20120514Request for Responses.pdf

STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDEN
RECEIVD
2012 MAY 114 PM 3:1414
iDAHO hJBL UTILITIES CGM1SiON
May 14, 2012
Avista Corporation
Michael Andrea
Avista Utilities
1411 E. Mission
P0 Box 3727
Spokane, WA 99220-3727
Rocky Mountain Power
Mark Moench
Daniel Solander
Ted Weston
PacifiCorp dba Rocky Mountain Power
One Utah Center
201 S. Main Street, Suite 2300
Salt Lake City, UT 84111
Idaho Power Company
Donovan E. Walker
Idaho Power Company
P0 Box 70
Boise, ID 83707-007
Clint Kalich
Avista Utilities
1411 E. Mission
P0 Box 3727
Spokane, WA 99220-3727
Greg Duvall
Hui Shu
Laren Hale
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR 97232
Randy Aliphin
Idaho Power Company
P0 Box 70
Boise, ID 83707-0070
Re: Case Nos. GNR-E-12-02; PAC-E-12-09
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 1 Colstrip Unit Coal Costs per megawatt hour (MWh) and adding
$2.00IMWh (the average variable O&M cost of Colstrip plus 200/MWh for generation taxes plus a five
percent (5%) adjustment for line loss). As computed by Commission Staff the Colstrip related adjustable
rate will change from 11.38 mill/kWh to 14.80 mill/kWh. The same calculated rate revision under the
avoided cost methodology is used by Avista, 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: [e-mail]
Located at 472 West Washington St., Boise, Idaho 83702
May 14, 2012
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
decreased by $0.39/MIvIBtu. The approved gas price of $4.99IMMBtu plus the $0.39/MMBtu decrease
results in a gas price of $4.60/MMBtu for the 2012-2013 year. This equates to a SAR fuel cost of 32.66
mill/kWh 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, 2012 extending through June 30, 2013 has been computed to be $1 8.52/MWh, an
increase from $16.42 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- 12-02, will read as
follows:
IN THE MATTER OF THE ANNUAL 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-12-09, is as follows:
IN THE MATTER OF THE ANNUAL REVISION OF QF VARIABLE ENERGY
PRICES N ACCORDANCE WITH TERMS OF THE 1992 AMENDMENTS TO
POWER PURCHASE AGREEMENTS BETWEEN IDAHO QFS AND PAC1FICORP.
Please file your respective responses with the Commission on or prior to May 25, 2012.
Thank you for your cooperation. Please feel free to contact Rick Sterling if you have any questions.
Sincerely,
le~ ~- a . qz'3'4~
Kristine A. Sasser
Deputy Attorney General
Enclosures
b1s/L:GNR-E-12-02_PAC-E-12-09 avoided cost
COLSTRIP ADJUSTABLE RATE CALCULATION
For Period 7/1/12-6/30/13
Colstrip Fuel Cost from Avista FERC Form I for CY 2010
line 12 Net Generation (kwh) 1,432,719,000
line 20 Fuel $18,339,428
Fuel cost per kwh $0.012800
Fuel Cost per MWh $12.8004
Variable O&M, Gen. Tax, 5% line loss per MWh $2.0000
Total Colstrip Adjustable Rate $14.8004
Reference GNR-E-99-1 O.N. 28708 4117/2001
Colstrip_1 2-1 3.xls
Average Gas Prices at Sumas, Washington from Inside FERC publication
($IMMBtu)
Calculating the 2012-2013 Avoided Cost Adjustable Rate
2010 2011
Jan $6.49 $4.19
Feb $5.51 $4.11
Mar $4.78 $3.82
Apr $3.98 $4.04
May $3.97 $3.99
Jun $3.75 $4.03
July $4.06 $4.00
Aug $3.80 $3.97
Sep $3.11 $3.72
Oct $3.66 $3.70
Nov $3.75 $3.66
Dec $4.98 $3.93
Average $4.32 $3.93
Actual Annual Adjustment:
$4.99 - ($4.32-$3.93) = $4.60
Note:
$2.80IMMBtu = 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
$5.3 1/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
$4.99/MMBtu = 2011-12 Approved Rate
PaciflCorp
Total Variable Energy Rate
for 201212013
Carbon Naughton Huntington Hunter Totals
Fuel Cost ($) $20,346,469 $ 101,169,233 $94,465,053 $ 121,472,568 $337,453,323
2011 FERC FORM I - Page 402 Line 20
Generation (MWH) 1,332,218 5,102,251 5,961,371 7,445,083 19,840,923
2011 FERC FORM 1 - Page 402 Line 12
Average Fuel Cost ($/MWH) $ 17.01 /MWH
Variable O&M $ 1.51 /MWH
Total Variable Energy Rate for 2012/2013 $ 18.52 /MWH
For deliveries commencing July 1, 2012 extending through June 30, 2013
12 PacifiCorp/QFs contracts with approved 1992 amendment language