Form FERC-580 Interrogatory on Fuel and Energy Purchase Practices

OMB No. 1902-0131
Expires 08/31/2013

Filing Deadline: November 30, 2012

Federal Energy Regulatory Commission
FERC Form 580 Interrogatory on Fuel and Energy Purchase Practices
Refer to the general guidance and directions provided in the FERC Form 580 Desk Reference, to complete the interrogatory.
Included herein is an appendix on Coal Contract Types and a Glossary of terms used. Terms highlighted in blue are defined in the
glossary.
1.
a) Enter the exact legal name of the filing utility (as company registered with the Commission).
Utility name:

b) Identify the principal contact person for clarification and additional information concerning your utility's fuel procurement.
Address
Name

street

suite

city

state

zip code

Telephone

Email address

c) Identify the principal contact person for clarification and additional information concerning your utility’s energy purchases
(purchased power).
Address
Name

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street

suite

city

state

zip code

Telephone

Email address

FERC Form 580

OMB No. 1902-0131
Expires 08/31/2013

2.
a. Provide the following information regarding non-transmission related wholesale automatic adjustment clauses (AACs) your utility had
on file with the Commission during calendar years 2010 and 2011. Note: if a single service agreement has more than one type of
AAC or more than one type of cost associated with an AAC/s enter each in subsequent rows, copying and pasting information from
the other columns to save time.
Docket number under which rate
Date rate
schedule containing AAC through
Rate schedule schedule was
which costs were passed during 2010
first accepted
number
and/or 2011 was accepted for filing by
for filing by
containing
FERC
AAC
Commission

If rate schedule
superseded or
First effective abandoned during
2010-2011? If so,
date of rate
provide dates.
schedule

Identify service
agreement within
rate schedule
containing AAC

Type of costs that were passed
through the AAC - if fuel, state fuel
type

Type/s of AAC

Add Row (+)

Delete Row (-)

b. If any of the Utility’s wholesale rate and/or service agreements containing an AAC listed in 2a, that was used during 2010 and/or
2011, was filed with the Commission before January 1, 1990, attach an electronic copy of it with this filing. List the documents you are
submitting below. Note: once this information is submitted electronically, in a text-searchable format, it will not be necessary to submit
it in future Form 580 filings. See: http://www.ferc.gov/docs-filing/elibrary/accept-file-formats.asp for listing of Commission-accepted
document types.
File name with extension

Document/ File
Description:

Add Row (+)

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Delete Row (-)

FERC Form 580

OMB No. 1902-0131
Expires 08/31/2013

3.

If during the 2010-2011 period, the Utility had any contracts or agreements for the purchase of either energy or capacity under which all
or any portion of the purchase costs were passed through the AAC, for each purchase provide the information requested in the table
below. Provide the information separately for each reporting year 2010 and 2011. Do not report purchased power where none of the
costs were recovered through an AAC.
If the Utility did not recover any purchased power costs through an AAC, check here:
Cost item/s recovered through AAC
By type chosen

Only energy
charges

Year

Seller name

Purchase
cost ($)

Annual
amount
recovered
through an
AAC ($)

All purchased power costs

Did the AAC
used for cost
recovery; include
Does the
the system
CommissionWas an afterreserve capacity
accepted AAC Was the total
the-fact
criteria by which
Were the total
used to recover
comparison
the system
of such
costs of
Was the
this cost, allow charges, less made of actual
purchased
duration of the operator decides
for automatic than the total avoided costs
whether a
power, less
purchased
recovery of
against the
reliability
avoided
than the total power equal to
purchased
purchase
purchase is
variable
avoided
or less than
power costs?
costs?
required?
costs?
variable costs? twelve months?

Were
purchases
made on an
hourly
economic
dispatch
basis?

Add Row (+)

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If the
purchased
power was
windgenerated,
was the
avoided cost
comparison
done on a
contract-bycontract basis?

Delete Row (-)

FERC Form 580

OMB No. 1902-0131
Expires 08/31/2013

4.

Were emission allowance costs incurred by the Utility in 2010 and/or 2011 and recovered through an AAC?
a) If yes, emission allowance costs were recovered through an AAC, provide the following information.

Dollar value of emission
allowance cost passed
through an AAC
Origin of emission allowance cost

2010

2011

Docket number, if any, of Commission
acceptance of emission allowance cost
recovery through the AAC

Date Commission accepted AAC
recovery of emission allowance
costs

Add Row (+)

Delete Row (-)

b) Were emission allowance costs recovered in any other method than through an AAC?
If yes, how were they recovered? Include specific Commission rate schedule and service agreement notations.

NOTE: If the utility for which you are filing did not have any rate/service schedules on file with the Commission
allowing the automatic adjustment of fuel and/or fuel-related items subject to 18 CFR 35.14 during 2010-11,
STOP HERE, you are finished. File your responses to questions 1 through 4 with the Commission. Otherwise,
continue with the questions that follow.

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FERC Form 580

OMB No. 1902-0131
Expires 08/31/2013

5.

Provide the information requested below regarding the Utility's fuel procurement policies and practices in place during 2010 and/or 2011
for fuels whose costs were subject to 18 CFR 35.14. Note: Responses to this question may be filed as Privileged. To do so, skip this
question now and answer it via the Q5 Privileged addendum provided. Otherwise, answer it here and your responses will be made public.
Are you filing the Question 5 Privileged addendum?

a1. How often does Utility management review the fuel procurement process?
a2. When was the last review?

Select value:

a3. Who conducted the last review?
(Last, First, MI) & (Title)
a4. What was covered in the last review?
b1. Does the Utility have a policy on fuel inventory levels?
b2. Does the policy state under what circumstance/s fuel inventory is increased or decreased?
Utility has no policy on fuel inventory levels.
b3. When was the fuel inventory policy last reviewed, and
who last approved it?
b4. Who made the working decisions to change inventory
levels? (Last, First, MI) & (Title)
c. Describe any use by the Utility of systematic procedures for periodic market investigations of fuel costs and availability, particularly prior to renewal or
renegotiation of contracts.

d. Describe any environmental constraints which influenced the Utility's fuel purchase practices.

e. What quality characteristics were routinely specified in the Utility's fuel contracts?
Energy Content
Sulfur Content
Ash Content
Fuel

Moisture Content

Other

Coal
Oil
Natural gas
Other

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FERC Form 580

OMB No. 1902-0131
Expires 08/31/2013

%

0%

>0-25%

25-50%

50-75%

75-100%

coal
f. What percentage of the Utility's fuel was
purchased from utility-controlled (i.e.
affiliate) sources?

oil
natural gas
other

g1. How were potential fuel suppliers qualified?

g2. What criteria are used to rank bidders?

g3. How were credit and performance ratings of potential fuel suppliers checked?

g4. Do you automatically select the lowest bidder?

Y

N

If not, what criteria are used for selection and negotiation of the fuel contract?

g5. Describe the procurement procedures used on your most recent fuel procurement contract for both:
- the purchase from a non-affiliated company

- the purchase from an affiliated company
h. Do the Utility's purchase policy's practices differ for
associated companies?

Y

N

If so, what generally, are the differences?

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FERC Form 580

OMB No. 1902-0131
Expires 08/31/2013

6.

For each fuel supply contract, where costs were subject to 18 CFR 35.14, (including informal agreements with associated companies) in
force at any time during 2010 and/or 2011, of longer than one year in duration, provide the requested information. Report the data
individually, for each contract, for each calendar year. [No response to any part of Question 6 for fuel oil no. 2 is necessary.] Report all
fuels consumed for electric power generation and thermal energy associated with the production of electricity. Information for ALL
FUELS (e.g. fossil fuels, wood chips), EXCEPT URANIUM, should be reported.

Contract 1
Use the add or delete buttons to manage Contract records: Add Contract (+)

a. Contract specifications
Contract type

Contract
ID /
number

Contract Contract
Reporting signing expiration
Year
date
date
Coal (choose from list)

Gas supply
(choose from
list)

Fuel quantity

Gas transportation
(choose from
list)

Gas
(x103
mmbtu)

Oil
(x103
bbls)

Coal
(x103
tons)

Del Contract (-)

Fuel quality

Other
non-fossil
(state
units)

Gas
(Btu/ft3)

Oil
(Btu/gal)

Coal
(Btu/lb)

Impurity content
Other
nonfossil
(state
units)

Sulfur
Ash
content
content Moisture
(%weight) (%weight)
(%)

b. Delivered characteristics
Fuel origin

Primary
State /
Country
of Origin

1.

Type of purchase point

Fuel destination

Total fuel transportation
distance (mi.) from Utility's
receipt point to plant

Fuel quantity

Gas
(x103
mmbtu)

Coal
Oil
(x103 bbls)

(x103
tons)

Destination Plant:

Fuel quality

Other
nonfossil
(state
units)

Gas
(Btu/ft3)

Oil
(Btu/
gal)

Coal
(Btu/lb)

Impurity content

Other
nonfossil
(state
units)

Fuel cost (see desk
reference)

Actual weighted Actual weighted
average
average
fuel price paid
fuel price paid
Ash
FOB
FOB
content
Sulfur
origin/year
plant/year
content
(%
Moisture
(cents/mmBtu) (cents/mmBtu)
(%)
(%weight) weight)

Enter Plant Not Listed:

Use the add or delete buttons to manage Delivery Characteristics information for each Contract : Add Delivery (+)

Del Delivery (-)

Copy Delivery

c. Fuel and transportation contract affiliates
Name of any entity affiliated with the Utility that is involved
in the procurement or transportation of its fuel

Type of affiliation

Affiliated entity involvement with the Utility

Add Row (+)

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Delete Row (-)

FERC Form 580

OMB No. 1902-0131
Expires 08/31/2013

7.

For each fuel supply contract, including informal agreements with associated or affiliated companies, in force at any time during
2010 or 2011, WHERE CONTRACT SHORTFALL COSTS WERE PASSED THROUGH an AAC subject to 18 CFR 35.14, provide for
each contract separately, the information requested below. Only report the information requested for shortfalls that occurred under your
contracts during reporting years 2010 or 2011 and that are not under dispute i.e. parties agree there was indeed a shortfall.

a) Cause of the shortfall [e.g., disruption in production,
fuel not meeting quality specifications, dispute over
contract provisions, a disruption in supplier's
transportation system or other (specify)].

b) Amount of shortfall costs
passed through the AAC

c) Utility or Supplier-caused?

d) Did contract contain
a provision for shortfall
consequences?
Add Row (+)

8.

For each fuel supply contract that was bought-out or bought-down, including informal agreements with associated or affiliated
companies in force at any time during 2008 or 2009, WHERE CONTRACT BUY-OUT AND/OR BUY-DOWN COSTS WERE PASSED
THROUGH an AAC subject to 18 CFR 35.14, provide for each contract separately, the information requested below. Only report the
information requested for contract buy-downs and buy-outs that occurred under your contracts during reporting years 2010 or 2011 and
that are not under dispute i.e. parties agree there was indeed a shortfall.

a) Type of change (buy-down
or buy-out)

b) Effective date of buy-out
or buy-down (mm/dd/yy).

c) Amount of any buy-out and buy-down costs
that were passed through the AAC ($xx).

d) Docket number of Commission waiver, if
any, allowing recovery of contract buy-down
and buy-out costs through the AAC.
Add Row (+)

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Delete Row (-)

Delete Row (-)

FERC Form 580

6. Fixed-Price Contract

APPENDIX A

Price is fixed over the life of the contract.

OMB No. 1902-0131
Expires 08/31/2013

FERC Form 580

Purchaser agrees to pay all producers' costs plus a management fee. Some contracts provide for
payment of both a management fee and a profit. This contract has an Incentive Fee provision, i.e.,
a variable fee that is tied to various productivity and cost reduction incentives.

5. Cost-Plus Contract with an Incentive Fee Provision

Purchaser agrees to pay all producers' costs plus a management fee. Some contracts provide for
payment of both a management fee and a profit. This contract has a Fixed Fee provision.

4. Cost-Plus Contract with a Fixed Fee Provision

Price tied to the price of coal being sold in a particular market. Product and market area are
defined in the contract. Contract may contain a "Most Favored Nations" clause, i.e., supplier will
not sell to any utility at a price lower than your utility is paying.

3. Price Tied to Market

The price is renegotiated at predetermined intervals, usually one year. This type of contract,
frequently known as an “EVERGREEN CONTRACT,” may also contain provisions for price
adjustments between renegotiations.

2. Price Renegotiation

Different components of the price escalate (or de-escalate) as a function of changing economic
conditions (indices).

1. Base Price plus Escalation

Coal Contract Types

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Capacity

Contract buy-outs

Contract buy-downs

Base price plus escalation

Avoided variable costs

Automatic adjustment clause (AAC)

Associated (affiliated) companies

Annual weighted average

Term

Reference to a Commission document/issuance.

Electricity available to provide to a market during a defined period.

Buy-out costs are compensation paid to suppliers for ending a contract before the previously agreed
upon contract expiration date.

Costs paid in compensation to suppliers for reducing the contract amount to below the minimum
requirement.

Different components of the price escalate (or de-escalate) as a function of changing economic
conditions (indices).

All identified and documented variable costs (costs that change or vary with usage, output or
production e.g. fuel costs) that would have been incurred by the buyer had a particular purchase not
been made. Such costs include, but are not limited to, those associated with fuel, start-up, shutdown or any purchases that would have been made in lieu of the purchase made.

A provision of a rate schedule which provides for increases or decreases (or both), without prior
hearing, in rates reflecting increases or decreases (or both) in costs incurred by an electric utility.

Companies or persons that directly or indirectly through one or more intermediaries, control, or are
controlled by, or are under common control with the account company. (see 18 CFR Part 101 for
more information)

An average taken over a 12-month period in which each item being averaged is multiplied by a
number (weight) based on the item's relative importance. The result is summed and the total is
divided by the sum of the weights.

Definition

OMB No. 1902-0131
Expires 08/31/2013

Commission cite

Unique contract identifier that the Utility uses internally to identify a contract.

Glossary

Contract ID/ number

Energy charge

EIA code

EIA

Effective date of rate schedule

Economic power

Cost-plus contract with an incentive fee
provision

The year the data is collected.

That portion of the charge for electric service based upon the electric energy (kWh) consumed or
billed.

Unique identification number assigned by EIA to utilities and plants.

EIA is an acronym for Energy Information Administration.

The date upon which service is approved by FERC to begin.

Power or energy purchased over a period of twelve months or less where the total cost of the
purchase is less than the buyer's total avoided variable cost.

Purchaser agrees to pay all producers' costs plus a management fee. Some contracts provide for
payment of both a management fee and a profit. This contract has an Incentive Fee provision, i.e., a
variable fee that is tied to various productivity and cost reduction incentives.

Purchaser agrees to pay all producers' costs plus a management fee. Some contracts provide for
Cost-plus contract with a fixed fee provision payment of both a management fee and a profit. This contract has a Fixed Fee provision.

Filing year

Price is fixed over the life of the contract.

FERC Form 580

Fixed-price contract

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Term
FOB is an acronym for Free On Board. The term FOB (often seen as f.o.b.) is commonly used
when shipping goods to indicate who pays loading and transportation costs, and/or the point at
which the responsibility of the goods transfers from shipper to buyer. FOB origin is the term used
when the ownership/liability of goods passes from the seller to the buyer at the time the goods leave
the origin. FOB plant designates that the seller is responsible for the goods until the buyer takes
possession at the delivery point. This is important in determining who is responsible for lost or
damaged goods when they are in transit from the seller to the buyer. The buyer is responsible when
shipped FOB origin and the seller is responsible when shipped FOB delivery point.

Definition

OMB No. 1902-0131
Expires 08/31/2013

FOB
A forward-looking process by which the system personnel responsible for selecting the source(s) of
energy to be used by the company to meet its loads in the next hour are free to, and do in fact,
decide which available energy resources will be used and in what amount solely on the basis of the
relative projected energy costs of those resources for that hour with the goal of minimizing total
production cost for that hour.
A generator who provides either capacity or wholesale power to utilities. IPPs operate in the
franchised territories of host utilities and do not possess transmission facilities or sell electricity on
the retail market.

Hourly economic dispatch
Independent Power Producer (IPP)

Renewable Energy Credit (REC)

Reliability purchase

System reserve capacity criteria

Receipt point

Rate schedule

Qualifying Facility (QF)

The time period to which the data provided in the FERC-580 applies.

A tax credit offered by some states as an incentive for the installation and operation of renewable
energy systems such as solar or wind power.

An energy purchase made when a utility does not have sufficient generating capability to meet its
own load plus its planning reserve requirement.

Planning criteria used to determine when a reliability purchase is made.

Where the Utility or Utility's contracted agent takes possession of the fuel.

The rates, charges, and provisions under which service is supplied to customers.

A QF is a generating facility which meets the requirements for QF status under the Public Utility
Regulatory Policies Act of 1978 and 18 CFR Part 292 of the Commission's regulations, and which
has either self-certified with the Commission or has obtained FERC certification of QF status. There
are two types of QFs: cogeneration facilities and small power production facilities.

The price is renegotiated at predetermined intervals, usually one year. This type of contract,
frequently known as an “Evergreen Contract,” may also contain provisions for price adjustments
between renegotiations.

Reporting year

A document describing the kinds of services to be furnished to the identified parties at the rates
specified.

Price renegotiation

Service schedule

Contracted less delivered amount.

Price tied to the price of coal being sold in a particular market. Product and market area are defined
in the contract. Contract may contain a "Most Favored Nations" clause, i.e., supplier will not sell to
any utility at a price lower than your utility is paying.

Shortfall

All identified and documented variable costs that would have been incurred by the buyer had a
particular purchase not been made.

Price tied to market

Total avoided variable cost

The exact legal name of the Utility

FERC Form 580

Utility name

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