28423.pdf

Office of the Secretary
Service Date
July 5, 2000
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE ANNUAL REVISION)
AND UPDATED CALCULATION OF THE
ADJUSTABLE PORTION OF THE AVOIDED
COST RATES FOR A VISTA CORPORATION
DBA AVISTA UTILITIES-WASHINGTON
WATER POWER DIVISION, IDAHO POWER
COMPANY AND PACIFICORP DBA UTAHPOWER & LIGHT COMPANY.
CASE NOS. A VU-OO-
IPC-OO- 7
UPL-OO-
ORDER NO. 28423
On April 28 , 2000, Avista Corporation dba Avista Utilities-Washington Water
Power Division (Avista; Water Power) filed with the Idaho Public Utilities Commission its
annual revised and updated calculations for the adjustable portion of avoided cost rates. A vista
submitted two sets of adjustable rate calculations: one for coal (Colstrip) and the other for gas
(Sumas). The Colstrip adjustments apply only to contracts executed between September 28
1990 and January 30, 1995. The Sumas adjustments apply to all contracts for projects, 1 MW
and less executed since January 31 , 1995. The annual adjustable rate calculation based on
Colstrip was addressed in Order Nos. 23349 and 26080, issued in Case Nos. WWP-89-6 and
WWP-95-3/IPC-95-7/UPL-95-, respectively. The annual adjustable rate calculation
based on Sumas was addressed in Order Nos. 25883 and 26086, issued in Case No. WWP-93-
10.
Adjustable Rates-Colstrip
The adjustable portion under the previous-170 coal-fired Surrogate Avoided Resource
(SAR) methodology (Case No. U-1500-170) is based on the variable costs associated with the
operation of Colstrip, a coal-fired generating facility in southeast Montana. An annual filing is
required by Order No. 23349 (Water Power), Order No. 23357 (Idaho Power), and Order No.
23358 (PacifiCorp). Pursuant to the Commission s administrative determination of avoided cost
rates, the adjustable portion of avoided cost rates is the same for all of Idaho s major electric
utilities.
ORDER NO. 28423
By Order No. 23738 issued in Case Nos. WWP-89-, IPC-89-11 and UPL-89-
5 issued June 17, 1991 , the Commission approved the methodology utilized by Water Power
(now Avista) in annual Colstrip adjustable avoided cost rate submittals. The Commission
indicated that future adjustable rate updates would require only a single filing by Water Power
with copies and party status provided to Idaho Power and PacifiCorp. The Commission directed
that all applications for future or subsequent annual updates be filed by June 1 with the effective
date for the new adjustable rate to be July 1. Under the established practice, the revised updated
calculations set forth in A vista s April 28 , 2000 filing are recognized as being submitted also for
approval for Idaho Power and PacifiCorp dba Utah Power & Light Company.
A vista represents that the Colstrip adjusted avoided cost rate calculated on actual
1999 costs changed from 8.86 mill/kWh to 10.51 milllkWh. Coal costs increased 22.85% from
$6.96/MWh to $8.55/MWh. Variable O&M costs decreased 1.35%. Generation increased
152%.
Adjustable Rates-Sumas
By Order Nos. 25883 , 25884 and 25882 issued in Case Nos. WWP-93-, IPC-
93-28 and UPL-93-3/UPL-93-7 on January 31 , 1995 , respectively, the Commission
determined that the adjustable portion of avoided cost rates for future projects should be based
on annual average gas prices indexed at Sumas, Washington. The purpose of including an
adjustable component in the avoided cost rates is to capture annual changes in natural gas fuel
costs. Under the Commission approved SAR avoided cost methodology, the adjustable portion
of avoided cost rates is the same for all ofIdaho s major electric utilities and an annual filing is
required.
Water Power (now Avista), in consultation with the Commission Staff, devised a
methodology for making annual adjustments, which was accepted by the Commission in Order
No. 26135 in Case Nos. WWP-95-3/IPC-95-7/UPL-95-2. As reported by Avista in its
annual filing of April 28 , 2000, the 1999 annual average gas price indexed at Sumas, Washington
was $2. 15/mmBtu resulting in an increase of $0.54/mmBtu. The previously approved base gas
price of $2.26/mmBtu plus the $0.54/mmBtu increase results in a gas price of $2.80/mmBtu for
2000-2001 year. This by Staffs calculation, equates to an SAR fuel cost of20.58 mills/kWh as
used in the model. The difference in the Sumas average price and the new base gas price is the
ORDER NO. 28423
result of a timing difference and the use of a trailing average. A proposed schedule of revised
rates and a detailed sheet of variables for each utility was prepared by Staff and reviewed by the
utilities. As reflected in letters filed with the Commission, all utilities concur with Staff s
variable adjustment calculations.
COMMISSION FINDINGS
The Commission has reviewed and considered the filings of record . in Case
Nos. A VU-99-, IPC-99-5 and UPL-99-2. We find that the accuracy of the variable rate
methodology figures submitted by A vista in this case has not been challenged
The Commission notes that pursuant to comments filed in last years docket for the
adjustable rate revision a separate generic electric docket (GNR-99-1) was established as a
place marker for further investigation into the continued reasonableness of using actual Colstrip
variable operating costs for determining the adjustable portion of avoided costs for the specific
generation of existing contracts utilizing same. Also to be explored in that case was the
availability of a reasonable and acceptable substitute or index, the use of which would result in
an avoided cost rate as defined in Sections 201 and 210 of the Public Utilities Regulatory
Policies Act of 1978 (PURPA) and the implementing Rules and Regulations of the Federal
Energy Regulatory Commission. The Commission is apprised that the established docket
remains active and continues to be used for discovery purposes. We find that it is reasonable to
continue with the existing methodology until such time as a factual record is developed
supporting a change in methodology, including a determination as to whether the variable rate
methodology can be changed independent of the fixed rate.
The methodology that this Commission has approved for determining the variable
components of the avoided cost rate is a relatively simple arithmetic recalculation. We find
based upon our review of the calculations of both the Colstrip and Sumas updates, that the
resulting adjustable rates are fair, just and reasonable. Attached to this Order as Appendices A
B and C are the tables showing the adjustable rates as updated by Avista s filing for Avista
Idaho Power and PacifiCorp, respectively.
ORDER NO. 28423
CONCLUSIONS OF LAW
The Idaho Public Utilities Commission has jurisdiction over A vista Corporation dba
Avista Utilities-Washington Water Power Division, Idaho Power Company and PacifiCorp dba
Utah Power & Light Company, electric utilities, pursuant to the authority and power granted it
under Title 61 of the Idaho Code, and the Public Utility Regulatory Policies Act of 1978
(PURP A).
The Commission has authority under PURP A and the implementing regulations of
the Federal Energy Regulatory Commission (FERC) to set avoided costs , to order electric
utilities to enter into fixed term obligations for the purchase of energy from qualified facilities
and to implement FERC rules.
ORDER
In consideration of the foregoing and as more particularly described, IT IS HEREBY
ORDERED that the Colstrip related adjustable portion of the avoided cost rate for existing
contracts and the Sumas related adjustable portion of the avoided cost rates for A vista, Idaho
Power and PacifiCorp dba Utah Power & Light Company are changed effective July 1 , 2000, as
outlined in the attached schedules.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-626.
ORDER NO. 28423
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this .3t:9,&L
day of June 2000.
~A- JJ~
MARSHA H. SMITH, COMMISSIONER
ISSIONER
ATTEST:
~~d
fJ. Myrna J. Walters
Commission Secretary
bls/O:avueO04 ipceO07 _upleO02
ORDER NO. 28423
AVISTA CORPORATION
AVOIDED COST RATES FOR
FUELED PROJECTS
mills/kWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED(YEARS)2000 2001 2002 2003 2004 2005 YEAR RATES
24.25.27.28.29.30.2000 '24.25.26.27.28.30.31.2001 25.25.26.28.29.45 30.32.2002 27.26.27.28.30.31.41 32.2003 28.26.28.08 29.30.32.33.2004 29.27.40 28.29.31.32.31.2005 30.27.29.30.49 31.30.29.2006 32.28.44 29.31.30.43 29.28.47 2007 33.28.30.29.29.28.27.2008 35.29.29.29.28.27.27.2009 36.28.28.28.27.27.26.2010 16.28.28.27.27.49 26.26.2011 16.27.27.27.27.26.26.2012 17.27.27.27.26.26.41 25.2013 17.26.26.26.26.26.25.2014 18.26.26.26.26.26.25.2015 19.26.26.26.26.26.01 25.2016 19.26.26.45 26.41 26.25.25.2017 20.4726.26.26.26.25.25.2018 21.26.26.26.26.25.25.2019 21.
2020 22.
2021 23.48
2022 24.
2023 25.
2024 26.
2025 26.
EFFECTIVE DATE ADJUSTABLE COMPONENT
7/1/00-6/30/01 20.
Beginning in the year 2010 , the annually adjustable component shall be added to each of the rates shown above.
Example 1. A 20 year levelized contract with a 2000 on-line date would receive the following rates:
Years Rate
26.
11-26.19 + Adjustable component in each year
Example 2. A 15 year non-Ievelized contract with a 2000 on-line date would receive the following rates:
Years Rate
Non-Ievelized rates from table above
16.09 + Adjustable component in year 2010
16.65 + Adjustable component in year 2011
17.23 + Adjustable component in year 2012
17.84 + Adjustable component in year 2013
18.46 + Adjustable component in year 2014
Note: As per Order No. 27212, Avista Corporation (Washington Water Power) is not required to offer contracts in excess of 5 years;
however, Avista may seek Commission approval for contracts exceeding 5 years should they be able to demonstrate that such contractsare in the best interests of its customers. Attachment A
Case No. A VU-00-
Page 1 of2
AVISTA CORPORATION
AVOIDED COST RATES FOR
NON-FUELED PROJECTS
mills/kWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED(YEARS)2000 2001 2002 2003 2004 2005 YEAR RATES
24.25.27.28.29.30.2000 24.
25.26.27.28.30.31.2001 25.25.26.28.29.30.32.2002 27.
26.27.28.30.31.41 32.2003 28.
26.28.29.30.32.33.48 2004 29.27.28.29.31.32.36.2005 30.27.29.30.49 31.34.38.2006 32.28.44 29.31.33.36.40.2007 33.
28.30.32.35.38.41.2008 35.29.31.34.36.39.43.2009 36.
30.33.35.38.41.44.2010 52.32.34.36.39.42.46.2011 55.
33.35.38.40.44.47.2012 58.34.36.39.42.45.48.2013 61.35.37.40.45 43.46.49.2014 64.36.38.41.44.47.51.2015 68.43
37.39.42.45.48.52.2016 72.38.40.43.46.49.53.2017 75.
39.41.44.47.50.54.2018 79.40.42.45.48.51.55.46 2019 84.
2020 88.
2021 93.
2022 98.
2023 103.77
2024 109.
2025 115.
Note: As per Order No. 27212, Avista Corporation (Washington Water Power) is not required to offer contracts in excess of 5 years;
however, Avista may seek Commission approval for contracts exceeding 5 years should they be able to demonstrate that such contractsare in the best interests of its customers. Attachment A
Case No. A VU-00-
Page 2 of 2
IDAHO POWER COMPANY
AVOIDED COST RATES FOR
FUELED PROJECTS
mills/kWh
LEVELIZED
.....
NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED(YEARS)2000 2001 2002 2003 2004 2005 YEAR RATES
11.12.12.13.13.14.2000 11.12.12.12.13.13.14.2001 12.12.12.13.13.14.14.2002 12.12.44 12.13.13.14.14.2003 13.12.13.13.14.14.15.2004 13.12.13.13.14.14.15.2005 14.13.13.46 13.14.14.15.2006 14.13.13.14.14.15.15.2007 15.13.13.14.14.15.15.2008 15.13.14.14.15.15.16.2009 16.13.14.14.15.15.16.2010 16.
13.14.14.15.42 15.16.2011 17.
14.14.15.15.16.16.2012 17.
14.14.15.15.16.16.2013 18.
14.14.15.15.16.17.2014 19.
14.15.15.16.16.17.2015 19.
14.15.15.16.16.17.2016 20.
14.15.15.16.17.17.2017 21.
15.15.16.16.17.17.2018 22.15.15.16.16.17.43 18.2019 22.
2020 23.
2021 24.40
2022 25.
2023 26.
2024 27.
2025 28.
EFFECTIVE DATE ADJUSTABLE COMPONENT
7/1/00-6/30/01 20.
Beginning in the year 2000, the annually adjustable component shall be added to each of the rates shown above.
Example 1. A 20 year levelized contract with a 2000 on-line date would receive the following rates:
Years Rate
15.19 + 20.
15.19 + Adjustable component in each year
Example 2. A 4 year non-Ievelized contract with a 2000 on-line date would receive the following rates:
Years Rate
11.85 + 20.
12.26 + Adjustable component in year 2001
12.69 + Adjustable component in year 2002
13.13 + Adjustable component in year 2003
Note: As per Order No. 27111 , Idaho Power is not required to offer contracts in excess of 5 years; however, Idaho Power may seekCommission approval for contracts exceeding 5 years should they be able to demonstrate that such contracts are in the best interests ofits customers. Attachment B
Case No. IPC-00-
Page 1 of 2
IDAHO POWER COMPANY
AVOIDED COST RATES FOR
NON.FUELED PROJECTS
mills/kWh
LEVELIZED NON-LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED(YEARS)2000 2001 2002 2003 2004 2005 YEAR RATES
32.43 34.35.37.39.41.2000 32.33.34.36.38.40.42.2001 34.34.35.37.39.49 41.43.2002 35.
34.36.38.45 40.42 42.44.2003 37.35.59 37.41 39.41.43.48 45.2004 39.36.38.40.42.44.47 46.2005 41.37.39.41.43.45.45 47.2006 43.37.39.41.44.46.43 48.2007 46.38.40.42.45.47.49.2008 48.40
39.41.43.46.48.50.2009 50.40.42.43 44.46.49.51.2010 53.41.43.45.47.50.52.2011 56.41.44.46.48.51.53.2012 59.42.44.47.49.52.54.2013 62.43.45.48.50.53.56.2014 65.44.46.48.51.54.57.2015 69.44.47.49.52.55.57.2016 72.45.48.50.53.56.58.2017 76.46.49 48.51.45 54.56.59.2018 80.47.49.52.55.57.60.2019 85.
2020 89.
2021 94.
2022 99.41
2023 104.
2024 110.
2025 116.
Note: As per Order No. 27111, Idaho Power is not required to offer contracts in excess of 5 years; however, Idaho Power may seekCommission approval for contracts exceeding 5 years should they be able to demonstrate that such contracts are in the best interests ofits customers. Attachment B
Case No. IPC-00-
Page 2 of 2
PACIFICORP
AVOIDED COST RATES FOR
FUELED PROJECTS
mills/kWh
LEVELIZED NON.LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED
(YEARS)2000 2001 2002 2003 2004 2005 YEAR RATES
12.12.13.13.47 13.14.2000 12.
12.12.13.13.14.14.2001 12.
12.12.13.13.14.14.2002 13.
12.13.13.14.14.15.2003 13.
12.13.40 13.14.14.15.2004 13.
13.13.14.14.15.15.2005 14.43
13.13.14.14.15.15.2006 14.
13.13.14.47 14.15.16.2007 15.
13.14.14.15.15.16.2008 16.
13.14.14.15.15.16.48 2009 16.
14.14.15.15.16.16.2010 17.
14.14.15.15.16.16.2011 17.
14.14.15.41 15.16.17.2012 18.
14.15.15.16.16.17.2013 19.
14.15.15.16.16.17.46 2014 19.
14.15.15.16.47 17.17.2015 20.
15.15.16.16.17.17.2016 21.
15.15.16.16.17.18.2017 21.
15.15.16.16.17.18.2018 22.
15.15.16.17.17.18.2019 23.
2020 24.
2021 25.
2022 25.
2023 26.
2024 27.
2025 28.
EFFECTIVE DATE ADJUSTABLE COMPONENT
7/1/00-6/30/01 20.
Beginning in the year 2000, the annually adjustable component shall be added to each of the rates shown above.
Example 1. A 20 year levelized contract with a 2000 on-line date would receive the following rates:
Years Rate
15.43 + 20.
15.43 + Adjustable component in each year
Example 2. A 4 year non-Ievelized contract with a 2000 on-line date would receive the following rates:
Years Rate
12.15 + 20.
12.58 + Adjustable component in year 2001
13.02 + Adjustable component in year 2002
13.47 + Adjustable component in year 2003
Note: As per Order No. 27213, PacifiCorp is not required to offer contracts in excess of 5 years; however, PacifiCorp may seekCommission approval for contracts exceeding 5 years should they be able to demonstrate that such contracts are in the best interests ofits customers. Attachment C
Case No. UPL-00-
Page 1 of 2
PACIFICORP
AVOIDED COST RATES FOR
NON-FUELED PROJECTS
mills/kWh
. .. .
LEVELIZED
'..
NON~LEVELIZED
CONTRACT ON-LINE YEAR
LENGTH CONTRACT NON-LEVELIZED(YEARS)2000 2001 2002 2003 2004 2005 YEAR RATES
32.34.36.37.39.41.2000 32.33.35.37.38.40.43.2001 34.
34.36.37.39.41.44.2002 36.35.36.38.40.42.45.2003 37.
35.37.39.41.43.46.2004 39.
36.38.40.42.44.47.2005 41.37.39.41.43.45.48.2006 44.
38.40.42.44.42 46.49.2007 46.4139.40.43.45.47.50.2008 48.39.41.43.46.48.51.2009 51.40.42.44.47.49.52.2010 54.41.43.45.47.50.53.2011 56.42.44.46.45 48.51.38 54.2012 59.
42.44.47.49.52.55.2013 62.43.45.48.50.53.55.2014 66.44.46.48.51.54.56.2015 69.44.47.49.52.54.57.2016 73.45.47.50.53.55.58.2017 77.
46.48.51.53.56.59.2018 81.46.49.51.54.57.46 60.46 2019 85.
2020 90.
2021 95.
2022 100.
2023 105.44
2024 111.
2025 117.
Note: As per Order No. 27213, PacifiCorp is not required to offer contracts in excess of 5 years; however, PacifiCorp may seekCommission approval for contracts exceeding 5 years should they be able to demonstrate that such contracts are in the best interests ofits customers. Attachment C
Case No. UPL-00-
Page 2 of 2