20130514Commission Letter.pdf

IDAHO C.L. "Butch" Otter, Governor. PUBLIC UTILITIES commission P.O. Box 83720, Boise, Idaho 83720-0074
Paul Kjellander, Commissioner
Mack A. Redford, Commissioner
Marsha H. Smith, Commissioner
May 13, 2013
Avista Corporation
Michael Andrea
Avista Utilities
1411 E. Mission
P0 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
Idaho Power Company
Clint Kalich
Avista Utilities
1411 E. Mission
P0 Box 3727
Spokane, WA 99220-3727
.
S..,
Greg Duvall
Hui Shu
Laren Hale
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR 97232
Donovan E. Walker Randy Aliphin
Idaho Power Company Idaho Power Company
P0 Box 70 P0 Box 70
Boise, ID 83707-007 Boise, ID 83707-0070
Re: Case Nos. GNR-E-13-01; PAC-E-13-08
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 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 200/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 14.80 mill/kWh to 15.12 mill/kWh. The same calculated rate revision under the
avoided cost methodology is used by Avista, PacifiCorp dba Rocky Mountain Power and Idaho Power
Company. This change in the variable rate affects existing contracts under the previous SAR
methodology.
Located at 472 West Washington Street, Boise, Idaho 83702
Telephone: [phone] Facsimile: [phone]
May 13, 2013
Page 2
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
decreased by $1.1 5IMMBtu. The approved gas price of $4.60/MMBtu plus the $1.1 5/IV11VIBtu decrease
results in a gas price of $3.45/MMBtu for the 2013-2014 year. This equates to a SAR fuel cost of 24.50
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 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, 2013 extending through June 30, 2014 has been computed to be $19.1 7/MWh, an
increase from $18.52 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-E-13-01, will read as
follows:
IN THE MATTER OF THE ANNUAL 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-13-08, 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 May 24, 2013.
Thank you for your cooperation. Please feel free to contact Cathleen McHugh if you have any questions.
Sincerely,
-r
Kristine A. Sasser
Deputy Attorney General
Enclosures
b1sIL:GNR-E-1 3-01_PAC-E-13-08 avoided cost
COLSTRIP ADJUSTABLE RATE CALCULATION
For Period 711/13-6/30/14
Colstrip Fuel Cost from Avista FERC Form I for CY 2012
line 12 Net Generation (kwh) 1,498,987,000
line 20 Fuel $19,671,443
Fuel cost per kwh $0.013123
Fuel Cost per MWh $131232
Variable O&M, Gen. Tax, 5% line loss per MWh $20000
Total Colstrip Adjustable Rate $151232
Reference GNR-E-99-1 O.N.28708 411712001
Coistri p_I 3-14
Average Gas Prices at Sumas, Washington from Inside FERC publication
($/MMBtu)
Calculating the 2013-2014 Avoided Cost Adjustable Rate
2011 2012
Jan $4.19 $3.47
Feb $4.11 $2.78
Mar $3.82 $2.47
Apr $4.04 $1.96
May $3.99 $1.82
Jun $4.03 $2.35
July $4.00 $2.44
Aug $3.97 $2.74
Sep $3.72 $2.44
Oct $3.70 $2.91
Nov $3.66 $3.94
Dec $3.93 $4.03
Average $3.93 $2.78
Actual Annual Adjustment:
$4.60 - ($3.93-$2.78) = $3.45
Note:
$6.94/MMBtu = 2007-08 Approved Rate
$7.1 8/MMBtu = 2008-09 Approved Rate
$9.00/MMBIu = 2009-10 Approved Rate
$4.62/MMBtu = 2010-11 Approved Rate
$4.99/MMBtu = 2011-12 Approved Rate
$4.60/MMBtu = 2012-13 Approved Rate
PacifiCorp
Total Variable Energy Rate
for 201312014
Carbon Naughton Huntington Hunter Totals
$ 25,897,410 $ 105801,044 $ 95307,621 $ 137,840,349 $ 364,846,424
1,287,240 5,056,959 6,744,160 7,574,593 $ 20,662,952
$ 20.12 $ 20.92 $ 14.13 $ 18.20 $ 17.66 /MWh
$ 1.51 /MWh
$ 19.17 /MWh
Fuel Cost ($)
FERC Form 1 - Page 402, line 20
Generation (MWh)
FERC Form 1 - Page 402, line 12
Average Fuel Cost ($/MWh)
Variable O&M
IPUC Order No. 28709
Total Variable Energy Rate for 2013/2014
For deliveries commencing July 1, 2013 extending through June 30, 2014
13 PacifiCorp OF contracts with 1992 approved amendment language
PacifiCorp 13-14 Variable cost adj