20070530Application.pdf

1 i
; :
; IJ i i I'J: ~'
STATE OF IDAHO Ii. "
" ,
: il.Ji i:.
:.
.J.
"".:).::,
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDEN
May 24, 2007
Avista Corporation
Blair Strong
Paine, Hamblen , et al
717 W, Sprague Avenue, Suite 1200
Spokane, WA 99201-3505
Clint Kalich
Avista Utilities
1411 E, Mission
PO Box 3727
Spokane, WA 99220-3727
Rocky Mountain Power
Dean Brockbank
PacifiCorp dba Rocky Mountain Power
201 S. Main Street, Suite 2200
Salt Lake City, UT 84111
Mark Widmer
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
P0I1land, OR 97232
Mark Moench
General Counsel
201 S. Main Street, Suite 2300
Salt Lake City, UT 84111
Idaho Power Company
Barton L. Kline
Idaho Power Company
PO Box 70
Boise, ID 83707-007
Randy Allphin
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
RE:Case Nos. GNR-O7-01; PAC-O7-
The Idaho Public Utilities Commission in Order No. 28708 , Case No. GNR-99-, established a
methodology for the annual adjustable rate p0l1ion 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 I 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 (5%) adjustment for line loss). As computed by Commission Staff the Colstrip related adjustable
rate will change from 9.38 mill/kWh to 11.47 mill/kWh. The same calculated rate revision under the
avoided cost methodology is used by A vista, PacifiCorp dba Rocky Mountain Power and Idaho Power
Company. This change in the variable rate affects existing contracts under the previous SAR
methodology.
Contracts & Administrative Law Division, Idaho Public Utilities Commission
O. Box 83720, Boise, Idaho 83720-0074, Telephone: [phone], FAX: [phone]. E-mail: Ipuclf!1puc.state.id.
Located at 472 West Washington St.. Boise, Idaho 83702
May 24, 2007
Page 2
The adjustable portion of the avoided cost rates under the Sum as-based methodology is based on annual
average gas prices indexed at Sum as, Washington. As rep0l1ed by Avista, the indexed gas prices have
decreased by $0.87/mmbtu. The approved gas price of $7.80/mmbtu plus the $0.87/mmbtu decrease
results in a gas price of $6.94/mmbtu for the 2007-2008 year. This equates to a SAR fuel cost of 51.
mill/kWh as used in the model.
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 I , 2003, the adjustable
p0l1ion 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 , 2007 extending through June 30, 2008 has been computed by PacifiCorp to be
$12.17/MWh, an increase from $12.03 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-07-, will read as
follows:
IN THE MA TTER OF THE ANNUAL REVISION AND UPDATED
CALCULATION OF THE ADJUSTABLE PORTION OF THE AVOIDED COST
RATE(S) FOR EXISTING PURPA CONTRACTS FOR AVISTA
CORPORA TION DBA A VISTA UTILITIES, FOR IDAHO POWER COMPANY
AND FOR PACIFICORP DBA ROCKY MOUNTAIN POWER.
The case heading in the PacifiCorp case for PacifiCorp QF contracts with 1992 Amendment language
Case No. PAC-07-, 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 15 2007.
Thank you for your cooperation. Please feel free to contact me, or Rick Sterling, if you have any
questions.
Sincerely,
exIScott D. Woodbury
Deputy Attorney General
[phone]
Enclosures
bls/LGNR-O7-0 I PAC-O7-09 sw
COLSTRIP ADJUSTABLE RATE CALCULATION
For Period 7/1/07-6/30/08
Colstrip Fuel Cost from Avista FERC Form 1 for CY 2006
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-99-1 D.28708 4/17/2001
578 798 000
$14 953 795
$0.009472
$9.4716
$2.0000
$11.4716
Average Gas Prices at Somas, Washington from Inside FERC publication
($/MMBtu)
Calculating the 2007-2008 Avoided Cost Adjustable Rate
2005 2006
Jan $5.$9.
Feb $5.$7.
Mar $5.$6.
Apr $6.41 $5.
May $6.$5.
Jun $5.$4.
July $6.$5.
Aug $5.$5.
Sep $7.$5.
Oct $9.$3.
Nov $11.11 $7.
Dee $9.$7.
Average $7.15 $6.28
Actual Annual Adjustment
$7.80 - ($7.15 - $6.28) = $6.
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
$5 . 92/MMBtu = 2005-06 Approved Rate
$7.80/MMBtu = 2006-07 Approved Rate
Pa
c
i
f
i
C
o
r
p
To
t
a
l

V
a
r
i
a
b
l
e

E
n
e
r
g
y

R
a
t
e
fo
r

20
0
7
/
2
0
0
8
Ca
r
b
o
n
Na
u
g
h
t
o
n
Hu
n
t
i
n
g
t
o
n
Hu
n
t
e
r
To
t
a
l
s
Fu
e
l

C
o
s
t

(
$
)
FE
R
C

F
o
r
m

1

-

P
a
g
e

4
0
2
,
l
i
n
e

2
0
Ge
n
e
r
a
t
i
o
n

(
M
W
h
)
FE
R
C

F
o
r
m

1

-

P
a
g
e

4
0
2
,
l
i
n
e

1
2
63
3
12
3
65
,
4
0
9
06
5
82
3
62
8
86
,
4
9
3
,
4
1
8
22
2
35
9
23
4
31
2
55
3
92
9
,
4
0
0
13
9
00
7
8,
4
7
7
27
6

$
20
,
85
8
23
6
10
.
13
.
10
,
10
,
66

/
M
W
h
51

I
M
W
h
12
.
17

/
M
W
h
Av
e
r
a
g
e

F
u
e
l

C
o
s
t

(
$
/
M
W
h
)
Va
r
i
a
b
l
e

O
&
M
IP
U
C

O
r
d
e
r

N
o
.

2
8
7
0
9
To
t
a
l

V
a
r
i
a
b
l
e

E
n
e
r
g
y

R
a
t
e

f
o
r

20
0
6
/
2
0
0
7