20131129Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER REDFORD
COMMISSIONER SMITH
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:RICK STERLING
DATE:NOVEMBER 27,2013
RE:ROCKY MOUNTAIN POWER’S ANNUAL COMPLIANCE FILING TO
UPDATE THE LOAD AND GAS FORECASTS AND LONG-TERM
CONTRACTS IN THE INTEGRATED RESOURCE PLAN AVOIDED
COST METHODOLOGY;CASE NO.PAC-E-13-13
BACKGROUND
In its final Order No.32697,the Commission determined that the inputs to the Integrated
Resource Plan (“IRP”)avoided cost methodology,utilized for all proposed Public Utility
Regulatory Policies Act of 1978 (“PURPA”)qualifying facility (“QF”)projects that exceed the
published rate eligibility cap,will be updated even’two years upon achowledgement of the
utililys IRP filing,with the exception of the load forecast and the natural gas forecast—which is
to be updated annually by October 15 of each year.The Commission stated:
We find that,in order to maintain the most accurate and up-to-date
reflection of a utility’s true avoided cost,utilities must update fuel price
forecasts and load forecasts annually —between IRP filings.For the sake
of consistency,these annual updates should occur simultaneously with
SAR updates —on June 1 of each year.in addition,it is appropriate to
consider long-term contract commitments because of the potential effect
that such commitments have on a utility’s load and resource balance.We
find it reasonable to include long-term contract considerations in an IRP
Methodology calculation at such time as the QF and utility have entered
into a signed contract for the sale and purchase of QF power.We further
find it appropriate to consider PURPA contracts that have terminated or
expired in each utility’s load and resource balance.We find it reasonable
that all other variables and assumptions utilized within the IRP
Methodology remain fixed between IRP filings (every two years).
Order No.32697,p.22.The date for the annual update was later changed from June ito October
15 of each year.Order No.32802.
DECISION MEMORANDUM NOVEMBER 27,2013
On October 15,2013,Rocky Mountain Power (“Company”)submitted its annual updates
for fuel prices,load forecasts,and changes to long term contracts for purchases or sales and any
new or expiring QF contracts in compliance with Order Nos.32697 and 32802.
STAFF REVIEW
Load Forecast
Rocky Mountain Power states that its current long term load forecast was prepared in
June 2013 using the same methodology as the forecast used in the IRP,with a refinement to the
forecasted commercial usage.The Company’s filing provided the July 2012 and June 2013 load
forecast summarized annually by jurisdiction.The long term load forecast used in the 2013 IRP
was prepared in July 2012 and was provided for reference only.
Gas Forecast
The Company’s Official Forward Price Curve was prepared September 30,2013 (“1309
OFPC”).The natural gas forecast used in the 2013 IRP was prepared September 28,2012 and is
referred to as the Company’s September 2012 Official Forward Price Curve (“1209 OFPC”).
The Company’s filing provided the 1309 OFPC natural gas prices summarized annually by
market hub.The 1209 OFPC from the IRP was also provided for reference only.
Contract Terminations,Expirations,and Additions
Rocky Mountain Power’s long-term contract inputs into the 2013 IRP were also locked
down in September 2012.Since then the Company has signed seventeen long term PURPA QF
contracts with a nameplate capacity rating of 367.8 MW.Five long term contracts with a
nameplate of 42.0 MW were terminated.The Company’s filing provided a list of the contracts.
STAFF RECOMMENDATION
Staff believes that the load and gas price forecasts submitted by Rocky Mountain Power
reflect the Company’s most current estimates,and were prepared consistent with the methods
used in the IRP.Staff believes the load and gas price forecasts and the long-term contract
changes submitted by the Company comply with the requirements of Order Nos.32697 and
32802.Staff recommends that the Commission accept the forecasts and contract changes for
filing without further process or procedure.
DECISION MEMORANDUM -2 -NOVEMBER 27,2013
COMMISSION DECISION
Does the Commission wish to accept Rocky Mountain Power’s compliance filing without
further process or procedure?
ick Sterling /‘
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DECISION MEMORANDUM -3 -NOVEMBER 27,2013