20150529Attorney General Letter and Worksheets.pdf

STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDENVIA E.MAIL
May 29,2015
Avista Corporation
Michael Andrea
m ichae l.andrea@av istacorp.com
Avista Utilities
1411 E. Mission
PO Box3727
Spokane, WA99220-3727
Rocky Mountain Power
Yvonne Hogle
yvonne.hogle@pacifi corp.com
Ted Weston
ted.weston@pacifi corp.com
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
[e-mail]
Idaho Power Company
PO Box 70
Boise, ID 83707-007
Re: Case Nos. GNR-E-15-01; PAC-E-15-08
Clint Kalich
[e-mail]
Avista Utilities
141 I E. Mission
PO Box3727
Spokane, WA99220-3727
Brian Dickman
brian.dickman@paci fi corp.com
Daniel MacNeil
daniel.macnei l@pacifi corp.com
Hui Shu
hui.shu@pacifi corp.com
Laren Hale
laren. hale@pac ifi corp.com
PacifiCorp dba Rocky Mountain
825 NE Multnomah Street
Portland, OR97232
Randy Allphin
ral [e-mail]
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
Power
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
fuelcosts 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 $2.00/1\,1Wh (the average variable O&M cost
of Colstrip plus 201lMWh for generation taxes plus a five percent (5%) adjustment for line loss). As computed
Contracts & Administrative Law Division, ldaho Public Utilities Commission
PO. Box 83720, Boise, ldaho 83720-0074, Telephone: [phone], FAX: [phone], E-mail: [e-mail]
Located at 472 West Washington St., Boise, ldaho 83702
May 29,2015
Page 2
by Commission Staff, the Colstrip related adjustable rate will change from 16.08 mill/kWh to 16,68 milUkWh.
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 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
$0.75lI4MBtu. The approved gas price of $4.3S/MMBtu plus the $0.75lMMBtu increase results in a gas price
of $5,l0AvIMBtu for the 2015-2016 year. This equates to a SAR fuel cost of 36.21mill/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 forthese
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 $ I .5 1 but exclusive of generation taxes and a
line loss adjustment. The variable energy rate applicable to deliveries commencing July 1,2015 extending
through June 3 0, 20 1 6 has been computed to be $2 1 .754{Wh, an increase from $20.47 last year.
Accompanying this letter are worksheets showing the computation of the updated adjustable rates for the
various affected contracts. If you acceptthe updated rates afterreviewingthem as accurate, please indicateyour
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-15-01, will read as follows:
TN THE MATTER OF THE ANNUAL REVISION AND UPDATED CALCULATION OF
TFIE ADJUSTABLE PORTION OF THE AVOIDED COST RATE(S) FOR EXISTTNG
PURPA CONTRACTS FOR AVISTA CORPORATION DBA AVISTA UTILITIES, FOR
IDAHO POWER COMPANY, AND FOR PACIFICORP DBA ROCKY MOI.INTATN
POWER.
The case heading in the PacifiCorp case for PacifiCorp QF contracts with 1992 Amendment language, Case No.
PAC-E-15-08, is as follows:
TN THE MATTER OF THE ANNUAL REVISION OF QF VARTABLE ENERGY PRICES TN
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 16,2015.
Thank you for your cooperation. Please feel free to contact Yao Yin if you have any questions.
Sincerely,
Deputy Attorney General
Enclosures
bls/L:CNR-E-15-01 PAC-E-15-08 avoided cost
Daphr{e J. Huang
COLSTRTP ADJUSTABLE RATE CALCULATION UiaCateO
For Period 7 l1 115-6130116
Colstrip Fuel Cost from Avista FERC Form 1 lor CY 2014
line 12 Net Generation (kwh)
line 20 Fuel
Fuel cost per kwh
FuelCost per MWh
Variable O&M, Gen. Tax,5o/o line loss per MWh
Total Colstrip Adjustable Rate
ReferenceGNR-E-99-1 O.N.28708 4l'1712001
$14.6826
$2.0000
-sm826
$0.014683
Colstrip_15-16
Average Gas Prices at Sumas, Washington from Inside FERC publication
($/lvIMBtu)
Calculating the 2015-2016 Avoided Cost Adjustable Rate
Jan
Feb
Mar
Apr
May
Jun
July
Aug
Sep
Oct
Nov
Dec
Average
2013
$3.s8
$3.s8
$3.46
$3.93
$3.91
$3.94
$3.46
83.27
$3.19
s3.24
$4.27
$4.31
$3.68
2014
$4.89
$s.12
$s.78
s4.37
$4.s3
$4.28
$4.37
$3.69
$3.85
$3.91
$3.62
$4.68
s4.42
Actual Annual Adjustment:
$4.3s - ($3.68 -s4.42): $5.10
Note:
$6.94lMMBtu : 2007 -08 Approved Rate
$7. 1 8/MMBtu : 2008-09 Approved Rate
$9.00iN{MBtu : 2009 -10 Approved Rate
$4.62lMMBtu : 2010-1 1 Approved Rate
$4.99lMMBtu = 20ll-12 Approved Rate
$4.60/MMBtu : 2012-13 Approved Rate
$3.45lMMBtu : 2013-14 Approved Rate
$4.3 s/MMBtu : 2014-1 5 Approved Rate
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