20140603Attorney General Letter and Worksheets.pdf

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STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G.WASDEN
RE CE V En
2O11JUN-3 PH 2:29
iDAHO
UTiLITIES COMMSON
June 3,2014
Avista Corporation
Michael Andrea
Avista Utilities
1411 E.Mission
P0 Box 3727
Spokane,WA 99220-3 727
Rocky Mountain Power
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
tdaho Power Company
P0 Box 70
Boise,ID 83 707-007
Re:Case Nos.GNR-E-14-O1;PAC-E-14-04
Clint Kalich
Avista Utilities
1411 E.Mission
P0 Box 3727
Spokane,WA 99220-3 727
Greg Duvall
Hui Shu
Laren Hale
PacifiCorp dba Rocky Mountain Power
825 NE Multnornah Street
Portland,OR 97232
Randy AlIphin
Idaho Power Company
P0 Box 70
Boise,ID 83 707-0070
The Idaho Public Utilities Commission in Order No.28708,Case No.GNR-E-99-l,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 0&M,future Colstrip variable cost adjtistments are
to be calculated by using FERC Form 1 Colstrip Unit Coal Costs per megawatt hour (MWh)and adding
$2.00/MWh (the average variable 0&M cost of Colstrip plus 20Ø/MWh for generation taxes plus a five
percent (5%)adjustment for line loss).As computed by Commission Staff,the Colstrip related adjustable
rate will change from 15.12 mill/kWh to 16.0$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.
The adjustable portion of the avoided cost rates under the Surnas-based methodology is based on annual
average gas prices indexed at Sumas,Washington.As reported by Avista,the indexed gas prices have
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
June 3,2014
Page 2
increased by $0.9/MMBtu.The approved gas price of $3.45/MMBtu plus the $0.9/MMBtu increase
results in a gas price of $4.35/MMBtu for the 2014-2015 year.This equates to a SAR fuel cost of 30.89
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 1,2014 extending through June 30,2015 has been computed to be $20.47/MWh,an
increase from $19.17 last year.
Accompanying this letter are worksheets showing the computation of the updated adjustable rates for the
various affected contracts.If you accept the updated rates after reviewing 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-14-01,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-14-04,is as follows:
IN THE MATTER OF THE ANNUAL REVISION OF QF VARIABLE ENERGY
PRICES IN ACCORDANCE WITH TERMS OF THE 1992 AMENDMENTS TO
POWER PURCHASE AGREEMENTS BETWEEN IDAHO QFS AND PACIFICORP.
Please file your respective responses with the Commission on or prior to June 17,2014.
Thank you for your cooperation.Please feel free to contact Yao Yin if you have any questions.
Sincerely,
Kristine A.Sasser
Deputy Attorney General
Enclosures
bls/L:GNR-E-14-0 1PAC-E-I 4-04 avoided cost
COLSTRIP ADJ USTABLE RATE CALCULATION Updated
For Period 7/1/14-6/30/15
Coistrip Fuel Cost from Avista FERC Form 1 for CY 2013
line 12 Net Generation (kwh)1,227,151,000
line 20 Fuel $17,275,865
Fuel cost per kwh $0014078
Fuel Cost per MWh $140780
Variable O&M,Gen.Tax,5%line loss per MWh $20000
Total Colstrip Adjustable Rate $160780
Reference GNR-E-99-1 O.N.28708 411712001
Colstrip_1 4-15
Average Gas Prices at SLimas,Yashington from lilside FERC publication
(S/MMBtu)
Calculating the 2014-2015 Avoided Cost Adjustable Rate
2012 2013
Jan $3.47 $3.58
Feb $2.78 $3.58
Mar $2.47 $3.46
Apr $1.96 $3.93
May $1.82 $3.91
Jun $2.35 $3.94
July $2.44 $3.46
Aug $2.74 $3.27
Sep $2.44 $3.19
Oct $2.91 $3.24
Nov $3.94 $4.27
Dec $4.03 $4.31
Average $2.78 $3.68
Actual Annual Adjustment:
$3.45 —($2.78 —$3.68)=$4.35
Note:
$6.94/MM Btu 2007-08 Approved Rate
$7.1 8/MM Btu =2008-09 Approved Rate
$9.00/MMBtu =2009-JO Approved Rate
$4.62/MMBtu =20 10-1 I Approved Rate
$4.99/MMBtu =2011-12 Approved Rate
$4.60/MMI3tu =20 12-13 Approved Rate
$3.45/MM Btu =2013-14 Approved Rate
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