20190531Attorney General Letter and Worksheets.pdf

RECEIVED
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iii,{1.10 pu$Llcrii it'i[$ c0MMlssloNSTATE OF IDAHO
OFFICE OF THE ATTORNEY GENERAL
LAWRENCE G. WASDENVIA E-MAIL
May 31,2019
Avista Corporation
Michael Andrea
m ichael.andrea@avi stacorp.com
Avista Utilities
l41l E. Mission
POBox3727
Spokane, WA99220-3727
Rocky Mountain Power
Daniel Solander
daniel.solander@pacifi corp.com
Ted Weston
ted.weston@pacif icorp.com
PacifiCorp dba Rocky Mountain Power
One Utah Center
201 S. Main Street, Suite 2300
Salt Lake City, UT 841l1
Idaho Power Company
Donovan E. Walker
[e-mail]
Idaho Power Company
PO Box 70
Boise, ID 83707-007
Clint Kalich
qLulkalich@avistacorc
Avista Utilities
l4l I E. Mission
POBox3727
Spokane, WA99220-3727
Daniel MacNeil
dan iel.macneil@pacifi corp.com
PacifiCorp dba Rocky Mountain Power
825 NE Multnomah Street
Portland, OR97232
Michael Darrington
M Darri nglon@idah opower.com
Idaho Power Company
PO Box 70
Boise, ID 83707-0070
Re: Annual Updates to the Adjustable Portion of Avoided Cost Rates for Existing PURPA Contractsl
Case Nos. GNR-E-19-01; PAC-E-19-07
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 201lMWh 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 16.54 mill/kWh to 16.17 mill/kWh.
The same calculated rate revision under the avoided cost methodology is used by Avista, PacifiCorp dba Rocky
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
Mountain Power, and Idaho Power Company. This change in the variable rate affects existing contracts under
the previous SAR methodology.
Order Nos. 25882, 25883, and 25884 established a Sumas-based methodology in which the adjustable portion of
the avoided cost rates was based on annual average gas prices indexed at Sumas, Washington. As reported by
Avista, the indexed gas prices have increased by $ I .53 7OlMMBtu. The approved gas price of $3 .4400/MMBtu
plus the $1.5370/MMBtu results in a gas price of $4.9710lMMBtu for the 2019-2020 year. This is equivalent to
35.3367 mill/kWh based upon a heat rate of 7100 BTU/kWh, as approved in Order No. 29124.
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 7,2003, 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 1,2019 extending
through June 30, 2020has been computed to be $23.85/MWh, an increase from $23.67lMWh 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-19-01, 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 MOLINTAIN
POWER.
The case heading in the PacifiCorp case for PacifiCorp QF contracts with 1992 Amendment language, Case No
PAC-E-19-07, is as follows:
IN THE MATTER OF THE APPLICATION OF ROCKY MOLTNTAIN 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 13,2019
Thank you for your cooperation. Please feel free to contact Yao Yin if you have any questions.
Sincerely,
&
Edward J
Deputy Attorney General
Enclosures
COLSTRIP ADJUSTABLE RATE CALCULATION Updated
For Period 7 l1 119-6130/20
Colstrip Fuel Cost from Avista FERC Form 1 for CY 2018
line 12 Net Generation (kwh)
line 20 Fuel
Fuel cost per kwh
Fuel Cost per MWh
Variable O&M, Gen. Tax,5'/" line loss per MWh
Total Colstrip Adjustable Rate
ReferenceGNR-E-99-1 O.N.28708 4117l2OO1
$14.1677
$2.0000
$16.1677
Colstrip_19-20
'1,389,037,000
$19,679,460
$0.014168
Average Gas Prices at Sumas, Washington from Inside FERC publication
($llVIIvfntu;
Calculating the 2018-2019 Avoided Cost Adjustable Rate
Jan
Feb
Mar
Apr
May
Jun
July
Aug
Sep
Oct
Nov
Dec
2017
$4.85
$3.1 7
$2.20
$2.34
$2.42
$2.70
$2.29
$2.48
$2.56
$2.35
$2.6s
$3.15
2018
s2.90
$2.53
$1.96
$1.75
$1.69
$ 1.48
$ 1.75
$2.24
$2.04
$2.2s
$13.32
$17.69
Average $2.763 $4.300
Actual Annual Adjustment:
$3.440 -($2.763 -$4.300) =$4.977
Note:
$6.94lMMBtu = 2007-08 Approved Rate
$7.l8/MMBtu = 2008-09 Approved Rate
$9.00/MMBtu = 2009-10 Approved Rate
$4.62lMMBtu = 2010-11 Approved Rate
$4.99lMMBtu = 2011-12 Approved Rate
$4.60/MMB tu = 2012-13 Approved Rate
$3.45lMMBtu = 2013-14 Approved Rate
$4.35/MMBtu = 2014-15 Approved Rate
$5.l0/MMBtu = 2015-16 Approved Rate
$3.092lMMBru = 2016-17 Approved Rate
$2.850/MMBtu = 2017-18 Approved Rate
$3.440lMMBtu = 2018-19 Approved Rate
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