20200514Petition.pdf

Edward J. Jewell
Deputy Attorney General
[e-mail]

May 14, 2020

VIA E-Mail

Diane M. Hanian, Secretary
Idaho Public Utilities Commission
[e-mail]

Re: Case No. IPC-E-20-24 and AVU-E-20-04
In the Matter of Commission Staff’s Petition to Update Inputs to the Colstrip
Method and to Discontinue the Sumas Method

Dear Ms. Hanian:

Enclosed for electronic filing in the above matter, please find Commission Staff’s Petition to
Update Inputs to the Colstrip Method and to Discontinue the Sumas Method. Please let me
know if you have any questions.

Regards,

Edward J. Jewell

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Enclosure(s)
I:\Legal\ELECTRIC\AVUE2004_IPCE2024\Cover Letter.docx
RECEIVED
2020 May 14PM3:12
IDAHO PUBLIC
UTILITIES COMMISSION
PETITION 1

EDWARD JEWELL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10446

Street Address for Express Mail:
11331 W CHINDEN BVLD, BLDG 8, SUITE 201-A
BOISE, ID 83714

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF COMMISSION STAFF’S
PETITION TO UPDATE INPUTS TO THE
COLSTRIP METHOD AND TO
DISCONTINUE THE SUMAS METHOD
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CASE NOS. IPC-E-20-24

AVU-E-20-04

PETITION

Commission Staff of the Idaho Public Utilities Commission (“Commission Staff”), in
accordance with Idaho Code §§ 61-501, -502, and -503, and applicable provisions of the Public
Utility Regulatory Policies Act of 1978 (“PURPA”) and pursuant to Commission Rule of
Procedure 37 and 51, respectfully petitions the Idaho Public Utilities Commission (“Commission”)
for an order updating inputs used in the Colstrip Method and eliminating all requirements related
to the Sumas Method.
In support of its Petition, Commission Staff states as follows:
I. BACKGROUND
1. The Commission establishes published avoided cost rates for Avista Corporation
(“Avista”), Idaho Power Company (“Idaho Power”), and PacifiCorp dba Rocky Mountain Power
(“Rocky Mountain Power”) (collectively, “Idaho utilities”). Over the years, the Commission has
ordered different methods to calculate published avoided cost rates.
2. Each July 1, the Commission updates QF contracts that are calculated based on the
Sumas Method and the Colstrip Method. Historically, Commission Staff initiated the Colstrip
Method and the Sumas Method updates via a letter to the Idaho utilities requesting confirmation
RECEIVED
2020 May 14PM3:12
IDAHO PUBLIC
UTILITIES COMMISSION
PETITION 2

that Commission Staff correctly applied the updated data to the preexisting methodology. The
Idaho utilities would each file a letter with the Commission indicating whether it agreed with
Staff’s updated computation. Finding this to be an administrative function and a relatively simple
arithmetic update to a preexisting methodology, the Commission would then issue an order
updating the published avoided cost rates. See e.g., GNR-E-19-01.
3. This year, Commission Staff is initiating these annual updates with this Petition
rather than a letter to the utilities. In a similar annual update that takes effect June 1 of each year,
Commission Staff initiated this year’s update with a Decision Memorandum rather than a letter.
In its Notice of Modified Procedure, the Commission stated, “For purposes of this docket, Staff’s
Decision Memo will operate as its Application to the Commission. Subsequent annual SAR
updates will be initiated with an Application to the Commission. Despite the change in procedure
to allow for better tracking and transparency, this update is still intended to be a simple arithmetic
calculation to an established methodology.” Order No. 34628 at 1, GNR-E-20-01. Staff believes
the rationale of Order No. 34628 applies equally to these July 1 annual updates as it does to the
June 1 annual updates.
4. In addition to the annual update to the Colstrip Method, Commission Staff also
requests the Commission remove all requirements related to the Sumas Method because none of
the Idaho utilities currently has an effective contract utilizing the Sumas Method.
II. COLSTRIP METHOD
5. Idaho Power and Avista each indicated they are still parties to effective contracts
with Colstrip Method rates. Rocky Mountain Power indicated it no longer has effective contracts
with Colstrip Method rates.
6. The Idaho Public Utilities Commission established the Colstrip Method in Order
No. 28708, Case No. GNR-E-99-1. The Colstrip Method is calculated using variable costs such
as fuel and operations and maintenance (“O&M”) associated with operating Colstrip, a coal-fired
generating facility in southeast Montana. The Colstrip Method is calculated using FERC Form 1,
which is attached hereto as Attachment A, Colstrip Unit Coal Costs per megawatt hour (MWh)
and adding $2.00 per MWh (the average variable O&M cost of Colstrip plus 20¢ per Mwh for
generation taxes plus a five percent adjustment for line losses.
PETITION 3

7. As computed by Commission Staff and shown below, this year’s update to the
Colstrip Method will result in a change from 16.17 mill/kWh to 16.55 mill/kWh effective July 1,
2020.
COLSTRIP ADJUSTABLE RATE CALCULATION Updated

Rates For Period 7/1/20-6/30/21

Colstrip Fuel Cost from Avista FERC Form 1 for CY 2019

line 12
Net Generation
(kwh) 1,582,048,000
line 20 Fuel $23,017,352
Fuel cost per kwh $0.014549

Fuel Cost per MWh $14.5491
Variable O&M, Gen. Tax, 5% line loss per MWh $2.0000
Total Colstrip Adjustable Rate $16.5491

III. SUMAS METHOD
8. Each of the Idaho utilities indicated that they no longer have an effective contract
utilizing the Sumas Method. The Sumas Method was established by the Commission in Order
Nos. 25882, 25883, and 25884. Under the Sumas Method, the adjustable portion of the rates was
based on annual average gas prices indexed at Sumas, Washington. Each year, Avista was required
to provide the Commission with gas price data. Because the Sumas Method is no longer in use,
Staff requests the Commission discontinue the responsibility for Avista to provide Sumas fuel
price data annually, the last vestigial remnant of the Sumas Method.
IV. PROCEDURE
9. Commission Staff believes that a hearing is not necessary to consider the issues
presented herein and respectfully requests that this Petition be processed under Modified
Procedure; i.e., by written submissions rather than by hearing. Commission Rule of Procedure
201, et seq.
V. COMMUNICATIONS AND SERVICE OF PLEADINGS
10. Communications and service of pleadings, exhibits, orders, and other documents
relating to this proceeding should be sent to the following:

PETITION 4

Edward J. Jewell
Deputy Attorney General
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]

Mike Louis
Supervisor of Engineering Sectin
Idaho Public Utilities Commission
P.O. Box 83720
Boise, ID 83720-0074
[e-mail]

VI. REQUEST FOR RELIEF
11. Commission Staff respectfully requests that the Commission issue an order making
the annual update to the Colstrip Method and discontinuing the Sumas Method.

Respectfully submitted this 14th day of May 2020.

____________________________
Edward J. Jewell,
Deputy Attorney General
Idaho Public Utilities Commission

PETITION 5

CERTIFICATE OF SERVICE

I HEREBY CERTIFY THAT I HAVE THIS 14TH DAY OF MAY 2020, SERVED
THE FOREGOING PETITION, IN CASE NOS. AVU-E-20-04 / IPC-E-20-24, BY
ELECTRONICALLY MAILING A COPY THEREOF TO THE FOLLOWING:

DONOVAN E WALKER
REGULATORY DOCKETS
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707-0070
E-mail: [e-mail]
[e-mail]

MICHAEL DARRINGTON
IDAHO POWER COMPANY
PO BOX 70
BOISE ID 83707
E-mail: [e-mail]

LINDA GERVAIS
CLINT KALICH
AVISTA CORPORATION
PO BOX 3727
SPOKANE WA 99220-3727
E-mail: [e-mail]
[e-mail]

MICHAEL G ANDREA
SENIOR COUNSEL
AVISTA CORPORATION
PO BOX 3727
SPOKANE WA 99220-3727
E-mail: [e-mail]

_________________________________
Keri J. Hawker
Assistant to Edward J. Jewell

ATTACHMENT “A”