20100316final_order_no_31025.pdf

Office of the Secretary
Service Date
March 16 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE ADJUSTMENT OF
AVOIDED COST RATES FOR NEW PURPA
CONTRACTS FOR AVISTA CORPORATION
DBA A VISTA UTILITIES, IDAHO POWER
COMPANY, AND PACIFICORP DBA ROCKY MOUNTAIN POWER
CASE NO. GNR-10-
ORDER NO. 31025
BACKGROUND
Pursuant to the Public Utility Regulatory Policies Act of 1978 (PURP A) and the
implementing regulations of the Federal Energy Regulatory Commission (FERC), the Idaho
Public Utilities Commission (Commission) has approved a Surrogate Avoided Resource (SAR)
methodology for calculation of the avoided cost rates paid to PURP A qualifying cogeneration
and small power production facilities (QFs) by Idaho Power Company, Avista Corporation and
PacifiCorp. Avoided cost rates are the purchase price paid to QFs for purchases of QF capacity
and energy.
One of the key input variables in the computation of avoided cost rates is a long-term
natural gas price forecast. In accordance with the methodology approved in Order No. 29124
the medium natural gas price forecast of the Northwest Power and Conservation Council (NPCC;
Council) is to be used as the basis for computing avoided cost rates. In Order No. 29124, the
Commission also found that the release of a new fuel price forecast by the Councilor the
Council's general advisory committees automatically triggers a recalculation of the published
avoided cost rates.
NPCC New Natural Gas Price Forecast
A new natural gas price forecast was approved by the Northwest Power and
Conservation Council on March 2 2010, in conjunction with the Council's approval and release
of its Sixth Power Plan (Plan). The forecast was posted on the Council's web site on March 8
2010. The forecast is Appendix A to the Plan. A copy of the medium natural gas price forecast
contained in Appendix A to the Plan is attached. Attachment 1. In accordance with the
approved methodology, east-side delivered prices are to be used for avoided cost computations.
ORDER NO. 31025
Commission Staff has recomputed avoided cost rates USIng the approved SAR
methodology and the Council's most recent gas price forecast. Staff provided Idaho Power
Avista and PacifiCorp with worksheets on March 9, 2010 , for review and comment showing the
computation of the revised avoided cost rates. Idaho Power, A vista and PacifiCorp by letter
filings accept Staff s avoided cost calculations as accurately incorporating the Council's March
, 2010, revised natural gas price forecast and as consistent with the Commission s approved
SAR methodology. A copy of the revised rates for all three utilities is attached. Attachments 2-
COMMISSION FINDINGS
Presented in this case for Commission approval are revised published avoided cost
rates incorporating the Council's March 8, 2010 medium natural gas price forecast. The
methodology for calculation of avoided cost rates was established in Case No. GNR-02-
Order No. 29124. We find that the method for revising the fuel cost adjustment to published
avoided cost rates is a simple arithmetic calculation. We find that the Council's new natural gas
price forecast was approved on March 2, 2010 , and posted on the Council's website on March 8
2010. Sixth Power Plan, Appendix A. We find that the change in avoided cost rates depicted in
Attachments 2-4 to this Order accurately incorporate the Council's revised natural gas price
forecast and are consistent with the Commission-approved SAR methodology. We find it
reasonable to issue an Order implementing new published avoided cost rates without further
notice or procedure.
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over Idaho Power Company,
PacifiCorp dba Rocky Mountain Power and A vista Corporation dba A vista Utilities , 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 Sections 20 I and 210 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 NO. 31025
ORDER
In consideration of the foregoing and as more particularly described above, IT IS
HEREBY ORDERED and the Commission hereby approves the revised published avoided cost
rates set forth in Attachments 2, 3 , and 4 to this Order for new PURP A contracts executed on and
after this date for A vista Corporation, Idaho Power, and PacifiCorp.
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. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code 9 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this S-tft
day of March 2010.
~/..
EMPTO , P SIDENT
MARSHA H. SMITH, COMMISSIONER
~~~E
ATTEST:
ill~Je D. Jewell
Commission Secretary
bls/O:GNR-IO-OI sw
ORDER NO. 31025
Table AI-I: Natural Gas Prices at Key Hubs and Northwest Generators
2006$/MMBtu
Medium Case
elivere.
2005
2006 6.42
2007
2008 8.41
2009
2010
2011
2012 4.47
2013 5.48
2014
2015
2016 5.48
2017 6.43
2018 6.44
2019 7.27
2020
2021
2022
2023
2024 7.42 6.46
2025 7.41
2026
2027 7.45
2028 8.47
2029
2030
Al-
ATTACHMENT
Case No. GNR-10-
Order No. 31025
Page 1 of
FOW'ER PLAN
AVISTA
AVOIDED COST RATES FOR NON-FUELED PROJECTS
SMALLER THAN TEN MEGAWATTS
March 15, 2010
$/MWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2010 2011 2012 2013 2014 2015 YEAR RATES
56.60.64.67.71.41 75.2010 56.
58.62.65.69.43 73.76.2011 60.
60.63.67.49 71.74.77.2012 64.
61.65.47 69.72.75.78.2013 67.
63.67.70.73.77.79.2014 71.41
65.68.71.75.78.80.2015 75.
66.69.73.76.79.82.2016 77.
67.71.74.77.80.83.2017 80.
68.72.75.78.81.84.2018 82.
70.73.76.79.40 82.40 85.2019 85.
71.74.77.80.44 83.46 86.40 2020 87.
72.75.78.81.47 84.87.45 2021 90.
73.76.79.82.48 85.88.47 2022 93.
73.77.80.83.46 86.89.46 2023 97.
74.78.81.84.40 87.45 90.42 2024 100.
75.79.82.85.88.91.2025 104.
76.79.83.86.89.92.2026 107.
77.57 80.83.87.90.93.2027 110.
78.81.84.87.91.94.2028 113.
79.82.85.88.91.94.2029 116.
2030 120.
2031 124.
2032 128.
2033 132.
2034 137.
2035 141.48
Note: The rates shown in this table have been computed using the Northwest Power and Conservation Council's Fuel Price Forecast
contained in its Sixth Power Plan approved on February 10, 2010. See page A1-, East-Side Delivered prices. (Reference Order No.
30480).
ATTACHMENT 2
Case No. GNR-10-
Order No. 31025
Page 1 of 2
AVISTA
AVOIDED COST RATES FOR FUELED PROJECTS
SMALLER THAN TEN MEGAWATTS
March 15, 2010
$/MWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2010 2011 2012 2013 2014 2015 YEAR RATES
21.22.22.22.23.23.2010 21.
22.22.42 22.23.23.45 23.2011 22.
22.22.22.23.23.23.2012 22.
22.40 22.23.23.42 23.24.2013 22.
22.22.23.23.23.24.2014 23.
22.23.23.23.24.24.45 2015 23.
22.23.23.23.24.24.2016 23.
22.23.23.24.24.24.2017 24.
23.23.46 23.24.24.24.2018 24.
23.23.23.24.24.25.2019 25.
23.23.24.24.44 24.25.2020 25.46
23.23.24.24.24.25.2021 25.
23.23.24.24.25.25.46 2022 26.
23.24.24.46 24.25.25.2023 26.
23.24.24.24.25.25.2024 27.
23.24.24.25.25.45 25.2025 27.45
24.24.44 24.25.25.25.2026 27.
24.24.24.25.25.26.2027 28.
24.24.25.25.40 25.26.2028 28.
24.24.25.25.25.26.2029 29.
2030 29.
2031 30.
2032 30.49
2033 30.
2034 31.42
2035 31.
EFFECTIVE DATE ADJUSTABLE COMPONENT
3/15/2010 35.
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 2010 on-line date would receive the following rates:
Years Rate
24.39 + 35.
24.39 + Adjustable component in each year
Example 2. A 4-year non-Ievelized contract with a 2010 on-line date would receive the following rates:
Years Rate
21.93 + 35.
22.26 + Adjustable component in year 2011
22.60 + Adjustable component in year 2012
22.94 + Adjustable component in year 2013
Note: The rates shown in this table have been computed using the Northwest Power and Conservation Council's Fuel Price Forecast
contained in its Sixth Power Plan approved on February 10, 2010. See page A1-, East-Side Delivered prices. (Reference Order No.
30480).
ATTACHMENT 2
Case No. GNR-I0-
Order No. 31025
Page 2 of2
IDAHO POWER COMPANY
AVOIDED COST RATES FOR NON-FUELED PROJECTS
SMALLER THAN TEN MEGAWATTS
March 15, 2010
$/MWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2010 2011 2012 2013 2014 2015 YEAR RATES
56.60.63.67.71.75.2010 56.
58.61.65.48 69.73.76.2011 60.
59.63.67.71.74.46 77.43 2012 63.
61.65.68.72.46 75.78.2013 67.
63.23 66.70.44 73.76.79.2014 71.
64.68.71.74.77.80.2015 75.
66.69.72.76.78.81.2016 77.
67.70.74.77.80.82.2017 79.
68.71.75.78.81.10 83.2018 82.
69.73.76.79.82.85.2019 84.
70.74.77.80.83.86.2020 87.40
71.75.78.81.84.87.2021 90.42
72.76.79.82.85.88.2022 93.
73.77.80.83.86.89.2023 96.
74.78.81.84.87.90.2024 100.
75.78.82.85.88.91.2025 103.
76.79.83.86.89.92.2026 106.
77.80.83.87.90.93.2027 109.
78.81.84.87.91.94.2028 113.
79.82.85.88.91.94.2029 116.
2030 119.
2031 124.
2032 128.
2033 132.
2034 136.
2035 141.
Note: The rates shown in this table have been computed using the Northwest Power and Conservation Council's Fuel Price Forecast
contained in its Sixth Power Plan approved on February 10, 2010. See page A1-, East-Side Delivered prices. (Reference 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
2008 general rate case.ATTACHMENT 3
Case No. GNR-10-
Order No. 31025
Page 1 of 2
IDAHO POWER COMPANY
AVOIDED COST RATES FOR FUELED PROJECTS
SMALLER THAN TEN MEGAWATTS
March 15, 2010
$/MWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2010 2011 2012 2013 2014 2015 YEAR RATES
21.21.22.22.23.23.2010 21.
21.22.22.48 22.23.23.2011 21.
21.22.22.22.23.23.2012 22.
22.22.46 22.23.23.49 23.2013 22.
22.22.22.23.23.24.2014 23.
22.42 22.23.23.45 23.24.2015 23.
22.22.23.23.23.24.2016 23.
22.23.23.23.24.24.47 2017 24.
22.23.23.23.24.24.2018 24.42
22.23.23.24.24.24.2019 24.
23.23.45 23.24.24.24.2020 25.
23.23.23.24.24.25.2021 25.
23.23.24.24.43 24.25.2022 25.
23.47 23.24.24.24.25.2023 26.
23.23.24.24.25.25.43 2024 26.
23.24.24.43 24.25.25.2025 27.
23.24.24.24.25.25.2026 27.
23.24.29 24.25.25.40 25.2027 27.
24.24.24.25.25.25.2028 28.
24.24.24.25.25.26.2029 28.
2030 29.
2031 29.
2032 30.
2033 30.
2034 31.
2035 31.
EFFECTIVE DATE ADJUSTABLE COMPONENT
3/15/2010 35.
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 2010 on-line date would receive the following rates:
Years Rate
24.13 + 35.
24.13 + Adjustable component in each year
Example 2.A 4-year non-Ievelized contract with a 2010 on-line date would receive the following rates:
Years Rate
21.67 + 35.
21.99 + Adjustable component in year 2011
22.32 + Adjustable component in year 2012
22.66 + Adjustable component in year 2013
Note: The rates shown in this table have been computed using the Northwest Power and Conservation Council's Fuel Price Forecast
contained in its Sixth Power Plan approved on February 10, 2010. See page A1-, East-Side Delivered prices. (Reference Order No.
30480). These rates also reflect a change in Idaho Power s weighted cost of capital as a result of Order No. 30722 in the Company
2008 general rate case.
A TT ACHMENT 3
Case No. GNR-10-
Order No. 31025
Page 2 of 2
PACIFICORP
AVOIDED COST RATES FOR NON-FUELED PROJECTS
SMALLER THAN TEN MEGAWATTS
March 15 2010
$/MWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2010 2011 2012 2013 2014 2015 YEAR RATES
56.60.63.67.71.75.40 2010 56.
58.62.65.69.73.76.2011 60.
60.63.67.40 71.74.77.62 2012 63.
61.65.69.72.75.78.2013 67.
63.40 67.70.73.76.79.2014 71.
65.68.71.75.78.80.2015 75.40
66.44 69.73.76.79.81.2016 77.
67.71.74.77.80.83.2017 80.
68.72.75.78.81.84.2018 82.
69.73.76.79.82.85.2019 85.
71.74.77.80.42 83.43 86.2020 87.
72.05 75.78.81.45 84.87.44 2021 90.
73.76.79.82.48 85.88.47 2022 93.
74.77.20 80.83.48 86.89.48 2023 97.
74.78.81.84.44 87.49 90.45 2024 100.44
75.79.82.85.88.42 91.40 2025 103.
76.79.83.86.89.92.2026 106.
77.80.84.87.90.93.2027 110.
78.81.70 84.88.91.94.2028 113.
79.82.85.88.92.95.2029 116.
2030 119.
2031 124.
2032 128.
2033 132.
2034 136.
2035 141.
Note: (1) The rates shown in this table have been computed using the Northwest Power and Conservation Council's Fuel Price Forecast
contained in its Sixth Power Plan approved on February 10, 2010. See page A1-, East-Side Delivered prices. (Reference 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).
ATTACHMENT 4
Case No. GNR-I0-
Order No. 31025
Page 1 of2
PACIFICORP
AVOIDED COST RATES FOR FUELED PROJECTS
SMALLER THAN TEN MEGAWATTS
March 15,2010
$/MWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2010 2011 2012 2013 2014 2015 YEAR RATES
21.22.22.22.23.23.2010 21.
22.22.22.23.23.23.2011 22.
22.22.49 22.23.23.23.2012 22.
22.22.22.23.23.24.2013 22.
22.46 22.23.23.49 23.24.2014 23.
22.22.23.23.24.24.2015 23.
22.23.23.44 23.24.24.2016 23.
22.23.23.23.24.24.2017 24.
23.23.23.24.24.44 24.2018 24.
23.23.23.24.24.24.2019 24.
23.29 23.24.24.24.25.2020 25.
23.42 23.24.24.49 24.25.24 2021 25.
23.23.24.24.24.25.2022 26.
23.24.24.24.25.25.2023 26.
23.24.24.24.25.25.2024 26.
23.24.24.24.25.25.2025 27.
24.24.24.25.25.49 25.2026 27.
24.24.48 24.25.25.25.2027 28.
24.24.24.25.25.26.2028 28.
24.24.25.25.44 25.26.2029 29.
2030 29.47
2031 29.
2032 30.
2033 30.
2034 31.
2035 31.
EFFECTIVE DATE ADJUSTABLE COMPONENT
3/15/2010 35.
The total avoided cost rate in each year is the sum of the adjustable component and the fixed component from either of the tables abo
Example 1.A 20-year levelized contract with a 2010 on-line date would receive the following rates:
Years Rate
24.32 + 35.
24.32 + Adjustable component in each year
Example 2.A 4-year non-Ievelized contract with a 2010 on-line date would receive the following rates:
Years Rate
21.85 + 35.
22.17 + Adjustable component in year 2011
22.51 + Adjustable component in year 2012
22.85 + Adjustable component in year 2013
Note: (1) The rates shown in this table have been computed using the Northwest Power and Conservation Council's Fuel Price Forecast
contained in its Sixth Power Plan approved on February 10, 2010. See page A1-, East-Side Delivered prices. (Reference 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).
ATTACHMENT 4
Case No. GNR-10-
ORDER NO. 31025
Page 2 of 2