20120803Avista Errata.pdf

iISTA
20I2AUG-3 AM 10:33 Corp.
Aigt2'202' WH
rè Utilities Commission
•ashington Street
93702
Errata to Rebuttal Testimony and Exhibits of Clint Kalich on Behalf of Avista
Corporation
IPUC Case No. GNR-E-11-03
Dear Ms. Jewell:
On June 29, 2012, Avista filed the Rebuttal Testimony and Exhibits of Clint Kalich in the
above-referenced proceeding. It has come to Avista's attention that Avista incorrectly numbered
the exhibits included in that filing as Exhibits 1-3. Avista submits this errata for the sole purpose
of correcting the numbering of those Exhibits.
Enclosed are an original and nine copies of Exhibits 101, 102, and 103 to replace
Exhibits 1, 2, and 3, respectively, and replacement pages 8 and 16 to the Rebuttal Testimony of
Clint Kalich changing the incorrect references to Exhibits 1, 2, and 3 to refer to Exhibits 101,
102, and 103, respectively. No other changes have been made to either the Rebuttal Testimony
of Clint Kalich or the Exhibits.
I apologize for any confusion. Please let me know if you have any questions regarding
this errata.
Michael U. Andrea
Senior Counsel
Enclosures
cc: Service List
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that I have served Avista Corporation's Errata to Rebuttal Testimony
and Exhibits of Clint Kalich in GNR-E-11-03, by electronic mail to the following:
Daniel E. Solander
PacifiCorp/ dba Rocky Mountain Power
201 S., Main St., Suite 2300
Salt Lake City, UT 84111
[e-mail]
Donovan E. Walker
Jason B. Williams
Idaho Power Company
P0 Box 70
Boise, ID 83707-0070
[e-mail]
[e-mail]
Robert D. Kahn
Executive Director
Northwest and Intermountain Power
Producers Coalition
117 Minor Ave., Suite 300
Seattle, WA 98101
rkahn(nippc.org
Robert A. Paul
Grand View Solar II
15690 Vista Circle
Desert Hot Springs, CA 92241
Robertapaul08(2agmail.com
Ronald L. Williams
Williams Bradbury, P.C.
1015 W. Hays Street
Boise, ID 83702
[e-mail]
C. Thomas Arkoosh
Capital Law Group, PLLC
205 N. 10 " St., 4th Floor
Boise, ID 83701
[e-mail]
Donald 1. Howell, II
Kristine A. Sasser
Deputy Attorneys General
Idaho Public Utilities Commission
472 W. Washington
Boise, ID 83702-0074
[e-mail]
kris.sasser(puc.idaho.gov
Peter J. Richardson
Gregory M. Adams
Richardson & O'Leary, PLLC
P0 Box 7218
Boise, ID 83702
[e-mail]
greg(richardsonandoleary.com
Don Sturtevant
J.R. Simplot Company
P0 Box 27
Boise, ID 83707-0027
[e-mail]
James Carkulis
Exergy Development Group of Idaho, LLC
802 W. Bannock St., Suite 1200
Boise, ID 83702
jkulis(exergydeveloprnent.com
Dr. Don Reading
6070 Hill Road
Boise, ID 83703
dreading(lmindspring.com
Don Schoenbeck
RCS
900 Washington St., Suite 780
Vancouver, WA 98660
[e-mail]
Page I 1
John R. Lowe, Consultant R. Greg Ferney
Renewable Energy Coalition Mimura Law Offices, PLLC
12050 SW Tremont St. 2176 E. Franklin Rd., Suite 120
Portland, OR 97225 Meridan, ID 83642
jravensanmarcos(yahoo.com greg2i)mimuralaw.com
Bill Piske Dean J. Miller
Interconnect Solar Development, LLC Chas F. McDevitt
1303 E. Carter McDevitt & Miller, LLP
Boise, ID 83706 P0 Box 2564
[e-mail] Boise, WA 83701
[e-mail]
[e-mail]
Lori Thomas M.J. Humphries
Capital Law Group, PLLC Blue Ribbon Energy LLC
P0 Box 2598 4515 S. Ammon Road
Boise, ID 83701-2598 Ammon, ID 83406
lthomas(capitallawgroup.com blueribbonenergvgmai1.com
Wade Thomas Arron F. Jepson
General Counsel Blue Ribbon Energy LLC
Dynamis Energy. LLC 10660 South 340 East
776 W. Riverside Dr., Suite 15 Sandy, UT 84070
Eagle, ID 83616 arronesg(ao1.com
wthomas(dynamisenergy. corn
Brian Olmstead Ted Diehl
Twin Falls Canal Company North Side Canal Company
P0 Box 326 921 N. Lincoln St.
Twin Falls, ID 83303 Jerome, ID 83338
[e-mail] [e-mail]
Bill Brown, Chair Ted S. Sorenson, P.E.
Board of Commissioners of Birch Power Company
Adams County, ID 5203 South 11th East
P0 Box 48 Idaho Falls, ID 83404
Council, ID 83612 [e-mail]
[e-mail]
Page 12
Megan Walseth Decker
Senior Staff Counsel
Renewable Northwest Project
421 SW 6th Avenue, Suite 1125
Portland, OR 97204
megan(rnp.org
Benjamin J. Otto
Idaho Conservation League
710 N. Sixth Street (83 702)
P0 Box 844
Boise, ID 83701
botto(idahoconservation.org
Mary Lewallen
Clearwater Paper Corporation
601 W. Riverside Ave., Suite 1100
Spokane, WA 99201
[e-mail]
Deborah E. Nelson
Kelsey J. Nunez
Givens Pursley LLP
601 W. Bannock Street (83702)
P0 Box 2720
Boise, ID 83701-2720
den(ägivenspurs1ey.com
kjn(givenspursley.com
Glenn Ikemoto
Margaret Rueger
Idaho Windfarms LLC
672 Blair Ave.
Piedmont, CA 94611
glenni,envisionwind.com
Margaretenvisionwind.com
Liz Woodruff
Ken Miller
Snake River Alliance
P0 Box 1731
Boise, ID 83701
lwoodruffsnakeriveralliance.org
[e-mail]
Tauna Christensen
Energy Integrity Project
769N 1100E
Shelley, ID 83274
tauna(energyintegritYprOj ect.org
Michael J. Uda
Uda Law Firm, P.C.
W. 6th Avenue, Suite 4E
Helena, MT 59601
[e-mail]
J.Kahle Becker, Idaho
The Alaska Center
1020 W. Main St. Suite 400
Boise, ID 83702
[e-mail]
By: 2, 2012
Paul Kimball
Regulatory Analyst
Page 13
I demonstrate that projects can be built in less than two years. The press releases explain
2 that Exergy Development, one of the largest developers of QF power in Idaho over the
3 past few years, built 11 wind farms in Idaho over a period of approximately six months,
4 with construction beginning in late August 2010 and ending by February 2011. The two
5 press releases, and Exergy' s responses to Avista' s Production Request 4(C) and 4(D), are
6 included as Exhibit 101 to my testimony.
7 Q. Are there any other examples supporting your position that locking in
8 prices two years prior to commercial operation is reasonable?
9 A. Yes. Idaho Power's Langley Gulch, a much larger and complex project, will be
10 completed in approximately two years. The project began construction in June 2010 and
11 is now (in June 2012) producing test energy. Idaho Power has scheduled a ribbon cutting
12 ceremony for the plant in June and anticipates commercial operation in July 2012. If a
13 project of this magnitude can be completed in such a timeframe, certainly it is not
14 unreasonable to expect smaller and less complicated PURPA projects to meet a two-year
15 timeline. This said, Avista can support Commission Staff's five-year recommendation.
16 Where a project cannot meet this timeline, the utility should be able to recalculate QF
17 rates at its option.
18 Q. Mr. Sterling supports PacifiCorp's proposal in this case that a tariff
19 be adopted specifying contracting procedures and rules for QF contracts and
20 recommends that each of the utilities be directed to prepare similar tariffs to
21 PacifiCorp's Schedule 38, and that a separate docket be opened for review and
22 comment on the specific details that would be contained in each proposed tariff. Do
8
Case No. GNR-E-1 1-03 Kalich, C. (Di-Reb)
June 29, 2012 Avista Corporation
1 Avista submitted Production Request No. 1 seeking support for Dr. Reading's
2 assertion in direct testimony at page 7, line 7, that the "SAR methodology has been
3 robust ... and has produced avoided cost rates that have proven to be remarkably accurate
4 in hindsight."4 (Emphasis added.) Dr. Reading also explained, beginning at line 20 of
5 page four of his testimony, that "the SAR methodology has been a successful, transparent
6 and effective method for estimating a utility's avoided cost rates." The CP/JRSIEDG
7 response to Production Request No. 1 provided no evidence to support Dr. Reading's
8 assertions, but instead stated that it is enough to take him at his word because he has
9 "almost three decades of experience or involvement in PURPA rate cases before the
10 Idaho Commission, and an even longer time period involved in electric utility rate cases
11 before the Idaho Commission." The response of CP/JRS/EDG to Avista's Production
12 Request No. 1 is attached hereto as Exhibit 102.
13 In addition to CP/JRS/EDG's response to Production Request No. 1,
14 CP/JRS/EDG's response to Avista's Production Request No. 2 also failed to support Dr.
15 Reading's statements, but makes clear that CP/JRS/EDG was aware of the large fall in
16 natural gas prices and the commensurate overpayment that would result absent updating
17 natural gas prices when the table was created.5 When asked whether Dr. Reading's table
18 on page 34 included updated natural gas prices, the response was simply "no."
19 CP/JRS/EDG's response to Production Request No. 2 is attached hereto as Exhibit 103.
20 Falling natural gas prices is one driver of the issues in this case. Using dated
21 input assumptions, such as high natural gas prices, puts utility customers at great risk.
Production Request 1 of Avista Corporation's First Production Request to Clearwater Paper Corporation,
J.R. Simplot Company and Exergy Development Group of Idaho.
Production Request 2 of Avista Corporation's First Production Request to Clearwater Paper Corporation,
J.R. Simplot Company and Exergy Development Group of Idaho.
16
Case No. GNR-E-1 1-03 Kalich, C. (Di-Reb)
June 29, 2012 Avista Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'S
REVIEW OF PURPA QF CONTRACT
PROVISIONS INCLUDING THE
SURROGATE AVOIDED RESOUCES
(SAR)AND INTERATED RESOURCE
PLANNING (IRE) METHODOLOGIES FOR
CALCULATING AVOIDED COST RATES
CASE NO. GNR-E-11--03
EXHIBIT NO. 101
CLINT G. KALICH
FOR AVISTA CORPORATION
(ELECTRIC ONLY)
-imam Mw
515 Ni -2 'Strwt
P.O. Box 1118
t.t
48*S.
Fax.
Attorneys for Clew -water Paper Corporation, J.R. Simplot Company and
Exergy Development Group of Idaho
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'S ) REVIEW OF PURPA CONTRACT ) Case No. (iNR-E-1 1-03
PROVISIONS INCLUDING THE ) SURROGATE AVOIDED RESOURCE (SAR) ) RESPONSE TO AVISTA AND INTEGRATED RESOURCE PLANNING) CORPORATION'S FIRST (MP) METHODOLOGIES FOR ) PRODUCTION REQUEST TO CAUCOLATING PUBLISHED AVOIDED ) CLEARWATER PAPER cosi RATES ) CORPORATION, J.R. SIMPLOT
) COMPANY AND EXERGY
DEVELOPMENT GROUP OF IDAHO
)
)
COMES NOW, Clearwater Paper Corporation, J. R. Simplot Company and Exergy
Development Group of Idaho and hereby responds to the First Production Request ofAvista
Corporation. D. Don Reading is available to respond to questions about or sponsor these
responsea
Page 1 Clearwater, Simplot and Exergy Response to Avista s First Production Request
RQUST NO. 4: On page 43, beginning at line 7, of Dr. Reading's direct testimony, Dr.
Reading explains that "for many types of generation projects, it could take much longer than two
yeas to complete construction atone."
A Based on the statement above are the companies stating categorically that solar and
projects [sic] cannot be constructed in two years or less?
B Do the Companies believe that the construction of different sized wind and solar QFs
might take less or more time for construction? Please discuss the impacts on construction
timelines of varying sizes of these two resources; 100 kW, 1 MW, 10 MW, 100 MW.
C This request is directed only to Exergy. Please provide a list of each PURPA facility in
Idaho that Exergy has developed or participated in the development of during the last five years.
D This request is directed only to Eergy. For each PURPA facility listed in the response
to subpart a of this request, please provide a detailed construction timeframe for the facility,
including when the facility commenced major construction and when it went commercial.
Where any construction timcframes exceed two years, please provide a detailed description of
the causes of the delay.
E Langley Gulch will be constructed in approximately two years. Do any or all of the
Companies acknowledge that the construction of a large resource like Langley Gulch might be
more complicated and take longer to obtain commercial operation that a PURPA resource?
Please explain.
F Is it any ofthe companies' positions that a firm contract for the sale of the output of a
PURPA facility with pricing is required before any development expenses arer incurred or any
development timeline can commence for a PURPA facility? If so, please list which of the
Companies holds such position and explain each such Company's rationale for its position.
Page 6 - Clearwater, Simplot and Exergy Response to Avista's First Production Request
G Is it any of the Companies' positions that a firm contract for the sale of the output of a
PURPA facility with pricing is required before any preliminary financing efforts for such facility
are eowpIted? If so, please list which of the Companies holds such position and explain each
Company's rationale for its position.
RESPONSE TO REQUEST NO. 4:
A The Companies are not so stating absolutely and utter!) without exception or
qualification.
B Yes. No such analysis has been conducted.
Thana Gulch
Op.gQu Trail
Thousand Springs
Salmon Pails
Yahoo Creek
Pilgrim Stage Station
Payne's Ferry
Milner Dam
Burley Butte
Golden Valley
1) Exergy begins construction on each wind project when the land rights are finally secured
from the landowner. That is when detailed wind resource measurement may begin which takes
at least one full year to satisfy lenders That is also when environmental studies are begun
Therefore the construction process takes several years typically.
Page 7 Clearwater, Simplot and Exergy Response to Avista.' s First Production Request
Camp Reed: construction commenced October, 2007 commercial operation December 2010.
Tuana Gulch: construction commenced November 2005 commercial operation December 2010.
Orego Trail: construction commenced June 2005 commercial operation December 2010.
Thousand Springs: construction commenced November 2005 commercial operation December
2010.
Salmon Falls: construction commenced August 2007 commercial operation December 2010.
Yahoo Creek: construction commenced September 2005 commercial operation December 2010,
Pilgrim Stage Station: construction commenced November 2005 commercial operation
1)eet 2010.
Payne's Ferry: construction commenced November 2002 commercial operation December 2010.
Milner Dam: construction commenced April 2007 commercial operation December 2010.
Burley Butte:eonstruction commenced May 2007 commercial operation December 2010.
Golden Valley: construction commenced September 2007 commercial operation December
2010.
E Langley Gulch was not constructed in approximately two years. Idaho Power had placed
the order for the turbine well before the summer of 2009 when the Commission held hearings on
that plant. It is now the summer of 2012 and Langley Gulch has yet to achieve commercial
operation. That said, it is true that all projects present their own unique challenges and
opportunities and will have their own timeframe in which they can be brought to commercial
F Unless you are pursuing a hobby, without seeking serious wall street financing, every
rational project developer must demonstrate adequate debt service and/or return on equity ratios
to have a viable project. Why would a developer incur development expense if be didn't believe
Page 8— Clearwater, Simplot and Exergy Response to Avista's First Production Request
he h4 a certain market for his project's output? This is especially true for the developer of a
:JA project where the:ouiy buyer for his product is historically unmotivated (and sometimes
hostile) to the very concept of doing business with him
G Again if one is building a hobby project then you don't worry about financing or
financial performance. If you are building a project that needs project financing from a bank or
institutional lender you need to show them the power purchase agreement with prices that meet
the operating margin requirements of the lender or the project will not be developed
RICHARDS N AND O'LEARY, PLLC
Peter J. 'ch'ds n (ISH No: 3195)
Gregory M. Adams (ISB No, 7454
Attorneys for Clearwater Paper Corporation,
J. R. Simplot Company and
Exergy Development Group of Idaho
Page 9 Clearwater, Simplot and Exergy Response to Avista's First Production Request
r2v
b.OMpiT SOP
Boise, Idaho. Exgy Development Group, one of the largt independent
anIes in the lisA) commenced conitruthon in Novmin4ecemberon 152
MW Texas project in 2012, this shall bring Exergy's total built wind park capacity to 761 MW In the USA.
In Idaho, Exergy Is WWRW 116 MW across Twin Falls, Lincoln and Bingham counties. The remaining 36
152 MW pràduced by these projects will
produce the annual energy equivalent of approximately 40,500 residential homes.
As In the past, Fagen, Inc. is Exergy's primary EPC and Balance of Plant Contractor on the set of 7
projects. On-site Owner's Engineer and Construction Manager is BCL, Inc.
"We have made substantial progress on the project sites in both states." says Dustin Shively, lead
Project Engineer. "Before the end of 2011, foundations shall be poured and completed in Minnesota,
and we shaft have all of the foundations excavated, site work, roads, and grading completed on the
Idabo project sites, We shall begin erecting turbines in the second quarter of 2012 as weather permits
arid all sites shall be fully operational by the fall,"
Exergy has a long history in the renewable energy sector since 2001. Last year they developed and
installed, in partnership with GE Capital, Atlantic Power, and Reunion Energy, the largest wind project in
Idaho's history. Exergy has work in progress in 17 states across the USA and 3 foreign countries. Exergy
also has four anaerobic digesters, and biomass projects scheduled for Arkansas and Kansas and has
partnered on a 20 MW solar project.
For more infornaton, please cøntact Elizabeth Woolsienhlulme at [e-mail] .
•exen
!MT :Gjou gy
Ft'bruarv 2.,', 2071
For immediate re/ease
Companyi(IIi riim ii dollars to Idaho
Boise - An Idaho developer of renewable-energy projects has released a study showing a
$120 million boost to the state's treasury from wind-energy projects set to begin
construction,
The study was first reported last week, but is being made available today to the general
public. The study was commissioned by Exergy Development and was completed by John
Church, a well-known and respected Idaho economist who has worked for Boise State
University and Idaho Power.
'This study shows the clear, positive economic impact from affordable, clean, homegrown
Idaho energy,' Exergy CEO James Carkulis said. "In addition to hundreds of jobs and a
direct infusion of over $50 million into rural Idaho communities, Exergy projects will help
the state meet its long-term budget needs over the coming decades."
According to Church's study, construction of an additional 300 megawatts of wind-energy
generation by Exergy Development will.
• Create 650 additional Idaho jobs during two years of construction due to the direct
economic impacts associated with planning, analysis, evaluation and building, plus
secondary economic impacts that will occur as a result;
• Mean 120 ongoing jobs each year for the next 25 years of the project, most of
them in rural communities in need of ongoing economic development;
• Provide nearly $2.8 million in additional tax revenue to the state of Idaho during
the two-year construction phase, and an additional $120 million in revenue over a
25-year period
Exergy is the state's largest developer of renewable energy, and while it has projects
throughout the northwest the company is headquartered in Boise er ypr1ts *

with CE Energy Financial S-ervlce, Atiantic Power ,Rnion -
near the communities &Hag nanct Burtew metn ne astmoff1and were instantly
80.2 W Bannock, 12th Floor Boise, ID 83 702 P 208.336V93
______
exerv
•vt0tI&NT.oUP .%d.i
the largest alternative energy project in Idaho. The wind farms have 122 turbi"1 69 ad are
capable of providircc enougWpWT1rneaiTy 40,000 Idaho homes.
The company has six new projects approved and prepared for construction in 2011. If
completed, the projects will make available to Idaho businesses and consumers each year
approximately 867,000 megawatt hours of energy.
"We appreciate the great working relationship we have with the Governor and with
legislators," Carkulis said. 'Gov. Otter's leadership on renewable energy and the strong
push to assist this growing and important Idaho industry sector means Exergy projects
will continue to benefit the Idaho economy."
More on Exergy Development Group:
Exergy is one of the largest independent renewable energy developers in the U.S. The
company develops projects from concept to commercial operation, with a focus on
environmental responsibility and economic success for local communities. The company's
focus on new and advanced technologies has resulted in the company assembling a queue
of projects totaling over 4,000 megawatts of renewable energy for the Western and
Midwestern United States.
For more information or to arrange interviews, please contact John Foster at Strategies
360 208559-3547 or jo @strateçes360 corn
F 20.83U94-31
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'S
REVIEW OF PURPA QF CONTRACT
PROVISIONS INCLUDING THE
SURROGATE AVOIDED RESOUCES
(SAR)AND INTERATED RESOURCE
PLANNING (IRP) METHODOLOGIES FOR
CALCULATING AVOIDED COST RATES
CASE NO. GNR-E-11-03
EXHIBIT NO. 102
CLINT G. KALICH
FOR AVISTA CORPORATION
(ELECTRIC ONLY)
WIWI
515 N. 21" Street
Box 7218
Idaho : '.
Telephone.- Is)
Attorneys for Clearwater Paper Corpora. on, J.R. Simplot Company and
Exergy Development Group of Idaho
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
Case No. GNR-E-1 1-03
(IRP) METHODOLOGIES FOR
CALCULATING PUBLISHED AVOIDED
COST RATES
,v
a F1W'b
Ij1Ia
rIvj .1k. iTI,pm:
COMES NOW, Clearwater Paper corporation, J. R. Simplot company and Exergy
Development Group of Idaho and hereby responds to the First Production Request of Avista
Corporation. Dr. Don Reading is available to respond to questions about or sponsor these
Page 1 - Clearwater, Simplot and Exergy Response to Avista's First Production Request
REQUEST NO. 1: On page 7, begizuiing at line 7 of the direct testimony of Dr. Don Reading,
Dr. Reading states: "The SAR methodology has been robust through all of those changes and has
produced avoided cost rates that have proven to be remarkably accurate in hindsight"
A Please provi4e.afl analysis and data supporting this statement.
B.Please provide the Companies' position on whether Idaho's published avoided cost rate
rates available to wind PTJRPA developers from January 1, 2010 through December 14, 2010
were "renuwksbly accurate in hindsight"
C.Please explain the basis for the response(s) to subpart b of this request and provide any
analysis or data suppoithg such response(s).
RESPONSE TO REQUEST NO. 1:
A Dr. Reading's statement is based on his almost three decades of experience of
involvement in PURPA rate cases before the Idaho Commission, and an even longer time period
involved in electric utility rate cases before the Idaho Commission. No studies were necessary
for Dr. Reading to express his expert opinion on electric utility rates and PURPA rates in
particular.
B Dr. Readings observation was not limited to a specific point in time. "In hindsight" has
a broader meaning than just eleven and a half months in 2010. Avoided cost rates fluctuate over
time in both directions - up and down.
C Nofle. The Companies rely on Dr. Reading's expert opinion.
Page 2— Clearwater, Simplot and Exergy Response to Avista's First Production Request
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE COMMISSION'S
REVIEW OF PURPA QF CONTRACT
PROVISIONS INCLUDING THE
SURROGATE AVOIDED RESOUCES
(SAR)AND INTERATED RESOURCE
PLANNING (IRP) METHODOLOGIES FOR
CALCULATING AVOIDED COST RATES
CASE NO. GNR-E-11-03
EXHIBIT NO. 103
CLINT G. KALICH
FOR AVISTA CORPORATION
(ELECTRIC ONLY)
REQUEST NO. 2: On page 34 of the direct testimony of Dr. Don Reading, Chart 1 is used to
explain the difference between the proposed Idaho IRP method rates in this case and those for
the current Idaho IRP method, the Idaho 2011 IRP, and the Langley Gulch project.
A Please provide all analysis supporting the data contained in Chart I in an Excel
spreadsheet with all formulas intact.
13 Does the data used to create Chart I include any adjustments to the gas prices to reflect
current prices?
C If the answer to subpart I, is "no", please explain why no adjustment to gas prices was
used in preparing Chart 1.
1) If the answer to subpart b is "yes," please explain and provide any supporting analysis
and data for any adjustment to the gas prices that was made in preparing Chart I
E If the answer to subpart b of this request is "no", please explain the purpose of Chart I
and its relevance to this proceeding.
RESPONSE TO REQUEST NO 2:
A ?iese see the attached spreadsheet.
13 No.
C The per $IMWh avoided costs are taken from either the filings of Idaho Power or the
Idaho Commission Staff. One would need each of the separate models used and rerun with the
same gas price. The values were selected as being presented by Idaho Power within the same
relatively close time period. The exception being Langley Gulch that the Company is currently
being put into rates, so the value used is the one presented to the Commission when Idaho Power
requested the CPCN for Langley Gulch. The implication of the question appears to presuppose
natural gas prices are the only impact on the avoided cost rates. Many other assumptions and
Page 3 Clear-water, Simplot and Exergy Response to Avista's First Production Request
factors can impact the calculation of avoided costs. For example the Idaho Commission Staff
stated that the Langley Gulch capacity factor in more recent runs is not 65% but rather 49%,
which would impact the cost of capacity per MWh; By contrast, the Langley Gulch CCCT, the
only CCCT in Idaho Powefs portfolio, shows an annual capacity factor ranging from 36 to 49
percent, with a 20-year average of 49 percent. [Comments of Commission Staff, IPC-E-11-26,
January, 2012, p. 6.]
1) N/A
E As stated in Dr. Reading's testimony following Table 1; While it might be argued each of
four cost estimates are not precisely comparable, the order of magnitude of the difference
between the utility's baseload load plant currently coming on line, and what it proposes to offer a
baseload QFs, is so dramatically different it calls into question the claims that the proposed
method is a realistic estimate of the Company's avoided cost. It is also important to note all four
of these estimates can be considered filing within the same time frame and are therefore
comparable. [Direct Testimony of Don Reading, IPC-E-1 1-03, p. 34.]
Page 4— Clearwater, Simplot and Exergy Response to Avista's First Production Request
Levehzed Cost
Resource Type (Capacity Factor) $/MWh I Source
Langley Gulch [300 MW] (65%) $111.13 Staff Comments, IPC-E-09-34 (Neal Hot Springs), 5/3/2010
CCCT lxi 1270 MWJ 2011 IRP (65%) $98.00 IPCo 2011 1RP, p. 47; without carbon adder of$10$/MWh
Baseload -Current !RP Method [20MW] $65.00 IPC0 Memorandum in Support of Stay, p. 15, GNR-E-111-03
Baseload -Proposed IRP Method [20MW] (92.0%*) $47.40 IPCo Memorandum in Support of Stay, p. 15, Gi\JR-E-111-03
8aseload -Proposed IRP Method [20MW] (92.0%*)
Baseload -Current IRP Method [20MW]
CCCI lxi [270 MW] 2011 11W (65%)
Langley Gulch 1300 MW] (651Q
$20 $40 $60 $80 $100 $120
11W Price Leveflred $/MWh
Response toAvista Data Request No.2 A