20050531Woodbury Letter.pdf

E CEJVED
STATE OF IDAHO
(2)
20U5 MAY 3 f PM 2: 25
.. '
1- IDAHO PUBLICU i ftlTIES COMMISSION
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDEN
May 31 , 2005
Blair Strong
Paine, Hamblen, et al
717 W. Sprague Avenue, Suite 1200
Spokane, WA 99201-3505
Clint Kalich
A vista Utilities
1411 E. Mission
PO Box 3727
Spokane, W A 99220-3727
. James C. Paine
James Fell
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, OR 97204
Mark Widmer
PacifiCorp
825 NE Multnomah Street
Portland, OR 97232
Barton L. Kline
Idaho Power Company
PO Box 70
Boise, ID 83707-007
RE:Case Nos. GNR-O5-1; PAC-O5-
The Idaho Public Utilities Commission in Order No. 28708, Case No. GNR-99-, 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 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 (50/0) adjustment for line loss).
As computed by Commission Staff the Colstrip related adjustable rate will change from 8.
mill/kWh to 8.87 mill/kWh. The same calculated rate revision under the avoided cost
methodology is used by A vista, PacifiCorp dba UP&L and Idaho Power Company. This change
in the variable rate affects existing contracts under the previous SAR methodology.
The adjustable portion of the avoided cost rates under the Sumas-based methodology -is based on
annual average gas prices indexed at Sumas, Washington. As reported by Avista, the indexed
gas prices have increased by $0.61/mmbtu. The approved gas price of $5.31/mmbtu plus the
$0.61/mmbtu increase results in a gas price of $5.92/mmbtu for the 2005-2006 year. This
equates to a SAR fuel cost of 43.51 mill/kWh as used in the model.
Contracts & Administrative Law Division, Idaho Public Utilities Commission
O. Box 83720, Boise, Idaho 83720-0074, Telephone: [phone], FAX: [phone], E-mail: Ipuc~puc.state.id.
Located at 472 West Washington St., Boise, Idaho 83702
May 31 , 2005
Page 2
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 for these contracts was ordered to be equal to the average cost of
fuel for the Carbon, Hale, Naughton Huntington and' Hunter generating plans, including a
variable O&M component of $1.51 but exclusive of generation taxes and a line loss adjustment.
The variable energy rate applicable to deliveries commencing July 1 , 2005 extending through
June 30, 2006 has been computed by PacifiCorp to be $11.55/MWh, an increase from $10.52 last
year.
Accompanying this letter are worksheets showing the computation of the revised adjustable rates
for the various affected contracts. If after reviewing the revisions, you accept 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-05-, will read as follows:
IN THE MATTER OF THE ANNUAL REVISION AND UPDA TED
CALCULATION OF THE ADJUSTABLE PORTION OF THE AVOIDED
COST RA TE(S) FOR EXISTING PURP A CONTRACTS FOR A VISTA
CORPORATION DBA VISTA UTILITIES FOR IDAHO POWER
COMPANY, AND FOR P ACIFICORP DBA UTAH POWER & LIGHT
COMP ANY.
The case heading in the PacifiCorp case for PacifiCorp QF contracts with 1992 Amendment
language, Case No. P AC-05-, is as follows:
IN THE MATTER OF THE ANNUAL REVISION OF QF VARIABLE
ENERGY PRICES IN ACCORDANCE WITH 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 17 2005.
Thank you for your cooperation. Please feel free to. contact me or Rick Sterling if you have any
questions.
Scott D. Woodbury
Deputy Attorney General
[phone]
Enclosures
blslL:GNREO501 PACEO506 sw
COLSTRIP ADJUSTABLE RATE CALCULATION
For Period 7/1/05-6/30/06
Colstrip Fuel Cost from Avista FERC Form 1 for CY 2004
line 12
line 20
Net Generation (kwh)
Fuel
Fuel cost per kwh
Fuel Cost per MWh
Variable O&M , Gen. Tax, 5% line loss per MWh
Total Colstrip Adjustable Rate
Reference GNR-99-N. 28708 4/17/2001
604 774 000
$11 022 574
$0.006869
$6.8686
$2.0000
$8.8686
Average Gas Prices at Sumas, Washington from Inside FERC publication
($/MMBtu)
Calculating the 2005-2006 A voided Cost Adjustable Rate
2003 2004
Jan $4.44 $5.
Feb $4.$5.
Mar $7.32 $4.4 2
Apr $4.$4.
May $4.$5.
Jun $4.$5.
July $4.$5.20
Aug $3.$5.
Sep $4.$4.
Oct $4.$4.
Nov $4.$7.27
Dec $4.$6.
Average $4.66 $5.
Actual Annual Adjustment:
$5.31 - ($4.66 - $5.27) =
Note:
$2.00/MMBtu = 1997-98 Approved Rate
$2.35/MMBtu = 1998-99 Approved Rate
$2.26/MMBtu = 1999-00 Approved Rate
$2.80/MMBtu = 2000-01 Approved Rate
$4.82/MMBtu = 2001-02 Approved Rate
$5.23/MMBtu = 2002-03 Approved Rate
$3.33/MMBtu = 2003-04 Approved Rate
$5.31/MMBtu = 2004-05 Approved Rate
Carbon
t"aCITI\"orp
Total Variable Energy Rate
for 2005 2006
Naughton Huntington Hunter Totals
Fuel Cost ($) $11,442 174 $60,497 565 $63 752 592 $77 145.4;52 $'212 837 783
FERC FORM 1 - Page 402 Line 20
Generation (MWH)
FERC FORM 1 - Page 402 Line 12
Average Fuel Cost ($/MWH)
Variable O&M
IPUC Order 28709
135 083 245,831 388 634
Total Variable Energy Rate for 2005 2006
Ijh Id AC June 2005 - Update Variable Coal Energy Rate.xls (2005)
8,437 874 21,207,422
10.04 IMWH
51 IMWH
11.55 IMWH
5/20/2005 10:42