20100603Letter asking Utility Responses to Calcuation.pdf

RECEiVED
2n\9 JUll -3 PI1 2: 39
STATE OF IDAHO . ~*tt~i¿lX~lŠSjDN
OFFICE OF THE ATTORNEY GENERALUTl
LAWRENCE G. WASDEN
June 3, 2010
Avista Corporation
Michael Andrea
A vista Utilties
141 1 E. Mission
PO Box 3727
Spokane, WA 99220-3727
Clint Kalich
A vista Utilities
141 1 E. Mission
PO Box 3727
Spokane, WA 99220-3727
Rocky Mountain Power
Mark Moench
Daniel Solander
Ted Weston
PacifiCorp dba Rocky Mountain Power
One Uta Center
201 S. Main Street, Suite 2300
Salt Lake City, UT 84111
Greg Duvall
Hui Shu
Laren Hale
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR 97232
Idaho Power Company
Donovan E. Walker
Idaho Power Company
PO Box 70
Boise, ID 83707-007
Randy Allphin
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
RE: Case Nos. GNR-E-IO-02; PAC-E-IO-06
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 facilty in southeast Montana. 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
$2.00IMWh (the average variable O&M cost of Colstrip plus 20tlM\Vh 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 14.09 millkWh to 12.78 milllWh. 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.
Contracts & Administrative Law Division, Idaho Public Utilities Commission
P.O. Box 83720, Boise, Idaho 83720-0074, Telephone: [phone], FAX: [phone], E-mail: Ipuclipuc.state.id.us
Located at 472 West Washington St., Boise, Idaho 83702
June 3, 2010
Page 2
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 A vista, the indexed gas prices have
decreased by $4.38IMMBtu. The approved gas price of $9.00/MBtu plus the $4.38IMMBtu decrease
results in a gas price of $4.62IMMBtu for the 2010-2011 year. . This equates to a SAR fuel cost of
32.80mil1lWh as used in the modeL.
In accordance with Order No. 29316, the 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, 2009 extending through June 30, 2010 has been computed to be $ 14.53IMWh, an
increase from $14.36 last 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 filing) directed to the Commission in the reserved case docket numbers
identified above. The case heading for the generic adjustment, Case No. GNR-E- 1 0-02, wil read as
follows:
IN TH MATTER OF THE ANNAL REVISION AND UPDATED CALCULATION
OF THE ADJUSTABLE PORTION OF THE A VOIDED COST RA TE(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 i 992 Amendment language,
Case No. PAC-E-I0-06, is as follows:
IN THE MATTER OF THE ANNAL REVISION OF QF VARIABLE ENERGY
PRICES IN ACCORDANCE WITH TERMS OF THE 1992 AMENDMENTS TO
POWER PURCHASE AGREEMENTS BETWEEN IDAHO QFS AND PACIFICORP.
Please fie your respective responses with the Commission on or prior to June 18, 2010.
Thank you for your cooperation. Please feel free to contact me, or Rick Sterling, if you have any
questions.
Sincerely,
Scott D. Woodbury
Deputy Attorney General
Enclosures
blslL:GNR-E-IO-02_PAC-E-IO-06_sw _avoided cost
COLSTRIP ADJUSTABLE RATE CALCULATION
For Period 7/1/10-6/30/11
Colstrip Fuel Cost from Avista FERC Form 1 for CY 2009
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 _10-11 .xls
1,277,376,000
$13,774,324
$0.010783
$10.7833
$2.0000
$12.7833
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Average Gas Prices at Sumas, Washington from Inside FER¿~Rililè~dJn AM 8;; j l
($rMlVIBtu)
UT¡d~m1Pê~J~j:~~~I~ss ¡ON
""F_a!clllating the 2009-2010 Avoided Cost Adjustable Rate
2008 2009
Jan $7.48 $6.89
Feb $8.57 $4.80
Mar $8.46 $3.83
Apr $8.81 $3.59
May $10.17.$2.74
Jun $10.77 $2.88
July $11.69 $2.69
Aug $7.94 $3.01
Sep $6.94 $2.46
Oct $6.23 $3.87
Nov $6.28 $5.22
Dec $6.66 $5.47
Average $8.33 $3.95
Actual Anual Adjustment:
$9.00 - ($8.33-$3.95) = $4.62
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
$6.94IMtu = 2007-08 Approved-te
$7 . 18IMtu = 2008-09 Approved Rate
$9.00IMtu = 2009-10 Approved Rate