20240801Application.pdf

APPLICATION OF AVISTA - 1
DAVID J. MEYER, Esq.
Vice President and Chief Counsel
Regulatory & Governmental Affairs
Avista Corporation
1411 E. Mission Avenue, MSC 27
P. O. Box 3727
Spokane, Washington 99220
Telephone: [phone]
[e-mail]
Attorney for Avista Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
AVISTA CORPORATION FOR A ) CASE NO. AVU-E-24-__
DETERMINATION OF 2022-2023 ELECTRIC )
ENERGY EFFICIENCY EXPENSES AS ) APPLICATION OF
PRUDENTLY INCURRED ) AVISTA CORPORATION
)
In accordance with IDAPA 31.01.01 (Rules of Procedure, or RP), RP 052 and RP 201, et
seq., Avista Corporation, dba Avista Utilities (Avista or the Company), at 1411 East Mission
Avenue, Spokane, Washington, hereby applies to the Idaho Public Utilities Commission
(Commission) for an order designating Avista’s electric energy efficiency expenditures from
January 1, 2022 through December 31, 2023, funded through the Company’s Schedule 91 Energy
Efficiency Rider Adjustment in the amount of $15,972,882, as prudently incurred (hereinafter
Application).
The Company also requests that this filing be processed under the Commission’s Modified
Procedure Rules (RP 201-204) through the use of written comments.
RECEIVED
Thursday, August 1, 2024
IDAHO PUBLIC
UTILITIES COMMISSION
NEW CASE:AVU-E-24-09

APPLICATION OF AVISTA - 2
All communications, pleadings, and orders with respect to this Application should be directed to:
David J. Meyer, Esq. Shawn J. Bonfield
Vice President and Chief Counsel Senior Manager, Regulatory Policy & Strategy
Regulatory & Governmental Affairs Avista Corporation
Avista Corporation P. O. Box 3727
P. O. Box 3727 1411 E. Mission Avenue, MSC 27
1411 E. Mission Avenue, MSC 27 Spokane, Washington 99220-3727
Spokane, Washington 99220-3727 Telephone: [phone]
Telephone: [phone] E-mail: [e-mail]
E-mail: [e-mail]
Avista Dockets (Electronic Only) - [e-mail]
Avista has included the following attachments in support of this filing, which are also
referenced below:
a) Exhibit No. 1 – Avista 2022 Idaho Annual Conservation Report
b) Exhibit No. 2 – Avista 2023 Idaho Annual Conservation Report
c) Exhibit No. 3 – 2023 NEEA Evaluation Report
d) Exhibit No. 4 – NEEA Response to ADM Evaluation

I. BACKGROUND
Avista has continuously offered energy efficiency services since 1978. Through these
offerings, the Company seeks to provide customers with programs and information that may help
them manage their energy use and to utilize cost-effective energy efficiency resources to meet the
energy and demand needs of the Company’s electrical and natural gas systems. These efforts are
funded through Avista’s Electric and Natural Gas Energy Efficiency Rider Adjustments (Schedule
91 and Schedule 191, respectively), or tariff riders.
The Company’s Energy Efficiency Program (Program) consist of options for residential,
non-residential and low-income customer segments. The Program includes offerings through
traditional prescriptive channels along with site-specific projects and upstream buy-down
programs. Additionally, Avista introduced a midstream program in 2023, as well as a small

APPLICATION OF AVISTA - 3
business direct install lighting program. Each program within the Company’s electric Energy
Efficiency Portfolio (Portfolio) is designed to meet cost-effectiveness requirements and is
evaluated by a third-party evaluator each year. The results of both the Company’s and the third-
party evaluator’s annual assessments of the Program are contained within Avista’s Annual
Conservation Report (ACR).
II. ELECTRIC PROGRAM EXPENDITURES
The Company requests Commission determination that the expenditures incurred during the
2022-23 Program years, totaling $15,972,882 for its electric Program, were prudent and in the public
interest. Of the total amount spent, $10,138,070, or 63%, of total expenditures were paid out to
customers in direct incentives.1 This percentage does not include additional benefits such as
technical analyses provided to customers by the Company’s Energy Efficiency engineering staff or
regional market transformation efforts through the Northwest Energy Efficiency Alliance (NEEA).
The Company reports the Schedule 91 balance on a monthly basis to Commission Staff
and its Energy Efficiency Advisory Group (EEAG or Advisory Group). As of June 30, 2024,
Avista’s electric tariff rider balance was approximately $540,000 underfunded, meaning that less
tariff rider funding was collected than actually needed to fund the ongoing Program operations.
This underfunded balance was anticipated and intentional. The current rate was designed to correct
an overfunded balance resulting from the lower levels of conservation achieved during the 2020
and 2021 program years.2 The rate decrease effective October 1, 2023 has had the desired effect
of reducing customer rate burden and bringing the tariff more in line with program targets. The
Company will continue to monitor the tariff balance on a monthly basis and request revisions to

1 $4,598,319 in incentives were paid to customers in 2022 and $5,539,751 in 2023.
2 his overfunding was addressed by a decrease to Schedule 91 rates effective October 1, 2023, approved by the
Commission in Order No. 35935 of Case No. AVU-E-23-10.

APPLICATION OF AVISTA - 4
its existing rate should any changes be required in the future. Table No. 1 below illustrates the
balances for the 2022 and 2023 Program years on a monthly basis.
Table No. 1 – Schedule 91 Tariff Balances By Month, January 2022-December 2023

III. 2022 AND 2023 PROGRAM PERFORMANCE
The Company’s energy efficiency targets are established on an annual basis through the
process of developing its electric Integrated Resource Plan (IRP). The targets derived through the
resource planning efforts provide a starting point for Program planning, which is accomplished
through the annual business planning process where Program offerings are optimized for the
Company’s service territory based on current economic and market conditions. Program savings
for 2022 were 14,972 MWh, which surpassed the electric savings target of 12,725 MWh, achieving

APPLICATION OF AVISTA - 5
117% of the target. For 2023, the Company accomplished 104% of its 14,970 MWh target,
achieving annual energy savings of 15,530 MWh. This represents 110% of the Company’s two-
year IRP target of 27,6951 MWh, which does not include the additional 11,686 MWh acquired
through NEEA. In support of these figures, Avista’s 2022 and 2023 Electric Impact Evaluations
are included as appendices within each respective year’s ACR (See Exhibit No. 1 for 2022 and
Exhibit No. 2 for 2023).
Table No. 2 – Total Savings to Target Comparison, 2022-2023
Time Period of
Reported Savings
Local Evaluated
MWh Savings IRP Target Percent Achieved
2022 14,927 12,725 117%
2023 15,530 14,970 104%
2022-2023 30,458 27,695 110%

As shown in Table No. 2 above, from January 1, 2022 through December 31, 2023 the
Company achieved 30,458 MWh of savings, excluding NEEA savings of 11,686 MWh. Table No.
3 below details the electric savings by residential, non-residential and low-income sectors, which
make up the Company’s electric Portfolio.
Table No. 3 – 2022-2023 Electric Savings by Program Sector

Avista evaluates the effectiveness of its electric Portfolio based upon a number of metrics,
including analyses utilizing four specific measurements to evaluate the cost-effectiveness of a
given program from both the Company’s and from customers’ perspectives: the Utility Cost Test

APPLICATION OF AVISTA - 6
(UCT),3 the Total Resource Cost (TRC), the Participant Cost Test (PCT), and the Ratepayer
Impact Test (RIM). The most commonly applied metrics to provide insight into the net value to
all customers are the UCT—a benefit‐to‐cost test from the utility perspective that includes
incentives and excludes net costs and non-energy benefits (NEBs)—and the TRC, which
represents the customer perspective by including all measure costs and NEBs, excluding
incentives. Per Commission Staff recommendations in previous prudence reviews, Avista has
shifted, in recent years, to conducting its own cost-effectiveness calculations in-house, rather than
relying on a third party. This prudence review marks the second cycle in which Avista has run
these calculations internally, and the Company has continued to develop its quality control, review
processes and knowledge to ensure the consistency and accuracy of these calculations. Avista’s
cost-effectiveness calculations have moved away from static, lump-sum inputs for cumulative
electric avoided costs, total year one energy savings, and total incentives. Calculations are based
on values within the Company’s reporting structure – specifically, units installed, unit energy
savings, and per-unit incentives. Avista has also improved its quality control process for cost-
effectiveness calculations and for overall accuracy of the Company’s work papers by developing
cost-effective workbooks that utilize active formulas, implementing peer reviews and reconciling
Portfolio savings totals against the systems of record. The Company will continue to refine its
processes, as needed, to ensure the appropriate and concise reporting of its Program. For 2022, the
overall Portfolio achieved a UCT ratio of 1.28 and a TRC ratio of 1.78 based on verified savings.
For 2023, the overall Portfolio achieved a UCT ratio of 1.45 and a TRC ratio of 1.22 based on
verified savings. The cost-effectiveness metrics are included in Table No. 4 below:

3 Also known as the Program Administer Cost (PAC) test.

APPLICATION OF AVISTA - 7
Table No. 4 – Electric Cost-Effectiveness, 2022-2023
Cost-Effectiveness Test 2022 2023
Utility Cost Test (UCT) 1.28 1.45
Total Resource Cost (TRC) 1.78 1.22
The primary reason for the shift in cost-effectiveness between the two periods is due to the
introduction of midstream and small business direct install lighting programs, which together
provided the majority of the savings volume and therefore skewed the overall cost-effectiveness
toward their respective program cost-effectiveness values.
IV. PROGRAM EVALUATION
In addition to the cost-effectiveness analyses conducted for the Program, Avista also
contracts with independent, third-party consultants to provide program Evaluation, Measurement,
and Verification (EM&V) activities each year. These EM&V activities are used to validate and
report verified energy savings related to the Company’s energy efficiency measures and Program
offerings, as well as provide viable recommendations to improve Program performance, enact
changes to Program components, and decide whether and when to phase out measures.
For both the 2022 and 2023 Program years, ADM and Associates, Inc. (ADM) was retained
by Avista to perform both impact and process evaluations on Avista's electric Program, inclusive
of the residential, non-residential, and low-income components of the Program. The primary goal
of the impact evaluations is to provide an accurate summary of the gross electric and demand
savings attributable to Avista’s Portfolio, while the main purpose of a process evaluation is to
identify any improvements needed at the Program level to increase Program effectiveness, and
efficiency while improving the participation experience for customers.

APPLICATION OF AVISTA - 8
As part of its 2022-23 evaluations, the evaluator concluded that Avista’s electric Program
achieved 30,458 MWh and that the Program addressed all impact and process evaluation needs in
accordance with industry and regulatory standards.
V. NEEA EVALUATION
Per Order No. 35129 in Case Nos. AVU-E-20-13 and AVU-G-20-08, Avista’s request for
a prudence determination of its 2018-2019 electric and gas energy efficiency programs, the
Commission ordered Avista to take several actions intended to improve its Program and associated
processes. One such action determined by the Commission was that Avista should pursue an
independent EM&V of the NEEA program in Idaho. The intent of this evaluation was to clarify
whether the savings claimed by NEEA, the allocation of those savings to Idaho, and the cost-
effectiveness are accurate and ultimately benefiting Idaho customers.
Avista began its EM&V vendor selection efforts early in 2022 and transitioned to pursing
a joint effort with Idaho Power for the NEEA review. Avista and Idaho Power collaborated to
jointly issue a Request for Proposal (RFP) for the review of the Program and ultimately selected
ADM to perform the EM&V evaluation. ADM completed their review in early 2023 and issued a
final evaluation report in April 2023. In summarizing their conclusions, ADM found that
contributions to NEEA efforts for standards and codes remained cost-effective across Program
years 2017 through 2021. ADM also made nine specific recommendations based on their findings,
eight of which have been agreed to and addressed by NEEA to-date.4 The final recommendation
related to attribution of code savings is being reviewed by NEEA’s Cost Effectiveness and
Evaluation Advisory Committee (CEAC) with a proposed resolution at the end of 2024. The full
ADM evaluation report is provided in Exhibit No. 3.

4 See Exhibit No. 4 for the NEEA Response to ADM Evaluation.

APPLICATION OF AVISTA - 9
VI. ADDITIONAL PROGRAM ACTIVITIES
Midstream Program
In 2023, Avista launched its Midstream Program, which offers incentives to distributors
and trade allies, rather than directly to customers, ensuring that the mix of HVAC products offered
to customers includes items with high efficiency ratings. By moving commercial and residential
HVAC offerings, as well as commercial food service equipment offerings, from a direct rebate
model to a midstream model, Avista saw savings for these programs increase significantly, as more
customers were offered incentives by participating companies.
While savings for these measures increased due to higher volumes, the Midstream Program
had a lower realization rate than expected, due to differences between the baseline assumed by the
implementor in comparison to the RTF, which was the baseline favored by the Company’s third-
party evaluator. Avista continues to work with the evaluator to coordinate and implement
appropriate midstream design modifications in pursuit of a higher realization rate for future
Program years.
Small Business Lighting Direct-Install Program and Business Partner Program
In April of 2023, Avista also launched its Direct-Install Lighting Program, aimed at
providing low cost or no-cost lighting upgrades to customers in Idaho serviced through rate
schedules 11 or 12. Under this offering, which has been hugely popular with customers and with
trade allies alike, trade allies conduct outreach to small businesses, conduct eligibility checks, visit
facilities to create project scope and cost estimates, then install lighting. Small business customers
are often channeled into this program through Avista’s Business Partner Program, an outreach
effort to help small customers in the Company’s rural areas of the service territory became aware
of efficiency opportunities. These two programs enable the Company to prioritize outreach to

APPLICATION OF AVISTA - 10
specific geographic areas, which in turn allows trade allies to batch projects by geographic areas,
resulting an efficient installation model. In 2023, the Business Partner Program conducted targeted
outreach to over 40 small communities in the Company’s Idaho service territories. As a result, 41
small businesses in Idaho had lighting upgrades installed through the Small Business Direct Install
lighting program, resulting in annual kWh savings of over 140,000.
Research and Development Funding
In the Company’s 2018-2019 prudence determination, Case Nos. AVU-E-20-13 and AVU-
G-20-08, the Commission directed Avista to update its Research and Development (R&D)
program to include measurable targets and metrics for programs that prioritize benefits for Idaho
customers (Order No. 35129). During 2022 and 2023, Avista continued to evaluate opportunities
for R&D projects that align with the Commission’s order, but did not submit any updated proposals
for its R&D program. However, as noted in the Company’s 2023 ACR, Avista is part of a large
cross-sector initiative to establish an Inland Northwest Center for Energy and Decarbonization
(“INTENT”). Several Idaho entities, including the University of Idaho, North Idaho, the Coeur
d’Alene Tribe and the Nez Perce Tribe, are participating in the initiative, which has already
received a planning grant of approximately $1 million from the National Science Foundation’s
Regional Innovation Engines Program to further develop a vision for the Center. Once the vision
has been finalized, Avista and its collaboration partners plan to submit the INTENT concept for a
10-year, $160 million grant from the National Science Foundation’s Regional Innovation Engines
program. If the concept obtains funding through this program, INTENT could then potentially be
leveraged in the future to pursue efficiency-related R&D projects. At that time, if Avista
determines that such an endeavor will have measurable metrics and provide direct benefits to Idaho
customers as intended, Avista will submit such a proposal to the Commission for approval.

APPLICATION OF AVISTA - 11
VI. REQUEST FOR RELIEF
As described in greater detail above, Avista respectfully requests that the Commission issue
an Order designating Avista’s 2022 and 2023 total electric Energy Efficiency Program
expenditures of $15,972,882 as prudently incurred, with this Application being processed under
Modified Procedure through the use of written comments.
DATED this 1st day of August 2024.
Respectfully submitted,
Avista Utilities
By: ___ /s/ David Meyer______________
David J. Meyer, Vice President and Chief
Counsel for Regulatory and Governmental Affairs