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HomeMy WebLinkAbout20071023Comments.pdfSCOTT WOODBURY DEPUTY ATTORNEY GENERAL IDAHO PUBLIC UTILITIES COMMISSION PO BOX 83720 BOISE, IDAHO 83720-0074 (208) 334-0320 IDAHO BAR NO. 1895 r:;l:C E 1' 2507 OCT 23 :i!O: IDA!-.D F'()3LIC UTILiTIES CO.,;i,JISSIO, Street Address for Express Mail: 472 W. WASHINGTON BOISE, IDAHO 83702-5983 Attorney for the Commission Staff BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF IDAHO POWER COMPANY'S PETITION TO MODIFY THE METHODOLOGY FOR DETERMINING FUEL COSTS USED TO ESTABLISH PUBLISHED RATES FOR PURPA QUALIFYING FACILITIES CASE NO. IPC-O7- COMMENTS OF THE COMMISSION STAFF COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Scott Woodbury, Deputy Attorney General, and in response to the Notice of Petition, Notice of Modified Procedure and Notice of Comment /Protest Deadline issued on September 27 2007, submits the following comments. Pursuant to the Public Utility Regulatory Policies Act of 1978 (PURP A) and the implementing regulations of the Federal Energy Regulatory Commission (FERC), the Idaho Public Utilities Commission (Commission) has approved a methodology for calculation ofthe avoided cost rates paid to PURP A qualifying cogeneration and small power production facilities (QFs) by Idaho Power Company, Avista Corporation and PacifiCorp. Avoided cost rates are the purchase price paid to QFs for purchases of QF capacity and energy. On September 10, 2007, Idaho Power Company (Idaho Power; Company) filed a Petition with the Idaho Public Utilities Commission (Commission) to modify the methodology for determining fuel costs used to establish published rates for PURP A QFs. Idaho Power contends STAFF COMMENTS OCTOBER 23 , 2007 that use of the current method to set the fuel cost component in the surrogate avoided resource (SAR) methodology will result in published avoided cost rates that are not representative of the costs Idaho Power is likely to avoid by purchasing energy from QFs. BACKGROUND In Order No. 29124 issued September 26 2002 in Case No. GNR-02-, the Commission established the methodology currently used to compute the fuel cost component of the surrogate avoided resource (SAR) methodology. For QF projects generating less than aMW, the avoided cost rates determined by the SAR methodology are commonly referred to as the published rates. The current SAR is a natural gas-fired combined cycle combustion turbine. In accordance with Order No. 29124, the release of a new forecast by the Northwest Power and Conservation Council (NWPCC; Council) triggers a recomputation of the published avoided cost rates. The method the Commission adopted in Order No. 29124 to calculate the fuel cost component in the SAR methodology starts with an arithmetic average of the nominal prices for natural gas for the first 3 years of the Council's median 20-year forecast of natural gas prices. These three years consist of the current year s forecasted price, plus the previous two years forecasted prices. The SAR methodology then escalates that 3-year average natural gas price at a uniform percent per year over 20 years. The escalation rate is also calculated from the NWPCC 20-year natural gas forecast. ST AFF ANAL YSIS On September 11 , 2007, the NWPCC released a new forecast of natural gas prices. Unlike past forecasts that predicted gradually increasing prices over the 20 years of the forecast the new forecast predicts a decrease in prices between 2008 and 2012. This decrease in prices produces a pronounced dip in the shape of the forecast as shown on the graph on Attachment 1. In its Petition, Idaho Power points out that there is an extreme divergence between NWPCC's new forecast of natural gas prices and the natural gas prices used in the avoided cost calculation model. This extreme divergence is illustrated in Attachment 1. Using the adopted method, the fuel prices used in the avoided cost model exceed the prices in the Council's actual gas price forecast in all but one year of the forecast. The current methodology, while it fairly replicated gas price forecasts in the past where prices were always increasing, now fails to STAFF COMMENTS OCTOBER 23 2007 recognize the expected downward trend in fuel prices apparent in NWPCC's 20-year forecast. Failing to recognize the downward price trend in the NWPCC's 2007 forecast will cause the published rates to be much higher than they otherwise would be. Staff notes that it is very important that the fuel cost component of the avoided cost rates be accurately modeled. The fuel cost component in the SAR methodology comprises approximately two-thirds of the avoided cost rates. Idaho Power proposes that the Commission utilize the average of all 20 years of the NWPCC's final 2007 median 20-year natural price forecast as the fuel cost component in the SAR methodology. Because Idaho Power proposes to use the 20-year average price, no escalation forecast is needed. Staff is convinced that the current methodology for computing the fuel component of the published avoided rates poorly replicates gas forecasts shaped like the Council's 2007 forecast. However, Staff does not agree with Idaho Power s proposal to average all 20 years of the forecast. The Company s proposed approach cannot accurately replicate the shape of any forecast, it fails to recognize the time value of money, and it could in the future produce even more divergence between forecasted and modeled gas prices than the current method. A much better approach, Staff contends, is to simply use each year of the Council' entire forecast "as-. This approach is straightforward, simple and mathematically sound. It eliminates problems that occur when trying to replicate a forecast with computed numbers. It recognizes the time value of money and will work equally well in the future with forecasts of any shape. The table below depicts four sets of published avoided cost rates for Idaho Power for the years 2007-2009: (1) the current published avoided cost rates; (2) the published avoided cost rates that would go into effect if the 2007 NWPCC natural gas price forecast is used and the 3-year average natural gas price method remains unchanged; (3) the Idaho Power proposal- the fuel cost component is computed using the average of the 20 years of natural gas prices from the NWPCC's 2007 median gas price forecast, and (4) Staffs proposal to use each year of the Council's entire forecast. STAFF COMMENTS OCTOBER 23 , 2007 20-yr Levelized Avoided Cost Rate for Idaho Power Updated Pricing Using Idaho Power Proposal Staff Proposal Current Pricing Established Method Using all 20 years ofUsing a 20 yr Avg.forecast On-line Date NWPCC 2004 NWPCC 2007 Forecast NWPCC 2007 Forecast NWPCC 2007 ForecastForecast 2007 62.72.67.66. 2008 63.73.68.67. 2009 65.74.68.67. Because the same methodology is used to compute the avoided cost rates for Idaho Power, A vista and PacifiCorp, any change in methodology approved by the Commission in this case should apply to all three utilities. Using Staffs proposed methodology and the Council' new forecast, avoided cost rates for each of the three utilities for the years 2007-2009 would be as shown in the table below: 20-yr Levelized Avoided Cost Rate Under Staff's Proposal to Use All 20 years of the NWPCC Gas Forecast On-line Date Idaho Power Avista PacifiCorp 2007 66.67.67. 2008 67.67.67. 2009 67.68.68. Staff believes its proposed approach is fair and reasonable, but it does suffer from one minor problem. The Council's forecast, while commonly referred to as a 20-year forecast actually extends to 2030. That provides Staff with 24 years of forecasted gas prices (including 2007) with which to use in computing avoided cost rates. Staff has traditionally produced tables showing avoided cost rates for projects scheduled to come online up to five years in the future (See Attachment 2). Thus, 25 years of forecasted prices are needed in order to produce 20-year contract rates for projects coming online five years from now. On Attachment 2, for example, a 20-year levelized rate for a project that comes online in 2012 cannot be computed with a gas forecast that only extends to 2030. Similarly on Attachment 2, non-Ievelized rates for years STAFF COMMENTS OCTOBER 23,2007 beyond 2030 also cannot be computed. (See the circled figures on Attachment 2). This problem will propagate one year at a time until the NWPCC renews and extends its forecast so that 25 years of forecasted prices are available. To resolve this problem, Staff proposes to extend the natural gas price forecast by the necessary years using a mathematical extrapolation. An exponential growth function is used in the avoided cost spreadsheet to compute gas prices based on the last ten years of the NWPCC forecast. Staff believes that this method produces reasonable results because any possible errors in the approximation technique are likely extremely small considering the overall forecast accuracy. Furthermore, it is uncommon for contracts to be written for projects not expected to come online five years into the future, thus, it is unlikely that approximated avoided cost rates would need to be used anyway. A complete set of fueled and non-fueled rates for each utility computed using the new NWPCC fuel price forecast and the methodology described in these comments is attached as Attachment 3. Also included for reference purposes, as Attachment 4 , is a printout of the revised avoided cost spreadsheet. Electronic copies of the spreadsheet have been provided to each of the utilities, and are available upon request to any 'other interested party. ST AFF RECOMMENDATIONS Staff recommends the following: 1) That the Commission adopt the September 2007 fuel price forecast of the Northwest Power and Conservation Council for use in computing published avoided cost rates; 2) That the Commission issue an Order changing the method for determining the fuel cost component of the SAR methodology to utilize each of the 20 years set out in the NWPCC's 2007 median forecast of natural gas prices rather than the escalated average of the first 3 years of the same forecast, and 3) That the rates computed using the September 2007 Council forecast and the new proposed fuel cost methodology be effective beginning November 2007. STAFF COMMENTS OCTOBER 23 2007 Respectfully submitted this Technical Staff: Rick Sterling i:/umisc/comments/ipceO7.15swrps comments STAFF COMMENTS J3 day of October 2007. Sco Woodbury Deputy Attorney General OCTOBER 23 2007 -U J ( j ; J ; - "2 S ' ~ ::+ ~: 4 J ( 1 ) ~ -- ( j Z 2 " go o S' (1 ) s: : a g (1 ) ( j =' Ii i t ( 1 -- . I CI)Co ) D.. I/ )CISC) $1 2 $1 0 Co m p a r i s o n B e t w e e n M o d e l e d an d F o r e c a s t e d G a s P r i c e s Pr i c e s U s e d i n t h e A v o i d e d C o s t M o d e l NW P C C G a s P r i c e F o r e c a s t $0 ,20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 20 1 3 20 1 4 20 1 5 20 1 6 20 1 7 20 1 8 20 1 9 20 2 0 20 2 1 20 2 2 20 2 3 20 2 4 20 2 5 20 2 6 20 2 7 Ye a r ID A H O P O W E R C O M P A N Y AV O I D E D C O S T R A T E S F O R N O N - FU E L E D P R O J E C T S SM A L L E R T H A N T E N M E G A W A T T S No v e m b e r 1, 20 0 7 $/ M W h LE V E L I Z E D NO N - LE V E L I Z E D ON - LI N E Y E A R CO N T R A C T NO N - LE V E L I Z E D 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 YE A R RA T E S 69 . 67 . 65 . 62 . 4 4 59 . 58 . 20 0 7 69 . 68 . 4 9 66 . 4 1 63 . 61 . 59 . 59 . 20 0 8 67 . 67 . 4 5 65 . 62 . 60 . 4 0 59 . 59 . 20 0 9 65 . 66 . 63 . 61 . 60 . 59 . 4 1 59 . 20 1 0 62 . 4 4 65 . 63 . 61 . 60 . 59 . 60 . 4 6 20 1 1 59 . 64 . 62 . 61 . 60 . 60 . 61 . 20 1 2 58 . 63 . 62 . 61 . 60 . 60 . 61 . 20 1 3 59 . 4 9 63 . 62 . 61 . 61 . 61 . 62 . 20 1 4 59 . 63 . 62 . 61 . 61 . 62 . 63 . 20 1 5 61 . 4 9 63 . 62 . 62 . 62 . 63 . 64 . 20 1 6 63 . 63 . 4 2 62 . 62 . 62 . 63 . 65 . 20 1 7 65 . 63 . 63 . 63 . 63 . 64 . 4 3 65 . 20 1 8 68 . 63 . 63 . 63 . 64 . 65 . 66 . 20 1 9 70 . 64 . 64 . 64 . 64 . 65 . 67 . 20 2 0 72 . 64 . 64 . 64 . 65 . 4 4 66 . 4 8 68 . 20 2 1 74 . 65 . 65 . 65 . 4 1 66 . 67 . 68 . 20 2 2 76 . 65 . 65 . 65 . 66 . 67 . 69 . 4 4 20 2 3 79 . 65 . 66 . 66 . 67 . 68 . 4 9 70 . 20 2 4 81 . 66 . 4 3 66 . 67 . 67 . 69 . 70 . 20 2 5 83 . 66 . 67 . 67 . 68 . 69 . 20 2 6 86 . 20 2 7 89 . 4 8 20 2 8 92 . -U J n ; J ; - 20 2 9 95 . "2 S ' ~ :: + 20 3 0 ~: 4 J ( 1 ) ~ 20 3 1 -- n z s - 0 0 20 3 2 -- . I S' (1 ) S: : a g (1 ) n =' ... . . t " I j '" -; - 1 AVISTA AVOIDED COST RATES FOR NON-FUELED PROJECTS SMALLER THAN TEN MEGAWATTS November 2007 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2007 2008 2009 2010 2011 2012 YEAR RATES 70.68.66.63.60.59.2007 70. 69.67.64.62.60.43 60.2008 68. 68.66.63.61.60.60.2009 66. 67.65.62.61.60.60.2010 63. 66.64.62.61.60.61.2011 60. 65.63.62.61.49 61.49 62.2012 59. 65.63.48 62.61.62.63.2013 60. 64.63.42 62.62.62.63.2014 60. 64.49 63.62.62.63.45 64.2015 62. 64.63.63.63.46 64.65.2016 64. 64.64.63.64.64.66.2017 67. 64.64.47 64.64.65.66.2018 69. 65.64.64.65.66.67.2019 71. 65.65.65.65.66.68.2020 73. 65.65.65.66.67.68.2021 76. 66.66.66.66.67.69.2022 78. 66.63 66.66.67.68.70.2023 80. 67.67.67.68.69.70.2024 83. 67.67.67.68.69.71.2025 85.49 67.67.68.69.70.72.05 2026 88. 2027 91. 2028 93. 2029 97. 2030 100. 2031 102. 2032 106. Attachment 3 Case No. IPC-07- Staff Comments 10/23/07 Page 1 of AVISTA AVOIDED COST RATES FOR FUELED PROJECTS SMALLER THAN TEN MEGAWATTS November 2007 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2007 2008 2009 2010 2011 2012 YEAR RATES 14.15.15.16.16.41 16.2007 14. 15.15.15.16.16.16.2008 15. 15.15.16.16.16.17.2009 15. 15.47 15.16.16.16.17.2010 16. 15.15.16.16.17.17.2011 16.41 15.16.16.16.17.17.2012 16. 15.16.16.17.17.45 17.2013 17. 16.16.45 16.17.17.18.2014 17. 16.16.16.17.17.18.2015 17. 16.16.17.17.17.18.2016 18. 16.16.17.17.18.18.49 2017 18. 16.17.17.17.18.18.2018 19. 16.17.17.17.18.18.2019 19. 16.17.17.18.18.18.2020 20. 17.17.41 17.18.18.19.2021 20. 17.17.17.18.18.19.2022 21. 17.17.18.18.48 18.19.2023 21. 17.17.18.18.19.19.47 2024 22. 17.48 17.18.18.19.19.2025 22. 17.17.18.18.19.19.2026 23. 2027 23. 2028 24. 2029 24. 2030 25. 2031 25. 2032 26. EFFECTIVE DATE ADJUSTABLE COMPONENT 11/1/2007 55. The total avoided cost rate in each year is the sum of the adjustable component and the fixed component from either of the tables above. Example 1. A 20-year levelized contract with a 2008 on-line date would receive the following rates: Years Rate 17.99 + 55. 17.99 + Adjustable component in each year Example 2. A 4-year non-Ievelized contract with a 2007 on-line date would receive the following rates: Years Rate 14.98 + 55. 15.33 + Adjustable component in year 2008 15.68 + Adjustable component in year 2009 16.04 + Adjustable component in year 2010 Attachment 3 Case No. IPC-07- Staff Comments 10/23/07 Page 2 of 6 IDAHO POWER COMPANY AVOIDED COST RATES FOR NON-FUELED PROJECTS SMALLER THAN TEN MEGAWATTS November 2007 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2007 2008 2009 2010 2011 2012 YEAR RATES 69.67.65.62.44 59.58.2007 69. 68.66.41 63.61.59.59.2008 67. 67.65.62.60.40 59.59.2009 65. 66.63.61.60.59.59.2010 62.44 65.63.61.60.59.60.46 2011 59. 64.62.61.60.60.61.2012 58. 63.62.61.60.60.61.2013 59.49 63.62.61.61.61.62.2014 59. 63.62.61.61.62.63.2015 61. 63.62.62.62.63.64.2016 63. 63.62.62.62.63.65.2017 65. 63.63.63.63.64.65.2018 68. 63.63.63.64.65.66.2019 70. 64.64.64.64.65.67.2020 72. 64.64.64.65.44 66.48 68.2021 74. 65.65.65.41 66.67.68.2022 76. 65.65.65.66.67.69.44 2023 79. 65.66.66.67.68.49 70.2024 81. 66.43 66.67.67.69.70.2025 83. 66.67.67.68.69.71.2026 86. 2027 89.48 2028 92. 2029 95. 2030 98. 2031 101. 2032 104.40 Attachment 3 Case No. IPC-07- Staff Comments 10/23/07 Page 3 of IDAHO POWER COMPANY AVOIDED COST RATES FOR FUELED PROJECTS SMALLER THAN TEN MEGAWATTS November 2007 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2007 2008 2009 2010 2011 2012 YEAR RATES 13.14.14.14.15.15.2007 13. 14.14.14.15.15.43 15.2008 14. 14.14.14.15.15.15.2009 14. 14.14.15.15.40 15.16.2010 14. 14.14.15.15.15.16.2011 15. 14.15.15.15.16.16.2012 15. 14.15.15.15.16.16.2013 15. 14.15.15.16.16.16.2014 16. 15.15.46 15.16.16.16.2015 16. 15.15.15.16.16.17.2016 17. 15.15.16.16.48 16.17.2017 17. 15.15.16.16.17.17.40 2018 17. 15.16.16.16.17.17.2019 18. 15.16.16.16.17.17.2020 18. 15.16.16.17.17.44 17.2021 19. 16.16.40 16.17.17.17.2022 19. 16.16.16.17.17.18.2023 20. 16.16.17.17.17.18.2024 20. 16.16.17.17.17.18.2025 21. 16.16.17.17.18.18.2026 21. 2027 22. 2028 22. 2029 23. 2030 23. 2031 24. 2032 24. EFFECTIVE DATE ADJUSTABLE COMPONENT 11/1/2007 55. The total avoided cost rate in each year is the sum of the adjustable component and the fixed component from either of the tables above Example 1. A 20-year levelized contract with a 2008 on-line date would receive the following rates: Years Rate 16.89 + 55. 16.89 + Adjustable component in each year Example 2. A 4-year non-Ievelized contract with a 2007 on-line date would receive the following rates: Years Rate 13.92 + 55. 14.24 + Adjustable component in year 2008 14.57 + Adjustable component in year 2009 14.91 + Adjustable component in year 2010 Attachment 3 Case No. IPC-07- Staff Comments 10/23/07 Page 4 of 6 PACIFICORP AVOIDED COST RATES FOR NON-FUELED PROJECTS SMALLER THAN TEN MEGAWATTS November 2007 $/MWh LEVELIZED NON-LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2007 2008 2009 2010 2011 2012 YEAR RATES 70.68.66.63.60.60.03 2007 70. 69.67.65.62.60.48 60.2008 68. 68.66.63.61.60.60.2009 66. 67.65.62.61.44 60.61.2010 63. 66.46 64.62.61.61.61.2011 60. 65.63.62.40 61.61.62.2012 60. 65.63.62.44 61.62.63.2013 60. 64.63.62.62.62.63.2014 60. 64.63.62.62.63.64.2015 62. 64.63.63.41 63.45 64.65.2016 65. 64.64.63.64.64.66.2017 67. 65.64.64.64.65.66.2018 69. 65.64.64.65.65.67.2019 71. 65.65.65.65.66.68.2020 73. 65.65.65.66.67.68.2021 76. 66.66.66.66.67.69.2022 78. 66.66.66.67.68.69.2023 80. 66.66.67.67.68.70.42 2024 83. 67.67.67.68.69.70.2025 85. 67.67.68.68.69.71.2026 88. 2027 91. 2028 94. 2029 97. 2030 100. 2031 103. 2032 106. Attachment 3 Case No. IPC-07- Staff Comments 10/23/07 Page 5 of PACIFICORP AVOIDED COST RATES FOR FUELED PROJECTS SMALLER THAN TEN MEGAWATTS November 2007 $/MWh LEVELIZED NON.LEVELIZED CONTRACT ON-LINE YEAR LENGTH CONTRACT NON-LEVELIZED (YEARS)2007 2008 2009 2010 2011 2012 YEAR RATES 15.15.15.16.16.16.2007 15. 15.15.15.16.16.17.2008 15. 15.15.16.16.44 16.17.2009 15. 15.15.16.16.16.17.2010 16. 15.16.03 16.40 16.17.17.2011 16.46 15.16.16.16.17.17.2012 16. 15.16.16.17.17.49 17.2013 17. 16.16.16.17.17.18.2014 17. 16.16.17.17.40 17.18.2015 18. 16.16.17.17.17.18.2016 18.45 16.16.17.17.18.18.2017 18. 16.17.17.42 17.18.18.2018 19. 16.17.17.17.18.18.2019 19. 16.17.17.18.18.18.2020 20. 17.17.40 17.18.18.63 19.2021 20. 17.17.17.18.18.19.2022 21. 17.17.18.18.45 18.19.2023 21. 17.17.18.18.18.19.43 2024 22. 17.17.18.18.19.19.2025 22. 17.17.18.18.19.19.2026 23. 2027 23. 2028 24. 2029 24. 2030 25.40 2031 25. 2032 26. EFFECTIVE DATE ADJUSTABLE COMPONENT 11/1/2007 55. The total avoided cost rate in each year is the sum of the adjustable component and the fixed component from either of the tables above. Example 1. A 20-year levelized contract with a 2008 on-line date would receive the following rates: Years Rate 17.94 + 55. 17.94 + Adjustable component in each year Example 2. A 4-year non-Ievelized contract with a 2007 on-line date would receive the following rates: Years Rate 15.03 + 55. 15.38 + Adjustable component in year 2008 15.73 + Adjustable component in year 2009 16.09 + Adjustable component in year 2010 Attachment 3 Case No. IPC-07- Staff Comments 10/23/07 Page 6 of AVOIDED COST CALCULATION MODEL 10/15/2007 Version 9.DRAFT NORTHWEST POWER AND CONSERVATION COUNCIL Natural Gas Price Forecast September 11, 2007 Real Price Nominal Price (East-5lde Delivered)by Year FUEL COST YEAR (2006 per MMBtu)($perMMBtu)$IMWh 2000 27. 2001 28. 2002 20. 2003 31. 2004 33. 2005 43. 2006 46. 2007 55. 2008 53. 2009 50. 2010 47. 2011 44.43 2012 43. 2013 43. 2014 43. 2015 44. 2016 46. 2017 5.41 48. 2018 50. 2019 52. 2020 53. 2021 55.47 2022 57. 2023 59. 2024 61. 2025 62. 2026 65. 2027 67.45 2028 69. 2029 10.72.26 2030 10.74. General inflation rate.1% per year 1. Choose Utility IIPCO 2, Choose Condition I NON-RJElED 3. Copy rates to tariff sheets (Repeat for each utility and fuel condition chosen). 4. Print Rates INPUT IPCO DATA DATA FIRST OEFICIT YEAR 2002 SURPLUS ENERGY COST ($/MWh).N/A SURPLUS COST BASE YEAR:1994 SAR" PLANT LIFE (YEARS). SAR" PLANT COST ($IkW).$679 BASE YEAR OF "SAR" COST:2000 SAR" CAPACITY FACTOR (%).92% HEAT RATE (BTUIkWH).100 UTLTY WT'D COST OF CAPITAL (%):852% RATEPAYER DISCOUNT RATE (%).852% SAR" FIXED O&M ($lkW):$10. SAR" VARIABLE O&M ($/MWh). CURRENT YEAR GAS PRICE ($/MMBTU).$7. CURRENT YEAR FUEL COST ($/MWh):55. BASE YEAR, O&M EXPENSES.2000 ESCALATION RATE; "SAR" (%).10% ESCALATION RATE; SURPLUS (%).N/A ESCALATION RATE; O&M (%).70% ESCALATION RATE; FUEL (%).70% ADJUSTABLE PORTION ($/MWh). CAPITAL CARRYING CHARGE (%).11.517% LEVEL CARRYING COST ($/MWh). "IlL TING" RATE (%).10% TYPE OF RATES.NON-FUELED CURRENT YEAR.2007 20-yr Levellzed rate, 2007 on-line date:66.88 UTILITY-SPECIFIC VARIABLES IPCO AVISTA PCP FIRST DEFICIT YEAR.2002 2002 2002 UTL TY WT'D COST OF CAPITAL (%).852%248%10.270% CAPITAL CARRYING CHARGE (%).11.517%12.679%12.600% HLH LLH PRICE DIFFERENTIAL.$7.28 $5.Monthly WIND INTEGRATION ADJUSTMENT. Tiber, Un~ed Metonels Slmplo~ Reneweble SEASONALIZATION FACTORS SEASON FACTOR Contracts Energy 0' Id., Fossil Gulch Mar-May 735 Mar-May Mar-May Idaho Power Jun-Sep 200 Jun, Jul, Nov, Dee Jul, Aug, Nov, Dee Oct-Feb 000 Jan. Feb. Auo, Sea, Oct Jan, Feb, Jun, SeD, Oct Jul-Feb 080 July - Feb Avista Mar-Jun 840 Mar - June PacifiCorp Monthly See PacifiCorp spreadsheets AVOID 9.0XLS Attachment 4 Case No. IPC-07- Staff Comments 10/23/07 Page 1 of SURPLUS COST ($/MWh) YEAR VALUE 1994 N/A 1995 N/A 1996 N/A 1997 N/A 1998 N/A 1999 N/A 2000 N/A 2001 N/A 2002 N/A 2003 N/A 2004 N/A 2005 N/A 2006 N/A 2007 N/A 2008 N/A 2009 N/A 2010 N/A 2011 N/A 2012 N/A 2013 N/A 2014 N/A 2015 N/A 2016 N/A 2017 N/A 2018 N/A 2019 N/A 2020 N/A 2021 N/A 2022 N/A 2023 N/A 2024 N/A 2025 N/A 2026 N/A 2027 N/A 2028 N/A 2029 N/A 2030 N/A 2031 N/A 2032 N/A 2033 N/A 2034 N/A 2035 N/A 2036 N/A 2037 N/A 2038 N/A 2039 N/A 2040 N/A 2041 N/A 2042 N/A 2043 N/A 2044 N/A 2045 N/A AVOID 9.0XLS ANNUAL CARRYING CHARGES Plant on-line in the year shown CARRYING TILTED YEAR CHARGE CAPITAL 2000 N/A 2001 N/A 2002 10. 2003 10. 2004 10. 2005 10. 2006 10. 2007 11. 2008 11. 2009 11. 2010 11. 2011 12. 2012 12.45 2013 12.10. 2014 12.10. 2015 13.10. 2016 13.10. 2017 13.11. 2018 14.11. 2019 14.40 11.48 2020 14.11. 2021 15.11. 2022 15.12. 2023 15.12.48 2024 15.12. 2025 16.13. 2026 16.13. 2027 17.13. 2028 17.13. 2029 17.14. 2030 18.14.43 2031 18.14. 2032 18.15. 2033 19.15. 2034 19.15. 2035 20.16. 2036 20.16. 2037 20.16. 2038 21.17. 2039 21.17. 2040 22.17. 2041 22.18. 2042 23.18. 2043 23.18. 2038 24.19. 2039 24.19. 2040 25.20. 2041 25.20. 2042 26.20. 2043 26.21. 2044 27.43 21. 2045 28.22. ANNUAL OPERATION & MAINTENANCE COSTS ($/MWh) YEAR FIXED VARIABLE TOTAL FUEL 2000 N/A 2001 N/A 2002 1.40 N/A 2003 N/A 2004 N/A 2005 N/A 2006 N/A 2007 55. 2008 3.47 53. 2009 50. 2010 47. 2011 44. 2012 43. 2013 43. 2014 43. 2015 44 .77 2016 46. 2017 4.40 6.49 48. 2018 50. 2019 52. 2020 53. 2021 55.47 2022 57. 2023 59. 2024 61. 2025 5.45 62. 2026 65. 2027 67.45 2028 69. 2029 72.26 2030 74. 2031 6.40 71.07 2032 79. 2033 82. 2034 10.85. 2035 10.88. 2036 3.46 10.91. 2037 11.94. 2038 11.97. 2039 11.100. 2040 11.103. 2041 12.107.45 2042 12.111. 2043 12.114. 2044 13.118. 2039 13.100. 2040 14.103. 2041 14.107.45 2042 4.77 10.14.111. 2043 10.15.114. 2044 10.15.118. 2045 10.16.122. Attachment 4 Case No. IPC-07- Staff Comments 10/23/07 Page 2 of -U J ( j ; J ; - "2 S ' ~ :: + ~: 4 J ( 1 ) ~ -- ( j z : : : r 0 0 S -- . I (1 ) .. . . . = ' '" 0 '" 0 I' J ( 1 ) ( j . j : o . . (J Q = ' I (1 ) I i i t ( 1 -- . I .. . . . , I U\ ~ NO N - AD J U S T A B L E P O R T I O N T O T A L C O S T S TI L T E D TO T A L YE A R CA P I T A L O& M FU E L SU R P L U S TO T A L 20 0 7 55 . NI A 69 . 20 0 8 53 . NI A 67 . 20 0 9 50 . NI A 65 . 20 1 0 47 . NI A 62 . 20 1 1 44 . 4 3 NI A 59 . 20 1 2 43 . NI A 58 . 20 1 3 10 . 43 . NIA 59 . 20 1 4 10 . 43 . NIA 59 . 20 1 5 10 . 44 . 7 7 NIA 61 . 4 9 20 1 6 10 . 46 . NIA 63 . 20 1 7 11 . 6.4 9 48 . NI A 65 . 20 1 8 11 . 50 . NIA 68 . 20 1 9 11 . 4 8 52 . NI A 70 . 20 2 0 11 . 53 . NI A 72 . 20 2 1 11 . 55 . NI A 74 . 20 2 2 12 . 7.4 2 57 . NI A 76 . 20 2 3 12 . 4 8 59 . NI A 79 . 20 2 4 12 . 61 . NI A 81 . 20 2 5 13 . 62 . NI A 83 . 20 2 6 13 . 65 . NI A 86 . 20 2 7 13 . 67 . NI A 89 . 20 2 8 13 . 69 . NI A 92 . 20 2 9 14 . 72 . NI A 95 . 20 3 0 14 . 4 3 74 . NI A 98 . 20 3 1 14 . 77 . NI A 10 1 . 20 3 2 15 . 79 . NI A 10 4 . 20 3 3 15 . 82 . NI A 10 7 . 20 3 4 15 . 10 . 85 . NI A 11 1 . 20 3 5 16 . 10 . 88 . NI A 11 4 . 20 3 6 16 . 10 . 91 . NI A 11 8 . 20 3 7 16 . 11 . 94 . NI A 12 1 . 20 3 8 17 . 11 . 97 . NI A 12 5 . 20 3 9 17 . 4 0 11 . 10 0 . NI A 12 9 . 20 4 0 17 . 11 . 10 3 . NI A 13 3 . 20 4 1 18 . 12 . 10 7 . 4 5 NI A 13 7 . 20 4 2 18 . 12 . 11 1 . NI A 14 2 . 20 4 3 18 . 12 . 11 4 . NI A 14 6 . 20 4 4 21 . 13 . 11 8 . NI A 15 3 . 20 4 5 22 . 16 . 12 2 . NI A 16 1 . 20 4 6 22 . 16 . 12 2 . NI A 16 1 . 20 4 7 22 . 16 . 12 2 . NI A 16 1 . 20 4 8 22 . 16 . 12 2 . NI A 16 1 . 20 4 9 22 . 16 . 12 2 . NI A 16 1 . 20 5 0 22 . 16 . 12 2 . NI A 16 1 . 20 5 1 22 . 16 . 12 2 . NI A 16 1 . AV O I D 9 . XL S CO N T R A C T AV O I D E D C O S T P R E S E N T V A L U E S ( $ / M W h ) LE N G T H ON - LI N E Y E A R (Y E A R S ) 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 66 . 65 . 62 . 60 . 57 . 4 7 56 . 60 . 58 . 55 . 53 . 52 . 53 . 53 . 51 . 49 . 48 . 49 . 49 . 4 1 47 . 45 . 45 . 45 . 45 . 47 . 42 . 4 7 41 . 42 . 42 . 4 8 43 . 45 . 38 . 39 . 39 . 40 . 42 . 43 . 4 1 36 . 36 . 37 . 38 . 40 . 41 . 33 . 34 . 36 . 37 . 38 . 39 . 32 . 33 . 34 . 35 . 36 . 38 . 31 . 32 . 33 . 34 . 35 . 36 . 4 1 29 . 30 . 31 . 32 . 33 . 34 . 28 . 29 . 4 9 30 . 4 0 31 . 32 . 33 . 27 . 28 . 29 . 29 . 30 . 31 . 26 . 26 . 27 . 28 . 29 . 30 . 24 . 25 . 26 . 4 4 27 . 28 . 28 . 23 . 24 . 25 . 26 . 26 . 27 . 22 . 23 . 4 3 24 . 24 . 25 . 26 . 21 . 22 . 23 . 23 . 24 . 25 . 20 . 21 . 22 . 22 . 23 . 24 . 19 . 20 . 21 . 21 . 22 . 23 . 19 . 19 . 20 . 20 . 21 . 4 9 22 . 18 . 18 . 19 . 19 . 20 . 21 . 17 . 17 . 18 . 19 . 19 . 20 . 16 . 17 . 17 . 18 . 18 . 19 . 15 . 16 . 16 . 17 . 4 3 17 . 18 . 15 . 15 . 16 . 16 . 17 . 17 . 14 . 14 . 15 . 4 5 15 . 16 . 4 4 16 . 13 . 14 . 14 . 15 . 15 . 16 . 13 . 13 . 14 . 14 . 15 . 15 . 12 . 13 . 13 . 13 . 14 . 14 . 12 . 12 . 12 . 13 . 13 . 14 . 11 . 11 . 12 . 12 . 13 . 13 . 11 . 11 . 11 . 12 . 12 . 13 . 10 . 10 . 11 . 11 . 12 . 12 . 10 . 10 . 4 8 10 . 11 . 11 . 11 . CO N T R A C T SU M M E D A V O I D E D C O S T P R E S E N T V A L U E S ( $ / M W h ) LE N G T H ON - LI N E Y E A R (Y E A R S ) 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 66 . 65 . 62 . 60 . 57 . 4 7 56 . 12 7 . 12 3 . 11 8 . 4 6 11 3 . 4 1 10 9 . 10 9 . 18 1 . 17 4 . 16 7 . 16 2 . 15 9 . 15 9 . 22 8 . 22 0 . 21 2 . 20 7 . 20 5 . 20 6 . 27 1 . 4 0 26 2 . 25 5 . 25 0 . 24 8 . 25 1 . 31 0 . 30 1 . 29 4 . 29 0 . 29 0 . 29 5 . 34 6 . 33 8 . 33 2 . 32 9 . 33 1 . 33 6 . 38 0 . 4 6 37 3 . 36 8 . 4 7 36 7 . 36 9 . 37 6 . 41 2 . 40 6 . 40 3 . 40 3 . 40 6 . 41 4 . 44 3 . 43 8 . 43 6 . 43 7 . 44 2 . 45 1 . 47 3 . 46 9 . 46 8 . 47 0 . 47 5 . 48 6 . 50 2 . 49 9 . 49 8 . 50 1 . 50 8 . 51 9 . 52 9 . 52 7 . 52 7 . 53 1 . 53 8 . 55 0 . 55 5 . 55 4 . 55 5 . 55 9 . 56 8 . 58 1 . 58 0 . 57 9 . 58 1 . 58 7 . 59 6 . 61 0 . 60 4 . 4 8 60 4 . 4 9 60 7 . 61 3 . 62 3 . 63 7 . 62 7 . 62 7 . 63 1 . 63 7 . 64 8 . 66 4 . 64 8 . 65 0 . 65 4 . 66 1 . 67 3 . 4 9 68 9 . 66 9 . 67 1 . 67 6 . 68 4 . 69 7 . 71 4 . 68 9 . 69 2 . 69 7 . 70 6 . 4 1 71 9 . 73 7 . 70 8 . 71 1 . 71 7 . 72 7 . 74 1 . 75 9 . 4 1 72 6 . 73 0 . 73 7 . 74 7 . 76 1 . 78 0 . 74 4 . 74 8 . 4 9 75 5 . 76 6 . 78 1 . 80 0 . 76 0 . 76 5 . 77 3 . 78 4 . 4 9 80 0 . 82 0 . 77 6 . 78 2 . 79 0 . 80 1 . 81 8 . 83 8 . 79 1 . 79 7 . 80 6 . 81 8 . 83 5 . 85 6 . 80 6 . 81 2 . 82 1 . 83 4 . 85 1 . 87 3 . 4 8 82 0 . 82 6 . 83 6 . 84 9 . 86 7 . 88 9 . 83 3 . 84 0 . 85 0 . 86 4 . 88 2 . 90 5 . 84 6 . 85 3 . 86 4 . 87 8 . 89 6 . 92 0 . 85 8 . 86 6 . 87 7 . 0 4 89 1 . 91 0 . 93 4 . 86 9 . 87 8 . 88 9 . 4 0 90 4 . 92 3 . 94 7 . 88 1 . 88 9 . 90 1 . 91 6 . 93 6 . 96 0 . 89 1 . 90 0 . 91 2 . 92 8 . 94 8 . 4 8 97 3 . 90 1 . 91 1 . 92 3 . 93 9 . 96 0 . 98 5 . -U J ( j ; J ; - "2 S ' ~ ;:+ ~: 4 J ( 1 ) ~ bQ ~ S -- . I a' (1 ) -0 3 : : a ~ ~ g \1 " ' " (1 ) v ; ' t T J .. , . . --. I .. . . . , U\ ~ AV O I D XL S CO N T R A C T NO N - AD J U S T A B L E L E V E L I Z E D AV O I D E D C O S T S ($ / M W h ) LE N G T H ON - LI N E Y E A R (Y E A R S ) 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 69 . 67 . 65 . 62 . 59 . 58 . 68 . 4 9 66 . 4 1 63 . 61 . 59 . 59 . 67 . 65 . 62 . 60 . 4 0 59 . 59 . 66 . 63 . 61 . 60 . 59 . 59 . 65 . 63 . 61 . 60 . 59 . 60 . 4 6 64 . 62 . 61 . 60 . 60 . 61 . 63 . 62 . 61 . 60 . 60 . 61 . 63 . 62 . 61 . 61 . 61 . 62 . 63 . 62 . 61 . 61 . 62 . 63 . 63 . 62 . 62 . 62 . 63 . 64 . 63 . 62 . 62 . 62 . 63 . 65 . 63 . 63 . 63 . 63 . 64 . 65 . 63 . 63 . 63 . 64 . 65 . 66 . 64 . 64 . 64 . 64 . 65 . 67 . 64 . 64 . 64 . 65 . 66 . 4 8 68 . 65 . 65 . 65 . 4 1 66 . 67 . 68 . 65 . 65 . 65 . 66 . 67 . 69 . 65 . 66 . 66 . 67 . 68 . 4 9 70 . 66 . 4 3 66 . 67 . 67 . 69 . 70 . 66 . 67 . 67 . 68 . 69 . 71 . 67 . 67 . 68 . 69 . 70 . 4 3 72 . 67 . 68 . 68 . 69 . 71 . 72 . 68 . 68 . 69 . 70 . 71 . 73 . 68 . 69 . 69 . 70 . 72 . 2 7 74 . 69 . 69 . 70 . 71 . 72 . 74 . 69 . 70 . 70 . 71 . 73 . 75 . 70 . 70 . 71 . 4 0 72 . 5 2 74 . 75 . 70 . 71 . 71 . 73 . 74 . 76 . 4 8 70 . 71 . 72 . 4 0 73 . 75 . 77 . 71 . 72 . 72 . 74 . 75 . 77 . 71 . 72 . 4 6 73 . 74 . 76 . 78 . 72 . 72 . 73 . 75 . 76 . 78 . 72 . 73 . 74 . 75 . 77 . 79 . 73 . 73 . 74 . 76 . 77 . 6 6 79 . 73 . 4 0 74 . 75 . 76 . 4 6 78 . 80 . -U J ( J ; J ; - "2 S ' ~ : : : I : ~: 4 J ( 1 ) ~ -- ( J Z 2 " 00 ~ -- . I S' (1 ) "O S : : a g PO ( 1 ) ( J ~ (J Q : : : I I (1 ) . . . . . t T j '" , U\ 0 -- . I .. . . . , I U\ ~ CO N T R A C T AD J U S T A B L E P L U S N O N - AD J U S T A B L E C O S T S ( $ / M W h ) LE N G T H ON - LI N E Y E A R (Y E A R S ) 20 0 7 20 0 8 20 0 9 20 1 0 20 1 . 1 20 1 2 69 . 67 . 65 . 62 . 4 4 59 . 58 . 68 . 4 9 66 . 4 1 63 . 61 . 59 . 59 . 67 . 4 5 65 . 62 . 60 . 4 0 59 . 59 . 66 . 63 . 61 . 60 . 59 . 4 1 59 . 65 . 63 . 61 . 60 . 59 . 60 . 4 6 64 . 62 . 61 . 60 . 60 . 61 . 63 . 62 . 61 . 60 . 60 . 61 . 63 . 62 . 61 . 39 . 61 . 61 . 62 . 63 . 62 . 61 . 61 . 62 . 63 . 63 . 62 . 62 . 62 . 63 . 64 . 63 . 4 2 62 . 62 . 62 . 63 . 65 . 63 . 63 . 63 . 63 . 64 . 4 3 65 . 63 . 63 . 63 . 64 . 65 . 66 . 64 . 64 . 64 . 64 . 65 . 67 . 64 . 64 . 64 . 65 . 66 . 4 8 68 . 65 . 65 . 65 . 4 1 66 . 67 . 68 . 65 . 65 . 65 . 66 . 67 . 69 . 65 . 66 . 66 . 67 . 68 . 4 9 70 . 66 . 4 3 66 . 67 . 67 . 69 . 70 . 66 . 67 . 67 . 68 . 69 . 71 . 67 . 67 . 68 . 69 . 70 . 4 3 72 . 67 . 68 . 68 . 69 . 71 . 72 . 68 . 68 . 69 . 70 . 71 . 73 . 4 7 68 . 69 . 69 . 70 . 72 . 74 . 69 . 69 . 70 . 71 . 4 2 72 . 74 . 69 . 70 . 70 . 71 . 73 . 75 . 70 . 70 . 71 . 4 0 72 . 74 . 75 . 70 . 71 . 71 . 73 . 0 5 74 . 76 . 4 8 70 . 71 . 72 . 4 0 73 . 75 . 77 . 0 4 71 . 72 . 72 . 8 8 74 . 75 . 77 . 6 0 71 . 72 . 4 6 73 . 74 . 76 . 78 . 72 . 72 . 8 9 73 . 75 . 76 . 78 . 72 . 6 1 73 . 74 . 75 . 77 . 1 6 79 . 73 . 73 . 74 . 76 . 77 . 6 6 79 . 73 . 4 0 74 . 75 . 76 . 4 6 78 . 80 . 'O l D 9 . 0X L S NO N - LE V E L I Z E D AV O I D E D C O S T R A T E ($ / M W h ) CO N T R A C T NO N - AD J U S T A B L E ST A R T PL U S M O S T R E C E N T YE A R AD J U S T A B L E 20 0 7 69 . 20 0 8 67 . 20 0 9 65 . 20 1 0 62 . 20 1 1 59 . 20 1 2 58 . 20 1 3 59 . 4 9 20 1 4 59 . 20 1 5 61 . 4 9 20 1 6 63 . 20 1 7 65 . 20 1 8 68 . 20 1 9 70 . 20 2 0 72 . 20 2 1 74 . 20 2 2 76 . 20 2 3 79 . 20 2 4 81 . 20 2 5 83 . 20 2 6 86 . 20 2 7 89 . 4 8 20 2 8 92 . 20 2 9 95 . 20 3 0 98 . 20 3 1 10 1 . 20 3 2 10 4 . 20 3 3 10 7 . 20 3 4 11 1 . 20 3 5 11 4 . 20 3 6 11 8 . 20 3 7 12 1 . 20 3 8 12 5 . 20 3 9 12 9 . 20 4 0 13 3 . 20 4 1 13 7 . 20 4 2 14 2 . 20 4 3 14 6 . 20 4 4 15 3 . 20 4 5 16 1 . 20 4 6 16 1 . CERTIFICA TE OF SERVICE HEREBY CERTIFY THAT I HAVE THIS 23RD DAY OF OCTOBER 2007, SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE NO. IPC-07-, BY MAILING A COpy THEREOF , POSTAGE PREPAID, TO THE FOLLOWING: BARTON L KLINE LISA D NORDSTROM IDAHO POWER COMPANY PO BOX 70 BOISE ID 83707-0070 MAIL: bkline(q),idahopower.com lnordstrom~idahopower. com JOHN R GALE VP - REGULATORY AFFAIRS IDAHO POWER COMPANY PO BOX 70 BOISE ID 83707-0070 MAIL: rgale~idahQl2ower.com ~#~ SECRET Y CERTIFICATE OF SERVICE