20160512Attorney General Letter and Worksheets.pdf

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I i t -- i' t).-: -iwI i' l'i' r-:. i.r,-il,iir{lSSl0t'lSTATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDENVIA E-MAIL
May 12,2016
Avista Corporation
MichaelAndrea
m ichae l.and rea@av i stacorp.corn
Avista Utilities
14l l E. Mission
POBox3727
Spokane, W A 99220-3727
Rocky Mountain Power
Daniel Solander
dan iel.solander@pacifi corp.com
Ted Weston
ted.weston@pac if icorp.com
PacifiCorp dba Rocky Mountain Power
1407 West North Temple, Suite 330
Salt Lake Ciry, UT 841l6
Idaho Power Company
Donovan E. Walker
[e-mail]
Idaho Power Company
PO Box 70
Boise, ID 83707-007
Re: Case Nos. GNR-E-16-01; PAC-E-16-09
Clint Kalich
cl [e-mail]
Avista Utilities
14l I E. Mission
PO Box3727
Spokane, WA99220-3727
Brian Dickman
brian.dickrnan@paci fi corp.com
DanielMacNeil
dan iel.macnei l@pacifi corp.com
Hui Shu
hui.shu@pacifi corp.corn
Laren Hale
laren.hale@pac ifi corp.com
PacifiCorp dba Rocky Mountain
825 NE Multnomah Street
Portland, OF.97232
Randy Allphin
[e-mail]
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
Power
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
1 Colstrip Unit Coal Costs per megawatt hour (MWh) and adding $2.0044Wh (the average variable O&M cost
of Colstrip plus 201lMWh for generation taxes plus a five percent (5%) adjustment for line loss). As computed
Contracts & Administrative Law Division, ldaho Public Utilities Commission
P.O. Box 83720, Boise, ldaho 83720-0074, Telephone: [phone], FAX: [phone], E-mail: [e-mail]
Located at 472 West \(ashington St., Boise, ldaho 83702
May 12,2016
Page2
by Commission Staff, the Colstrip related adjustable rate will change from 16.68 mill/kWh to 15.61 milUkWh.
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.
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
$2.008/lvIMBtu. The approved gas price of $5.1OA{MBtu minus the $2.008iMMBtu results in a gas price of
$3.092A4MBtu for the 2016-2017 year. This equates to a SAR fuel cost of 21.95 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 forthese
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 1,2016 extending
through June 30, 2017 has been computed to be $23.6|lMWh, an increase from $21.75 last year.
Accompanying this letter are worksheets showing the computation of the updated adjustable rates for the
various affected contracts. Ifyou accept the updated rates after reviewing them as accurate, please indicate your
approval by letter (or other filing) directed to the Commission in the reserved case docket numbers identified
above. The case heading for the generic adjustment, Case No. GNR-E-16-01, will read as follows:
IN THE MATTER OF THE ANNUAL REVISION AND UPDATED CALCULATION OF
THE ADJUSTABLE PORTION OF THE AVOIDED COST RATE(S) FOR EXISTING
PURPA CONTRACTS FOR AVISTA CORPORATION DBA AVISTA UTILITIES, FOR
IDAHO POWER COMPANY, AND FOR PACIFICORP DBA ROCKY MOLTNTAIN
POWER.
The case heading in the PacifiCorp case for PacifiCorp QF contracts with 1992 Amendment language, Case No.
PAC-E-16-09, is as follows:
IN THE MATTER OF THE APPLICATION OF ROCKY MOLINTAIN POWER
REQUESTING APPROVAL OF THE ANNUAL REVISION OF QF VARIABLE ENERGY
PRICES IN PURSUANT TO TERMS OF THE 1992 AMENDMENTS TO POWER
PURCHASE AGREEMENTS BETWEEN IDAHO QFS AND PACIFICORP.
Please file your respective responses with the Commission on or prior to June 10,2016.
Thank you for your cooperation. Please feel free to contact Yao Yin if you have any questions.
Sincerely,
Deputy Attorney General
Enclosures
bls/L:GNR-E-16-01 PAC-E-16-09 avoided cost
COLSTRIP ADJUSTABLE RATE CALCULATION Updated
For Period 7 l1 116-6130117
Colstrip Fuel Cost from Avista FERC Form 1 for CY 2015
line 12
line 20
Net Generation (kwh)
Fuel
Fuel cost per kwh
:::t#89,986'00$.
, ., : $.??,;9t92;4,$Q.
$0.013605
$13.6051
$2.0000
$15.6051
Fuel Cost per MWh
Variable O&M, Gen. Tax, 5o/o line loss per MWh
Total Colstrip Adjustable Rate
ReferenceGNR-E-99-1 O.N.28708 411712001
Colstrip_16-17
Average Gas Prices at Sumas, Washington from Inside FERC publication
($/NIMBtu)
Calcu latin g the 2016-20 I 7 Avoided Cost Adj ustable Rate
Jan
Feb
Mar
Apr
May
Jun
July
Aug
Sep
Oct
Nov
Dec
Average
2014
$4.89
$s. l2
$5.78
$4.37
$4.s3
$4.28
$4.37
$3.69
$3.8s
$3.91
$3.62
$4.68
$4.424
2015
$3.23
$2.56
$2.40
s2.1 s
s2.1 3
$2.48
$2.21
s2.43
s2.41
$2.41
s2.l l
$2.47
s2.416
Actual Annual Adjustment:
$s. l0 - (54.424- $2.41 6) = $3.092
Note:
$6.94A4MBtt : 2007 -08 Approved Rate
$7. I 8/MMBtu : 2008-09 Approved Rate
$9.00/MMBtu : 2009-10 Approved Rate
$4.62lMMBtu = 2010-11 Approved Rate
S4.99lMMBtu = 2011 - I 2 Approved Rate
$4.60/MMBtu : 2012-13 Approved Rate
$3.45lMMBtu : 201 3- I 4 Approved Rate
$4.35/MMBtt = 201 4-15 Approved Rate
$5.I0/MMBtu = 2015-16 Approved Rate
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