20190412Attorney General Letter.pdf

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STATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G, WASDEN
VIA E-MAIL
Aprll12,2019
Avista Corporation
MichaelAndrea
michael.andrea@avistacorp. com
Avista Utilities
l4l I E. Missioh
POBox3727
Spokane, WA99220-3727
Rocky Mountain Power
Yvonne Hogle
yvonne.hogle@pacifi corp.com
Ted Weston
ted.weston@pacifi corp.com
PacifiCorp dba Rocky Mountain Power
1407 West North Temple, Suite 330
Salt Lake City, UT 84116
Idaho Power Company
Donovan E. Walker
dwalker@idahopower. com
Idaho Power Company
PO Box 70
Boise, ID 8370'1-007
Clint Kalich
[e-mail]
Avista Utilities
l4l I E. Mission
POBox3727
Spokane, WA99220-3727
Daniel MacNeil
daniel.macneil@pacifi corp.com
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR97232
Michael Darrington
MDarrin [e-mail]
Idaho Power Company
PO Box 70
Boise,ID 83707-0070
Re: UPDATES TO PUBLISHED AVOIDED COST RATES; Case Nos. IPC-E-19-13,
PAC-E- I 9-05, AVU-E-I 9-05.
Pursuant to the Public Utility Regulatory Policies Act of 1978 ("PURPA") and the
implementing regulations of the Federal Energy Regulatory Commission ("FERC"), the Idaho
Public Utilities Commission ("Commission") has approved a Surrogate Avoided Resource
("SAR") methodology for calculation of avoided cost rates at which PURPA qualiffing
cogeneration and small power production facilities ("qualifying facilities" or "QFs") are paid by
Idaho Power, Avista, and PacifiCorp. Avoided cost rates are the purchase price paid to QFs for
purchases of QF capacity and energy. The release of a new natural gas price forecast by the U.S.
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
lLIC
FJISSIOI,J
Page2
Energy Information Adminisration ("EIA") triggered an updated calculation of avoided cost
rates.
In accordance with the methodology approved in Order No. 32697, the "reference case"
natural gas price forecast for the Mountain Region's Electric Power sector included in EIA's
Annual Energy Outlook serves as the basis for computing avoided cost rates. In Order No.
32697, the Commission also found that the final release of Annual Energy Outlook automatically
triggers a recalculation of the published avoided cost rates. In Order No. 32802, the Commission
clarified that an update should occur on June 1 or within 30 days of the final release of the
Annual Energy Outlook, whichever is later. EIA released the Annual Energy Outlook 2019 on
January 24, 2019. A copy of the relevant natural gas price forecast is attached. Staff has
incorporated this foreeast into the new model.
In addition, the federal Tax Cuts and Jobs Act of 2017 changed the federal corporate tax
rate from 35 percent to 2l percent, effective January 1,2018. Idaho House Bill 463 changed
Idaho corporate tax rate from 7.4 percent to 6.925 pereent, effective January 1,2018. Staffhas
also changed the "Federal Defened Rates" and "Federal/All State Combined Tax Rates" in the
model to reflect the tax changes.
Lastly, Staff updated Avista's eosts of capital in the model according to the stipulation
and settlement in Avista's most recent general rate case (Case No. AVU-E-17-01). The
conclusion of the rate case has triggered an update of Avista's cost of capital figures in
accordance with the approved methodology, and Staff has incorporated the new cost of capital
figures listed below in the SAR model,
Cost of Debt 5,72%
Cost of Common Equity 950%
Overall, the combination of al! the ehanges results in about an eight to nine pereent
decrease in 2O-year levelized avoided eost rates for all three utilities.
Please find attached (l) EIA's 2019 natural gas forecast, (2) updated published avoided
cost rates for all three utilities, and (3) a copy of the updated SAR rnodel. Please review these
attaehments and file comments with the Commission regarding the updated SAR model and the
resulting rates as they pertain to your utility.
Staff will present a Decision Memo at the April 15, 2019 Decision Meeting
recommending the Comrnission issue Notiees of Application and Notices of Modified Frocedure
in these rnatters and set comment deadlines of May 16,2019 and reply comment deadlines of
May 23,2019.
Avista Idaho Power Rocky Mountain Power
Federal/All State
Combined Ta,x Rates
24.6700%25.7400%24.5866%
Federal Deferred Rates 21.0000%21.0000Yo 2l.0000%
Page 3
Thank you for your cooperation. Please contact Yao Yin ([e-mail]) if
you have any questions.
Sincercly,
*>da*-t(
&lward Jewell
Deputy Attorney General
Enclosures:
Updated SAR model excel spreadsheet
Updated SAR price lists
EIA's 2019 Annual Energy Outlook - Mountain Region Electric Power
PACIFICORP
AVOIDED COST RATES FOR WND PROJECTS
June 01, 2019
$/MWh
New Contracts and Replacement Contracts without Full Capacity Payments
Eliglblllty for these rates ls limited to proiects 100 kW or smaller.
LEVELlZED NON.LEVELIZED
LENGTH
ON.LINE YEAR
CONTBACT
YEAR
NON-LEVELIZED
RATES201 I 2020 2021 2022 2023 2024
1
2
3
4
5
6
7
8I
10
11
12
13
14
15
16
17
t8
19
20
26.64
27.67
28.10
28.63
29.35
30.22
31 .16
32.05
32.80
33.76
34.59
35.35
36.04
36.73
37.38
38.01
38.60
39.1 7
39.71
40.22
28.78
28.92
29.40
30.1 7
31.12
32.14
33.09
33.88
34.90
35.78
36.57
37.29
38.00
38.68
39.33
39.95
40.54
41.10
41.63
42.14
29.O7
29.75
30.70
31.83
32.99
34.02
34.86
35.97
36.90
37.74
38.48
39.23
39.94
40.61
41.25
41.87
42.45
43.00
43.53
44.04
30.48
31.62
32.89
34.17
35.25
36.1 1
37.29
38.26
39.12
39.88
40.65
41.38
42.O7
42.73
43.36
43.96
44.53
45.07
45.60
46.1 0
32.84
34.25
35.59
36.69
37.51
38.76
39.75
40.62
41.38
42.16
42.90
43.60
44.28
44.92
45.53
46.1 1
46.66
47.21
47.73
48.22
35.76
37.14
38.1 I
38.92
40.24
41.24
42.12
42.87
43.65
44.40
45.1 1
45.79
46.45
47.O7
47.66
48.22
48.78
49.31
49.82
50.32
201 I
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
26.64
28.78
29.07
30.48
32.84
35.76
38.62
40.55
41.50
46.66
47.59
49.01
50.1 0
52.62
54.47
56.27
57.99
59.99
61.44
63.01
64.70
67.17
68.52
70.1 0
72.75
75.89
Note: These rates will be lurther adiusted with the applicable integration charge.
Note: The rates shown in this table have been computed using the U.S. Energy lnformation Administration (ElA)'s Annual Energy
Outlook2019,releasedJanuary2019. SeeAnnualEnergyOutlook20l9,Table3.SEnergyPricesbySector-Mountainat
https://www.eia. gov/outlooks/aeo/tables_reiphp
PACIFICORP Page 1
PACIFICORP
AVOIDED COST RATES FOR SOLAR PROJECTS
June 01, 2019
$/MWh
New Gontracts and Replacement Contracts without Full Capacltv Pavments
Ellgibillty lor these rates ls llmited to proiects 100 kW or smaller.
ON.LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
'|
2
3
4
5
6
7
8
9
10
1l
12
13
14
15
16
17
18
19
20
26.64
27.67
28.10
28.63
29.35
30.22
31.16
32.05
32.80
35.83
38.36
40.54
42.44
44.17
45.73
47.16
€.46
49.67
50.78
51.80
28.78
28.92
29.40
30.17
31.12
32.14
33.09
33.88
37.29
40.1 0
42.49
44.53
46.38
48.05
49.55
50.93
52.1 I
53.35
54.42
55.41
29.O7
29.75
30.70
31.83
32.99
34.02
34.86
38.78
41 .91
44.53
46.74
48.72
50.48
52.O7
53.51
54.83
56.04
57.1 5
58.1 8
59.1 6
30.48
31.62
32.89
34.17
35.25
36.1 1
40.64
44.14
47.00
49.37
51.47
53.32
54.98
56.47
57.84
59.08
60.22
61.28
62.29
63.21
32.84
u.25
35.59
36.69
37.51
42.83
46.77
49.87
52.39
54.59
56.52
58.22
59.75
61.15
62.42
63.58
64.65
65.67
66.62
67.49
35.76
37.14
38.1 9
38.92
45.33
49.78
53.14
55.79
58.07
60.04
61.78
63.32
64.73
66.00
67.17
68.24
69.27
70.21
71.10
71.95
201 I
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
26.64
28.78
n.o7
30.48
32.84
35.76
38.62
40.55
41.50
76.53
77.90
79.76
81.31
84.28
86.60
88.87
91.07
93.55
95.50
97.57
99.77
102.75
104.63
106.75
109.93
1 13.62
Note: These rates will be further adiusted with the applicable integration charge.
Note: The rates shown in this table have been computed using the U.S. Energy lnformation Administration (ElA)'s Annual Energy
Outlook 2019, released January 2019. See Annual Energy Outlook 2019, Table 3.8 Energy Prices by Sector-Mountain at
https ://www.eia.gov/outlooks/aeo/tables_ref .php
PACIFICORP Page 2
LEVELIZED NON-LEVELIZED
PACIFICORP
AVOIDED COST RATES FOR NON.SEASONAL HYDRO PROJECTS
June 01,2019
UMWh
and
Eligibility for these rates is limited to projects smaller than 10 aMW.
ON-LINE YEAR
LENGTH CONTRACT NON.LEVELIZED
1
2
3
4
5
6
7
8I
10
11
12
13
14
15
16
17
18
19
20
26.64
27.67
28.1 0
28.63
29.35
30.22
31.16
32.05
32.80
35.63
37.99
40.04
41.82
43.45
M.92
46.27
47.51
48.65
49.70
50.58
28.78
28.92
29.40
30.1 7
31.12
32.14
33.09
33.88
37.06
39.68
41.91
43.83
45.57
47.14
48.56
49.86
51.06
52.1 6
53.18
54.12
29.07
29.75
30.70
31.83
32.99
34.O2
34.86
38.50
41.43
43.87
45.94
47.80
49.46
50.96
52.32
53.57
54.72
55.78
56.76
57.69
30.48
31.62
32.89
34.17
35.25
36.1 1
40.31
43.57
46.23
48.45
50.42
52.1 6
53.72
55.14
56.43
57.61
58.70
59.71
60.67
61.55
32.84
34.25
35.59
36.69
37.51
42.44
46.09
48.97
51.32
53.39
55.20
56.81
58.25
59.58
60.78
61.88
62.91
63.88
64.78
65.62
35.76
37.14
38.1 9
38.92
44.U
48.95
52.O7
54.53
56.67
58.52
60.16
61.62
62.96
64.16
65.27
66.30
67.28
68.19
69.03
69.85
201 I
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
26.64
28.78
29.O7
30.48
32.84
35.76
38.62
40.55
41.50
73.63
74.96
76.77
78.28
81.21
83.48
85.71
87.86
90.30
92.19
94.21
96.37
99.30
101.13
1 03.1 I
106.32
109.96
Note: These rates will be lurther adjusted with the applicable integration charge.
Note: The rates shown in this table have been computed using the U.S. Energy lnformation Administration (ElA)'s Annual Energy
Outlook 20 1 9, released January 201 9. See Annual Energy Outlook 201 9, Table 3.8 Energy Prices by SectorMountain at
https ://www.eia. gov/outlooks/aeo/tables_ref . php
PACIFICORP Page 3
LEVELIZED NON-LEVELIZED
PACIFICORP
AVOIDED COST RATES FOR SEASONAL HYDRO PROJECTS
June 01, 2019
$/MWh
New Contracts and Replacement Contracts without Full Capacity Payments
Eliglblllty for these rates ls llmited to proJects smaller than 10 aMW.
ON-LINE YEAR
LENGTH CONTRACT NON.LEVELIZED
1
2
3
4
5
6
7II
10
11
12
13
14
15
16
17
18
19
20
26.64
27.67
28.10
28.63
29.35
30.22
31 .16
32.05
32.80
37.03
40.55
43.56
46.17
48.51
50.61
52.50
il.22
55.79
57.23
58.56
28.78
28.92
n.40
30.1 7
31.12
32.14
33.09
33.88
38.69
42.62
45.93
48.76
51.27
53.51
55.52
57.33
58.98
60.49
61.88
63.1 5
29.O7
29.75
30.70
31.83
32.99
34.O2
34.86
40.42
44.U
48.49
51.56
54.26
56.64
58.76
60.66
62.39
63.97
65.40
66.73
67.97
30.48
31.62
32.89
34.17
35.25
36.11
42.59
47.58
51.59
54.90
57.78
60.29
62.51
64.49
66.28
67.90
69.38
70.74
72.02
73.1 9
32.84
34.25
35.59
36.69
37.51
45.21
50.86
55.26
58.81
61.85
64..16
66.75
68.78
70.62
72.27
73.77
75.15
76.44
77.63
78.74
35.76
37.14
38.r9
38.92
48.31
54.75
59.57
63.32
66.lB
69.1 7
71.50
73.55
75.39
77.O4
78.55
79.92
81.22
82.41
83.51
84.57
2019
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
26.64
28.78
29.07
30.48
32.84
35.76
38.62
40.55
41.50
93.95
95.57
97.69
99.51
102.75
105.33
107.88
1 10.37
1 13.13
1 15.36
117.73
120.23
123.51
125.70
128.12
131 .62
135.63
Note: A "seasonal hydro proiect' is delined as a generation facility which produces at least 55% of its annual generation during the
months of June, July, and August. Order 32802.
Note: These rates will be lurther adjusted with the applicable integration charge.
Note: The rates shown in this table have been computed using the U.S. Energy lnlormation Administration (ElA)'s Annual Energy
Outlook 201 9, released January 201 9. See Annual Energy Outlook 201 9, Table 3.8 Energy Prices by Sector-Mountain at
https ://www.eia. gov/outlooks/aeo/tables-ret.php
PACIFICORP Page 4
NON-LEVELIZEDLEVELIZED
PACIFICORP
AVOIDED COST RATES FOR OTHER PROJECTS
June 01 , 201 I
$/MWh
New Contracts and Replacement Contracts without Full Capacity Payments
Ellglblllty for these rates ls llmlted to projects smaller than 10 aMW.
LEVELIZED NON.LEVELIZED
LENGTH
ON-LINE YEAR
CONTRACT
YEAR
NON-LEVELIZED
RATES2019 2020 2021 2022 2023 2024
1
2
3
4
5
6
7II
10
1l
12
13
14
15
16
17
'18
19
20
26.64
27.67
28.1 0
28.63
29.35
30.22
31 .16
32.05
32.80
35.08
37.00
38.67
40.1 3
41.49
42.72
43.86
44.91
45.88
46.79
47.63
28.78
28.92
29.40
30.1 7
31.12
32.14
33.09
33.88
36.43
38.54
40.35
41.92
43.36
44.67
45.87
46.97
47.99
48.93
49.81
50.63
29.O7
29.75
30.70
31.83
32.99
34.02
34.86
37.76
40.1 0
42.08
43.76
45.30
46.68
47.94
49.09
50.16
51.14
52.05
52.90
53.71
30.48
31.62
32.89
34.17
35.25
36.1 1
39.43
42.02
44.16
45.95
47.57
49.01
50.32
51.52
52.62
53.63
v.56
55.44
56.27
57.04
32.84
34.25
35.59
36.69
37.51
41.37
44.24
46.54
48.42
50.1 1
51.61
52.95
54.17
55.30
56.33
57.28
58.1 7
59.02
59.81
60.54
35.76
37.14
38.19
38.92
43.50
46.70
49.16
51.13
52.87
54.40
55.77
57.00
58.1 4
59.1 8
60.1 3
61.03
61.88
62.68
63.42
64.15
201 I
2020
2021
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
2036
2037
2038
2039
2040
2041
2042
2043
2044
26.64
28.78
29.07
30.48
32.84
35.76
38.62
40.55
41.50
65.76
66.97
68.67
70.06
72.87
75.01
77.12
79.1 5
81.45
83.22
85.1 1
87.13
89.92
91.61
93.54
96.52
100.02
Note: "Other projects" refers to projects other than wind, solar, non-seasonal hydro, and seasonal hydro projects. These "Other
projects" may include (but are not limited to): cogeneration, biomass, biogas, landfill gas, or geothermal proiects.
Note: The rates shown in this table have been computed using the U.S. Energy lnlormation Administration (ElA)'s Annual Energy
Outlook 2019, released January 2019. See Annual Energy Outlook 20'19, Table 3.8 Energy Prices by SectorMountain at
https ://www.eia.gov/outlooks/aeo/tables_ref .php
PACIFICORP Page 5
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