20180530Attorney General Letter and Worksheets.pdf

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rr,ir l,l i_'LiCLlCj;:l :Jl,: I C()i*il''lissl0llSTATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDENVIA E.MAIL
May 30,2018
Avista Corpo
MichaelAndrea
Avista Utilities
14l I E. Mission
PO Box3727
Spokane, WA
Rocky
Daniel Solander
daniel
Ted Weston
PacifiCorp dba
One Utah Cen
201 S. Main S
Mountain Power
Suite 2300
20-3727
Power
Clint Kalich
cl int.kal [e-mail]
Avista Utilities
l4l I E. Mission
PO Box3727
Spokane, WA99220-3727
Brian Dickman
brian.d ickman@pacifi corp.com
DanielMacNeil
dan iel.macnei l@pacifi corp.com
Hui Shu
hui. shu@pacifi corp.corn
Laren Hale
laren.hale@pacifi corp.com
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR97232
Michael Darrington
M Darri n [e-mail]
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
Salt Lake City, UT 84111
Idaho Power Company
Donovan E. Walker
dwal ker@ idahopower.corn
Idaho Power Company
PO Box 70
Boise, ID 83707-007
Re: Case Nos. GNR-E-18-02; PAC-E-18-05
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 $2.0044Wh (the average variable O&M cost
of Colstrip plus 20plMWh for generation taxes plus a five percent (5%) adjustment for line loss). As computed
Contracts & Administrative Law Division, ldaho Public Utilities Commission
P.O. Box 83720, Boise, ldaho 83720-0074, Telephone: [phone], FAX: [phone], Email: [e-mail]
Located at 472 West Washington St., Boise, ldaho 33702
201 830,
2
May
Page
by Commission Staff, the Colstrip related adjustable rate will change from 17.61 mill/kWh to 16.54 mill/kWh.
The same calculated rate revision under the avoided cost methodology is used by Avista, PacifiCorp dba Rocky
Mountain Power, and ldaho Power Company. This change in the variable rate affects existing contracts under
the previous SAR methodology.
Order Nos. 25882, 25883, and 25884 established a Suma-based methodology in which the adjustable portion of
the avoided cost rates was based on annual average gas prices indexed at Sumas, Washington. As reported by
Avista, the indexed gas prices have increased by $0.59/MMBtu. The approved gas price of $2. BS/Ir4MBtu plus
the $0.59/MMBtu results in a gas price of $3.44A4MBtu for the 2018-2019 year. This equates to a SAR fuel
cost of 24.42 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 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 $ 1 .5 I but exclusive of generation taxes and a
line loss adjustment. The variable energy rate applicable to deliveries commencing July 1,2018 extending
through June 30,2019 has been computed to be $23.67lMWh, an increase from $23.291MWh last year.
Accompanying this letter are worksheets showing the computation of the updated adjustable rates for the
various affected contracts. Ifyou 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-18-02, 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
POWE,R.
The case heading in the PacifiCorp case for PacifiCorp QF contracts with 1992 Amendment language, Case No
PAC-E-18-05, is as follows:
TN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
REQUESTING APPROVAL OF THE ANNUAL REVISION OF QF VARIABLE ENERGY
PRICES IN PURSUANT TO 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 1 l, 201 8.
Thank you for your cooperation. Please feel free to contact Yao Yin if you have any questions.
Sincerely,
Sean Costello
Deputy Attorney General
Enclosures
COLSTRIP ADJUSTABLE RATE CALCULATION Updated
For Period 7 11 I 1 8-61301 1 I
Colstrip Fuel Cost from Avista FERC Form 1 tor CY 2017
line 12 Net Generation (kwh)
line 20 Fuel
Fuel cost per kwh
Fuel Cost per MWh
Variable O&M, Gen. f ax,5/o line loss per MWh
Total Colstrip Adjustable Rate
Reference GNR-E-99-1 O.N. 28708 4117l2OO1
1 ,423,3'19,000
$20,697,118
$0.014541
$14.5414
$2.0000
$16.5414
Colstrip_'18-19
Average Gas Prices at Sumas, Washington from Inside FERC publication
($/MMBtu)
Calculatin g the 2017 -20 1 8 Avoided C ost Adj ustable Rate
Jan
Feb
Mar
Apr
May
Jun
July
Aug
Sep
Oct
Nov
Dec
2016
s2.s7
$2. l0
$ 1.41
$1.42
$ 1.34
$ 1.46
$2.28
s2.34
$2.63
$2.64
$2.62
$3.27
2017
$4.8s
$3. l7
$2.20
$2.34
$2.42
$2.70
s2.29
$2.48
$2.s6
$2.35
$2.6s
$3.ls
Average $2.173 $2.763
Actual Annsal4ili ustrnqut :
$2.8s0 - ($2, t73 - 52.763) : $3.440
Note:
$6.94lMMBtu : 2007-08 Approved Rate
$7. I 8/MMBtu : 2008-09 Approved Rate
S9.O0/MMBtu : 2009-10 Approved Rate
$4.62lMMBtu : 2010-1 I Approved Rate
$4.99lMMBtu : 201 l-12 Approved Rate
$4.60/MMBtn : 2012-13 Approved Rate
$3.45lMMBtu : 2013-14 Approved Rate
$4.3 s/MMBttt : 2014-15 Approved Rate
$5. lO/MMBtu : 2015-16 Approved Rate
S3.092A4MBtu : 201 6-17 Approved Rate
$2.850/MMBtu : 2017- I 8 Approved Rate
Carbon
PacifiCorp
Total Variable Energy Rate
lor 2018 I 2A19
Naughton Huntington Hunter Totals
$ 105,045,552 $ 138,300,998 $ 145,938,639 $ 389,285,189
4,740,158 5,399,777 7,429,297 17,fi9,232
22.16
1.51
23.67
Fuel Cost ($) $
201 7 FERC FORM I - Peg. 402 Lin. 20
Generation (MWH)
2017 FERC FORM I - Pagc 402 Linc 12
Average Fuel Cost ($/M\Aftl)
Variable O&M
Total Variable Energy Rate for 2018 12419
For deliveries commencing July 1, 2018 extending through June 30, 2019
12 PacifiCorplQFs contracts with approved 1992 amendment language
$
$
$
/MVlftt
/MWH
/M\,tl
!