20250131Direct T. Benjamin_Exhibits.pdf

RECEIVED
Friday, January 31, 2025
IDAHO PUBLIC
UTILITIES COMMISSION
DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY& GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
DAV ID.MEYER@AVI S TACORP.COM
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) CASE NO. AVU-E-25-01
OF AVISTA CORPORATION FOR THE ) CASE NO. AVU-G-25-01
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC AND ) DIRECT TESTIMONY
NATURAL GAS SERVICE TO ELECTRIC ) OF
AND NATURAL GAS CUSTOMERS IN THE ) TIA C. BENJAMIN
STATE OF IDAHO )
FOR AVISTA CORPORATION
(ELECTRIC AND NATURAL GAS)

1 I. INTRODUCTION
2 Q. Please state your name, employer and business address.
3 A. My name is Tia C. Benjamin. I am employed by Avista Corporation as
4 Manager of Regulatory Affairs in the Regulatory Affairs Department. My business address is
5 1411 East Mission, Spokane, Washington.
6 Q. Please briefly describe your educational background and professional
7 experience.
8 A. I am a graduate of the University of Idaho with a Bachelor of Science degree,
9 majoring in Accounting. After spending nearly four years in financial services in the public
10 school system,I joined Avista in July 2011 where I have since served in several roles including
11 an Analyst on our Asset Management team and several years on our Budget and Forecasting
12 team before joining the Regulatory Affairs Department in September 2020. In my current role
13 as Manager of Regulatory Affairs, I am responsible for, among other things, preparing the
14 capital additions pro forma adjustments in determination of the revenue requirement for all
15 jurisdictions in which the Company provides utility services.
16 Q. What is the scope of your testimony?
17 A. My testimony and exhibit in this proceeding will describe the Company's
18 restated twelve-months ended (12ME) June 30, 2024 net plant from average-of-monthly-
19 averages (AMA) to an end-of-period (EOP) adjustment, as well as explain how pro forma
20 capital additions for the period of July 1, 2024, through August 31, 2027, are incorporated
21 into the Company's Two-Year Rate Plan' and proposed electric and natural gas revenue
'The Company is proposing a Two-Year Rate Plan for the period September 1,2025,through August 31,2027.
For both electric and natural gas,the Company is proposing an increase for Rate Year 1 effective September 1,
2025 (hereafter"RY1"),and Rate Year 2 effective September 1,2026(hereafter"RY2").
Benjamin, Di 1
Avista Corporation

I requirements sponsored by Company witness Ms. Schultz. A table of contents for my
2 testimony is as follows:
3 TABLE OF CONTENTS
4 Description Page
5 I. INTRODUCTION............................................................................ 1
6 II. CAPITAL ADDITIONS WITNESSES..........................................2
7 III. SUMMARY OF CAPITAL ADJUSTMENTS ............................. 8
8
9 Q. Are you sponsoring any exhibits?
10 A. Yes. I am sponsoring Exhibit No. 13, Schedule 1, which provides a summary
11 of the capital additions included in each of the capital witnesses' testimonies by project
12 (Business Case) for the period of July 1, 2024, through August 31, 20272, broken out by pro
13 forma period, July 2024 through August 2025 (pro forma prior to the rate effective period),
14 Rate Year 1 (RY1) September 2025 through August 2026, and Rate Year 2 (RY2) September
15 2026 through August 2027.
16
17 II. CAPITAL ADDITIONS WITNESSES
18 Q. Would you please provide a brief summary of the witnesses who provide
19 testimony related to capital additions in this proceeding?
20 A. Yes. Other capital witnesses, besides Ms. Schultz and myself who support the
21 capital-related adjustments,provide more detailed information on certain capital projects and
22 describe the need for and timing of these capital projects. The following witnesses are
23 presenting direct testimony supporting the capital additions adjustments I sponsor3 as outlined
z Company witnesses Mr.DiLuciano,Mr.Howell,Mr.Manuel and Mr.Malensky sponsor testimony explaining
the Company's capital additions for the Pro Forma adjustments I sponsor.
3 With the exception of the Pro Forma Colstrip Unit 3 and 4 investment and regulatory amortization included in
Pro Forma Adjustments 3.15 discussed and sponsored by Company witness Ms.Andrews.
Benjamin, Di 2
Avista Corporation

I in Section III below:
2 Mr. David Howell, Director of Generation Production and Substation Support, will
3 address the generation production and environmental capital Business Cases described
4 in this case.
5
6 Mr. Josh DiLuciano,Vice President of Energy Delivery,will explain capital additions
7 related to electric transmission and distribution, natural gas delivery, facilities, fleet,
8 and general plant.
9
10 Mr. Wayne Manuel, Vice President and Chief Information and Security Officer, will
11 provide an overview of Avista's Information Service/Information Technology(IS/IT)
12 programs and projects. This includes summaries of the Company's capital additions
13 for a range of IS/IT systems used by the Company, many representing short-lived
14 assets.
15
16 Mr. Vern Malensky, Director of Electrical Engineering, will discuss the strategy and
17 actions comprising the Company's Wildfire Resiliency Plan.
18
19 Q. How have capital witnesses presented the transfers-to-plant information
20 in their testimony?
21 A. Mr. Howell, Mr. DiLuciano, Mr. Manuel and Mr. Malensky present capital
22 transfers-to-plant (gross plant additions) for the pro forma period on a system basis (Idaho,
23 Washington, and Oregon jurisdictions).4 Each witness's testimony discusses capital additions
24 from July 1, 2024, to August 31, 2027, on a system basis. A detailed listing of Business Case
25 (project) names and totals for the pro forma adjustment period July 2024—August 2027 can
26 be found in my Exhibit No. 13, Schedule 1. Table No. 1 below also reflects the pro forma
27 period broken out by July 1, 2024 —August 31, 2025, RY1 September 1, 2025 —August 31,
28 2026 and RY2 September 1,2026—August 31,2027 transfers-to-plant(TTP)for projects that
29 are discussed in each witness's testimony, on a system basis:
4 The Company has excluded Business Cases which have transfers to plant that exclusively occur in Washington
or Oregon and therefore do not impact Idaho.
Benjamin, Di 3
Avista Corporation

I Table No. 1: Pro Forma Capital Additions
2 Capital Additions(System),S in(0001s)
Exhibit Rate Year 1 Rate Year 2
3 Juh•2024- Sept 2025- Sept 2026-
Functional Area witness NO August 2025 August 2026 August 2027
4 Electric Transmission&Distribution Mr.DiLuciano 10 $ 204.646 $ 162.688 $ 201.435
Natural Gas Distribution Mr.DiLuciano 10 $ 95.873 $ 81.971 $ 83.886
5 General Plant&Fleet Investments Mr.DiLuciano 10 $ 21.957 $ 13.877 $ 17.087
Generation Production&Environmental Mr.Howell 7 $ 66.166 $ 66.733 $ 54.000
6 Wildfire Resiliency Plus Mr.Malensky 11 $ 40.834 $ 51.500 $ 60.250
Enterprise Technology Mr.Manuel 12 $ 109.776 $ 66.340 $ 83.140
7 Total S 539,253 S 443.109 S 499,798
8 Q. Referring to Table No. 1 above, reflecting system level capital projects
9 transferring to plant by Witness, what is the overall level of system capital additions
10 included by the Company in this case, and how does this capital investment compare
11 between the pro forma periods,July 2024—August 2025, RY1 and RY2?
12 A. Illustration No. 1 below shows overall total system capital additions for pro
13 forma July 2024—August 2025,RY1 and RY2 periods,of$539.3 million, $443.1 million and
14 $499.8 million, respectively. As also noted in the illustration, the "Pro Forma" period
15 represents 14 months (July 1, 2024—August 31, 2025). Finally, this illustration distinguishes
16 between what are ongoing projects or programs from the pro forma period ending August
17 2025, versus incremental projects that are expected to transfer-to-plant between September
18 2025 through August 2027, representing $40.8 million in RY1 and $30.5 million in RY2.5
19
5 Witnesses Mr. Howell, Mr. DiLuciano, and Mr. Manuel, who address most of the capital projects,have also
included similar bar charts for the transfers to plant represented by the Business Cases in each of their respective
areas by period, Pro Forma, RY1 and RY2. Each depicts transfers to plant of existing Business Cases versus
transfers-to-plant associated with entirely new Business Cases in RY1 and RY2.
Benjamin, Di 4
Avista Corporation

I Illustration No. 1—System Total Capital Additions Plant Investment
2 Avista Total Annual Capital Additions
$'s in millions (System Transfers to Plant)
3 $600 (l) $30.5(2)
4 $500 $40.8
$400
5
$300
6 $200
7 $100
S-
8 Pro Forma RY1 RY2
July 2024-Aug 2025 Sept 2025-Aug 2026 Sept 2026-Aug 2027
9 $539.3 $443.1 $499.8
■Continuation of Ongoing Business Cases ■Additional Business Cases Initiated in RYl-RY2
10 w The majority of incremental investment in RY1 is associated with Coyote Springs 2(CS2)CT Rotor Replacement and Noxon
Rapids Gantry Crane Modernization,totaling$39.1 million.
(2)The majority of incremental investment in RY2 is associated with KF Ash Landfill Expansion,CS2 Low Pressure Evaporator
11 Replacement,Central 24 HR Operations Facility,and Energy Trade&Risk Management Implementation,totaling$28.2 million.
12 Notably, as can be seen from this illustration, the vast majority of the capital
13 investment (91% in RY1 and 94% in RY2) relate to ongoing, multi-year efforts that continue
14 over time, in areas already familiar to the parties. The rationale and justification for these
15 ongoing projects or programs do not change over time, only the funding1 . Furthermore,
16 many of these ongoing, multi-year Business Cases have been reviewed by parties in prior
17 general rate cases, and the Commission therefore has approved the associated investments as
18 prudently incurred,but at different funding levels. This should facilitate the review of changes
19 in expenditure levels for the Business Cases in this Two-Year Rate Plan.
20 Specific to the incremental projects of$40.8 million (system) in RY1, these projects
21 relate to the Coyote Springs 2 (CS2) CT Rotor Replacement ($19.6 million), the Noxon
22 Rapids Gantry Crane Modernization ($19.5 million), the Noxon Rapids Unit 5 Turbine
Benjamin, Di 5
Avista Corporation

I Runner Replacement ($0.5 million)', and the Ambient-Adjusted Transmission Line Ratings
2 ($1.2 million). The incremental Business Cases of$30.5 million in RY2 relate to the Kettle
3 Falls (KF) Ash Landfill Expansion ($10.2 million), the CS2 Low Pressure Evaporator
4 Replacement($3.8 million), the Automation Replacement($2.2 million)', the Central 24 HR
5 Operations Facility($3.3 million)9 and the Energy Trade&Risk Management Implementation
6 ($10.9 million)10. Each of these Business Cases are discussed individually within the
7 testimonies of witnesses Mr. Howell, Mr. DiLuciano, and Mr. Manuel.
8 Q. Company witness Mr. Christie identifies and briefly explains the six
9 "Investment Drivers" or classifications of Avista's infrastructure projects and
10 programs. How then do these "drivers" translate to the capital additions that are
11 represented in each capital witness's testimony?
12 A. Mr. Christie provides an overview of our capital investment prioritization
13 process and the six key "Investment Drivers". The Company's six Investment Drivers are
14 briefly described as follows:
15 1. Customer Requested — Respond to customer requests for new service or
16 service enhancements required for connecting new distribution customers or
17 large transmission-direct customers.
18
6 A short description of the Coyote Springs 2 CT Rotor Replacement, the Noxon Rapids Gantry Crane
Modernization, and the Noxon Rapids Unit 5 Turbine Runner Replacement projects has been provided in Mr.
Howell's direct testimony and the full Business Case justification narrative for each has been provided in Mr.
Howell's Exhibit No.7, Schedule 1.
7 A short description of the Ambient-Adjusted Transmission Line Ratings project is provided in Mr.DiLuciano's
direct testimony. The full Business Case justification narrative has been provided in Mr. DiLuciano's Exhibit
No. 10, Schedule 3.
'A short description of the Kettle Falls Ash Landfill Expansion,the CS2 Low Pressure Evaporator Replacement
projects,and the Automation Replacement program has been provided in Mr.Howell's direct testimony and the
full Business Case justification narrative for each has been provided in Mr.Howell's Exhibit No. 7,Schedule 1.
9 A short description of the Central 24 HR Operations Facility project is provided in Mr. DiLuciano's direct
testimony. The full Business Case justification narrative has been provided in Mr.DiLuciano's Exhibit No. 10,
Schedule 3.
10 A short description of the Energy Trade & Risk Management Implementation project is provided in Mr.
Manuel's direct testimony. The full Business Case justification narrative has been provided in Mr. Manuel's
Exhibit No. 12, Schedule 1.
Benjamin, Di 6
Avista Corporation

1 2. Mandatory and Compliance — These investment drivers are compelled by
2 regulation or contract and are generally beyond the Company's control as they
3 are a direct result of compliance with laws, regulations and agreements,
4 including projects related to dam safety upgrades, public safety, air and water
5 quality, and equipment essential to legally operate within the interconnected
6 grid, among others.
7
8 3. Failed Plant and Operations — This investment driver includes the
9 replacement of equipment that is damaged or fails due to an accident,or normal
10 wearing out requiring periodic replacement. The large, massive rotating
11 equipment and associated support machinery used for electric generation, for
12 example, can experience sudden mechanical failures or electrical insulation
13 breakdowns even with the benefit of ongoing maintenance and preventive
14 maintenance programs.
15
16 4. Asset Condition—Replace infrastructure assets or portions of assets at the end
17 of their functional service life based on asset condition due to age,
18 obsolescence and parts availability,and degradation of the asset. This category
19 includes replacement of critical parts requiring replacement prior to failure, as
20 well as replacing or overhauling older equipment to bring it up to meet current
21 codes and standards.
22
23 5. Customer Service Ouality and Reliability — Meet our customers'
24 expectations for quality and reliability of service, as well as increasing the
25 reliability of operating assets.
26
27 6. Performance and Capacity — Programs and projects to address system
28 performance and capacity issues so Company assets can continue to satisfy
29 business needs and meet performance standards to support the interconnected
30 grid and to ensure the ability to participate in the regional wholesale energy
31 market.
32
33 Each of the Company's capital witnesses outlined above provide additional detail as
34 well as the main drivers for capital investments under their area of responsibility.
35 Q. Mr. Christie refers to planned capital expenditures of $500 million in
36 2024, $525 million in 2025 and $575 million in 2026. Why do the totals in Table No. 1
37 differ from the planned expenditures Mr. Christie discusses?
38 A. There are two primary reasons, first the totals in Table No. 1 above differ from
39 Mr. Christie's $500 million, $525 million and $575 million plan because Table No. 1
40 represents transfers-to-plant,whereas Mr. Christie's plan represents capital expenditures(i.e.,
Benjamin, Di 7
Avista Corporation

I spend). There is a timing difference between when dollars are spent, and when the capital
2 projects are completed, become used and useful and are transferred to plant-in-service.
3 Second, Mr. Christie's capital expenditure plan is outlined on a calendar basis while Table
4 No. 1 displays transfers to plant aligned with the pro forma capital adjustment periods, July
5 2024—August 2025,RY 1 September 2025—August 2026 and RY2 September 2026—August
6 2027.
7
8 III. SUMMARY OF CAPITAL ADJUSTMENTS
9 Q. Would you please summarize the adjustments included in the Company's
10 Two-Year Rate Plan as it relates to new additions in utility plant to serve customers?
11 A. Yes. The Company is proposing a Two-Year Rate Plan for the period
12 September 1, 2025, through August 31, 2027. For both electric and natural gas, the Company
13 is proposing an increase for RY1 effective September 1, 2025, and RY2 effective September
14 1,2026.As discussed by Ms. Schultz,the Electric and Natural Gas Pro Forma Studies include
15 restating and pro forma adjustments beyond the historical test year (12ME June 30, 2024).
16 The Company started with utility plant rate base balances from historical accounting
17 information, which for this case consists of the actual AMA balances for the 12ME June 30,
18 2024, and made the following adjustments:
19 Rate Year 1
20
21 (1) Adjustment (1.01) — Deferred FIT Rate Base: This adjustment adjusts the
22 electric and natural gas accumulated deferred federal income tax (ADFIT) rate
23 base balance included in the Results of Operations to the adjusted ADFIT balance
24 reflected on an AMA basis. ADFIT reflects the deferred tax balances arising from
25 timing differences between book recognition and tax recognition of certain income
26 and deductions.The primary deductions that have timing differences,and therefore
27 associated ADFIT, are accelerated tax depreciation over book depreciation and the
28 repairs deduction.
29
Benjamin, Di 8
Avista Corporation

1 (2) Adjustment(1.04)-Restate 06.2024 AMA Rate Base to EOP: This adjustment
2 adjusts plant-in-service, accumulated depreciation(A/D)and ADFIT to restate the
3 June 30, 2024 AMA rate base to June 30, 2024 EOP balances. The impacts of
4 retirements through June 30, 2024, are included in the test year.
5
6 (3) Pro Forma Adjustment(3.08)-August 2025 Pro Forma EOP: This adjustment
7 includes three components. The first component adjusts EOP June 30, 2024 rate
8 base to EOP August 31, 2025 rate base by extending A/D and ADFIT balances on
9 utility plant-in-service from June 30, 2024 EOP balances to August 31, 2025 EOP
10 balances. The second component reflects the impact of retirements from July 1,
11 2024, through August 31, 2025. The third component reflects additions to plant-
12 in-service, inclusive of new growth capital", between July 1, 2024, and August
13 31, 2025, on an EOP basis, inclusive of the A/D, depreciation expense, and
14 ADFIT12 associated with these additions for the period. This adjustment also
15 adjusts depreciation expense to reflect the appropriate level of expense at August
16 31, 2025.
17
18 (4) Pro Forma Adjustment (3.09) - August 2026 Pro Forma AMA: This
19 adjustment includes three components. The first component adjusts plant-in-
20 service at August 31, 2025 EOP balances to August 31, 2026 AMA balances by
21 extending A/D and ADFIT balances. The second component reflects the impact of
22 retirements from August 31, 2025 EOP balances to August 31, 2026 AMA
23 balances. The third component reflects additions to plant-in-service, inclusive of
24 new growth capital, between August 31, 2025 on an EOP basis and August 31,
25 2026 on an AMA basis, inclusive of the A/D, depreciation expense, and ADFIT
26 associated with these additions for the period. This adjustment also adjusts
27 depreciation expense to reflect the appropriate level of expense at August 31,2026.
28
29 Rate Year 2
30
31 (5) Pro Forma Adjustment(26.01)-August 2026 AMA to August 2026 EOP: This
32 adjustment includes two components. The first component adjusts plant-in-service
33 at August 31, 2026 AMA balances to August 31,2026 EOP balances by extending
34 A/D and ADFIT balances. Since this adjustment is only pro forming the change
35 from August 31, 2026, from an AMA to EOP basis, there is no impact to
36 depreciation expense on the capital additions and retirements because the impact
37 was recorded in PF Adj. 3.09 - August 2026 Pro Forma AMA. The second
38 component reflects the impact of retirements from August 31,2026 AMA balances
39 to August 31, 2026 EOP balances.
40
" For the period July 1, 2024, through August 31, 2027, capital additions associated with connecting new
customers to the Company's system(New Revenue-Growth Business Case)were included. As discussed by
Ms.Schultz in her testimony,an increase in revenues from growth in the number of customers from the historical
test year to the RY1 and RY2 rate periods are included, offsetting the impact of growth in plant investment
associated with customer growth.
12 For each of the Pro Forma rate base adjustments for the period June 30,2024 EOP through August 31,2027
AMA,the associated ADFIT includes an estimated basis deduction(repairs expense),where applicable.
Benjamin, Di 9
Avista Corporation

1 (6) Pro Forma Adjustment(26.02)—August 2026 EOP to August 2027 AMA: This
2 adjustment includes three components. The first component adjusts plant-in-
3 service at August 31, 2026 EOP balances to August 31, 2027 AMA balances by
4 extending A/D and ADFIT balances. The second component reflects the impact of
5 retirements from August 31, 2026 EOP balances to August 31, 2027 AMA
6 balances. The third component reflects additions to plant-in-service, inclusive of
7 new growth capital, between August 31, 2026, on an EOP basis and August 31,
8 2027, on an AMA basis, inclusive of the A/D, depreciation expense, and ADFIT
9 associated with these additions for the period. This adjustment also adjusts
10 depreciation expense to reflect the appropriate level of expense at August 31,2027.
11
12 An overall summary of the change in rate base associated with the adjustments
13 outlined above is included as Table No. 2 (electric) and Table No. 3 (natural gas) below.
14 Detailed calculations for each adjustment that I sponsor have been provided in my workpapers
15 filed with the Company's case. Please note, however, that Ms. Andrews discusses and
16 sponsors the pro forma capital additions adjustment (3.15) related to Colstrip Units 3 and 4.
17 These capital additions are included in Ms. Schultz's Electric and Natural Gas Pro Forma
18 Studies but are not included in my summary tables below.
19 Q. What is the change in electric and natural gas net plant for the capital
20 adjustments included in this testimony?
21 A. The results of the Electric and Natural Gas Pro Forma Studies reflect the net
22 plant that will be in service serving customers during RY1 and RY2. Prior to reflecting the
23 additional projects sponsored by Ms. Andrews (Colstrip Units 3 and 4), for RY1, Electric net
24 plant,after ADFIT,increases$116,419,000 from the June 30,2024 AMA results of operations
25 balance of$1,020,673,000 to the August 31,2026 AMA balance of$1,137,091,000. For RY2,
26 Electric net plant, after ADFIT, increases $73,572,000 from the August 31, 2026 AMA
27 balance of$1,137,091,000 to the August 31, 2027 AMA balance of$1,210,663,000. Table
28 No. 2 below summarizes the adjustments for electric capital additions included in this
29 testimony and sponsored by me.
30
Benjamin, Di 10
Avista Corporation

I Table No. 2: Idaho Electric Adiustments Summary by Year
2 Idaho Electric Adjustments in$(000's)
Plant in Accumulated Accumulated
3 Adj# Service Depreciation DFIT Net Plant
Rate Year 1 (September 1,2025-August 31,2026)
4 June 2024 AMA Results $ 1,987,790 $ (771,087) $ (196,030) $ 1,020,673
Deferred FIT Rate Base 1.01 3,022 3,022
Restate 12 ME 06.2024 AMA to EOP Adj 1.04 479474 (20,171) 427 27,730
5 July 1,2024 to August 31,2025 Pro Forma EOP Adj 3.08 1039214 (49,757) (19946) 51,511
August 31,2025 FOP to August 31 2026 AMA Ad' 3.09 47,840 11,386 2,298 34,156
6 Rate Year 1 Total $ 2,186,318 $ 852,401 $ 196,825 $ 1,137,091
7 Rate Year 2(September 1,2026-August 31,2027)
August 31,2026 AMA Balance 2,186,318 (852,401) (196,825) 1,137,091
8 August 31,2026 AMA to August 31,2026 EOP Adj 26.01 50,832 (21,924) (2,786) 26,122
August 31,2026 EOP to August 31,2027 AMA Ad' 26.02 57,978 8,223 2,305 47,450
9 Rate Year 2 Total $ 2,295,128 $ 882,549 $ (2QL9161 $ 1,210,663
*Electric Pro Forma Rate Year 1 totalbalances exclude the effect ofadditional Pro Forma Adjustments sponsored by Ms.Andrews for Colstrip Units 3
and 4 investments.
10
11 For RY1, Natural Gas net plant, after ADFIT, increases $16,329,000 from the June
12 30, 2024 AMA balance of $215,298,000 to the August 31, 2026 AMA balance of
13 $231,627,000. For RY2, Natural Gas net plant, after ADFIT, increases $6,589,000 from the
14 August 31, 2026 AMA balance of $231,627,000 to the August 31, 2027 AMA balance of
15 $238,216,000.Table No. 3 below summarizes the adjustments for natural gas capital additions
16 included in this testimony and sponsored by me.
Benjamin, Di 11
Avista Corporation

I Table No. 3: Idaho Natural Gas Adiustments Summary by Year
Idaho Natural Gas Adjustments in$(000's)
2 Plant in Accumulated Accumulated
Adj# Service Depreciation DFIT Net Plant
3 Rate Year 1 (September 1,2025-August 31,2026)
June 2024 AMA Results $ 387,073 $ (138,287) $ (33,488) $ 215,298
4 Deferred FIT Rate Base 1.01 589 589
Restate 12 ME 06.2024 AMA to EOP Adj 1.04 8,612 (3,775) 136 4,974
5 July 1,2024 to August 31,2025 Pro Forma EOP Adj 3.08 14,707 (8,753) 635 6,589
August 31,2025 EOP to August 31,2026 AMA Ad' 3.09 4,869 812 121 4,178
6 Rate Year 1 Total $ 415,261 $ 151,627 $ 32,007 $ 231,627
7 Rate Year 2(September 1,2026-August 31,2027)
August 31,2026 AMA Balance 415,261 (151,627) (32,007) 231,627
August 31,2026 AMA to August 31,2026 EOP Adj 26.01 4,833 (4,263) 60 630
8 August 31 2026 EOP to August 31,2027 AMA Ad' 26.02 6,230 357 85 5,958
Rate Year 2 Total $ 426,324 $ 156,246 $ 31,862 $ 238,216
9
10 Q. Please describe how the capital additions included in the pro forma
11 adjustments described above are derived.
12 A. The Company directly assigns costs when appropriate. Costs not specifically
13 identifiable to a specific jurisdiction are allocated in accordance with an approved allocation
14 procedure. Costs that are not directly assigned to electric or natural gas projects specific to
15 our Idaho jurisdiction,are allocated to Idaho as part of an allocation process,which designates
16 costs as common to all services and jurisdictions (CD.AA), common to electric operations
17 only (ED.AN) or common to natural gas operations only (GD.AA).
18 Q. Please explain what offsets have been included within the pro forma
19 capital additions adjustments.
20 A. First, for each of the pro forma capital adjustments described in my testimony,
21 I have included the reduction in depreciation expense related to plant retirements. The overall
22 effect of reflecting retirements from June 30, 2024 plant-in-service to August 31, 2027 AMA
23 reduces the incremental depreciation expense pro formed in these adjustments by $11.8
24 million(or a reduction of 69%)for electric and$2.6 million(or a reduction of 85%)for natural
Benjamin, Di 12
Avista Corporation

I gas.
2 In addition, each pro forma capital project included in the pro forma capital
3 adjustments was also analyzed to determine if any additional offsets (e.g., reduced O&M
4 costs)were probable. For example,maintenance records were reviewed to determine whether
5 any specific maintenance costs were incurred in the test period that would be reduced or
6 eliminated by the investment at the facility. When reviewing project offsets,typically projects
7 may have two types of offsets. The first type of offset is a redeployment of costs or efficiency
8 gains, that do not generally allow for an offset to its O&M costs, as there are no changes to
9 the total level of expense that the Company will incur during the rate year. The second type
10 of offset includes actual or "hard" incremental savings expected beyond the historical test
11 period, that will occur during the rate-effective period, as a result of the capital investment.
12 These offsets result in an overall reduction in the level of expense the Company will incur,
13 such as a reduction in workforce or energy savings.
14 After review of the capital projects included in this case during RY1, September 1,
15 2025, through August 31, 2026, quantifiable savings included as a reduction to O&M in
16 Adjustment 3.10 — Pro Forma Revenue and O&M Offsets are approximately $469,000 for
17 electric operations and $117,000 for natural gas operations. For RY2, September 1, 2026,
18 through August 31, 2027, incremental quantifiable savings above RY1 levels, included as a
19 reduction to O&M in Adjustment 26.05 — Pro Forma Revenue and O&M Offsets are
20 approximately $93,000 for electric operations and $15,000 for natural gas. Refer to
21 Adjustments 3.12 and 26.05 — Pro Forma Revenue and O&M Offsets workpapers for more
22 information on the specific Business Cases included in this adjustment.
23 In addition, the increase in electric and natural gas revenue, due to the growth in the
24 number of customers from the historical test year to RY1 and RY2 (new growth revenue
Benjamin, Di 13
Avista Corporation

I capital additions associated with connecting new customers to the Company's system, i.e.,
2 New Revenue — Growth Business Case) are also included. These revenues, totaling $3.3
3 million in RY 1 and$1.7 million in RY2 for electric, and$1.4 million in RY 1 and$0.7 million
4 in RY2 for natural gas, are included as "Other Revenue" within Adjustments 3.10 and 26.05
5 —Pro Forma Revenue and O&M Offsets,respectively,reducing the overall requested revenue
6 requirement over the Company's Two-Year Rate Plan, as discussed by Ms. Schultz.
7 Q. What conclusions have you drawn regarding the increased capital
8 additions included in this case?
9 A. The Company is making substantial levels of capital additions in its electric
10 and natural gas system infrastructure to address customer growth, replacement and
11 maintenance of Avista's aging system, and to sustain reliability and safety. As soon as this
12 new plant is placed in service, the Company must start depreciating the new plant and incur
13 other costs related to the addition. Unless these capital additions are reflected in retail rates
14 in a timely manner,it has a negative impact on Avista's earnings,particularly because the new
15 plant is typically far more costly to install than the cost of similar plant that was embedded in
16 rates decades earlier. As plant is completed and is providing service to customers, it is
17 appropriate for the Company to receive timely recovery of the costs associated with that plant.
18 Q. Does this conclude your pre-filed direct testimony?
19 A. Yes, it does.
Benjamin, Di 14
Avista Corporation

DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY & GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
[e-mail]
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) CASE NO. AVU-E-25-01
OF AVISTA CORPORATION FOR THE ) CASE NO. AVU-G-25-01
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC AND )
NATURAL GAS SERVICE TO ELECTRIC ) EXHIBIT NO. 13
AND NATURAL GAS CUSTOMERS IN THE )
STATE OF IDAHO ) TIA C. BENJAMIN
1
FOR AVISTA CORPORATION
(ELECTRIC AND NATURAL GAS)

Avista Capital Additions Detail
July 1,2024-August 31,2027 Transfers-to-Plant
(System)In$(000's)
July 2024- Rate Year 1 Rate Year 2
Business Case Name Investment Driver August 2025 Sept 2025-Aug 2026 Sept 2026-Aug 2027
Witness:Josh DiLuciano-Exhibit 10,Schedule 3
Electric Distribution Capital Projects
Distribution Grid Modernization Asset Condition $ 451 $ 799 $ 1,411
Distribution Minor Rebuild Asset Condition 14,562 13,833 14,657
Distribution System Enhancements Performance&Capacity 11,399 10,063 10,719
East CDA Lake Reinforcement Program Performance&Capacity 243 694 -
Elec Relocation and Replacement Program Mandatory&Compliance 9,968 6,960 7,020
Electric Storm Failed Plant&Operations 2,836 2,529 2,529
Joint Use Mandatory&Compliance 4,530 4,167 3,667
Meter Minor Blanket Failed Plant&Operations 274 250 250
Metro 115kV Substation Asset Condition 3,990 - 9,315
New Revenue-Growth Customer Requested 78,190 62,629 66,746
Substation-Asset Condition Asset Condition 26,781 19,003 6,895
Substation-Performance and Capacity Performance&Capacity 15,594 11,517 14,660
Substation Failed Plant Failed Plant&Operations 1,000 1,500 1,500
Wood Pole Management Asset Condition 8,797 11,573 12,577
Total Planned Electric Distribution Capital Projects $ 178,616 $ 145,517 $ 151,946
Electric Transmission Capital Projects
Ambient-Adjusted Transmission Line Ratings Mandatory&Compliance $ - $ 1,200 $ -
Colstrip Transmission Mandatory&Compliance 1,251 1,094 588
Electric Storm Failed Plant&Operations 1,931 1,471 1,471
SCADA-SOO and BuCC Asset Condition 960 1,011 1,148
Substation-West Plains System Reinforcement Project Mandatory&Compliance 1,667 3,592 37,992
Transmission-Minor Rebuild Asset Condition 5,494 4,000 4,000
Transmission Construction-Compliance Mandatory&Compliance 382 500 500
Transmission Critical Crossing Reinforcement Asset Condition 500 - -
Transmission Major Rebuild-Asset Condition Asset Condition 7,817 4,303 3,789
Transmission NERC Low-Risk Priority Lines Mitigation Mandatory&Compliance 3,051 - -
Westside 230/115kV Station Brownfield Rebuild Project Mandatory&Compliance 2,978 - -
Total Planned Electric Transmission Capital Projects $ 26,030 $ 17,171 $ 49,489
Natural Gas Distribution Capital Projects
Gas Above Grade Pipe Remediation Program Mandatory&Compliance $ 738 $ 657 $ 643
Gas Cathodic Protection Program Mandatory&Compliance 757 1,002 600
Exhibit No. 13
Case Nos.AVU-E-25-01/AVU-G-25-01
T.Benjamin,Avista
Schedule 1,Page 1 of

July 2024- Rate Year 1 Rate Year 2
Business Case Name Investment Driver August 2025 Sept 2025-Aug 2026 Sept 2026-Aug 2027
Gas Facility Replacement Program(GFRP)Aldyl A Pipe
Replacement Mandatory&Compliance 30,530 28,265 29,682
Gas Isolated Steel Replacement Program Mandatory&Compliance 2,440 2,000 2,000
Gas Non-Revenue Program Failed Plant&Operations 11,419 10,850 11,437
Gas PMC Program Mandatory&Compliance 4,205 3,810 3,670
Gas Regulator Station Replacement Program Asset Condition 1,094 1,051 1,050
Gas Reinforcement Program Performance&Capacity 5,020 1,115 1,025
Gas Replacement Street and Highway Program Mandatory&Compliance 5,427 5,665 5,757
Gas Telemetry Program Performance&Capacity 98 - -
Gas Transient Voltage Mitigation Program Mandatory&Compliance 1,165 154 313
Jackson Prairie Natural Gas Storage Facility Performance&Capacity 2,256 2,386 2,376
New Revenue-Growth Customer Requested 30,723 25,016 25,333
Total Planned Natural Gas Distribution Capital Projects $ 95,873 $ 81,971 $ 83,886
General Plant&Fleet Investments Capital Projects
Capital Equipment Program Asset Condition $ 2,486 $ 2,084 $ 2,090
Central 24 HR Operations Facility Performance&Capacity - - 3,339
Fleet Services Capital Plan Asset Condition 9,259 5,257 5,695
Palouse Service Center Asset Condition 750 750 -
Right-of-Way Use Permits Mandatory&Compliance 337 243 243
Sandpoint Service Center Performance&Capacity 1,250 - -
Structures and Improvements/Furniture Asset Condition 7,197 5,494 5,670
Telematics 2025 Asset Condition 495 - -
Total Planned General Plant&Fleet Investment Capital Projects $ 21,774 $ 13,827 $ 17,037
Misc.accrual reversals,corrections or additional TTP $ 183 $ 50 $ 50
Total Distribution,Transmission,Natural Gas and General Plant Capital Projects $ 322,476 $ 258,536 $ 302,408
Witness:Wayne Manuel-Exhibit 12,Schedule 1
Enterprise Technology Capital Projects
Customer Experience Platform Program Customer Service Quality&Reliability $ 2,699 $ 740 $ -
Customer Facing Technology Program Customer Service Quality&Reliability $ 4,825 $ 5,455 $ 5,419
Customer Transactional Systems Customer Service Quality&Reliability 4,535 4,750 5,450
Energy Delivery Modernization&Operational Efficiency Performance&Capacity 7,105 6,147 10,648
Energy Market Modernization&Operational Efficiency Performance&Capacity 260 - -
Energy Resources Modernization&Operational Efficiency Performance&Capacity 4,533 2,881 2,842
Energy Trade&Risk Management Implementation Performance&Capacity - - 10,900
Financial&Accounting Technology Performance&Capacity 3,383 2,344 4,555
Human Resources Technology Performance&Capacity 250 486 340
Exhibit No. 13
Case Nos.AVU-E-25-01/AVU-G-25-01
T. Benjamin,Avista
Schedule 1,Page 2 of 4

July 2024- Rate Year 1 Rate Year 2
Business Case Name Investment Driver August 2025 Sept 2025-Aug 2026 Sept 2026-Aug 2027
Legal&Compliance Technology Performance&Capacity 656 117 450
Outage Management System&Advanced Distribution Manages Asset Condition 18,656 6,731 6,511
Basic Workplace Technology Delivery Performance&Capacity 1,944 810 795
Control and Safety Network Infrastructure Performance&Capacity 2,443 457 2,108
Data Center Compute and Storage Systems Performance&Capacity 3,098 1,367 4,415
Digital Grid Network Performance&Capacity 4,130 2,692 2,674
Dynamic Infrastructure Platform Enhancements Performance&Capacity 881 262 1,002
Endpoint Compute and Productivity Systems Performance&Capacity 4,197 5,436 6,646
Enterprise Communication Systems Performance&Capacity 1,672 2,109 1,822
Enterprise Network Infrastructure Performance&Capacity 5,376 2,725 1,905
Environmental Control&Monitoring Systems Performance&Capacity 1,563 872 782
ET Modernization&Operational Efficiency-Technology Performance&Capacity 7,008 1,338 3,123
Fiber Network Lease Service Replacement Performance&Capacity 1,157 2,339 1,314
Land Mobile Radio&Real Time Communication Systems Performance&Capacity 3,674 2,180 1,052
Network Backbone Performance&Capacity 5,322 1,585 2,901
NexGen Control System Networks Performance&Capacity 6,649 7,305 1,760
Technology Failed Assets Failed Plant&Operations 1,041 1,019 1,023
Disaster Resiliency Customer Service Quality&Reliability 142 9 198
Enterprise Security Customer Service Quality&Reliability 3,660 1,986 980
Facilities and Storage Location Security Customer Service Quality&Reliability 2,003 362 179
Generation,Substation&Gas Location Security Customer Service Quality&Reliability 6,305 1,334 1,045
Identity and Access Governance Mandatory&Compliance 558 451 201
Security Compliance Mandatory&Compliance 47 53 100
Misc.accrual reversals,corrections or additional TTP 2 - -
Total Planned Enterprise Technology Capital Projects $ 109,776 $ 66,340 $ 83,140
Witness:David Howell-Exhibit 7,Schedule 1
Generation Production and Environmental Capital Projects
Cabinet Gorge Dam Fishway Mandatory&Compliance $ 537 $ - $ -
Clark Fork Settlement Agreement Mandatory&Compliance 2,938 2,664 3,122
Hydro Safety Minor Blanket Mandatory&Compliance 230 - -
Spokane River License Implementation Mandatory&Compliance 896 1,040 973
Asset Lifecycle Management Asset Condition 2,538 3,628 5,440
Automation Replacement Customer Service Quality&Reliability - - 2,250
Boulder Park Engine Controls Upgrade Asset Condition 2,500 2,790 -
Cabinet Gorge HVAC Replacement Asset Condition 2,981 - -
Cabinet Gorge Station Service Asset Condition 18,190 171 -
Cabinet Gorge Stop Log Replacement Asset Condition 1,980 - -
Exhibit No. 13
Case Nos.AVU-E-25-01/AVU-G-25-01
T. Benjamin,Avista
Schedule 1,Page 3 of 4

July 2024- Rate Year 1 Rate Year 2
Business Case Name Investment Driver August 2025 Sept 2025-Aug 2026 Sept 2026-Aug 2027
Coyote Springs 2 CT Rotor Replacement Failed Plant&Operations - 19,583 -
CS2 Low Pressure Evaporator Replacement Asset Condition - - 3,799
HMI Control Software Asset Condition 3,276 3,650 5,554
KF 4160 V Station Service Replacement Asset Condition 722 1,541 -
KF Secondary Superheater Replacement Asset Condition 3,401 - -
KF Ash Landfill Expansion Mandatory&Compliance - - 10,189
KF_ID Fan&Motor Replacement Asset Condition 3,360 - -
Little Falls Plant Upgrade Asset Condition 566 - -
Long Lake Plant Upgrade Asset Condition 300 - -
Nine Mile Unit 3 Mechanical Overhaul Asset Condition 6,903 - -
Nine Mile Units 3&4 Control Upgrade Asset Condition 2,200 - 5,122
Noxon Rapids Gantry Crane Modernization Asset Condition - 19,494 -
Noxon Rapids Unit 5 Turbine Runner Replacement Asset Condition - 499 -
Operational Safety and Compliance Mandatory&Compliance 3,837 2,907 1,267
Operational Sustainment Performance&Capacity 6,126 8,066 16,283
Peaking Generation Business Case Failed Plant&Operations 372 - -
Post Street Substation Crane Rehab Asset Condition 1,080 702 -
Regulating Hydro Asset Condition 1,235 - -
Total Planned Generation Production and Environmental Capital Projects $ 66,166 $ 66,733 $ 54,000
Witness:Vern Malensky
Wildfire Resiliency Plan Capital Projects
Wildfire Resiliency Plan Customer Service Quality&Reliability $ 40,834 $ 51,500 $ 60,250
Total Planned Wildfire Resiliency Capital Projects $ 40,834 $ 51,500 $ 60,250
Total Pro Forma Capital Additions(System)' $539,253 $443,109 $499,798
Excludes Colstrip capital and projects assigned directly to Washington or Oregon only.
Exhibit No. 13
Case Nos.AVU-E-25-01/AVU-G-25-01
T. Benjamin,Avista
Schedule 1,Page 4 of 4