20230630Final_Order_No_35841.pdf

ORDER NO. 35841 1
Office of the Secretary
Service Date
June 30, 2023
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF COMMISSION
STAFF’S PETITION TO UPDATE
COLSTRIP-RELATED ADJUSTABLE
PORTION OF AVOIDED COST RATES
FOR EXISTING PURPA CONTRACTS
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CASE NOS. IPC-E-23-16

ORDER NO. 35841

On May 3, 2023, Staff petitioned the Commission for an order implementing the annual
update to the Colstrip-related adjustable portion of the published avoided cost rates (“Colstrip
Method”) for certain qualifying facilities (“QF”) under the Public Utility Regulatory Policies Act
of 1978 (“PURPA”). Staff also requested that rather than Staff filing future annual updates for the
Colstrip Method, Idaho Power be directed to do so. The annual update to the Colstrip Method is
scheduled to take effect on July 1.
On May 23, 2023, the Commission issued a Notice of Petition and set deadlines for public
and Company comments and Staff’s reply. Idaho Power Company (“Idaho Power”) filed
comments to which Staff did not reply. No other comments were received.
Having reviewed the record in this case we now issue this Final Order updating the Colstrip
Method, effective July 1, 2023.
THE PETITION
In 1999 the Commission established a method 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. See Order No. 28708, Case No. GNR-E-99-01.
Idaho Power has contracts with Colstrip Method rates. The last Idaho Power contract
expires in May 2031.1
For those QF contracts with Colstrip-related fuel costs and variable O&M, future Colstrip
variable cost adjustments are calculated using FERC Form 1 Colstrip Unit Coal Costs per
megawatt hour (“MWh”) and adding $2.00/MWh (the average variable O&M cost of Colstrip,
plus 20¢/MWh for generation taxes, plus a five percent adjustment for line loss). Relevant pages

1 Idaho Power clarified that the last of the six contracts using the Colstrip Method expires on May 1, 2031, contrary
to information it had previously provided that the date was September 2030 as represented in Staff’s Petition.

ORDER NO. 35841 2
from Avista Corporation’s (“Avista”) FERC Form 1 are attached to Staff’s Petition as Attachment
A.
As computed by Staff, the Colstrip-related adjustable rate will change from 19.13
mill/kilowatt hour (“kWh”) to 21.67 mill/kWh, effective July 1, 2023.
Because Idaho Power is the last Idaho regulated utility using Colstrip Method rates for
certain contracts, Staff proposes that Idaho Power be directed to file future updates instead of Staff.
Staff also proposes that Idaho Power use Colstrip data from Avista’s FERC Form 1 until it is no
longer possible and at that point, use data from NorthWestern Energy’s (“Northwestern”) FERC
Form 1 for the remainder of the necessary updates (unless data availability becomes an issue).2
IDAHO POWER’S COMMENTS
Idaho Power supported Staff’s calculation for the adjustable portion of the avoided cost
rate that relies on the Colstrip Method. Regarding Staff’s additional recommendations that Idaho
Power initiate the annual update beginning in 2024, first using data from Avista’s FERC Form 1
and after Avista’s exit from Colstrip to use NorthWestern’s FERC Form 1, Idaho Power expressed
concerns. While it did not oppose initiating the filing and agreed that NorthWestern’s FERC Form
1 data would be used after Avista no longer has any interest in Colstrip, Idaho Power explained
that there could be differences in the rate based on ownership percentages.
Idaho Power’s understanding is that NorthWestern already owns a 30 percent share
of Colstrip Unit 4. . . . Idaho Power compared the resulting rate derived from
NorthWestern’s Colstrip data based on its current Unit 4 ownership to the rate Staff
derived from Avista’s data. The rate calculated from NorthWestern’s data was
higher than the rate Staff calculated from Avista’s data (approximately $0.91 per
MWh higher).

Company Comments at 2.

Additionally, Idaho Power was unsure if NorthWestern would report its interest in Colstrip
separately or aggregated after the transfer from Avista due to its complete ownership of Colstrip
Units 3 and 4.
Because neither Avista nor NorthWestern would have a duty to provide their FERC Form
1 data to Idaho Power in advance of it becoming public, Idaho Power believed it could obtain the

2 On January 16, 2023, Avista entered into an agreement with NorthWestern and will transfer its 15 percent ownership
in Colstrip Units 3 and 4 to NorthWestern, effective December 31, 2025. Petition at 2. If data availability becomes an
issue, Staff recommends Idaho Power work with Staff to develop a new method.

ORDER NO. 35841 3
data from FERC’s website or the utilities’ websites in time to make the filing each year. If data
availability becomes an issue, Idaho Power noted it would work with Staff.
COMMISSION DECISION AND FINDINGS
The Commission has jurisdiction over Idaho Power under the authority and power granted
it under Title 61 of the Idaho Code and PURPA. The Commission has authority under PURPA and
the FERC’s implementing regulations to set avoided costs, to order electric utilities to enter fixed-
term obligations for the purchase of energy from QFs, and to implement FERC rules.
The Commission has reviewed the record, all submitted materials, and all submitted
comments. Based on its review of the record, and the calculations for the adjustable portion of the
avoided costs using the Colstrip Method, the Commission finds it fair, just, and reasonable to
approve the resulting adjustable rates of 21.67 mill/kWh for existing contracts, effective July 1,
2023.
We understand Idaho Power’s position that it may encounter data availability issues
because Avista and NorthWestern are not required to provide advance access to their FERC Form
1s and NorthWestern’s Colstrip data may lead to a skewed result because of its ownership and
reporting differences. As Idaho Power represented, we trust it will be able to obtain the necessary
data for the update as it begins filing future updates to the Colstrip method in 2024. We direct
Idaho Power to notify and work with Staff in the event it cannot meet the deadline based on an
inability to access necessary data. Additionally, if Idaho Power suspects the data it obtains after
NorthWestern assumes Avista’s interest in Colstrip results in a skewed update as it discussed in its
comments, we direct it to work with Staff to find a dataset or mechanism that leads to an adjustable
rate that meets the intent of Order No. 28708.
ORDER
IT IS HEREBY ORDERED that the adjustable portions of the avoided-cost rates for
existing PURPA contracts using the Colstrip Method are changed from 19.13 mill/kilowatt hour
(“kWh”) to 21.67 mill/kWh, effective July 1, 2023.
IT IS FURTHER ORDERED that Idaho Power shall file updates to the Colstrip-related
adjustable portion of avoided cost rates beginning in 2024.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order regarding any matter

ORDER NO. 35841 4
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 30th day of
June 2023.

ERIC ANDERSON, PRESIDENT

JOHN R. HAMMOND JR., COMMISSIONER

EDWARD LODGE, COMMISSIONER

ATTEST:

Jan Noriyuki
Commission Secretary

I:\Legal\ELECTRIC\IPC-E-23-16_Colstrip\IPCE23-16_Final_dh.docx