAE) (PRINT NAME)(TITLE) (TITLE)
The United States, Department of Energy U.S. Geothermal Inc.
By By
(PRINT NAME) (PRINT NAME)(TITLE) (TITLE)
Exergy Tuana Springs Energy LLC
(PRINT NAME)
(TITLE)
By
(PRINT NAME)
(TITLE)
Glen Ikemoto
STIPULATION - 7
e
Avista Corporation
By
(PRINT NAME)
(TITLE)
The United States Department of Energy
By
(PRINT NAME)
(TITLE)
Exergy
By
(PRINT NAME)
(TITLE)
Idaho Windfarrn, LLC
STIPULATION - 7
e
PacifiCorp
By
u.s. Geothermal Inc.
By
(PRINT NAME)
(TITLE)
Tuana Springs Energy LLC
By
(PRINT NAME)
(TITLE)
(PRINT NAME)
(TITLE)
.. ...