HomeMy WebLinkAbout20110603Request for Responses.pdfRECEIVED
2011 JUN -3 PM 2: 0 I
STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDEN
June 3, 2011 (;l/~ ~~il..o L
Avista Corporation
Michael Andrea
A vista Utilties .
14 i i E. Mission
PO Box 3727
Spokane, WA 99220-3727
Clint Kalich
A vista Utilties
1411 E. Mission
PO Box 3727
Spokane, WA 99220-3727
Rocky Mountain Power
Mark Moench
Daniel So lander
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
POBox 70
Boise, ID 83707-0070
Re: Case Nos. GNR-E-11-02; PAC-E-11-14
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 costs and variable O&M, future Colstrip variable cost adjustments are
to be calculated by using FERC Form i Colstrip Unit Coal Costs per megawatt hour (MWh) and adding
$2.00IMWh (the average variable O&M cost of Colstrip plus 20tIMWh 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 12.78 mil/kWh to i 1.38 mill/Wh. 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: (208) 334-0300, FAX: (208) 334-3762, E-mail: Ipuc(ípuc.state.id.us
Located at 472 West Washington St., Boise, Idaho 83702
June 3, 201 i
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 Avista, the indexed gas prices have
increased by $0.37/MBtu. The approved gas price of $4.62IMMBtu plus the $0.37IMMBtu increase
results in a gas price 'of $4.99IMMBtu for the 2011-2012 year. This equates to a SAR fuel cost of
35.43mill/Wh as used in the modeL.
In accordance with Order No. 293 i 6, 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 $1.5 i but
exclusive of generation taxes and a line loss adjustment. The variable energy rate applicable to deliveries
commencing July 1, 201 i extending through June 30, 2012 has been computed to be $16.42IMWh, an
increase from $14.53 last year.
Accompanying this letter are worksheets showing the computation of the revised adjustable rates for the
various affected contracts. If after reviewing the revisions, you accept them as accurate please indicate
your approval by letter (or other fiing) directed to the Commission in the reserved case docket numbers
identified above. The case heading for the generic adjustment, Case No. GNR-E-11-02, wil read as
follows:
IN TH MATTER OF THE ANNAL REVISION AND UPDATED CALCULATION
OF THE ADJUSTABLE PORTION OF THE AVOIDED COST RATE(S) FOR
EXISTING PURPA CONTRACTS FOR AVISTA CORPORATION DBA AVISTA
UTILITIES, FOR IDAHO POWER COMPANY, AND FOR PACIFICORP DBA
ROCKY MOUNTAIN POWER.
The case heading in the PacifiCorp case for PacifiCorp QF contracts with 1992 Amendment language,
Case No. PAC-E-11-14, is as follows:
IN THE MA ITER OF THE ANNAL REVISION OF QF VARIABLE ENERGY
PRICES IN ACCORDANCE WITH TERMS OF THE i 992 AMENDMENTS TO
POWER PURCHASE AGREEMENTS BETWEEN IDAHO QFS AND PACIFICORP.
Please fie your respective responses with the Commission on or prior to June 17,2011.
Thank you for your cooperation. Please feel free to contact Rick Sterling if you have any questions.
Sincerely,~Û-.~
Kristine A. Sasser
Deputy Attorney General
Enclosures
blslL:GNR-E-1 I-02_PAC-E-I 1-14_ avoided cost
,
,
Average Gas Prices at Sumas, Washington from Inside FERC publication
($/MBtu)
Calculating the 2010-2011 Avoided Cost Adjustable Rate
2009 2010
Jan $6.89 $6.49
Feb $4.80 $5.51
Mar $3.83 $4.78
Apr $3.59 $3.98
May $2.74 $3.97
Jun $2.88 $3.75
July $2.69 $4.06
Aug $3.01 $3.80
Sep $2.46 $3.11
Oct $3.87 $3.66
Nov $5.22 $3.75
Dec $5.47 $4.98
Average $3.95 $4.32
Actual Anua Adjustment:
$4.62 - ($3.95-$4.32) = $4.99
Note:
$2.80/MMBtu = 2000-01 Approved Rate
$4.82/MMBtu = 2001-02 Approved Rate
$5.23/MMBtu = 2002-03 Approved Rate
$3.33/MMBtu = 2003-04 Approved Rate
$5.31/MMBtu = 2004-05 Approved Rate
$5.92/MMBtu = 2005-06 Approved Rate
$7.80/MMBtu = 2006-07 Approved Rate
$6.94/MMBtu = 2007-08 Approved Rate
$7 .18/MMBtu = 2008-09 Approved Rate
$9.00/MMBtu = 2009-10 Approved Rate
$4.62/MMBtu = 2010-11 Approved Rate
COLSTRIP ADJUSTABLE RATE CALCULATION
For Period 7/1/11-6/30/12
Colstrip Fuel Cost from Avista FERC Form 1 for CY 2010
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_11-12.xls
1,748,898,000
$16,398,780
$0.009377
$9.3766
$2.0000
$11.3766
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