20090513Application.pdf

(\ ;:,: L ~\ .,:t.¡"...'......
1UUQ tU,l \ 3 PM 2: 32
STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDEN
May 13,2009
Avista Corporation
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, WA 99220-3727
Michael Andrea
A vista Utilties
1411 E. Mission
PO Box 3727
Spokane, WA 99220-3727
Rocky Mountain Power
Mark Moench
Daniel Solander
Ted Weston
PacifiCorp dba Rocky Mountain Power
One Utah Center
201 S. Main Street, Suite 2300
Salt Lake City, UT 84111
Greg Duvall
Hui Shu
Laren Hale
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR 97232
Idaho Power Company
Baron L. Kline
Idaho Power Company
POBox 70
Boise, ID 83707-007
Randy Allphin
Idaho Power Company
POBox 70
Boise, ID 83707-0070
RE: Case Nos. GNR-E-09-01; PAC-E-09-04
The Idaho Public Utilities Commission in Order No. 28708, Case No. GNR-E-99-1, 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 facilty 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 20t/MWh for generation taes plus a five percent (5%) adjustment for line loss). As computed by
Commission Staff the Colstrip related adjustable rate wil change from 12.06 mil/kWh to 14.09 mil/kWh. The
Contracts & Administrative Law Division, Idaho Public Utilities Commission
P.O. Box 83720, Boise, Idaho 83720-0074, Telephone: [phone], FAX: [phone], E-mail: Ipuc~puc.state.id.us
Located at 472 West Washington St., Boise, Idaho 83702
May 13,2009
Page 2
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.
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 indexéd gas prices have increased by
$1.82/MMBtu. The approved gas price of$7.18/MMBtu plus the $1.82/MMBtu increase results in a gas price of
$9.00/MMBtu for the 2009-2010 year. This equates to a SAR fuel cost of 63.90mil/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 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 plants, 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, 2009 extending
through June 30, 2010 has been computed to be $14.36/MWh, an increase from $14.11 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-E-09-01, wil read as follows:
IN THE MATTER OF THE ANNAL REVISION AND UPDATED CALCULATION OF
THE ADJUSTABLE PORTION OF THE AVOIDED COST RATE(S) FOR EXISTING
PURPA CONTRACTS FOR AVISTA CORPORATION DBA AVISTA 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-E-09-04, is as follows:
IN THE MATTER OF THE ANNAL 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 5, 2009.
Thank you for your cooperation. Please feel free to contact me, or Rick Sterling, if you have any questions.
Sincerely,
41i2J,
Scott D. Woodbury
Deputy Attorney General
Enclosures
blslL:GNR-E-09-0 i _P AC-E-09-04 _sw _avoided cost
COLSTRIP ADJUSTABLE RATE CALCULATION
For Period 7/1/09-6/30/10
Colstrip Fuel Cost from Avista FERC Form 1 for CY 2008
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.E.99.1 O.N. 28708 4/17/2001
Colstrip _ 09-10 .xls
1,757,659,000
$21,253,774
$0.012092
$12.0921
$2.0000
$14.0921
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
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

2
0
0
9
/
2
0
1
0
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
$
18
,
5
2
9
,
8
2
3
$
76
,
5
0
3
,
8
0
2
$
81
,
2
7
1
,
8
8
4
$
10
8
,
4
2
1
,
7
2
3
$
28
4
,
7
2
7
,
2
3
2
1,
2
0
4
,
9
8
2
5,
1
1
4
,
4
0
9
7,
1
4
8
,
8
5
0
8,
6
9
1
,
7
2
1

$
22
,
1
5
9
,
9
6
2
$
15
.
3
8
$
14
.
9
6
$
11
.
3
7
$
12
.
4
7
$
12
.
8
5

I
M
W
h
$
1.
5
1

I
M
W
h
$
14
.
3
6

I
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

2
0
0
9
/
2
0
1
0
Pa
c
i
f
i
C
o
r
p

0
9
-
1
0

V
a
r
i
a
b
l
e

c
o
s
t

a
d
j
.
x
l
s
, .
o?\rti.J
Average Gas Prices at Sumas, Washington from Inside FERC pußi~ãUf 6 AM B: 28
($/Mtu)IDl\H() PI i
UTiL.iTn=S' ¡...~... . ~ 1 ~:!_,'. ....~....
Calculating the 2009-2010 Avoided Cost Adjustable Rate
2007 2008
Jan $6.41 $7.48
Feb $6.98 $8.57
Mar $7.15 $8.46
Apr $6.60 $8.81
May $6.74 $10.17
Jun $6.86 $10.77
July $6.03 $11.69
Aug $5.22 $7.94
Sep $4.81 $6,94
Oct $5.85 $6.23
Nov $7.45 $6.28
Dec $8.12 $6.66
Average $6.52 $8.33
Actual Anual Adjustment:
$7.18 - ($6.52-$8.33) = $9.00
Note:
$2.00/Mtu = 1997-98 Approved Rate
$2.35/Mtu = 1998-99 Approved Rate
$2.26/Mtu = i 999-00 Approved Rate
$2.80/Mtu = 2000-01 Approved Rate
$4.82/Mtu = 2001-02 Approved Rate
$5.23/MMBtu =2002-03 Approved Rate
$3.33/MMtu = 2003-04 Approved Rate
$5.31/Mtu = 2004-05 Approved Rate
$5.92/Mtu = 2005-06 Approved Rate
$7.80/Mtu = 2006-07 Approved Rate
$6.94/Mtu = 2007-08 Approved Rate
$7; 18/Mtu = 2008-09 Approved Rate