20170512Attorney General Letter and Worksheets.pdf

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flSTATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDENVIA E.MAIL
May 12,2017
Avista Corporation
Michael Andrea
michae l. andrea@avi stacorp.com
Avista Utilities
l4l l E. Mission
POBox3727
Spokane, WA99220-3727
Rocky Mountain Power
Daniel Solander
dan iel.solander@pacifi corp.com
Ted Weston
ted. weston @ pac ifi co rp. com
PacifiCorp dba Rocky Mountain Power
One Utah Center
201 S. Main Street, Suite 2300
Salt Lake City, UT 84111
Idaho Power Company
Donovan E. Walker
[e-mail]
Idaho Power Company
PO Box 70
Boise, D 83707-007
Clint Kalich
clint. kalich@av i stacorp.com
Avista Utilities
l4l1 E. Mission
POBox3727
Spokane, WA99220-3727
Brian Dickman
brian.dickman@paci fi corp.com
Daniel MacNeil
daniel.macnei l@pacifi corp.com
Hui Shu
hui. shu@pacifi corp.com
Laren Hale
laren.hale@pacifi corp.com
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR97232
Michael Darrington
M Darrin [e-mail]
Idaho Power Company
PO Box 70
Boise,ID 83707-0070
Re: Case Nos. GI\R-E-17-01; PAC-E-17-04
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 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 $2.004,IWh (the average variable O&M cost
of Colstrip plus 201lNIWh 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], Email: [e-mail]
Located at 472 West Washington St., Boise, ldaho 33702
May 12,2017
Page2
by Commission Staff the Colsfrip related adjustable rate will change from 15.61 milUkWh to 17.61 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
$0.243lIvIMBtu. The approved gas price of $3. 0924/tMBtu minus the $0.243l]vIMBtu results in a gas price of
$2.850/lvIMBtu for the 2017-2018 year. This equates to a SAR fuel cost of 20.24 milUkWh as used in the
model.
ln 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 $ L5l but exclusive of generation taxes and a
line loss adjustment. The variable energy rate applicable to deliveries commencing July l, 2017 extending
through June 30, 2018 has been computed to be $23.2944Wh, a decrease from $23.61 last year.
Accompanying this letter are worksheets showing the computation of the updated adjustable rates for the
various affected contracts. If you 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-I7-01, will read as follows:
IN THE MATTER OF THE ANNUAL REVISION AND UPDATED CALCULATION OF
THE ADruSTABLE PORTION OF THE AVOIDED COST RATE(S) FOR EXISTING
PURPA CONTRACTS FOR AVISTA CORPORATION DBA AVISTA UTILITIES, FOR
IDAHO POWER COMPA}.IY, 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-17-04, is as follows:
IN THE MATTER OF THE APPLICATION OF ROCKY MOUNTAIN POWER
REQUESTING APPROVAL OF THE ANNUAL REVISION OF QF VARIABLE ENERGY
PRICES IN PURSUANT TO TERMS OF T}IE 1992 AMENDMENTS TO POWER
PURCHASE AGREEMENTS BETWEEN IDAHO QFS AND PACIFICORP.
Please file your respective responses with the Commission on or prior to June 10,2017.
Thank you for your cooperation. Please feel free to contact Yao Yin if you have any questions
Sincerely,
J. Huang
Deputy Attorney General
Enclosures
COLSTRIP ADJUSTABLE RATE CALCULATION Updated
For Period 7 I 1 I 17 -61301 1 I
Colstrip Fuel Cost from Avista FERC Form 1 for CY 2016
line '12 Net Generation (kwh)
line 20 Fuel
Fuel cost per kwh
Fuel Cost per MWh
Variable O&M, Gen. Tax,5o/o line loss per MWh
Total Colstrip Adjustable Rate
$15.6125
$2.0000
$17.6125
ReferenceGNR-E-99-1 O.N.28708 411712001
Colstrip_17-18
Average Gas Prices at Sumas, Washington from Inside FERC publication
($ilVlMBtu)
Calculatin g the 2017 -20 18 Avoided Cost Adjustable Rate
Jan
Feb
Mar
Apr
May
Jun
July
Aug
Sep
Oct
Nov
Dec
2015
$3.23
$2.s6
$2.40
$2.1 5
$2.1 3
$2.48
$2.21
$2.43
s2.41
$2.41
$2.1I
92.17
2016
$2.s7
$2.1 0
$1.41
$1.42
$1.34
$1.46
$2.28
$2.34
$2.63
s2.64
$2.62
$3.27
Average $2.416 $2.173
Actual Adiustment:
$3.092 - ($2.416 - $2.173): $2.850
Note:
$6.94lMMBtu : 2007-08 Approved Rate
$7. I 8/MMBtu : 2008-09 Approved Rate
$9.004{MBtu : 2009-10 Approved Rate
$4.62lMMBtu : 2010-1 1 Approved Rate
$4.99/MMBtu : 20 1 1 - I 2 Approved Rate
$4.60/MMBtu : 2012-13 Approved Rate
$3.45lMMBtu : 20 I 3-14 Approved Rate
$4.35/MMBtu = 2014-15 Approved Rate
$5. I 0/MMBtu : 20 15-l 6 Approved Rate
$3.092lMMBtu : 2016-17 Approved Rate
Carbort
PacifiCorp
Tokl Variable En*rgy Rate
tat2017 lzAlQ
Naughton
$ 110,299,322
Hu*tinglon Hunter Totals
$ 129,979,273 g 139,3741A4 $ 379.652,099Fuel Cost($) $
21)lB FERC FORM 1 - Prga 4OA Uns 20
Generation (MW{
2818 FERC FORM 1 - rtalga 4w Ut16 12
Average Fuel Cost ($rMWH)
VariableO&M
TotalVariable Energy Ratrr tur 2017 12A18
Fordeliveries mmmencing July 1,2017 e,rtending through June 30, 2018
12 Pacr'fiCoq/QFe ontnac,{s with approved 1992 amEndment language
4,871,939 5,503,890 7,A57,745 17,433474
21.78
1.61
23.29
$
$
$
/U!WH
/t\,l\^/H
lutwH
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