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HomeMy WebLinkAbout20090220Decision Memo.pdfDECISION MEMORANDUM TO:COMMISSIONER REDFORD COMMISSIONER SMITH COMMISSIONER KEMPTON COMMISSION SECRETARY COMMISSION STAFF LEGAL FROM:SCOTT WOODBURY DEPUTY ATTORNEY GENERAL DATE:FEBRUARY 20, 2009 SUBJECT:CASE NO. GNR-09-01 (Avista, PacifiCorp, Idaho Power) FUEL COST ADJUSTMENT TO PUBLISHED AVOIDED COST RATES On September 10, 2007 , Idaho Power Company filed a Petition with the Idaho Public Utilities Commission (Commission) to modify the methodology for determining fuel costs used to establish published rates for PURP A qualifying facilities (QFs). Reference Case No. IPC- 07-15. On December 28, 2007, the Commission in Order No. 30480 changed the fuel cost component of published avoided cost rates from the three-year escalated average established in Order No. 29124 (Case No. GNR-02-1) to use of each year of the Northwest Power and Conservation Council (Council) medium 20-year natural gas price forecast. The Commission found that the release of a new fuel price forecast by the Council automatically triggers a recalculation of the published avoided cost rates under the methodology approved in Order No. 29124 and carried out in Order No. 29646 when the Council released its 2004 fuel price forecast. Published avoided cost rates are adjusted as new fuel-related SAR values become available from the Councilor the Council's general advisory committees. A new Council natural gas price forecast was released on December 29 2008. Staff provided Idaho Power, Avista and PacifiCorp with worksheets on February 9, 2009 showing the computation of the revised avoided cost rates. The revised rates also reflect a change Idaho Power s weighted cost of capital as a result of Order No. 30722 in Idaho Power s recent general rate case. The proposed changes are made in accordance with existing Commission Orders and methodologies. See attached rates. DECISION MEMORANDUM Idaho Power and A vista accept Staff s avoided cost calculations as accurately incorporating the Council's December 29, 2008 revised natural gas price forecasts and as consistent with the Commission s approved SAR methodology. See attached comments. PacifiCorp in its comments believes that the Council's medium natural gas price curve yields a price that is too high, and is not a true reflection of current gas costs. The Council's price forecast includes five different levels to capture a range of possible outcomes (low, medium-low, medium, medium-high, and high). Given the Council's description of their low case forecasts, current market "sign posts " and current market forwards, PacifiCorp believes that the Council's low and medium-low price forecasts are a better indicator of current market conditions than the medium case. See attached comments. PacifiCorp requests that a technical conference be conducted to allow the parties to revisit the existing avoided cost methodology and come up with a solution in light of the current economic forecast. PacifiCorp suggests that the Commission consider updating the price forecast after conditions have become more stable. At a minimum, PacifiCorp requests that the Commission postpone approval of the gas curve component of published avoided cost rates until the Council's draft fuel prices become final. PacifiCorp states it has received six wind QF project requests totaling 235 MW since January 26, 2009. All of these projects are off-system QFs with scheduled deliveries into an already transmission constrained area. PacifiCorp reminds the Commission that based on the Revised Protocol agreement, costs associated with new QF contracts which exceed the costs PacifiCorp would have otherwise incurred acquiring comparable resources will be assigned directly to the state approving those contracts. COMMISSION DECISION Presented in this case for Commission approval are revised published avoided cost rates incorporating the Council's December 29, 2008 medium natural gas price forecast. PacifiCorp contends that use the Council's medium natural gas price curves results in avoided prices that are too high. PacifiCorp recommends that a technical conference be held to determine the continued reasonableness of the published rate avoided cost methodology. Under the present methodology, rates are changed when the Council issues a new gas price forecast. PacifiCorp recommends that there be no change until the Council's draft fuel prices become final. The DECISION MEMORANDUM calculation of the fuel cost adjustment to published avoided cost rates is arithmetic. Does the Commission find it reasonable to approve the change in rates? Scott Woodbury Deputy Attorney General bls/M:GNR-O9-01 sw DECISION MEMORANDUM ... ROCKY MOUNTAIN POWER A DIVISION Of PAClACORP r::\/r::r': '01 February 18 2009 'LfiG9 rEB \ 8 PM \2: 3S PUr:,Uc "I"\fl . " ' I"C'IU" UTILITIES C ;;.,\:, \ :,:)", 201 South Main, Suite 2300 Salt Lake City, Utah 84111 VL4 OVERNIGHT DELIVERY Rick Sterling Idaho Public Service Commission 472 W. Washington Street O. Box 83720 Boise, Idaho 83720-0074 rick. stefl ing~puc.idaho. gov RE:Case No. GNR-09-1 - Annual Adjustment of Avoided Cost Rates. Rocky Mountain Power (the "Company") would like to provide you and the Idaho Commission with our comments regarding the draft avoided cost rates for small non-fuel projects less than ten megawatts that you circulated on January 26, 2009. Although the Company agreed with the stipulation s logic for computing and updating capital costs, heat rate, and O&M Costs in the SAR methodology, the Company is concerned that the overall Qualifying Facility ("QF" avoided cost price that the SAR methodology yields is too high. The assumptions underlying the avoided cost prices in the January 26, 2009 draft paper are representative of elevated pricing and bullish economic perceptions in the first half of 2008 and are not representative of costs that reflect the dramatic recessionary environment that is forecast by most experts to be deep and long. The primary, but not sole driver to the high QF avoided costs in the January 26, 2009 draft paper is the result of using the Northwest Planning and Conservation Council's ("NPCC") Draft Fuel Prices for the Sixth Power Plan, December 29, 2008. The NPCC price forecast includes five different levels to capture a range of possible outcomes (low, medium low, medium, medium-high, and high). When the NPCC price forecast was first used in the SAR methodology, the Commission expressed confidence that the medium forecast had the highest probability of being right (Order No. 29124, pg. 10). Given the rapid pace of decline in global economic conditions in recent months, the Company feels the medium NPCC gas price forecast is, at present, not the most accurate representation of current market conditions. The NPCC Draft Fuel Prices for the Sixth Power Plan states: The low case assumes slow world economic growth which reduces the pressure on energy supplies. It is a future where world supplies of natural gas are made available through aggressive development of LNG capacity, favorable nonconventional supplies and the technologies to develop them, and low world oil prices providing an alternative to natural gas use. The low case would also be consistent with a scenario of more rapid progress in renewable electric generating technologies, thus reducing the demand for natural gas... Idaho Public Utilities Commission February 18, 2009 Page 2 The intermediate cases are variations on the medium case that are considered reasonably likely to occur. The medium-high case would contain elements of the high scenario however, not to the same degree. Similarly, the medium-low case would contain some of the more optimistic factors described for the low case. There are a number of market "sign posts" that align well with NPPC's description of their low case: . Wodd economic growth has slowed and reduced pressure on energy supplies. There are a number of significant liquefaction projects coming online in 2009 and 2010, with projects in Indonesia, Qatar, Russia, and Yemen expected to contribute nearly 7 BCF/d of new capacity to the global market. In 2008, there was more LNG regasification capacity added than in the four prior years combined, with even larger growth expected for 2009. Technological advancements in horizontal drilling and hydraulic fracturing have enabled growth in nonconventional natural gas supplies to outpace declines in conventional production and imports. Despite OPEC's efforts to cut production, oil prices remain much lower than the recent highs experienced this past summer. As of January 30, 2009, prompt month WTI crude settled below $42 per barrel. At the time the NPCC medium gas price forecast was first adopted, there was very little liquidity in the forward markets beyond 12 to 18 months, and thus the ability to test which of the NPCC five forecast levels was most reflective of then current market conditions was limited. However since 2002, the forward markets have become more liquid, and NYMEX now offers physical contracts for Henry Hub through 2021. The figure below shows how the medium, medium-low and low NPCC price forecasts compare to NYMEX forwards as of market close on January 30 2008. fThis space is intentionally left blank) Idaho Public Utilities Commission February 18 2009 Page 3 Comparison of Henry Hub Natural Gas Prices (Nominal) 514 513 512 511 510 (;j 2009 2010 2011 2012 2013 2014 2015 2016 2011201820192020 2021 2022 2023 2024 2025 202620272028 2029 2030 NPCC Medium -+- NPCC Medium-Low""" NPCC Low NYMEX (01lJO12OO9) Tbe average NYMEX price from March 2009 through December 2009 is $4.99 per mmBtu. Because this is a partial year average, it is not shown as a comparison against the NPCC forecasts in the figure above. The NPCC forecasts were converted from 2006$ to nominal using a 2% per year escalation rate. While not shown in the figure above, market forwards for the balance of 2009 are considerably lower than even the low NPCC price forecast. Market forwards in 2010 are most closely aligned with the low NPCC price forecast. Beyond 2010, the medium-low NPCC price forecast begins to align reasonably well with current market forwards. Over the entire NYMEX strip, the NPCC medium case projection is considerably higher than current market. While the Company had previously supported using the median NPCC price forecast, given the NPCC's description of their low case forecasts, current market "sign posts " and current market forwards, the Company strongly believes that the low and medium-low NPCC price forecasts are a better indicator of currant market conditions than the medium case. According to the methodology circulated on January 26, 2009, the draft avoided cost rate will be a nominallevelized $87.42 per MWh for a twenty year contract for projects on-line in 2009. This rate is 27% higher than current Idaho avoided cost of $68.66 and 15% higher than any avoided cost price Rocky Mountain Power has experienced in other states, where QF avoided cost prices for the same length of contract range from approximately $55 to $74 per MWh nominallevelized. This rate also exceeds those included in the Company s current IRP and that of recently acquired renewable resources. Based on the Revised Protocol agreement, costs Idaho Public Utilities Commission February 18, 2009 Page 4 associated with new QF contracts which exceed the costs PacifiCorp would have otherwise incurred acquiring comparable resources will be assigned directly to the state approving those contracts. After correcting an error in the draft avoided cost calculation, the revised methodology results in a nominal levelized avoided cost rate of $89.95. The Company is concerned with the impact that establishing an avoided cost of $89.95 per MWh could have on its Idaho customers. The Company s concern is that these extreme rates will become a "magnet" for out-of-state or off-system QF projects seeking the highest prices for their project at a cost to the Company s Idaho customers. To illustrate this point, over the past 5 years, the Company had received a total of a half dozen requests for wind QF projects totaling 100 MW, of which only one resulted in a signed power purchase agreement. Within three days after the January 26 draft methodology and prices were circulated by Staff, the Company received six wind QF project requests, totaling 235 MW. All of these proposed projects are off-system QFs with scheduled deliveries into an already transmission constrained area. The Company believes that the medium natural gas price curve from NPCC yields a price that is too high, and is not a true reflection of current gas costs. The impact of using the draft medium NPCC fuel curve is approximately two-thirds of the 27% increase in the avoided costs and the Company feels that warrants, at a minimum, postponing Commission approval of the gas curve component until the NPCC fuel prices are final. The Company is also requesting additional time be provided in order to more thoroughly review all of the assumptions used in the NPCC forecast and requests a technical conference be conducted to allow the parties to revisit the existing methodology and come up with a solution in light of the current economic forecasts. Given the dramatic global economic downturn and extraordinary downward impact on commodity costs that has occurred in the last few months, the Company questions the timing of an update that does not appear to reflect current market conditions and suggests the Commission consider updating the price forecast after conditions have become more stable. Accordingly, the Company requests that the Commission reevaluate its use of this draft price curve before QF prices are established using these inflated costs so that Idaho customers are not impacted by potentially above market QF prices. Please let me know if you have any further questions. ~L/ Vice President, Regulation Rocky Mountain Power Enclosures Avista Corp. 1411 East Mission P.O. Box 3727 Spokane. Washington 99220-0500 Telephone 509-489-0500 Tall Free 800-727-9170 r"~ """'"'-'"\,:: ' ..J ~ \i ~ ' ~~~'iI'ST Corp.2DD3FEB 18 PM 3: 24 IDAHO PU~;! !CI:;;;q" ""-' ,jJ, ~!,...,:, 1- "-,, l,,'i'IL'\-:i;j0"'_.li' VIA Electronic Mail February 18 2008 Jean D. Jewell, Secretary Idaho Public Utilities Commission Statehouse Mail W. 472 Washington Street Boise) Idaho 83720 RE: Case NO. GNR-09-01 - In the Matter ofllie Fuel Cost Related Adjustment to Published Idaho Avoided Cost Rates for Idaho Power Company, Pacificorp DBA Rock Mountain Power, and A vista Corporation DBA A vista Utilities Dear Ms. Jewell: In response to Scott Woodbury s letter dated February 9,2009, Avista Utilities has reviewed the avoided cost calculations in Case No. GNR-09-O1 and accepts them as accurately incorporating the draft Northwest Power and ConservatiDn Council natural gas price forecast into the SAR model. Attached are Avista s comments in the above referenced Case provided to Commission Staff on February 4, 2009. Please direct questions on,this matter to Clint Katich at (509) 495-4532. Sincerely, cp,~ Linda Gervais Manager, Regulatory Policy State and Federal RegulatiDn A vista Utilities 509-495-4975 Ene. Avista cnrp. 1411 East Missiqn PO 80)(3127 Spohl1i;Was.iin!j!on 9921-0.3727 Telephone SCs,.:ae,G5QO Toll Free 800-727,9170 ECE\VE':: Lun, FEB \ 8 PM 3: 24 .AE;!!~ - ./PHi ~15:r1lp. "\-10 FU'\C .." \\\ 11f';:- ." 1"",:,\,) iA \SS tv i. UTILI I !'co':: ,.,,/v', February 4, 2009 Via Email Onlv Rick Sterling Idaho Public Utilities Commission 472 W.WaShington Boise, ID $3702 Emai1:ric k. sterling(fYp uc.i:dah o. gov Re: Idaho Draft AvoidedCo~t Rates Dear Rick: On January 26 2009, you fOIwardcd forreview and comment Idaho s draft avoided costrates. I have reViewedthe draft avoided cost rates for Avista Corporation ("Avista ) and believethat you havc properly calculated costs given your assumptions. That said, A vista has some concerns with thqse assumptionsand provides the fol1owlng comments Qn the draft avoided costtates. NWPCC Assumptions are Not Yet Final According tp the stipulation agreed by the parties late last year in IPUC Docket No. GNR-O8-, Surrogate A voided Resource ("SAR") assumptions are to be updated as they beCome available from the Northwest Power and Conservation CoUncil C"N\VPCC" orCouridl"). Although draft values are now available from the ' Council" it has not released even its Drafl:SiXth Power Plan. The final plan is not anticipated until late this year. The values included in the proposed PURPA rate appear to be based on current draft documents and not final values. It is Very likely thatthis information will not change; however, A vista understands that UJ1der the stipulationfi"Qal val1,les win be used. At a minimum, the IPUC should make clear ~hat, once final values are available, the avoided cost rates. win be revised to reflect such fma! values. The SAR Assumption for EM Was Not Updated NotWithstanding the aboye comment regarding the use of final values issued by the NWPCC, the !PUG has ,not updated all SAR assumptions identified in the stipulation. Specifically, the equivalent availability factor ("EAP") was not increased to 92% per the NwPCC &:aft. Thi$ stipulation is clear that the listed SAR values will all be updated, including EAF. Adjusting the EAP to 92% based on Council data lowers the 20~year leve1ized rate by approximately $2Jl\.1vVh CapitaL Costs Are Overstated 1# revi ewing the capital cost assllmptioIl; it appears that the IPUC selected the highest capital cQstvalue from the NWPCC forecast, oot11 fWl11 a historical and projected basis. The N\V'PCC is forecasting a dramatjc fall in gas plant capital costs~fTom approximate1y$l ,200 per kWpresently to $85() per kW. It is inappropriate to set long-terrnPURPA rates IQY projects built ye:arsmto.the futureattoday'$irifla ~dCat1d fa1ling) prices. Another method should be employed. One approach wowdbe to calculate an avoided cost for each (u1line ye~r; using the NWP.CC capatitycost estimate in that year. Another approach would he to accept the long-term cost trend ($&52 pet kW in 2DO6 dollars) by a v~raging prices OYer the 20- year horizon 0 f 201 0 to 2029. Avistais open to other ideas, so long as they retlect anticipated expected 10ng-tenll prbje~tc~$ts. Lowermgthe ca!1italcost from $1 ,3001k W in 2008 to$900/kW in 20081bwetgthe 20~ye.ar levelizedrate byapprox:i1l1ately $7/lVIWh. The !PUG Should Make Clear that the Use oIlliatt Data ill tiris Circumstance Does Not Set Any Prec.eO.ent Assuming theIPtJCmustpro'ceed with implementing rates b~ed on draft NPCC datain thisea~e~Avisla would hopetl1at in the futt",readjits1:l11ents are made based on infonn.atloncBrita:rned iilfimil. docunh~trts. Grandiathering There is along history of ,granclfathering projcctsdue to changing circumstances. To grevi$nltllis, Avi$ta would like itmadecTcar to all parties aneM ofume thaLcontractssigned b~tXi.on~ese rates will not he adjusted in the fut1J.I~. up 01' do"vn, based on new infonnation. Contrapts:&igned Imder then-current terms should stand. tJiliformitv with Other State PURPA Rates IdahoPlJRPA rates are now significantly above rates available to developers located outside of Idaho. Thediscrepmcies are large enoug~ that it would. be reasonable to expcGt these developers to' whrel their power frQmlocat1ons outside of Idaho (but potenriaHy wi thin the service territories ofbiulti-jurisdictipIlalutilities) to locations inside simply to acquire the higher PURP A ratc. EVen: with the cost of transmission the economics would appear to support this adi vity. Although. WUC staffhave indieated that they do not believeiliis wouid be allowed" Avista is tI,l)?bl~ to locate any 10.\lv' or order that \vould prevent this occurring. OveFaliPURPARate Appears High Paylllgnearly $90 per .MWh for wind generation when Avista docs not obtain ilie green tag value Seems" very high. AY:tsta believes there is the potential for it to build wind prpjects at this cost fetaintbe green tag value. One solution th~ cQ111panyl1as conSidered is moving to a Wind $AA where a prQct::ecl1ugcoqld be u&ed to define genetic wind costs rather than fotting 8. "vind fa~ility t'O look like a glIs. plant AvisMappreciatestlle opportunity to comment on the draft avoided cost rates. Please (Dontact me if YOlt have any questions regarding any of Avista s eomh1ents. Respecrfully submitted ::/ if'/,0 . . ..-""", \..(:...-~ -'-- Clint Kalicn Manager of Resource Planning and Analysis IDAHO ~POWERCID F 1\" An IDACORP Company LOUg FE8 18 PI'1 3: 56 February 18, 2009 iDi\,Hn F' .~r.~ 10- 'J"-ISSIC);; Randy C. Allphin Senior Planning Administrator Tel: (208) 388-2614 rallphin(cv'i dahopower. com Idaho Public Utilities Commission Attn: Scott Woodbury PO Box 83720 Boise, ID 83720-0074 RE:CASE NOS. GNR-09- IN THE MATTER OF THE FUEL COST RELATED ADJUSTABLE TO IDAHO AVOIDED COST RATES FOR IDAHO POWER COMPANY, P ACIFICORP DBA ROCKY MOUNTAIN POWER, AND A VISTA CORPORATION DBA A VISTA UTILITIES. We have reviewed the infonnation you have provided in your letter dated February 9, 2009 notifying Idaho Power of revision of the Published avoided cost rates due to inclusion of a revised Northwest Power and Conservation Council natural gas forecast that was released on December 29 2008. On February 11 , 2009 Rick Sterling called Randy Allphin at Idaho Power advising of a mathematical error discovered in the values that were included in the letter dated February 9, 2009 and e-mailed a revised Published Avoided Cost calculation to Idaho Power for review. For reference a representative value from this revised calculation is $88.11 for a 20 year levelized contract with an on-line year of2009. Idaho Power concurs that the model and calculations used by the IPUC staff for Idaho Power Company are consistent with IPUC Order 30480. Idaho Power believes there may be some question as to whether the December 29, 2008 Northwest Power and Conservation Council natural gas forecast is a final or draft forecast. However in reviewing the Northwest Power and Conservation Council process in developing its 6th plan, there are numerous indications that this Natural Gas forecast is the final forecast that will be used in the 6th plan. Idaho Power assumes that if at a later date a different frnal forecast is included in the 6th plan these Published Avoided Costs will be revised accordingly and any QF purchase power agreements executed will include the Published Avoided Costs as approved by the Commission at the time the agreement was executed and will not be subject to change. Sincerely, , landY C Allphin Page 1 of2 POBox 70 Boise, Idaho 83707 1221 W Idaho St. Boise, Idaho 83 7 (P' cc:Bart Kline (IPCo) Donovan Walker (IPCo) Mike Youngblood (IPCo) Mark Stokes (IPCo) POBox 70 Boise, Idaho 83707 Page 2 of2 1221 W Idaho St. Boise, Idaho 83702 AVISTA AVOIDED COST RATES FOR FUELED PROJECTS SMALLER THAN TEN MEGAWATTS February 24, 2009 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2009 2010 2011 2012 2013 2014 YEAR RATES 15.15.46 15.16.16.16.2009 12. 15.28 15.15.16.16.17.2010 12. 15.45 15.16.16.16.17.2011 12. 15.15.16.16.17.17.2012 13. 15.16.16.16.17.17.2013 13. 15.16.16.17.17.45 17.2014 14. 16.16.45 16.17.17.18.2015 14.41 16.16.16.17.17.18.2016 14. 16.16.17.17.17.18.2017 15. 16.16.17.17.18.18.2018 15. 16.17.17.46 17.18.18.2019 16. 16.17.17.18.18.43 18.2020 16. 16.17.17.18.18.19.2021 16. 17.17.49 17.18.18.19.2022 17.42 17.17.18.18.45 18.19.2023 17. 17.17.18.18.19.19.46 2024 18. 17.48 17.18.18.19.19.2025 18. 17.18.18.43 18.19.19.2026 19. 17.18.18.18.19.42 19.2027 19. 17.18.18.19.19.20.2028 20.42 2029 20. 2030 21. 2031 22. 2032 22. 2033 23. 2034 23. EFFECTIVE DATE ADJUSTABLE COMPONENT 2/24/2009 56. The total avoided cost rate in each year is the sum of the adjustable component and the fixed component from either of the tables above. Example 1. A 20-year levelized contract with a 2009 on-line date would receive the following rates: Years Rate 17.84 + 56. 17.84 + Adjustable component in each year Example 2. A 4-year non-Ievelized contract with a 2009 on-line date would receive the following rates: Years Rate 12.19 + 56. 12.54 + Adjustable component in year 2010 12.89 + Adjustable component in year 2011 13.26 + Adjustable component in year 2012 Note: The rates shown in this table have been computed using the Northwest Power and Conservation Council's December 29, 2008 Fuel Price Forecast. (See Order No. 30480). AVISTA AVOIDED COST RATES FOR NON-FUELED PROJECTS SMALLER THAN TEN MEGAWATTS February 24, 2009 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2009 2010 2011 2012 2013 2014 YEAR RATES 71.47 70.73.76.78.81.2009 71.47 71.72.74.77.50 79.82.2010 70. 71.73.46 76.78.81.83.2011 73. 72.74.77.79.82.85.2012 76. 73.75.78.80.83.86.2013 78. 74.76.79.46 82.84.87.47 2014 81. 75.77.80.83.85.88.2015 83. 76.78.81.84.87.89.2016 86. 77.80.82.85.44 88.91.2017 89. 78.81.83.77 86.89.92.2018 92. 79.82.84.87.90.40 93.2019 95. 80.83.85.88.91.48 94.41 2020 98. 81.84.86.89.92.95.2021 101.45 82.85.87.90.93.96.2022 104. 83.85.88.91.94.97.2023 108. 84.86.89.92.95.98.2024 111.45 85.87.90.93.96.100.2025 115. 86.88.91.94.97.101.2026 119. 87.89.92.95.98.102.2027 123. 87.90.93.96.99.103.2028 128. 2029 132. 2030 137. 2031 142. 2032 147. 2033 152. 2034 157.46 Note: The rates shown in this table have been computed using the Northwest Power and ConseNation Council's December 29, 2008 Fuel Price Forecast. (See Order No. 30480). IDAHO POWER COMPANY AVOIDED COST RATES FOR FUELED PROJECTS SMALLER THAN TEN MEGAWATTS February 24, 2009 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2009 2010 2011 2012 2013 2014 YEAR RATES 15.15.15.16.16.16.2009 12. 15.15.16.16.40 16.17.2010 12. 15.48 15.16.16.16.17.2011 12. 15.16.16.16.17.17.2012 13. 15.16.16.16.17.17.72'2013 13. 15.16.16.17.17.17.2014 14. 16.16.16.17.17.18.2015 14.45 16.16.17.17.43 17.18.2016 14. 16.43 16.17.17.18.18.42 2017 15. 16.16.17.17.18.18.2018 15. 16.17.17.17.18.18.2019 16. 16.17.17.18.18.48 18.2020 16. 17.17.40 17.18.18.19.2021 17. 17.17.17.18.18.19.2022 17.47 17.17.18.18.18.19.2023 17. 17.41 17.18.18.19.19.2024 18.42 17.17.18.18.19.19.2025 18. 17.18.18.18.19.19.2026 19.43 17.18.18.19.19.19.2027 19. 17.18.18.19.19.20.2028 20.48 2029 21. 2030 21. 2031 22. 2032 22. 2033 23. 2034 23. EFFECTIVE DATE ADJUSTABLE COMPONENT 2/24/2009 56. The total avoided cost rate in each year is the sum of the adjustable component and the fixed component from either of the tables above. Example 1. A 20-year levelized contract with a 2009 on-line date would receive the following rates: Years Rate 17.91 + 56. 17.91 + Adjustable component in each year Example 2. A 4-year non-Ievelized contract with a 2009 on-line date would receive the following rates: Years Rate 12.23 + 56. 12.57 + Adjustable component in year 2010 15.93 + Adjustable component in year 2011 13.30 + Adjustable component in year 2012 Note: The rates shown in this table have been computed using the Northwest Power and Conservation Council's December 29, 2008 Fuel Price Forecast. (See Order No. 30480). These rates also reflect a change in Idaho Powers weighted cost of capital as a result of Order No. 30722 in the Companys recent general rate case. IDAHO POWER COMPANY AVOIDED COST RATES FOR NON-FUELED PROJECTS SMALLER THAN TEN MEGAWATTS February 24, 2009 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2009 2010 2011 2012 2013 2014 YEAR RATES 71.70.73.76.78.81.2009 71. 71.72.22 74.77.80.82.2010 70. 71.73.76.78.81.83.2011 73. 72.74.77.26 79.82.42 85.2012 76. 73.75.78.81.83.86.2013 78. 74.76.79.82.84.87.2014 81. 75.77.80.83.85.88.2015 83. 76.79.81.84.42 87.89.2016 86. 77.80.82.85.88.91.2017 89.43 78.81.83.86.89.40 92.2018 92.40 79.82.84.87.90.93.41 2019 95. 80.83.85.88.91.94.2020 98. 81.84.86.89.92.95.2021 101.49 82.85.87.90.93.96.2022 104. 83.86.88.91.94.97.2023 108. 84.87.89.92.95.99.2024 111. 85.46 87.90.93.97.100.2025 115. 86.88.91.94.98.101.2026 119. 87.89.92.95.99.102.41 2027 123. 88.90.93.96.100.103.48 2028 128. 2029 132. 2030 137. 2031 142. 2032 147. 2033 152. 2034 157. Note: The rates shown in this table have been computed using the Northwest Power and Conservation Council's December 29, 2008 Fuel Price Forecast. (See Order No. 30480). These rates also reflect a change in Idaho Powers weighted cost of capital as a result of Order No. 30722 in the Company s recent general rate case. PACIFICORP AVOIDED COST RATES FOR FUELED PROJECTS SMALLER THAN TEN MEGAWATTS February 24, 2009 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2009 2010 2011 2012 2013 2014 YEAR RATES 15.15.15.16.16.17.2009 12. 15.42 15.16.16.16.17.2010 12. 15.15.16.16.17.17.47 2011 13. 15.16.16.49 16.17.17.2012 13.41 15.16.16.17.17.44 17.2013 13. 16.16.45 16.17.17.18.2014 14. 16.16.16.17.17.18.2015 14. 16.16.17.17.17.18.2016 14. 16.16.17.17.18.18.2017 15. 16.17.17.47 17.18.18.2018 15. 16.17.17.18.18.45 18.2019 16. 16.17.17.18.18.19.2020 16. 17.17.17.18.18.19.2021 17. 17.17.18.18.48 18.19.2022 17. 17.17.18.18.19.19.2023 18. 17.17.18.18.19.19.2024 18. 17.18.18.48 18.19.19.2025 19. 17.18.18.19.19.48 19.2026 19. 17.18.18.19.19.20.2027 20. 18.18.44 18.19.19.20.2028 20. 2029 21. 2030 21. 2031 22. 2032 22. 2033 23. 2034 24. EFFECTIVE DATE ADJUSTABLE COMPONENT 2/24/2009 56. The total avoided cost rate in each year is the sum of the adjustable component and the fixed component from either of the tables above. Example 1.A 20-year levelized contract with a 2009 on-line date would receive the following rates: Years Rate 18.02 + 56. 18.02 + Adjustable component in each year Example 2. A 4-year non-Ievelized contract with a 2009 on-line date would receive the following rates: Years Rate 12.33 + 56. 12.68 + Adjustable component in year 2009 13.04 + Adjustable component in year 2010 13.41 + Adjustable component in year 2011 Notes: (1) The rates shown in this table have been computed using the Northwest Power and Conservation Council's December 29 2008 Fuel Price Forecast. (See Order No. 30480). (2) The rates shown in this table have been computed using the weighted average cost of capital from PacifiCorp s most recent general rate case. (See Order No. 30482). PACIFICORP AVOIDED COST RATES FOR NON-FUELED PROJECTS SMALLER THAN TEN MEGAWATTS February 24, 2009 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2009 2010 2011 2012 2013 2014 YEAR RATES 71.71.73.76.48 78.81.42 2009 71. 71.72.33 75.77.80.82.2010 71. 72.73.76.78.81.83.2011 73. 73.05 74.77.37 79.82.85.2012 76.48 74.75.78.81.83.86.43 2013 78. 75.77.00 79.82.84.87.2014 81.42 76.78.80.83.40 86.88.2015 84. 77.04 79.81.84.87.90.2016 86. 78.80.82.85.88.91.2017 89. 79.81.83.86.89.92.2018 92. 79.82.85.87.90.93.2019 95.46 80.83.86.88.91.94.2020 98.49 81.84.87.89.92.95.2021 101. 82.85.88.90.93.96.2022 104. 83.86.89.91.94.98.2023 108. 84.87.90.92.96.99.2024 111. 85.88.90.94.97.100.2025 115. 86.41 88.91.95.98.101.2026 119.43 87.89.92.96.99.102.47 2027 123. 88.90.93.97.100.103.2028 128.40 2029 133. 2030 138. 2031 142. 2032 147. 2033 152. 2034 157. Notes: (1) The rates shown in this table have been computed using the Northwest Power and Conservation Council's December 29 2008 Fuel Price Forecast. (See Order No. 30480). (2) The rates shown in this table have been computed using the weighted average cost of capital from PacifiCorp s most recent general rate case. (See Order No. 30482).