20070619Decision memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
CO MMISSI 0 NER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:SCOTT WOODBURY
DATE:JUNE 18,2007
SUBJECT:CASE NO. PAC-07-13 (PacifiCorp)
PETITION TO REVISE PUBLISHED AVOIDED COST RATES TO
INCLUDE MONTHLY AND DAILY LOAD SHAPE ADJUSTMENTS
On June 18 2007, PacifiCorp dba Rocky Mountain Power (RMP; Company) filed a
Petition with the Idaho Public Utilities Commission (Commission) requesting authority to revise
its published avoided cost rates for qualifying facilities (QFs) under Sections 201 and 210 of the
Public Utility Regulatory Policies Act of 1978 (PURP A) to include monthly price multipliers to
recognize the monthly difference in value between energy delivered by QFs during heavy load
hours (HLH) and energy delivered during light load hours (LLH). As reflected in the
Company s Petition, this revision would not change the computation of avoided cost but could
change the total revenues received by QFs depending on which month and when during the day
they deliver energy.
RMP notes that Idaho Power Company in its petition in pending Case No. IPC-07-
04 has requested that the published avoided cost rates be adjusted to include a daily load shape.
Idaho Power already has in place a recognition of its seasonal load. RMP notes further that
A vista Corporation requested, and the Commission approved, a similar daily shape adjustment in
Case No. A VU-06-04 (Order No. 30111).
As reflected in RMP's Petition, at the present time, the Company pays the same price
to a QF that delivers energy entirely during light load hours as a QF that delivers entirely during
heavy load hours. Likewise, the Company pays the same price to a QF that delivers entirely in a
peak load month as a QF that delivers entirely in a non-peak load month. RMP believes that the
existing payment structure is inappropriate as it does not provide proper incentives to QFs , and is
DECISION MEMORANDUM
neither fair to customers nor to the QF because it could result in either under or over payments
for the value of the power.
The Company s proposed heavy load hour and light load hour monthly price
multipliers are .reflected below.
Month Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec
HLH 103%105%95%95%92%94%121%121%109%115%110%129%
LLH 94%97%80%76%63%65%92%106%99%105%96%120%
Note: These monthly price multipliers are derived from:
(1) 48-months of historical daily Dow Jones firm market data for the COB
Four Comers, Mid-Columbia and Palo Verde wholesale market hubs.
The 48-months reflected in this analysis is from April 1 , 2003 through to
and including March 31 , 2007; and
(2) 48-months of system balancing data extracted from two GRID scenarios;
a Base Case and an A voided Cost Case. The 48-months reflected in these
studies is from January 1 , 2007 through to and including December 31
2010.
These multipliers are subject to change if different 48-month periods are selected.
RMP notes that it has provided its Petition via e-mail to all intervenors in Case No.
IPC-05-22 and other entities that participated in the wind workshops that followed the
issuance of Order No. 29839, the Commission s Order reducing the published rate cap for
published avoided cost rates for eligible wind projects from 10 aMW to 100 kW.
COMMISSION DECISION
Rocky Mountain Power recommends that its Petition in Case No. PAC-07-13 be
processed expeditiously. Staff notes that Idaho Power s daily load shape proposal in Case No.
IPC-07-04 is being processed pursuant to Modified Procedure. The deadline for filing written
comments was March 23,2007. The continued processing ofldaho Power s petition in that case
has been informally stayed to administratively allow for the contemporaneous processing of the
similar requests by Avista and RMP. The Commission Staff recommends that a Notice of
Application be issued in Case No. PAC-07-13 and pending concurrence of participants in the
wind workshop scheduled for June 20, 2007 recommends that RMP's Petition be processed
pursuant to Modified Procedure, i., by written submission rather than by hearing. Reference
DECISION MEMORANDUM
Commission Rules of Procedure, IDAPA 31.01.01.201-204. Does the Commission agree with
the procedure recommended by Staff?
Scott Woodbury
blsfM:PAC-O7-13 sw
DECISION MEMORANDUM