20250131Direct W. Manuel_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]
DAVID.MEYER@AVIS 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 ) WAYNE O. MANUEL
STATE OF IDAHO )
1
FOR AVISTA CORPORATION
(ELECTRIC &NATURAL GAS)

1 I. INTRODUCTION
2 Q. Please state your name, employer and business address.
3 A. My name is Wayne O. Manuel. I am employed by Avista Corporation as the
4 Vice-President, Chief Information Officer (CIO) and Chief Information Security Officer
5 (CISO). My business address is 1411 E. Mission Avenue, Spokane, Washington.
6 Q. Mr. Manuel, please provide information pertaining to your educational
7 background and professional experience.
8 A. I am a graduate of the University of Alaska-Anchorage with a Bachelor of
9 Business Administration(BBA),majoring in Management Information Systems,and from the
10 University of Houston-Victoria with a Master of Business Administration, concentration in
11 Economic Development & Entrepreneurship. I joined Avista on June 1, 2023. I have held the
12 role of Senior Vice President, Chief Strategy Officer and Chief Information officer at UW
13 Medicine I Valley Medical Center in Renton, Washington, the largest nonprofit healthcare
14 provider between Seattle and Tacoma. I have held various roles at The Cleveland Clinic,
15 Providence Health& Services and ConocoPhillips with experience through direct application
16 and management of Information Services over the course of my 30-year information
17 technology career.
18 During my time at Valley Medical Center, I designed and implemented near real-time
19 COVID-19 Operational Dashboards and facilitated and instituted a plan to handle major
20 surges in patient volumes. In addition, I directed the implementation and operationalization
21 of the hospital's advance cybersecurity team and framework. Beyond Information
22 Technology, my responsibilities have also included Human Resources, Marketing,
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Avista Corporation

I Communications, Clinical Operations, Process Improvement, Project Management, and
2 Change Management.
3 Q. What is the scope of your testimony in this proceeding?
4 A. I will provide an overview of and discuss capital additions and expenses
5 associated with the Company's Information Service/Information Technology (IS/IT)
6 programs, projects and security included in the Company's filed case over its proposed Two-
7 Year Rate Plan. These costs are comprised of the capital investments for a range of IS/IT
8 projects that support systems used by the Company, as well as cyber and physical security
9 projects and costs. I will explain why our information technology and security investments
10 are necessary in the time frames indicated. While I discuss this plan in detail within my
11 testimony and exhibits, Company witnesses Ms. Schultz and Ms. Benjamin incorporate the
12 capital additions, and incremental expenses associated with the Company's IS/IT costs
13 included in the Company's request for rate relief over the Two-Year Rate Plan effective
14 September 1, 2025, and ending August 31, 2027.
15 A table of contents for my testimony is as follows:
16 Table of Contents
17 I. INTRODUCTION........................................................................................................1
18 II. IS/IT OVERVIEW ......................................................................................................3
19 III. IS/IT PRIORITIZATION, DELIVERY AND GOVERNANCE PROCESS............7
20 IV. IS/IT TECHNOLOGY CAPITAL BUSINESS CASES............................................9
21 V. IS/IT AND SECURITY OPERATING AND MAINTENANCE EXPENSES........26
22
23 Q. Are you sponsoring any exhibits in this proceeding?
24 A. Yes. I am sponsoring Exhibit No. 12, Schedule 1, which includes Information
25 Technology Capital Project Business Cases.
26
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Avista Corporation

1 II. ISAT OVERVIEW
2 Q. How are Avista's technology investments linked to supporting business
3 processes?
4 A. Avista's technology investments fall into two major areas: (1) enabling
5 technology and (2) business and operating application systems. Avista also takes an
6 enterprise-wide approach to security and disaster recovery (resiliency) that links our
7 technology investments with protecting our people, our assets, and our facilities. Specifically,
8 "enabling technology" consists of the technology infrastructure such as data storage, and
9 endpoint computing hardware, (e.g., Personal Computers (PC's), Laptops, Smartphones, and
10 Wireless Network Access Devices). Enabling technology also includes operating systems,
11 network transport connectivity (e.g., microwave radios, routers and switches). Additionally,
12 enabling technology includes databases and data schemas, integration software, business
13 intelligence tools, communication and collaboration platforms, etc., necessary to enable
14 business capabilities through business application systems. It is the foundation on which we
15 deliver energy safely and reliably, meet business objectives, and deliver value for our
16 customers through business and operating application systems.
17 "Business and operating application systems" are dependent on a reliable
18 infrastructure that delivers the technology foundation for meeting customer needs. Some of
19 the business capabilities within these areas include electric and natural gas service design in
20 the field response to customer requests for prompt installation of new electric or natural gas
21 service. Business application systems help business capabilities by automating business
22 processes to optimize efficiencies and add functionality.
23 Illustration No. 1 below shows the relationship between the areas of Enabling
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Avista Corporation

I Technologies, Business & Operating Application Systems, and Enterprise Security and how
2 those fit into the different capital business cases discussed later in my testimony. Enabling
3 technology is there to support our critical business operations along with the business
4 applications technology,and just as importantly,neither of the two can co-exist without proper
5 security to protect the information that is used to make business decisions and deliver energy
6 to our customers.
7 Illustration No. 1-Business Technology Structure:
8
Customer at the Shared Business
9 Center Energy Resources Energy Delivery
(Web,Customer Care& Systems (Power supply,generation (Asset Mgmt.,SCADA.
Billing,Call Center (Human Resources,Legal, facilities,environmental and Outage Mgmt,Meter Data
1 O Technology) Finance and Accounting) real estate applications) Management,Fleet)
11 Business & Operating Application Systems
12 Communication Back Office Data Compute
Systems Network Systems Systems �
(Microwave,wireless (pC's,Monitors,Operating and Storage
(Telephone systems, technology, fiber optic and (On premise storage,
13 gR P systems,printers,handheld offsite storage,cloud,
voicemail,video,teleconf copper cables) devices mid productivity hardware and software)
and electronic mail) tools)
14 Enabling Technology
15 (Supporting Business&Operating Application Systems and Enterprise Security)
Enterprise Security
16 (Physical, Cyber,Business Continuity and Disaster Recovery of all Enabling Technology and Business &Operating Application
Systems)
17
18 Q. How is Avista's technology investment landscape changing in the future?
19 A. Many of Avista's on-premise systems are nearing the end of their useful life,
20 posing risks such as data breaches, system failures, data loss, and decreased resiliency during
21 outages. To address the risks associated with multiple outdated systems,Avista is in an RFP
22 (Request for Proposal) process for an Enterprise Resource Planning (ERP) system, common
23 to many organizations. In addition, the Company is developing new strategies that include
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Avista Corporation

I application rationalization and a shift from on-premise to cloud-based(SaaS) technology.
2 Implementing a cloud-based ERP system will enhance efficiency, streamline
3 processes, and foster data-driven decision-making. These comprehensive systems integrate
4 various business functions such as finance, human resources, supply chain, and project
5 management into a unified platform, ensuring real-time data visibility and reducing
6 operational silos. By automating routine tasks and providing accurate insights, ERP systems
7 enable companies to optimize resource allocation, improve workflow, and enhance overall
8 productivity.As many of the Company's software assets will need to move to the cloud in the
9 future, Avista is evaluating the cost and benefits of these assets to determine the best long-
10 term, cost-effective strategy. Ultimately,these changes will impact the Company's technology
11 landscape and may influence overall investment planningl.
12 Q. As discussed above, the software industry and the Company is shifting
13 delivery of application technology solutions from a"buy or build" model to SaaS.Please
14 explain how Avista is handling this transition, and what impact this has on capital and
15 operations & maintenance (O&M) costs.
16 A. Onsite solutions presently run in Avista's onsite data center. They require
17 capital investments in licensing and infrastructure, and on-premise personnel and support
18 agreements to operate and maintain them at required levels. Vendor-managed cloud solutions
19 range widely in what they deliver. They can range from delivering data and information only,
20 or running applications and storing data, to fully replicating all the infrastructure, computing
21 power and storage necessary to the point that only an internet connection is needed to make it
22 useful. In general terms, as solutions move across the spectrum of fully on premise to fully
1 The Company will update this case with capital investments associated with an ERP system, if applicable, as
they become known and measurable.
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Avista Corporation

I vendor-managed cloud-based, the cost to implement and run those solutions shifts along the
2 spectrum from capital investment to expense. This is a result of the accounting treatment of
3 cloud-based SaaS solutions moving the Company from capital investments in licensing,
4 infrastructure, and implementation to outsourcing those components as services, and the
5 expenses entailed. This change will require the Company to account for this methodology
6 change surrounding how and when we capitalize and expense these types of solutions.
7 Q. Does this mean that Avista will be making fewer capital investments as
8 technology solutions shift to the cloud?
9 A. No. The need for technology investment will continue to increase as
10 traditionally mechanical and manual functions within different business areas of the Company
11 move more towards digitalization. A great example of this effort is our Outage Management
12 System & Advanced Distribution Management System (OMS/ADMS) Business Case
13 discussed in further detail, later in my testimony. The replacement of Avista's legacy Outage
14 Management tool (OMT) and Distribution Management System(DMS) is aimed at improved
15 field and office worker productivity,providing more accurate data and improvement of outage
16 management and restoration times.
17 In addition, it is likely not all our vendors are moving to the cloud, meaning we need
18 to continue to invest in and support on-premise solutions, as well as network infrastructure
19 (which is part of IS/IT investment) throughout our service territory. As mentioned above,
20 Avista will continue to evaluate SaaS on a case-by-case basis to determine how the benefits
21 might outweigh the costs and/or other risks.
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Avista Corporation

1 III. IS/IT PRIORITIZATION, DELIVERY AND GOVERNANCE PROCESS
2 Q. How are the enabling technologies and business and operating application
3 systems Business Cases prioritized within IS/IT?
4 A. The IS/IT departments leadership team continuously evaluates prioritization of
5 technology investments and those are recommended to the Technology Planning Group (TPG
6 — comprised of Directors from each business area) for the best path forward for technology
7 investments. As shown below in Illustration No. 2, this group resides within executive
8 leadership and business case governance.
9 Q. Describe the alternatives evaluated and how the solutions were chosen.
10 A. Technology evolves in short cycles, as new and sometimes more improved
11 technologies can perform more efficiently than older ones.Through our technology programs,
12 Avista evaluates and plans the direction of its information technology portfolio. A team of
13 IS/IT professionals guide technology programs by analyzing the benefits and costs of
14 investing in new technology verses maintaining existing technology. The team considers
15 whether the current technology environment is stable and secure (e.g., run-the-business), so
16 that it is in Avista's and its customers'best interests to maintain it, and if so, for how long. If
17 not, other options that may better suit the technology needs of Avista and its customers are
18 considered. The technology programs also evaluate the risks of not making an immediate
19 technology change or delaying a change to a later date.
20 Q. What are the governance and cost controls for all business cases with
21 technology investments?
22 A. There are three levels of governance that occur within technology business
23 cases. Executive, Director, and Business Case, as detailed below in Illustration No. 2.
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Avista Corporation

I Illustration No. 2 —Technology Governance Structure
2
3 Executive ExecutivenTechnologyGovernance Steering E
4
5 Director Technology Planning
Governance Group(TPG)
6
7
Business Case Business Case Owner
8 Governance
9
10 Under each Business Case there are two more levels of governance depending on if it
11 is a program or project through Pro_gram Steering Committees and Project Steering
12 Committees. Both have cost control responsibilities to manage and therefore meet regularly
13 to report on scope, schedule,and budget. Governance committee responsibilities are described
14 further below.
15 • Program Steering Committee - The Program Steering Committee consists of
16 members in management positions that are identified and responsible for prioritizing
17 the projects within each respective program. The Program Steering Committee is
18 accountable for the financial performance of the program and hold regular meetings
19 to review the progress of the program and make decisions on the following topics:
20
21 Project prioritization and risk
22 Approving program funding requests
23 New project initiation and sequencing
24
25 The program is facilitated and administrated by an assigned Program Manager within
26 the IS/IT Project Management Office (PMO). The project queue is reviewed
27 periodically and consists of projects needed to meet program goals for technology
28 solutions under each respective program.
29
30 • Project Steering Committee-Project Steering Committees act as the governing body
31 over each individual project within a program and consist of key members in
32 management positions that are identified as responsible for the successful completion
33 of the scope of work identified in the Charter document for each respective project.
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Avista Corporation

I The Project Steering Committee is responsible to provide guidance and make
2 decisions on key issues that affect the following topics:
3 Scope
4 Schedule
5 Budget
6 Project Risks
7 Project Issues
8
9 Project Steering Committees meet at defined intervals documented in the Charter of
10 the project and are facilitated by an assigned Project Manager from within the IS/IT PMO.
11 Project Steering Committees may or may not be necessary depending on the size of the
12 project. In addition, Project Steering Committees may not meet on a monthly or regular basis
13 if the project is on track with all the above deliverables.
14
15 IV. IS/IT TECHNOLOGY CAPITAL BUSINESS CASES
16 Q. Please describe the Enterprise Technology capital Business Cases with
17 projects that are planned to be transferred to plant in service during 2024 - 2027.
18 A. The Enterprise Technology capital Business Cases with projects that are
19 planned to be transferred to plant in service during 2024 - 2027 are shown in Table No. 1
20 below. An explanation of each of the Business Cases follows the table.
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Avista Corporation

I Table No. 1 -Enterprise Technology Capital Additions:
2 Enterprise Technology Capital Projects(System)In S(000's)
Rate Year 1 Rate Year 2
Line July 2024- Sept 2025- Sept 2026-
3 # Business Case Name Investment Driver August 2025 Aug2026 Aug2027
4 Business&Op Technology
1 Customer Experience Platform Program Customer Service Quality&Reliability $ 2,699 $ 740 $
2 Customer Facing Technology Program Customer Service Quality&Reliability 4,825 5,455 5,419
5 3 Customer Transactional Systems Customer Service Quality&Reliability 4,535 4,750 5,450
4 Energy Delivery Modernization&Operational Efficiency Performance&Capacity 7,105 6,147 10,648
5 Energy Market Modernization&Operational Efficiency Performance&Capacity 260 - -
6 6 Energy Resources Modernization&Operational Efficiency Performance&Capacity 4,533 2,881 2,842
7 Energy Trade&Risk Management Implementation Performance&Capacity - - 10,900
8 Financial&Accounting Technology Performance&Capacity 3,383 2,344 4,555
7 9 Human Resources Technology Performance&Capacity 250 486 340
10 Legal&Compliance Technology Performance&Capacity 656 117 450
g Outage Management System&Advanced Distribution
11 Management System(OMS&ADMS) Asset Condition 18,656 6,731 6,511
9 Enabling Technology
12 Basic Workplace Technology Delivery Performance&Capacity $ 1,944 $ 810 $ 795
13 Control and Safety Network Infrastructure Performance&Capacity 2,443 457 2,108
10 14 Data Center Compute and Storage Systems Performance&Capacity 3,098 1,367 4,415
15 Digital Grid Network Performance&Capacity 4,130 2,692 2,674
11 16 Dynamic Infrastructure Platform Enhancements Performance&Capacity 881 262 1,002
17 Endpoint Compute and Productivity Systems Performance&Capacity 4,197 5,436 6,646
18 Enterprise Communication System Performance&Capacity 1,672 2,109 1,822
12 19 Enterprise Network Infrastructure Performance&Capacity 5,376 2,725 1,905
20 Environmental Control&Monitoring Systems Performance&Capacity 1,563 872 782
21 ET Modernization&Operational Efficiency-Technology Performance&Capacity 7,008 1,338 3,123
13 22 Fiber Network Lease Service Replacement Performance&Capacity 1,157 2,339 1,314
23 Land Mobile Radio&Real Time Communication Systems Performance&Capacity 3,674 2,180 1,052
24 Network Backbone Performance&Capacity 5,322 1,585 2,901
14 25 NexGen Control System Networks Performance&Capacity 6,649 7,305 1,760
26 Technology Faded Assets Failed Plant&Operations 1,041 1,019 1,023
15 Enterprise Security
27 Disaster Resiliency Customer Service Quality&Reliability $ 142 $ 9 $ 198
16 28 Enterprise Security Customer Service Quality&Reliability 3,660 1,986 980
29 Facilities and Storage Location Security Customer Service Quality&Reliability 2,003 362 179
30 Generation,Substation&Gas Location Security Customer Service Quality&Reliability 6,305 1,334 1,045
17 31 Identity and Access Governance Mandatory&Compliance 558 451 201
32 Security Compliance Mandatory&Compliance 47 53 100
18 Total Planned Enterprise Technology Capital Projects $ 109,774 $ 66,340 $ 83,140
19 33 Misc.accrual reversals,corrections or additional TIP Performance&Capacity $ 2 $ _ $ -
Total Misc.accrual reversals,corrections or additional TIT $ 2 $ $
20 Q. Please provide an overview of the technology programs for the period of
21 July 1, 2024 to August 31, 2027.
22 A. Table No. 1 lists the ISAT Business Cases for the period from July 1, 2024, to
23 August 31, 2027. These Business Cases are categorized by project type, as previously
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Avista Corporation

I discussed in my testimony on Business and Operating Application Systems, Enabling
2 Technology, and Enterprise Security. Additionally, they are organized according to
3 investment drivers: Mandatory and Compliance, Failed Plant and Operations, Asset
4 Condition, Performance and Capacity, and Customer Service Quality and Reliability.
5 Detailed narratives for each Business Case in Table No. 1 can be found in Exhibit No. 12,
6 Schedule 1.
7 Q. Generally, what alternatives were considered for the above Business &
8 Operating Application Systems, Enabling Technologies, and Enterprise Security
9 programs?
10 A. Alternatives considered for each program can vary and may include the type
11 of technology solutions available in the market,the total cost of ownership for the technology,
12 the option to do the work differently, such as leasing or hiring a service. In addition, running
13 the technology asset longer by purchasing extended warranties, or running the technology to
14 failure for technology assets with an available sparing model are also alternatives. Additional
15 alternatives considered under each program include balancing the performance and capacity
16 requirements for each respective technology investment impacted by vendor driven
17 technology obsolescence lifecycles. For example,how long can an upgrade be deferred before
18 business risks become greater than the necessary upgrade? This can lead to security risks by
19 the vendors no longer offering system patches or system reliability risks as systems can
20 become incompatible with one another.
21 Q. Do Enabling Technologies, Business and Operating Application
22 Technology, and Enterprise Security programs have completion timelines?
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Avista Corporation

I A. Technology investments can fall into programs with both ongoing and defined
2 timelines, as well as projects with defined timelines.All projects transfer to plant the total cost
3 of each project at the completion of every project,which at times can straddle calendar years.
4 This includes projects that fall within a program, as well as those that are standalone projects.
5 Quarterly forecasts capture changes in transfers-to-plant schedules and costs determined by
6 project status.
7
8 Information Related to "Business and Operating Application Technology"Proiects Listed
9 in Table No. 1 (See Exhibit No. 12,Schedule 1, pages 2— 145)
10
11 Q. Please describe investments in Business and Operating Application
12 Technology in 2024 through August 31, 2027.
13 A. Business and Operating Application Systems are the engines that produce,
14 store, and compute information that allow decision-making and automate what once were
15 manual processes.
16 Customer Experience Platform Program (July 2024-August 2025: $2,699,000, RY1:
17 $740,000, RY2: $0)
18 The Customer Experience Platform (CXP) Business Case is to implement the technology
19 necessary to support the emphasis on Customer Experience at Avista. The CXP strives to
20 deliver functionality that empowers all departments to work as one in support of customers.
21 The work executed under this program supporting delivering the personalized experiences
22 customers expect and build lasting,trusted partnerships. CXP has created a single interface to
23 provide a consistent and comprehensive view of each customer, their preferences, past
24 interactions with the Company, communications, and history. This reduces confusion across
25 departments, allows our employees to handle an entire situation and answer customer
26 questions without having to transfer a call or tell the customer we will need to get back to
27 them. We are developing and enhancing this platform based on our strategy of putting the
28 customer at the center and to improve overall customer interaction and experience; if we do
29 not improve the customer experience by providing the proper tools to our employees to serve
30 our customers, then we put meeting current customer expectations at risk.
31
32 Customer Facing Technology Program (July 2024-August 2025: $4,825,000, RY1:
33 $5,455,000,RY2: $5,419,000)
34 The Customer Facing Technology Business Case focuses on delivering value, ease and
35 transparency to all customers (ID, WA, and OR) through our various digital channels
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Avista Corporation

I including but not limited to MyAvista.com, text/SMS, inbound and outbound voice phone
2 systems, and our mobile app. Customer expectations are clear: companies are expected to
3 deliver fast, easy, personalized, and intuitive self-service options 24 hours per day and on
4 many channels of customer choice such as desktop computer, mobile device, tablets, and
5 phone. Customers want a consistent experience from their first interaction to the resolution
6 of their issue or the completion of their self-service transaction. If the digital channels become
7 stagnant and are not enhanced to accommodate adjusted consumer behavior, then customer
8 satisfaction will decline,resulting in increased calls to the call center and increases in costs to
9 serve our entire customer base.
10
11 Customer Transactional Systems (July 2024-August 2025: $4,535,000,RY1: $4,750,000,
12 RY2: $5,450,000)
13 Customer transactional systems are used to support the day-to-day business critical
14 operational needs of all our customers, internal users, third party partners and our regulators.
15 These systems include functionality such as: collection and storage of meter reads and meter
16 data, storage and access for all customer premise and service agreements, customer bills and
17 billing history, energy and assistance agency program reporting, rate design and rate
18 implementation tools. To keep these systems up to date and operational, the company must
19 perform regular upgrades and invest in enhancements that will benefit our customers, internal
20 users, third party partners and regulators. Not investing in this technology would greatly
21 reduce the ability to keep our major systems current and fully operational. We would put
22 significant risk on the ability to meet customer,third party partner and regulatory expectations.
23
24 Energy Delivery Modernization & Operational Efficiency (July 2024-August 2025:
25 $7,105,000,RY1: $6,147,000, RY2: $10,648,000)
26 This Business Case supports both existing and new technologies leveraged by the Energy
27 Delivery business areas including Gas Engineering & Operations, Electric Engineering &
28 Operations, Asset Management & Supply Chain, Facilities, Fleet Operations, and Metering.
29 These technologies are used to automate and augment business solutions bringing efficiencies
30 and capabilities to support the delivery of energy to customers. This support includes the
31 following: 1)improving the performance and capacity of business resources by implementing
32 new functionality in existing technologies, 2) improving the performance and capacity of
33 business resources by implementing overall new technologies, and 3) modernizing existing
34 technologies in accordance with product lifecycles and technical roadmaps, typically through
35 product or system upgrades. Major applications supported in this Business Case include
36 Enterprise Asset Management system (Maximo), mobile workforce management, crew
37 planning and schedules,system operations support,and metering support,among other things.
38
39 Energy Market Modernization & Operational Efficiency (July 2024-August 2025:
40 $260,000, RY1: $0, RY2: $0)
41 Avista's Energy Supply business processes and complexities have expanded significantly
42 with western organized market expansion, reductions in bi-lateral trading partners, the need
43 to understand credit positions and requirements, and the tightening of emission and renewable
44 regulations. To meet these existing and additional market complexities soon, the Company
45 requires a vendor-supported Energy Trade and Risk Management (ETRM) system to meet
46 current, and future electric and natural gas wholesale operational needs. Avista has relied on
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Avista Corporation

I Nucleus since 2001 —an in-house application supporting core functions across Energy Supply,
2 System Operations, Transmission Services, Risk/Credit, Resource Accounting, and
3 Compliance. The Company has added additional functionality well beyond its original intent,
4 resulting in a complex and highly integrated data system. Additional development of the
5 system is not advantageous for the Company, as Nucleus has reached the end of its useful life.
6
7 Energy Resources Modernization & Operational Efficiency (July 2024-August 2025:
8 $4,533,000,RYl: $2,881,000, RY2: $2,842,000)
9 This program supports the application-related technology initiatives for all areas within
10 Energy Resources, which includes Power Supply, Gas Supply, Generation Production
11 Substation Support(GPSS), and Environmental and Real Estate. Application refresh projects
12 are necessary to maintain updates,upgrades and/or replacements to existing Energy Resource
13 applications, to respond to changing business needs and/or technical obsolescence. These
14 refreshes or upgrades are essential to remain current, maintain compatibility, reliability and
15 address security vulnerabilities. The Energy Resources programs supported in this Business
16 Case include support for Avista's energy risk management and energy trading operations,
17 including Avista's Decision Support System (ADSS), Nucleus (Avista's energy transaction
18 book of record), and Energy Risk Management system, among other items.
19
20 Energy Trade & Risk Management Implementation (July 2024-August 2025: $0, RY1:
21 $0,RY2: $10,900,000)
22 Avista's Energy Supply business processes and complexities have expanded significantly
23 with western organized market expansion, reductions in bi-lateral trading partners, the need
24 to understand credit positions and requirements,and the tightening of emission and renewable
25 regulations. To meet these existing and additional market complexities in the near future, the
26 Company requires a vendor-supported Energy Trade and Risk Management (ETRM) system
27 to meet current, and future electric and natural gas wholesale operational needs. Avista has
28 relied on Nucleus since 2001 — an in-house application supporting core functions across
29 Energy Supply, System Operations, Transmission Services, Risk/Credit, Resource
30 Accounting, and Compliance. The Company has added additional functionality well beyond
31 its original intent, resulting in a complex and highly integrated data system. Additional
32 development of the system is not advantageous for the Company, as Nucleus has reached the
33 end of its useful life.
34
35 Financial & Accounting Technology (July 2024-August 2025: $3,383,000, RY1:
36 $2,344,000,RY2: $4,555,000)
37 This program supports financial applications critical to maintaining the financial health and
38 compliance of regulatory requirements through the completion of reoccurring business
39 processes. The business processes change on a frequent basis, driven by several factors and is
40 dictated by the lifecycles of the applications governed in the Business Case, further requiring
41 resources and adaptive technology solutions. Investment in this program supports Company
42 applications including Oracle e-Business Suite, PowerPlan (for fixed assets and tax),
43 depreciation forecasting, supply chain support, and FERC reporting, among other things.
44
45 Human Resources Technology (July 2024-August 2025: $250,000, RY1: $486,000,RY2:
46 $340,000)
Manuel, Di 14
Avista Corporation

I The Human Resources Technology Business Case supports the technology-related application
2 projects required for both expansion and refresh activities required within the Human
3 Resources business area. This program is required to support the application related
4 technology initiatives for all areas of Human Resources including Human Resources Labor
5 and Employee Relations, Leadership and Organizational Development, Human Resources
6 Shared Services, Craft Training, Safety, and Internal Communications. This Business Case
7 results in direct offsets to O&M related to reducing costs of printing, copier maintenance and
8 filing of paper documents. The annual system estimated value of these Direct Offsets is
9 expected at $16,300 annually beginning in 2024. Idaho's share of these offsets have been
10 included in the Company's electric and natural gas revenue requirements as a reduction in
11 expense within pro forma Adjustment 3.10.
12
13 Legal & Compliance Technology (July 2024-August 2025: $656,000, RY1: $117,000,
14 RY2: $450,000)
15 The various business entities within Avista rely on the legal and compliance systems to ensure
16 business operations are done in the most efficient and cost-effective manner. The legal and
17 compliance technology systems vary from the simple to complex and require continuous
18 management of the enhancements needed to meet the internal and external business
19 requirements.Direct annual offsetting system benefits associated with this project is expected
20 at$856,250, of which$642,180 will be reflected in 2025, and the remainder in 2026. Idaho's
21 share of these direct savings has been prorated over the Two-Year Rate Plan and included in
22 the Company's electric and natural gas revenue requirements as a reduction in expense within
23 pro forma Adjustments 3.10 (Rate Year 1) and 26.05 (Rate Year 2).
24
25 Outage Management System & Advanced Distribution Management System (OMS &
26 ADMS) (July 2024-August 2025: $18,656,000, RY1: $6,731,000, RY2: $6,511,000)
27 Avista's Outage Management Tool (OMT) is an in-house developed custom application that
28 supports outage analysis, management, and restoration. OMT provides the functionality to
29 help manage the overall cycle of electric outage and restoration processes for the Idaho and
30 Washington service territories. It works in synchronization with Avista's Distribution
31 Management System (DMS), feeding it current operating state data of its electric assets to
32 monitor and control Avista's electric distribution network efficiently and reliably. The DMS
33 is a commercial application used to monitor and control the distribution grid. It relies on GIS
34 data to determine the current operating state. The OMT and DMS applications and electric
35 and gas data model have been used for nearly two decades and have reached technology
36 obsolescence.
37
38 Replacing Avista's OMT and DMS with a modern commercial Outage Management System
39 (OMS) and Advanced Distribution Management System (ADMS) will improve field and
40 office worker productivity, provide more accurate data, and provide the ability to reengineer
41 work processes and methods to support the continuous improvement of Avista's outage
42 management and restoration program.An OMS/ADMS solution also provides Avista with the
43 ability to respond to more stringent and detailed regulatory compliance reporting
44 requirements, enables effective operation of an increasingly complex and dynamic
45 distribution grid, and delivers more accurate estimated restoration time (ERT) information to
46 electric customers during outages. The improved ERT accuracy and restoration status for
Manuel, Di 15
Avista Corporation

I customers will improve customer confidence in the information,which will reduce the number
2 of calls received by our customer service representatives, as well as call durations. There will
3 be incremental additions to O&M due to support staff employees that will need to be hired to
4 maintain the ADMS solution past the Go-Live and into the 15-year project depreciation
5 lifespan.2 These increases after the Go-Live date are anticipated to be $251,000 in 2025,
6 $235,000 in 2026 and $247,000 in 2027.
7
8 Information Related to "Enabling Technolo'-y"Proiects Listed in Table No. 1 (See Exhibit
9 No. 12, Schedule 1, pages 146—289)
10
11 Q. Please describe the investments in Enabling Technology from July 1,2024
12 to August 31, 2027 included in Table No. 1.
13 A. As previously mentioned, enabling technology consists of the infrastructure
14 technology required to enable business and operating application systems that in turn enable
15 business capabilities. For comparison purposes, it is the concrete footings, the framing, the
16 roof, the conduit, and drywall that transform materials into a house that people make into a
17 home.Below are the Enabling Technologies that are Mandatory and Compliance,Failed Plant
18 and Operations, Asset Condition, and Performance and Capacity as defined by Company
19 witness Mr. Christie.
20 Basic Workplace Technology (July 2024-August 2025: $1,944,000,RYl: $810,000,RY2:
21 $795,000)
22 This Business Case represents hardware and software that end users need to perform day-to-
23 day job functions. This may generally include personal computers, tablets, print/copy/scan
24 systems,television displays,monitors,mobile phones etc.,and the basic software productivity
25 tools. Without Basic Workplace Technology Delivery hardware and software,productivity is
26 significantly impacted and can become a blocking factor, as some job functions are extremely
27 difficult to perform without digital productivity tools. Additionally, Basic Workplace
28 Technology Delivery deployments that fall under this Business Case are often in short notice,
29 and minimum inventory quantities are maintained to meet business value time frames. The
30 Business Case is structured in such a way to handle both planned and unplanned short-cycle
31 business demand to deliver basic technology items to all job functions and office areas.
32
33 Control and Safety Network Infrastructure (July 2024-August 2025: $2,443,000, RYl:
34 $457,000, RY2: $2,108,000)
2 Per Order 36236,in Case No.AVU-E-24-04,the Commission authorized a 15-year depreciable life for certain
OMS/ADMS software assets transferring in 2025,and a 12-year remaining life of the overall project,for software
assets transferring in 2028.
Manuel, Di 16
Avista Corporation

I The Control and Safety Network Infrastructure Business Case invests in network assets that
2 deliver reliable network communication solutions that allow Avista to manage and operate
3 our electric grid assets, gas network assets and safety communication systems. The Control
4 and Safety Network Infrastructure enables the ability to remotely monitor,control,and operate
5 critical business and safety systems. These systems include those that connect users in
6 emergency or safety situations, control generation assets, maintain and expand network
7 transport systems that enable push-to-talk radio connectivity for field crews and other
8 personnel, deliver communication networks for protective relays, and supervisory control
9 by providing data from transmission and distribution assets in the field. 2024-2027
10 programmatic projects include investments in replacing end of life assets that mitigate cyber
I I and network security risks on the very networks that allow Avista to operate and control our
12 generation assets and refreshing legacy end-of-life network equipment that meets compliance
13 requirements for field worker communications.
14
15 Data Center Compute and Storage Systems (July 2024-August 2025: $3,098,000, RY1:
16 $1,367,000,RY2: $4,415,00)
17 This Business Case represents projects that are driven by performance and capacity. This
18 includes investment in server technology required to process and store massive amounts of
19 data to automate and enable business processes that support natural gas and electric customers
20 across service territories. The technology solutions to meet performance standards and
21 reliability requirements vary from hardware and software upgrades in an on-premise data
22 center, offsite storage, or service provider (cloud) facility, or in operating technology to
23 optimize compute and storage capacity. Avista's office, call center, and field staff require on-
24 demand information to meet customer needs, when providing natural gas and electric service
25 to customers across our service territory. The information can be critical to prevent, reduce,
26 or optimize an outcome that benefits our customers. Data center processing and storage
27 investment benefits all Avista customers,as it optimizes cost and productivity by not reverting
28 to manual business processing, which would result in increased labor costs, human error, and
29 overall processing delays. Direct annual offsetting benefits associated with this project is
30 expected at $152,000 for 2024 and 2025, and $350,000 for 2026 and 2027 on a system basis.
31 Idaho's share of these direct savings has been prorated over the Two-Year Rate Plan and
32 included in the Company's electric and natural gas revenue requirements as a reduction in
33 expense within pro forma Adjustments 3.10 (Rate Year 1) and 26.05 (Rate Year 2).
34
35 Digital Grid Network Expansion (July 2024-August 2025: $4,130,000, RY1: $2,692,000,
36 RY2: $2,674,000)
37 This program provides network solutions that optimize technology communication and
38 operations for field crews, inspectors, employees, contractors, and customers, and is critical
39 to maintain the ability of providing safe and reliable electric and natural gas service.
40 Technology investments under the Digital Grid Network program are necessary for expanding
41 and maintaining network assets for system reliability and business productivity throughout
42 our service territory. Not investing in this Business Case may result in reduced quality and
43 performance of our network system to transmit information, data and communication for
44 back-office transactions, operation systems, and customer service centers, across our service
45 territory. The Digital Grid business investments expand and maintain network assets in
Manuel, Di 17
Avista Corporation

I support of system reliability and business productivity, ensuring our ability to appropriately
2 and timely respond to the needs of our customers.
3
4 Dynamic Infrastructure Platform Enhancements (July 2024-August 2025: $881,000,
5 RY1: $262,000, RY2: $1,002,000)
6 The Dynamic Infrastructure Platform Enhancements Business Case is a program to invest in
7 and maintain the necessary products and skills to facilitate the discipline of infrastructure
8 automation within the Infrastructure Technology organization. This investment will allow the
9 technology department to manage and support the growing technology infrastructure footprint
10 and their complexity without a rapid growth of our staff. This solution will benefit our
11 customers across all jurisdictions as it will drive an increase in system performance and
12 reliability.
13
14 Endpoint Compute and Productivity Systems (July 2024-August 2025: $4,197,000,RY1:
15 $5,436,000,RY2: $6,646,000)
16 This program addresses technology obsolescence by delivering technology solutions required
17 to support day-to-day operations. Technology solutions under this program include, but are
18 not limited to, Personal Computer (PC) hardware and operating systems, various handheld
19 devices, printers, configuration and management systems as well as productivity toolsets like
20 Microsoft Office365. Each technology under this program undergoes regular review of
21 utilization and performance levels to determine if expected performance standards are being
22 met and to review the capacity requirements to maintain system reliability under the
23 established budget constraints. These reviews can result in the periodic need for additional
24 investments to address technology that is falling behind determined lifecycles performance
25 standards. Additionally, and as part of keeping up with vendor-driven technology
26 obsolescence, Avista's technology team manages technology lifecycle plans to maintain
27 system reliability.
28
29 Enterprise Communication Systems (July 2024-August 2025: $1,672,000, RY1:
30 $2,109,000,RY2: $1,822,000)
31 All Avista business functions are affected by this program, as it enables all day-to-day work
32 activities and automated business processes around communications. From service center to
33 call center to field work, every worker requires communications systems technology to
34 perform their business function and deliver natural gas and electric service to our customers.
35 These investments include video- and tele-conferencing platforms, electronic mail, instant
36 messaging, and calendar systems to support a hybrid digital workforce. The Enterprise
37 Communication Systems Business Case benefits Avista's customers by enabling the
38 communication between employees to be able to provide safe,reliable service and by enabling
39 communication to our customers.
40
41 Enterprise Network Infrastructure (July 2024-August 2025: $5,376,000, RY1:
42 $2,725,000,RY2: $1,905,000)
43 The Enterprise Network Infrastructure Business Case invests in network assets that deliver
44 network capacity and reliability for day-to-day enterprise business productivity and back
45 office system traffic. These investments deliver the enterprise network infrastructure that
46 serve access to data from one endpoint, system and/or user to another. 2024-2027
Manuel, Di 18
Avista Corporation

I programmatic projects include investment in a new network impact analysis solution that
2 allows us to optimize and baseline our network load and capacity, as well as investments that
3 remove cyber risks from our network by replacing end of life assets that carry and serve
4 enterprise network traffic at remote office sites, substations, district offices and generation
5 plants; investments that replace end of life enterprise network traffic load balancing solutions.
6
7 Environmental Control & Monitoring Systems (July 2024-August 2025: $1,563,000,
8 RYl: $872,000, RY2: $782,000)
9 The Environmental Control and Monitoring systems ensure reliable operation of Telecom
10 facilities by managing the performance and capacity of assets that support safety, control,
11 customer facing and back office automated business processes. Assets require specific
12 operating environments to prevent physical damage, such as temperature, humidity, and
13 power supply voltages. Environmental Control and Monitoring systems monitor and control
14 these environmental parameters and alert operational personnel when they fall outside of
15 optimal conditions. The alarms allow operational personnel to respond to issues that may
16 cause damage to other assets well in advance of any failure resulting in loss of business
17 automation processes.
18
19 ET Modernization & Operational Efficiency - Technology (July 2024-August 2025:
20 $7,008,000,RY1: $1,338,000, RY2: $3,123,000)
21 This program was designed to keep up with supporting the growth of business application
22 technology and complexity. The program invests in the digital systems and tools to address
23 the needs of the IS/IT department to support business applications. These technology systems
24 and tools provide functional enhancements that address ongoing changes in the workplace,
25 provide increased employee efficiency through the reduction of steps required to complete a
26 task, and make better use of Avista resources. The technology tools and systems under this
27 program benefit all Avista customers,as they support business application systems throughout
28 the Company.
29
30 Fiber Network Lease Service Replacement (July 2024-August 2025: $1,157,000, RY1:
31 $2,339,000,RY2: $1,314,000)
32 This project is a multi-year effort to transition, by 2027, Avista's use of leased fiber optic
33 cable, which transports emergency and control network data, to a private network
34 infrastructure. This transition aligns to the Company's network strategy, reduces operating
35 costs, and gains control over the 54 fiber segments for critical communication paths. The
36 technology investments under this Business Case benefit customers by investing in the
37 privately-owned fiber optic cable segments thereby mitigating the potential of increased O&M
38 costs for leased fiber in the future and having full control over the fiber that transports
39 emergency&control data. The underlying agreement expires in 2027 with an option to renew
40 for(5)five years.To reduce leasing costs and maintain control of critical infrastructure,Avista
41 will not renew the leased fiber agreement. Therefore, if this program stays on schedule and
42 maintains the appropriate priority, it will sunset in 2027 or 2028.
43
44 Land Mobile Radio & Real Time Communication Systems (July 2024-August 2025:
45 $3,674,000, RY1: $2,180,000, RY2: $1,052,000)
Manuel, Di 19
Avista Corporation

I The investments under this program provide the communication technology that enables real
2 time communication with natural gas and electric field staff. Due to the remoteness and
3 topology of the service territory, the technology investments span a wide range across field
4 radio sites where traditional commercial cellular or telecommunication services are not
5 available. The Land Mobile Radio & Real Time Communications Systems facilitates critical
6 communication between field personnel, dispatch, system operations, and other end users.
7 This radio system is used for normal day to day operation work, coordinating responses to
8 outage events, switching and tagging procedures, communication with external agencies
9 including Public Safety entities, and several other uses. It is a business-critical system used to
10 maintain day to day operations and respond to emergency situations.
11
12 Network Backbone Infrastructure (July 2024-August 2025: $5,322,000, RYl:
13 $1,585,000,RY2: $2,901,000)
14 The Network Backbone Infrastructure Business Case invests in network assets that deliver
15 and expand data and communication transport networks in support of system reliability and
16 business productivity for Avista. This network backbone infrastructure is the transmission
17 system to our digital network. Across Avista, we move very large amounts of enterprise,
18 control, and safety traffic types all via our network backbone infrastructures. 2024-2027
19 programmatic projects include investment in legacy end of life microwave transport system
20 assets, private fiber infrastructure investments and access points, and assets that manage the
21 movement and prioritization of traffic over this infrastructure.
22
23 NextGen Control System Networks (July 2024-August 2025: $6,649,000, RY1:
24 $7,305,000,RY2: $1,760,000)
25 This NexGen Control System Networks (NCSN) Program Business Case will administer
26 projects specifically scoped to replace products and services on our control system
27 communication networks that have been designed and provisioned over time division
28 multiplexing (TDM) methodologies. TDM based products and services are end-of-life, end-
29 of-support and are at the end-of-manufacturing. As vendors continue ramping down on the
30 manufacturing and support of TDM based products and services, LECs and other
31 telecommunication service providers continue removing these services from their own
32 product portfolios, recognizing that these services are no longer viable products to maintain.
33 Direct offsetting benefits associated with this project are expected at $10,000 for 2024 and
34 $20,000 for 2025 through 2027 annually on a system basis. Idaho's share of these direct
35 offsets has been calculated and included in the Company's electric and natural gas revenue
36 requirements as a reduction within pro forma Adjustment 3.10.
37
38 Technology Failed Assets (July 2024-August 2025: $1,041,000, RY1: $1,019,000, RY2:
39 $1,023,000)
40 This program includes a range of solutions from computers to hand-held radios carried by
41 field staff to printers in remote offices to networking equipment. Sometimes technology assets
42 fail prior to being refreshed as part of a lifecycle management program. Any failed asset can
43 cause downtime for an employee or system resulting in significant disruption to daily
44 operations across the service territory depending on where and to what asset the failure
45 occurred. To support these types of unplanned failures,the Technology Failed Assets program
46 was established and consists of technology assets meant for rapid deployment as failures occur
Manuel, Di 20
Avista Corporation

I and when repairs are not feasible. A technology inventory is maintained to quickly restore
2 business automation. This program provides benefits to customers by providing a technology
3 inventory to quickly restore business automation and reduce the downtime caused by the
4 failure. This Business Case is planning for laptop, mobile phone, printer, field area network,
5 audio visual devices, and monitor replacements when the assets fail,just to name a few.
6
7 Q. How do the Enabling Technology projects benefit Avista Customers?
8 A. Enabling technology benefits our customers by providing the foundational
9 technology infrastructure required to connect with our customers over the phone, web, text,
10 or the ability to process billing, meter reads, or communicate outages and restoration times
11 during an unplanned outage. It also enables our field workers to safely connect over the radio
12 across rugged remote locations or during storm restoration efforts that require significant field
13 coordination to maintain employee safety. Enabling technology is the foundation to delivering
14 natural gas and electric service safely to our customers.
15 Information Related to "Security" Proiects Listed in Table No. I (See Exhibit No. 12,
16 Schedule 1, names 290-350)
17
18 Q. Please describe any major changes in "Security".
19 A. In the Spring of 2021, President Biden's Administration launched a 100-day
20 initiative to secure our nation's critical infrastructure. The initiative focused primarily on
21 improving cybersecurity of industrial control systems of electric utilities. The initiative
22 represents swift, aggressive actions to confront cyber threats from adversaries who seek to
23 compromise critical systems that are essential to U.S. national and economic security.
24 Secondarily, in July of 2021, the Biden Administration expanded the initiative to
25 include natural gas pipelines. The initiative established voluntary cybersecurity goals, as well
26 as mandatory requirements that clearly outline expectations for owners and operators of
27 critical infrastructure. The voluntary goals and mandatory requirements are based on
28 cybersecurity `best practices'. Investments to meet the new mandatory obligations required a
Manuel, Di 21
Avista Corporation

I reprioritization of 2021 planned investments in various areas of Enterprise Security,Business
2 Continuity, and Disaster Recovery. Furthermore, should requirements continue to change,
3 based on ever-changing cyberthreats, further reprioritization will continue in future years.
4 Q. Please describe major investments in Enterprise Security — Physical and
5 Cyber Security, Business Continuity, and Disaster Recovery from July 1, 2024 through
6 August 31, 2027.
7 A. Avista understands that a safe, reliable, and secure energy infrastructure is
8 essential to the economies in the areas that we serve and our customer's way of life and that
9 intruders can use a variety of cyber and physical attacks to try and disrupt the delivery of safe,
10 reliable, and secure energy. Cyber and physical attacks can not only have a reliability impact
11 but also can lead to data breaches, ransomware, or other costly system repairs and threaten
12 employee safety. Based on information from our government partners in the Information
13 Sharing and Analysis Centers (ISACs), FBI, DHS, TSA, and State Fusion Centers, we know
14 the attacks continue to grow in size and complexity and therefore it is prudent that Avista
15 continues to invest in its cyber, physical, business continuity, and compliance programs.
16 Investments in "Security" primarily fall into cyber and physical security, followed by
17 investments in business continuity and meeting new compliance requirements.
18 Disaster Resiliency (July 2024-August 2025: $142,000, RY1: $9,000, RY2: $198,000)
19 Recovery is a critical business capability for Avista, as we have witnessed after a major
20 weather event when time is of the essence to recover from a storm. Avista's Disaster
21 Resiliency program Business Case (formerly Enterprise Business Continuity) is similar,
22 whereby readiness is critical before, during, and after an incident. Although many of Avista's
23 technology systems have built-in redundancy or high availability requirements,there are some
24 gaps that necessitate further investment. To identify these gaps, Avista conducts an annual
25 disaster recovery exercise that evaluates the effectiveness of its program, which includes
26 people, process, and systems. The results of these exercises, along with peer collaboration
27 with utility industry partners,provide Avista with a strong baseline from which to measure its
28 recover capabilities and channel the appropriate level of investment to address any identified
29 issues or risks. If we do not invest in our Disaster Resiliency continuity program, it can lead
Manuel, Di 22
Avista Corporation

I to our inability to recover from an incident affecting technology systems required to deliver
2 safe and reliable energy. So, while the date and time of an incident cannot be predicted,
3 prudency lies in the Company's ability to timely recover from an incident.
4
5 Enterprise Security (July 2024-August 2025: $3,660,000, RY1: $1,986,000, RY2:
6 $980,000)
7 Threat actors continue to evolve their tactics in response to our defenses and therefore
8 investments that were effective in the past, need to be enhanced with an upgrade or paired
9 with another solution to help mitigate new risk. Firewalls, anti-virus, and intrusion detection
10 systems all continue to evolve to ensure they are effective in preventing and detecting modern
I I attacks. Investing in physical and cyber security is a direct benefit to our customers, as it is
12 critical to the protection of the natural gas and electric infrastructure. It is also protecting the
13 Company's sensitive customer, employee, operating, and financial information. Unable to
14 predict when or where the next attack will occur requires a proactive security posture to
15 identify, protect, detect, respond, and recover from any incident type. This may include a
16 physical breach to a Company facility, such as a construction yard or substation targeted for
17 copper wire or precious metals that can be cashed in for recycling, or a data breach to capture
18 sensitive customer information or operational data critical to delivering electric and natural
19 gas service that can be used to perpetuate future attacks on the Company or its customers. In
20 either case, theft of a physical or cyber asset can result in unanticipated costs to remediate
21 damages, risk the safety and reliability of the energy system, or release sensitive data that the
22 Company stewards.
23
24 Facilities and Storage Locations Security (July 2024-August 2025: $2,003,000, RY1:
25 $362,000, RY2: $179,000)
26 This Business Case maintains security at our facilities and storage locations. Security remains
27 a concern at these locations. The locations contain people, equipment, and material that are
28 critical to support our day-to-day operations and, in turn, the delivery of safe and reliable gas
29 and electricity. A physical security incident at any of these locations may harm people,
30 damage equipment, or even restrict our ability to respond to customers. Investments under
31 this Business Case are prioritized based on risk to the people, equipment, and assets in each
32 of the Company's facilities and storage locations. Company vehicles, tools, equipment, and
33 spare parts often used to maintain our energy infrastructure and respond to emergencies may
34 be affected without continuous investment in physical security protections at our facilities and
35 storage locations.
36
37 Generation, Substation & Gas Location Security (July 2024-August 2025: $6,305,000,
38 RY1: $1,334,000,RY2: $1,045,000)
39 This Business Case covers physical security at the Company's generation, substation, and gas
40 locations. Many of these locations are remote,unmanned, and vulnerable, which makes them
41 difficult to protect. A physical security incident at any of these locations could deny, degrade,
42 or disrupt the delivery of energy. In addition, physical attacks can also give intruders access
43 to critical cyber equipment, which can lead to a cyber security event.
44
45 Identity and Access Governance (July 2024-August 2025: $558,000, RY1: $451,000,
46 RY2: $201,000)
Manuel, Di 23
Avista Corporation

I Avista's current Identity and Access Governance (IAG) program is a framework of business
2 processes, policies and technologies that facilitates the management of electronic or digital
3 identities. With an IAG framework in place, management can control user access to critical
4 information. The IAG program will create role-based system access profiles, define system
5 privileges, automate access management, and facilitate regular user access review and
6 validation. This solution will benefit Avista and its customers by adhering to the security
7 principle of`least privilege', whereby individuals are limited access only to information and
8 resources necessary to perform their current and intended job functions. It also reduces the
9 risk associated with individuals having broad access, to systems or to facilities, their roles no
10 longer require.
11
12 Security Compliance (July 2024-August 2025: $47,000, RY1: $53,000, RY2: $100,000)
13 This Business Case was originally titled NERC CIP Compliance in previous years. It was
14 focused on the cyber and physical security investments needed to meet new NERC CIP
15 standards. In response to various compliance agencies requiring updates or improvements to
16 Avista's cyber and physical security, the Company determined that a broader scope was
17 necessary to achieve and maintain NERC CIP, Western Electricity Coordinating Council
18 (WECC), Transportation Security Administration (TSA), Payment Card Industry (PCI),
19 Federal Energy Regulatory Commission (FERC), and other emerging security compliance-
20 driven requirements. Not being compliant is not a viable alternative, as it puts Avista's cyber
21 and physical security posture at risk.
22
23
24 Q. Referring to the individual Table No. 1 above, what is the overall level of
25 system capital additions for which you sponsor, and how does this capital investment
26 compare between the Pro Forma and RY1 and RY2 periods?
27 A. Illustration No. 3 below shows overall system capital additions (transfers to
28 plant) for IS/IT capital investment for the Pro Forma, RY1 and RY2 periods, of $109.8
29 million, $66.3 million and $83.1 million, respectively. As also noted in the illustration, the
30 "Pro Forma" period represents 14 months (or July 1, 2024 —August 31, 2025). Finally, this
31 illustration distinguishes between what are ongoing projects or programs from the Pro Forma
32 period ending August 2025,versus incremental projects that are estimated to transfer-to-plant
33 from September 2025 through August 2027 for RYI and RY2.
Manuel, Di 24
Avista Corporation

I Illustration No. 3 —IS/IT Plant Investment(System Transfers to Plant)
2 Avista IS/IT Capital Additions
3 S120 $'s in millions(System Transfers to Plant)
4 $100 $10.91"
5 $80
6 $60
7 $40
8 $20
9 $
Pro Forma RY1 RY2
10 Total $109.81i1 $66.3 $83.1
■Continuation of Ongoing Business Cases ■Additional Business Cases Initiated in RY1-RY2
11 0)Pro Forma period includes July 1,2024-August 31,2025 capital additions.
(')The incremental investment in RY2 is associated with the Energy Trade&Risk Management Implementation.
12
13 Notably, as can be seen from this illustration, most of the capital investment (100% in RY1
14 and 87% in RY2) relates to ongoing, multi-year efforts that continue over time, at various
15 funding levels. The rationale and justification for these ongoing projects, however, does not
16 change over time, only the fundin levels.evels. The additional Business Case listed in RY2 relates
17 to the Energy Trade & Risk Management Implementation ($10.9 million system) that is
18 discussed earlier in my testimony.
Manuel, Di 25
Avista Corporation

I V. IS/IT AND SECURITY OPERATING AND MAINTENANCE EXPENSES
2 Q. Please describe the general make-up of IS/IT and Security Operating &
3 Maintenance (O&M) costs.
4 A. IS/IT and Security O&M consists of centralized expense for labor and non-
5 labor security, information services and technology expenses primarily driven by increasing
6 trends of software vendors changing how they license and deliver software solutions, and by
7 capital investment across all areas of the Company, including Energy Delivery, Energy
8 Resources, Customer, HR, Finance, IS/IT, Security, etc. In general, for any investment the
9 Company makes that is enabled, supported, or secured by technology and requires ongoing
10 licensing, maintenance and support, those expenses will be centralized in IS/IT and Security
11 O&M.The expense impact of annual and multi-year operating agreements surrounding capital
12 investment reflects most of the overall incremental increase and are primarily driven by the
13 digital transformation of the utility.
14 Keeping pace with emerging technologies and taking advantage of the opportunities
15 digital technologies provide, drive the need for the Company to convert analog information
16 into digital form and to incorporate digital technologies into business processes and
17 interactions with our customers and within the utility itself. Some examples of investment
18 that support the Company's digital transformation include, Outage Management System
19 (ADMS), Customer Experience Platform, and Enterprise Security, to name a few.
20 Illustration No. 4 below, displays all IS/IT and Security O&M expense from 2021 through
21 2024.
Manuel, Di 26
Avista Corporation

I Illustration No. 4: Average Annual Growth Rate of Contracts, Labor & Periodic Non-
2 Labor(System):
3
4 Average Annual Growth Rate of Contracts, Labor& Periodic Non-Labor
5 50•001•0DO 2021 a Test Year Average Annual Growth
Rate:
6 45,000,00o Contracts:7%
Labor&Periodic Non-Labor:6%
40,000,000
7
35,000,000
8
30,000,000
9 25 000 000
10 20,000,000
1 1 15,000,000
10,000,000
12
5,000,000
13
2021 2022 2023 Test Year
14
■Contracts ■Periodic Non-Labor+Labor
15
16 As shown above in Illustration No. 4, IS/IT and Security system labor and periodic
17 (typically usage-based monthly, not quarterly/annual) non-labor expenses remain relatively
18 flat from 2021 through the test year, increasing at an annual average growth rate (AAGR) of
19 6%. During this same period,known and measurable contracts increased at an AAGR of 7%.3
20 The resulting change is driven largely by the need to support IS/IT and Security and non-IS/IT
21 and Security investments, changes to the licensing and delivery models of software vendors,
22 inflation and changing market conditions. An example of a contract with built in escalation is
23 with Oracle, which is the publisher of several of the Company's enterprise software systems
24 including Customer Care and Billing (CC&B), Meter Data Management (MDM) and Oracle
s Known and measurable contracts refer to contracts currently entered into by the Company and other parties.
Manuel, Di 27
Avista Corporation

I Financials. Historically these contracts increased roughly 4% annually, but Oracle increased
2 its prices by up to 8% annually beginning in 2023. Annual increases for IBM software
3 maintenance and support were consistent at 3%, though IBM upped their annual increase to
4 10%beginning in 2022.
5 Q. Please summarize the incremental IS/IT O&M expenses beyond the
6 Company's test period, included in this case.
7 A. In Ms. Schultz' Electric and Natural Gas Pro Forma Studies, she has pro
8 formed security, information services, and technology expenses. IS/IT and Security increases
9 in expense have been pro formed first, using a narrowed scope of incremental expenses to
10 known and measurable items that will be in place over the Two-Year Rate Plan beginning in
11 September 2025, reflecting an increase of approximately $1.03 million system. These
12 increased expenses represent non-labor impacts of annual and multiyear agreements for
13 products and services, licensing, and maintenance fees for a range of centralized information
14 services. These incremental expenditures are necessary to support the Company's cyber and
15 general security, emergency operations readiness, electric and natural gas facilities and
16 operations support,and customer services.This increase in IS/IT expense represents an overall
17 4.9% increase in known and measurable IS/IT expenses in Rate Year 1 above the historical
18 test period twelve months-ended 06.30.2024 (12ME 06.30.2024) levels.
19 Next the Company included incremental expected increases in IS/IT expenses,mainly
20 associated with general business systems as described below, totaling approximately
21 $399,000 in Rate Year 1 (RY1) and an additional increase of$435,000 in Rate Year 2 (RY2)
22 on a system basis. This incremental increase reflects an expected increase in IS/IT expense
23 above test year levels of approximately 1.9%annually over the Two-Year Rate Plan. Idaho's
Manuel, Di 28
Avista Corporation

I share of the total pro formed IS/IT expenses reflects an increase in expense of approximately
2 $254,000 for Idaho electric and$55,000 for Idaho natural gas in RY1, and $91,000 for Idaho
3 electric and $26,000 for Idaho natural gas in RY2.
4 Q. Will you please provide a summary table showing the O&M expenses pro
5 formed by the Company in this case?
6 A. Yes. Please see Table No. 2 below. This table includes the non-labor expenses
7 pro formed in the case over the Two-Year Rate Plan, above test period levels for RY1 and
8 RY2.
9 Table No. 2—Total Pro Formed Expenses—RY1 and RY2 Incremental (Non-Labor)
10 Rate Year 1 Rate Year 2
11 Total Pro Formed Expenses Incremental Incremental
Non-Labor O&M System $ 11434,531 $ 434,598
12 ID Electric Share $ 254,000 $ 91,000
13 ID Natural Gas Share $ 55,000 $ 26,000
14 Q. What is driving the increase in system non-labor O&M expense of
15 $1,434,531 in RY1 1 and $434,598 in RY2 as shown in Table No. 2 above?
16 A. The main driver in system non-labor O&M expense is capital investment in
17 Enabling Technology, Business & Operating Application Systems, and Enterprise Security
18 from areas across the Company as described earlier in my testimony. As digitalization drives
19 technology further and further into areas of the utility that traditionally were not as technology
20 dependent, nearly all capital investment - regardless of what functional area it supports -
21 include technology components that result in incremental increases to licensing, support and
22 maintenance expense for those systems.
23 Another significant driver is the increasing trend of software vendors changing how
Manuel, Di 29
Avista Corporation

I they license and deliver software solutions; examples include a shift from a perpetual license
2 to a subscription license,or from an on-premise solution to a cloud-based solution. In addition,
3 software vendors regularly increase the cost of ongoing maintenance and support to keep up
4 with the cost of enhancing, fixing and supporting their products, and to align with market
5 driven forces such as annual consumer price index increases and inflation.
6 As digital transformation increases the number and complexity of systems dependent
7 on information technology, the Company prudently negotiates annual and multi-year
8 agreements to normalize, control and manage IS/IT and Security expense to the benefit of our
9 customers. The majority of the adjustment in RY1 is the result of known and measurable
10 expense from those annual and multi-year agreements currently in place or continuation of
11 agreements expected, that have increased beyond the test period. A breakdown of the
12 incremental increase beyond the test period for RY1 expense of$1,434,531 and RY2 expenses
13 of$434,598 by technology type is include in Table No. 3 below:
14 Table No. 3: System Non-Labor O&M Expense (By Technology Type)
15 RY1 RY2
General Tech Type Test Year Incremental RY1 Incremental RY2
16 Enabling Technology $ 4,957,710 $ 361,994 $ 5,319,704 $ 166,522 $ 5,486,225
Business&Operating Application
17 Systems 13,781,244 1,085,366 14,866,610 312,339 15,178,949
Enterprise Security 2,519,534 (12,829) 2,506,705 (44,262) 2,462,443
18 Grand Total $ 21,258,488 $ 1,434,531 $ 22,693,019 $ 434,598 $ 23,127,617
19 Q. Table No. 3 includes increases of $1,434,531 and $434,598 in RY1 and
20 RY2, respectively, most of which is related to the Business & Operating Application
21 Systems. Please describe the reasons for the increase in the Business & Operating
22 Application Systems area.
23 A. The primary increases to the Business & Operating Application Systems
24 originate from non-IS/IT and Security items moving out of the construction phase of
Manuel, Di 30
Avista Corporation

I development. Once out of this initial phase, the Company recognizes the ongoing operating
2 and maintenance costs related to these projects. Some examples of the projects that are driving
3 the incremental increase are Sirion Labs CLM (Contract Lifecycle Management), ITSM (IT
4 Service Management), Salesforce's Marketing Cloud, and ADMS (Advanced Distribution
5 Management Systems). These projects are all slated to move from being under construction
6 to in service between the test year and RY1.
7 Further, the Company's Business and operating Application Systems have seen
8 contractual escalation related to Oracle, as noted above, which is the publisher of several of
9 the Company's enterprise software systems, including Customer Care and Billing (CC&B),
10 Meter Data Management (MDM), and Oracle Financials.
11 Q. What are the primary types of incremental IS/IT and Security non-labor
12 O&M expense?
13 A. The primary types of incremental non-labor O&M expenses include Hardware
14 and Software License support and maintenance, and Software Services and Subscriptions.
15 Hardware and Software License support and maintenance are costs associated with a
16 traditional licensing model where a capital asset license is purchased along with the required
17 license support and maintenance costs. Support and maintenance costs are the ongoing
18 expense portion associated with vendor provided security patches, bug fixes, incremental
19 upgrades, and expert technical support with pre-determined service level agreements.
20 Software Services and Subscriptions are costs associated with a less traditional but
21 increasingly more common licensing model where all or most of the license cost is considered
22 ongoing expense,rather than a capital asset.Examples include items like Software as a Service
23 (SaaS), data feeds, or site license subscriptions. Costs in this category range from solutions
Manuel, Di 31
Avista Corporation

I that enable or supplement on premise systems, to complete end-to-end solutions
2 (infrastructure, networks, computing, storage, hosting, etc.) with little to no on-premise
3 footprint. The incremental expenses included in this case and displayed above in Table No.
4 3, on a system basis, are re-categorized and shown by general cost types in Table No. 4:
5 Table No. 4: System Non-Labor O&M Expense (By Cost Category)
6
RY1 RY2
7 Row Labels Test Year Incremental Sum of RY1 Incremental Sum of RY2
Dedicated Voice and Data Circuits $ 103,357 $ 10,686 $ 114,042 $ - $ 114,042
8 Hardware License Support 1,000,948 555,969 1,556,918 28,641 1,585,558
Lease Expense-Equipment 100,779 24,776 125,555 - 125,555
9 Network Maintenance 17,940 - 17,940 - 17,940
Professional Services 605,583 6,978 612,562 (23,418) 589,144
Radio Tower Site Leases 286,736 37,553 324,288 827 325,115
10 Rental Expense-Equipment 125,080 4,087 129,166 - 129,166
Software License Support 10,058,104 635,554 10,693,657 294,740 10,988,397
11 Software Services&Subscriptions 8,950,681 149,872 9,100,553 133,808 9,234,361
Training 5,963 5,963 _ - 5,963
12 Wireless WAN 9,280 3,093 12,374 - 12,374
Grand Total $ 21,258,488 $ 1,434,531 $ 22,693,019 $ 434,598 $ 23,127,617
13
14 Q. Please describe what is being represented in Table No. 4.
15 A. As demonstrated,Table No.4 represents an alternative view of the incremental
16 adjustment from Test Year to RY1 and RY2, focusing on the general cost types of items that
17 make up the categories displayed in Table No. 3. As shown in Table No. 4, the largest single
18 driver of increased non-labor O&M costs is increases in software License Support, of which
19 the largest portion is a result of contractual escalation related to Oracle,which is the publisher
20 of several of the Company's enterprise software systems including Customer Care and Billing
21 (CC&B), Meter Data Management(MDM) and Oracle Financials.
22 Q. Are IS/IT capital projects the only driver of incremental IS/IT O&M
23 expense?
24 A. No. As described earlier in my testimony,information technology is prevalent
Manuel, Di 32
Avista Corporation

I throughout the utility and underpins most of the modern business and operating systems as a
2 result of the digital transformation of the utility.
3 Q. Provide an example of a non-ISAT driven capital investment that is
4 driving incremental IS/IT O&M expense.
5 A. The Customer at the Center Platform is an initiative that consists of three
6 program investment areas: Customer Experience Platform (CXP), Customer Facing
7 Technology, and Customer Transactional Systems. While these projects are information
8 system based, they are being sponsored outside of my area, yet causing centralized costs in
9 my area of responsibility. While components of Customer Facing Technology have been in
10 service for several years and drive incremental IS/IT expense, more recently CXP and
11 Customer Transactional Systems investments have gone into service in phases starting from
12 2018 through today and will continue. These non-IS/IT capital investments have driven
13 increases in current and pro-formed IS/IT expense.
14 Illustration No. 5,below, displays the percentage of IT, Security and Non-IT sourced
15 IS/IT non-labor O&M from the test year through RY1 and RY2. As is clearly demonstrated,
16 a significant portion of IS/IT non-labor O&M is driven by Security and Non-IS/IT areas of
17 the business.
Manuel, Di 33
Avista Corporation

I Illustration No. 5: IS/IT Non-Labor O&M Driven by Non-IS/IT
2 IS/IT Non-Labor O&M Driven by Non-IS/IT
loom
3 90•00
80%
4 70%
60%
5 S0•O/0
40%
6 30%
20%
7 10•00
0%
8 Test Year RY1 RY2
■Enabling Technology(IT) ■Enterprise Security ■Business&Operating Application Systems(Non-IT)
9
10 Q. Describe how technology system support and maintenance service
1 1 contracts provide value and benefit customers.
12 A. Technology systems are becoming more integrated and complex as business
13 transactions become more integrated and automated. These technology systems require
14 regular maintenance activities to stay current on security vulnerability patching, software
15 defect patching,and various software functionality changes.Due to the increase in complexity
16 of these systems, vendor support is needed to assist with root cause analysis when
17 troubleshooting failures in the system. Without support and maintenance services for these
18 technology systems the Company and our customers would experience longer system
19 downtimes due to complexities of root cause analysis. In addition, the Company would be at
20 an increased risk of malicious activities in our technology systems if we did not have access
21 to software vulnerability patches, and our ability to optimize and maintain the business value
22 of the technology system would be degraded.
23 Q. How has Avista focused on managing its overall IS/IT expenses for the
Manuel, Di 34
Avista Corporation

I benefit of its customers?
2 A. Avista employs several approaches to regularly assess,review, and take action
3 to manage and control IS/IT costs. One approach is through software application license
4 acquisition,renewal,and recovery.A software analyst works in conjunction with our technical
5 and business subject matter experts to negotiate right-sized licensing, and to review and
6 validate the value and use of software applications to identify opportunities to reduce and
7 remove unused license and maintenance costs prior to any renewal of software agreements.
8 An example of this practice from the current year occurred when ahead of the license
9 renewal for our data analytics platform we analyzed license assignments and usage. Our team
10 examined reporting from the platform to identify users that may not be fully leveraging the
11 service or do not justify the assigned license cost. Additionally, we surveyed users to
12 determine how the service was being used, and whether there was a lower cost/no cost
13 alternative that would meet their needs.
14 Avista regularly evaluates all available purchasing options from our software vendors.
15 In the process of renewing Enverus Load Forecast SaaS subscription the vendor initially
16 provided a proposal that represented an 8%rate increase over the previous term. By engaging
17 with the vendor we were able to negotiate a 3 year agreement that eliminated any price
18 increase for the first two years,with a controlled 5%increase for the third year. Additionally,
19 we were able to get language included to limit any future price increases to 5%. This provides
20 Avista with price protection and allows for accurate budget forecasting.
21 Another approach Avista takes to manage and control IS/IT costs is to identify
22 opportunities to consider annual and multi-year agreements with software and service vendors
23 when business needs align with the duration of the agreement. These agreements allow Avista
Manuel, Di 35
Avista Corporation

I to lock in pricing at or below current or expected market pricing, providing protection from
2 adverse market conditions, which benefits both Avista and our customers. An additional way
3 IS/IT looks to reduce expense over time is to seek further discounts from vendors in exchange
4 for pre-payment of annual and multi-year agreements. Avista prudently approaches pre-
5 payment of software agreements which are considered and agreed to when the benefits of
6 prepayment outweigh the cost, or where the vendor requires it as part of the agreement.
7 Q. What are other methods Avista uses to manage its overall IS/IT expenses
8 for the benefit of its customers?
9 A. Another method which has been discussed above is the use of digitalization,
10 an industry-wide strategy that requires additional investment in IT's support capabilities. As
11 existing and new services are digitalized, IT departments are experiencing a significant
12 increase in workloads. Although these increasing workloads are expected, we actively work
13 to decelerate the associated cost increases using automation technology and changes to our IT
14 operating models.
15 Other examples of practices to manage and control IS/IT expense include training
16 employees to use mobile devices to scan documents and temper investment in
17 printing/scanning technology, and working with our Supply Chain department to negotiate
18 volume rebates ($764,004 in discounts from 2022 across capital and expense projects), and
19 early pay discounts ($116,312 in discounts from 2022, and$43,908 in 2023 through October,
20 across capital and expense projects) for technology products and services procured each year.
21 Those savings, among others, have been captured in proposed rates.
22 Q. Does this conclude your pre-filed direct testimony?
23 A. Yes.
Manuel, Di 36
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. 12
AND NATURAL GAS CUSTOMERS IN THE ) OF
STATE OF IDAHO ) WAYNE O. MANUEL
FOR AVISTA CORPORATION
(ELECTRIC AND NATURAL GAS)

Exhibit No. 12,Schedule 1
Capital Investment Business Case Justification Narratives Index
Business Case Name Page Number
Enterprise Technologv Capital Proiects
Customer Experience Platform Program 2
Customer Facing Technology Program 13
Customer Transactional Systems 27
Energy Delivery Modernization&Operational Efficiency 35
Energy Market Modernization&Operational Efficiency 48
Energy Resources Modernization&Operational Efficiency 57
Energy Trade&Risk Management Implementation 70
Financial&Accounting Technology 89
Human Resources Technology 100
Legal&Compliance Technology 112
Outage Management System&Advanced Distribution Management System(OMS&ADMS) 124
Basic Workplace Technology Delivery 146
Control and Safety Network Infrastructure 156
Data Center Compute and Storage Systems 164
Digital Grid Network 173
Dynamic Infrastructure Platform Enhancements 184
Endpoint Compute and Productivity Systems 196
Enterprise Communication Systems 205
Enterprise Network Infrastructure 214
Environmental Control&Monitoring Systems 222
ET Modernization&Operational Efficiency-Technology 232
Fiber Network Lease Service Replacement 245
Land Mobile Radio&Real Time Communication Systems 254
Network Backbone 263
NexGen Control System Networks 271
Technology Failed Assets 280
Disaster Resiliency 290
Enterprise Security 298
Facilities and Storage Location Security 309
Generation, Substation&Gas Location Security 320
Identity and Access Governance 332
Security Compliance 342
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 1 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
EXECUTIVE SUMMARY
The purpose of the Customer Experience Platform (CXP) Business Case is to implement the
technology necessary to support the emphasis on Customer Experience at Avista. The CXP
strives to deliver functionality that empowers all departments to work as one in support of
customers. The work executed under this program supporting delivering the personalized
experiences customers love and build lasting, trusted partnerships. CXP has created a single
interface to provide a consistent and comprehensive view of each customer, their preferences,
past interactions with the Company, communications, and history. This reduces confusion across
departments, allows our employees to handle an entire situation and answer customer questions
without having to transfer a call or tell the customer we will need to get back to them. This also
allows our customers to no longer have to repeat information with various employees of Avista
about a single situation because all interactions are being logged and made available to customer
facing employees. This platform brings our employees and our customers together by providing
a single lens into each individual customer and their interactions with us.
The CXP program continues to create new features in an iterative agile fashion for various
departments across our company and for our customers with a specific focus to the overall
customer and employee experience. These features may include (but are not limited to) the
following: Customer Account Management, Lead Management, Segmentation, Approvals &
Workflows, Communication Campaign management tracking, Start/Stop Service, High Bill
Analysis, Payment Processing, Field service request & tracking, Rebate programs, New
construction, and ability for CSRs to see location of field personnel. Through the implementation
of CXP, some systems will be replaced as their functionality is integrated into CXP. For example,
centralizing communication platforms, moving functionality from InforCRM to the CXP.
Not investing in the customer experience platform would put overall customer satisfaction at risk.
Lower customer satisfaction would result in higher costs in serving dissatisfied customers,
increased customer complaints to Avista and to our commissions, and a lack of trust with our
company. We are developing and enhancing this platform based on our strategy of putting the
customer at the center and to improve overall customer interaction and experience; if we do not
improve the customer experience by providing the proper tools to our employees to serve our
customers, then we put meeting current customer expectations at risk.
This program is intended to set the foundational technology and organizational structure in place
to enable the support of the experiences required of the utility of the future. This program's capital
costs are forecast to transfer to the"Customer Transactional Systems" and the "Customer Facing
Technology Program" business cases over the next 3 years.
Business Case Justification Narrative Template Version: February 2023 Page 1 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 2 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
VERSION HISTORY
Version Author Description Date
1.0 Stephanie Myers Initially approved 0611512020
2.0 Stephanie Myers Updated Executive Summary 06/26/2020
2.1 Stephanie Myers Additional content in narrative 0712112020
2.2 Stephanie Myers Additional detail added for cost avoidance 0712812020
3.0 Kim Henscheid Updated requested spend amounts 0710912021
4.0 Matt Halloran Annual Update 0910212022
5.0 Matt Halloran Annual Update,moved to new template
BCRT Christine Tasche Has been reviewed by BCRT and meets necessary requirements 04/28/2023
6.0 Matt Halloran Annual Update 5/02/2024
BCRT Joe Wright Has been reviewed by BCRT and meets necessary requirements 510212024
Business Case Justification Narrative Template Version: February 2023 Page 2 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 3 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $4,000,000 $4,000,000
2026 $3,000,000 $3,000,000
2027 $1,800,000 $1,800,000
2028 $1,000,000 $1,000,000
2029 $0 $0
Project Life Span 5 years
Requesting Organization/Department Customer Solutions
Business Case Owner I Sponsor Matt Halloran I Nicole Hydzik
Sponsor Organization/Department Customer Solutions
Phase Execution
Category Program
Driver Customer Service Quality& Reliability
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
The purpose of the Customer Experience Platform (CXP) Business Case is to implement
the technology supporting the emphasis on Customer Experience at Avista.
Our systems and how our employees transact with those systems are somewhat siloed in
nature. A specific department uses systems that are completely separate and specialized
to the job that department is performing. For example, customer service's primary role is
to help the customer and answer questions to the best of their ability. They can help a
customer with their bill, process a payment, create a payment arrangement, analyze their
usage, and create an activity for a field person to perform. The customer service
representative (CSR) does not have knowledge of where individual field personnel are
located, or how much availability our field personnel may have to meet with a customer. In
essence, this will provide a more holistic or 360 degree view of the customer.
This program enables the customer at the center strategy by creating transformative tools
for our employees that tie together multiple disparate systems to create a single lens to
better understand customer history and interactions across all workstreams and depts. The
Business Case Justification Narrative Template Version: February 2023 Page 3 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 4 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
CX platform will be enhanced over time and will eventually be used by all employees that
work directly with or support our customers (both electric and gas customers in all service
territories). These employees include but are not limited to customer service
representatives, field workers, account executives, construction workers, various
management roles.
This program has delivered an interface that can provide consistent information and a single
source of truth about our customers and their historical interactions with Avista. Having this
type of holistic interface reduces confusion across departments, allows our employees to
handle an entire situation and answer customer questions without having to transfer a call
or tell the customer we will need to get back to them. This also allows our customers to no
longer have to repeat information with various employees of Avista about a single situation
because all interactions will be logged and made available to employees. This platform
brings our employees and our customers together by providing a single lens into all
customer interactions.
From a strategic perspective, we are putting technology in place that will allow our
employees to create the experience that customers are increasingly expecting. Companies
that focus on great customer experience have higher customer satisfaction and loyalty
which will be increasingly important as the utility industry evolves and more customer choice
options are available.
1.2 Discuss the major drivers of the business case.
The major driver of this business case is Customer Service Quality & Reliability combined
with a focus on our corporate customer at the center strategy. The CXP program is a key
building block that empowers all our departments to work as one. It will enable us to deliver
the personalized experiences customers love and build lasting, trusted relationships. With
the Customer Experience Platform, customers will experience shorter lead times, less time
between follow-up activities because our system will escalate cases when the customer has
been waiting.
Customers will experience streamlined processes and the introduction of electronic
signatures. They will have the ability to chat with us virtually without having to pick up the
phone. The customer will be able to get communication through the channel they choose
(email, phone, print, text, etc.). Our customers will get communication that is specific and
personalized and therefore more relevant to them. If they need help paying their bill, our
communication will be targeted and focused on features that will help that customer, like
agency locations or new incentives. We will be able to log every interaction our employees
have with our customers, which should allow customers to avoid having to call multiple
different people within the company to address an issue. A single employee could help
answer multiple customer questions because the information will be logged and made
available to employees in order to streamline that customer experience.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 5 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
Avista's strategy is increasingly focused on putting our customer at the center of everything
we do. Part of this strategy is preparing for a future where customers will have more choice
for energy service and adjacent products and services. We want them to choose us
because of the exemplary experiences they have had with our company. It takes many
years to build the capabilities and associated improved customer satisfaction and if we defer
this work, we risk being far behind the curve and not meeting expectations that our
customers have around a desired experience.
This investment will also create internal efficiencies for our employees that interact directly
with our customers and those who are behind the scenes accomplishing tasks and work on
behalf of our customers. The transactions we will be providing in the customer experience
platform will be streamlined and take less time to complete. The CXP will also require less
training time for new employees and for new features.
If this work is not approved, all existing systems and business processes would remain in
their existing state with no new functionality added. This alternative would put overall
customer satisfaction at risk. Lower customer satisfaction would result in higher costs in
serving dissatisfied customers, increased customer complaints to Avista and to our
commissions, and a lack of trust in our company. We currently enjoy high customer
satisfaction scores, but if we do nothing, we are at risk of this going down.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strateiic Goals
Our corporate Mission Statement says simply: "We improve our customers' lives through innovative
energy solutions" and continues to say that "We put those we serve at the center of
everything we do." The foundation of the CXP work is rooted in that commitment and is
our key technology initiative aimed at delivering upon that strategy. As the program
matures it will continue to deliver value in many areas of the business and across multiple
customer journeys that will result in enhanced customer experiences.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
The detailed report that was created jointly by Salesforce and Avista that outlined avoided
costs can be found on the CXP Project Web Site: htti)s://siD2Ol6.cori).com/sites/si)/CXP/.
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 6 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The proposed solution is to continue to deliver organizational benefit via a companywide
"Customer Relationship Management" (CRM) system. The company has specifically
chosen to implement the Salesforce CRM, which comes with a multitude of benefits for
reliability, completeness of available feature set and supportability.
The CXP program will continue to create new features in an on-going agile fashion for
various departments across our company. These features include (but are not limited to)
the following:
• Quoting & Order Entry: Ability to develop quotes, cost estimates and assemble
orders related to an opportunity (construction work, etc.) based on products or
services that a customer is interested in (estimate upfront and ongoing costs for a
natural gas conversion based on expected usage, estimate the cost of connecting
a new home to electric and gas)
• Account Management: Ability to add, change, delete various attributes on an
account (contact information, billing preferences, and communication preferences).
Account management is also responsible for allowing all activities and related
information to be displayed on an account to assist communications teams in
communicating the correct information to the correct type of customer groups.
• Contract management: Create, update, negotiate, renew, and execute service
contracts with customers or potential new customers.
• Lead Management: Identification, qualification, tracking, and management of
potential new customers or interest from existing customers in adding a product or
service, such as: natural gas conversion, electrification, energy efficiency programs,
etc.
• Segmentation: Ability to divide a customer base into groups of individuals that are
similar in specific ways relevant to communication such as propensity to participate
in an energy efficiency program or convert fuel use, or interest in electric vehicle
charger, etc.
• Content management: process of organizing and consolidating pieces of content
and tagging schemes in an efficient way and storing them in a repository for use in
customer communications.
• Approvals & Workflows: Ability to design, implement and automate business
processes.
• Campaign management tracking: Planning, execution, tracking and analysis of a
communication plan (campaign); Campaigns involve programs or initiatives that the
utility needs to communicate to its customers (energy efficiency, e-billing, auto-pay,
energy assistance, etc.).
• Trouble Management: Ability to report, dispatch, resolve, and communicate updates
on outages or other emergencies (e.g. downed wires, gas odor, etc.) related to
customer's electric or natural gas service.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 7 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
• Credit & Collections: A set of processes and events to encourage payment of a
customer's delinquent balance. It involves notifying customers of past due
balances, providing alternatives to paying on time including payment arrangements,
severance of their electric or gas service and subsequent re-activation.
• Field service request & tracking: Ability to initiate and track all field activities
happening at a customer's service point. The work can be originated in either CC&B
or Maximo.
• Ability for CSRs to see location of field personnel
• Ability for all employees to see every interaction our customers have with us
• Ability for all written customer communication to be seen by all employees
• Ability to route customer inquiries to various departments and to see the history of
the routing, includes escalation as necessary
• Ability to send ad-hoc emails to customers through the platform
• Ability to post customer education to all social media platforms through one single
interface
• Ability to track conversations and tasks completed by employees with all types of
customers (residential, commercial, small/medium business) in all service territories
• Ability for an employee to be guided through an interaction with a customer
• Ability to chat with a customer through a single interface on myavista.com or the
Avista Mobile App
• Ability for field personnel to pull up a customer account through an app on their
mobile device
• Ability to track customer claims
CXP prudency should be evaluated based upon three criteria. First, cost avoidance as
discussed in section 1.5 above. Second, cost avoidance of technology systems that will
be reduced or eliminated as systems are combined into CXP. Third, improved customer
satisfaction and engagement as we improve business processes and make interactions
more proactive and personalized. Although the benefits in the third category are more
intangible and difficult to measure and assign a financial value to, they are an inherent
expectation from customers. Collectively, we are confident that those three benefits
combined make CXP a prudent investment.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
We are in a time when customers' expectations of their product and service providers have
never been higher, and their needs and desires are changing rapidly. In order to respond
to and stay ahead of the needs of our customers in this changing landscape, it is imperative
that we shift from a reactive, customer service system to a more proactive, customer-led
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 8 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
framework where we intentionally design customer experiences, products, and services that
can meet their changing needs and preferences. We want to make sure every touch point
with our customer is easy and effective for them to do business with us, with a desire to
improve the overall sentiment. By putting our customers at the center of our corporate
strategy, we are investing in building a Customer Experience (CX) system to meet the
needs of our current and future customers.
CX is how customers perceive their interactions with an organization. A customer's
perception starts the moment they become aware of our Company and is ultimately the sum
of all interactions they have with us. There are three dimensions to CX that are components
of an experience that increases customer satisfaction and ultimately creates customer
loyalty. These dimensions are as follows:
Effective: Effective interactions meet the needs of the customer. The product or
service must deliver value to customers or the experience will fail fundamentally.
Effectiveness is critical even though it is less likely to drive customer loyalty than
emotion.
Ease: Easy interactions let customers achieve their goals with minimal effort. When
alternative paths to value are harder, ease of doing business creates competitive
advantage.
Emotion: The best interactions evoke positive customer emotions and avoid provoking
negative emotions. Positive customer emotions can lead to customer retention,
enrichment, advocacy, and loyalty.
A positive CX creates customer loyalty and loyal customers mean more than retention.
Loyal customers become advocates, they are more likely to seek our advice as energy
advisors and follow safety messages. Loyal customers are more likely to be aware of and
participate in the variety of products and services we offer such as Comfort Level Billing,
energy efficiency programs, or distributed energy programs, to name a few. We also
believe that loyal customers are beneficial for the utility in the long-term, as competitive
forces take hold in our industry.
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
The business case will contain multiple projects within each calendar year. Each project
will be estimated, planned, and a benefit summary will be documented and provided as a
part of the chartering process. The total benefit achieved will be directly impacted by the
specific projects prioritized within a calendar year.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 9 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
A summary of this cost avoidance can be seen below; a total of $1,007,949 in cost
avoidance is estimated on an annual basis as the result of the work in this business case.
The split of expense vs capital for that estimated cost avoidance will be determined by the
split of projects/features delivered within the program.
AvoidanceCost Avoidance Measurement Estimated Cost
Case Deflection $610,609
Case Resolution Time $116,133
CSR Productivity(Back Office only) $163,125
Faster Onboarding $118,082
i0 • - •
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Implementing at a reduced capital cost, reduces the amount of features we are able to
deploy to our employees, resulting in a longer amount of time until the avoided costs
are experienced. Additionally, we'd delay realizing customer and employee benefit of
bringing together disparate systems, thus leading to continued inefficiencies and
decreases in customer experience and satisfaction.
Alternative 2:
Not funding would result in a stagnation of investments already made to date and not
realizing customer and employee benefit of bring together disparate systems, thus
leading to continued inefficiencies and decreases in customer experience and
satisfaction.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
We identified measurements to determine whether this investment would successfully
deliver on the objectives. We worked with Salesforce.com, the software vendor that is
the platform behind the CXP. Salesforce has hundreds of thousands of customers across
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 10 of 351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
many different industries. They track efficiencies through the implementation of their
software; and thus the avoided future costs due to their software. We will be using these
data points to determine success:
• Case Deflection:
o The CXP could deflect the number of calls placed into our call centers
o Salesforce's research: 17% case deflection
o Avista's conservative estimate: 10% case deflection
• Case Resolution Time:
o The CXP can reduce the amount of time it takes to resolve a case
o Salesforce's research: 24% improvement in resolution time
o Avista's conservative estimate: 10% improvement
• Employee Productivity:
o Due to streamlined tasks in the system, the CXP could save employees time
throughout their day, freeing them up to take more calls or complete more
tasks in a single day
o Salesforce's research for call center representatives: 12 hrs. saved per week
o Avista's conservative estimate for call center representatives: 3 hrs. saved
per week
o Avista's conservative estimate for other employees: 1 hr. saved per week
• Faster Onboarding:
o due to the ease of use in the system, training a user to use the CXP will take
less time and be more straightforward, thus allowing our employees to spend
less time training
o Salesforce's research: 26% reduction in the time to onboard/train
o Avista's conservative estimate: 20% reduction in the time to onboard/train
• Overall Customer Satisfaction:
o Customer satisfaction will go up as a result of this investment
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
This business case is a program and will be executed over the next 5 years in an agile
fashion. Multiple projects will exist per year and functionality will be released in an on-
going fashion. Transfers to plant will occur 3 or more times per year.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
This business case will be governed by the Customer Facing Technology Program
(CFTP), Customer Experience Platform (CXP) & Customer Transactional Systems (CTS)
Governance group. This group prioritizes and governs the projects under the Customer
Experience Platform throughout the entire project lifecycle. They then surface these to
the IS/IT PMO for execution.
Business Case Justification Narrative Template Version: February 2023 Page 10 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 11 of351

DocuSign Envelope ID:72C43A39-B44A-44F3-AEA8-4F6DDFC3F319
Customer Experience Platform Program
The CFTP Governance Group meets on a monthly basis.
Members include:
Latisha Hill —VP, Community & Chief Customer Officer
Jennifer Esch — Director, Customer Service
Nikdel Hossein — Director, Applications and System Planning
Alexis Alexander— Director, IT Infrastructure
Dana Anderson — Director, Corporate Communications
David Howell — Director, Generation, Production, and Substation Support
Vern Malensky— Director, Electric Engineering
Nicole Hydzik— Director, Energy Efficiency
Matt Halloran — Manager, Customer Technology Solutions
Graham Smith — Manager Applications Delivery and Application Support
Facilitators include:
Kim Henscheid — Program Manager, Customer Experience Platform
Ethan Jelinek—Sr. Program Manager, IS/IT
Decision making and general prioritization decisions for the business case and
programs will be documented and monitored through monthly meeting notes. Project
specific decisions will be documented within the PMO's current process through project
change orders.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Customer Experience Platform
Program and agree with the approach it presents. Significant changes to this will be
coordinated with and approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: Ntthrm. Date: May-02-2024 12:04 PM PDT
Print Name: Matt Halloran
Title: Manager, Customer Technology
Solutions
Role: Business Case Owner
DocuSigned by:
Signature: t� 'k Date: May-02-2024 I z:v PM PDT
Print Name: Nicole Hydzik
Title: Director, Energy Efficiency
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 11 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 12 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
EXECUTIVE SUMMARY
The Customer Facing Technology business case focuses on delivering value, ease and
transparency to all customers (ID, WA, and OR) through our various digital channels including
but not limited to MyAvista.com, text/SMS, inbound and outbound voice phone systems, and our
mobile app. Customer expectations are clear: companies are expected to deliver fast, easy,
personalized, and intuitive self-service options 24 hours per day and on many channels of
customer choice such as desktop computer, mobile device, tablets, and phone. Customers want
a consistent experience from their first interaction to the resolution of their issue or the completion
of their self-service transaction. They are not comparing Avista to other utilities, rather they
compare us to all the brands with which they interact including companies such as large tech
companies that are providing world class digital experiences. Those types of digital experiences
are becoming the norm and customers are expecting that level of service from all companies they
do business with, including Avista.
In addition to existing customers desiring to work with Avista in digital ways, new customers reach
adulthood every year and the expectations for self-service and digital engagement will continue
to increase as these new generations become our customers (Kulbyte, 2021). Funding the
Customer Facing Technology business case ensures that Avista can meet the customer where
they are and continue delivering value, ease and transparency to our customers.
Features in this business case include ways for our customers to interact with and transact with
Avista, including, but not limited to:
• Viewing bill and associated info (desktop web, mobile web, mobile app, automated
phone)
• Paying bill (desktop web, mobile web, mobile app, automated phone, payment kiosk)
• Viewing personalized usage info (desktop web, mobile web)
• Reporting outage (desktop web, mobile web, mobile app, automated phone, text/SMS)
• Viewing outage information (desktop web, mobile web, mobile app, automated phone,
text/SMS)
• Alerts and Notifications (Automated for Billing, Outage and Budget Alerts via email or
SMS)
• Stop, Start, Transfer Service (desktop web, mobile web, automated phone)
• Apply for Energy Efficiency Rebates (desktop web, mobile web)
In addition to these features for customers, this business case also includes the foundational and
technical work to run the digital channels. The underlying technology must be kept up to date in
order to be available for our customers. Upgrades and service packs are required to keep the
channels performing and secure. More functionality is included in this business case and is
referenced in Section 2.4.
Avista's digital channels continue to experience increasing usage year over year. If the digital
channels become stagnant and are not enhanced to accommodate adjusted consumer behavior,
then customer satisfaction will decline, resulting in increased calls to the call center and increases
in costs to serve our entire customer base.
Business Case Justification Narrative Template Version: February 2023 Page 1 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 13 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
VERSION HISTORY
Version Author Description Date
1.0 Stephanie Myers Initial approved 04/20/2020
2.0 Stephanie Myers Updated Executive Summary 06/26/2020
2.1 Stephanie Myers Additional content added 07/20/2020
2.2 Stephanie Myers Finalization of document 0712812020
3.0 Matt Halloran Annual Update 0910212022
4.0 Matt Halloran Annual Update and New Template 04/28/2023
BCRT Christine Tasche Has been reviewed by BCRT and meets necessary requirements 0412812023
5.0 Matt Halloran Annual Update 05/02/2024
BCRT Joe Wright Has been reviewed by BCRT and meets necessary requirements 05/02/2024
Business Case Justification Narrative Template Version: February 2023 Page 2 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 14 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $5,000,000 $5,000,000
2026 $5,500,000 $5,500,000
2027 $6,200,000 $6,200,000
2028 $6,500,000 $6,500,000
2029 $7,000,000 $7,000,000
Project Life Span Ongoing Program
Requesting Organization/Department Customer Solutions
Business Case Owner I Sponsor Matt Halloran I Nicole Hydzik
Sponsor Organization/Department Customer Solutions
Phase Execution
Category Program
Driver Customer Service Quality& Reliability
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
With every passing year, customer expectations for self-service ease, value and
transparency continue to evolve. Our customers expect Avista to be easy to work with,
demand more value for their energy dollars and have an increasing expectation of
transparency and availability of information. Gone are the days when only mailing and
having a drive up drop box for payments was acceptable.
The Company's customers have interest in a variety of offerings that can simplify their
interactions with Avista and give them more information about, and control over, their energy
use. This, combined with the expansive growth of technology, creates a customer
expectation that information is easy to find, payments are easy to make, communications
are proactive, timely, personalized, and available through a variety of channels.
The Customer Facing Technology Program delivers on ease, by providing efficient digital
self-service options to our customers. The Program delivers on value, as a self-service
transaction cost less over time than an equivalent live contact, and lastly, the Program
delivers on information availability, as self-service automations enable more information
transparency for the customer than at any point in our 135 year history.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 15 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
1.2 Discuss the major drivers of the business case.
The Customer Facing Technology Program delivers and supports tools that enable our
customers to self-serve through a digital channel that they choose and improves on our
ability to do automated and personalized outbound communications. Improvement of the
digital customer experience is at the core of the Customer Facing Technology Program.
One of the major drivers of this business case is that Avista's digital self-service channels
are the primary way our customers choose to interact with our Company, and they continue
to get more and more use every year. In 2023, our self-service channels supported more
than 9 million customer contacts as compared to a little over 3 million in 10 years earlier, in
2013 (Figure 1). These channels provide ways our customers can self-serve and gain
access to a level of information that was not readily available to them in years past. The
customer desire for self-service is a common trend across all industries. In fact, 80+% of
all consumers now prefer self-service to live contact (NICE, 2022) and 70% expect a
company's website to include self-service options (Kulbyte, 2021). Avista's customers are
no different as evidenced by their behavior in choosing self-service to live contact by a ratio
of almost 18:1 in 2023 (Figure 1).
Customer Contact Counts by Channel(2009-2022)
12,000,000
10,000,000
8,000,000 — — ■Emails
■Proactive Notifications(Email,SMS,App)
■Mobile App Sessions
6,000,000
d,Text Conversations
■Web Visits
4,000,000 ■EVP/NR Handled Calls
■Live Agent Phone Calls
2,000,000
0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Figure 1: Customer Contact Counts by Channel
Customer expectations are generally set by interactions with organizations outside
the utility industry. Those customer service and self-service expectations then get
applied to their interactions with Avista. The investments in this business case will
provide tools to customers that they are familiar using with other companies. This
will keep customer satisfaction high, provide value for their energy dollars, and
provide an exceptional customer experience.
Another major driver for this business case is that our customers require the
Company to keep their information secure. All of Avista's self-service channels and
supporting technology platforms require ongoing upgrades and enhancements to
ensure the technology does not go out of support with software vendors and that the
technology continues to deliver the value that customers expect. Specifically, the
Business Case Justification Narrative Template Version: February 2023 Page 4 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 16 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
Company's customer facing channels require security and operating system
upgrades to ensure resiliency and security of customer related Personally
Identifiable Information (PII).
Additionally, our customers expect our digital self-service channels to be available
24/7. Avista must build our technology infrastructure and architecture to meet that
demand and do it in a cost-effective way. Our customers no longer tolerate website
outages related to system maintenance or reductions in performance related to high
web traffic, like is often observed during major weather events. They expect the
tools to be available at the moment of their need and/or choosing and sometimes
their need may be urgent. The Customer Facing Technology Program is required
to be able to deliver on that customer requirement.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
This work is needed now because customer expectations are not stagnate and our
technology systems are constantly requiring feature enhancements, version upgrades, as
well as backend changes. In parallel, new tools and options continue to materialize that our
customers grow to expect.
Customers expect superior performance of our technology systems and the availability of
tools and options similar to what they see on other industries digital channels. They are
constantly comparing their utility experience to experiences they have with other businesses
and "utilities," such as Amazon, Apple, Safelite, Comcast, etc. Avista must keep up with
customer expectations and provide value for their energy dollars that is tied to digital
experiences for utility services and do so in the most cost-effective way possible.
If this business case is not approved, we risk a major decline in customer satisfaction by
not meeting customer expectations. Figure 4 & 5.
If this business case is not approved, the Company risks increased calls into the call center
which is a more costly way to complete customer transactions. See Section 2.2
summarizing cost per customer contact via digital self-service vs live contact.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Avista's strategic vision is to put the customer at the center of everything we do. The
meaning behind this business case is to provide tools for our customers to interact with our
company in the way that the customers choose. This is 100% in line with our strategic
vision.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 17 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
A specific focus area is for our customers, "We must hold our customers' interests at the
forefront of all our decisions, operating our business by showing that we are transparent,
genuinely care, and are easy to do business with." This business case offers a choice to
our customers; therefore, we are easy to do business with. If a customer wants to avoid
talking to a customer service representative and pay their bill online, sign up for alerts and
notifications, or get information on the mobile app regarding their outage, they can do that
within seconds or minutes.
Our mission is "We improve our customers' lives through innovating energy solutions."
Some of the planned work in the coming years will provides functionality that enables
customers to become more in control of their energy use. By providing these digital channel
tools to our customers we are facilitating understanding of how they are using energy and
thus allowing them to more effectively manage their energy and see where they may be
able to save money or repair underperforming appliances. This business case enables
innovative customer interactions and provides immense value to our customers, both in
terms of how they interact with us, but also through reductions in the cost to serve
1.5 Supplemental Information - please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
Live Agent EVP/IVR Proactive
Year Phone Handled Web Visits Text Mobile App Notifications Agent
Calls Calls Sessions (Email,SMS, Emails
App)
2009 930,585 735,938 1,451,840 - - -
2010 790,406 753,613 1,587,786 - - -
2011 811,762 708,310 2,001,136 - - -
2012 748,840 675,436 2,228,809 - - -
2013 734,771 667,107 2,349,995 - - -
2014 748,891 706,042 2,770,632 - - -
2015 722,241 814,363 3,474,739 56,723 - 78,612 -
2016 685,966 755,271 2,838,599 3,704 41,984 40,510 -
2017 693,863 875,424 3,466,919 3,566 107,462 312,041 48,552
2018 626,910 1,029,601 3,770,243 4,691 104,786 469,133 24,366
2019 615,229 1,131,232 4,406,233 8,665 282,974 639,375 31,581
2020 491,774 1,145,869 4,209,265 12,460 859,348 817,039 37,936
2021 459,067 1,404,306 4,708,597 27,969 1,368,740 1,484,633 35,432
2022 468,381 1,297,024 4,590,879 9,103 1,601,123 1,307,837 37,134
2023 480,342 1,470,215 5,085,552 8,614 1,707,771 1,431,453 29,855
Table 1: Customer Contacts by Channel Summary Table
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 18 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
Avista has demonstrated evidence that when we add customer requested features to our
channels it drives adoption and use of that channel. In Q1 of 2019, Avista deployed the `pay
my bill' capability within the mobile app channel. As demonstrated in Figure 2 below,
customer adoption of the mobile app increased markedly based on the availability of that
feature, and has continued to increase over time.
Mobile App Sessions Over Time
250,000
200,000
:50,000
100,000
50,000
h I� r r r a0 m a0 00 m a0 O Q Ot O O O O O O O O O � N ry N Nf HI m
O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O O
N N N N
Figure 2:Avista Mobile App Usage Over
This business case provides self-service options for our customers through our digital
channels. Automated self-service tools reduces amount of manual work our employees are
performing on behalf of our customers. Less follow-up is required between CSR's and other
employees because customers are able to self-serve and gather information on their own.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The recommended solution includes a multitude of self-service functionality additions and
enhancements. Under the leadership of the Customer Technology Governance Team, the
Program undergoes monthly assessment and prioritization of deliverables to ensure the
Customer Facing Technology Program is aligned with current customer and business
needs. Please note that the list below is updated and reprioritized regularly based on
customer and business identified needs and as such, items listed below may be removed
or deprioritized at a future date. Deliverables within the Customer Facing Technology
Program could include enhancements to (but are not limited to) the following:
Business Case Justification Narrative Template Version: February 2023 Page 7 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 19 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
Self-Service Functionality Enhancements
• Viewing bill and associated info (desktop web, mobile web, mobile app, automated
phone)
• Paying bill (desktop web, mobile web, mobile app, automated phone, payment
kiosk)
• Viewing meter data and usage info (desktop web, mobile web)
• Outage Reporting (desktop web, mobile web, mobile app, automated phone,
text/SMS)
• Viewing outage information (desktop web, mobile web, mobile app, automated
phone, text/SMS)
• Start Service (desktop web, mobile web, automated phone)
• Stop Service (desktop web, mobile web, automated phone)
• Transfer Service (desktop web, mobile web, automated phone)
• Apply for Energy Efficiency Rebates (desktop web, mobile web)
• Reporting an Issue or Concern (desktop web, mobile web, mobile app)
• Alerts and Notifications (desktop web, mobile web, mobile app, automated phone,
text/SMS)
• Enroll in Payment Arrangements (desktop web, mobile web)
• Update Personal Contact and Account Information (desktop web, mobile web)
• AMI smart meter enabled personalized energy usage insights using customer facing
tools on the web and mobile application.
• Storm Center/Outage Map enhancements for an improved user interface, more
useful information and tools, enhanced alert features, admin event history module,
and map legend enhancements.
• Implementation of"Bill Image" generation software and/or vendor with the objective
of improving availability and value to the customer.
• Mobile App Upgrade —Addition of high frequency and high volume transactions on
the Mobile App that are currently available to customers via myavista.com (example:
Add the ability for a customer to view their Usage Data on the Mobile App). It may
also include Mobile App specific functionality that is optimized for that channel.
• Enhanced reporting for energy assistance to allow partner agencies to provide a
better experience for Avista's customers seeking bill assistance.
• Tools for customers who have their own onsite renewable generation (net metering).
• Ability for customers to schedule appointments and view how various work is
progressing through the pipeline (construction tracker, tree trimming status/work
tracker, etc.) —This work may reduce the number of calls to our Call Center and/or
Customer Project Coordinators.
• Ability to report streetlight outages via the web and mobile app. This may reduce
calls to the Call Center and reduce manual processes.
Technology Updates
• Web content management system maintenance, upgrades, and ongoing
enhancements. Some of this work will allow content editors to make updates to our
website and the ability to provide customer facing web updates in real-time and will
remove workload from our development team. The web content management
system is the underlying technology and is required in order to keep a website up
and functioning.
• Digital channels technologies maintenance, upgrades and ongoing enhancements.
This work covers digital channels technologies other than the web content
Business Case Justification Narrative Template Version: February 2023 Page 8 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 20 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
management system, such as vendor related systems like Storm Center, outage
map, agent web, InfoPortal, mobile app, IVR, etc.
• Customer systems resiliency work which includes redesigning existing technology
processes and integrations and the replacement of web services to industry
standards to improve upon our digital channels performance.
• Outage Resiliency improve the resiliency (availability) of our digital channels in the
face of high traffic or catastrophic events.
• Web maintenance and technical debt to ensure our website is up to date, secure,
accurate data presentment, updated customer information, banners and alerts,
security enhancements, server upgrades, license and certificate renewals, etc.
• Call Center application upgrades.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
As demonstrated in Figure 1 and Table 1, the digital self-service channels are the
companies most used and customer preferred channels. The second most used
functionality by customers are proactive notifications, such as automated emails and
text notifications. Both of these methods have higher quantities than live phone and
email contacts.
In 2023, Avista had 9,703,605 self-service customer contacts. If that stays the same
for 2024, and we invest $5,200,000 into the Customer Facing Technology Program,
that equates to approximately $0.54 per customer contact. Compare that to 2023
calculations for cost to serve the customer via live contact. In 2023, the yearly
average cost-per-call was roughly $10.55.
Based on data obtained from surveys of Avista Customers (Figure 3), up to 46% of
customers stated their `next action' would be to call customer service if the self-
service tool fails in the digital channels. As a result, if 46% of self-service customer
contacts were instead a phone call, that would equate to roughly $47M (9,703,605
x 0.46 x $10.55) in annual call center costs required to support customer demand
for information and service. We recognize that not all 46% are in reality going to
call or email the contact center, but a conservative estimate of even 10% creating a
contact center interaction is $10.2M per year in costs avoided. This means that the
digital self-service channels are critical to keeping our costs down.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 21 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
FUTURE PLANS OF H9e_
22022
Q
UNSUCCESSFUL VISITORS 04101122-06130i22
Mobile visitors who were unable to complete their task were most likely to call customer servloe.
What are non-accomplishers doing next?
(Multi-select)
•Not M1in Can custom_r servke •Return to tnc,ate later
M 1E Return to the site
37 later
Call customer 25/
service
46%
Nothing
29
Figure 3: Customer"Next Action" Survey Results
One balancing reality to acknowledge is that even though customers are making
less phone calls to Avista, as the more routine-type services can be managed
through our digital channels, the calls the company does receive are more
complex, taking longer to work through and requiring more care. Avista's
Customer Service Representatives have answered 42% less phone calls when
comparing 2023 to 2013 (See table 1). However, average call handle time has
increased in that same timeframe because `simple' transactions have largely
moved to digital self-service channels. Not only are our customers receiving more
value for their energy dollars through our digital self-service channels but our
customer service representatives are able to provide more time and attention to
those customers that do call in to solve more complex issues. This demonstrates
that investment in our digital channels provides a two-fold value to customers.
In summary, we expect the trend for digital self-service preference to continue.
With a $5.2M investment for 2025 and $5.6M for 2026, Avista can expect to keep
the cost per digital/self-service customer contact at or below $0.70, which is
extremely cost effective when comparing to the 2023 cost-per-call average of
$10.55.
This becomes especially important when considering that the Avista service
territory is currently experiencing growth (Jones, 2022) and every investment in
self-service capability results in relative cost-per-contact decreases. As an
example, Avista recently fully automated the `Start Service' process as a
deliverable under the Customer Facing Technology Program. Initial measures for
labor-based cost savings are greater than $150,000 annually when comparing to
the non-automated workflow that was replaced. Over the course of 5 years, this
should result in $750,000 labor cost savings via Avista Call Center's "Flex"
staffing model.
Business Case Justification Narrative Template Version: February 2023 Page 10 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 22 of 351

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Customer Facing Technology
With our flexible work force in the call centers, we can flex the staffing to meet call
volume. If calls increase, then we `flex' on more staff to maintain the level of
service. On the contrary, if calls decrease, then we staff at fewer hours for the
week and sustain this level of staffing, if the lower call volume is maintained.
Continuing to increase our self-service offerings enables Avista more opportunity
for labor savings.
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
There are no direct O&M reductions due to this capital business case, this business case
supports customer expectations related to availability of self-service transactions that
support customer value, ease and transparency.
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028
Capital $0 $0 $0 $0
0&M Avoided Call Cost Offset $10.OM $10.1 M $10.2M $10.3M
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1: Funding at a reduced level
In this alternative, Avista would implement some of the customer solution capabilities and
improvements listed in section 2.1, excluding those that require the help of outside
professional services. This alternative will delay some of the benefits to our customers
which may generate dissatisfaction and cause systems performance to degrade by
preventing us from maximizing the benefits of these previously funded core systems, such
as the myavista.com website, mobile app, and smart meter and load disaggregation
capabilities.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 11 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 23 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
Digital Self-Service customer satisfaction will be used to determine if this investment is
successfully delivering on its objectives. We receive a quarterly scorecard that measures
customer satisfaction for myavista.com. According to the most recent metrics for Q2
2022, Avista scored 81.2 points (avg of desktop and mobile score) as compared to the
ForeSee Website Index average of 68.5 points.
How are we doing?
an
Your CX Score
ii
Last 81.2
Avesta Utilities ® Utilities-Desktop
Ds 0Desktop Benchmark
+/-3.4 is significant at 90%0
How do we compare?
Average
79.3
6 71
Q
Veriit Wetsite kidex-Desktop Utilities-Deskicp EServices(Private and Public 82C-Desktop
Sector)-DeskW
Figure 4: Avista's Q4 2023 Desktop Customer Satisfaction Score and Comparison
How are we doing?
65
DO fimi_i*
Score
Mobile�'697
Last Quarter's Score: 85.8
Avista Utilities ® Utilities-
Mobile Phone/Tablet Sites
and Apps
+/-2-1 is significant at 90%Cl
How do we compare?
Awege
81.4 _
8
Utilities-Phonerlablet Sites and E-Services-Phone/iablet Sites 82C-PhonisTablel Sites and
Apes and Apps Apps
Figure 5: Avista's Q4 2023 Mobile Customer Satisfaction Score and Comparison
Business Case Justification Narrative Template Version: February 2023 Page 12 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 24 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
At this time, the company is not able to measure satisfaction for the mobile app or text
channels, however the consistent increase in mobile app usage lets us know that this
channel is being leveraged by customers to meet their needs.
The Company will also continue to track and monitor live customer contacts. If this business
case is successful in meeting customer expectations for self-service functionality, we'd
expect live customer contacts to remain the same or decrease from current levels. See
Figure 1.
The Company will also measure total self-service customer contacts. If this business case
is successful in meeting customer demand for self-service functionality, we'd expect digital
self-service contacts to remain the same or increase from current levels year over year. See
Figure 1.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The work within this business case will be conducted through a program that will contain
multiple projects. The work will transfer to plant most often on an integrated release cycle;
new features will go-live for customers 3 or more times per year.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
This business case is governed by the Customer Facing Technology (CFTP), Customer
Experience Platform (CXP)&Customer Transactional Systems (CTS)Governance group.
This group prioritizes and governs the projects under the Customer Solutions Portfolio
throughout the entire project Iifecycle. They then surface these to the IS/IT PMO for
execution.
The CFTP, CXP and CTS Governance Group meets on a monthly basis.
Members include:
Latisha Hill —VP Community Affairs and Chief Customer Officer
Wayne Manuel —VP Chief Information Officer and Chief Security Officer
Nicole Hydzik— Director Energy Efficiency and Customer Solutions
Jennifer Esch — Director of Customer Service
Nikdel Hossein — Director Applications and System Planning
Alexis Alexander— Director IT and Security
Dana Anderson — Director Corporate Communications
Paul Good — Director of Electric Operations
Vern Malensky— Director Electric Engineering
Decision making and general prioritization decisions for the business case and programs
will be documented and monitored through monthly meeting notes. Project specific
decisions will be documented within the PMO's current process through project change
orders.
Business Case Justification Narrative Template Version: February 2023 Page 13 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 25 of 351

DocuSign Envelope ID: C9D62CEE-43CE-46FA-96FA-BBF67F549559
Customer Facing Technology
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Customer Facing Technology and
agree with the approach it presents. Significant changes to this will be coordinated with and
approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: 64.OV' & Date: May-02-2024 12:03 PM PDT
2453B362CFD34F9...
Print Name: Matt Halloran
Title: Manager, Customer Technology
Solutions
Role: Business Case Owner
DocuSigned by:
Signature: luck- j�k Date: May-02-2024 12:18 PM PDT
114111
Print Name: Nicole Hydzik
Title: Director of Energy Efficiency and
Products and Services
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Reference:
Jones, P. (2022, July 28). Spokane County's Population Grows Faster Than Expected. Retrieved
from Spokane Journal of Business: https://www.spokanejournal.com/local-news/spokane-
countys-population-grows-faster-than-expected/
Kulbyte, T. (2021, May 4). THE VALUE OF CUSTOMER SELF-SERVICE IN THE DIGITAL
AGE. Retrieved from Super Office: https://www.superoffice.com/blog/customer-self-
service/
NICE. (2022). Retrieved from NICE 2022 Digital-First Customer Experience Report Finds 81%
of Consumers Say They Want More Self-Service Options I NICE
Business Case Justification Narrative Template Version: February 2023 Page 14 of 14
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 26 of 351

DocuSign Envelope ID: 1EF40FF3-CA70-446B-A34F-6027A0055084
Customer Transactional Systems
EXECUTIVE SUMMARY
Customer transactional systems are used to support the day-to-day business critical operational
needs of all our customers, internal users, third party partners and our regulators. These systems
include functionality such as: collection and storage of meter reads and meter data, storage and
access for all customer premise and service agreements, customer bills and billing history, energy
and assistance agency program reporting, rate design and rate implementation tools. To keep
these systems up to date and operational, the company must perform regular upgrades and invest
in enhancements that will benefit our customers, internal users, third party partners and
regulators.
We strive to meet the needs of our customers by offering new options and features and to also
ensure that the users of these systems can perform their jobs in the most efficient and timely
manner. It is important to be able to meet the request of our third-party partners and to ensure
we are reporting back accurately to our regulators. These systems are business critical and
foundational in our interactions with all our partners. We must keep these systems updated to
support new requests such as: new billing and rate options, product and service offerings,
scheduling appointments and tracking jobs, payment arrangements and payment options, and
meter data information.
Not investing in this technology would greatly reduce the ability to keep our major systems current
and fully operational. We would put significant risk on the ability to meet customer, third party
partner and regulatory expectations.
VERSION HISTORY
Version Author Description Date
1.0 Mary Silkworth Initially approved 07/15/2019
2.0 Stephanie Myers Update executive summary 06/26/2020
2.1 Stephanie Myers Additional detail 0712112020
2.2 Stephanie Myers Measurements added 07/30/2020
3.0 Heather Bruns Update r5-yearplanning 0710912021
4.0 Matt Halloran Annual Update 09/02/2022
5.0 Matt Halloran Annual Update,moved to new Business Case Template 04/28/2023
BCRT Christine Tasche 04/28/2023
6.0 Matt Halloran Annual Update for 5-yearplanning 05/02/2024
BCRT Joe Wright Has been reviewed by BCRT and meets necessary requirements 05/02/2024
Business Case Justification Narrative Template Version: February 2023 Page 1 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 27 of 351

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Customer Transactional Systems
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $4,500,000 $4,500,000
2026 $5,200,000 $5,200,000
2027 $5,800,000 $5,800,000
2028 $6,300,000 $6,300,000
2029 $6,800,000 $6,800,000
Project Life Span Ongoing Program
Requesting Organization/Department Customer Solutions
Business Case Owner I Sponsor Matt Halloran I Nicole Hydzik
Sponsor Organization/Department Customer Solutions
Phase Execution
Category Program
Driver Customer Service Quality& Reliability
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
At Avista, there are a number of Customer Transactional Systems that are used to support
the day-to-day business critical operational needs of our customers, internal users, third
party partners and our regulators.
These systems include functionality such as:
• Collection and storage of Meter Reads and Meter Data
• Storage and utilization of Customer Information such as Service Agreements and
Premise Information
• Storage of Customer Contact Information
• Customer Bills and Billing History
• Energy and Assistance Agency program reporting
• Rate Design and Modeling tools
• Rate Implementation Tools
• Field Activity (field visit) records initiation
• Customer Energy Efficiency Program Participation Records and Opportunities
Business Case Justification Narrative Template Version: February 2023 Page 2 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 28 of 351

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Customer Transactional Systems
To keep these systems up to date and operational, we must perform regular upgrades and
invest in enhancements that will benefit our customers, internal users, third party partners
and regulators. Technology and user expectations continue to grow, and we need to
execute on programs to meet those expectations.
We must meet the needs of our customers by offering new options and features and to also
ensure that the users of these systems can perform theirjobs in the most efficient and timely
manner. It is important to be able to meet the requests of our third-party partners and to
ensure we are reporting back accurately to our regulators. These systems are foundational
in our interactions with all our partners.
We must keep these systems updated to support new requests such as: new billing and
rate options, product and services offerings, scheduling appointments and tracking jobs,
payment arrangements and payment options and meter data information.
1.2 Discuss the major drivers of the business case.
This business case is driven by the need to consistently and accurately bill our customers,
keep track of customer accounts and provide a way for call center representatives and other
employees to keep customer accounts current. This business case also supports
enhancements to systems needed to track energy efficiency and data required to report to
our regulators. Work requests (`Field Activities') from our customers are managed and sent
to field personnel from our Customer Transactional Systems. Without these systems we
put our quality and reliability of serving our customers at risk.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Not investing in this technology would greatly reduce the ability to keep business critical
systems secure, current and fully operational. These systems require regular updates from
the software vendors and constant security updates to ensure our customer data is
protected. If this business case is not approved, we would put significant risk on the ability
to meet customer, third party partner and regulatory expectations for system performance,
accuracy and capability set.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
This business case aligns with the "Perform" focus area. At Avista, we have a variety of
"Customer Transactional Systems" that are used to support the day-to-day operational
needs of our customers, internal users, third party partners and our regulators.
For The Company to provide "Better energy for life..." it is important to keep core business
systems functioning at the optimal level, not allow them to become stagnant and keep
Business Case Justification Narrative Template Version: February 2023 Page 3 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 29 of 351

DocuSign Envelope ID: 1EF40FF3-CA70-446B-A34F-6027A0055084
Customer Transactional Systems
current with industry and security standards. Continually improving, enhancing, replacing,
and building upon these systems keeps us in step with our value of performing and
continuously improving and finding better ways to get things done. This concept is directly
stated in our mission statement, "Our focus on performance today is critical to serving our
customers well..." and is a demonstration of placing the customer at the center of everything
we do.
In addition to focusing on our customers, our employees are foundational to everything that
we do. Improving these systems also includes direct benefit to our employees and their
performance. They are using these tools daily to deliver value to our customers and the
communities we serve. If these systems aren't kept current and secure, then it negatively
will impact our employees ability to perform theirjob functions.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
CC&B/MDM Cumulative Updates/Upgrade: Direct impacts to our customers, Customer
Service, Construction Services, Rates, Energy Efficiency, Security, Remittance, and
Finance are among the many departments that utilize these systems along with specific
roles such as Customer Service Reps, Customer Project Coordinators, account executives
and regional business managers. This work will continue to keep our two most critical
business applications updated to the most current versions and help to mitigate future
support and security risks.
DSM System: This system will impact the employees that keep track of energy efficiency
projects on behalf of our customers. Information in this system is tracked (for example:
kWh and therms saved through a lighting upgrade in a supermarket)and reported to energy
efficiency governing bodies.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The proposed solution is to continue to invest in enhancement and improvement of existing
customer transactional systems that are core to Avista business functions. It is considered
a prudent investment as it provides business efficiencies, alignment to current security
standards and ensures customer information, billing, metering and field activity information
is accurate.
The Customer Transactional Business Case will fund the following deliverables over the
next 3 years. Please note that this list is updated and reprioritized regularly based on
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 30 of 351

DocuSign Envelope ID: 1EF40FF3-CA70-446B-A34F-6027A0055084
Customer Transactional Systems
customer and business identified needs and as such, items listed below may be removed
or deprioritized at a future date.
• Customer Care and Billing (CC&B) Application Upgrade(s) inclusive of
security patches, bug fixes and feature enhancements.
• Meter Data Management (MDM) Application Upgrade(s) inclusive of security
patches, bug fixes and feature enhancements.
• Bill Image Rendering Enhancements
• Tivoli Server Replacement
• Real Time Address Validation updates and enhancements
• Server Updates and Replacements as necessary
• Net Metering Bill Presentment
• New Rate implementations
• Comfort Level Billing (CLB) Enhancements
• Payment Arrangement and Payment Plan implementation(s) and
enhancements.
• Field Activity Management Enhancements
• Energy Assistance back-end system enhancements
• Renewable Natural Gas program enrollment enhancements.
• Improving bill image (PDF) availability.
• Demand Side Management System enhancements that tracks all large energy
efficiency projects being conducted on behalf of our customers.
• Various products and services for customers including a time of use rate for
residential customers, a bundled service for transportation electrification
customers, and the ability to pre-pay for service.
• CCB/MDM Performance work is ongoing to maintain optimum performance for
CCB & MDM end users.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
Executing on this business case offers the company a multitude of benefits that range from
adherence to current security and regulatory standards to improved customer and employee
experience. Execution of upgrades, enhancements and implementation of new features
within the CTS business case enable core business functionality, and without it, the
company would be unable to effectively manage customer information, billing data, metering
data, credit, collections, rebates and field activity monitoring. Execution of this business
case is key to effective and efficient operation of the business.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 31 of 351

DocuSign Envelope ID: 1EF40FF3-CA70-446B-A34F-6027A0055084
Customer Transactional Systems
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
Given the intent of the business case is to maintain and enhance customer transactional
systems to maintain adherence to technology, performance and security standards, there
are no direct O&M reductions related to this business case. However, there are specific
projects executed within the Customer Transactional Systems program that will lead to
direct O&M offsets or savings. In the cases where this applies, it will be thoroughly
documented within the specific project charter and project management plan.
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
The intent of the business case is to maintain and enhance customer transactional systems
to ensure adherence to technology, performance and security standards. With some
specific projects executed under this business case, there are indirect offsets observed and
forecasted. As those projects are executed, the indirect offsets will be documented within
the specific project charter executed within this business case.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1: FUNDING AT A LOWER LEVEL
The "Funding at a Lower Level" option would delay benefits to our employees and
customers, users of the system and third-party partners. This option could potentially
increase O&M costs as we may delay our major technology system upgrades. In addition,
we would delay implementing security and functionality enhancements that would benefit
users of the systems and create operational efficiencies. Lastly, funding at a lower level
creates risk for customer billing and data security as this business case supports
enhancement of that functionality.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
Success measures are as follows:
• Number of integrated releases executed within a calendar year.
• Severity level 1 defects created as a result of integrated releases.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 32 of 351

DocuSign Envelope ID: 1EF40FF3-CA70-446B-A34F-6027A0055084
Customer Transactional Systems
• Number of bills successfully generated and processed annually.
• AMI metering commands sent annually.
• Project specific efficiency and O&M savings.
• Number of trackers completed annually.
• Direct O&M Savings and/or Offsets at an individual Project Level
• Indirect O&M Savings and/or Offsets at an individual Project Level
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The work within this business case will be conducted through a program that will contain
multiple projects. The work will transfer to plant most often on both an integrated and
independent release cycle; new features will go live for employees and/or customers 5-8
times per year.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
This business case is governed by the Customer Facing Technology (CFTP), Customer
Experience Platform (CXP)&Customer Transactional Systems (CTS)Governance group.
This group prioritizes and governs the projects under the Customer Solutions Portfolio
throughout the entire project Iifecycle. They then surface these to the IS/IT PMO for
execution.
The CFTP, CXP and CTS Governance Group meets on a monthly basis.
Members include:
Latisha Hill —VP Community Affairs and Chief Customer Officer
Wayne Manuel —VP Chief Information Officer and Chief Security Officer
Nicole Hydzik— Director Energy Efficiency and Customer Solutions
Jennifer Esch — Director of Customer Service
Nikdel Hossein — Director Applications and System Planning
Alexis Alexander— Director IT and Security
Dana Anderson — Director Corporate Communications
Paul Good — Director of Electric Operations
Vern Malensky— Director Electric Engineering
Decision making and general prioritization decisions for the business case and programs
will be documented and monitored through monthly meeting notes. Project specific
decisions will be documented within the PMO's current process through project change
orders.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 33 of 351

DocuSign Envelope ID: 1EF40FF3-CA70-446B-A34F-6027A0055084
Customer Transactional Systems
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Customer Transactional Systems and
agree with the approach it presents. Significant changes to this will be coordinated with and
approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: — Ral.(,(.6rajA, Date: May-02-2024 1 2:02 PM PDT
2453B362CFD34Fg...
Print Name: Matt Halloran
Title: Manager, Customer Technology
Solutions
Role: Business Case Owner
DocuSigned by:
Signature: Im
ab- Date: May-02-2024 I 2:18 PM PDT
14111
Print Name: Nicole Hydzik
Title: Director, Energy Efficiency and
Products and Services
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 8 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 34 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
EXECUTIVE SUMMARY
Energy Delivery Modernization and Operational Efficiency (EDMOE) Program' as a business
case supports both existing and new technologies leveraged by the Energy Delivery business
areas including Gas Engineering & Operations, Electric Engineering & Operations, Distribution
System Operations, Asset Management & Supply Chain, Facilities, Fleet Operations & Metering.
These technologies are used to automate and augment business solutions bringing efficiencies
and capabilities to support the delivery of energy to our customers. This support includes the
following: 1) improving the performance and capacity of business resources by implementing new
functionality in existing technologies. 2) improving the performance and capacity of business
resources by implementing overall new technologies. 3) modernizing existing technologies in
accordance with product lifecycles and technical roadmaps, typically through product or system
upgrades. Due to an increase in vendor-driven planned obsolescence, if these systems are not
refreshed on a regular cadence, the ability of Avista to meet customer, regulatory and compliance
requirements will be at risk. Although these are the primary purposes of this business case, other
benefits include cost savings, safety, regulatory compliance and innovative customer-focused
products and services.
The total program budget over the next five years is estimated to be $48.8M dollars. The funds in
this business case will be utilized to fund the EDMOE Program as detailed in the supplemental
information referenced in section 2.0 below. Though not exhaustive, the list of supported
technologies includes the following major systems: Metering solutions including Openway Riva
our predominant Automated Metering solution, GIS our Geospatial Information System, Maximo
our Enterprise Work and Asset Management System, DIMP our Distribution Integrity
Management Plan tool, ECM our Enterprise Content Management solution where this solution is
used in support of energy delivery activities, PI our plant information system where this system is
used to support our energy delivery activities, and Service Suite our mobile workforce
management system. Beyond these major systems, there are other miscellaneous applications
that are leveraged that also require periodic updates and enhancements. The years 2025-2029
will be focused on the systems and capabilities detailed below.
VERSION HISTORY
Version Author Description Date
1.0 Michael Mudge Initial version 0712112018
2.0 Michael Mudge Updated Tem late 0612912020
3.0 Michael Mudge Updated Information 0613012021
4.0 Michael Mudge Updated Information for 2023-2027 timeline 0710712022
5.0 1 Michael Mudge Updated Information for 2024-2028 timeline &merged Atlas into BC 0313112023
6.0 Michael Mudge Updated information for 2025-2029 timeline 0411112024
BCRT Steve Carrozzo Has been reviewed by BCRT and meets necessary requirements 0510112024
[1] "A Program is defined as related projects, subsidiary programs, and program activities managed in a coordinated manner to
obtain benefits not available from managing them individually.Managing projects,subsidiary programs,and program activities as
a program enhances the delivery of benefits by ensuring that the strategies and work plans of program components are responsively
adapted to component outcomes,or to changes in the direction or strategies of the sponsoring organization.,"Project Management
Institute Global Standard,The Standard for Program Management,Fourth Edition.Page 3(Copyright 2017).
Business Case Justification Narrative Template Version: February 2023 Page 1 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 35 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $11,036,198 $9,397,929
2026 $10,971,786 $12,610,055
2027 $5,699,662 $4,492,870
2028 $13,985,237 $15,192,030
2029 $7,030,715 $7,030,715
Project Life Span Ongoing Program
Requesting Organization/Department Energy Delivery
Business Case Owner I Sponsor Michael Mudge I Hossein Nikdel
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
The Energy Delivery and Shared Services (Fleet, Flight, Facilities, Supply Chain)
business area utilizes a suite of technologies and applications to execute ongoing
business processes better and more efficiently. As these business processes change,
or new opportunities for better or more efficient business processes emerge, these
technologies need to change as well. These changes often can be met through
leveraging the capabilities of existing systems with minor modifications or configuration
changes. We call these types of changes enhancements and set up minor programs to
support these activities. Examples of this type of activity includes the GIS and Maximo
enhancement packages. Sometimes these changes are larger and require a project of
their own, but still leverage existing in portfolio products. Examples include the Utility
Network and Mobility in the Field projects which are modernizing the Esri based
Geographic Information System (GIS) infrastructure and digitizing work processes.
Other times these changes may require new systems altogether with new or different
capabilities. Regardless, these changes require technology resources (people)that are
versed both in the changing business processes and the systems being leveraged to
make the changes.
Business Case Justification Narrative Template Version: February 2023 Page 2 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 36 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
Additionally, this suite of technologies, whether the applications themselves or the
technologies supporting them (databases, operating systems, etc.) often require
upgrades to keep them current with vendor lifecycle roadmaps. The performance of
these upgrades often leverages the same resources as identified above, technology
experts who understand both the capabilities of the systems themselves as well as
strong familiarity with the business processes they support.
Finally, this business case additionally supports the capital purchases of licensing
necessary for the commercial software purchased to support the energy delivery
business areas.
Under this business case, we are referring to the technologies and applications
leveraged by the Energy Delivery business areas including Gas Engineering &
Operations, Electric Engineering & Operations, Distribution System Operations, Asset
Management & Supply Chain, Facilities, Fleet Operations & Metering.
These technologies are used to automate and augment business solutions bringing
efficiencies and capabilities to support the delivery of energy to our customers. This
support includes the following:
1. improving the performance and capacity of business resources by implementing
new functionality in existing technologies.
2. improving the performance and capacity of business resources by implementing
overall new technologies.
3. modernizing existing technologies in accordance with product lifecycles and
technical roadmaps, typically through product or system upgrades.
Although these are the primary purposes of this business case, other benefits include
cost savings, safety, regulatory compliance and innovative customer-focused products
and services.
The current major applications included in the Energy Delivery Program portfolio
include:
• Geospatial platform environment - ArcGIS solution(s)— Esri
o Enhancements to existing applications
o Transition to the Utility Network
• Enterprise Asset Management system — Maximo solution(s) - IBM
• Time Series Operational Data - Plant Intelligence (PI) solution(s)— OSlsoft
• Mobile Workforce Management— Mobile Dispatch solution(s)— Hitachi/Service
Suite
• Distribution Integrity Management Plan (DIMP) —JANA DIMP
• Fleet Asset &Work Order Management— FASuite solution(s)—Asset Works
• Crew Planning & Scheduling - Crew Manager solution(s) -Arcos
• System Operations Outage Management— CROW— Equinox
• ADMS —Advanced Distribution Management System - GE
• Metering solution(s)
o OpenWay Riva
o MV90
o Field Collection System (FCS)
o Fixed Network
o TWACS
Business Case Justification Narrative Template Version: February 2023 Page 3 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 37 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
1.2 Discuss the major drivers of the business case.
At the core of the EDMOE business case is the ongoing support and development of
the technologies that enable the Energy Delivery business areas including Gas
Engineering & Operations, Electric Engineering & Operations, Distribution System
Operations, Asset Management & Supply Chain, Facilities, Fleet Operations &
Metering. These technologies enable the workers in these various teams to respond to
customer requests faster; provide information to customers that is more accurate,
timely and complete; and improves customer satisfaction when they interact with
Avista. Other benefits for the company and our customers include cost savings, safety,
regulatory compliance and innovative customer-focused products and services. This
business case supports the ongoing changes necessary to improve the performance
and capacity of these business areas.
In addition to modernizing and enhancing traditional desktop applications, additional
mobile applications and digital field work processes will provide field staff with
applications for near real-time editing and data collection. For example, a mobile design
tool will enable functionality for a designer to perform designs at a job site, providing an
improved customer experience, and will be fully compatible with the desktop design
tool. In addition, the Mobile tools will provide field personnel with powerful functionality
to meet customer responsiveness expectations; Global Positioning System (GPS)
guided turn by turn directions to work locations; electronic Receipt sent to the
customer's communication preference (email, text, etc.) at completion of work orders;
access to GIS data in the field; capture of as-built configuration, compliance data and
materials electronically by taking advantage of a variety of data sources, including
digital image data, keyed data, bar code scanned data, and GPS location data.
Although performance and capacity are the key driver, this business case where
necessary also supports the other major drivers listed.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
The suite of technologies managed under this business case and the business
processes they enable in many cases are core to Avista's ability to deliver energy safely
and reliably to our customers.
These technologies and the business processes they support evolve on a continual
basis based on both internal and external drivers. These drivers include continuous
improvements in business process, continuous improvements in safety, changing
compliance requirements, changing regulatory requirements, vendor driven change,
product obsolescence, changes in customer expectations, as well as changes in
system reliability.
Additionally, as these changes are ongoing in nature, they require a minimum level of
staff capability to support these necessary changes. If the work is deferred or delayed,
the technologies will not be in alignment with evolving business processes, the
technologies will not support improvements in safety, regulatory, or compliance, and
the technologies will not be aligned with vendor driven change. Further, if deferred or
delayed (meaning the labor required to do the work is made unavailable)when the work
Business Case Justification Narrative Template Version: February 2023 Page 4 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 38 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
is funded the staff required to implement these changes will not be readily available or
will likely be more expensive to hire.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization.
Avista has as its mission, to improve our customers lives through innovative energy
solutions: safely, reliably, affordably. Avista has as its Focus Areas: Our Customers,
Our People, Perform, and Invent. This business case supports the Technologies in the
Energy Delivery Business area. Half of all our customer contacts happen in the field as
we work to service and deliver energy to meet our customer needs. Every interaction
is an opportunity to better our customers lives through informed field workers who have
the necessary information and workflows to do their job. The strategy this work most
aligns with is Perform.
The systems that support these activities and are supported under this business case
include Maximo our Work and Asset Management system, GIS our Geospatial
Information System, and Mobile Dispatch/Service Suite our Mobile Work Management
system, and in 2025 we will be additionally supporting an Advanced Distribution
Management System. These systems are highly leveraged to enable the work our Field
Workers perform for our customers and supports them doing so safely, reliably, and
affordably.
This business case also supports our Metering systems — MV90, TWACS, Fixed
Network, and Itron RIVA. These systems are critical to obtaining our customers meter
reads for proper billing. PI is our Engineering Analytics platform that collects sensor
data from various distribution sensors including our Itron Riva Meters, this data is used
to analyze the performance of our distribution system and to support making changes
to improve efficiencies and identify anomalies requiring correction.
Work within EDMOE is strategically replacing the suite of custom Geographic
Information System (GIS) applications known as Avista Facility Management (AFM).
AFM is the system of record for spatial electric facilities in Washington and Idaho and
gas facility data in Washington, Idaho and Oregon and provides the connectivity model
to support:engineering and analysis applications and well as the electric and gas outage
management applications. The AFM applications and data model have been used for
nearly two decades and are approaching technology obsolescence. Having a modern
GIS will enable Avista to meet the changing needs in energy delivery such as
Distributed Generation and Smart Grids with Grid Edge Intelligence. It will also enable
the ability to model complex networks and equipment such as electric substations and
gas regulator stations to provide a more accurate view of the assets in the field. The
increased accuracy and currency of the data along with modern mobile applications will
provide field personnel with powerful functionality to meet customer responsiveness
expectations. Finally, the advanced modelling will enable improved analysis and
reporting capabilities.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 39 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.2
Avista's Energy Delivery and Shared Services technology systems are a necessity, as
they provide essential functions to our employees and customers throughout all service
territories. These vital systems require systematic upgrades and enhancements to
maintain reliability, compatibility, and reduce security vulnerabilities.
This funding level will provide the appropriate technology and development to meet the
periodic upgrades and enhancements prioritized by the Energy Delivery Modernization
and Operational Efficiency(EDMOE)governance committee. This funding is necessary
to mitigate the risk of unsupported applications, security liability, and significantly higher
costs because of the deferment of upgrades and enhancements, etc.
Investment prudency is reviewed by the EDMOE governance committee to ensure
alignment of initiatives through judiciously selected and implemented projects. The
funding requested as part of this program generally fits these initiatives and are
assigned to specific projects (with Project Steering Committee oversight) as they are
identified. Also, the Business Case owner will work with Steering Committee(s) to set
project priority and sequence over a five-year planning period, subject to any additional
funding changes as directed by the Capital Planning Group (CPG). Each program and
project steering committee meet regularly to review the demand to ensure that it aligns
with Avista's strategies. The Project Steering Committee oversees scope, schedule and
budget within their respective programs and projects and informs the Business Case
owner of any changes needing escalation to the Technology Planning Group (TPG) or
CPG for decision-making around resource or funding constraints.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The technologies and applications improved upon and delivered under this business
case automate and enable key business processes used today to deliver safe and
reliable energy to our customers. These technologies and applications require ongoing
enhancements and sometimes replacement to keep them in line with changing
business processes and with changing vendor roadmaps. Technical resources with
specialized skills who are familiar with these supported business areas are required to
make the ongoing changes. This business case supports the required changes, along
with the technical resources, for technologies and applications that support the Energy
Delivery business areas including Gas Engineering & Operations, Electric Engineering
& Operations, Distribution System Operations, Asset Management & Supply Chain,
Facilities, Fleet Operations & Metering.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 40 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).3
A thorough review of the list of technologies and applications currently providing
automation to Energy Delivery business processes was performed. Based on this
cataloging, two types of activities were identified, projects and programs. Projects are
typically used to support one-time major efforts such as software or platform upgrades,
technology replacement or technology implementation. Programs are typically used to
enhance existing technologies, keeping the technology in line with existing and evolving
business process or to facilitate implementation of additional digitization of business
process using existing technologies. For projects, estimates were developed based on
identified staffing requirements, software, and hardware requirements (license and
product costs), and professional service requirements. These were based on current
scope and schedule estimates. For Programs providing ongoing enhancements or new
functionality to support changing or developing business process the costs were
estimated based on staffing, license, professional service, and product costs identified
through historical trends.
2.3 Summarize in the table, and describe below the DIRECT offsets4 or
savings (Capital and O&M) that result by undertaking this investment.
There are no direct offsets for this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $ $ $ $ $
0&M $ $ $ $ $
2.4 Summarize in the table, and describe below the INDIRECT offsets5
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A $ $ $ $ $
0&M New DIMP Application $200k $200k $200k $200k $200k
0&M GIS Enhancements $212.5k $212.5k $212.5k $212.5k $212.5k
0&M Maximo Enhancements $425k $425k $425k $425k $425k
0&M AMI Enhancements $143k $143k $143k $143k $143k
3 Please do not attach any requested items to the business case, rather be sure to have ready access to such
information upon request.
4 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work under this
business case. Such savings could include reductions in labor, reduced maintenance due to new equipment,
or other.
5 Indirect offsets are those items that do not directly reduce the current costs of the Company, but may serve to
reduce future hirings,improve efficiencies,reduces risk(cost or outage),or allows current employees to focus
on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 41 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
0&M Metering Head End Upgrades $23k $23k $23k $23k $23k
0&M AMI System Reliability $1.OM $1.OM $1.0M $1.OM $1.OM
0&M Mobility in the Field $239k $239k $239k $239k $239k
0&M Utility Network Projects $425k $425k $425k $425k $425k
EDMOE Indirect Savings - EDMOE as a business case supports both existing and
new technologies leveraged by the Energy Delivery business areas including Gas
Engineering & Operations, Electric Engineering & Operations, Distribution system
Operations, Asset Management & Supply Chain, Facilities, Fleet Operations &
Metering. These technologies are used to automate and augment business solutions
bringing efficiencies and capabilities to support the delivery of energy to our customers.
The costs incurred under this business case across the next five years will be spent on
product licenses, hardware, professional services, and labor in support of the technical
systems in place across the Energy Delivery business area. Significant costs include
the cost to license and implement a new Distribution Integrity Management Plan-
(DIMP) solution, labor to continue enhancements to our GIS system in support of
business process, labor to continue enhancements to our Maximo solution in support
of business process, labor to upgrade our Maximo solution in line with vendor product
lifecycles, labor and hardware updates necessary to support enhancements and
upgrades of our AMI head end platform in support of business process and vendor
product Iifecycles, labor in support of upgrading MV90 and TWACS in line with vendor
product Iifecycles, labor and professional services for smaller applications in line with
vendor product Iifecycles. The timelines for this work have been developed with the
best information available today and represent ideal scenarios. It is subject to change
based on priorities, availability of shared labor, and our ability to find appropriate
professional services.
The new DIMP solution provides the following benefits:
• Additional transparency/clarity to Avista's gas integrity investment decision
making process.
• Adds probabilistic modeling into the gas system and addresses whether the
right amount of capital is being employed in the business unit and helps identify
the higher risk, more immediate maintenance targets.
• Promotes capital efficiency in terms of obtaining the most stakeholder value for
each dollar spent by the company.
• Creates language commonality, that can be used across business units,
incorporating a risk-based approach, to better understand and determine
investment priorities.
• Improves line of sight between business units and strategic objectives.
Currently, the implementation of DIMP is expected to result in a$200K annual reduction
in risk profile beginning in 2023.
Enhancements to Avista's GIS applications is anticipated to provide the following
indirect labor savings (This is separate and unique from those benefits achieved under
the Atlas Program):
GIS Enhancements Annual Indirect Offset Potential
Estimated Number of Users 200
Business Case Justification Narrative Template Version: February 2023 Page 8 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 42 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
Estimated Efficiency per User 5 minutes per day
Estimated Usage Days per year 200
Standard Hourly Labor Rate $85.00
Estimated Percent of Users in WA 75%
Estimated Annual Indirect Labor Offset $212,500
Maximo Enhancements Annual Indirect Offset Potential
Estimated Number of Users 400
Estimated Efficiency per User 5 minutes per day
Estimated Usage Days per year 200
Standard Hourly Labor Rate $85.00
Estimated Percent of Users in WA 75%
Estimated Annual Indirect Labor Offset $425,000
AMI Enhancements Annual Indirect Offset Potential
Estimated Number of Users 60
Estimated Efficiency per User 15 minutes per day
Estimated Usage Days per year 150
Standard Hourly Labor Rate $85.00
Estimated Percent of Users in WA 75%
Estimated Annual Indirect Labor Offset $143,437
AMI, FCS and MV90 Upgrades. These are meter head end solutions meaning they
collect the reads from all the meters and distribute them to the billing solution. From
time to time these solutions require updates to keep them in-line with vendor roadmaps
and to keep them secure and stable (operational) on newer technologies.
(Database, Operating Systems, Hardware). Instability of these systems can take days
to resolve and require resources from multiple disciplines including business analysts,
technical analysts, DBA's, and Central Systems engineers.
Meter Head End Upgrades Annual Indirect Offset Potential
Estimated Number of Users 5
Estimated Efficiency per User 480 minutes per day
Estimated Usage Days per year 9 3 faults per system
Standard Hourly Labor Rate $85.00
Estimated Percent of Users in WA 75%
Estimated Annual Indirect Labor Offset $22,950
Business Case Justification Narrative Template Version: February 2023 Page 9 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 43 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
Further, if these solutions were to become unavailable for longer periods, billing tasks
would require extensive manual intervention and put at risk the timely billing of
customers and result at minimum in substantial estimated billing. The AMI Riva
solution supports over 400,000 customers and process over $2M billed daily. The
MV90 solution, for our commercial customers, supports 208 customers with over
$2.3M billed daily. The FCS solution currently supports approx. 158,000 customers
and processes $490K daily.
Total Annual Indirect Labor Offset: $1,003,887
Modernizing Avista's GIS platform under the prior Atlas projects, future Utility Network
projects, and deploying mobile GIS applications under the Mobility in the Field project
is anticipated to provide the following indirect labor savings. The estimated savings are
based on a review a of current and previous GIS projects completed in the Atlas
Business case with a uniform efficiency value applied based on the types of
applications deployed.
Mobility - GIS Mobile Applications Annual Indirect Offset Potential
Estimated Number of Users 75
Estimated Efficiency per User 15 minutes per day
Estimated Usage Days per year 200
Standard Hourly Labor Rate $85.00
Estimated Percent of Users in WA 75%
Estimated Annual Indirect Labor Offset $239,063
Atlas, Utility Network, and GIS Modernization Annual Indirect Offset Potential
Estimated Number of Users 200
Estimated Efficiency per User 10 minutes per day
Estimated Usage Days per year 200
Standard Hourly Labor Rate $85.00
Estimated Percent of Users in WA 75%
Estimated Annual Indirect Labor Offset $425,000
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Avista could choose to stop upgrading the solutions and run them to the end of life of
the current version. This would reduce the funding needs to $13.6M dollars. The risk of
Business Case Justification Narrative Template Version: February 2023 Page 10 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 44 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
this approach is that the vendors typically require upgrades a minimum of every three
years to keep them current with their roadmaps. Running beyond three years would
mean running on an unsupported solution. This is true for application support from the
vendors and is often in line with the underlying technologies (operating systems,
databases, switches, security appliances, etc....). Running on unsupported versions
means Avista will not be able to receive patching from the application vendors.
Following this approach would introduce significant operational risk as well as
cybersecurity risk for each of the unsupported technologies. As Avista relies on these
technologies to support Energy Delivery operations, (both gas and electric), these
operations would be at high risk of moving to manual operations.
Alternative 2:
Avista could choose to no longer support additional operational efficiency work on the
applications that support Energy Delivery operations. These modern Commercial off
the shelf (COTS) applications are highly configurable to support the operational
challenges of delivering energy to our customers. Avista employs and/or contracts with
developers to configure these solutions to meet these challenges. An alternative to this
approach would be to no longer make these changes, locking in the solutions to a status
quo. One risk with this approach is, Avista no longer has the ability to leverage the high
initial investment made in these solutions to find new efficiencies. Attempts to leverage
the solutions to `do more with less' will not be possible. Another risk is requests to
modify the solutions to meet regulatory or compliance needs will also go unanswered
and will need to be solutioned outside the applications. A third risk is that it is these
same employees and/or contractors that perform the upgrades and thus would not be
available for that work. This risk is why the cost of this alternative is $15-$20M instead
of only $9M as alternative resources, (likely professional service contractors unfamiliar
with our implemented solutions), would need to be leveraged to perform timely
upgrades for the solutions.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
A thorough review of the list of technologies and applications currently providing
automation to Energy Delivery business processes was performed. Based on this
cataloging, two types of activities were identified, projects and programs. Projects are
typically used to support one-time major efforts such as software or platform upgrades,
technology replacement or technology implementation. Programs are typically used to
enhance existing technologies, keeping the technology in line with existing and evolving
business process or to facilitate implementation of additional digitization of business
process using existing technologies. For projects, estimates were developed based on
identified staffing requirements, software, and hardware requirements (license and
product costs), and professional service requirements. These were based on current
scope and schedule estimates. For Programs providing ongoing enhancements or new
functionality to support changing or developing business process the costs were
estimated based on staffing, license, professional service, and product costs identified
through historical trends.
Business Case Justification Narrative Template Version: February 2023 Page 11 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 45 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The timelines shown in the table below for this work has been developed with the best
information available today and represent ideal scenarios. It is subject to change based
on priorities, availability of shared labor, our ability to find appropriate professional
services and current estimates of scope.
Projects
/Programs/ 2025 2026 2027 2028 2029
Licenses
ESRI ELA Q1/2025 Q1/2028
(Licenses)
Schneider ELA Q1/2025 Q1/2028
(Licenses)
GE ADMS Q1/2028
Licenses
Maximo Q1/2025 Q1/2028
(Licenses)
GIS Q1/2025- Q1/2026- Q1/2027- Q1/2028- Q1/2029-
Enhancements Q4/2025 Q4/2026 Q4/2027 Q4/2028 Q4/2029
Maximo Q1/2025- Q1/2026- Q1/2027- Q1/2028- Q1/2029-
Enhancements/ Q4/2025 Q4/2026 Q4/2027 Q4/2028 Q4/2029
Upgrade
PI Q1/2025- Q1/2026- Q1/2027- Q1/2028- Q1/2029-
Enhancements/ Q4/2025 Q4/2026 Q4/2027 Q4/2028 Q4/2029
Upgrade
AMI Q1/2025- Q1/2026- Q1/2027- Q1/2028- Q1/2029-
Enhancements/ Q4/2025 Q4/2026 Q4/2027 Q4/2028 Q4/2029
Upgrade
ADMS Q1/2026- Q1/2027- Q1/2028- Q1/2029-
Enhancements/ Q4/2026 Q4/2027 Q4/2028 Q4/2029
Upgrade
MV90 Upgrade Q1/2025-
Q4/2025
TWACS Upgrade Q3/2026 Q2/2027
Service Suite Q1/2026-
Up rade Q4/2026
Misc. Upgrades Q1/2025- Q1/2026- Q1/2027- Q1/2028- Q1/2029-
Q4/2025 Q4/2026 Q4/2027 Q4/2028 Q4/2029
Utility Network Q1/2025- Q1/2026- Q1/2027- Q1/2028- Q1/2029-
Q4/2025 Q4/2026 Q4/2027 Q4/2028 Q4/2029
Mobility in the Q1/2025- Q1/2026- Q1/2027- Q1/2028- Q1/2029-
Field Q4/2025 Q4/2026 Q4/2027 Q4/2028 Q4/2029
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The EDMOE Business Case has three levels of governance: The Executive Technology
Steering Committee (ETSC), an Energy Delivery Director Governance group and Project
Steering Committees. The committees review monthly project status reports, which
identify project scope, schedule, and budget, as well as any risks and/or issues that the
Business Case Justification Narrative Template Version: February 2023 Page 12 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 46 of 351

DocuSign Envelope ID: 1041220A-D696-4DAF-9225-4D7B01470AAF
Energy Delivery Modernization and Operational Efficiency
(EDMOE) Technology
project team is currently working on. The Energy Delivery Director Governance group
reviews roadmaps and funding levels. The EDMOE Program Team reports progress
monthly to the steering committees and other stakeholder groups.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Energy Delivery & Operational Efficiency
Business Case and agree with the approach it presents. Significant changes to this will be
coordinated with and approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: �1�m6L�` Date: May-02-2024 1 11:21 AM PDT
Print Name: Mike Mudge
Title: Sr. Manager, Application Delivery
Role: Business Case Owner
DocuSigned by:
Signature: 56SL vt(mUala Date: May-02-2024 10:53 AM PDT
Print Name: Josh DiLuciano
Title: VP, Energy Delivery
Role: Business Case Sponsor
DocuSigned by:
Signature: F_""I At&ra Date: May-03-2024 2:36 PM PDT
Print Name: Kelly Magalsky
Title: Director, Shared Services
Role: Steering/Advisory Committee Review
cuSigned by:
Signature: Date: May-02-2024 1 11:44 AM PDT
F�60w-
Print Name: Hossein Nikdel
Title: Director, Applications & System Planning
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 13 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 47 of 351

Energy Market Modernization and Operational Efficiency
EXECUTIVE SUMMARY
Please provide a one-page summary of the business case and high-level summary of the projects or
programs included. Please describe the need for the project (a synopsis of the problem, the current state,
and recommended solution), alternatives considered, the cost of the recommended solution, applicable
metrics, customer benefits,Avista benefits or offsets derived from the investment, and risks, to customer and
Avista, if the business case is not funded.
Avista participates in two energy markets operated by the California Independent System
Operator (CAISO)—the Market Redesign Technology Upgrade (MRTU) and the Western
Energy Imbalance Market (WEIM). Avista began transacting with the CAISO in June 2017
through participation in MRTU, which allows entities outside the CAISO balancing
authority area to submit hourly energy bids at specific transmission intertie locations. This
day-ahead market gave Avista access to economically priced solar energy, provides an
opportunity to optimize internal resource flexibility by importing generation into CAISO,
and provides access to additional generation during resource reliability scarcity events.
Avista joined the WEIM on March 2, 2022. The WEIM is a real-time, intra-hour energy
market that facilitates regional resource dispatch on a five-minute basis to dispatch the
lowest cost resources across the entire market footprint, while balancing in-hour load and
resource obligations. This market allows participants to lower energy costs by either
dispatching less expensive resources to meet load obligations, or by increasing revenue
through the bidding of excess energy into the market. With more than 80% of the western
interconnection load transacting in the WEIM, the liquidity of the hourly bi-lateral market
has been significantly impacted, as market rules require participants to determine
resource schedules well in advance of the operating hour. As renewable generation
portfolios are increasingly mandated, market participation can ease the financial pressure
of integrating renewable resources, while maintaining reliability.
For Avista to maintain operations within the CAISO markets, it must remain compliant in
making required operational improvements and market design changes. Failure to comply
with the upgrades in the given timeframe will disrupt Avista's ability to gain access to cost-
efficient power in the market, lead to missed benefit opportunities, and may impact
Avista's ability to reliably operate the electric grid. CAISO releases annual market
technology updates and the estimated costs for these upgrades and enhancements is
$500k annually. They are typically applied simultaneously across multiple systems, with
primary impacts to and approvals from Power Supply, System Operations, Generation
Production & Substation Support (GPSS) and the WEIM Settlements team. Market
compliance obligations and business approvals will determine when an upgrade is
applied during a calendar year.
VERSION HISTORY
Version Author Description Date
1.0 Kelly Den el Business Case Template 612021
2.0 Kelly Dengel BC Narrative Update 512022
Business Case Justification Narrative Template Version: February 2023 Page 1 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 48 of 351

Energy Market Modernization and Operational Efficiency
3.0 Kelly Den el BC Narrative Update 9/2022
4.0 Kelly Den el BC Narrative Update/Revised form 5/2023
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements Steve 5/9/2023
Member Carrozzo
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2024 $500,000 $500,000
2025 $600,000 $600,000
2026 $500,000 $500,000
2027 $600,000 $600,000
2028 $600,000 $600,000
Project Life Span 5 Years?
Requesting Organization/Department Energy Delivery
Business Case Owner I Sponsor James Dykes Mike Magruder
Sponsor Organization/Department Transmission System Operations
Phase Execution
Category Program
Driver Performance & Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
�. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
For Avista to maintain operations within the CAISO markets, it must remain compliant
with software operational improvements and market design changes. Failure to comply
with the upgrades in the given timeframe will disrupt Avista's ability to gain access to cost-
efficient power in the market, lead to missed benefit opportunities, and may impact
Avista's ability to reliably operate the electric grid. This Business Case (BC) is required to
support the required updates to the software platforms and integrations implemented to
transact in the CAISO markets. The upgrades are essential to remain reliable, compatible
with CAISO market software releases and address security vulnerabilities to ensure
ongoing value is achieved by joining CAISO markets. Failure to comply with the upgrades
Business Case Justification Narrative Template Version: February 2023 Page 2 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 49 of 351

Energy Market Modernization and Operational Efficiency
in the given timeframe will disrupt Avista's participation in the market, hinder operational
efficiency, and may lead to missed economic opportunities or system reliability issues.
1.2 Discuss the major drivers of the business case.
The primary investment driver for this BC is Performance and Capacity. A secondary
investment driver is Asset Condition. The software applications in this BC enables Avista
to effectively perform the required market functions that impact Avista's ability to operate
in the market, optimize generation resources (including additional renewable generation),
gain access to cost-efficient power, and reliably operate the electric grid. Benefits of
upgrading and enhancing these systems for market participation include:
• Continued market participation and the realization of market benefits.
• Continued optimization of Avista's generation resource portfolio.
• Continuing as a low-cost energy provider though market participation.
• Economically managing renewable resource variability and balancing obligations.
• Enhanced grid reliability through sharing information on electricity delivery
conditions between balancing authorities across the EIM region.
• Economically efficient congestion management as compared to non-market
curtailments and bilateral redispatch capabilities.
• Access to 15-minute interval generation commitment and 5-minutal interval
generation redispatch across the EIM footprint.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
These applications are essential to meeting operational efficiency, grid management and
market participation. Updates/upgrades to these applications and associated integrations
address operational changes within the CAISO markets — MTRU and EIM software
applications and Avista's business process. For each market release, the CAISO provides
backward compatibility for two previous market release versions, thus giving Avista
flexibility in determining when an update is applied. The software vendors also release
upgrades independent of CAISO market releases that Avista will need to incorporate into
the delivery cycle. Performing at least one annual CAISO-initiated software updates as
planned supports Avista's ability to continue to operate and have access to cost-efficient
energy within the market. While there is flexibility in determining when a minor upgrade
can be applied, operational efficiencies may be lost by omitting recommended upgrades.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Avista prides itself on improving our customers' lives through innovative energy solutions
and the WEN is a portion of that goal. In 2019, Washington State passed clean energy
legislation that will drive additional renewable resources to be built in Avista's Balancing
Area Authority (BAA) to meet specific emission reduction requirements between 2030
Business Case Justification Narrative Template Version: February 2023 Page 3 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 50 of 351

Energy Market Modernization and Operational Efficiency
and 2045. In April of 2019, Avista announced its own clean energy goals that will transition
the generation resource mix to 100 percent clean by 2045. In order to meet these goals,
factoring renewable generation growth integrated into Avista's BAA, a mechanism is
required to provide flexibility to optimize these resources with Avista's existing generation
portfolio. Participating in the CAISO markets, both MTRU and EIM, is the most efficient
and cost-effective way to meet this requirement and the necessary flexible ramping
capability.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
Prior to signing the CAISO WEIM Implementation agreement in April 2019, Avista hired
Energy Environmental Economics (E3) to conduct an EIM benefit assessment in the fall
of 2017. E3 conducted similar benefit assessments for several other utilities to help
understand the potential value of EIM participation. The E3 assessment estimated that
Avista could see a range of annual benefits from $2 to $12 million from EIM participation.
Using Avista's best estimates for these critical study assumptions, Avista originally
anticipated EIM annual benefits of $5.8 million, with potential for benefits to move closer
to the upper end of the study range depending upon observed market price volatility. As
of Q1 2023, the total lifetime net benefit actuals from participating in the WEIM are $27.1
million.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The proposed recommended solution is to make the required operational improvements
to the software. This will enable Avista to continue to operate in the CAISO markets and
thereby continue to receive benefits and generate value for customers. Failure to comply
with the upgrades in the given timeframe will disrupt Avista's ability to gain access to cost-
efficient power in the market, lead to missed benefit opportunities which may increase
customer costs, and may impact Avista's ability to reliably operate the electric grid. CAISO
releases annual market technology updates in partnership with software vendors. The
estimated costs for these upgrades and enhancements are $0.5 million annually.
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 51 of 351

Energy Market Modernization and Operational Efficiency
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).Z
In 2017, the MTRU project to conduct market settlements was $0.3 million in capital, and
O&M software licensing costs were estimated at $0.03 million annually. In 2022, the EIM
implementation was $27.4 million (capital and incremental expense), with annual O&M
expense associated with incremental EIM employees and software
maintenance/licensing costs estimated at $3.1 million and an annual capital estimate of
$0.5 million to support software enhancements and upgrades (this BC). The total Avista
lifetime net benefit actuals received from operating in the CAISO market as of Q1 2023
are $46.2 million, with MTRU at $19.1 million and EIM at $27.1 million. These benefits
flow through the state recovery mechanisms. With more than 80% of the Western
Interconnect transacting in the CAISO market, Avista needs continued market
participation to access economically priced power, to ease renewable resource
integration costs, and to economically managed transmission congestion. These benefits
help manage customer costs and allow Avista to continue as a low-cost energy provider.
2.3 Summarize in the table and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
The value generated from operating in the CAISO market, with software
updates/enhancements supported by this BC, does not provide any direct
capital or expense offsets.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital N/A $0 $0 $0 $0 $0
0&M N/A $0 $0 $0 $0 $0
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 52 of 351

Energy Market Modernization and Operational Efficiency
2.4 Summarize in the table and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
The value generated from operating in the CAISO market, with software
updates/enhancements supported by this BC, does provide indirect expense
offsets. There are no direct capital offsets. The financial benefits of operating
in CAISO markets flow through the state recovery mechanisms — the Energy
Recovery Mechanism (ERM) in Washington and the Power Cost Adjustment
(PCA) in Idaho. The total Avista lifetime net benefit actuals received from
operating in the CAISO market as of Q1 2023 are $46.2 million, with MTRU at
$19.1 million and EIM at $27.1 million.
The annual O&M offsets in the table below represent a combined estimate for
MRTU and EIM net benefits. The final rules for the Washington Climate
Commitment Act could impact future market net benefits.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital N/A $0 $0 $0 $0 $0
0&M Net Market Financial Benefits $26M $26M $26M $26M $26M
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 53 of 351

Energy Market Modernization and Operational Efficiency
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, which were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risk to Avista that may occur if an alternative is selected.
Alternative 1:
Failure to pursue the required market updates is the primary alternative to
keeping these systems market compliant. This could keep Avista from operating
in the market until the upgrade has been applied, thus keeping Avista from
economically priced power and increasing potential grid risk. As more than 80%
of the Western Interconnection load is transacting in the CAISO markets, the bi-
lateral market has been reduced. Avista needs to participate in the market to
maintain reliability and access economically priced energy to continue as a low-
cost energy provider. The market also allows Avista to reduce costs associated
with integrating renewable resources, while maintaining the flexibility and
optimization of its hydro generation. As more renewable resources are
mandated by state legislation, there will be a point where Avista's hydro flexibility
cannot sufficiently or economically supply the required load following for
renewable resources and must transact in an organized market to provide cost-
effective energy. Additionally, Avista cannot internally develop the software
needed to transact in the market and does not have access to the expertise and
logic the CAISO employs in the market design.
Alternative 2:
Alternative 3:
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
For the WEIM, the CAISO publishes a quarterly benefit report, which represents a
calculation of each entities' market benefits. This report is used in part to reflect Avista's
WEIM benefits and support justification of on-going upgrades. In October 2022, Avista
developed an internal benefit report, which includes considerations for Avista-specific
operational factors that may not be adequately represented in CAISO's benefit
calculation. This internal benefit calculation logic will be submitted to the commissions for
review and used in future rate filings to estimate EIM benefits as part of determining
overall power supply expense. These two benefit calculations will help Avista determine
the financial return on the implementation and on-going EIM net benefits. The financial
benefits listed in this BC are based on the internal Avista benefit logic.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 54 of 351

Energy Market Modernization and Operational Efficiency
Upgrades and enhancements for both MRTU and EIM software will happen throughout
the year, with a primary upgrade in the fall of each year. For each market release, the
CAISO provides backward compatibility for two previous market release versions, thus
giving Avista flexibility in determining when an update is applied. The software vendors
also release upgrades independent of CAISO market releases that Avista will need to
incorporate into the delivery cycle. Performing at least one annual CAISO-initiated
software updates as planned supports Avista's ability to continue to operate and have
access to cost-efficient energy within the market. While there is flexibility in determining
when a minor upgrade can be applied, operational efficiencies may be lost by omitting
recommended upgrades.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Energy Markets Modernization & Operational Efficiency Steering Committee
members include BC Sponsors and Owners, and directors within Power Supply, System
Operations, GPSS, Finance & Accounting and Enterprise Technology.
Delivery within the BC requires a partnership between various business unit teams and
Enterprise Technology (ET) and will be governed by the Technology Planning Group
(TPG), the Integrated Oversight Committee (IOC), and Program/Project Steering
Committees.
Project prioritization is evaluated by the ET management team on a weekly basis through
the IOC, while program and project steering committees meet regularly and oversee
scope, schedule and budget within their respective programs and projects and inform the
BC owner of any changes. Any changes in funding or scope are documented at the BC
level, via Change Request document that is presented to the monthly CPG meeting and
evaluated for approval. All projects in this BC are managed through the PMO, which
follows the Project Management Institute (PMI) standards.
The undersigned acknowledge they have reviewed the EIM Modernization & Operational
Efficiency Business Case and agree with the approach it presents. Significant changes
to this will be coordinated with and approved by the undersigned or their designated
representatives.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Energy Markets Modernization and
Operational Efficiency Business Case and agree with the approach it presents. Significant
changes to this will be coordinated with and approved by the undersigned or their designated
representatives.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 55 of 351

Energy Market Modernization and Operational Efficiency
Signature: Date:
Print Name:
Title:
Role: Business Case Owner
Signature: ��!�r.C`ZC.��4 Date: 5/10/2023
Print Name: Michael A. Magruder
Title: Director, System Operations & Planning
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 9 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 56 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
EXECUTIVE SUMMARY
The Energy Resources Modernization and Operational Efficiency Technology Program' Business Case
sponsors the technology related applications that support the Energy Resources business areas
operational and strategic initiatives.The Energy Resources business area includes applications associated
primarily with Power Supply, Gas Supply, Generation Production Substation Support (GPSS), and
Environmental. Avista's Energy Resources technology systems are a necessity, as they provide essential
functions, such as energy risk management,trading,forecasting, and market compliance,to our customers
throughout all service territories. These vital systems require systematic upgrades and enhancements to
maintain reliability, compatibility, and reduce security vulnerabilities.
In order to ensure that Energy Resources can meet these initiatives and respective timelines over the next
five years, Avista will comply with the recommended application refresh and expansion requirements for
these applications. The requested allocation is based primarily on compatibility, reliability, security,
adaptability, safety, and compliance. Additional criteria considered is the ability to maintain operational
efficiencies and strategic alignment by ensuring business processes are sustained, as well as future
proofing to adapt to emerging impacts in our energy landscape.
This business case is necessary to fund the portfolio of components that maintain the applications and
licenses necessary to meet internal and external business processes and objectives, and our strategic
focus areas. The technology systems and processes within this business case strengthen our ability to
perform, which impacts our capacity to grow and improve the generation and delivery of safe, reliable,
clean, affordable energy services to our customers.
In order to maintain these business processes and systems supported by this business case, the
recommended funding amount is $22,375,000 over the next five years. This funding level will provide the
appropriate technology and development to meet the periodic upgrades and enhancements necessary to
ensure that business processes are more efficient, and result in cost savings.
If this business case is not funded at the recommended level, it will risk the disruption of necessary business
processes and functions that impact our customers, employees, and compliance requirements. Deferment
of upgrades and enhancements can result in unsupported applications, increased security vulnerabilities,
downtime, missed opportunities, and significantly higher costs.
This Business Case plan was created by the Business Case Owner, Domain Architect, Product Owner,
Business Technology Analyst, and the ET Project Management Office, and approved by the Energy
Resources Governance Team (includes Business Sponsor, Director and Managers within Energy
Resources and Power Supply).
Y Starting in 2025, the Energy Markets Modernization and Operational Efficiency Business Case will end,
and that programs'projects and work packages will be represented in this Business Case (ERMOE)
moving forward. This justification narrative and funding request has been updated accordingly.
VERSION HISTORY
Version Author Description Date
1.0 E. Sibulsk /L.Raymond Initial draft-combining EMMOE with ERMOE 04109124
2.0 B. Hoerner BC Owner Review 04126124
3.0 K. Schuh Final Review
BCRT Jeff Holter Has been reviewed by BCRT and meets necessary requirements 04124124
' [1]"A Program is defined as related projects, subsidiary programs, and program activities managed in a coordinated
manner to obtain benefits not available from managing them individually. Managing projects,subsidiary programs,and
program activities as a program enhances the delivery of benefits by ensuring that the strategies and work plans of
program components are responsively adapted to component outcomes,or to changes in the direction or strategies of
the sponsoring organization.,"Project Management Institute Global Standard,The Standard for Program Management,
Fourth Edition. Page 3(Copyright 2017).
Business Case Justification Narrative Template Version: February 2023 Page 1 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 57 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2024 $4,530,000 $4,530,000
2025 $3,795,000 $4,025,000
2026 $5,010,000 $5,010,000
2027 $4,170,000 $4,170,000
2028 $4,800,000 $4,800,000
2029 $4,600,000 $4,600,000
Project Life Span 5+years Program
Requesting Organization/Department Energy Resources
Business Case Owner I Sponsor Brian Hoerner I Kevin Holland
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.Ke6-
1.1 What is the current or potential problem that is being addressed?
This program is required to support the application-related technology initiatives for all areas within
Energy Resources. These areas include Power Supply, Resource Planning, Acquisition &
Scheduling, and Generation Production Substation Support(GPSS).
Application refresh projects are necessary due to software lifecycle requirements to provide updates,
upgrades and/or replacements on existing Energy Resources applications as they are required to
respond to changing business needs and/or technical obsolescence. Application refreshes/upgrades
are essential in order to remain current, maintain compatibility, reliability, and address security
vulnerabilities.
Application expansion projects result from demand related to transformations in the utility and
continuous technology progression required to achieve operational efficiencies and strategic
objectives. The industry is navigating a period of rapid technological change that requires adaptation
and the ability to expand our conventional business practices and processes.
1.2 Discuss the major drivers of the business case.
The primary investment driver for the Energy Resources Business Program is Performance and
Capacity.Asset Condition is also a key component. Technology automation reduces manual effort,
minimizes human error, and streamlines processes. Data management and accuracy is also a
Business Case Justification Narrative Template Version: February 2023 Page 2 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 58 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
major component, as it enables better analysis that can help identify trends, risks, and growth
opportunities. Many of the applications and respective projects in this business case provide direct
support to Avista customers,while the remaining provide many indirect benefits through automation
efficiencies, accuracy, timely reporting, and decision making. The lifecycle management of these
applications is critical to maintain performance and productivity and are largely dictated by the
technology solutions that are used. All of this work is necessary to enable efficiencies, reduce risk
and allow Avista to best serve our internal and external customers. Without properly managed
business application lifecycles, our customers would potentially see difficulty in our ability to
manage our energy resources, which could jeopardize our customers' trust in the integrity and
reliability of services we provide. Asset condition also plays a pivotal role in driving the technology
refresh lifecycle due to depreciation and value loss, as newer application versions with enhanced
specifications are continually released. The ability to manage optimal asset conditions reduces the
risks of downtime, resource drain on IT (Information Technology) support, and performance factors
due to aging technology.
More specific Energy Resources investment drivers include:
• Promoting Risk Management via energy transaction data that contains market positioning
monitoring, reporting, and conditions.
• Utilizing technology for supply, demand, forecasting and decision support.
• Control and monitoring of multiple operations from a single location
• Sharing generation resources to provide a more efficient use of renewable energy at the lowest
available cost Understanding the supply, demand, and market
• Maintaining compliance with all FERC, NERC, and FCC rules, including environmental and
safety management of hazardous waste production, storage, transport, and disposal
• Near real-time market analytics to obtain renewable energy efficiently and at the lowest
available cost for our customers.
• Continual grid reliability through the Energy Imbalance Market (EIM) participation and the
realization of associated benefits.
• Continuing as a low-cost energy provider through EIM participation.
• Asset management mobility for preventative/unplanned work
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
In 2019, Washington State passed clean energy legislation that will drive additional renewable
resources to be built in Avista's Balancing Area Authority (BAA) to meet specific emission reduction
requirements between 2030 and 2045. In order to meet these goals, the continuation of the Western
EIM is the most efficient and cost-effective way to meet this requirement and the necessary flexible
ramping capability.
The projects and initiatives in this business case position Avista to adapt and respond to the
increasing complex and technical industry behaviors and trends. They also provide functional
enhancements that address ongoing changes in the workplace, provide increased employee
efficiency through the reduction of steps required to complete a task, and make better use of Avista
resources. They shift costs from inefficient processes to more value-driven activities.
The primary alternative to these projects is to use existing systems as-is and to not put new systems
in place. This perpetuates inefficiencies as employees are less efficient and effective.
Working through these projects as suggested, reduces Avista's overall risk exposure by ensuring
Avista is using funds in the most cost-efficient manner and by maintaining a culture of performance
and innovation, which has a positive impact on our employees and customers.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 59 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Avista Focus Areas:
■ Mature our customer experience, both internal &external
❑ Our E Support affordability,equity,and economic vitality
Customers ■ Understand and address the evolving customer needs by offering products,services,
&solutions
■ Evolve our employee experience with a focus on engagement,development,
Our resiliency&well-being
❑ People Improve safety&training systems to reduce injuries,expand learning&understand
risks
■ Strengthen equity, inclusion,&diversity within systems, practices, & behaviors
■ Affordably operate&maintain safe,clean, reliable generation &energy delivery
❑X Perform infrastructure
■ Achieve stated financial objectives
■ Foster&apply an innovation culture to benefit employees,customers,
communities,&shareholders
❑ Invent Create the utility of the future with our stakeholders,optimizing for cost,carbon,&
reliability
The Energy Resources business team utilizes technology as a critical component to achieve these
strategic objectives. Most of the projects in the technology roadmap align with the `Perform' Focus
Area. The ERMOE technology drives performance through efficiency, productivity and automating
manual or ineffective processes. The continuous maintenance and optimization of the technology
ensures that it continues to not only function, but it is also agile and can scale at the pace of ind ustry
and technological change.
There are also technology and associated investments in this Business Case that are more
innovative and align with our `Invent' Focus Area, particularly with the Avista Decision Support
System (ADSS) system. This technology provides the ability to make better energy trading and
planning decisions quickly and more accurately. The opportunity to properly maintain and improve
this investment fosters the innovation culture to benefit Avista's employees, customers,
communities, &shareholders.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation, photographic
evidence, or other materials that explain the problem this business case will
resolve. '(50
Compliance Plan - Environmental Affairs: Avista is subject to multiple Federal, State and Local
environmental regulatory programs. The Environmental Compliance Group is tasked with managing
and maintaining compliance with the applicable requirements from these programs. National
standards have been established to control the handling, emission, discharge, and disposal of
harmful substances. Waste sources must comply with these national standards whether the
programs are implemented directly by EPA or delegated to the States. In many cases, the national
standards are applied to sources through permit programs which control the release of pollutants into
the environment. Some examples include:
• Air Quality: Clean Air Act (CAA)—Rathdrum
• Water Quality: Clean Water Act (CWA) - Kettle Falls
• Waste Management: Resource Conservation and Recovery Act(RCRA)—LIMS/Stackvision
Business Case Justification Narrative Template Version: February 2023 Page 4 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 60 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
• Property Clean-up: Comprehensive Environmental Response, Compensation and Liability
(CERCLA)—LIMS/ Intelex
• Public Disclosure: Emergency Planning and Community Right-to-Know Act(EPCRA)- LIMS
/ Intelex/ Stackvision
Stackvision Tier 1 -Air Quality Permit: Operating Permits are required for Rathdrum per the"Rules
for the Control of Air Pollution in Idaho" issued by the Idaho Department of Environmental Quality
(DEQ). This Tier I operating permit establishes facility-wide requirements in accordance with the
Idaho State Implementation Plan. Some examples of parameters that are required at applicable
generation locations are:
• Dust (airborne particulate matter)
• Odors (gases, liquids, or solids in such quantities as to cause air pollution)
• Visible Emissions (any air pollutant emission for more than three minutes, greater than 20%
opacity)
• Excess Emissions (action to correct, reduce and minimize excess emissions events)
EIM benefit assessment - Prior to signing the California Independent System Operator (CAISO)
Western Energy Imbalance Market (WEIM) Implementation agreement in April 2019, Avista hired
Energy Environmental Economics (E3)to conduct an EIM benefit assessment in the fall of 2017. E3
conducted similar benefit assessments for several other utilities to help understand the potential value
of EIM participation. The E3 assessment estimated that Avista could see a range of annual benefits
from $2 to $12 million from EIM participation. Using Avista's best estimates for these critical study
assumptions, Avista originally anticipated EIM annual benefits of $5.8 million, with potential for
benefits to move closer to the upper end of the study range depending upon observed market price
volatility. As of Q4 2024,the total lifetime net benefit actuals from participating in the WEIM are$44.9
million
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The recommended solution to ensure that Energy Resources can meet these initiatives and
respective timelines over the next five years, is to follow the recommended application refresh and
expansion requirements for Energy Resources applications. The recommended application refresh
and expansion requirements have been determined based on vendor expertise, meeting FERC and
NERC requirements as well as managing Avista's internal IT/OT convergence. The actual
implementation may deviate depending on circumstances yet to be determined. The requested
allocation is based primarily on compatibility, reliability, security, adaptability, and safety. Additional
criteria consider maintaining operational efficiencies and aligning with strategic objectives.
Conventional business practices and processes must be scalable, provide mobility, and focus on the
employee and customer experience.
The project roadmap for the next five years includes refreshing and/or expansion initiatives made
possible by these core Energy Resources systems
• Energy Risk Management and Energy Trading — Managing Avista's collection of energy
assets, asset position, and relationships within the various energy markets. Supported
applications include:
• Avista Decision Support System (ADSS) — Forecasting and decision support for
Energy Traders and Planners, developed and maintained by Avista. (NOTE: The ADSS
development is funded via its own business case through 2022. Only enhancements and
updates in 2022 and beyond are included here.)
Business Case Justification Narrative Template Version: February 2023 Page 5 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 61 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
• Nucleus — An energy risk management and energy trading tool enhanced and
maintained by Avista, captures all wholesale energy transactions, including significant
metering data and forward pricing curves, provides data for tracking energy positions,
credit monitoring, compliance reporting, financial reporting, accounting, and market
drivers.
• Gas Forecasting — Understanding the supply, demand, and market influences on natural gas
volume and prices. Supported applications include:
• Nostradamus—An off-the-shelf industry solution used in gas forecasting.
• Work Management/Asset Management—Asset management, preventative/ unplanned work
management, and construction project/portfolio management for Generation Production and
Substation Support (GPSS). Supported applications include:
• Maximo for GPSS—Work and Asset Management utilizing modules of Maximo, an off-
the-shelf industry solution provided by IBM and used in various Avista business units.
• Generation Plant and Substation Operations — Control and monitoring of operations at all
plants and substations from a single location. Supported applications include:
• Ignition (replacing Wonderware) —An off-the-shelf industry solution under the Human
Machine Interface (HMI) called Ignition that handles control and monitoring of most
Avista generation and substation locations.
• Stackvision - Software that is used for monitoring the stack emissions at the Rathdrum
Combustion Turbine.
• Fuel Inventory Management—Management of Avista's biomass fuel(in the form of logging and
mill wood waste) at its Kettle Falls thermal plant. Supported applications include:
• WeighWiz — Part of an off-the-shelf Log Inventory and Management System (LIMS)
dedicated to timber and wood products procurement and management
• Hazardous Waste Management-Management of Avista's waste production, storage, transport,
and disposal to ensure compliance with global regulations and minimizes safety and
environmental hazards.
• Intelex - Automated tracking and reporting system for the various stages of waste
management and disposal. It manages different waste types, varying disposal rules and
confusing transport restrictions.
• Western Energy Imbalance Market(WEIM) - a real-time energy wholesale market that permits
the western region to share generation resources over a large geographic area, resulting in a
more efficient use of renewable energy at the lowest available cost for our customers. The WEIM
program is currently funded under its own business case until the implementation and entry into
the market in 2022. The Energy Resources Business Case will then consume the ongoing
optimization and enhancements for these associated applications currently forecasted in 2023:
• Asset Operations
• Generation Outage Management System (GOMS) — Performs functions to submit
planned and unplanned outages to CAISO for the generation units.
• Transmission Outage Management System (TOMS) — Performs functions to submit
planned and unplanned outages to CAISO for the transmission lines.
• GenManager Front Office (WEIM only)
• PRSC Bidding & Scheduling System — Performs Merchant functions to submit bids
and base schedules to CAISO for participating resources.
• EESC Scheduling System — Performs Entity(Balancing Authority) functions to submit
base schedules for both participating resources and non-participating resources.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 62 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
• Energy Accounting
• Energy Accounting System — Performs meter verification, estimation, and editing
(VEE)for generation and interchange metering to produce and share Settlement Quality
Meter Data (SQMD)with CAISO.
• SettleCore
• PRSC Settlement System — Performs Merchant settlement functions for the
participating resources and activities.
• EESC Settlement System — Performs Entity settlement functions for non-participating
resources and transmission resources.
• Visual Analytics
• Performance&Analytics System—Performs a near real-time market analytic functions
in a visual display.
• Licensing/Cross-Functional/Other—Not every project fits nicely into one of the initiatives
above. Some are cross-functional, and some are simply good ideas that continue to improve
upon Avista's workplace (OATI /Gurobi).
Upcoming technology-related initiatives for the Energy Resources business area include the
continuous improvements to work management processes via the Maximo Anywhere application,
HMI (Ignition) enhancements to optimize the generation and substation monitoring, and Avista's
Decision Support System. This business case will support these initiatives along with required
refresh projects.
These projects are within industry norms for like-sized Energy Resources departments within like-
sized utilities and are accepted and widely adopted approaches used within the energy industry.
Capturing every detail of every project over the course of the next five years is not possible. This
is part of why the Steering Committee exists—to help propel Avista forward in its initiatives through
intelligently selected and implemented projects. The funding requested as part of this program
generally fits these initiatives and will be assigned to specific projects (with Steering Committee
oversight) as they are identified.
2.2 Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other information that
was considered when preparing this business case (i.e., samples of savings,
benefits or risk avoidance estimates; description of how benefits to customers
are being measured; metrics such as comparison of cost ($) to benefit (value),
or evidence of spend amount to anticipated return).2
Due to budget constraints within ET Applications and the Energy Resources Business Case over the
past couple of years, the majority of focus has been to ensure we are as current as we need to be to
maintain support, compatibility, reliability, and security. In 2025 the goal is to maintain that standard,
while moving toward more strategic objectives and potentially replacing some outdated systems to
create efficiency and cost savings. Many of the enhancements planned will create significant value
quantitatively and qualitatively, such as the 5 Year unlimited Gurobi licenses that reduce O&M in future
years, as well as the need to purchase additional licenses (only the renewal).
There are some direct savings through the Avista Decision Support System (ADSS), although direct
savings are difficult to explicitly define for applications like ADSS. Academic and industry estimates
are between a 2% and 10% gain derived from more efficient (productive) utilization of existing
generation assets. Estimates such as this one, and anecdotal internal analyses using ADSS
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 63 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
technology in other ways (e.g., portfolio maintenance planning, accurate price bidding in Energy
Imbalance Market (EIM), more informed decisions when acquiring new resources), indicate the likely
potential to save more annually than has or will be spent over the life of the technology. Therefore, we
cannot reasonably quantify exact direct savings, however most of the benefits associated with ADSS
are already incorporated into the power supply baseline expense determination by including resource
optimization revenue, EIM benefits and California optimization revenue in the baseline calculation per
the agreed upon stakeholder methodology. The strategy for and ability to achieve benefits associated
with resource optimization, California day ahead trading, and EIM resource bidding is contingent upon
ADSS optimization solutions. Since these offsets are already included as offsets in power supply
expense, they are not additive, but the potential savings are provided below as potential indirect
savings.
There are several categories of indirect savings that could arise from the Avista Decision Support
System (ADSS), such as the following:
• Commodity Energy Savings-The value of the commodity energy supplying Avista's retail load
for the 12 months ending September 2021, at Mid-C wholesale market prices, was over$400
million. The savings then, using the 2% to 10% metric shared above, ranges between $8 and
$40 million per year by being more efficient.
• Maintenance Planning and Scheduling-Avista for decades has worked to bring more analytics
to maintenance planning for its generation portfolio. Although additional ADSS enhancements
are necessary before the full-fledged analytical ADSS Maintenance Planner module can be
deployed, early beta tests have shown savings between $0.5-$4.0 million per year, depending
on the complexity and number of maintenance projects being completed in a given year. The
original business case justification for the Maintenance Planner module (expected to be
completed in 2022-2023)was based on annual estimated savings of$1.5 million.
• EIM Bidding - Bidding into the WEIM program entails an entirely new level of interaction in
wholesale markets. Avista decided to enter the WEIM because our other trading partners were
doing increasingly more of their intra-day business in the WEIM,starving the NW hourly market
of counterparties to buy and sell energy that we have relied upon for decades to meet our load
obligations reliably. Greatly less and falling NW real-time liquidity also compromises our ability
to maximize the value of our portfolio. Besides having to work with WEIM 5-minute market
windows where in the past the market time step was hourly, the Company never needed to
create detailed price curves for all of its assets for every bidding period. Although no specific
estimates have been developed for ADSS' contribution in the WEIM effort to date, its base
schedule creation and Bidding module provide more accuracy and less staff effort than a
manual process. The mid-point range of overall WEIM savings included in our 2020
Washington General Rate Case (GRC)was nearly$6 million annually and was included in the
power supply expense baseline calculation.
• Planning Studies- ADSS has a unique ability to support resource planning in that it can re-
optimize system operations when system conditions change. This enables robust scenario
analysis. For example, ADSS allows Avista to model a historical year of operations but change
inflows to our reservoirs, add new units or create entirely new power plants to see their detailed
impacts on system costs and reliability. We can perform variable energy resource integration
cost studies, and model how our system value changes when we have changing data or an
opportunity/obligation to upgrade a facility. Further, with its detailed representations,the value
of ancillary services can be valued differently among resources and the entirety of the portfolio.
Constraints and risks are possible and would hinder the delivery of the outlined objectives. In these
circumstances, the Business Case owner would work with Steering Committee(s) to set project
priority and sequence, subject to any additional funding changes as directed by the Capital
Planning Group (CPG). Each program and project Steering Committee meets regularly to review
the demand to ensure that it aligns with Avista's strategies. The Steering Committee oversees
Business Case Justification Narrative Template Version: February 2023 Page 8 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 64 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
scope, schedule and budget within their respective programs and projects and inform the Business
Case owner of any changes needing escalation to the Technology Planning Group (TPG) or CPG
for decision-making around resource or funding constraints.
2.3 Summarize in the table and describe below the DIRECT offsets3 or savings
(Capital and O&M) that result by undertaking this investment.
• There are no direct offsets for this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $ $ $ $ $
00 $ $ $ $ $
2.4 Summarize in the table and describe below the INDIRECT offsets4 (Capital
and O&M) that result by undertaking this investment.
• Quantified indirect savings (total estimate) is $8.5 - $400 million, assuming a 10-year software
life
• The value generated from operating in the CAISO market, with software updates/enhancements
supported by this BC, does provide indirect expense offsets. There are no direct capital offsets.
The financial benefits of operating in CAISO markets flow through the state recovery
mechanisms — the Energy Recovery Mechanism (ERM) in Washington and the Power Cost
Adjustment (PCA) in Idaho. The total Avista lifetime net benefit actuals received from operating
in the CAISO market as of Q1 2023 are $46.2 million, with MTRU at $19.1 million and EIM at
$27.1 million. The annual O&M offsets in the table below represent a combined estimate for
MRTU and EIM net benefits. The final rules for the Washington Climate Commitment Act could
impact future market net benefits.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $ $ $ $ $
O&M Commodity energy savings $8-40M $8-40M $8-40M $8-40M $8-40M
O&M Maintenance planning and $.54M $.5-4M $.5-4M $.5-4M $.5-4M
scheduling
O&M Net Market Financial Benefits $26M $26M $26M $26M $26M
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 65 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not provide
the same benefit as the chosen solution. Include those additional risks to
Avista that may occur if an alternative is selected.
Option Capital Cost
Alternative 1 — Fund Energy Markets in separate Business Case $19,120,000
Alternative 2—Reduce GPSS Maximo funding. '/z= $21,737,500/all =
$21,055,000
Iternative 3—Replace Nucleus $19,875,000
Alternative 1: Do not add the Energy Markets projects to the ERMOE Business Case at this time.
This could be done but would not be as efficient as combining.The work within the Energy Markets
business area supports the same portfolio,aligns strategically and departmentally, and is governed
by the same stakeholders and leaders. At this point in time, considering the maturity of the
programs and governance processes, the work can be managed collectively.
Alternative 2 - Reduce GPSS Maximo by'/z, or Remove Funding)
Reduce or remove GPSS Maximo funding. The resources funded by this had previously been
funded by expense and we could revert back to that model. The amount reduced in capital would
move to expense, as the need for the optimization of the tools and business processes is still
required.
Alternative 3 — If the Energy Trade and Risk Management Business case is approved to replace
Nucleus and fully funded, this business case would see a reduction in cost 2026 and 2027 for the
Nucleus Development team of approximately$1 M per year and a partial reduction in 2028.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Avista's Energy Resources technology systems are a necessity, as they provide essential
functions to Avista. These vital systems require systematic upgrades and enhancements to
maintain reliability, compatibility, and reduce security vulnerabilities.
This funding level will provide the appropriate technology and development to meet the periodic
upgrades and enhancements prioritized by the Energy Resources and Enterprise Technology
(ET) governance committee. This funding is necessary to mitigate the risk of unsupported
applications, security liability, and significantly higher costs as a result of the deferment of
upgrades and enhancements.
Investment prudency is reviewed by the Steering Committee to ensure alignment of initiatives
through judiciously selected and implemented projects. The funding requested as part of this
program generally fits these initiatives and is assigned to specific projects (with Steering
Committee oversight)as they are identified.Also,the Business Case owner will work with Steering
Committee(s)to set project priority and sequence over a five-year planning period, subject to any
additional funding changes as directed by the Capital Planning Group (CPG). Each program and
project steering committee meets regularly to review the demand to ensure that it aligns with
Avista's strategies. The Steering Committee oversees scope, schedule and budget within their
respective programs and projects and inform the Business Case owner of any changes needing
escalation to the Technology Planning Group (TPG)or CPG for decision-making around resource
or funding constraints.
Business Case Justification Narrative Template Version: February 2023 Page 10 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 66 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
This is a program with discrete projects and packages that typically run annually and Transfer to
Plant within that same year. There are times that a project may start in Q3/Q4 of one year and
Transfer to Plant the following year. Typically, application projects will Transfer to Plant about 60
days prior to the project completion date (due to the post implementation warranty period and to
capture the trailing charges).
The goal is to break out large/complex projects into smaller projects(phases)to avoid scope creep,
budget overages, and ensure the work can be properly prioritized. The first phase of every project
would be scoped at the Minimum Viable Product(MVP), and subsequent phases would be scoped
accordingly, based on the next highest priority after MVP. This also allows for more accurate
Transfer to Plant forecasts.
The current roadmap is as follows and subject to change:
2025 2026 2027 2028 2029
EIM-Energy EIM-Energy EIM-Energy EIM-Energy EIM-Energy
Markets Expansion Markets Expansion Markets Expansion Markets Expansion Markets Expansion
Nucleus Expansion Nucleus Expansion Nucleus Expansion Nucleus Expansion Nucleus Expansion
ADSS Expansion ADSS Expansion ADSS Expansion ADSS Expansion ADSS Expansion
GPSS Maximo GPSS Maximo GPSS Maximo GPSS Maximo GPSS Maximo
Expansion Expansion Expansion Expansion Expansion
Stackvision Upgrade Stackvision Upgrade Stackvision Upgrade Stackvision Upgrade Stackvision Upgrade
Ignition Expansion Ignition Expansion Ignition Expansion Ignition Expansion Ignition Expansion
EIM—MV90 LIMS Upgrade EIM—MV90 LIMS Upgrade EIM—SettleCore
Upgrade TTP Upgrade Upgrade
MRTU Licensing EIM—SettleCore Nostradamus GT Pro/GT Master
Upgrade Upgrade Licensing
Plexos Gas Plexos Gas
Nostradamus Licensing:
Upgrade MRTU
Aurora & Plexos
Licensing:
GT Pro/GT Master
Aurora& Plexos
Gurobi
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Energy Resources Steering Committee members include Business Case Sponsors, Directors
and Managers within Energy Resources, and the Business Case Owner. The Energy Resources
Business Case has four levels of governance: The Executive Technology Steering Committee
(ETSC); Technology Planning Group (TPG) of Directors; Integrated Oversight Committee (IOC),
Business Case Justification Narrative Template Version: February 2023 Page 11 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 67 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
and Program/Project Steering Committees.Applicable stakeholders and disciplines meet regularly
to govern the business case and subsequent programs and projects.
The IOC evaluates and compares all of the application portfolio project priorities on a bi-weekly
basis, utilizing risk,capacity,and other situational factors to ensure each planned project is meeting
critical milestones. The TPG sets priority across the technology investment portfolio, balancing:
strategic alignment, business value, and customer benefits, as driven by the strategic initiatives
established by the ETSC. The Capital Planning Group (CPG), an independent body, establishes
funding allocations for each Business Case across the enterprise.
The Business Case is largely limited by the funding allocation and resource capacity(staff)to meet
its goals.The funding is generally established at the Business Case level by the CPG.The resource
capacity constraint is generally managed by the TPG and the Business Case owner. Once the two
constraints are established, the Business Case owner will work with steering committee(s) to set
project priority and sequence over a five-year planning period, subject to additional funding
changes as directed by the CPG.
Project prioritization is evaluated by the management team on a weekly basis through the IOC.
Each program and project steering committee meets regularly and oversees scope, schedule and
budget within their respective programs and projects and inform the Business Case owner of any
changes needing escalation to the TPG or CPG for decision-making around resource or funding
constraints.
Any changes in funding or scope are documented at the Business Case level, via a Change
Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for
approval.
Changes in scope, schedule, or budget are also documented through a 'Change Request' at the
project level and reviewed and approved through a formal workflow process. All Enterprise
technology projects in this business case are managed through the PMO,which follows the Project
Management Institute (PMI) standards. Projects initiate with a 'Charter' to begin the planning
process.When planning is complete, a 'Project Management Plan (PMP)' is created and approved
as the projects baseline for scope, schedule, and budget. At the end of execution, an 'Approval to
Go Live' is submitted and approved prior to implementation (Transfer to Plant).After the technology
is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and
subsequently submit an 'Approval to Close' prior to finishing the project. All Monitor and Control
documentation and Change Requests are documented and stored to ensure a comprehensive
audit trail. ::
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Energy Resources Modernization and
Operational Efficiency and agree with the approach it presents. Significant changes to this will be
coordinated with and approved by the undersigned or their designated representatives.
Signature: D—S.-by:
Date: May-01-2024 2:32 PM PDT
� E �
Print Name: Brian Hoerner
Title: Manager, Application Delivery
Role: Business Case Owner
Signature: Scoff Z= Date: May-02-2024 6:37 AM PDT
swararsart�aa
Print Name: Scott Kinney
Title: VP, Energy Resources
Business Case Justification Narrative Template Version: February 2023 Page 12 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 68 of 351

DocuSign Envelope ID:OA8A6073-DD78-4EE5-A7C4-08E5CE059028
Energy Resources Modernization & Operational Efficiency
(ERMOE) Technology
Role: Business Case Sponsor
Signature: (fiossuw�t Date: May-01-2024 1 12:55 PM PDT
Print Name: Hossein Nikdel
Title: Director, Applications & System Planning
Role: Steering/Advisory Committee Review
Signature: May-01-2024 12:58 PM PDT
V-4 hwta Date:
Print Name: David Howell
Title: Director, Generation, Production, &
Substation Support
Role: Steering/Advisory Committee Review
d by-
Signature: �/ Date: May-01-2024 2:18 PM PDT
Print Name: Kevin Holland
Title: Director, Energy Supply
Role: Steering/Advisory Committee Review
Signature: Date:
Print Name:
Title:
Role:
Business Case Justification Narrative Template Version: February 2023 Page 13 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 69 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
EXECUTIVE SUMMARY
Avista's Energy Supply business processes and complexities have expanded significantly
with western organized market expansion, reductions in bi-lateral trading partners, the
need to understand credit positions and requirements, and the tightening of emission and
renewable regulations. To meet these existing and additional market complexities in the
near future, the Company requires a vendor-supported Energy Trade and Risk
Management (ETRM) system to meet current, and future electric and natural gas
wholesale operational needs. Avista has relied on Nucleus since 2001 — an in-house
application supporting core functions across Energy Supply, System Operations,
Transmission Services, Risk/Credit, Resource Accounting, and Compliance. The
Company has added additional functionality well beyond its original intent, resulting in a
complex and highly integrated data system. Additional development of the system is not
advantageous for the Company, as Nucleus has reached the end of its useful life. The
risks associated with retaining the system can be summarized into two main categories:
Software Obsolesces / System Limitations:
■ Oracle will cease new software development of its Forms and Reports software
platform as of December 2026. When end of life support is reached, Oracle will no
longer provide updates for security vulnerabilities, critical patches, or performance
improvements. Integrating additional market software on an obsolescing platform
involves unnecessary risk and should be resolved with a vendor-supported
solution.
■ Existing Nucleus limitations such as spreadsheet reliance and limited
market/credit/carbon position visibility hinder efficiencies and expose the Company
to unnecessary cost risks.
Organized Market Opportunities / Compliance:
■ In March 2022, Avista joined the Western Energy Imbalance Market (WEIM) — an
intra-hour market — operated by the California Independent System Operator
(CAISO). The CAISO will launch a day-ahead market in the fall of 2026.
■ In the summer of 2027, the Company is likely to enter as a binding participant of
the Western Resource Adequacy Program (WRAP) — a regional compliance
program for addressing resource adequacy and reliability needs.
■ In 2027, Southwest Power Pool (SPP) will bring Markets+, the second organized
market to the west, offering a combined intra-hour and day-ahead market.
■ By 2027, the west's intra-hour and day-ahead energy will transact in organized
markets, impacting bilateral liquidity and transmission availability. To avoid those
risks, the Company needs to evaluate the customer benefits of the CAISO and
SPP markets and choose a single organized market— as Avista cannot operate in
both simultaneously, nor would it be viable avoid joining a day-ahead market.
A Customer Internal Rate of Return (CIRR) analysis was conducted with consultant
Utilicast estimates for a vendor supported ETRM implementation and in-house Very
Business Case Justification Narrative Template Version: February 2023 Page 1 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 70 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
Rough Order of Magnitude (VROM) estimates for an in-house rewrite of Nucleus — see
Figure 1 below.
Figure 1 — Customer Internal Rate of Return Analysis'
Customer Internal Rate of Return Analysis
Scenario CIRR Annual Revenue Requirement
Nucleus VROM Rewrite 11.96% $3,711,125
Nucleus VROM Rewrite (+50%contigency) 3.48% $5,575,969
Purchase ETRM Utilicast Estimates 3.44% $5,495,432
Purchase ETRM Utilicast Esimates(+15%contigency) 2.64% $6,225,951
Although the internal re-write of Nucleus, as compared with the Utilicast estimates of
purchasing an ETRM, provides the highest rate of return for the customer, it does not
address the risks associated with continued internal custom development or resolve
business needs that are lacking in the current Nucleus system. The Company prefers not
to bear the responsibly of custom software development, with interpretation of market
rules and logic or carry the expertise for on-going support of custom of in-house solutions.
Although a re-write of Nucleus may address the Oracle Forms and Report end of life
support, it does not address the business needs and risks discussed in Section 1.1 and
Section 1.3. Rewriting Nucleus does not allow the Company to leverage an existing and
proven vendor solution or native integrations amongst a single vendor as additional
organized market software is needed. See Section 2.2 for additional CIRR information.
This BC requests $30.3 million in capital and $3.2 million in expense over a four-year
period beginning in 2025 to implement a vendor supported ETRM system and the
foundation for future organized market expansion.
VERSION HISTORY
Version Author Description Date
1.0 Kelly Den el Initial draft of original business case 05/24/2023
BCRT BCRT Team Member Reviewed by BCRT and meets necessary requirements Steve Carrozzo 05/23/2023
2.0 Kelly Den el Business case—2024 update 04/23/2024
BCRT BCRT Team Member Reviewed by BCRT and meets necessary requirements Steve Carrozzo 0412912024
Cost estimates include implementation and post-implementation maintenance capital and expense.
Business Case Justification Narrative Template Version: February 2023 Page 2 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 71 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $2,300,000
2026 $11,900,000 $14,200,000
2027 $12,300,000
2028 $3,800,000 $16,100,000
2029
Project Life Span 4 Years
Requesting Organization/Department Energy Supply
Business Case Owner I Sponsor Kevin Holland Scott Kinney
Sponsor Organization/Department Energy Supply
Phase Initiation
Category Project
Driver Asset Condition
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
Business Case Justification Narrative Template Version: February 2023 Page 3 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 72 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Nucleus is a legacy, custom-coded system that allows Avista to conduct wholesale
natural gas and electric transactions, bill transmission customers, track wholesale
risk/credit obligations, manage energy schedules, interface complex data sources
with multiple internal and external systems/entities, conduct financial energy
accounting and ultimately, operate the Company's electric and gas systems for
customers. It is literally "the Nucleus" of the Energy Supply, System Operations,
Transmission Billing, Risk/Credit and Resource Accounting departments and the
system of record for all associated transactions. As Avista prepares for an
increasingly complex future with organized market expansion,jurisdictional resource
allocation, increasing carbon compliance laws, and risk/capital management
requirements, relying on antiquated and unsupported software isn't beneficial for the
Company or its customers.
In 2023, Nucleus enabled more than $431 million in wholesale electric purchases
and sales, $50 million in transmission and almost $480 million in natural gas
transactions — see Figure 2. Those transactions, along with Nucleus functionality,
allow Avista to balance generation and customer load, while optimizing generation,
transmission, and natural gas assets to provide reliable power and generate
customer value. Without an ETRM system, Avista would be at the mercy of
spreadsheets and paper to manage a multi-million-dollar business — leaving the
Company and its customers at risk for unplanned outages, decreased optimization,
and increased costs due to poor visibility of system operations and market position.
Figure 2 — Nucleus Wholesale Transaction Totals2
Nucleus Transaction Totals 2023
Purchase Sales
Commodity Amount Cost Amount Cost
Electric 5,601,050 MW $ 191,172,493 3,521,491 MW $ 240,236,330
Transmission 2151115 MW $ 19,063,436 4,446,353 MW $ 30,969,981
Natural Gas 120,408,856 MMBTU $ 425,934,141 114,836,128 MMBTU $ 53,656,676
'Based on Resource Accounting forms filed with FERC in 2024 for 2023 actuals.Excludes EIM transactions.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 73 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
To continue providing that customer value, while simultaneously adapting to
complex market changes in the west, Avista needs a vendor supported ETRM to
maintain wholesale operations, while planning for significant organized market
business changes. Over the last 20 years, Avista chose to develop additional
functionality in Nucleus instead of pursuing off-the-shelf products, including system
operations and energy management functions such as tag calculations, metering
calculations, and inadvertent energy management that are better suited for a
balancing authority operation and/or an energy management application. Nucleus
has reached its useful life and is at a point where additional development for on-
going use is not advantageous for the Company and elevates risk as market
operations complexity increases.While the system is currently stable and avoid risks
after software support has ended, the Company should implement a commercial
ETRM prior to joining another organized market.
Nucleus has limitations that require spreadsheets, manual input, and cause
inefficiencies. Critical business functions, including energy market hedging, credit
and market position reports, resource optimization, and clean energy/carbon
compliance obligations are conducted on highly complex and sophisticated
spreadsheets using Nucleus data. These require knowledge of the Nucleus
database and a deep understanding of the business logic to maintain. Avista
anticipates significant day ahead market process changes in regard to scheduling,
tagging and transmission, and will benefit from a natively integrated ETRM and
market software solution for processing the 24-hour day-ahead market solution.
In terms of carbon emission compliance and multi-jurisdictional requirements, the
tracking of Renewable Energy Credits (RECs), Renewable Thermal Credits (RTCs)
and carbon allowances has become increasingly more important. A modern ETRM
will allow the Company to manage these commodities with system visibility to overall
position, costs, optimization opportunities, and compliance obligations instead of
relying on a spreadsheet. To ensure adequate compliance, while optimizing REC
sales for customer benefit, the Company needs a system that can provide visibility
to the multi-year compliance obligation and the current year's REC forecast
(amongst other compliance instruments) to proactively manage the position —
avoiding the over selling of RECs and a costly compliance deficit.
The Company needs a system that can forecast a near real-time current credit and
collateral position when making transactions across multiple trading horizons such
as term to balance of the month to day-ahead. In addition, the Company would
benefit from a credit analyzer feature to understand the impact a potential deal would
have on Avista's credit position. As the commodity and borrowing costs have
increased, visibility to credit limits has come increasingly important in managing
price volatility. Without these tools, the Energy Supply team is making decisions
without understanding the full impact to credit, which has a cascading affect across
the Company.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 74 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
While the ETRM will support both natural gas and electric operations, the Company
will need to implement the electric business first in anticipation of additional market
software and business changes associated with the WRAP and a day-ahead market.
In 2027, the Company will likely enter as a binding participant of the WRAP and join
a day-ahead market operated by CASIO or SPP soon after to reduce operating risk
and optimize the full value these critical regional programs offer. It is highly possible
Avista will need to start a market implementation while the ETRM implementation is
in progress, which is why the ETRM implementation must start in 2025.
1.2 Discuss the major drivers of the business case.
The primary investment driver for this BC is Asset Condition, as Nucleus is an aging
and obsolescent application approaching Oracle's end-of-life support in December
2026. It is the core of wholesale operations and the official system of record, as this
system allows Energy Supply and System Operations to perform their job functions
in providing reliable and cost-effective power and natural gas, as well as allocate
settlement and transmission charges for Resource Accounting and Transmission
Billing.
A secondary investment driver is Performance and Capacity, as this software
enables whole operations and lays a foundation for future market integration.
Maintaining the intra-hour organized market operations, while joining a day-ahead
market allows the Company continued access to available power— especially cost-
effective wind and solar across the region —and the ability to maintain flexibility with
its hydro resources, both of which generate value for customers. Abstaining from an
organized market (intra-hour or day-head) will severely limit — if not eliminate — the
Company's access to market energy and third-party transmission capacity needed
for meeting hourly energy needs.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 75 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
In the fall of 2022, Avista contracted Utilicast — an utility consultant and proven
system integrator in Avista's Western Energy Imbalance Market implementation —to
conduct a Nucleus/ETRM assessment. The assessment identified risks, key
business processes, ETRM vendor options and an estimate of implementation costs
over a three-to-four-year period. They identified 17 risks across the areas of
personnel, process, and technology, and by severity of critical, high, medium and
low (see Figure 3 below — Nucleus Risk Summary). Of the identified risks,
spreadsheet reliance and personnel retirement were scored as critical, while new
market opportunities, software obsolescence and developer retainment were scored
as high. As such, there are two primary areas of concerns with retaining Nucleus for
wholesale operations: software obsolescence and system limitations, and ensuring
the Company is well positioned to take advantage of future market opportunities and
comply with multi-jurisdictional obligations.
Figure 3 — Nucleus Risk Summary
f• Personnel Retirement
• Personnel Replacement&Retainment(Business&Technology)
• Domain/Tech Expertise to Support Processes/Spreadsheets
People Documentation Limitations
• Uncertainty of Change Risk Scores
Medium
S9%
Data Entry—Multiple Manual Entries of Data
• Manual Verification Processes(comparing multiple datasets)
Ability to Maximize Dataset Value
Process New Market Opportunities
Low
6%
■• Spreadsheet Reliance 1 -Criticgh
al
Vendor Support/Legacy Application End-of-Life 12%
• Python Open-Source Package Security
User Interface Quirks
• Globalscape and MuleSoft Incongruities
Tech Nucleus Outage Recovery
• General Nucleus Cyber Security Awareness
• Development Tool Acceptance Impacts to Hiring rusk Score Legend:
Critical Medium
High Low
Software Obsolescence/System Limitations: The Nucleus application has been
in use for more than two decades and is approaching technology obsolescence by
December 2026. Oracle Forms & Reports is the technology upon which the Nucleus
interface is built and is considered a legacy application.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 76 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
As legacy systems age, they limit the business' ability to evolve and stay nimble as
processes change and new requirements emerge. This limitation is often driven by
a vendor's discontinued development of the software, technical limitations, and on-
going support. Over time, this results in inaccessible data, system complexities,
limited functionality, rigid structure, cybersecurity vulnerabilities, and an overall
decrease in system performance.
These limitations are present in a lack of near real-time credit position visibility,
carbon compliance tracking (RECs, RTCs, carbon allowances) deal to tagging
automation, spreadsheet reliance, automated validation and error handling
resolution, and compatibility with organized market integrations. In addition, the risk
of continuing with unsupported software introduces additional security vulnerabilities
and requires Avista to become an expert in interpreting requirements and
developing market software. For additional software limitation explanation see
Section 1.1.
Market Opportunities/Compliance: As clean energy requirements continue in
complexity and organized markets continue expansion in the west, the Company
should utilize an industry-standard software from a vendor that is interpreting
requirements and developing solutions for all utilities, instead of continuing to
customize Nucleus — or even consider other custom in-house solutions. Nucleus
was not designed for the complexity of organized markets (intra-hour or day-ahead),
or the level of tracking required for carbon compliance and multi-jurisdictional energy
requirements. Commercial ETRMs have native functionality for regulatory and
compliance obligations that legacy systems or spreadsheets cannot. By relaying on
an industry software vendor to implement a solution, Avista is transferring risk
associated with market rule interpretation, implementation timing and data accuracy.
In addition, Avista needs an ETRM that will natively integrate with organized market
software for efficient wholesale operations and avoid custom integrations.
Continuing to rely on Nucleus does not provide a solid foundation for which the
Company will execute on future energy supply opportunities, including becoming a
binding WRAP participant in 2027, evaluating additional organized market
opportunities with CAISO and SPP, joining a day-ahead market and potentially
joining a Regional Transmission Organization (RTO). The Company will benefit from
a single vendor to accommodate ETRM and other market software needs with
native integration to avoid custom integrations across disparate, multi-vendor
platforms. Addressing this need ahead of the next market integration will reduce the
risk of simultaneously integrating an ETRM, while also implementing new market
software. A vendor supported, modern ETRM will reduce manual processes and the
opportunity for human error, decrease reliance on extraordinarily complex
spreadsheets, accommodate current and future market needs, increase automated
validation, provide near real-time position visibility, and natively integrate to reduce
siloed workflows.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 77 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link. AVISTA STRATEGIC GOALS
Mission Statement excerpt: "By delivering energy safely, responsibly, and
affordably, Avista helps empower our customers to live their lives to the fullest."
An ETRM system is at the core of system operations and energy market
functions, which enables Avista to deliver safe, reliable and responsible energy.
Given the changing market landscape, carbon compliance obligations, and
elevated credit/collateral requirements, Avista's needs a modern ETRM to
improve current operations and integrate future organized market software. A
vendor supported ETRM will reduce the risk of manual input error, spreadsheet
reliance, risk of system failure and reduce inefficiencies. In addition, it will allow
the Company to leverage contemporary industry wide ETRM solutions and
features, while transferring compliance risk associated with organized market
changes.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 78 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.
Through an inventory of business processes in the 2022 assessment, Utilicast
identified core ETRM functionality versus functionality better suited for another
system, including meter data management and balancing authority area functions.
The Utilicast estimated funding requirements include costs for migrating Nucleus
functionality to non-ETRM systems which may or may not already be in Avista's
environment. They also assume a software as a service (SaaS) implementation.
Based on Utilicast experience with ETRM implementations, software vendors and
Avista's internal labor contribution, the 2022 assessment provided a total
implementation estimate range of $21.5 million to $26.3 million, including capital
and expense integration costs, system integrator and vendor(s) costs. Based on
accounting rules, once a decision has been made to replace a system (likely upon
signature of a software contract), any future work on the existing system, regardless
of type, is expense. As such, the implementation expense estimates include
expense labor associated with maintaining Nucleus during the four-year
implementation period. See Figure 4 for the original 2022 Utilicast estimates, which
were used in the 2023 BC request.
Figure 4 — 2023 Original ETRM Cost Estimates3
ETRM Cost Estimates
Implementation Maintenace
Year Capital Expense Capital Expense
2025 $2.0 $1.2
2026 $10.0 $0.8
2027 $10.0 $0.5
2028 $3.0 $0.3
2029 $0.5 $1.2
Totals $25.0 $2.7 $ 0.5 $ 1.2
in Millions
3 See the "Financial Estimates Tables — Utilicast Nucleus Assessment" Excel spreadsheet for cost
estimating detail as included in Utilicast's"Avista Nucleus CTRM Assessment" final report.
Business Case Justification Narrative Template Version: February 2023 Page 10 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 79 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
Figure 5 below represents the 2024 estimates for both implementation and post-
implementation (capital and expense), which have been adjusted based on projected
inflation rates. This 2024 BC requests $30.3 million for capital implementation costs, $3.3
million for implementation expense for the Request for Proposal (RFP) software process
(estimated at $1.2 million) and various non-capital implementation costs (including
Nucleus expense labor). The total estimated implementation cost over the four-year
period is $33.6 million. Ongoing annual capital investments are estimated at $0.8 million
and software license/maintenance costs are estimated between $0.60 million and $1.3
million. Cost estimates and project timeline will be updated after the system integrator
and software RFP(s) selections are complete.
Figure 5 — 2024 Adjusted ETRM Cost Estimates4
Adjusted ETRM Cost Estimates
Implementation Maintenace
Year Capital Expense Capital Expense
2025 $2.3 $1.4
2026 $11.9 $0.9
2027 $12.3 $0.6
2028 $3.8 $0.4
2029 $0.8 $1.3
Totals $30.3 $3.3 $0.8 $1.3
in Millions
4 Updated ETRM implementation cost estimates for implementation and post-implementation
maintenance, capital and expense, have been adjusted for inflation with year 2025 at 5% and years
2026-2028 at 3%.
Business Case Justification Narrative Template Version: February 2023 Page 11 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 80 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
With the tightening of carbon regulations, multi-jurisdictional obligations and
western organized market expansion, Avista is facing a complex energy future.
A future of change that must be planned and sequenced in order to maintain
operations, while adopting market changes to meet future operating
requirements. With these unavoidable market changes coming in 2027 and
2028, the Company is attempting to reduce operating risk by starting this
implementation in 2025 to avoid simultaneous ETRM and market expansion
software changes. Although Avista plans to implement the electric business first,
followed by natural gas, there is a risk of starting an organized market
implementation while the electric implementation is still in progress or before the
project has even begun.
Implementing a vendor-supported ETRM allows Avista to transfer the risk and
responsibility of system enhancements, upgrades, and maintenance to the
vendor, while leveraging industry-wide utility features and functionality common
in a commercial ETRM, including those Avista has traditionally conducted on
spreadsheets. Commercial ETRMs have native functionality that allows utilities
to accommodate regulation and compliance obligations that legacy systems or
spreadsheets are not well-equipped to manage. As state's carbon policies
evolve and mandate a decarbonized grid, Avista needs a system to monitor and
report carbon emissions, track compliance instruments or credits and optimize
offsets.
Instead of developing Avista-specific tools in Nucleus, the Company should
leverage vendor provided tools, as they service multiple utility customers with
the same needs. Avista foresees a modern ETRM system that will allow for an
integrated platform that manages front office (merchant/system
operations/transmission services/natural gas), middle office (risk/credit) and
back office (financial accounting) tasks, and natively integrate across multiple
systems and with organized market software. The remaining Nucleus
functionality not provided by a commercial ETRM application will transfer to
other industry standard commercial solutions to accommodate energy
accounting and balancing authority operations with user-configurable interface
that can adapt to changing business needs. As the Company considers future
software needs, they will strongly consider single vendor solutions for native
integration amongst systems, implementing standard functionality and
configuration, and leveraging bundled pricing to save on integrations and
maintenance costs. Where possible the Company intends to avoid "best of
breed" systems with custom integrations.
Business Case Justification Narrative Template Version: February 2023 Page 12 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 81 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
If this effort is not funded, Avista will assume a myriad of unnecessary risks and
liabilities in continuing with an end-of-life system, and jeopardize preparedness
for future market integration, which will impact market liquidity and transmission
access.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).
As based on a Customer Internal Rate of Return (CIRR) analysis (see Figure 5
below), a comparison of four costs estimates were considered, including the
updated Utilicast costs estimates (Figure 5 above), the internal Very Rough
Order of Magnitude (VROM) estimates of re-writing Nucleus (Section 2.5 /
Figure 6 below), the Utilicast estimates increased by 15 percent and the rewrite
VROMs increased by 50% (see Figure 6 below).
The internal VROM estimates (4+50% accuracy) and the Utilicast estimates are
not a like for like comparison. For an adequate cost estimate comparison, the
Company would need to issue an RFP for a re-write of and an RFP to implement
a vendor supported ETRM — both would include requirements to address the
business risks/needs identified in this BC.
Figure 6 — Customer Internal Rate of Return Analysis5
Customer Internal Rate of Return Analysis
Scenario CIRR Annual Revenue Requirement
Nucleus VROM Rewrite 11.96% $3,711,125
Nucleus VROM Rewrite (+50%contigency) 3.48% $5,575,969
Purchase ETRM Utilicast Estimates 3.44% $5,495,432
Purchase ETRM Utilicast Esimates(+15%contigency) 2.64% $6,225,951
Although the internal re-write of Nucleus provides the highest rate of return for
the customer, as compared with the Utilicast estimates of purchasing an ETRM,
it does not address the risks associated with continued custom development or
resolve business needs that are lacking in the current Nucleus system. The
Company does not want to bear the responsibly of custom software
development, with interpretation of market rules and logic, carry the expertise
5 Cost estimates include implementation and post-implementation maintenance capital and expense
over an assumed 15-year life.
Business Case Justification Narrative Template Version: February 2023 Page 13 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 82 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
for on-going support of custom of in-house solutions or support the multiple
Nucleus interfaces that have evolved over the 20 plus years of operation.
Although a re-write of Nucleus may address the Oracle Forms and Report end
of life support, it does not address the business needs and risks discussed in
Section 1.1 and Section 1.3. Rewriting Nucleus does not allow the Company to
leverage an existing and proven vendor solution or native integrations amongst
a single vendor as additional organized market software is needed.
2.3 Summarize in the table and describe below the DIRECT offsetss or
savings (Capital and O&M) that result by undertaking this investment.
There may be direct offsets related to implementing an ETRM and associated
systems. However, based on Utilicast estimates — see Figure 4 above — post
implementation licensing/maintenance support estimates will increase
expense costs, while capital expenses are expected to stay flat. Direct offset
opportunities will be reviewed and updated after the software RPF is
conducted and the vendor(s)/applications(s) are selected.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M ETRM license/maintenance $0 $0 $0 $0 $1.3M
2.4 Summarize in the table and describe below the INDIRECT offsets (Capital
and O&M) that result by undertaking this investment.
A new ETRM will allow Avista to continue to conduct wholesale energy sales
— see Figure 1 above — and capture additional organized market benefit. Any
costs/benefits associated with ETRM transactions are indirect and will flow
through the state's recovery mechanisms — Idaho's Power Cost Adjustment
(PCA) and Washington's Energy Recovery Mechanism (ERM). Indirect offsets
opportunities will be reviewed after the software RPF is conducted and the
vendor(s)/applications(s) are selected, however indirect offsets are more
strongly associated with enabling wholesale transactions and should be
reviewed after the new system is in production.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
00 $0 $0 $0 $0 $0
s Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 14 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 83 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, which were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1: Custom In-House Application Rewrite
In 2017 and 2018, the Company discussed options for replacing Nucleus,
including re-writing the application layer and retiring Oracle Forms & Reports,
while also evaluating the options and impacts of joining the WEIM operated by
CAISO. By Q3 2018, the Company had hired Utilicast to conduct EIM
preparedness assessments and on April 25, 2019, Avista signed the WEIM
Implementation Agreement with CAISO to join the market in March 2022. At that
point, discussions about Nucleus replacement options were paused as the
Company focused resources on the multi-year, multi-million EIM
implementation.
During that analysis period, Avista was made aware of three known production
instances of Nucleus at Shell Energy, Dominion Energy and Florida Light and
Power. In September 2018, Avista contacted Shell Energy about their version
of Nucleus (likely branching from Avista's Nucleus code base around 2001) and
their front-end rewrite of the system. Shell Energy had hired a software
development company called Paragon to re-write 375 screens and 200 reports
with 19 developers over a two-year period. At that time, the Company did not
contact the other two utilities, nor did they know Shell Energy's costs associated
with the effort.
For this 2024 BC update, the Company has drawn from Shell Energy's 2018
information to estimate costs for an in-house, on premise re-write of Nucleus.
The Company also contacted Dominion Energy and Florida Light and Power
about their use of the Nucleus product. Florida Light and Power confirmed they
hadn't used Nucleus in at least 10 years. After retiring Nucleus, they
implemented another in-house custom solution and are currently planning a
commercial, vendor-supported implementation. After multiple email and phone
call attempts were made to discuss Nucleus with Dominion Energy, a contact
there reported Nucleus had not been in use at Dominion for many years and
there wasn't anyone still employed with the company who could speak to its use.
Based on this information, there are two known implementations of Nucleus still
in use today —Avista and Shell Energy.
Based on Shell Energy's resource count, timeline and number of
screens/reports, a very rough order of magnitude (VROM) estimate could be
established at $9.5 million in 2024 dollars with a loaded and blended rate of
$120/hour per developer. However, Avista has at least a third more screens and
reports, which would bring the VROM estimate to $12.5 million. In addition to
Business Case Justification Narrative Template Version: February 2023 Page 15 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 84 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
forms and reports replacement, Avista would also need to address the
numerous integrations and security vulnerabilities present in the existing version
of Nucleus. Over the last 20 years, security protocols for integrations have
improved with the use of Secure Sockets Layer (SSL) encryptions. However,
Nucleus has interfaces that aren't able to use SSL encryption or encrypted
email. Based on previous internal integration and security vulnerability
remediation efforts, a VROM estimate would include four developers working
half time throughout the project at$1.5 million. Implementation expense as been
estimated at $1.0 million — see Figure 7 for total VROM estimates.
Figure 7 — Custom In-House Application Rewrite
VROM Estimates'
Nucleus Re-Write Cost VROM Estimates
Implementation Maintenace
Item Capital Expense Capital Expense
Forms/Reports $12.5 $0.5
Secruity/Integrations $1.5 $0.5 $1.5 $0.3
Totals $14.0 $1.0 $1.5 $0.3
Uncertianty-50% $7.0 $0.5 $0.8 $0.1
Uncertianty+50% $21.0 $1.5 $2.3 $0.4
in Millions
These VROM estimates require a plus or minus 50% uncertainty factor and were
compiled based on internal experience and knowledge. The Company did not
contact an outside software development company or issue a Request for
Information (RFI) or RFP. As such, a $14 million VROM for an in-house rewrite
of Nucleus, provides a cost range of $7 million to $21 million capital for the
implementation and a range of $0.5 to $1.5 million in implementation expense.
In terms of post-implementation costs, a VROM range of $0.8 to $2.3 million in
capital and $0.1 to$0.4 million in expense has been estimated—these estimates
are not incremental to the existing Nucleus capital and expense spend. These
VROM estimates were compared to the Utilicast estimates for a CIRR analysis
in Section 2.2.
This custom in-house rewrite of the Nucleus application does not meet the
following business needs and objectives, or mitigate risk concerns:
Avista did not issue an RFI/RFP for these VROM estimates. Internal estimates assumed hiring staff
with appropriate skill set, developing an on-premises solution with a desktop client— not at a cloud
hosted (Avista or third-party) web-based client, which would have increased implementation and
maintenance costs. Although the database is expected to pose limitations (regardless of on-prem or
cloud implementation), this re-write scenario assumes the existing database is able to accommodate
all future business and technical requirements.
Business Case Justification Narrative Template Version: February 2023 Page 16 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 85 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
■ Avista has made a corporate decision that it is not a software
development company and will instead purchase and configure industry-
standard applications to reduce the risks and costs of owning and
maintaining custom applications.
■ Avista does not staff the technical or business knowledge required for
this undertaking.
■ Replacing Nucleus would require the Company to carry the sole
responsibility for resolving performance, accuracy, and reliability issues
with a first-generation application.
■ The Company anticipates the Nucleus database will pose limitations to
future organized market operations and already limits business
operations with spreadsheet workarounds. If the Company were to start
this project and change scope mid-project to implement a new database,
it would jeopardize costs and schedule, and increase complexity.
Replacing the entire system with in-house technology would require
implementing and maintaining a full software stack from a front-end
browser, middle ware, database, security protocols, and a host of other
technologies to maintain and update.
■ Developing another in-house custom solution does not position the
Company well for integrating additional organized market software.
Ideally, the Company would select a vendor who could provide an ETRM
solution and organized market software to leverage native integration
amongst the systems.
■ See Section 1.1, Section 1.3 and Section 2.2 for additional business
needs and risks this alternative does not accommodate.
Alternatives 2, 3, 4: The following alternatives continue with in-house
development and support of Nucleus. Based on information available as of April
2024, annual O&M support for Nucleus is approximately $0.05 million a year
and capital investments range between $0.70 to $0.95 million a year. These
alternatives do not solve the business problem in preparing for organized market
expansion, multi-jurisdictional obligations/tracking or alleviate the unnecessary
risks and liabilities associated with using a software system beyond its end-of-
life date. They do not protect against cyber security threats, remediate
integrations limitations, or enable performance upgrades and improvements.
Alternative 2: Expect Oracle to Extend the End-of-Life Support Date
Although Oracle has extended the end-of-life support date in the past, there is
no guarantee Oracle will continue to do so in the future. When the future of
Nucleus was discussed in 2017, the end-of-life support date was planned for
October 2020 with an extended support date of October 2023. As of April 2024,
the end-of-life support has been extended to December 2026, with extended
support expiring in December 2027.
Alternative 3: Purchase Oracle's Extended Support
Business Case Justification Narrative Template Version: February 2023 Page 17 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 86 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
Based on a call with Oracle in May 2023, end-of-life support was planned for
December 2025, with an option to purchase extended support to December
2027 for an additional fee. As of April 2024, the end-of-life support has been
extended to December 2026, with extended support expiring in December 2027.
The extended support does not offer access to new or on-going updates as
Oracle will not develop any — it only allows to access existing updates from
Oracle, providing no real value.
The incremental cost to purchase extended support would be based on Oracle's
annual costs at the time of the purchase. They are estimated at 10 percent of
the licensing/support costs for year one of support and 20 percent for year two.
Based on the April 2024 Oracle WebLogic Suite annual costs of $0.06 million,
two years of extended support is estimated at $0.02 million. Purchasing this
support extension would be based on future Oracle costs, which are unknown,
but are expected to increase by 8 percent annually based on Oracle's pricing
policy.
Alternative 4: Operate Application Without Oracle Support
Avista may also chose to continue use of Nucleus beyond the current Oracle
end-life-life support date of December 2026 and/or chose not to purchase the
extended support, as it offers no value.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Although early in the initiation phase of this ETRM implementation, the following
metrics may be leveraged to measure success including the Company's ability to
maximize organized market participation and benefits, optimize transmission
sales, the ability to supply and deliver natural gas and power and the ability to
meet compliance and program obligations under NERC, FERC or the WRAP.
Metrics will be reviewed and updated after the RPF phase.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The 2022 Nucleus/ETRM assessment conducted in partnership with Utilicast,
provided an estimated implementation of three-to-four years. The project must first
conduct a software RFP and select a vendor(s), which is planned for early 2025
with the capital project beginning in late 2025. If capital and expense funding for
this BC is not approved to begin in 2025, the project would be delayed to 2026
which increases operating performance risk and jeopardizes future organized
market opportunities. Utilicast provided an estimated timeline for delivery for
electric and natural gas, however that schedule is dependent on chosen vendor
capabilities and business priorities. An updated delivery timeline will be provided
Business Case Justification Narrative Template Version: February 2023 Page 18 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 87 of 351

DocuSign Envelope ID:2EB5BFF7-5773-4C74-A1D1-88477AC43C11
Energy Trade & Risk Management (ETRM) Implementation
after the system integrator, software vendor(s) have been contracted and business
priorities have been reviewed and prioritized.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
This BC will have two levels of governance: the Director Steering Committee and
the Executive Steering Committee. The committees will review monthly project
status reports, which identify project scope, schedule, and budget, as well as risk
or issues the project team has identified.
Status reports to the steering committees will be used as the official review and
approval process for decisions, prioritization and change requests. Risk, issues
and change requests will be documented in project logs and kept as artifacts.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Energy Trade & Risk
Management Implementation BC and agree with the approach it presents.
Significant changes to this will be coordinated with and approved by the undersigned
or their designated representatives.
Signature: max, Date: Apr-29-2024 1 12:19 PM PDT
�oo� e
Print Name: Kevin Holland
Title: Director, Energy Resources
Role: Business Case Owner
Signature: .. v
s�++6— Date: Apr-30-2024 13:48 PM PDT
sv
Print Name: Scott Kinney
Title: Vice President Energy Resources
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 19 of 19
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 88 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D90081892lD6
Financial and Accounting Technology
EXECUTIVE SUMMARY
The Finance and Accounting Technology Program' Business Case sponsors the financial applications that
are critical to Avista's financial health, regulatory compliance, and supports the business areas operational
and strategic initiatives. The Finance and Accounting business areas include Financial Planning &
Analysis, Corporate Accounting, Utility Accounting, Revenue-Financial Systems, Accounts Payable,
Remittance, Resource Accounting, EIM Settlements, Risk Management,Treasury,Tax Services and Data
Science.
Avista's Finance and Accounting technology systems are a necessity as they provide critical financial,
economic, regulatory and budgetary business functions that support our employees and customers
throughout all service territories. These vital systems require systematic upgrades and enhancements to
maintain reliability, compatibility, and reduce security vulnerabilities.
This business case is necessary to fund the portfolio of components that maintain the applications and
licenses necessary to meet internal and external business processes and objectives. In addition, it will
enable the automation of manual business processes in order to strengthen our ability to perform, which
impacts our capacity to achieve stated financial objectives and affordably operate and maintain safe and
reliable generation and energy delivery infrastructure.
In order to maintain these business processes and systems supported by this business case, the
recommended funding amount is $19,325,000 over the next five years. This funding level will provide the
appropriate technology and development resources to meet the periodic upgrades and enhancements
prioritized by the Finance and Accounting Governance committee. This funding level also considers the
development staff required to maintain these core technology solutions. The cost of these solutions varies
by scale of footprint and resource models. The technology under this program undergoes regular
utilization and performance reviews to determine expected standards and capacity requirements to
maintain system reliability under the established budget allocations and respective technology lifecycles.
These reviews can result in periodic supplementary investment demands as a result of technology lagging
behind its lifecycle or predetermined performance standards. The technology, tools, and systems under
this program benefit Avista customers, as they support company-wide business application
systems that empower employees to perform at a more strategic level.
Failure to approve the recommended funding would cause the deferment of upgrades and enhancements,
resulting in unsupported applications, which in turn results in increased security liability, non-compliance,
and significantly higher operational and future capital costs. It would also risk the reduction of skilled
resources resulting in the loss of institutional business processes and technology skillsets in an
exceptionally competitive market.
This Business Case plan was created by the Business Case Owner, Domain Architect, Product Owner,
Business Technology Analyst, and the ET Project Management Office and approved by the Finance and
accounting Governance Team (includes Business Sponsor, Director and Managers within Finance and
Accounting).
VERSION HISTORY
Version Author Description Date
1.0 L Raymond Updated template and content for new planning cycle 04105124
2.0 G. Smith/K. Schuh Final Review 04/29/24
BCRT Jeff Holter Has been reviewed by BCRT and meets necessary requirements 04115124
1 I'] °A Program is defined as related projects, subsidiary programs, and program activities managed in a coordinated
manner to obtain benefits not available from managing them individually. Managing projects,subsidiary programs,and
program activities as a program enhances the delivery of benefits by ensuring that the strategies and work plans of
program components are responsively adapted to component outcomes,or to changes in the direction or strategies of
the sponsoring organization.,"Project Management Institute Global Standard, The Standard for Program Management,
Fourth Edition. Page 3(Copyright 2017).
Business Case Justification Narrative Template Version: February 2023 Page 1 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 89 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $4,000,000 $3,850,000
2026 $4,570,000 $3,775,000
2027 $3,640,000 $4,435,000
2028 $3,715,000 $4,075,000
2029 $3,400,000 $3,400,000
Project Life Span 5 Years (Program)
Requesting Organization/Department Finance & Accounting
Business Case Owner I Sponsor Graham Smith I Ryan Krasselt
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - this section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
This program is required to support the application-related technology initiatives for all areas within
Finance and Accounting. These areas include Financial Planning & Analysis (Oracle Enterprise
Performance Management and UI Planner), Corporate Accounting (Oracle E-Business Suite), Utility
Accounting (PowerPlan Fixed Assets), Revenue-Financial Systems (Oracle E-Business Suite), Accounts
Payable (Oracle E-Business Suite and APx), Remittance (Paycourier and OPEX), Resource Accounting,
EIM Settlements, Risk Management (Nucleus), Treasury, and Tax Services (PowerPlan Tax Fixed
Assets).
Application refresh projects play a crucial role in the realm of finance and accounting. These projects are
driven by software lifecycle requirements, necessitating updates, upgrades, or replacements for existing
systems. Their purpose is to align with evolving business needs and address technical obsolescence. By
undertaking application refreshes,Avista is able to maintain system compatibility, reliability,supportability,
and security enhancements.
In today's dynamic landscape, the industry faces rapid technological shifts. To thrive, Avista must adapt
their conventional practices and processes. Application expansion becomes imperative as demand
evolves, compelling us to enhance the functionality of their software investments.
Business Case Justification Narrative Template Version: February 2023 Page 2 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 90 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
1.2 Discuss the major drivers of the business case.
The primary investment driver for the Finance and Accounting Business Program is Performance and
Capacity. A secondary investment driver, nearly as important as the first, is Asset Condition.
The Finance and Accounting department relies on software for performance and capacity for efficiency
and automation of routine tasks such as data entry, reconciliation, and financial reporting. Technology
automation reduces manual effort, minimizes human error, and streamlines processes. Data
management and accuracy is also a major component, as it enables better analysis that can help identify
trends, risks, and growth opportunities.
Many of the applications and respective components in this Business Case provide indirect support to
Avista customers through automation efficiencies, accuracy in financial records, timely reporting, and
decision making.The lifecycle management of these applications are critical to maintain performance and
productivity and are largely dictated by the technology solutions that are used.All of this work is necessary
to enable efficiencies, reduce risk and allow Avista to best serve our internal and external customers.
Without properly managed business application lifecycles, our customers would potentially see difficulty
in our ability to report company financials, which could jeopardize our ability to access capital markets
and impair customers' ability to trust our integrity, and the reliability of services that we provide.
Asset condition plays a pivotal role in driving the technology refresh lifecycle due to depreciation and
value loss, as newer versions with enhanced specifications are continually released. The ability to
manage optimal asset conditions reduces the risks of downtime, resource drain on IT support, and
performance factors due to aging technology.
1.3 Identify why this work is needed now and what risks there are if not approved or
if deferred or risks being mitigated by the request.
Timely system upgrades and enhancements are essential for maintaining operational efficiency, security,
and business continuity. Failing to approve or fund these upgrades exposes Avista to risks, including
performance bottlenecks, security vulnerabilities, and business disruptions.
The projects and initiatives outlined in the Finance and Accounting technology roadmap (see section 2.1)
provide functional enhancements that address ongoing changes in the workplace, provide increased
employee efficiency through the reduction of steps required to complete a task, and better utilization of
resources. They shift costs from inefficient processes to more value-driven activities.
Working through these projects as suggested, reduces Avista's overall risk exposure by ensuring Avista
is using funds in the most cost-efficient manner and by maintaining a culture of performance and
innovation,which has a positive impact on our employees and customers.
1.4 Discuss how the proposed investment, whether project or program, aligns with
the strategic vision, goals, objectives and mission statement of the organization.
See link.
Avista Strategic Goals
This is a program with discrete projects and products that strategically aligns with `Perform' Focus Area.
The technology and business processes directly impact our ability to achieve our financial objectives as
they are not only providing internal efficiencies, but also serve as the source of record for our financial
results. In addition, these internal business technologies enable best practices and impact Avista's ability
to affordably operate and maintain safe, clean, reliable generation and energy delivery infrastructure.
Specific Focus Areas include:
• Perform: The technology in this business case provides the capability to operate efficiently,
make informed decisions, and better navigate the complexities of the industry. It increases
employee productivity through the reduction of steps required to complete a task and shifts
efforts from inefficient processes to more value-driven activities by leveraging technology to
meet business needs. The technology within this program supports the delivery of safe, clean,
Business Case Justification Narrative Template Version: February 2023 Page 3 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 91 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
reliable energy delivery by enabling prudent financial decisions, risk management, compliance,
and efficient resource utilization.
• Our People: Technology plays a critical role in how employees feel about their day to day
experience. Employees that are more productive and efficient by using technology, allows them to
focus on more strategic objectives that help to propel the company forward. These types of
activities naturally promote more resilient, engaged employees that are more performance and
results driven.
Primary Focus Area for project (select one):
■ Mature our customer experience, both internal &external
❑ Our Customers Support affordability,equity,and economic vitality
■ Understand and address the evolving needs of our customers
■ Advance our employee experience with a focus on cultural values
❑ Our People 0 Continuously Improve the safety and wellbeing of our people
■ Strengthen equity, inclusion, and diversity
■ Affordably operate and maintain safe,clean, reliable generation and energy delivery
0 Perform infrastructure
■ Achieve stated financial objectives
■ Manage risks to protect our employees,customers,communities and owners
❑ Invent Build the utility of the future with our stakeholders
■ Foster an environment of continuous improvement and transformation
Business Case Justification Narrative Template Version: February 2023 Page 4 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 92 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
1.5 Supplemental Information — please describe and summarize the key findings
from any relevant studies, analyses, documentation, photographic evidence, or
other materials that explain the problem this business case will resolve.2
Vendor roadmaps and technology asset lifecycles serve as critical data points for planning replacements
of existing technology within this program. The goal is to align with business value and strategic objectives
while working within the constraints of resource capacity and funding. However, deferring replacements
introduces the risk of technology failure. Regular reviews of vendor roadmaps and technology asset
lifecycles help track how much our technology investment lags behind the vendor's roadmap, thereby
introducing risk to supporting business application systems and their corresponding automated processes.
Other references utilized include:
• Gartner, a renowned authority in Information Technology, offers valuable insights, research, and
reference materials.As an industry leader, Gartner provides a deep understanding of market trends, best
practices, and informed technology decision-making. For instance, Gartner's `Magic Quadrant' visually
positions technology providers in the market, allowing us to focus on critical capabilities aligned with
specific requirements and use cases. This capability significantly streamlines our research, evaluation,
and reference-checking efforts. Gartner for Information Technology(IT) Leaders
• SaaS (Software as a Service) Metrics & Adaptive Planning — Moving applications from on-premise to
SaaS environments will reduce the amount of capital for internal resources required to maintain, upgrade,
enhance, and support the technology solutions along with bypassing the need for hardware to run the
applications and the maintenance, support, and upgrades of the hardware as well. It also provides the
organization with more predictable costs, less oversight of budgeting and estimating as less effort is spent
on those activities. In addition, less customization, and more standardization, which is also proven to
increase productivity and eventually may lead to the reduction of business, delivery, and support FTEs
(Full-Time Employees). SaaS vs On-Premises: Choosing the Right Enterprise Solutions
A study commissioned by adaptive planning revealed that the total cost of ownership (TCO) for SaaS
performance management solutions can be as much as 77% lower than on-premises alternatives. The
reduction in labor required for maintaining in-house applications contributes significantly to these savings.
2. PROPOSAL AND RECOMMENDED SOLUTION - Describe the proposed solution to the
business problem identified above and why this is the best and/or least cost alternative(e.g., cost benefit analysis).
2.1 Please summarize the proposed solution and how it helps to solve the business
problem identified above.
The proposed solution to ensure that Finance and Accounting align with upcoming initiatives and meet their
respective timelines over the next five years involves adhering to the recommended application refresh and
expansion requirements for their business applications. The allocation request is primarily driven by factors
such as compatibility, reliability, security, and safety. Additionally, we consider maintaining operational
efficiencies and strategic alignment. Our conventional business practices and processes must be scalable,
promote mobility, and prioritize both employee and customer experience.
The project roadmap for the next five years includes refreshing and/or expansion initiatives made possible
by these core Finance and Accounting systems:
These upcoming technology-related initiatives for the Finance and Accounting business area include the
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 93 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
continuous improvements to Oracle EBS and PowerPlan, including upgrading to a Software as a Service
(SaaS) model within the 5-year roadmap. There is also the demand to upgrade the budgeting system
(EPM) and replace the current Debt and Extract Databases, as the existing processes are manual and
inefficient. There are also plans for automation that will enable technology to manage processes that can
be automated and save labor costs.
These projects are within industry norms for like-sized Finance and Accounting departments within like-
sized utilities and are accepted and widely adopted approaches used within the energy industry. This
is part of why the Steering Committee exists — to help propel Avista forward in its initiatives through
intelligently selected and implemented projects. The funding requested as part of this program generally
fits these initiatives and will be assigned to specific projects (with Steering Committee oversight) as they
are identified.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other information that was
considered when preparing this business case (i.e., samples of savings, benefits or
risk avoidance estimates; description of how benefits to customers are being
measured; metrics such as comparison of cost ($) to benefit (value), or evidence of
spend amount to anticipated return).3
As part of the 5-year planning process, Enterprise Technology and the Finance and Accounting
departments key stakeholders meet to review the technology demand that is derived from maintaining the
current 'core' systems currently in place, as well as enhancements or new technology that enables the
business to meet their strategic technology roadmap.
Upgrading to the recommended or latest versions of software is important to maintain the overall health of
our business. There are many reasons that upgrades are necessary, from enhanced security, to increases
in employee productivity (and lower costs). Upgrading business software is an economical decision
compared to the cost of maintaining outdated software that suffers breakdowns and increases the cost to
maintain. More detailed examples are as follows:
• Operational Efficiency:
o Upgrades optimize system performance, leading to streamlined processes.
o Enhanced efficiency translates to cost savings through reduced labor hours and improved
productivity.
• Security and Compliance:
o Upgraded systems receive necessary security patches and compliance updates.
o Avoiding security breaches or penalties saves both money and reputation.
• Reduced Maintenance Costs:
o Enhancements often simplify workflows and reduce manual interventions.
o Fewer maintenance hours mean lower operational costs.
• Scalability and Flexibility:
o Upgrades allow systems to handle increased workloads.
o Scalable solutions accommodate business growth without major investments.
• Avoiding Technical Debt (result of prioritizing speed over quality):
o Regular upgrades prevent the accumulation of technical debt.
o Addressing issues promptly avoids costly fixes later.
3 Please do not attach any requested items to the business case, rather be sure to have ready access to such
information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 94 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
• Improved Decision-Making:
o Enhanced analytics provide better insights for strategic decisions.
o Informed choices lead to cost-effective resource allocation.
• Business Continuity:
o Timely upgrades prevent system failures and disruptions.
o Avoiding downtime ensures uninterrupted operations.
Software enhancements are also critical, as demands change so rapidly, we must look for ways to extend
the functionality of our software investment rather than go through a full replacement process.
The requested funding was developed from estimates based on the historical trends for enhancement work
and the recommended product lifecycle for upgrades and licensing renewals, as well as high-level
estimates for new product technologies. High level estimates are collected by the business level subject
matter experts, technology domain architects, and delivery management teams. The schedule was
developed with the most recently available information and is subject to change via the governance
processes mentioned above.
2.3 Summarize in the table and describe below the DIRECT offsets4 or savings
(Capital and O&M) that result by undertaking this investment.
When the Power Plan application is move to the cloud,the capital project will be removed from the roadmap.
There are typically increased O&M costs when moving to the cloud, but those are unknown at this time.
When the ERP to SaaS project completes,we will see significant reduction in capital in 2030+for the same
reason.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital Power Plan to SaaS $ $ $ $ $1,000,000
0&M $ $ $ $ $
2.4 Summarize in the table and describe below the INDIRECT offsets,(Capital and
O&M) that result by undertaking this investment.
According to research and analysis (see section 1.5) we plan to see a continued offset each year after
replacing on premise systems with SaaS. This will primarily impact the capital offsets, as the labor heavy
upgrades will no longer be needed.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $ $ $ $ $
0&M 2 rious projects(See section $345,000 $375,000 $375,000 $425,000 $$425,000
4 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work under this
business case. Such savings could include reductions in labor, reduced maintenance due to new equipment,
or other.
5 Indirect offsets are those items that do not directly reduce the current costs of the Company, but may serve to
reduce future hirings,improve efficiencies,reduces risk(cost or outage),or allows current employees to focus
on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 95 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
2.5 Describe in detail the alternatives, including proposed cost for each alternative,
that were considered, and why those alternatives did not provide the same benefit
as the chosen solution. Include those additional risks to Avista that may occur if an
alternative is selected.
Option Capital Cost
Alternative 1 —Not replacing the Extract Database $16,325,000
Alternative 2—Not moving to SaaS (Power Plan, EBS) $14,500,000
• Alternative 1: Not replacing the Extract Database: The Extract Database contains financial data
from multiple subledgers (Accounts Payable, Accounts Receivable, Projects, Tax Fixed Assets)
and incorporates data from UKG (HR system), Enterprise Performance Management (EPM) and
Forecasting. It also serves as a'backend system'for Claims and Financial Support System (FSS).
If Extract is not maintained, updated or upgraded (assuming it will not be replaced by an integrated
database) then there is risk of losing financial transaction history and disabling a multitude of
reports leveraging the data housed within Extract.
• Alternative 2: Not moving to SaaS (Power Plan, EBS): Remaining 'on premise' with our core
financial applications is not a viable and sustainable option long term. Software as a Service
(SaaS) solutions provide the capabilities and benefits that allow us to better manage costs,
enhance scalability, and focus on higher value activities. The costs associated with managing our
hardware and infrastructure investments becomes a non-issue with SaaS or cloud solutions,
particularly with growth, where there is the ability to quickly and easily add new users, modules,
and features without any additional hardware investments.There are also savings associated with
energy costs and other operational expenses related to maintaining on-premises hardware and
infrastructure.
Another major advantage of moving to SaaS is the ease of upgrades and maintenance of the
systems. Our current on-premises upgrades are very time-consuming and disruptive, requiring
extensive testing and downtime.Transitioning to SaaS would simplify this process as it is managed
by the vendor(which includes patches and new features)with minimal disruption to the business.
This not only saves time, but also helps reduce the risk of errors and system downtime. With SaaS
solutions, we are able to more quickly realize benefits and reduce risks, such as implementation
failure or cost overruns. By outsourcing to a SaaS provider, the team can spend less time
managing and maintaining the software and infrastructure and more time redirected towards
strategic initiatives, such as innovation, digital transformation, and improving core business
processes.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will success be
measured).
Finance and Accounting's technology is critical to Avista's ability to function. The business process
supported by this business case impacts all of the financial transactions for the company. A few examples
include the creation of a new accounting project, a new customer construction request, or the payment of
an invoice.
The ability for this business area and job functions to succeed is dependent on the understanding and
support of Avista's employees and contractors. Failure to support these systems may cause numerous near
term and downstream impacts.
• Timely reporting of monthly/quarterly/annual financial statements
• 80% of the Technology solutions utilized are on a vendor supported version
Business Case Justification Narrative Template Version: February 2023 Page 8 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 96 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
• 5% reduction in the quantity of services incidence opened against the financial systems
2.7 Please identify the timeline of when this work is schedule to commence and
complete, if known.
This is a program with discrete projects and product packages that typically run annually and Transfer to
Plant within that same year. There are times that a project may start in Q3/Q4 of one year and Transfer to
Plant the following year. Typically, application projects will Transfer to Plant about 60 days prior to the
project completion date.
The goal is to break out large/complex projects into smaller projects(phases)to avoid scope creep, budget
overages, and ensure the work can be properly prioritized.The first phase of every project would be scoped
at the Minimum Viable Product(MVP), and subsequent phases would be scoped accordingly, based on the
next highest priority after MVP. This also allows for more accurate Transfer to Plant forecasts.
This is the current roadmap as identified by the business governance team and ET.
EBS/PP Expansion EBS/PP Expansion EBS/PP Expansion EBS/PP Expansion EBS/PP Expansion
Account Debt Database Extract Database Extract Database EPM Budget Tool
Reconciliation Replacement Replacement Replacement(TTP) Expansion
Refresh
Oracle EBS ERP(Enterprise
Upgrade UI Planner Upgrade Resource Planning) ERP to SaaS ERP to SaaS (TTP)
to SaaS
RED/JET Remittance Remittance EPM Budget Tool
Replacement Processing Refresh Processing Refresh TTP) Expansion
Revenue&Gross Revenue&Gross UI Planner
Margin Forecasting Margin Forecasting Upgrade
Tool Tool Expansion
UI Planner Power Plan Core Power Plan Core
Upgrade Accounting to SaaS Accounting to SaaS
TTP
APx Upgrade APx Upgrade
Replacement Replacement(TTP)
Energy Risk
Management
Integrations (post
Nucleus rep.)
2.8 Please identify and describe the Steering Committee/governance team that are
responsible for the initial and ongoing approval and oversight of the business case,
and how such oversight will occur.
The Finance and Accounting Business Case has four levels of governance: The Executive Technology
Steering Committee (ETSC); Technology Planning Group (TPG) of Directors; Integrated Oversight
Committee (IOC), and Program/Project Steering Committees. Applicable stakeholders and disciplines
meet regularly to govern the business case and subsequent programs and projects.
The IOC evaluates and compares all of the application portfolio project priorities on a bi-weekly basis,
utilizing risk, capacity, and other situational factors to ensure each planned project is meeting critical
milestones. The TPG sets priority across the technology investment portfolio, balancing strategic
alignment, business value, and customer benefits, as driven by the strategic initiatives established by the
ETSC.The Capital Planning Group(CPG), an independent body, establishes funding allocations for each
Business Case across the enterprise.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 97 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
The Business Case is largely limited by the funding allocation and resource capacity (staff) to meet its
goals.The funding is generally established at the Business Case level by the CPG. The resource capacity
constraint is generally managed by the TPG and the Business Case owner. Once the two constraints are
established, the Business Case owner will work with steering committee(s) to set project priorities and
sequence over a five-year planning period,subject to additional funding changes as directed by the CPG.
Project prioritization is evaluated by the management team on a bi-weekly basis through the IOC. Each
program and project steering committee meets regularly, as set by each project but generally monthly, and
oversees scope, schedule and budget within their respective projects and programs and informs the
Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around
resource or funding constraints.
Any changes in funding or scope are documented at the Business Case level, via a Change Request
document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval.
Changes in scope, schedule, or budget are also documented through a `Change Request' at the project
level and reviewed and approved through a formal workflow process. All Finance and Accounting
Technology projects in this business case are managed through the Project Management Office (PMO),
which follows the Project Management Institute (PMI) standards. Projects initiate with a `Charter' to begin
the planning process. When planning is complete, a `Project Management Plan (PMP)' is created and
approved as the projects baseline for scope, schedule and budget. At the end of execution, an `Approval
to Go Live' is submitted and approved prior to implementation (Transfer to Plant). After the technology is in
service and out of the warranty period,the Project Manager will hold a Lessons Learned, and subsequently
submit an `Approval to Close' prior to finishing the project. All Monitor and Control documentation and
Change Requests are documented and stored to ensure a comprehensive audit trail.
3 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Financial and Accounting Business Case and agree
with the approach it presents. Significant changes to this will be coordinated with and approved by the
undersigned or their designated representatives.
DocuSigned by:
Signature: rl Sal Date: Apr-29-2024 4:58 PM PDT
Print Name: drKa"M...§Rth
Title: Sr. Manager, ET Application Delivery
Role: Business Case Owner
DocuSiglned by: "�1
Signature: aJA, 4aSSu.I Date: Apr-30-2024 8:33 AM PDT
02B36C66587D411...
Print Name: Ryan Krasselt
Title: VP & Controller
Role: Business Case Sponsor
LDocuSigned by:
Signature: 6 (�t(L6), Date: Apr-30-2024 10:08 AM PDT
5
Print Name: o�nWt@A`x'
Title: Director, Accounting
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 10 11
Exhibit No.of 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 98 of 351

DocuSign Envelope ID:OCE5CD3B-CDD3-4D5B-959B-D900818921D6
Financial and Accounting Technology
DocuSigned by:
Signature: w6sSILA-I& MW Date: Apr-29-2024 1 4:26 PM PDT
Print Name: 4E2Dsc7EE 74del
F
osseln I
Title: Director, Applications &System Planning
Role: Steering/Advisory Committee Review
uSigned by:
Signature: rDoc
'V , , Date: May-01-2024 1 8:17 AM PDT
Print Name: an 11%�c�e 'and
Title: Manager, Revenue Accounting
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 11 11
Exhibit No.of 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 99 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology (HRT)
EXECUTIVE SUMMARY
The Human Resources Technology (HRT) Program' Business Case sponsors the technology related
applications that support the Human Resources (HR) business areas operational and strategic initiatives.
The HR business area includes Benefits, Occupational Health, Avista First Care Clinic, Wellness,
HRIS/Payroll, Employee Relations, Labor Relations, Leadership and Organizational Development,
Corporate Training & Development, HR Shared Services, Recruiting, On-Boarding, Employee Experience,
Equity-Inclusion-Diversity, HR Analytics & Compliance, Craft & Technical Training, Apprenticeships &
Safety.
This business case is intended to fund the portfolio of components that maintain the technology and licenses
necessary to meet HR's internal and external business processes and objectives. Avista's Human
Resources technology systems are a necessity, as they provide essential functions to all our employees
and customers throughout all service territories, such as hiring, payroll, benefits, safety, personnel
development, and labor/regulatory compliance. These vital systems require systematic upgrades and
enhancements to maintain reliability, compatibility, and reduce security vulnerabilities. To maintain these
business processes and systems supported by this business case, the recommended funding is$3,160,000
overthe next five years($535k to $750k per year). This funding level will provide the appropriate technology
and development to meet the periodic upgrades and enhancements prioritized by the HR and Enterprise
Technology(ET) Governance Committee. This funding level also considers the development staff required
to maintain these core technology solutions. The cost of these solutions varies by scale of footprint and
resource models.
The technology under this program undergoes regular utilization and performance reviews to determine
expected standards and capacity requirements to maintain system reliability under the established budget
allocations and respective technology lifecycles. These reviews can result in periodic supplementary
investment demands as a result of technology lagging behind its lifecycle or predetermined performance
standards. The technology, tools, and systems under this program benefit Avista customers, as they
support company-wide business application systems that empower employees to perform at a more
strategic level.
Failure to approve the recommended funding would cause the deferment of upgrades and enhancements,
resulting in unsupported applications, which in turn results in increased security liability, non-compliance,
and significantly higher operational and future capital costs. It would also risk the reduction of skilled
resources resulting in the loss of institutional business processes and technology skillsets in an
exceptionally competitive market.
This Business Case plan was created by the Business Case Owner, Domain Architect, Product Owner,
Business Technology Analyst,and the ET Project Management Office and approved by Human Resources
Governance Team (includes Business Sponsor, Director, and Managers within HR).
VERSION HISTORY
Version Author Description Date
1.0 L. Ra mond Draft 03121124
2.0 D.Quincy Draft edits 04122124
3.0 B. Hoerner/K.Schuh Final Review 04129124
BCRT Jeff Holter Has been reviewed by BCRT and meets necessary requirements 04115124
' [1]"A Program is defined as related projects, subsidiary programs, and program activities managed in a coordinated
manner to obtain benefits not available from managing them individually. Managing projects,subsidiary programs,and
program activities as a program enhances the delivery of benefits by ensuring that the strategies and work plans of
program components are responsively adapted to component outcomes,or to changes in the direction or strategies of
the sponsoring organization.,"Project Management Institute Global Standard,The Standard for Program Management,
Fourth Edition. Page 3(Copyright 2017).
Exhibit No. 12
Case Nos.AVU-E-25-01iAVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 100 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology (HRT)
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2024 $450,000 $315,000
2025 $535,000 $345,000
2026 $700,000 $735,000
2027 $600,000 $600,000
2028 $750,000 $750,000
2029 $575,000 $575,000
Project Life Span 5+ years (Program)
Requesting Organization/Department Human Resources
Business Case Owner I Sponsor Brian Hoerner I Bryan Cox
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
This program is required to support the application-related technology initiatives for all areas within
Human Resources (HR). Those areas include Payroll &Timekeeping, Benefits & Compensation,
Leadership & Organizational Development, Labor & Employee Relations, Recruiting, On-
Boarding & Compliance, HR Analytics, Occupational Health, Safety and Craft Training.
Application refresh projects are necessary due to the ongoing HR and enterprise technology
business requirements to provide updates, upgrades and/or replacements on existing HR
applications, as they are required to respond to changing business needs and/or technical
obsolescence. Refreshes/upgrades are also essential to remain current, maintain compatibility,
reliability, and address security vulnerabilities.
Application expansion projects result from demand related to transformations in the utility and
continuous technology progression required to achieve operational efficiencies and strategic
objectives. Current trends in the areas of mobility (portable internet-ena bled devices like
smartphones, tablets, notebooks, GPS devices, etc.), scalability(ability to increase or decrease in
performance in response to changes), and employee experience (nature of the relationship
between the organization and employees), require technological expansion of conventional
business practices and processes.
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 101 of351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology (HRT)
1.2 Discuss the major drivers of the business case.
The primary investment driver for the Human Resources Business Case is 'Performance and
Capacity' as it is intended to achieve work process and business continuity objectives through a
range of system reinforcement projects to meet performance standards.
A secondary investment driver is 'Mandatory & Compliance,' as it contains investments driven by
compliance with laws, rules,and contractual obligations that are external to the Company(e.g., State
and Federal statutes, settlement agreements, FERC, NERC, FCC rules, and Commission Orders,
employment law, etc.).
Many of the applications and respective projects in this Business Case indirectly support Avista
customers through technology and business processes that include:
• Advancing the `Customer Experience' (cumulative impact of various touchpoints over the
course of customer's interaction with Avista)focus
• Improving the 'Employee Experience' and engagement
• Attracting and retaining diverse resources
• Fostering 'Equity, Inclusion and Diversity' and a culture of belonging
• Promoting safety and health /reducing risks
• Increasing employee productivity
• Encouraging and facilitating learning and skill development
• Refining talent management
• Fostering collaboration and communication
• Investing in our people supporting their development, resiliency, and well-being
• Enabling more efficient, more modern modes of accomplishing work and providing services
• Maintaining compliance with relevant local, state, and federal regulations
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Growing needs and expectations in mobility access, scalability and providing an effective and
attractive employee digital experience require expansion of conventional business practices and
processes.These needs are growing, given the accelerated migration to a hybrid/virtual/digital work
environment.
The projects and initiatives in this business case provide functional enhancements that address
ongoing changes in the workplace (e.g., hybrid/remote work, increased mobile app capabilities),
provide increased employee efficiency through the reduction of steps required to complete a task,
and make better use of Avista resources. They shift costs from inefficient processes to more value-
driven activities.
Upgrading to the recommended or latest versions of software is important to maintain the overall
health of our business. Upgrades reduce security, compatibility, and reliability risks and naturally
provide improved productivity, user experience, and cost savings.
Software enhancements are just as critical, as demand changes so rapidly, we must look for ways
to extend the functionality of our software investments rather than go through full replacement
cycles. Software enhancements help to improve system efficiency, anomalies, and better cross-
platform compatibility. There are also unavoidable governance and compliance changes that may
drive the need for software optimization, thus continuous delivery and continuous integration are
customary practices within business applications.
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 102 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology (HRT)
Working through these projects as suggested reduces Avista's overall risk exposure by confirming
our employees are fully compliant with all FERC, NERC, and FCC rules (via training and talent
management), ensuring Avista is using funds in the most cost-efficient manner (via improved
employee tools that increase overall efficiency and keep employees focused), limiting costly
employee turnover, and by keeping employees educated in the latest safety and health trends and
requirements.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization.
Primary Focus Area for project
Our Mature our customer experience, both internal &external
❑ 0 Support affordability,equity,and economic vitality
Customers 0 Understand and address the evolving needs of our customers
■ Advance our employee experience with a focus on our cultural values.
❑X Our People w Continuously improve the safety&well-being of our people.
■ Strengthen equity, inclusion, &diversity
■ Affordably operate& maintain safe, clean, reliable generation &energy
0 Perform delivery infrastructure
■ Achieve stated financial objectives
■ Manage risks to protect our employees,customers,communities &owners.
■ Build the utility of the future with our stakeholders.
❑ Invent Foster an environment of continuous improvement and transformation.
This is a program with discrete projects and packages that strategically align with the`Perform' and
`Our People' Focus Areas. Specific Focus Areas include:
Our People: Technology plays a critical role in how employees feel about their day-to-day
experience. Employees that are more productive and efficient by using technology are to focus on
more strategic objectives that help to propel the company forward.These types of activities naturally
promote more resilient, engaged employees that are more performance and results driven. HR
focuses on engagement through technology that helps to evolve employee development, resiliency,
and well-being,as well as equity, inclusion,&diversity practices and behaviors.This Business Case
also includes the technology that will continuously improve safety, reduce injuries, and better
understand the associated risks.
Perform: The technology in this business case provides increased employee efficiency through the
reduction of steps required to complete a task and make better use of Avista resources. They shift
efforts from inefficient processes to more value-driven activities by leveraging technology to meet
business needs, which aids in Avista's ability to meet necessary financial objectives. In addition,
HR technology is utilized to continuously perform and improve through systems that focus on
employee development, training, apprenticeships, recruiting, analytics, and compliance.
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 103 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation, photographic
evidence, or other materials that explain the problem this business case will
resolve.
Vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan
replacements for existing technology under the HR program, while meeting business value and
strategic alignment, within the constraints of resource capacity and funding, which in turn can result
in deferred replacement introducing the risk of technology failure. Ongoing reviews of vendor
roadmap and technology asset lifecycle alignment provide necessary information to track how much
of our investment in technology is lagging the vendor roadmap, and thereby introducing risk to
supporting business application systems and their corresponding and respective automated business
processes.
Gartner is used for Information Technology insights, analysis, research, and reference materials.
Gartner is an industry leader in IT research, benchmarking, and consulting practices and provides
Avista with the ability to understand market trends, best practices and make more informed
technology decisions. For example, Gartner's `Magic Quadrant,' provides a graphical positioning of
technology providers in the market, with the ability to home in on critical capabilities based on
requirements and specific use cases. This capability alone significantly reduces the time and effort
of researching, evaluating, and reference checking. Gartner for Information Technology(IT) Leaders.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The recommended solution to ensure that HR can meet these initiatives and their timelines
over the next five years, is to follow the recommended software development lifecycle
application refresh and expansion requirements for HR applications. The requested allocation
is based primarily on compatibility, reliability, security, and safety. The increase in 2025 and
2026 is due to the prospective replacement of the current ALN as the contract will also be up
for renewal. The core HR system, UKG is also up for renewal in 2025. We will be evaluating
renewal strategies for these two key systems to ensure core business functionality, as well as
aligning with the overall company integrated technology strategy direction in the coming years.
Currently, Business Process Automation is funded under a separate Business Case through
2025. After 2025, the HR Business Case will need to fund any HR automation, thus those
forecasted costs have been added to 2026-2029. The project roadmap for the next 5 years
includes refreshing and/or expansion of the core HR systems that support these initiatives:
• Analytics/Compliance—Compliance is an important part of Avista's regulated business.
This includes compliance with finance laws, safety laws, and more. Ensuring compliance
requires a great deal of data discovery and analysis. Additionally, growing Operator
Qualification Compliance for gas workers and contractors creates increased requirements
for learning systems. This is one of the drivers behind reviewing Avista's current LMS
(Learning Management System), a potential shift to other systems, and emerging needs
for additional applications.
• Employee Engagement and Belonging —Studies show that an engaged workforce is a
healthier workforce. Engaged employees have higher job satisfaction, lower attrition rates,
and higher productivity. Some of that engagement comes in the form of Avista's ALN work
mentioned above; some comes in the form of surveys and other forms of employee input.
HR personnel are considering products and product suites that target employee sentiment
Business Case Justification Narrative Template Version: February 2024 Page 5 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 104 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology
and suggest new areas of employee engagement. Employee engagement also comes
from having the people systems and tools that support ease of productivity, collaboration,
communication, belonging, equity, and fairness. Providing a modern and effective Digital
Employee Experience is also a key factor in attracting and retaining employee talent, key
to supporting our customers. This may including incorporation of appropriate generative
Al tools and functions as they become feasible to enable accelerated productivity and
efficiency, ease of use.
• HR Information Systems (HRIS) — HR Information Systems (HRIS) are those that
process and manage employee records and transactions. Examples include systems
responsible for timekeeping (UltiPro), change of status and other people-system related
functions (Resource Hub), performance management, employee perceptions, benefits
enrollment, and more.
• HR Management (HRM) — HR Management (HRM) systems support the day-to-day
management of employees from across the employee life cycle from recruiting to
onboarding to exit interviews.
• Learning and Ongoing Training — Providing up-to-date training keeps the Avista
workforce safe (through ongoing safety training), productive and customer-focused (by
learning the latest approaches and techniques), and compliant (through ongoing
FERC/NERC/Other training by Avista contractors and employees). Avista does this by
accelerating the development of new leaders and employees through guided talent
management, building a skilled workforce, and providing central talent to Avista leaders
through learning platforms (Avista Learning Network and other learning systems such as
Articulate 360 learning design tools and Mandarin Learning Center software)
• Safety and Health —Safety and Health are key elements of Avista's culture. Promoting a
culture of safety and health falls to Avista's HR team. (Enterprise Health and Safety
System- Intelex, PrognoCIS EMR)
• Cross-Functional / Other— Not every project fits nicely into one of the initiatives above.
Some are cross-functional, and some are simply good ideas that continue to improve upon
Avista's workplace.
Capturing every detail of every project over the next five years is impossible. This is part of why
the Steering Committee exists—to help propel Avista forward in its initiatives through intelligently
selected and implemented projects,while maintaining the ability to be agile.The funding requested
as part of this program generally fits these initiatives and will be assigned to specific projects (with
Steering Committee oversight)as they are identified.
These upcoming technology-related initiatives forthe Human Resources business area include the
continuous improvements to UltiPro/UKG, Hub, Intelex, and Articulate, including potential
replacement of the ALN system and renewal strategies for the ALN and UKG within the 5-year
roadmap. There is also the demand to replace the Library System as the existing system is
outdated. There are also plans for automation that will enable technology to manage processes
that can be mechanized and will save labor costs.
These projects are within industry norms for like-sized HR departments per our discussions with
our peer like-sized utilities and are accepted and widely adopted approaches used within the utility
industry.
Business Case Justification Narrative Template Version: February 2024 Page 6 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 105 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other information
that was considered when preparing this business case (i.e., samples of
savings, benefits or risk avoidance estimates; description of how benefits to
customers are being measured; metrics such as comparison of cost ($) to
benefit (value), or evidence of spend amount to anticipated return).2
There are direct savings or offsets in this business case, primarily from reducing printing costs,
copier maintenance and filing of paper documents. Some examples include:
• UKG - $15,000 annually resulting from implementing a file and content management
module in 2023. Reduced costs by eliminating printing paper.
• Sum Total (ALN)- $1,300 annually resulting from implementing a mobile solution, so
that workers do not have to print out their weekly report of qualifications; and so that
worker skill evaluations can be moved from paper to electronic and completed in the
field.
The majority of offsets are realized through indirect savings, such as increased efficiency,
productivity, and accessibility, so that employees can re-direct their efforts toward more core
and value-added work and reduce administrative burden. Other offsets are realized through
maturing safety systems and avoiding risk of injury. Some examples include:
• UKG - $67,000 annually resulting from implementing document management and
people assist modules in 2023 that will centralize employee documents within the
system, integrate document approval, signing functionality, create workflows, and assist
HR resources. Employees, and retirees in request activities, including a request tracking
system, status and action needed notifications.Will also provide enhanced security and
more efficient retrieval of information for internal and external stakeholders, auditors,
and regulators.
• UKG - $45,000 annually resulting from improving manual processes by implementing
electronic data transfer interfaces with other key systems that rely on HRIS data such
as HUB, pension calculation services (WTW), finance reporting (Transportation
Subledger), union employee timekeeping (ARCOS), learning management system, HR
analytics reporting, safety reporting & information system (Intelex), donations and
contributions (Cybergrants), and more.
• Sum Total - $125,000 annually resulting from implementing a mobile solution in 2023
so that employees can access training and required certifications via any electronic
device from any location. And so that we can improve the employee digital experience
with improved ease of access. External learning systems industry and vendor
benchmarks provide conservative estimates of a 3% productivity gain upon
implementation of a mobile solution for employee learning and training. We used the
three-year average time in a system of 19 hours per year per user to calculate a 3%
productivity gain to determine productivity gain estimate.
• Sum Total - $103,000 annually from implementing a mobile skill evaluation process,
eliminating a manual paper process and duplicate data entry. The ability for Avista Skill
Evaluators to evaluate our gas workers in the field and certify or de-certify a user in a
skill via the Avista Learning Network(ALN)mobile app, will provide real-time updates to
the workforce and eliminate redundant data entry. Estimate 5-minute savings per task
along with annual task volume to determine productivity gain estimate.
• Intelex - $60,000 annually. From avoiding hearing loss and soft tissue injuries by
implementing an Industrial Hygiene module. This module will better enable us to target
where hearing protection is needed, better identify and reduce potential injuries related
to ergonomic factors and better zero in on areas and trends where we can mitigate
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2024 Page 7 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 106 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology
hazard risks.
There are numerous other smaller technology systems needed to operate HR in this
complex environment that contribute to the goals of the HR Technology Business case.
2.3 Summarize in the table and describe below the direct offsets3 or savings
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M Paper, printing, and copier
maintenance(File Management and $16,300 $16,300 $16,300 $16,300 $16,300
Mobile ALN)
2.4 Summarize in the table and describe below the indirect offsets4(capital
and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M Efficiency, productivity, accessibility
for employees via UKG, ALN $400,000 $400,000 $400,000 $400,000 $400,000
Mobile,&Intelex
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not provide
the same benefit as the chosen solution. Include those additional risks to
Avista that may occur if an alternative is selected.
Option Capital Cost
Alternative 1 — Fund only current technology(no replacement) $2,725,000
Alternative 2—Remove Business Process Automation $2,850,000
s Direct offsets are defined as those hard cost savings Avista customers will gain due to the work under this
business case. Such savings could include reductions in labor, reduced maintenance due to new equipment,
or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but may serve to
reduce future hirings,improve efficiencies,reduces risk(cost or outage),or allows current employees to focus
on higher priority work.
Business Case Justification Narrative Template Version: February 2024 Page 8 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 107 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology
Alternative 1: Use existing systems as-is and to not put new systems in place.This would put Avista
at a disadvantage through attrition and perpetuates inefficiencies as employees rely on productivity
tools to perform their job. New technologies can streamline processes, reduce overhead, and lead
to cost savings. Also, leveraging new systems, enables features and functionalities such as artificial
intelligence, automation, and cloud computing. Finally, compliance standards evolve over time and
many legacy systems don't align with current regulations, data privacy laws, and security protocols.
Alternative 2 —Removing the Business Process Automation from the forecast is an option but
would hinder our ability to reduce administrative tasks and improve productivity, allowing resources
to work on higher priority, more strategic initiatives, saving labor costs. The longer Avista delays
technology automation,the more difficult it will be scale and thrive in the dynamic digital ecosystem.
Note: this Business Case includes upgrades that are not optional and are vendor-driven to stay
current. Such as annual Articulate upgrades as well as others.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
The HR business team utilizes technology as a critical component to meet their operational and
strategic objectives. Some tools used to measure success would include surveys, reporting
(compliance, training, payroll), collaboration tools (Viva Engage, Avenue, Teams) and various
other forms of employee input.
Constraints and risks are possible to hinder the delivery of the outlined objectives. In these
circumstances, the Business Case owner and Program Manager will work with the Steering
Committee to set project priority and sequencing, subject to any additional funding changes as
directed by the Capital Planning Group (CPG). Each program and project Steering Committee
meets monthly to review the demand to ensure that it aligns with Avista's strategies.The Steering
Committee oversees scope, schedule and budget within their respective programs and projects
and inform the Business Case owner of any changes needing escalation to the Technology
Planning Group (TPG) or CPG for decision-making around resource or funding constraints. In
addition, the Enterprise Technology Project Management Office (PMO) performs a Project
Performance Report(PPR)which is the integrated measurement of the success of the technology
to align with Avista's corporate strategy and Focus Areas. This report produces a score
associated with cost, schedule, and scope management, and the value-add (via survey to the
business stakeholders and Steering Committee).
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
This is a program with discrete projects and packages that typically run annually and Transfer to
Plant(TTP)within that same year. There are times that a project may start in Q3/Q4 of one year
and Transfer to Plant the following year.
Typically, application projects will Transfer to Plant about 60 days prior to the project completion
date (due to the post implementation warranty period and to capture the trailing charges).
Business Case Justification Narrative Template Version: February 2024 Page 9 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 108 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology
The project roadmap for the next five years includes refreshing and/or expansion initiatives of the
core HR systems. The current roadmap includes but it not limited to:
HR Hub HR Hub HR Hub HR Hub Expansion HR Hub
Expansion Expansion Expansion Expansion
UKG Expansion UKG Expansion UKG Expansion UKG Expansion UKG Expansion
Intelex Expansion Intelex Expansion Intelex Expansion Intelex Expansion Intelex Expansion
Articulate 360 Articulate 360 Articulate 360 Articulate 360 Articulate 360
Upgrades Upgrades Upgrades Upgrades Upgrades
Library System HR Employee Digital Employee Di Digital Employee Di Digital Employee
Replacement Relationship g g g
Management Experience Experience Experience
ALN Replacement ALN Replacement HR Business HR Business HR Business
(or renewal) (Start) (or renewal) (TTP) Process Process Process
Automation Automation Automation
UKG - Change of UKG Timekeeping Articulate 360
Status Upgrade Contractor Portal Licensing Renewal
Plus ALN renewal
Articulate 360 HR Business
Licensing Renewal Process
Automation
Note: further evaluation of renewal vs. replacement strategies of key systems up for contract
renewals will be conducted with due diligence over this 5 year time horizon. This Business Case will
also seek alignment with company direction such as integrated platforms and data architecture
strategies.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Human Resources Steering Committee (called the HR Tech Roadmap group) members
include Business Case Sponsors, Directors and Managers within Human Resources, and the
Business Case Owner.
The Human Resources Business Case has four levels of governance: The Executive Technology
Steering Committee (ETSC); Technology Planning Group (TPG) of Directors; Integrated
Oversight Committee (IOC), and Program/Project Steering Committees. Applicable stakeholders
and disciplines meet regularly to govern the business case and subsequent programs and
projects.
The IOC evaluates and compares all of the application portfolio project priorities on a weekly
basis, utilizing risk, capacity, and other situational factors to ensure each planned project is
meeting critical milestones. The TPG sets priority across the technology investment portfolio,
balancing strategic alignment, business value, and customer benefits, as driven by the strategic
initiatives established by the ETSC. The Capital Planning Group (CPG), an independent body,
establishes funding allocations for each Business Case across the enterprise.
The Business Case is largely limited by the funding allocation and resource capacity (staff) to
meet its goals. The funding is established at the Business Case level by the CPG. The resource
capacity constraint is managed by the TPG and the Business Case owner. Once the two
constraints are established, the Business Case owner will work with steering committee(s)to set
Business Case Justification Narrative Template Version: February 2024 Page 10 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 109 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology
project priorities and sequence over a five-year planning period, subject to additional funding
changes as directed by the CPG.
Project prioritization is evaluated by the management team on a weekly basis by the IOC. Each
program and project steering committee meets regularly and oversees scope, schedule and
budget within their respective programs and projects and inform the Business Case owner of any
changes needing escalation to the TPG or CPG for decision-making around resource or funding
constraints.
Any changes in funding or scope are documented at the Business Case level, via Change
Request document that is presented to the CPG on a monthly basis and evaluated by the CPG
for approval.
Changes in scope, schedule, or budget are also documented through a 'Change Request' at the
project level and reviewed and approved through a formal workflow process. All Enterprise
technology projects in this business case are managed through the Project Management Office
(PMO), which follows the Project Management Institute (PMI) standards. Projects initiate with a
'Charter'to begin the planning process.When planning is complete, a 'Project Management Plan
(PMP)' is created and approved as the project baseline for scope, schedule, and budget. At the
end of execution, an 'Approval to Go Live' is submitted and approved prior to implementation
(Transfer to Plant). After the technology is in service and out of the warranty period, the Project
Manager will hold a Lessons Learned, and subsequently submit an `Approval to Close' prior to
finishing the project. All Monitor and Control documentation and Change Requests are
documented and stored to ensure a comprehensive audit trail.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Human Resources Technology Business
Case and agree with the approach it presents. Significant changes to this will be coordinated with
and approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: l;at", f QbUVUr Date: Apr-30-2024 1 7:19 AM PDT
Print Name: 3 E7'3A99 1F54CF
rlan oerner
Title: Manager, Application Delivery
Role: Business Case Owner
uSigned by:
F�;.
Signature: (" Date: Apr-30-2024 9:01 AM PDT
Print Name: B2DA2D 50418...
rya n ox
Title: VP, Safety and Human Resources
Role: Business Case Sponsor
DocuSigned by:
Signature: t Date: Apr-29-2024 1 4:54 PM PDT
Print Name: �138iry
Title: Director, Leadership and Org.
Development
Business Case Justification Narrative Template Version: February 2024 Page 11 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 110 of 351

DocuSign Envelope ID:52F169CD-A6D3-4846-8202-DE7EDBF41A26
Human Resources Technology
Role: Steering/Advisory Committee Review
DOCUSigned by:
Signature: w6sSILA-I& MW Date: Apr-29-2024 1 5:01 PM PDT
Print Name: W69seiA4 ikdel
Title: Director, Applications and System
Planning
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2024 Page 12 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 111 of351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
EXECUTIVE SUMMARY
The Legal and Compliance Technology Program' Business Case sponsors applications critical to Avista's
legal, compliance, and regulatory's operational and strategic objectives. The Legal and Compliance
business areas include Claims, Legal (Labor Relations, Data Privacy), and Compliance [Ethics,
Environmental, Federal Energy Regulatory Commission (FERC), North American Electric Reliability
Commission (NERC), and Environmental, Social & Governance (ESG)].
This Business Case is necessary to fund the portfolio of components that maintain the technology and
licenses required to meet the Legal and Compliance internal and external business processes and
strategic objectives. Avista's Legal and Compliance technology systems are a necessity, as they provide
essential business functions to our employees and customers throughout all service territories.These vital
systems require systematic upgrades and enhancements in order to maintain reliability, compatibility, and
reduce securityvulnerabilities.
In order to maintain these business processes and the systems supported by this business case, the
recommended funding amount is $2,420,000 over the next five years. This funding level will provide the
appropriate technology and development to meet the periodic upgrades and enhancements prioritized by
the Legal and Compliance Governance team. This funding level also considers the development staff
required to maintain these core technology solutions. The cost of these solutions varies by scale of
footprint and resource models.
The technology under this program undergoes regular utilization and performance reviews to determine
expected standards and capacity requirements to maintain system reliability under the established budget
allocations and corresponding technology lifecycles. These reviews can result in the need for periodic
supplementary investment demands as a result of the technology falling behind its lifecycle or established
performance standards.
Failure to approve the recommended funding would cause the deferment of upgrades and enhancements,
resulting in unsupported applications, which increases the risk for security liability, non-compliance, and
significantly higher operational and future capital costs. It would also risk the reduction of skilled resources
resulting in the loss of institutional business process and technology skillset in an exceptionally competitive
market.
This Business Case was created with input by the Business Case Owner, Domain Architect, Product
Owner, Business Technology Analyst, ET Project Management Office and approved by the Legal and
Compliance Governance Team (includes Business Sponsor, Director and Managers within the Legal
and Compliance organization).
VERSION HISTORY
Version Author Description Date
1.0 L. Ra mond 2024 Draft 04106124
2.0 G. Smith/K. Schuh 2024 Final Review 04129124
BCRT Jeff Holter Has been reviewed by BCRT and meets necessary requirements 04111124
1 I'] °A Program is defined as related projects, subsidiary programs, and program activities managed in a coordinated
manner to obtain benefits not available from managing them individually. Managing projects,subsidiary programs,and
program activities as a program enhances the delivery of benefits by ensuring that the strategies and work plans of
program components are responsively adapted to component outcomes, or to changes in the direction or strategies of
the sponsoring organization.,"Project Management Institute Global Standard, The Standard for Program Management,
Fourth Edition. Page 3(Copyright 2017).
Business Case Justification Narrative Template Version: February 2023 Page 1 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 112 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $495,000 $495,000
2026 $450,000 $450,000
2027 $515,000 $515,000
2028 $435,000 $435,000
2029 $525,000 $525,000
Project Life Span 5+years (Program)
Requesting Organization/Department Legal and Compliance
Business Case Owner I Sponsor Graham Smith I Greg Hesler
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
The Legal and Compliance department includes Claims, Legal (Labor Relations, Data Privacy),
and Compliance [Ethics, Environmental, Federal Energy Regulatory Commission (FERC), North
American Electric Reliability Commission (NERC), and Environmental, Social & Governance
(ESG)]. These crucial business functions require reliable, secure, and effective software
technology solutions that enable their capability to ensure that Avista adheres to laws,
regulations, standards, etc.
Many of these technology solutions require regular application upgrades to ensure they respond
to changing business needs and avoid the risks of outdates systems, such as security
vulnerabilities, reliability, and overall performance. Application expansion demands result from
evolving requirements in the utility and continuous technology progression required to achieve
operational efficiencies and strategic objectives. Technology continues to move at a rapid pace
and technology expansion of conventional business practices and processes is imperative to
Avista's growth, resilience, and relevance in this dynamic digital landscape.
Business Case Justification Narrative Template Version: February 2023 Page 2 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 113 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
1.2 Discuss the major drivers of the business case.
The primary investment driver for this business case is'Performance and Capacity'as it is intended
to achieve work processes and business continuity objectives through technology.
The Legal and Compliance department relies on software for performance and capacity for
efficiency and automation of routine tasks such as data entry, reconciliation, and compliance
reporting. Technology automation reduces manual effort, minimizes human error, and
streamlines processes. Data management and accuracy is also a major component, as it enables
better analysis that can help identify trends, risks, and opportunities.
Many of the applications and respective component projects in this Business Case provide
indirect support to Avista customers through automation efficiencies, accuracy in records, timely
reporting, and decision making. The lifecycle management of these applications are critical to
maintain performance and productivity, and are largely dictated by the technology solutions that
are used. All of this work is necessary to enable efficiencies, reduce risk and allow Avista to best
serve our internal and external customers.
A secondary investment driver is 'Mandatory & Compliance,' as it contains investments driven by
compliance with laws, rules, and contractual obligations that are external to the Company (e.g.,
State and Federal statutes, settlement agreements, FERC, NERC, and FCC rules, and
Commission Orders, etc.). Avista customers benefit from our internal efficient systems in place
that allows our employees to manage legal and compliance matters effectively, adhering to
mandatory requirements, reducing risk, and safeguarding our reputation and integrity.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
This funding supports a program to manage the on-going changes to legal and compliance
business processes. If this work is not funded,itincreases the potential for operational costs and
associated fines related to non-compliance with federal, state, or other regulations. The projects
and initiatives provide functional enhancements that address ongoing changes in the workplace,
provide increased employee efficiency through the reduction of steps required to complete a task,
and make better use of Avista resources. They shift costs from inefficient processes to more
value-driven activities.
Upgrading to the recommended or latest versions of software is important to maintain the overall
health of our business. There are many reasons that upgrades are necessary, from enhanced
security, to increases in employee productivity (and lower costs). Upgrading business software is
an economical decision compared to the cost of maintaining outdated software that suffer
breakdowns and increases the cost to maintain. More detailed examples are as follows:
• Operational Efficiency:
o Upgrades optimize system performance, leading to streamlined processes.
o Enhanced efficiency translates to cost savings through reduced labor hours and
improved productivity.
• Security and Compliance:
o Upgraded systems receive necessary security patches and compliance updates.
o Avoiding security breaches or penalties saves both money and reputation.
• Reduced Maintenance Costs:
o Enhancements often simplify workflows and reduce manual interventions.
o Fewer maintenance hours mean lower operational costs.
• Scalability and Flexibility:
Business Case Justification Narrative Template Version: February 2023 Page 3 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 114 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
o Upgrades allow systems to handle increased workloads.
o Scalable solutions accommodate business growth without major investments.
• Avoiding Technical Debt(result of prioritizing speed over quality):
o Regular upgrades prevent the accumulation of technical debt.
o Addressing issues promptly avoids costly fixes later.
• Improved Decision-Making:
o Enhanced analytics provide better insights for strategic decisions.
o Informed choices lead to cost-effective resource allocation.
• Business Continuity:
o Timely upgrades prevent system failures and disruptions.
o Avoiding downtime ensures uninterrupted operations.
Software enhancements are also critical, as demands change so rapidly, we must look for ways
to extend functionality of our software investment ratherthan go through full replacement process.
The primary alternative to these projects is to use existing systems as-is and to not upgrade
systems that are in place. This perpetuates inefficiencies as employees are less productive and
lack relevant tools to make effective business decisions.
Working through these components as planned reduces Avista's overall risk exposure by
ensuring Avista is using funds in the most cost-efficient manner and by maintaining a culture of
performance, which results in an improved downstream impact on our employee and customer
experience.
The requested funding was developed from estimates based on the historical trends for
enhancement work and the recommended product lifecycle for upgrades and licensing renewals,
as well as high-level estimates for new product technologies. High level estimates are collected
by the business level subject matter experts, technology domain architects, and delivery
management teams.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 115 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization.
Primary Focus Area for project (select one):
■ Mature our customer experience, both internal &external
❑ Our 0 Support affordability,equity,and economic vitality
Customers 0 Understand and address the evolving customer needs by offering products,
services, &solutions
■ Evolve our employee experience with a focus on engagement, development,
resiliency&well-being
❑ Our People m Improve safety&training systems to reduce injuries,expand learning&
understand risks
■ Strengthen equity,inclusion, &diversity within systems, practices,&behaviors
■ Affordably operate& maintain safe, clean, reliable generation &energy delivery
❑X Perform infrastructure
■ Achieve stated financial objectives
■ Foster&apply an innovation culture to benefit employees, customers,
communities,&shareholders
El Invent Create the utility of the future with our stakeholders, optimizing for cost, carbon,
& reliability
This is a program with discrete projects and product packages that strategically align with the
'Perform' Focus Area.
Perform: The technology in this business case provides increased employee efficiency through
the reduction of steps required to complete a task and make better use of Avista resources. They
shift efforts from inefficient processes to more value-driven activities by leveraging technology to
meet business needs, which aids in Avista's ability to meet necessary financial objectives. In
addition, legal and compliance technology is utilized to continuously perform and improve through
systems that focus on compliance management and risk avoidance, which also helps to reduce
associated operational expenses.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 116 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation, photographic
evidence, or other materials that explain the problem this business case will
resolve.2
Vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan
replacements for existing technology under the Legal and Compliance program, while meeting
business value and strategic alignment, within the constraints of resource capacity and
funding, which in turn can result in deferred replacement introducing the risk of technology failure.
Ongoing reviews of vendor roadmap and technology asset lifecycle alignment provide necessary
information to track how much of our investment in technology is lagging behind the vendor
roadmap, and thereby introducing risk to supporting business application systems and their
corresponding and respective automated business processes.
Gartner is used for Information Technology insights, analysis, research and reference materials.
Gartner is an industry leader in IT research, benchmarking, and consulting practices and provides
Avista the ability to understand market trends, best practices and make more informed technology
decisions. For example, Gartner's`Magic Quadrant,' provides a graphical positioning of technology
providers in the market, with the ability to home in on critical capabilities based on requirements
and specific use cases. This capability alone significantly reduces the time and effort of
researching, evaluating, and reference checking. Gartner for Information Technology(IT) Leaders.
The `Contract Lifecycle Management' Business Case was utilized for reference regarding CLM
impact, offsets, etc. This is currently funded through Productivity (ER 7050, BI 30001). FP&A
Productivity CLM BC
2. PROPOSAL AND RECOMMENDED SOLUTION
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
This program is set up to maintain and enhance the technology that supports the Legal and
Compliance business processes. By keeping the technology current with industry standards and
aligned with business processes this program reduces the risks that may incur additional O&M
expense. Much of 2023-2024 was focused on ensuring we are as current as we need to be to
maintain support, compatibility, reliability, and security. The goal is to maintain that standard,
while moving toward more strategic objectives, such as the Contract Lifecycle Management
implementation.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 117 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
The recommended solution to ensure that Legal and Compliance can meet these initiatives and
timelines over the next five years, is to follow the recommended software development lifecycle
application refresh and expansion requirements for each application. The requested allocation is
based primarily on compatibility, reliability, security, and safety. Additional criteria considers
maintaining operational efficiencies and aligning with Avista and Legal and Compliance's strategic
Focus Areas. Conventional business practices and processes must be scalable (cost effectively
handling increased workloads), provide mobility, and focus on the employee and customer
experiences. The project roadmap for the next five years includes refreshing and/or expansion
initiatives of the core LCT systems.
Those systems include:
• Contract Lifecycle Management system —new system will manage the contracts process from
creation to execution and renewal. This new solution will be instrumental in providing a more
organized approach to contract management activities, broader contract lifecycle visibility,
better negotiation opportunities, and enable proactive cost savings measures. In addition, this
will become the system of record for Electric and Gas Service Agreements and other revenue-
based agreements that are currently being tracked in disparate systems. Software and vendor
selection is in process and implementation is currently forecasted to complete before 2024.
• CATSWeb (Corrective Action Tracking System) - Avista's compliance tracking and reporting
system.
• Valuemation - Avista's legacy contract management system, that will be replaced by the
Contract Lifecycle Management system when all phases are fully implemented.
• Navex / Conflict of Interest — Software as a Service (SaaS) technology module used for
systematic tracking and reporting of Conflicts of Interest Disclosures which are necessary to
protect corporate reputation, avoid actual or apparent conflicts of interest, and to comply with
legal requirements.
• Claims Management System — The claims management system tracks all claims for Avista
both for and counter to the company. All of the necessary information tied to the claim (the
research, documentation, financial information is housed within this system. It is heavily relied
upon for internal, commission and compliance reporting purposes. The custom legacy Avista
Claims Management (ACM)system will be replaced by Salesforce in 2024.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other information that
was considered when preparing this business case (i.e., samples of savings,
benefits or risk avoidance estimates; description of how benefits to customers
are being measured; metrics such as comparison of cost ($) to benefit (value),
or evidence of spend amount to anticipated return).3
In order to ensure that Avista maximizes the benefits for the investments made in our enterprise
applications, we implement regularly released enhancements that provide incremental
improvements and optimization to these systems. The work under this business case enables
improvements in these processes thus creating efficiencies and cost savings. These savings
come from having systems to aid the legal and compliance activities and without them, we would
see an increase in our direct costs.
The CLM investment is a typical SaaS purchase with significantly positive productivity and
financial benefits to Avista. Enabling CLM as an enterprise-wide capability allows us to leverage
automation as one of our solutions for managing costs over the long-term and provide
3 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 118 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
organizational transparency for our enterprise contract environment. An estimate of achievable
value over time shows that there is an Internal Rate of Return (IRR) of 25%.
2.3 Summarize in the table, and describe below the DIRECT offsets4 or
savings (Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
00 Contract Performance $856,250 $856,250 $856,250 $856,250 $856,250
Direct offsets noted above are related to the CLM implementation, considering reductions in
costs related to improved contract renewal negotiations, enforceable credits/penalties for unmet
supplier obligations, overpayments, and sunsetting Valuemation.
2.4 Summarize in the table, and describe below the INDIRECT offsets5(Capital
and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M Labor Efficiencies $273,400 $411,800 $411,800 $411,800 $411,800
Indirect offsets noted above are related to the general personnel efficiency gains, adding in
expected '/2 CLM impact in 2025, and full savings starting in 2026.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not provide
the same benefit as the chosen solution. Include those additional risks to
Avista that may occur if an alternative is selected.
Option Capital
Cost
Alternative 1 —Fund at a lower level (Waterline) $2.000,000
Alternative 1: Funding at a lower level
The Waterline is bottom-up estimate for technology that is required to enable and sustain
automated business processes of existing enterprise applications that essentially maintain
business operations. These investments allow the company to continue to extract value from the
initial technology investment that supports essential functions and delivers efficiency at the
appropriate level of quality and performance. Without this investment, systems can fall out of
support based on technology vendor-driven lifecycles, as well as degrade appropriate levels of
performance and capacity needed to sustain existing automated or technology-supported
business processes or to keep automated solutions in line with changing business processes.
4 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work under this
business case. Such savings could include reductions in labor, reduced maintenance due to new equipment,
or other.
a Indirect offsets are those items that do not directly reduce the current costs of the Company, but may serve to
reduce future hirings,improve efficiencies,reduces risk(cost or outage),or allows current employees to focus
on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 119 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
Estimates include labor and non-labor forecasts based on historical trends and anticipated
expenses, which support the skillset, product, and licensing entitlements required to keep the
systems current. Waterlines can be fluid for various reasons and therefore are calibrated
annually. This alternative has a number of factors working against it.
If this Business Case were funded at the waterline, it would result in the need to run the projects
at a slower pace or defer existing system enhancements. This alternative would cause a decline
in the number of enhancements implemented and efficiencies gained each year. While the work
would likely get pushed to future years, the ability to meet planned strategic objectives would be
delayed even further. This action will also increase the risk of timely reporting which could result
in compliance challenges. The scale of increased risk is dependent upon many factors such as,
regulatory environment, license renewals and other factors outside of our direct control.
In short, while feasible, funding at a lower level reduces the timing of efficiency gains that are
introduced with new or updated features, and adds risk that Avista would have to increase the
number of software application assets that would need to be deferred, thereby increasing risk of
obsolescence, losing maintenance and support, and reducing automation efficiencies.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
The Legal and Compliance Business teams utilizes technology as a critical component to meeting
their strategic objectives. Some success measurements would include risk avoidance, system
reporting, and better forecasting results.
Constraints are possible and risks hinder the delivery of the outlined objectives. In these
circumstances, the Business Case owner will work with Steering Committee (see section 2.8)to
set project priority and sequence over a five-year planning period,subjectto any additional funding
changes as directed by the Capital Planning Group (CPG). Each program and project Steering
Committee meets monthly to review the demand to ensure that it aligns with Avista's strategies.
The Steering Committee oversees scope, schedule and budget within their respective programs
and projects and inform the Business Case owner of any changes needing escalation to the
Technology Planning Group (TPG) or CPG for decision-making around resource or funding
constraints.
Avista's Legal and Compliance technology systems are a necessity, as they provide essential
business process and productivity capabilities to all of our employees and customers
throughout all service territories. These vital systems require systematic upgrades and
enhancements in order to maintain reliability, compatibility, and reduce security vulnerabilities.
This funding level will provide the appropriate technology and development to meet the periodic
upgrades and enhancements prioritized by the Legal and Compliance Technology (LCT) and
Enterprise Technology(ET)governance committee. This funding is necessary to mitigate the risk
of unsupported applications, security liability, and significantly higher operational costs as a result
of the deferment of upgrades and enhancements, etc.
Investment prudency is reviewed by the Steering Committee (see section 2.8) to ensure
alignment of initiatives through judiciously selected and implemented projects. The funding
requested as part of this program generally fits these initiatives and are assigned to specific
projects (with Steering Committee oversight) as they are identified. Also, the Business Case
owner will work with Steering Committee(s)to set project priority and sequence over a five-year
planning period, subject to any additional funding changes as directed by the Capital Planning
Group (CPG). Each program and project steering committee meets regularly to review the
demand to ensure that it aligns with Avista's strategies.The Steering Committee oversees scope,
schedule and budget within their respective programs and projects and inform the Business Case
Business Case Justification Narrative Template Version: February 2023 Page 9 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 120 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
owner of any changes needing escalation to the Technology Planning Group (TPG) or CPG for
decision- making around resource or funding constraints.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
This is a program with discrete projects and packages that typically run annually and Transfer to
Plant within that same year. There are times that a project may start in Q3/Q4 of one year and
Transfer to Plant the following year. Typically, application projects will Transfer to Plant about 60
days prior to the project completion date (due to the post implementation warranty period and to
capture the trailing charges).
The goal is to break out large/complex projects into smaller projects (phases) to avoid scope
creep, budget overages, and ensure the work can be properly prioritized.The first phase of every
project would be scoped at the Minimum Viable Product (MVP), and subsequent phases would
be scoped accordingly, based on the next highest priority after MVP. This also allows for more
accurate Transfer to Plant forecasts.
The current roadmap includes but it not limited to:
CATSWeb CATSWeb CATSWeb CATSWeb CATSWeb
Expansion Expansion Expansion Expansion Expansion
Claims Claims Claims Claims Claims
Management Management Management Management Management
Expansion Expansion Expansion Expansion Expansion
Contract Contract
CATSWeb Lifecycle CATSWeb Lifecycle CATSWeb
Upgrade Management Upgrade Management Upgrade
Expansion Expansion
Contract Contract
Lifecycle Lifecycle
Management Management
Expansion Expansion
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
This business case is governed by a steering committee made up of the principal managers of
the legal and compliance domains, and typically facilitated by the Application Delivery Manager.
The roles include but are not limited to: Director of Environmental Affairs, VP General Counsel
Chief Compliance Officer, Manager Reliability Compliance, Manager Claims, Manager FERC
Compliance, and Ethics and Compliance Manager.
The Legal and Compliance Technology Business Case has four levels of governance: The
Executive Technology Steering Committee (ETSC); Technology Planning Group (TPG) of
Directors; Integrated Oversight Committee (IOC), and Program/Project Steering Committees.
Applicable stakeholders and disciplines meet monthly (at a minimum) to govern the business
case and subsequent programs and projects.
The IOC evaluates and compares all of the application portfolio project priorities on a weekly
basis, utilizing risk, capacity, and other situational factors to ensure each planned project is
Business Case Justification Narrative Template Version: February 2023 Page 10 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 121 of351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
meeting critical milestones. The TPG sets priority across the technology investment portfolio,
balancing: strategic alignment, business value, and customer benefits, as driven by the strategic
initiatives established by the ETSC. The Capital Planning Group (CPG), an independent body,
establishes funding allocations for each Business Case across the enterprise.
The Business Case is largely limited by the funding allocation and resource capacity(staff)to meet
its goals.The funding is generally established at the Business Case level by the CPG. The resource
capacity constraint is generally managed by the TPG and the Business Case owner. Once the two
constrains are established, the Business Case owner will work with steering committee(s) to set
project priority and sequence over a five-year planning period,subjectto additional funding changes
as directed by the CPG
Project prioritization is evaluated by the management team on a weekly basis by the IOC. Each
program and project steering committee meets monthly (at a minimum) and oversees scope,
schedule and budget within their respective programs and projects and inform the Business Case
owner of any changes needing escalation to the TPG or CPG for decision-making around
resource or funding constraints.
Any changes in funding or scope are documented at the Business Case level, via Change
Request document that is presented to the CPG on a monthly basis and evaluated by the CPG
for approval.
Changes in scope, schedule, or budget are also documented through a 'Change Request' at the
project level and reviewed and approved through a formal workflow process. All Enterprise
technology projects in this business case are managed through the Project Management Office
(PMO), which follows the Project Management Institute (PMI) standards. Projects initiate with a
'Charter'to begin the planning process.When planning is complete, a 'Project Management Plan
(PMP)' is created and approved as the projects baseline for scope, schedule and budget. At the
end of execution, an `Approval to Go Live' is submitted and approved prior to implementation.
After the technology is in service and out of the warranty period, the Project Manager will hold a
Lessons Learned, and subsequently submit an 'Approval to Close' prior to finishing the project.
All Monitor and Control documentation and Change Requests are documented and stored to
ensure a comprehensive audit trail.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Legal and Compliance Technology Business
Case and agree with the approach it presents. Significant changes to this will be coordinated with
and approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: l � Stall Date: Apr-29-2024 1 3:56 PM PDT
Print Name: Ba sac canna
Vac ams mith
Title: Sr. Manager, Application Delivery
Role: Business Case Owner
Business Case Justification Narrative Template Version: February 2023 Page 11 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 122 of 351

DocuSign Envelope ID:90CC70EF-D93A-45BC-981B-75EA55AE5AFA
Legal & Compliance Technology
DocuSigned by:
Signature: ALS(,t,►r Date: Apr-29-2024 1 8:36 AM PDT
Print Name: "G�reg' e'sjer
Title: VP, General Counsel & Chief Compliance
Officer
Role: Business Case Sponsor
DocuSigned by:
Signature: ^,(� Date: Apr-29-2024 8:55 AM PDT
Print Name: °dal y Wiiffeberg
Title: Manager, Ethics & Compliance
Role: Steering/Advisory Committee Review
DocuSigned by:
Signature: W6SSuln, Wa Date: Apr-29-2024 1 9:33 AM PDT
Print Name: E4ffBfgeiH'fZfikdel
Title: Director, Applications & System Planning
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 12 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 123 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
EXECUTIVE SUMMARY
Avista's Outage Management Tool (OMT) is an in-house developed custom application
that supports electric outage analysis, management, and restoration. OMT is a mission
critical system which provides the functionality to manage the electric distribution grid, the
overall life cycle of electric outages and the restoration processes for the Washington and
Idaho service territories. The OMT application and data model were developed by Avista
at a time when commercial outage management software was not available. It has been
used for nearly two decades and is approaching technology obsolescence. Since the
time that OMT was developed, societal and business needs have evolved necessitating
a more innovative solution. These needs include customer desire for improved restoration
times and business needs for Wildfire. In addition, the existing Geographic Information
System (GIS) operating platform on which OMT is built is scheduled by the vendor for
end of life in 2025 and is recommended for replacement in the Energy Delivery
Modernization and Operational Efficiency business case. The OMT application is
showing increasing signs of fatigue (such as system instability during storm scenarios)
and the loss of OMT would mean significant risks, increased costs, and customer benefit
impacts which are detailed in the narrative below. The loss of OMT is rated 12th on
Avista's corporate risk register, which means replacing it with a modern application is a
high priority.
OMT works in synchronization with Avista's Distribution Management System (DMS), to
monitor and control Avista's electric distribution network efficiently and reliably. The DMS
is a commercial application used to monitor and control the portion of the distribution grid
that is equipped with "smart grid" technology that enables remote monitor and control. It
relies on Geographic Information System (GIS) data to determine the current operating
state of the distribution system, which is provided via an outdated, custom-built data
model import tool and OMT integration. Frequent integration failures result in the two
systems being out of synch with each other, requiring a significant amount of manual
intervention to resolve. For example, comparisons between the DMS and OMT model
data sets must be reviewed line by line and verified Monday thru Thursday, and pushed
out to applications every Friday. The DMS marginally meets the current business needs
but it cannot scale to meet future needs for additional distribution grid automation and
Distributed Energy Resources requirements to meet customer choice and Clean Energy
Transformation Act requirements. Avista's relationship with the DMS vendor the past
decade has shown that these future needs are not adequately planned for on the vendor's
long-term roadmap.
Avista foresees a future utility architecture that bridges use cases across Customer, Grid,
Operations, and Utility Enterprise domains. This future will require a technology platform
that enables the integration of these domains. The industry standard for this platform is
an Advanced Distribution Management System (ADMS). Replacing Avista's OMT and
DMS with a single ADMS will achieve improved operational awareness and grid
management capabilities, enable real-time automated outage restoration, enable real-
time grid optimization and performance, improve field and office worker productivity, and
Business Case Justification Narrative Template Version: February 2023 Page 1 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 124 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
provide the ability to reengineer work processes and methods to support the continuous
improvement of Avista's Distribution System Operator program. An ADMS solution
incorporates industry best practices for optimized workflow, software performance and
reporting which will provide Avista with the ability to respond to more stringent and
detailed regulatory compliance reporting requirements, such as those for Wildfire
Resiliency and the Clean Energy Transformation Act. A modern ADMS also enables the
ability to deliver more geographically specific Estimated Restoration Time (ERT)
information to electric customers during outages. The improved ERT accuracy and
restoration status for customers will improve customer confidence in the information,
reducing the number of calls received by our customer service representatives, as well
as call durations.
The estimated project cost is $43M over a four-year planned project duration. Because
of the importance of this project, and the fact that the primary reason ADMS projects fail
or run over time and over budget is due to the inability to create and maintain an accurate
distribution grid data model, initial development work on the data model was started in
2022. The bulk of the ADMS implementation effort is scheduled to start in Q2-2023, with
a three-month Phase 0 effort focused on validating the data model and identifying
technically challenging use cases by running a series of tests utilizing the out-of-the-box
software, using Avista's distribution grid data model and Avista's realtime distribution grid
simulator. The Phase 0 effort will enable the project to efficiently proceed into the Phase
1 design and implementation effort in Q3-2023 with reduced risk to scope, schedule, and
budget, improving the likelihood of completing the project as planned.
Since this is a multiyear project, the work needs to start in 2023 as scheduled to have the
ADMS fully operational before the OMT operating platform is no longer supported and to
meet increasing customer and regulatory expectations which cannot be achieved with the
legacy OMT and DMS applications. Avista needs to proceed with the work now to be
ready for the future, in a similar way to how planning is done for future power needs; i.e.,
we don't wait until we run out of power to build new generation. It would not be prudent
to wait until after our current system completely fails to meet our needs to start an ADMS
project.
A Request for Proposal (RFP) was released to the industry leading ADMS software
vendors in Q3-2022. From that process, four vendors responded which were thoroughly
evaluated and a recommendation to proceed with General Electric (GE) was made to
executive leadership to proceed into contract negotiations with the successful bidder. The
recommendation was approved, and contract negotiations were complete in Q1-2023.
VERSION HISTORY
Version Author Description Date
1.0 Mike Littrel Initial draft of business case 04/2017
2.0 Mike Littrel Updated business case format 0712020
3.0 Mike Littrel Updated program details and budget 0712021
4.0 Mike Littrel Updated program details and budget 0812022
Business Case Justification Narrative Template Version: February 2023 Page 2 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 125 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
5.0 Mike Littrel Updated program details and budget 0412023
6.0 Myers/Ruppert Updated program details and budget 0512024
BCRT Team Steve
BCRT Member Has been reviewed by BCRT and meets necessary requirements Carrozzo
413012024
Business Case Justification Narrative Template Version: February 2023 Page 3 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 126 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
GENERAL INFORMATION
YEAR PLANNED/ACTUAL SPEND PLANNED/ACTUAL TRANSFER
AMOUNT ($) TO PLANT ($)
2025 $10.5 $22.7M
2026 $7.9M $7.9M
2027 $4.OM $4M
2028 $0 $0
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology
Business Case Owner Sponsor Stephanie Myers Mike Magruder, Hossein
Nikdel
Sponsor Organization/Department Energy Delivery Technology Projects
Phase Execution
Category Project
Driver Asset Condition
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
Business Case Justification Narrative Template Version: February 2023 Page 4 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 127 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Avista's current Outage Management Tool (OMT) has been used for nearly two
decades and is approaching obsolescence. The technology is becoming more
and more difficult to configure to meet the changing business needs and has
exceeded its useful life. The software has already undergone two major
conversions to extend the life to this point. Both changes achieved their goals;
however, the code is now more fragile which has increased the complexity of
supporting OMT.
Additionally, the existing system is custom built and requires continual
maintenance and support by internal staff whose skillset is becoming scarce, as
the fundamental code and architecture is complex and outdated. OMT does not
have the full complement of functionality required to meet current and future
needs of the Distribution System Operators as they respond to an increasingly
complex and dynamic electric distribution grid. Outage incident processing
performance can be very slow and unstable during high-volume outage
conditions (storms), particularly in field division offices, impacting the ability to
restore service quickly. When a new configuration request is surfaced, the
change cannot always be implemented, as the custom code and architecture
may not allow it. The existing operating platform used by OMT is currently
scheduled for end of life in 2025.
The existing OMT workflow does not include a fully digital workflow for field
personnel who are responding to outage scenarios. This lack of a digital
workflow creates gaps in situational awareness for the field personnel and the
Distribution Operators who are planning and coordinating the restoration effort.
These gaps can lead to potential safety hazards and inefficiencies in the
restoration process. It also creates gaps in the level of detail collected during
the damage assessment and restoration activities. These details are becoming
increasingly important to be able to report on for programs such as Wildfire
Resiliency. Modern ADMS platforms either includes or has the ability to
integrate with a solution(s) that provide a fully digital workflow. This will enable
both field and office personnel to have access to the same information and
receive near real-time status updates during an outage event, improving safety
and efficiency. A digital workflow also ensures that the damage and repair
information is captured accurately and completely through the use rule driven
forms.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 128 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
Switching (the process to de-energize a section of the electric grid for
construction, maintenance, or repair) is another area for significant improvement
in both effectiveness and safety. Currently switching plans are developed in a
Word document through conversations with the people involved (Area Engineer,
Foreman, Distribution Operators, etc.) and the plan steps are executed
manually on the day of the planned switching activity. An ADMS provides a fully
digital and integrated process for switch plan development, study mode, and
execution of the switching activity. This fully digital process ensures that the
switching meets all electric grid and safety requirements by monitoring each
step of the plan against the actions taken and alerting the personnel if a step is
missed, a step is invalid, or an error is made during the switching process. The
switch plans are also stored in an online library for quick reference to have a
highly reproducible process for future switch plans.
The existing Distribution Management System (DMS) has several challenges
which the ADMS will address. First, the DMS relies on GIS data to determine
the current operating state of the distribution system which is provided via an
outdated, custom-built OMT integration. Frequent integration failures result in
the two systems being out of synch with each other, requiring a significant
amount of manual intervention to resolve each week. The DMS marginally
meets the current business needs but will not meet future needs for additional
distribution grid automation and Distributed Energy Resources requirements to
meet customer choice, and Clean Energy Transformation Act requirements.
Regulatory bodies are also expected to soon require reporting on certain
Wildfire Prevention initiatives and metrics, possibly including those related to
observations, ignition locations, or prevention. Presently, OMT only provides
minimal data on fire-related events or outages, and the methods to extract the
data are very labor-intensive due to the tedious review needed of Distribution
Operator notes in a simple text-box field.
It is additionally expected that regulatory bodies will expect reporting on certain
Clean Energy Transformation Act (CETA) requirements by providing metrics
outlined by Avista within its Clean Energy Implementation Plan (CEIP).
Presently, these metrics are still being established through several parties
including Avista's Connected Communities project, but it is highly probable that
the business need of capturing the applicable data will not be possible in Avista's
current solutions such as OMT.
1.2 Discuss the major drivers of the business case.
Avista can gain significant operations and business advantages by replacing the
OMT and the DMS with an ADMS. A modern ADMS can address many of the
issues currently faced by Distribution System Operators and Electric Operations
field personnel. The benefits of an ADMS fully integrated with other enterprise
systems along with optimized business processes include; improved outage
Business Case Justification Narrative Template Version: February 2023 Page 6 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 129 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
analysis and restoration capabilities, improved safety, improved status
information to customer facing systems, and improved system reliability and
dependability. Avista responds to multiple major storm events per year. An
ADMS with a fully digital workflow has the potential to reduce the labor costs of
these major events by at least 10%. Based on actual storm costs for 2017-2021
that's an average savings of $340,379 per year (see table below) split 75%
capital and 25% O&M.
Accounting Year Summary Exp Category Sum of Actuals with ADMS 10% Savings
2017 Labor $3,357,066 $3,021,360 $335,707
Edon-Labor 54,460,419 S4,460,419 50
2017 Total S7,817,485 S7,481,778 S335,707
2i118 Labor S2,227,664 S2,004,897 5222,766
[don-Labor $2,649,948 S2,649,948 50
2018 Total S4,877,611 S4,654,845 S222,766
2019 Labor S2,366,126 S2,129,514 S236,613
Non-Labor $5,341,119 $5,341,119 SO
2019 Total S7,707,245 S7,470,633 S236,613
2i120 Labor S4,139,030 S3,725,127 5413,903
IJon-Labor $14,288,254 S14,288,254 S0
2020 Total S18,427,284 S18,013,381 S413,903
2021 Labor S4,929,088 S4,436,179 $492,909
[Jon-Labor $14,398,068 514,398,068 SO
2021 Total S19,327,156 S18,834,248 S492,909
Annual Average S11,631,356 S11,290,977 S340,379
A fully integrated ADMS provides capabilities that include: (1) a platform that
integrates numerous utility systems to achieve improved operational awareness
and grid management capabilities, (2) expanded real-time automated outage
restoration, (3) enables real-time optimization of electric distribution grid
performance, and (4) meeting regulatory requirements related to wildfire and
CETA programs.
While improved customer experience is difficult to quantify, it is perhaps the
most important business reason forjustifying a new ADMS. During major outage
event situations, the ability to communicate timely, accurate and consistent
status of outages and estimated restoration time is of paramount importance to
customers. Whether the customer hears directly from the utility, the media or a
public agency, the information about the outage needs to be consistent. An
ADMS is that vehicle to provide this timely, accurate and consistent information
to customers.
Significant customer value from other corporate initiatives will be at risk if Avista
lost the OMT and/or DMS capabilities and did not have an ADMS in place. This
value is at risk if the ADMS project does not occur (or is delayed until OMT/DMS
failure) because the Advanced Metering Infrastructure (AMI) meters simply
provide near real-time data, they do not perform the analytics or initiate the
Business Case Justification Narrative Template Version: February 2023 Page 7 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W. Manuel,Avista
Schedule 1, Page 130 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
optimization functions that produce the customer benefit. That work is currently
accomplished by custom functionality within OMT and DMS, which would
become native functionality within an ADMS. Some examples of these
customer values from the August 2020 Avista Utilities Advanced Metering
Infrastructure (AMI) Project Report include:
Benefit Average Annual Customer Value
Early Outage Notification $4,005,827
More Rapid Restoration $2,269,968
Avoided Single Lights Out $289,723
Reduced Major Storms Cost $327,566
Conservation Voltage Reduction $2,108,817
Business Case Justification Narrative Template Version: February 2023 Page 8 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 131 of351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
The OMT application and data model have been used for nearly two decades
and are approaching technology obsolescence. Continuing to utilize OMT
would continue to create Operating and Maintenance cost pressure while also
creating risks of system failure during times of high demand (storms).
Additionally, any investment in the current system is a sunk cost, as the system
is limited in the additional functionality it can provide to our staff as they respond
to electric customer outages on an increasingly complex distribution system and
the underlaying platform in schedule for end-of-life in 2025. The current system
is highly customized making it increasingly difficult to integrate with newer
enterprise applications. OMT is a cornerstone to Avista's ability to manage the
overall cycle of the electric outage and restoration processes for the Washington
and Idaho electric service territories. If it is not replaced prior to system failure,
it would likely double the amount labor required to complete the restoration
efforts, while also increasing public safety risks and lowering customer
satisfaction. Based on a five-year average of actual storm labor costs for 2017-
2021 that's an addition cost of $3,403,795 per year (see table below) split 75%
capital and 25% O&M. The costs and risks would continue to accumulate after
the storm as daily operations would be impacted for the duration of an OMT
system failure. The Avista Risk register has the impact range of an OMT system
failure set at $1.OM - $10.OM.
Accounting Year Summary Exp Category Sum of Actuals OMT/DMS Failure Annual Cost Increase
2017 Labor $3,357,066 56,714,132 $3,357,066
Non-Labor $4,460,419 54,460,419 $0
2017 Total 57,817,485 511,174,551 53,357,O66
2018 Labor $2,227,664 54,455,327 52,227,664
Non-Labor 52,649,949 52,649,948 Sig
2018 Total 54,877,611 57,105,275 52,227,664
21-i19 Labor $2,366,126 54,732,253 $2,366,126
rJon-Labor 55,341,119 55,341,119 S0
2019 Total 57,7O7,245 51O,O73,372 52,366,126
2020 Labor $4,139,030 58,278,060 S4,139,030
IJon-Labor $14,288,254 514,288,254 $0
2020 Total 518,427,284 522,566,313 54,139,O3O
2021 Labor $4,929,088 59,858,176 34,929,088
Non-Labor $14,398,068 514,398,068 SO
2021 Total 519,327,156 524,256,245 54,929,088
Annual Average 511,631,356 515,O35,151 53,4O3,795
Since this is a multiyear project, the work needs to start as scheduled in order
to have the ADMS fully operational before the OMT operating platform is no
longer supported, and to meet increasing customer and regulatory
expectations, which cannot be achieved with the legacy OMT and DSM
applications. Avista needs to proceed with the work now in order to be ready
for the future, in a similar way to how planning is done for future power needs;
i.e., we don't wait until we run out of power to build new generation.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W. Manuel,Avista
Schedule 1, Page 132 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
Implementing an ADMS is a long-term project, so we don't want to wait until
after our current system completely fails to meet our needs to start an ADMS
project. If OMT is not replaced with a modern ADMS, the ability of Avista to
meet current and future customer, regulatory, and compliance requirements
will be at risk.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Having a modern ADMS will improve field and office worker productivity, provide
more accurate data, and provide the ability to reengineer work processes and
methods to support the continuous improvement of Avista's outage
management and restoration program. It will also provide Avista with the ability
to respond to more stringent and detailed regulatory compliance reporting
requirements, enable effective operation of an increasingly complex and
dynamic electric distribution grid, and may deliver more accurate Estimated
Restoration Time (ERT) information to electric customers during outages. The
improved ERT accuracy and restoration status for customers will improve
customer confidence in the information which may reduce the number of calls
received by our customer service representatives, as well as call durations. The
additional Distributed Energy Resource Management (DERM) functionality will
support the long-term goals of the CEIP and Connected Communities project.
CEIP and Connected Communities goals are described in more detail in section
2.6. A DERM provides the ability to actively manage energy resources such and
wind, solar, batteries, etc. based on specific grid requirements in order to
achieved goals such as increased distribution grid reliability.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
Justification for system replacement is based on comprehensive assessments
of technologies, processes and functions that were performed in 2015 by third-
party consultants as part of an enterprise project planning process. The details
of the assessments are available in the following supporting documents:
• Business Case
• Current State Report
• Future State Report
• Gap Analysis Report
• Industry Analysis Report
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 10 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 133 of 351

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OMS ADMS
• Requirements Report
• Alternative Analysis Report
The Gap Analysis report includes a list of more than 30 gaps in the current state
OMT/DMS applications that would be resolved/corrected with the
implementation of an ADMS. The conclusion from the third-part consultant is:
Avista can gain significant operations and business advantages by
replacing OMT with a commercial OMS (ADMS). A new OMS (ADMS) can
address many of the issues currently faced by dispatch and field
personnel. Properly integrated with other systems with optimized
processes, benefits to be realized include improved outage analysis and
restoration capabilities, improved status information to customer facing
systems, and improved system reliability and dependability. A new
OMS(ADMS) will improve Avista's ability to respond to storm condition
outages and restoration processes.
Avista Facilities Management(AFM)
Electric and Gas Design
Electric and Gas Edit Distribution Management
Outage Management ..l
L System
Engineering Analysis
ifflu ...zmj engine ..:
'GIS-Geographic Information System
An Esri Geographic Information System (GIS) serves as the foundational
data structure on which Avista Facility Management (AFM) applications,
including OMT, are built or rely on. AFM is the system of record for spatial
electric and gas facility data and provides the connectivity model to
support OMT. The following is a brief description of AFM tools.
• Electric and Gas Edit are tools inherent in the system used for data
edits prior to committing final data changes and additions.
• Outage Management Tool is an in-house developed application that
supports outage analysis and management.
• Engineering Analysis is a commercial tool used for engineering
analysis modeling.
• Distribution Management System is a commercial application used to
monitor and control the portion of the distribution grid that is enabled
with "smart grid" technology. It relies on the GIS data from OMT to
determine the current operating state.
Business Case Justification Narrative Template Version: February 2023 Page 11 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 134 of 351

DocuSign Envelope ID: 78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
Avista foresees a future utility architecture that bridges use cases across Customer,
Grid, Operations, and Utility Enterprise domains. This future will require a technology
platform that enables the integration of these domains. The industry standard for this
platform is an Advanced Distribution Management System (ADMS). Replacing
Avista's OMT and DMS with a single ADMS will achieve improved operational
awareness and grid management capabilities, enable real-time automated outage
restoration, enable real-time grid optimization and performance, improve field and
office worker productivity, and provide the ability to reengineer work processes and
methods to support the continuous improvement of Avista's Distribution System
Operator program. An ADMS solution also provides Avista with the ability to respond
to more stringent and detailed regulatory compliance reporting requirements, such as
those for Wildfire Resiliency and the Clean Energy Transformation Act. A modern
ADMS also enables the ability to deliver more geographically specific Estimated
Restoration Time (ERT) information to electric customers during outages. The
improved ERT accuracy and restoration status for customers will improve customer
confidence in the information which will reduce the number of calls received by our
customer service representatives, as well as call durations.
The additional Distributed Energy Resource Management (DERM) functionality will
support the long-term goals of the CEIP and Connected Communities project. CEIP
and Connected Communities goals are described in more detail in section 2.6.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
Detailed documentation from industry experts as listed in section 1 .5 above,
along with project costs from recent comparable projects at other utilities were
used to determine the amount of the capital funds request and duration of the
business case.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 12 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W. Manuel,Avista
Schedule 1, Page 135 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
Avista released a Request for Proposal (RFP) in Q3-2022 to qualified ADMS
software vendors and implementors. The responses were evaluated and
scored in order to determine the best ADMS solution. The RFP results were
provided to the project governance group for review and approval to proceed.
The decision was made to proceed into contract negotiations with the
recommended solution from GE, which provided both a rich set of features and
functionality and a very competitive price. An initial Phase 0 engagement is
planned to refine the project's scope, schedule and budget which will reduce
the risks of unforeseen issues impacting the project as work proceeds.
The funds in this business case will be utilized to fund the replacement of OMT
and DMS with an ADMS. The project is estimated to have a four-year duration.
Upon completion, the ADMS will fully replace both the existing Outage
Management Tool and the Distribution Management System. The project is
scheduled to start in Q2-2023, with a six month Phase 0 effort focused on
validating the data model and identifying technically challenging use cases by
running a series of tests utilizing the out-of-the-box GE software, using Avista's
distribution grid data model and Avista's real-time distribution grid simulator.
The Phase 0 effort will enable the project to efficiently proceed into the Phase 1
design and implementation effort in Q4-2023 with reduced risk to scope,
schedule, and budget, improving the likelihood of completing the project as
planned. The project will ramp up during 2023, then have a levelized spend for
multiple years over the duration of the project.
The Regulatory Affairs Team has reviewed the project and determined that an
internal rate of return calculation would not be needed for this project.
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
The ADMS project is not forecasting any direct offsets because there will be
no staffing or software reductions as a result of this project. There will be
incremental additions to O&M and Capital due to support staff employees
that will need to be hired to maintain the ADMS solution past Go-Live and into
its 15-year projected depreciation lifespan. As of Q2 2024, the estimated costs
for these new support staff employees are as follows.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 13 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 136 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
Offsets Offset Description 2025 2026 2027 Annually
Beyond
Capital Employee Additions(not an offset) $488K $412K $318K $318K
0&M Employee Additions(not an offset) $251 K $235K $247K $247K
NOTE: The Capital and O&M additions shown on the chart above are based upon employee
resources that have been approved by the SteerCo as of April 2024. Both the Capital and O&M
amounts might change as this Business Case evolves over time, especially as the Narrative is
updated year over year.
2.4 Summarize in the table, and describe below the INDIRECT offsets
(Capital and O&M) that result by undertaking this investment.
Modernizing Avista's outage management software and business processes is
potentially anticipated to provide the following indirect labor savings from
improved work efficiencies for Field personnel and Distribution Operations
personnel who respond to electric outages. The five-year estimated savings
(starting in 2025) is estimated to be $1.OM.
These high-level estimated savings are based on a review of current and
previous projects completed at Avista with a uniform efficiency value applied
based on the types of applications deployed. The following are high-level
estimates, and the Company does not currently have a way to track if these
benefits will be realized.
Offsets Offset Description 2025 2026 2027 Annually
Beyond
Capital Improved Storm Response $255K $255K $255K $255K
0&M Field personnel $81 k $81 k $81 k $81 k
0&M Distribution Operations Personnel $120K $120K $120K $120K
0&M Improved Storm Response $85K $85K $85K $85K
OMS/ADMS Indirect Savings Estimates
Field Personnel Annual Indirect Offset Potential
Estimated Number of Users 85
Estimated Efficiency per User 15 minutes per incident
Estimated Usage Incidents per year 60
Standard Hourly Labor Rate $85.00
Estimated Percent of Users in WA 75%
Estimated Annual Indirect Labor Offset $81,281
Distribution Operations Annual Indirect Offset Potential
Business Case Justification Narrative Template Version: February 2023 Page 14 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 137 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
Estimated Number of Users 10
Estimated Efficiency per User 10 minutes per day
Estimated Usage Days per year 365
Standard Hourly Labor Rate $85.00
Estimated Percent of Users in WA 75%
Estimated Annual Indirect Labor Offset $38,781
Estimated Annual Indirect Labor Offset $120,063
Improved Storm Response
Avista can gain significant operations and business advantages by replacing the
OMT and the DMS with an ADMS. A modern ADMS can address many of the
issues currently faced by Distribution System Operators and Electric Operations
field personnel. The benefits of an ADMS fully integrated with other enterprise
systems along with optimized business processes include; improved outage
analysis and restoration capabilities, improved safety, improved status
information to customer facing systems, and improved system reliability and
dependability. Avista responds to multiple major storm events per year. An
ADMS with a fully digital workflow has the potential to reduce the labor costs of
these major events by at least 10%. Based on actual storm costs for 2017-2021
that's an average savings of $340,379 per year (see table below) split 75%
capital and 25% O&M.
Estimated Annual O&M Indirect Labor Offset $85,095
Estimated Annual Capital Indirect Labor Offset $255,294
Accounting Year Summary Exp Category Sum of Actuals with ADMS 10%Savings
2017 Labor S3,357,066 S3,021,360 S'35;707
(Jon-Labor S4,460,419 54,460,419 S0
2017 Total S7,817,485 S7,481,778 S335,707
201 Labor $2,227,664 $2,004,897 $222,766
Hon-Labor S2,649,948 52,649,948 50
2018 Total S4,877,611 S4,654,845 S222,766
201Q Labor S2,366,126 S2,129,514 $236,613
Hon-Labor S5,341,119 S5,341,119 SO
2019 Total S7,707,245 57,470,633 S236,613
20210 Labor $4,139,030 $3,725,127 $413,903
Non-Labor 514,288,254 $14,288,254 50
2020 Total S18,427,284 S18,013,381 S413,903
2121 Labor $4,929,088 $4,436,179 $492,909
Hon-Labor $14,398,068 514,398,068 Sri
2021 Total S19,327,1561 S18,834,248 S492,909
Annual Average S11,631,356 S11,290,977 S340,379
Additionally, as part of CETA and CEIP, an ADMS will assist in achieving the goals
of those programs for the indirect benefits listed below:
Business Case Justification Narrative Template Version: February 2023 Page 15 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 138 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
• Environmental Responsibility
• Regulatory Compliance of emission standards
• Economic Benefits of CETA implementation
• Equity Considerations for vulnerable populatons and highly impacted
communities
• Improved Public Health and air quality
• Energy Assistance for low-income households
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Option Capital Cost Start Complete
Alternative 1 — Rewrite Custom OMT Not Available 01/2023 06/2026
and keep DMS
Alternative 2 - Continue to utilize the $1.0M 06/2023 12/2025
custom OMT and DMS applications until
OMT runs out of support in 2025
Alternative 1 — Rewrite OMT - Avista could endeavor to rewrite the current OMT
application to function on the new Esri operating platform and data model. An initial
effort estimate on this alternative indicates that it would have a lower first cost than
implementing an ADMS however this alternative has several areas of high risk that
would likely overshadow the initial costs savings. Examples include:
• Avista has made a corporate decision that it is not a software
development company and will instead purchase and configure industry
standard applications to reduce the risks and costs of owning and
maintaining custom applications.
• OMT is a mission critical system. At the time it was originally developed
by Avista there were no commercially available outage management
applications that met Avista's requirements. That is no longer the
situation.
• No other utility has written a custom OMT application using the new Esri
operating platform. This first of its kind development effort has many
unknowns that Avista would discover along the way likely increasing
timelines, costs, and risks. Avista would also carry the sole responsibility
for resolving performance/accuracy/reliability issues that will inevitably
crop up in production with a first-generation application.
• Keeping OMT in the GIS environment, rather than moving it to a
separate ADMS platform, keeps the outage system closely coupled to
the GIS data model. This will introduce new risks and complexities as
Avista transitions to Esri's new data model in the next 3-5 years.
Business Case Justification Narrative Template Version: February 2023 Page 16 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 139 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
Having a separate ADMS platform will isolate the ADMS from future
Esri data model changes.
• Keeping OMT in the GIS environment rather than moving it to a separate
ADMS platform, would cause the system to continue to be susceptible to
configuration changes made to support GIS Edit functionality which has
an inadvertent negative impact on OMT. A change made in 2022 to
support Edit introduced a data problem which did not reveal itself for
several months, but eventually lead to a failure in OMT during an outage
event.
• A rewrite of the existing functionality would not provide the improved
safety, performance, and data accuracy features that a fully digital
workflow through and ADMS would provide. Because a GIS environment
is not built for the high volume of data and high rate of data change that
is required during outage scenarios. This leads to slow performance as
the volume of data and increases. This performance issue would not be
overcome with a rewriting of the OMT application, because the
underlying architecture would still have the performance limitation.
• Rewriting OMT is estimated to take about the same number of years as
implementing an ADMS but does nothing to address the current
shortcomings of the existing DMS or its inability to fulfill future needs of
Distributed Energy Resources requirements to meet customer choice
and Clean Energy Transformation Act requirements. These
shortcomings would need to be addressed in a future project, extending
the timing for when Avista would be able to meet those requirements and
significantly increasing the total cost of ownership.
Alternative 2- Continue to use OMT - There's an option to continue to use the
existing OMT in its current format with continued minor enhancements to keep it
operational. It would not resolve any of the issues that have been identified
throughout this narrative. In addition, delaying the start of a project to replace OMT
and the DMS with a modern ADMS increases the risk that the existing systems will
fail before an ADMS project can be completed. Should this risk occur, it would
require the immediate increase of labor across many departments to implement
manual work arounds for processes that rely on OMT. Avista needs to proceed with
the work now to be ready for the future, in a similar way to how planning is done for
future power needs; i.e., we don't wait until we run out of power to build new
generation.
It is estimated that there would be $1 M in capital costs yearly to build the systems
to create the continuously changing workarounds described above. Additionally,
there would be an estimated $500K to $1 M annual O&M costs to provide ongoing
support resources for these multiple workarounds and systems.
Business Case Justification Narrative Template Version: February 2023 Page 17 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 140 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
Avista tracks a large number of electric system reliability statistics (SAIDI, SAIFI,
CAIDI, etc.) that can and will be used to benchmark and measure success of
the project. The project team will work with key stakeholders to determine which
reliability statistics would be directly or indirectly influenced by the increased
capabilities and functionality of an ADMS and use those as one measure of the
success for the project.
As mentioned in Section 1.2 there are a series of high customer value items
enabled by the data provided to OMT/DMS from the AMI meters. Those metrics
will inform the project requirements, and the project team will undertake efforts
to try to maintain (or possibly improve) the values with the integrated ADMS
capabilities. This includes functionality such as automatic "pings" of AMI meters
to validate power has been restored.
Wildfire Resiliency is a key focus area for Avista. The ADMS project team will
coordinate closely with the Wildfire Resiliency team and idenfity key metrics they
are tracking to inform the planned fully digital damage assessment and
restoration workflow solutions, while capturing necessary data as much as
possible from the ADMS.
Program details for the Clean Energy Implementation Plan (CEIP) and metrics
are still being developed, however, it's clear that the plan will include the need
for additional grid automation, new Distributed Energy Resources, and new non-
wires alternatives for customers such as time of use rates and energy efficiency.
Many of these potential alternatives of being explored in the Connected
Communities project which is planned to start in 2023 and run for five years.
The results of the project will be used to determine which alternatives will move
out to the larger customer base. The ADMS project Team will be coordinating
with the Connected Communities team as both projects are underway.
In order to achieve these goals a future utility architecture that bridges use cases
across Customer, Grid, Operations, and Utility Enterprise domains is required.
This future will require a technology platform that enables the integration of
these domains. The industry standard for this platform is an Advanced
Distribution Management System (ADMS). As details of the CEIP and others
become more well defined in the coming years, the ADMS team will work
collaboratively with these teams to determine specific metrics that will be
achieved via the capabilities of the ADMS.
Business Case Justification Narrative Template Version: February 2023 Page 18 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 141 of351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The ADMS project is scheduled to start in mid-2023 and estimated to have a
four-year duration. Upon completion, the ADMS will fully replace both the
existing Outage Management Tool and the Distribution Management System
and provide additional Distributed Energy Resource Management (DERM)
functionality in support of the CEIP and Connected Communities project. The
investment is planned to be deployed in two phases. First phase is planned to
be used and useful in 2025 and the second phase in late 2026. The project
costs related to each phase would transfer to plant in those years.
Test ADMS in Avista's Lab _ _ OpenDSO Enhancements
•Test ability of the selected system Incorporate learning from Connected
with real-word use cases and Communities and other initiatives at
devices Go-live with the OMS only Go-live with New DMS the lab
• Confirm design approach and inform Legacy DMS still used for operations New DMS to Go-live after period of Begin with Connected Communities
the detailed design work and New DMS only for monitoring stability of OMS Feeders
• Results used to refine scope schedule • Requires a parallel path for Switch over RTUs to New DMS Strategically/expanded to other DMS
and budget for the main project DNP3 communication enabled feeders
with RTUs • Decommission legacy DMS Implement DERMS functionaliit
CIM Compliant model p Y
• Prepare the CIN1compliant model to ICCP integration between legacy DMS
be available at the starting point of the and New DMS for parallel operation
ADMS project Configure all RTUs to provide a parallel
• Network model for a specified data stream to the ADMS Front End
substation/feeders will be transferred Implement all ADMS integrations
via GIS CIM exporter(built by Avlsta) Establish CIM(GIs)and understand
how to deliver data to ADMS
• Decommission legacy OMT
Business Case Justification Narrative Template Version: February 2023 Page 19 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 142 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
Project Schedule for Phase 1A as of April 2024, shown below. Please note TTP
in Q2 2025.
3.16.3 3.18 3.19)3 enhancements)
,12/31/2024
2025
♦ �-
loaay
OMSG.U-
1212
1214—4/5
4/8-5/10 r 0!""
5/13-6/11 r fMAM
6/12 r 7/9
9/24
h...r C-fig u— 5/31
5/7—6/24
6/25—9/24
9125—1/15
1/1611�3/26
11/24—3/26
9/16 3/26
Dry Rum
3/27 4/9
Phase 1 B is initially scheduled to be completed end of 2025, and Phase 2 is
initially scheduled to be completed end of 2026.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
This business case will have two levels of governance: The Executive
Technology Steering Committee (ETSC), and Project Steering Committee that
will be formed as part of the project initiation. The committees will review
monthly project status reports, which identify project scope, schedule, and
budget, as well as any risks and/or issues that the project team has identified.
Status reports to the steering committees will be used as the official review and
approval process for prioritization and change requests. Risks, issues and
change requests will be documented in project logs and kept as artifacts of each
project within Enterprise Technology's project management software system.
Business Case Justification Narrative Template Version: February 2023 Page 20 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 143 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
DeremEsr W23
ADMS Project Organizational Structure
sis,_=>Pd3
tt;�nre
ExecutiveSponsors Governance eCOP°n"r�"�ry Maga�dn
a6 sponsor.novein nidN
ADMS Executive
Josh DiLuciano,Latisha Hill,Wayne Manuel
Mike Magruder',Hossein Nikdel,Kelly Magalsky,
Business Case Sponsors ADMS Director Jennifer Esch,John Gibson,Gay Storey,Alexis
Alexander,Pat Ehrbar
1)David Howell represented by
® ® ® Vance Ruppert,Roby Harden,Stephanie Myers,
ADMS Core Team Michael Mudge,Reuben Arts,Craig Figart,Tom
Heavey,Elisabeth Sibulsky,Angela Wilson,Matt
Reding,Shawna Kiesbuy,Mike Busby,Andy Leija
Project Management
k
Project Team
Enterprise Technology Distribution Operations
.k.
LFAD PO:Pon Real ET PMO:xa.en Srm,n INTEGRATIONS:A.erdect_P-i,Gupta
SME:Rob Cloward Lead:Craig Figart Lead:Reuben Arts
CENTRAL SYSTEMS:Lead/SME.-Man Broa,n NETWORK:ArNke¢s:oan xenda—k, SME:Allen Cousins SMEs:Greg Paulson,Kevin SMEs:Jill Ham,Derek
SECURITY:Lead:And,Ln Russell,Daniel Murphy, Hansen,Darrel Richardson,
DATA:Lead:Jason Pegg/SME:Kevin Daymont A/Arclr'nects'.Sean
Wells,Leff Anderson/SCADq SME Jeff Jones Caleb Clutter,Brad Calbick Mark Magers
GIS:Archxects:Matt Townsend,Mike Fallon
Lead:Todd Colton Lead:Pat Janessa Lead:Ryan Lead:Cesar Godinez Lead:John Lead/SME: SME:Mike Lead:Andrea
Contracts:Stacey Ehrbar Stromberger Bradeen SME:Tim Figart Gross Matt Halloran Diedesch Pike
Levin SME:Liz Tiffany Adams SME:Brian SME:Marshall Law SME:Erik Lee Architect: SME:Jon SME:Brandon
Andrews Dollar DTN:((NEW)) Mark Fenello Thompson Kafflen
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the OMS/ADMS Business Case and agree with
the approach it presents. Significant changes to this will be coordinated with and approved by the
undersigned or their designated representatives.
�Signature: D...S',-ne�tley Date: May-01-2024 1 11:03 AM PDT
5]1AAf6E336IId1��
Print Name: Stephanie Myers
Title: Manager of Energy Delivery Technology
Projects
Role: Business Case Owner
Signature: M L' Date: May-01-2024 3:23 PM PDT
�iseeezzneeeeso
Print Name: Mike Magruder
Title: Director of Transm Ops & System
Planning
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 21 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 144 of 351

DocuSign Envelope ID:78B82B82-7CB3-418A-A328-4C2327320BB5
OMS ADMS
Nossuw N Date: May-01-2024 1 3:24 PM PDT
Signature: E E?E9E EE i
Print Name: Hossein Nikdel
Title: Director of Applications and Systems
Planning
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 22 of 22
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 145 of 351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
EXECUTIVE SUMMARY
The Basic Workplace Technology (BWT) Program Business Case sponsors the tools and
systems used by the technology teams to support business application. The Basic Workplace
Technology business case delivers essential technology hardware and software productivity tools
that end users need to perform day-to-day job functions. Generally, this includes personal
computers, laptops, tablets, print/copy/scan systems, digital displays, monitors, mobile phones,
and basic software productivity tools.
The Basic Workplace Technology (BWT) business case responds to five essential functions that
equip our staff to optimize our business and be responsive to our customers. The five essential
functions include: Employee Onboard; Contractor Onboard; Job Function Change; Off Cycle
Exchange; and General Additions. Definitions further explaining these functions are identified
below in section 1.2.
To ensure readiness for delivery, BWT maintains a reasonable inventory to meet business value
timeframes. Inventory levels and demand for delivery determine the overall performance and
capacity standards under the established budget allocations. Equipment purchases are realized
through regular review of existing inventory, historical trends, reorder points, and planned
requests. These reviews can result in calling for additional investment under this program from
time-to-time for technology procurement trending behind planned requests. Not funding this
program can result in delays in hiring, onboarding, job function changes, automation
opportunities, etc.
The nature of basic workplace technology requests can vary, be either planned or unplanned and
generally have short turnaround cycles. The short turnaround nature of the requests can cause
chaos in the procurement processing of basic workplace technology, as the lag time from when
a request is submitted to when it is fulfilled can exceed expected timeframes. Additionally, ad-hoc
requests impact business value by un-batching technology orders, as well as reducing employee
productivity and experience by submitting individual orders to meet requests. The business case
is structured in such a way to handle both planned and unplanned short-cycle business demand
to deliver basic technology items to all job functions and office areas.
The primary driver for this program is performance and capacity, whereby the Company balances
the need to meet job function requirements and technology availability. To do so, it requires
historical trend analyses, technology inventory management, and cost per unit control measures.
The costs associated with each solution can vary by the type of solution and number deployed.
In order to deliver necessary technology items to workers, the recommended funding amount for
this business case is $8,000,000 over the next five years, averaging $1,600,000 each year.
Absent the Basic Workplace Technology deliverables, production is significantly impacted and
becomes a blocking factor, as most job functions are extremely difficult to perform without digital
productivity tools. For example, a new worker would not be able to adequately meet job function
requirements in a customer call center without a personal computer and telephone. Thus, the
ability to leverage productivity tools distributed through BWT directly impacts the Company's
ability to deliver reliable and efficient service to customers.
Business Case Justification Narrative Template Version: February 2023 Page 1 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 146 of 351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
VERSION HISTORY
Version Author Description Date
1.0 Walter Ro s Initial draft of original business case 0712019
2.0 Walter Roys 0712020
3.0 Dave Husted 0712022
4.0 Dave Husted 0412023
5.0 Dave Husted 0412024
BCRT Team
BCRT Member Has been reviewed by BCRT and meets necessary requirements
Business Case Justification Narrative Template Version: February 2023 Page 2 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 147 of 351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $1,600,000 $1,600,000
2026 $1,600,000 $1,600,000
2027 $1,600,000 $1,600,000
2028 $1,600,000 $1,600,000
2029 $1,600,000 $1,600,000
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology
Business Case Owner I Sponsor Dave Husted I Alexis Alexander
Sponsor Organization/Department Enterprise Technology
Phase Monitor/Control
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
BWT ensures that workers have the reliable, current, and necessary technology tools they need
to fulfill their job duties. Technology enables workers to perform and communicate with greater
efficiency and effectiveness. Without these tools, workers' productivity would decrease
significantly, which would have an impact on their ability to support customers.
Basic workplace technology is required and allows Avista's workforce to perform office, call
center, or field job functions. Technology assists the enablement and/or automation business
processes that deliver gas and electric service to our customers. Regularjob changes can occur
in our workforce throughout our service territory as new employees or contractors are hired,
leave, or retire, while others can change in job role or responsibilities. These planned or
unplanned changes result in technology requests that can vary, and generally have short
turnaround cycles of(2)two weeks or less to for fulfillment. Examples range from onboarding a
cohort of customer service center staff, each requiring a technology suite to a change in job
function requiring a completely different set of technology tools.
The short turnaround nature of the requests can cause challenges in processing procurement
requests, which can result in lag time from when a request is submitted to when it is fulfilled and
put worker productivity at risk of not having the technology to perform their new job assignment.
Additionally, the ad-hoc nature of requests can impact business value by un-batching
technology orders, as well as reduce employee productivity and experience by submitting
individual orders to meet requests.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 148 of 351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
1.2 Discuss the major drivers of the business case.
The Basic Workplace Technology Business case is to respond to technology requests that allow
workers to meet performance expectations in their respective job functions within the capacity
of in-portfolio technology at Avista. Therefore, the major driver for this business case is
Performance & Capacity.
The business requests generally fit within these major categories:
• Employee Onboard: A request from leadership to deliver workspace technology for a new
employee. The business case averages delivery on 160 Employee Onboard requests
annually.
• Contractor Onboard: A request from leadership to deliver workplace technology for a new
contractor. The business case averages delivery on 155 Contractor Onboard requests
annually.
• Job Function Change: A request from leadership to add or change workplace technology to
enable a job function change for an existing employee or contractor. The business case
averages delivery on 90 Job Function Change requests annually.
• Off-Cycle Exchange: A request from leadership to exchange in service workplace
technology, in a timeframe that does not align with a technology refresh cycle. The business
case averages delivery on 50 Off-Cycle Exchange requests annually.
• General Additions: General requests from leadership for additional workplace technology.
The business case averages delivery on 260 General Additions requests annually.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Assuring that each technology request is met within the expected timeframe for job additions or
changes allows Avista's workforce to continue to provide gas and electric service to our
customers across all our service territory. These timeframes for delivery are discovered by a
combination of the type of request and an agreed upon completion date between the requestor
and Coordinator team member. Priority of the request and team capacity are also considered
as timeframes are determined.
Job role additions, and changes are not new and will not stop, as the utility workforce continues
to evolve with many retiring from older roles, and new roles created to meet the changing nature
of our industry.The risk of not approving this program will result in delay of technology fulfillment
to Avista's workers who are requiring new technology due to a new job or change in job function.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
The technology investments under this business case program align with Avista's vision to
deliver `better energy for life' to our customers and in the area of`Perform,' which calls for"our
focus on performance today to serving our customers well and unlocking pathways to growth."
Tracking of each request is done to determine if each technology request is fulfilled within the
(2)two-week timeframe, as the objective of this business case is to meet in-portfolio technology
requests for employee and contractor onboarding, job function changes, off-cycle exchanges,
and general additions.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 149 of 351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
There are no specific studies to point to on the need for basic workplace technology since it is
now an expected norm. Generally, all job functions require some form of basic technology
equipment to perform day-to-day job assignments. From a computer with the right set of
applications to a mobile radio that keeps field workers safe in remote and hard to reach
locations. This program was designed to deliver on each of those requests based on the criteria
mentioned above.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The basic workplace technology requests may generally include personal computers, tablets,
print/copy/scan systems, television displays, monitors, telephones, etc., and the basic software
productivity tools. They generally fall within these major categories and are therefore tracked
accordingly: Employee Onboard; Contractor Onboard; Job Function Change; Off Cycle
Exchange; and General Additions. This requires a need to keep a small amount of inventory to
meet business value timeframes.
The technology solutions fall within the capacity of in-portfolio technology at Avista, and
therefore the recommended solution is a funding level commensurate with historical technology
requests for employee and contractor onboarding, job function changes, off-cycle exchanges,
and general additions. This business case does not include planned technology refresh
investments based on technology obsolescence.
The recommended solution allows the business case program to proactively plan for
procurement intervals to maintain small batches of technology inventory in-house to meet the
short-turnaround requests over the course of the year.
Historically, the business case has exceeded its initial capital funding level, referenced in the
table below. The spending trend for 2024 predicts a forecast near$1,800,000. A greater initial
funding level will ensure that the business case can continue fulfilling requests throughout the
year without the administrative cost and delays occurred when making additional funding
requests.
' Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 150 of 351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
BWT Historical Spend and Funding
S3,500,000
52,131,918 53,000,000 S1,970,961
—
52,500,000
52,000,000 $1,281,103 S1,141,
51,500,000
S1,000,000 $800,000 S800,000
5400,000 S400,000
5500,000
5-
2020 2021 2022 2023
�Baseline Funding --e—ActualSpend
Option Capital Cost Start Complete
Recommended Solution $8,000,000 01/2025 12/2029
[Alternative#1]—80% Funding Level $6,400,000 01/2025 12/2029
[Alternative#2]—70% Funding Level $5,600,000 01/2025 12/2029
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
Due to the nature of unpredictability of job role additions or changes, a historical trend analysis
is provided in the table below depicting request type counts by year. The historical spend by
year is comprised of these requests.
Request type by Year
Total Capital Requests 00061111111111111111111111
5.General Additions
4.Off-Cycle Exchange r
3.Job Function Change
2.Contractor Onboard
1.Employee Onboard
0 100 200 300 400 500 GOD 700 800 900 1000
Completed Tracker Count
02023 02022 ■1ii:_
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 151 of351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
2.3 Summarize in the table and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A N/A N/A N/A N/A N/A
0&M N/A N/A N/A N/A N/A N/A
There are no O&M reductions or offsets resulting from these investments, as this technology
enables the Avista workforce to perform their day-to-day job functions in delivering gas and
electric services to our customers.
2.4 Summarize in the table and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A N/A N/A N/A N/A N/A
0&M Operating Expenses $100k- $100k- $100k- $100k- $100k-
$10M $10M $10M $10M $10M
The basic technology tools that workers leverage daily are key to their performance and
success. There was a time, of course, when the conveniences of technology productivity tools
were not mainstream. As technology has been introduced and refined over the years, the value
and benefit are certainly realized but perhaps taken for granted. In the current work environment,
expectations and performance of workers are measured with the underlying assumption that
they have technology at their side. Absent these tools, workers would flounder.
The funding requested under the Basic Workplace Technology business case will be invested
in technology to fulfill business requests in the areas of employee and contractor onboarding,
job function changes, off-cycle exchanges, and general additions.
New inventory levels are maintained to ensure that recipients are provided with technology
equipment in a timely fashion. When an employee leaves their role a technology review and
assessment is performed. Used technology that has not exceeded its useful lifespan is retained
as spare inventory. Sparing levels are maintained and used primarily for like-replacement in
break/fix scenarios. If spare inventory levels exceed our thresholds, they will be issued to new
employees rather than purchasing new equipment. Used equipment that no longer has useful
value is taken out of circulation and decommissioned.
Issuing equipment beyond its useful lifespan introduces the risk of productivity reduction by
using inferior devices that are more prone to breakdown.The stability and reliability gained from
the issuance of new equipment is realized as both indirect savings and productivity gain.
Roughly 1,500 people leverage BWT in their day-to-dayjob duties.Without proper technological
equipment, productivity would be severely impacted, and staffing levels would need to
significantly increase. The Company does not have a method to quantify such a broad indirect
saving.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 152 of 351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
Investment in these technologies can result in added O&M expenses from an increase in
licenses from time to time. There are no O&M reductions or offsets resulting from these
investments, as this technology enables the Avista workforce to perform their day-to-day job
functions in delivering gas and electric services to our customers.
All Avista business functions requesting basic workplace technology due to a job addition or
change, off-cycle exchange,or general addition are affected by this business case,as it enables
everyday work activities and automated business processes.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Several options were considered and proposed. However, the 'Do Nothing' alternative was
removed as an option, as it is not realistic. Below are the alternatives discussed in detail.
Alternative 1:
• A'Do Nothing' option would not fund the basic technology items and become a blocking
factor of productivity; job functions are extremely difficult to perform without digital
productivity tools. For example, a new worker would not be able to adequately meet job
function performance requirements in a customer call center without a personal
computer and telephone.
Alternative 2:
• Alternative #2 is to fund 80% of the recommended solution and seek alternative ways
to reduce deployment costs to deliver basic workplace technology and return during the
year for additional funds to meet business demand, if not successful. If these additional
funds are not fulfilled,the business case will not be able to deliver necessary technology
items to workers, thereby rendering them unable to work effectively and efficiently.
Alternative 3:
• Alternative #3 is to fund 70% of the recommended solution and seek alternative ways
to reduce deployment costs to deliver basic workplace technology and return during the
year for additional funds to meet business demand, if not successful. If these additional
funds are not fulfilled,the business case will not be able to deliver necessary technology
items to workers, thereby rendering them unable to work effectively and efficiently.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
This business case is a program of blanket technology projects that transfers to plant monthly.
Quarterly forecasts capture changes in transfers to plant based on trends of fulfillment requests.
Each investment under this business case program allows Avista to deliver electric and gas
services to our customers.
Nearly all Avista's workforce interface with basic workplace technology business case, either as
a leader requesting technology changes or a worker responding to job role and responsibility
changes.
The technology deployed under this business case is in the existing technology portfolio, which
is driven by engineering teams who are responsible for managing technology obsolescence and
asset lifecycles.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 153 of 351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
The reason that the technology investment under the Basic Workplace Technology program
business case is prudent is because the Avista workforce requires this technology every day to
deliver gas and electric service to our customers either in an office, customer service center, or
in the field.
Basic workplace technology deployments that fall under this business case are often in short
notice, and minimum inventory quantities are maintained to meet business value timeframes.
The business case is structured in such a way to handle both planned or unplanned short-cycle
business demand to deliver basic technology items to all job functions and office areas.
Alternative funding levels are considered, yet not investing in it is not an option as basic
workplace technology is a minimum requirement to perform day-to-day job functions to deliver
gas and electric service to our customers, respond to compliance requirements, and conduct
business operations and reporting.
Additionally, the existing governance structure overseeing this business case program meets
regularly to oversee and make decisions on the ongoing needs, benefits, costs, and risks
associated with basic workplace technology fulfillment requests.
Nearly all Avista's workforce interface with basic workplace technology business case, either as
a leader requesting technology changes or a worker responding to job role and responsibility
changes.
The technology deployed under this business case is in the existing technology portfolio, which
is driven by engineering teams who are responsible for managing technology obsolescence and
asset lifecycles.
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
This business case is a program of blanket technology projects that transfers to plant monthly.
Quarterly forecasts capture changes in transfers to plant based on trends of fulfillment requests.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Basic Workplace Technology Delivery governance team will act as the governance
committee that oversees investment under this business case. The governance team consists
of the Business Case Owner, Business Case Sponsor, and may include other key leadership
stakeholders.
The governance team is accountable for the financial performance of this business case. The
governance team will have regular monthly meetings to review the progress of the program and
make decisions on the following topics:
• Prioritization of Business Drivers
• Funding Constraints
• Long-term Planning
• Scope of Workplace Technology
• Monitoring Workplace Technology Productivity
The governance structure under this business case program is responsible for decision-making,
prioritization,and change requests.Through the regular Program Steering Committee Meetings,
the team reviews and balances planned work versus unplanned work to determine prioritization,
as well as pending project change requests. Any change request requiring either an increase or
decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is
submitted to the Capital Planning Group for consideration.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 154 of 351

DocuSign Envelope ID:7DE128DC-ECB9-4808-9407-57EBE05B205D
Basic Workplace Technology
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Basic Workplace Technology Business Case
and agree with the approach it presents. Significant changes to this will be coordinated with and
approved by the undersigned or their designated representatives.
Signature: 9s{�� Date: Apr-29-2024 8:19 AM PDT
C�"t,�
Print Name: Dave Husted
Title: Technology Services Manager
Role: Business Case Owner
Signature: s" Date: May-03-2024 1:20 PM PDT
Ql�pis Ql�pau.dtir
Print Name: Alexis Alexander
Title: Director, Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 10 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 155 of 351

DocuSign Envelope ID: 9lA8D634-041D-4CF5-B625-4342B86ECAD8
Control and Safety Network Infrastructure
EXECUTIVE SUMMARY
The Control and Safety Network Infrastructure Program' Business Case administers multiple projects
specifically scoped for the provisioning and expansion of network communications assets for Avista's
generation, transmission, and distribution assets which support the safe and reliable energy delivery to
Avista customers. Assets included in this business case have a finite lifecycle. And, given the pace of
change in technology, constant threats from bad actors, growth of the Avista network and need to have
suitable performance and capacity, the project work done within this program will help maintain a robust
and reliable network.The Control and Safety Network Infrastructure enables the ability to remotely monitor,
control, and operate critical business and safety systems. If this business case did not exist or receive
funding, the network communications assets that enable data transmission in control and safety
environments could fail, become vulnerable to cyber-attacks from bad actors, or could become obsolete
which would result in a lack of real time communication for field crews, a lack of visibility into generation,
transmission,and distribution status,or even a lack of control of field assets for safety events.This business
case also serves to design and deploy new communication network assets for control and safety
environments as Avista's service area and business functions expand.
For this business case, funding is being requested at $8,000,000 over five years to upgrade or replace
network communication systems and assets within the control and safety environments. Collectively these
assets&systems are tracked by lifecycle management, manufacturer warranty, maintenance, and support
(contract) status, licensing, capacity, and replacement costs. Manufacturer lifecycles drive a considerable
portion of the required work within this request. Concurrently, a sizable portion of work is also driven by the
ongoing modernization and digitization of energy delivery infrastructure.
Avista customers across all jurisdictions will benefit from the projects in this program by having a robust
network that has capacity and reliability to transport real-time data on system status and performance.
Proactive updates to assets or timely placement of assets to locations will reduce possible service
interruptions or delays. With reduced funding, risk increases by way of system failures that can interrupt
services as it relates to the safe and reliable delivery of energy to customers across the Avista service
territory.
Currently, there are no direct cost savings. Indirect offsets may be realized with fewer truck roles, staff
efficiency, etc.
VERSION HISTORY
Version Author Description Date
3.0 Shawna Kiesbuy Update content and new template 412023
4.0 Shawna Kiesbuy Annual update 412024
BCRT Heidi Evans Has been reviewed by BCRT and meets necessary requirements 04119124
1 1 [1]"A Program is defined as related projects,subsidiary programs,and program activities managed in a coordinated manner to
obtain benefits not available from managing them individually.Managing projects,subsidiary programs,and program activities as
a program enhances the delivery of benefits by ensuring that the strategies and work plans of program components are responsively
adapted to component outcomes,or to changes in the direction or strategies of the sponsoring organization.,"Project Management
Institute Global Standard,The Standard for Program Management,Fourth Edition.Page 3(Copyright 2017).
Business Case Justification Narrative Template Version: February 2023 Page 1 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 156 of 351

DocuSign Envelope ID: 91A8D634-041D-4CF5-B625-4342B86ECAD8
Control and Safety Network Infrastructure
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $1,200.000 $1,100,000
2026 $2,300,000 $3,100,000
2027 $1,500,000 $1,300,000
2028 $1,500,000 $1,300,000
2029 $1,500,000 $1,300,000
Project Life Span 5 years+
Requesting Organization/Department Enterprise Technology/Network Systems
Business Case Owner I Sponsor Shawna Kiesbuy I Alexis Alexander
Sponsor Organization/Department Enterprise Technology/Network Systems
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Assets included in this business case have a finite lifecycle. And, given the pace of change in
technology, constant threats from bad actors, growth of the Avista network and need to have
suitable performance and capacity, the project work done within this program will help maintain
a robust and reliable network. This business case administers multiple projects specifically
scoped for the provisioning, refresh and expansion of network communications systems and
assets for Avista's generation, transmission, and distribution environments which deliver safe
and reliable energy to Avista customers.The Control and Safety Network Infrastructure enables
the ability to remotely monitor, control, and operate critical business and safety systems. These
systems include those connecting users in an emergency or safety situation, controlling
generation assets, maintaining, and expanding push-to-talk radio connectivity for field crews
and other personnel, communication networks for protective relays, and supervisory control by
providing data and control of transmission and distribution assets in the field. These network
system examples, and many others, must be maintained based on a periodic upgrade schedule.
If this business case did not exist or receive funding, the network communications assets could
fail, become vulnerable to cyber-attacks from bad actors or the technology becomes obsolete
which would result in a lack of communication and data for field crews, a lack of visibility into
generation, transmission, and distribution status, or even a lack of control of field assets for
safety events.This business case also serves to design and deploy new communication network
assets for control and safety environments as Avista's service area and business functions
expand.
Business Case Justification Narrative Template Version: February 2023 Page 2 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 157 of 351

DocuSign Envelope ID: 91A8D634-041D-4CF5-B625-4342B86ECAD8
Control and Safety Network Infrastructure
1.2 Discuss the major drivers of the business case.
The main driver for this business case is Performance and Capacity. The network
communications infrastructure enables command-and-control applications within Avista's
critical business and safety systems. Creating and managing this program business case is
crucial to supporting the safe and reliable delivery of gas and electric services to our customers.
Specifically, the Controls and Safety Network Infrastructure facilitates the ability to control
electric generation, transmission, and distribution assets in addition to carrying voice
communications to field and line crews working on outage events. With Performance and
Capacity as the business case driver, the network communication assets are managed in
alignment with technology lifecycles based on manufacturer product roadmaps and planned
obsolesces to proactively reduce the business impact that failing assets serving critical
operations systems, processes, and infrastructure reliability would deliver.
The network infrastructure investments in this business case are necessary to sustain our
business by using technology to deliver real time data for control and safety operations. This
business case specifically addresses network infrastructure requirements for energy control
systems and systems necessary for the safety of our workforce and public. The business case
considers business impact vs. likelihood/probability when sequencing and prioritizing resource
allocations and responds to vendor-manufactured product obsolescence risks as well as cyber
security risks.
The use cases supported in this business case include the network infrastructure requirements
for Substation-to-Substation Communication, Substation SCADA(Supervisory Control and Data
Acquisition), SCADA/EMS Control, Generation Control, and Land Mobile Radio. The key
performance indicator for network availability and reliability is 99.9%, 24x7. Our investment
sequencing is based on three drivers, 1) Compliance, 2) Initiatives, 3) Reliability. The
Compliance driver should be regulation, Initiatives are executive sponsored (current example is
a cybersecurity vulnerability risk on out-of-support assets), and the Reliability driver is often the
highest volume of work.
The sequencing of the Reliability projects is driven first by the network asset end-of-support date
for cybersecurity patching, then the performance and capacity to meet the business
requirement, and lastly product obsolescence date.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
The network project work captured in this program business case enables the ability to control
and operate core services at our generation, transmission, and distribution facilities. With
Avista's vision of delivering better energy for life, this business case is key to enabling the gas
and electric service delivery to our customers in a safe and reliable manner.The work is needed
daily and is ongoing with a direct tie to our core operations.
The risks of not approving this business case at the level to which it can maintain the balance
of meeting its asset management strategy and scale for future technology could result in
unplanned failures and outages to our communication network system. The result is tied to the
following risks: an increase in employee, contractor and/or public safety risks due to the inability
to see and remotely operate the electric and gas systems.This risk has the potential to increase
labor and non-labor costs tied to unplanned system scope changes, where delays to
procurement can be realized to replace the failed asset, as well as downtime to the critical
systems supported. This would also lead to additional exposure of outdated or unsupported
devices to external cyber vulnerabilities.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Business Case Justification Narrative Template Version: February 2023 Page 3 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 158 of 351

DocuSign Envelope ID: 91A8D634-041D-4CF5-B625-4342B86ECAD8
Control and Safety Network Infrastructure
The network enables the ability to control and operate core services. These services include
connecting users in an emergency or safety situation,controlling generation assets, maintaining,
and expanding push-to-talk radio connectivity for field crews and other personnel, and
supervisory control by providing data and control of distribution assets in the field. These
network system examples, and many others, move and present data that drive operational
decisions and controls, tying back to all four strategic goals affecting our customers, people,
performance, and invention.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.2
The Software Engineering Institute at Carnegie Mellon University in 2018 updated a collection
of 2011 studies which establish the base structure of the "Smart Grid Maturity Model", and the
sub architectures thereof. Several challenges are identified and discussed in the studies
specifically around the interconnection and intersection of critical operational controls systems
and modern communications technologies.
Avista network systems architects also engage in industry events hosted by, for example, the
Utilities Technologies Council, which discusses these industry challenges.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
Executing and completing planned projects within this business case should refresh assets or
install new instances of technology to increase reliability, performance, and capacity. If the fail
rate associated with the network systems in the business case remains low, then the project
work is adding value by proactively reducing the business impact and associated risk of failing
assets affecting critical operations systems, processes, and infrastructure reliability. In addition,
expanding network assets in advance of Avista adding services ensures uninterrupted business
operations and reliable performance and capacity.
2.2 Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).3
Each individual network infrastructure asset is tracked throughout its active presence using
several systems. Collectively these systems track lifecycle, manufacturer warranty,
maintenance, and support (contract) status, licensing, capacity, and replacement cost.
Manufacturer lifecycles drive a considerable portion of the required work within this request.
Concurrently, a sizable portion of work is driven by the ongoing modernization and digitization
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
3 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 159 of 351

DocuSign Envelope ID: 91A8D634-041D-4CF5-B625-4342B86ECAD8
Control and Safety Network Infrastructure
of energy delivery infrastructure. Subject Matter Experts in Energy Delivery are regularly
consulted with in technical cadences so that a real-world, collaborative approach is taken to
evaluate each asset's risk of failure, as well as the impact of a given failure. Capacity and
performance planning activities occur in the same forum,the result of which is a robust controls
and safety communications network that will enable the reliable and safe delivery of energy.
*Growth may not be capitalized in listed BC
**Accurate as of this writing and subject to change based on future manufacturer notifications
EoL= End of planned asset lifecycle
Communication Network Assets within the Controls and Safety Network Infrastructure
solution portfolio are selected for a planned lifecycle of 10 years, with some exceptions.
2.3 Summarize in the table, and describe below the DIRECT offsets4 or
savings (Capital and O&M) that result by undertaking this investment.
There are no direct savings related to this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
2.4 Summarize in the table, and describe below the INDIRECT offsets5
(Capital and O&M) that result by undertaking this investment.
There are no indirect savings related to this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Fund the business case at an amount which is less than the original request.
Funding of this business case at an amount less than the full request will reduce expansion of
network communication systems to meet business needs in multiple control and safety areas of
the business. This reduction in funding will also lessen the ability for a proactive approach
refreshing systems to be upgraded prior to failure creating a loss of communications which
increases the risk of failure or cyber security vulnerability because assets will no longer be
supported by their manufacturers.
4 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
5 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 160 of 351

DocuSign Envelope ID: 91A8D634-041D-4CF5-B625-4342B86ECAD8
Control and Safety Network Infrastructure
Alternative 2:
Do not fund the business case
Removing all funding for this business case would be catastrophic for Avista since this business
case provides network communications to generation, substation,transmission, and distribution
sites to support safe and reliable energy delivery. The network enables the ability to control and
operate core services. If the projects in this business case cease to exist, there will be no funding
to expand the backbone transport supporting future sites (substation and generation sites), on
transmission or distribution poles, and the network systems that age beyond their vendor
lifecycles will fail. These failures translate to a lack of visibility and control into critical systems
that deliver gas and electric services.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Executing and completing planned projects within this business case should refresh assets or
install new assets and systems to enhance and increase performance and capacity needs. If
the fail rate associated with the network systems in the business case remains low, then the
project work is adding value by proactively reducing the risk of failing assets affecting critical
operations systems, processes, and infrastructure reliability. In addition, expanding network
assets in advance of Avista adding services ensures business operations are not delayed and
the system reliability is properly addressed with increased capacity.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The Control and Safety Network Infrastructure business case is managed as a program of
projects planned yearly.Throughout the year,the business case's multiple projects are Initiated,
Planned, Executed, and then Completed with a Transfer to Plant for the individual projects in
this business case. Therefore, investments become used and useful on a project-by-project
basis and happen frequently throughout the year. Additionally, the assets deployed are typically
short-lived assets. Therefore,the work in this program is largely cyclical. Lifecycle management
analysis and business risk criteria are consistently analyzed and considered.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of
the business case, and how such oversight will occur.
Steering Committee members are invaluable to the project and will provide approval on scope,
schedule, and budget related changes. Additionally, they will provide approval on issues and
risks pertaining to project deliverables outlined in this document, which also typically have an
impact on the scope, schedule, or budget of a project. Steering Committee members will also
provide approval on Change Requests, Go-Live, and the Approval to Close documents. For the
Control and Safety Network Infrastructure business case, the Steering Committee will consist
of the Directors and Managers within ET, Energy Delivery, GPSS and the Business Case
Owner.
The Control and Safety Network Infrastructure Business Case has two levels of governance:
The Program Steering Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee
consists of members in management positions that are identified and responsible for
prioritizing the projects within this program. The Steering Committee is also held
accountable for the financial performance of this program. The Program Steering
Business Case Justification Narrative Template Version: February 2023 Page 6 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 161 of351

DocuSign Envelope ID: 91A8D634-041D-4CF5-B625-4342B86ECAD8
Control and Safety Network Infrastructure
Committee will have regular meetings to review the progress of the program and to make
decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within
the PMO. The project queue will be reviewed periodically to plan and sequence work to
the levels of funding allocation received.
Project Steering Committee
Project Steering Committees function as the governing body over each individual project
within the program and will consist of key members in management positions that are
identified as responsible for the successful completion of the scope of work identified in the
Charter document for the Project. The Project Steering Committee is responsible for
providing guidance and making decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the
Charter of the project and will be facilitated by an assigned Project Manager from within
the PMO.
Project prioritization is evaluated by the management team monthly. Each program and
project steering committee meet regularly and oversee scope, schedule and budget within
their respective programs and projects and inform the Business Case owner of any
changes needing escalation to the Technology Planning Group (TPG) or Capital Planning
Group (CPG)for decision-making around resource or funding constraints.
Any changes in funding or scope are documented at the Business Case level,via a Change
Request document that is presented to the CPG monthly and evaluated by the CPG for
approval.
Changes in scope, schedule, or budget are also documented through a 'Change Request'
at the project level and reviewed and approved through a formal workflow process. All ET
projects in this business case are managed through the PMO, which follows the Project
Management Institute (PMI) standards. Projects initiate with a 'Charter' to begin the
planning process. When planning is complete, a 'Project Management Plan (PMP)' is
created and approved as the project baseline for scope, schedule, and budget. At the end
of execution, an 'Approval to Go Live' is submitted and approved prior to implementation
(Transfer to Plant). After the technology is in service and out of the warranty period, the
Project Manager will hold a Lessons Learned, and subsequently submit an 'Approval to
Close' prior to finishing the project. All Monitor and Control documentation and Change
Requests are documented and stored to ensure a comprehensive audit trail.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 162 of 351

DocuSign Envelope ID: 91A8D634-041D-4CF5-B625-4342B86ECAD8
Control and Safety Network Infrastructure
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Control and Safety Network Infrastructure
business case and agree with the approach it presents. Significant changes to this will be coordinated
with and approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: Date: May-06-2024 1 6:58 PM PDT
Print Name: Shawna Kiesbuy
Title: Sr. Manager, Network Engineering
Role: Business Case Owner
DocuSigned by:
Signature: Ea
(t, lS a�t, Aandt,V Date: May-07-2024 6:08 AM PDT
Print Name: Alexis Alexander
Title: Director, Information Technology
Role: Business Case Sponsor
Signature: N/A Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 8 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 163 of 351

DocuSign Envelope ID:A7D4338A-FCFC-4FEE-84AE-AD7A9B442EOE
Data Center Compute and Storage
EXECUTIVE SUMMARY
The Data Center Compute and Storage Program Business Case sponsors the tools and systems
used by the technology teams to support business application hosting, data storage, and disaster
recovery. Business processes require technology solutions to meet the ever-increasing need for
data and information to automate business processes and support decision making by utility
employees. All industries are reliant on the ability to produce, transmit, analyze, and store
information to meet various business requirements. This digitalization is resulting in an over-
growing need for data processing and storage for on-demand requests and decision-making.
Avista is no different. The Company produces, transmits, analyzes, and stores meter data,
telemetry data, asset data, customer billing data, geographic information systems data, etc. Data
processing and storage requires high reliability and is no different than our electric and gas grids
supplying customers with power and gas. The Data Center Compute and Storage Systems
business case is a program of investments in server and storage technology required to process
and store massive amounts of data to automate and enable business processes that support our
gas and electric customers across our service territory.
The technology solutions to meet performance standards and reliability requirements can vary
from hardware and software upgrades in an on-premise data center, offsite storage, or service
provider (cloud)facility, or in operating technology to optimize compute and storage capacity and
reliability. Solution costs can also vary depending on the magnitude of the technology footprint or
vendor licensing model(s). As an enabling technology, data center processing and storage
investment benefits all Avista customers. It optimizes cost and productivity by not reverting to
manual business processing, which would result in increased labor costs, human error, and
overall processing delays. Because technology is evolving so quickly, this program undergoes
regular review of the levels of investment and utilization needed to meet performance and
capacity standards, and reliability requirements, while balancing against pre-established budget
allocations. These reviews can result in calling for additional investment under this program for
technology at risk of poor application system performance, system unavailability and risk of cyber
and ransomware attacks.
In order to maintain these business tools and systems supported by this business case, the
recommended funding amount is $16,655,470 over the next five years, averaging $3,331,094
each year.
VERSION HISTORY
Version Author Description Date
1.0 Walter Ro s Initial BCJN Draft 6/2017
2.0 Walter Ro s Revision of BCJN to new template 7/2020
3.0 Walter Ro s Revision of BCJN 812022
4.0 Walter Ro s Revision of BCJN to new template 412023
5.0 Walter Ro s Revision of BCJN to new template and content update 412024
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements
Member
Business Case Justification Narrative Template Version: February 2023 Page 1 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 164 of 351

DocuSign Envelope ID:A7D4338A-FCFC-4FEE-84AE-AD7A9B442EOE
Data Center Compute and Storage
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $2,695,377 $2,695,377
2026 $3,853,902 $3,853,902
2027 $3,396,700 $3,396,700
2028 $2,772,801 $2,772,801
2029 $3,936,690 $3,936,690
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology/Systems Engineering
Business Case Owner I Sponsor Walter Roys I Alexis Alexander
Sponsor Organization/Department Enterprise Technology/Systems Engineering
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Technology is not only subject to the traditional mortality rate or lifecycle, but it is compounded
by planned obsolescence, also known as technology obsolescence. That is, whereby, the
technology asset although within its functional lifespan is technologically flawed or no longer
meets the need of users or customers, as expectations increase due to newer and more
powerful technology that is available in the market. Data center compute and storage technology
is no different which is why this business case is needed to stay up to date to perform at a high
level and provide adequate capacity.
Additionally,with the rapid pace of technological change,technology vendors require continuous
upgrades to maintain system maintenance and support, which can include security patching,
bug fixes, version upgrades, to maintain security compliance, interoperability, and compatibility
with other technologies. The Data Center Compute and Storage business case is essential to
enabling the capabilities that align with our strategic goals of putting our customers' interests at
the forefront of our decisions.
Business Case Justification Narrative Template Version: February 2023 Page 2 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 165 of 351

DocuSign Envelope ID:A7D4338A-FCFC-4FEE-84AE-AD7A9B442EOE
Data Center Compute and Storage
Servers Decommissioned Avista Annual Server Growth-as of 04/09/2024
3000 Servers Installed
Total Servers
2846 2849 2778
2500 2699 2710
2593 2564
2233
2000
2740
15M
1512
1000 —- 1031
849 674 723
638
732
500 625 350 338 383 469 440 353 488 446 3/4 377
22 333278
0
Mo
155
.2i21 0 1 01 � i 11 11 111III16
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total NetApp Storage Capacity(TB)
5000 TB
4500 TB
4000 TB
3500 TI3
3000 TB
250O TB
2000 TB
1500 TB
1000 TB
500 TB `
OTB
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
1.2 Discuss the major drivers of the business case.
The Data Center Compute and Storage Systems Business Case is driven by managing
technology replacement according to manufacturer product roadmaps or changes in business
requirements with an objective to maintain infrastructure performance and align infrastructure
assets with business demand for capacity. Therefore, it falls under the Performance and
Capacity investment driver.
All Avista customers benefit from maintaining data center compute and storage systems, as this
technology enables the Avista workforce to perform their day-to-day job functions in delivering
safe and reliable gas and electric service to our customers. Additionally, assets that fail due to
not being replaced within their technology lifecycle are replaced by the Technology Failed Asset
business case,which tracks technology asset failures, and is also used as a data point to inform
the technology lifecycles under this business case.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 166 of 351

DocuSign Envelope ID:A7D4338A-FCFC-4FEE-84AE-AD7A9B442EOE
Data Center Compute and Storage
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Avista's offices, call center, and field staff require on-demand information to meet customer
expectations when providing gas and electric service to customers across our service territory.
The information can be critical to prevent, reduce, affect, or optimize an outcome that benefits
our customers.
Reliance on obsolete technology that stores and computes many of our on-premise business
applications to automate business processes presents significant risk that in reality could not
be solved with the reinstatement of manual processes. Continued operation of obsolete or End
Of Life equipment increases the risk of cyber-attacks including ransomware that would pose a
serious risk to the safe and reliable delivery of energy.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Investments under this business case are to maintain performance and capacity standards in
each respective data center compute and storage technology. For example, when the product
manufacturer terminates maintenance and support for specific devices or solutions, an asset
therefore becomes incompatible with other advancing technologies. This introduces the risk of
cyber-attack and this business case will change or upgrade the asset.
The technology investments under this business case program align with Avista's vision to
deliver 'better energy for life' to our customers and in the area of`Perform', which calls for"our
focus on performance today to serving our customers well and unlocking pathways to growth."
Each investment under this business case program allows Avista to deliver electric and gas
services to our customers.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
The Enterprise Technology team references various technology vendor and third-party
resources to stay informed and recommend decisions on the various technology investments.
A few sample sources are included below:
Directions on Roadmaps, Independent IT Planning Information and Advisory Service focused
exclusively on Microsoft enterprise software and services. Retrieved from
https://www.directionsonmicrosoft.com/
Gartner Industry Research and Reference Material. Retrieved from
https://www.qartner.com/en/information-technology
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 167 of 351

DocuSign Envelope ID:A7D4338A-FCFC-4FEE-84AE-AD7A9B442EOE
Data Center Compute and Storage
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The data center compute and storage technology systems provide the infrastructure foundation
for basically all automated business processes.
The recommended solution is to Address 100% of obsolete products and capacity
constraints.
This is the optimal solution. This option fully addresses and minimizes the likelihood of
technology impact to automated business process.
The funding requested under the Data Center Compute and Storage Business Case will be
invested in technology, such as:
• Data center compute technology, which includes both on premise servers and cloud
services
• Remote office compute and storage
• Application systems to manage compute and storage technology
• Server operating systems (OS)
• Data storage systems
• Data center racks and power distribution units (PDU)
• Backup and recovery systems
Investment in these technologies can increase or decrease O&M expenses. These can include
licensing increases from time to time, or decreases in workload for O&M resources. However,
not funding this business case may result in removing automated business functions, which will
either cause delay in meeting business and customer demands or completely change whether
we can even respond to business and customer demands. There are no O&M reductions or
direct offsets resulting from these investments, as this technology enables the Avista workforce
to perform their day-to-day job functions in delivering gas and electric service to our customers.
Reliance on obsolete technology for automated business process presents significant risk that
may only be solved with the reinstatement of manual process. Sustaining automated business
process by replacing automation with workforce would increase labor expense.
Additionally,with the rapid pace of technological change,technology vendors require continuous
upgrades to maintain system maintenance and support, which can include security patching,
bug fixes, version upgrades, interoperability, and compatibility with other technologies. These
upgrades can in turn drive subsequent system replacements, creating a cascading event of
change.Therefore,vendor roadmaps and technology asset lifecycles are data points that inform
on how best to plan replacements,while meeting business value and strategic alignment,within
the constraints of resource capacity and funding, which in turn can result in deferred
replacement introducing the risk of technology failure.
Option Capital Cost Start Complete
Recommended: Address 100% obsolete products $16,655,470 01 2025 122029
and capacity constraints recommended
Alternative#1: Address 75% obsolete products and $12,491,603 01 2025 122029
capacity constraints
Alternative#2 Address 40% obsolete products and $6,662,188 01 2025 122029
capacity constraints
Business Case Justification Narrative Template Version: February 2023 Page 5 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 168 of 351

DocuSign Envelope ID:A7D4338A-FCFC-4FEE-84AE-AD7A9B442EOE
Data Center Compute and Storage
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
The funds request was based on a calculation of the performance and capacity associated with
each technology asset, the scope of the technology footprint across our service territory, and
historical project costs for technologies previously refreshed under this business case. Through
regular reviews, the program balances the need to meet system performance and reliability
standards for the various technologies under this program within annual budget allocations.
These reviews can result in calling for additional investment under this program from time to
time for technology either falling behind technology lifecycles or predetermined performance
and reliability standards.
The Business Case Governance group, consisting of Technology Domain Architects and ET
Management and Project Management Office, maintains technology roadmaps to inform the
Business Case of investment demand. Investment demand is assessed against funding
constraints each year and prioritized based on risk of technology impact to the business.Various
data points inform the team's decisions and recommendations, which include, but are not limited
to vendor-driven obsolescence, compute capacity and storage, historical project costs for similar
type projects, etc.
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A $1,950,000 N/A N/A N/A
0&M $152K $350K $350K $350K $350K
The Capital offset of$1,950,000 is for Corporate Storage end of life refresh 2026.
The O&M offset is for Corporate Storage extended support required by not refreshing the end
of life storage.
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A N/A N/A N/A N/A
0&M $100k $100k $100k $100k $100k
-$10M -$10M -$10M -$10M -$10M
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 169 of 351

DocuSign Envelope ID:A7D4338A-FCFC-4FEE-84AE-AD7A9B442EOE
Data Center Compute and Storage
In addition, when data center devices break down it can result in the inability of employees to
access essential technology systems such as our meter data, customer billing and our mapping
data. This can result in a productivity reduction across all areas of the business. Savings related
to avoiding these down time issues could range from $100k -$10M a year representing at least
1 full time employee up to 100 full time employees needed to implement manual processes.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Address 75% of obsolete products and capacity constraints (Recommended).
This will introduce risk associated with technology systems reliability, interoperability and
capacity. The investment required to address obsolete technology products is deferred to
subsequent years, increasing risk in subsequent years and thet likelihood of technology impact
to business is increased. To minimize the impact of this risk, the Program Steering Committee
will manage project sequence according to the investment priority documented in section 3.2.
Alternative 2:
Address 40% of obsolete products and capacity constraints
This will introduce risk associated with technology systems reliability, interoperability and
capacity. The investment required to address obsolete technology products is deferred to
subsequent years. The likelihood of technology impact to business is increased. Interoperability
constraints may force unplanned funding requests. Multi-year, complex projects are at risk of
completion prior to product obsolescence. This option impacts the workforce.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
Vendor roadmaps and technology asset lifecycles are data points that inform on how best to
plan replacements,while meeting business value and strategic alignment, within the constraints
of resource capacity and funding, which in turn can result in deferred replacement introducing
the risk of technology failure.Ongoing reviews of vendor roadmap and technology asset Iifecycle
alignment provide necessary information to track how much of our investment in technology is
lagging behind the vendor roadmap, and thereby introducing risk.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
This business case is a program that transfers to plant the total cost of each sub-project at the
completion of every project, which can straddle calendar years. Quarterly forecasts capture
changes in transfers to plant based on project status.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Data Center Compute & Storage Systems Business Case has two levels of governance;
The Program Steering Committee and the Project Steering Committee.
Program Steering Committee
Business Case Justification Narrative Template Version: February 2023 Page 7 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 170 of 351

DocuSign Envelope ID:A7D4338A-FCFC-4FEE-84AE-AD7A9B442EOE
Data Center Compute and Storage
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
Enterprise Technology(ET) Project Management Office (PMO) Department. The project queue
will be reviewed periodically and will consist of projects needed to maintain the reliability and
performance of all Data Center Compute & Storage Systems.
Technology product roadmaps identify investment demand that is generally not fully funded.
Technology product investments are prioritized in this manner:
1) Safety Systems
2) Control Systems
3) Customer Facing Systems
4) Back Office Systems
Project Steering Committee
Project Steering Committees act as the governing body over each individual project within the
program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible to provide guidance and make
decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the ET PMO
Department.
The governance structure under this business case program is responsible for decision-making,
prioritization,and change requests.Through the regular Program Steering Committee Meetings,
the team reviews and balances planned work versus unplanned work to determine prioritization,
as well as pending project change requests. Any change request requiring either an increase or
decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is
submitted to the Capital Planning Group for consideration.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 171 of351

DocuSign Envelope ID:A7D4338A-FCFC-4FEE-84AE-AD7A9B442EOE
Data Center Compute and Storage
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Data Center Compute and Storage Business
Case and agree with the approach it presents. Significant changes to this will be coordinated with
and approved by the undersigned or their designated representatives.
Signature: DNS Date: Apr-29-2024 1 10:45 AM PDT
Co09.0 9nt9t�3Lp
Print Name: Walter Roys
Title: Sr Manager System Engineering
Role: Business Case Owner
Signature: b Date: May-02-2024 1 3:46 PM PDT
Qi..pis Qlapan.du^
Print Name: Alexis Alexander
Title: Director, Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 9 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 172 of 351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
EXECUTIVE SUMMARY
The Digital Grid Networks (DGN) Program[1] Business Case includes network communications
technology that establishes a reliable, secure, and supportable mix of private and third-party
solutions that compose the FAN (Field Area Network), including mesh devices using unlicensed
wireless bands installed throughout the service territory and devices that leverage commercial
LTE (Long Term Evolution) communications systems. With increased utility use cases such as
Wildfire prevention, ADMS (Advanced Distribution Management System), and EV (Electric
Vehicle) charging, having a multi-tiered field area network solution allows for better support of the
utility demand across the entire geographic service territory. The current mix of private and third-
party wide area wireless services relies too heavily on leased external services which may result
in degraded security, performance, and overall reliability because 1) the assigned TTR (time to
restoration) is outside of Avista's control, and 2) the commercial leased service providers are
generally in the business of growing subscribers, not delivering reliable service that meets utility
service level criteria in support of the essential services we deliver to our customers 24/7/365.
Overreliance on these commercial systems presents a risk to the stability of critical core services,
therefore Avista's control and safety field area communication networks are being moved to utility-
grade leased or private services.
For this business case, funding is being requested for $23,300,000 over five years to upgrade or
replace identified network communication systems within the field area network. Analysis of
current traffic profiles and future use-cases is reconciled to reliability metrics and supportability
requirements to generate the desired mix of private and leased services to support the Field Area
Networks. Additionally the Advanced Meter Infrastructure (AMI) Connected Grid Router (CGR)
refresh work along with AMI Washington support and expansion projects have added to the
business case. In the later years,the design and build of a private LTE network has been included
as that buildout is now being planned. The risks of not approving this business case at the level
to which it can maintain the balance of meeting vendor and/or Network asset management
strategies and scale for future technology could result in unplanned failures and unplanned
outages across the field area network communication system meaning data and communications
may not be received in a timely manner.
Avista customers across select jurisdictions will benefit from the projects in this program by having
a robust network that has capacity and reliability to transport real time data on system status and
performance. Proactive updates to assets or timely placement of assets to locations will reduce
possible service interruptions or delays.
Currently, there are no direct cost savings. Indirect offsets may be realized with fewer truck roles,
staff efficiency, etc.
VERSION HISTORY
Version I Author I Description Date
Business Case Justification Narrative Template Version: February 2023 Page 1 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 173 of 351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
3.0 Shawna Kiesbuy Update content and new template 412023
4.0 Shawna Kiesbuy Update content and new template 412024
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements
Member
Business Case Justification Narrative Template Version: February 2023 Page 2 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 174 of 351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $2,800,000 $2,000,000
2026 $5,500,000 $3,500,000
2027 $5,000,000 $3,500,000
2028 $5,000,000 $3,500,000
2029 $5,000,000 $3,500,000
Project Life Span 5 years+
Requesting Organization/Department Enterprise Technology/Network Systems
Business Case Owner I Sponsor Shawna Kiesbuy I Alexis Alexander
Sponsor Organization/Department Enterprise Technology/Network Systems
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
This business case includes network communications technology that establishes a reliable,
secure, and supportable mix of private and third-party solutions that compose the FAN (Field
Area Network), including mesh devices using unlicensed wireless bands installed throughout
the service territory and devices that leverage commercial LTE communications systems. With
increased utility use cases such as Wildfire prevention, ADMS (Advanced Distribution
Management System), and EV (Electric Vehicle) charging, having a multi-tiered field area
network solution allows for better support of the utility demand across the entire geographic
service territory.
The current mix of private and third-party wide area wireless services relies too heavily on leased
external services which can result in degraded security, performance, and overall reliability
because 1) the assigned TTR (time to restoration) is outside of Avista's control, and 2) the
commercial leased service providers are generally in the business of growing subscribers, not
delivering reliable service that meets utility service level criteria in support of the essential
services we deliver to our customers 24/7/365. Overreliance on these commercial systems
presents a risk to the stability of critical core services, therefore Avista's control and safety field
area communication networks are being moved to utility-grade leased or private services.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 175 of 351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
1.2 Discuss the major drivers of the business case.
The main driver for this business case is Performance and Capacity. Since the field area network
wireless transport systems support both back office and critical infrastructure, creating and
managing the business case is crucial to building a field area network transport system that
protects and provides the performance and capacity needed by all end users. Specifically,
allowing for the monitoring and protection of utility assets in high wildfire prone areas, supporting
the build out of an EV communications network across the service territory, supporting ADMS
functions including the automation of outage restoration and optimizing the performance of the
distribution grid and in delivery of AMI (Advanced Metering Infrastructure) data. With
Performance and Capacity, the network communication assets are managed in alignment with
technology lifecycles that are based on manufacturer product roadmaps and planned
obsolesces to proactively reduce the risk of failing assets affecting critical operations systems,
back-office processes, and infrastructure reliability.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
The network project work captured in this business case establishes a more reliable, secure,
and supportable mix of private and third-party solutions for wireless transport systems. With
Avista's vision of delivering better energy for life, this business case is key to enabling the gas
and electric service delivery to our customers in a safe and reliable manner by providing
pathways for sending and receiving operational data. The project work is performed based on
schedules that meet priority ranking and resource availability throughout the calendar year.
The risks of not approving this business case at the level to which it can maintain the balance
of meeting its asset management strategy and scale for future technology could result in
unplanned failures and unplanned outages across the field area network communication
system.The result is tied to the following risks:an increase in employee, contractor and/or public
safety risks due to the inability to see and remotely operate the electric and gas systems. This
has the potential to increase labor and non-labor costs tied to unplanned system scope changes,
where delays to procurement can be realized to replace the failed asset, as well as downtime
to the critical systems supported. This would also lead to additional exposure of outdated or
unsupported devices to external cyber vulnerabilities.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
The Digital Grid Network (DGN) business case investments align with Avista's commitment to
invest in its infrastructure to achieve optimal lifecycle performance —safety, reliability, and at a
fair price. Network technologies that allow for communication with field area assets and
workforce in the field are critical in support of the bulk electric system. The implementation of
these network technologies will continue to enable and support these critical communications
for all workers and at all locations across Avista.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 176 of 351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
Reference materials that support the needed changes in Network technology are maintained by
Technology Domain Architects within each respective technology area. These materials are
located within the department shared file and/or Teams location and available upon asking.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
DGN exists to develop, deploy, and maintain a portfolio of Field Area Network (FAN) backhaul
technologies to serve wide-area, remote and/or isolated utility data communication use cases.
Use cases include Advanced Meter Infrastructure (AMI), AMR, Supervisory Control and Data
Acquisition (SCADA), and Wildfire. DGN solutions must be secure and reliable. The business
case must strive toward private solutions where possible while curating a selective mix of carrier
services such as LTE in an evolving technological market. DGN plans for future convergence of
services over a single multi-technology FAN architecture in alignment with current utility industry
trend toward distributed resource and machine-to-machine communications.
2.2 Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
Each individual network infrastructure asset is tracked throughout its active presence using
several systems. Collectively these systems track lifecycle, manufacturer warranty,
maintenance, and support (contract) status, licensing, capacity, and replacement cost. For
assets connected to third party wireless services, such as commercial LTE, tracking of carrier
orientation, usage, and cost are also maintained for each individual asset. Analysis of current
traffic profiles and future use-cases is reconciled to reliability metrics and supportability
requirements to generate the desired mix of private and leased services to support the Field
Area Networks. Capacity and performance planning is conducted based on industry trends,
disruptors, and expected customer growth, the result of which is a robust, converged, field area
network that will enable Avista to efficiently and effectively deliver timely information and
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 177 of 351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
There are no direct savings related to this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
There are no indirect savings related to this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
*According to the Company Enterprise Risk Register, under the "Loss of Communication or
Network Technologies" and the "Cyber Intrusion" risks the probability of this failure has an
income statement score of 3, which equates to a $10-$20 million avoided cost over a period of
2-3 years.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Fund the business case at an amount which is less than the original request
Funding of this business case at an amount less than the full request will reduce expansion of
the field area network transport systems to meet business needs in multiple areas of the
business. This reduction in projects will also lessen the ability for a proactive approach
refreshing devices prior to failure creating a loss of communications which increases the risk of
failure or cyber security vulnerability because assets will no longer be supported by their
manufacturers.
Alternative 2:
Do not fund the business case
Removing all funding for this business case would result in a lack of wireless network access
(this can occur due to lack of coverage or failure due to end of life or breakage) for our field
devices such as Connected Grid Routers (CGR's)supporting Advanced Metering Infrastructure
(AMI), Service Aggregation Routers-Hardened Mobile Cellular (SAR-HMC) supporting midline
devices and Wildfire efforts, 700Mhz supporting metering usage data and rural substation
communications. A lack of access and/or a lack of optimization and capacity management,
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 178 of 351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
minimizing network capacity reducing the ability to communicate with field devices. Manual
interventions and field visits would be required, increasing expense costs and degrading trust
between teams regarding real time data that used to be available when device communications
were present.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
The projects in this business case establish a more reliable, secure, and supportable mix of
private and third-party solutions for wireless transport systems. The projects are dependent on
length of construction season and other geographically similar but unrelated work being
performed at impacted substations. Planning for these projects is done in partnership with other
Avista departments to ensure an alignment of technical needs is accounted for in this business
case, including the requirements, risks, and effects of the project work. Many times, this work
will be aligned with a previously scheduled outage window to gain efficiency and reduce the
amount of downtime experienced by operators at the sites. Specific business functions and
processes affected are determined project by project. Through those projects, business
functions and processes might be impacted but the technology upgrades being made at the
varied locations throughout Avista's service territory should strive to increase performance and
capacity for employees in their daily work life.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The Digital Grid Network business case is managed as a program of projects planned yearly.
All individual projects are managed through the Project Management Office (PMO), which
follows the Project Management Institute (PMI) standards. Throughout the year, the business
case's projects are Initiated, Planned, Executed, and then Completed with a Transfer to Plant
for the scope requests which over the course of a calendar year equates to the funded budget
allocation.
The network infrastructure investments in this business case sustain our business by using
network systems and assets to deliver data in support of critical system operations. This
business case specifically addresses network infrastructure required for our distribution digital
grid. The business case considers business impact vs. likelihood/probability when sequencing
work and allocating resources and responds to vendor-manufactured product obsolescence risk
as well as cyber security risks.
The use cases served by this business case include field area network transport infrastructure
for distribution automation devices,automated meter reading,advanced metering infrastructure,
and other field area network applications. The key performance indicator for network availability
and reliability is 99.9%, 24x7. Our investment sequencing is based on three drivers, 1)
Compliance, 2) Initiatives, 3) Reliability. The Compliance driver should be regulation, Initiatives
are executive sponsored (current example is a cybersecurity vulnerability risk on out-of-support
assets), and the Reliability driver is often the highest volume of work.
The sequencing of the Reliability projects is driven first by the network asset end-of-support date
for cybersecurity patching, then the performance and capacity to meet the business
requirement, and lastly product obsolescence date.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
Steering Committee members are invaluable to the project and will provide approval on scope,
schedule, and budget related changes. Additionally, they will provide approval on issues and
risks pertaining to project deliverables outlined in this document, which also typically have an
Business Case Justification Narrative Template Version: February 2023 Page 7 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 179 of 351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
impact on the scope, schedule, or budget of a project. Steering Committee members will also
provide approval on Change Requests, Go-Live, and the Approval to Close documents. For the
Digital Grid Network business case, the Steering Committee will consist of the Directors and
Managers within ET, Energy Delivery, GPSS and the Business Case Owner.
The Digital Grid Network Business Case has two levels of governance: the Program Steering
Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
PMO. The project queue will be reviewed periodically to plan and sequence work to the levels
of funding allocation received.
Project Steering Committee
Project Steering Committees function as the governing body over each individual project within
the program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible for providing guidance and
making decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the PMO.
Project prioritization is evaluated by the management team monthly. Each program and project
steering committee meet regularly and oversee scope, schedule and budget within their
respective programs and projects and inform the Business Case owner of any changes needing
escalation to the Technology Planning Group (TPG) or Capital Planning Group (CPG) for
decision-making around resource or funding constraints.
Any changes in funding or scope are documented at the Business Case level, via a Change
Request document that is presented to the CPG monthly and evaluated by the CPG for
approval.
Changes in scope, schedule, or budget are also documented through a `Change Request' at
the project level and reviewed and approved through a formal workflow process. All ET projects
in this business case are managed through the PMO, which follows the Project Management
Institute (PMI) standards. Projects initiate with a 'Charter' to begin the planning process. When
planning is complete, a `Project Management Plan (PMP)' is created and approved as the
project baseline for scope, schedule, and budget. At the end of execution, an `Approval to Go
Live' is submitted and approved prior to implementation (Transfer to Plant). After the technology
is in service and out of the warranty period, the Project Manager will hold a Lessons Learned,
and subsequently submit an 'Approval to Close' prior to finishing the project. All Monitor and
Business Case Justification Narrative Template Version: February 2023 Page 8 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 180 of 351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
Control documentation and Change Requests are documented and stored to ensure a
comprehensive audit trail.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 181 of351

DocuSign Envelope ID:2 E55CC8C-01 C9-4C5D-83E7-A89 E BEE 1 39E8
Digital Grid Networks
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Digital Grid Networks business case and
agree with the approach it presents. Significant changes to this will be coordinated with and approved
by the undersigned or their designated representatives.
DocuSigned by:
Signature: F�6&" Date: Apr-29-2024 1 3:16 PM PDT
Print Name: fflilRf6%3buy
Title: Sr Manager Network Engineering
Role: Business Case Owner
DocuSigned by:
Signature: ratk�,(S &;t IAA jtr Date: May-02-2024 1 10:33 AM PDT
Print Name: Arexis X(exan'der
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 10 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 182 of 351

COMMENT HISTORY DocuSign
Complete with DocuSign: BCJN_Digital Grid Networks 2024
Sender: Leianne Raymond
Envelope Id: 2e55cc8c-0 1 c9-4c5d-8 3e7-a89e bee 1 39e8
Time Zone: (UTC-08:00) Pacific Time (US & Canada)
Date Sent: 4/29/2024 1 2:31:57 PM
Date Completed: 5/2/2024 1 10:33:58 AM
All Recipients
Alexis Alexander-5/2/2024 1 10:33:12 AM
[e-mail]
We will need to identify additional funding alternatives with risks included for each.
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 183 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
EXECUTIVE SUMMARY
Avista has been rapidly expanding its technology portfolio to automate and enable business
processes throughout various areas of the business. The technology department is required to
support this technology found throughout our service territory, in office buildings, call centers,
fleet vehicles, and mountain tops. To do so, the technology department requires tools and
standardized tasks to support the various systems. Similarly, the technology department will
develop routine maintenance activities to keep systems healthy and proactively prevent system
degradation. In technology terms,reduce the likelihood of an unplanned outage,which can impact
employee productivity and potentially affect services used by our customers, such as our website
or IVR Phone System. In the event of an outage, these automation tools and methodologies will
reduce recovery time, whether it is identifying root cause or redeploying previously known good
configurations, ensuring minimal disruption to our services and enhancing customer experience.
As a result of increasing demands for data and connectedness, Avista has thousands of devices
both at our facilities and in the field. They range from network devices to servers to endpoints
used by employees. The number of technology devices and the complexity to provision,
operate/maintain, and monitor these devices has presented challenges that are not scalable with the
technology department's manual tasks. This can in turn cause delay in response times to system
reliability issues, as the backlog of system routine maintenance can outpace the technology team's
ability to accomplish. An alternative is to add additional resources to the technology team to keep
up with the pace of technology. However, this approach is not a scalable solution, as it requires
continuous training of a growing team, increases the probability of human error with more and
more people, and can lead to diminishing returns, as only so many people can log into a particular
system, etc.
The Dynamic Infrastructure Platform Enhancements business case is a program to invest in and
maintain the necessary products and skills to facilitate the discipline of infrastructure automation
within the Infrastructure Technology organization'. This investment will allow the technology
department to manage and support the growing technology infrastructure footprint and their
complexity without a rapid growth of our staff. This solution will benefit our customers across all
jurisdictions as it will drive an increase in system performance and reliability. This business case
is requesting$7.5M over 5 years and if it is not funded,the tools and automation programs created
under the Dynamic Infrastructure Platform productivity business case will not be maintained. In
addition, the existing technology footprint will continue to outpace the technology team's ability
' A Program is defined as related projects, subsidiary programs, and program activities managed in a
coordinated manner to obtain benefits not available from managing them individually. Managing projects,
subsidiary programs, and program activities as a program enhances the delivery of benefits by ensuring that
the strategies and work plans of program components are responsively adapted to component outcomes, or to
changes in the direction or strategies of the sponsoring organization.", Project Management Institute Global
Standard, The Standard for Program Management,Fourth Edition.Page 3 (Copyright 2017)
Business Case Justification Narrative Template Version: February 2023 Page 1 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 184 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
to maintain and respond to system issues or failures, as well as the opportunity to manage our
infrastructure more efficiently and effectively.
VERSION HISTORY
Version Author Description Date
1.0 Mike Beil Initial draft of DIP business case 812020
2.0 Kaitl n Richardson Initial draft of original business case 412023
3.0 Mike Beil Updated template and content for new planning period 412024
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements Jeff Holter
Member 4124
Business Case Justification Narrative Template Version: February 2023 Page 2 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 185 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $1,030,000 $1,030,000
2026 $1,350,000 $1,350,000
2027 $1,800,000 $1,800,000
2028 $2,000,000 $2,000,000
2029 $1,350,000 $1,350,000
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology
Business Case Owner I Sponsor Mike Beil I Alexis Alexander
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
Business Case Justification Narrative Template Version: February 2023 Page 3 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 186 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Considerable effort has been made to expand Enterprise Technology's (ET's)
technology portfolio to enable business automation within the company. As part of this
process, we have seen a pattern of increase in both system complexity and exponential
technology growth to meet business needs. The exponential growth in technology
complexity is driven by advancements in computing power,increased interconnectivity,
and the need to process large volumes of data. This trend is likely to continue as
technology continues to evolve. The application of a technology management model
consisting of primarily manual tasks is not scalable with the rapid growth of our
technology systems. It results in an outpacing of the technology team's ability to
maintain and respond to technology system issues and associated workloads .
Infrastructure Automation is necessary to reduce the number of manual tasks. The
productivity business case that implemented the dynamic infrastructure platform has
and will continue to reduce the number of manual task hours performed by infrastructure
operations and delivery teams through 2025 (see chart below).
Hours Saved
25000
22304
20000
15679
15000
10016
10000
5000
2660
2000
0 ■
2021 2022 2023 2024 2025
Business Case Justification Narrative Template Version: February 2023 Page 4 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 187 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
1.2 Discuss the major drivers of the business case.
The Dynamic Infrastructure Platform Enhancements Business Case is driven by our need to
manage our growing and increasingly complex infrastructure technology portfolio. The
approach of manually managing these devices is not scalable and susceptible to human
error,and infrastructure automation is crucial to maintaining system performance,
consistency, reliability. Tools like the Ansible Automation Platform will help automation
engineers create and standardize automation workflows to reduce manual tasks currently
needed to support infrastructure technologies. Therefore, the major driver for this business
case is Performance & Capacity. This solution will benefit our customers across all
jurisdictions as it will drive an increase in system performance and reliability.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
As our technology portfolio continues to grow, enabling business processes, the technology
department's workload of managing this new technology has reached an unsustainable level.
It is critical that we leverage infrastructure automation technology such as the Ansible
Automation Platform to build and maintain a dynamic infrastructure platform that allows the
automation of manual tasks to reduce the workload of managing these systems, as well as
reduce the risk of human error related outages. The Dynamic Infrastructure Platform
Enhancements program also provides a more proactive approach to system capacity and
performance issues. This Data Analytics capability will not only shorten the recovery time
during system outages, but it will also minimize service interruptions, ensuring a smoother
and more reliable experience for our users. This is achieved by quickly identifying and
addressing system issues and anomalies, thereby reducing the overall impact and duration
of any potential service disruptions.. If this business case is not funded, the existing
technology footprint will continue to outpace the technology team's ability to maintain and
respond to system issues or failures, as well as the opportunity to manage our infrastructure
more efficiently and effectively(See outpacing performance in graph below).
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
The technology investments under this business case program align with Avista's vision to
deliver `better energy for life' to our customers and in the area of`Perform', which calls for
"our focus on performance today to serving our customers well and unlocking pathways to
growth." The Dynamic Infrastructure Platform Enhancements program aligns with Avista's
culture of Innovation and allows us to more efficiently manage our technology systems with
a higher level of reliability.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 188 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.2
The technology department has consistently been able to capture and define infrastructure
automation use cases based on historic work patterns in our work management system.
Those use cases formed the basis of the productivity business case and resulted in the hours
saved noted in the graph in section I.I. Based on that data, a strategy for the productivity
business case was established by leveraging several sources of information, including
industry white papers, conversations with other utilities, and advisory firms such as Gartner.
This business case will continue to build on that established strategy but further refining use
cases and developing new ones. Success can be measured by the implementation of
automation use-cases and the reduction in the amount of manual tasks required to manage
the environment. Additionally, we should expect to see less human caused outages, as well
as shorter MTTR when troubleshooting system outages.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 189 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The business case will be split into a series of projects and work packages that will
deliver on automation use cases at a regular semiannual interval. These work packages
will enhance the dynamic infrastructure platform's functionality by implementing
defined automation use cases on the platform. In addition, this business case will fund
the periodic upgrades to the dynamic infrastructure platform itself so that the technology
remains current and in line with industry standards for performance and cyber security.
Investment in these technologies can result in added O&M expenses from increases in
licenses from time to time. However, not funding this business case may result in a
greater increase in O&M as we will need to hire more staff to perform manual tasks to
support the environment.
2.2 Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).3
The Infrastructure Technology team continues to capture and define infrastructure
automation use cases based on historic work patterns in our work management system.
Based on that data, a strategy was established by leveraging several sources of
information, including industry white papers, conversations with other utilities, and
advisory firms such as Gartner.
The Dynamic Infrastructure Platform Enhancements program is split into the following
areas of opportunity:
Labor Automation (Automate Manual Tasks)
The automation of tasks that are currently performed manually. This data is based on
historic work tasks and the amount of labor spent on each task.
Incident Avoidance
Leverage Data Analytics to avoid incidents, and the corresponding effort of managing
them. It provides alerts to conditions that indicate a problem is coming, dashboards that
provide visual representations of system health, and automated root cause analyses.
Accelerate Investigation of System Incidents
Leverage Data Analytics to move away from pulling system logs and searching them
manually. It involves storing the data in one location, and results in a single source of
3 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 190 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
truth for machine data. Through simplified analysis and automated correlation,
determining root cause is significantly faster and more consistent than current methods.
Streamline System Problem Management
Problem Management includes the activities required to diagnose the root cause of
production incidents, and to determine a definitive resolution to those problems so they
don't reoccur.Data Analytics helps with this process by providing complete and accurate
information about the systems associated with an incident, which allows faster closure
of problem records.
Optimize Compute Capacity
Data Analytics helps gain greater visibility by analyzing infrastructure data, application
data, and usage trends. This leads to improved allocation of unused system resources
and greater confidence of running the environment without overprovisioning.
The Dynamic Infrastructure Platform productivity business case was started in 2021 and
was expected to meet a 20% IRR. This business case will also continue to track IRR
overall to ensure that new use cases developed are of value to Avista and it's customers.
2.3 Summarize in the table, and describe below the DIRECT offsets' or
savings (Capital and OW) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
00 $0 $0 $0 $0 $0
There is no expected direct offsets in this business case.
2.4 Summarize in the table, and describe below the INDIRECT offsets5
(Capital and OW) that result by undertaking this investment.
The Dynamic Infrastructure Platform productivity business case was started in 2021
and was expected to meet a 20% IRR. This business case will also continue to track
IRR overall to ensure that new use cases developed are of value to Avista and it's
customers. However, as automation requests are incoming it is not possible to
accurately anticipate the split between Capital and O&M. Thus, the numbers below
are an even split of a calculated 20% IRR of the requested funding amount.
4 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
5 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 191 of351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
Offsets Offset Description 2025 2026 2027 2028 2029
Capital Automation of manual $500,000 $1,200,000 $1,200,000 $1,200,000 $1,200,000
Capital work
0&M Automation of manual $500,000 $1,200,000 $1,200,000 $1,200,000 $1,200,000
0&M work
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Increase headcount to accommodate new work
The alternative is to not fund this initiative and continue to grow O&M costs through
increasing labor required to support the platforms. We will also not be able to maintain
the capacity management and reliability improvements that were achieved as part of the
DIP Productivity business case. System outages related to either lack of operational data
analytics, or human error during manual changes, has a severe impact on Avista's
workforce and their ability to deliver gas and electric service to our customers either in
an office, customer service center, or in the field.
Alternative 2:
Do nothing
This alternative adds significant risk to the company and as a result our customers
because the technology team will not be able to keep up with the pace of the large
technology portfolio that Avista relies on to deliver electricity and natural gas to our
customers.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
Each use case defined by the infrastructure technology team will be scored using a
prioritization method defined by the DIP business case. They will be evaluated against an
estimated time to develop and approved by the governance committee to determine if
work on the use case should proceed. Internal Rate of Return metrics will be tracked each
year to ensure the business case continues to provide the expected value.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 192 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The business case will break the identified automation use cases into semi-annual work
packages that will close and transfer to plant every 6 months. These monthly forecasts
capture changes in transfers to plant based on project status.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee
consists of members in management positions that are identified and responsible for
prioritizing the projects within this program. The Steering Committee is also held
accountable for the financial performance of this program. The Program Steering
Committee will have regular meetings to review the progress of the program and to make
decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
•New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within
the Enterprise Technology (ET) Project Management Office (PMO) Department. The
project queue will be reviewed periodically and will consist of projects needed to maintain
the reliability and performance of all endpoint compute &productivity systems.
Project Steering Committee
Project Steering Committees act as the governing body over each individual project within
the program and will consist of key members in management positions that are identified
as responsible for the successful completion of the scope of work identified in the Charter
document for the Project. The Project Steering Committee is responsible to provide
guidance and make decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the
Charter of the project and will be facilitated by an assigned Project Manager from within
the ET PMO Department.
Business Case Justification Narrative Template Version: February 2023 Page 10 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 193 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
The governance structure under this business case program is responsible for decision-
making, prioritization, and change requests. Through the regular Program Steering
Committee Meetings,the team reviews and balances planned work versus unplanned work
to determine prioritization, as well as pending project change requests. Any change request
requiring either an increase or decrease of funds is reviewed at the upcoming Technology
Planning Group meeting before it is submitted to the Capital Planning Group for
consideration.
Business Case Justification Narrative Template Version: February 2023 Page 11 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 194 of 351

DocuSign Envelope ID: 9F89FBB3-FA40-4AB9-B8E2-F83B56A8803E
Dynamic Infrastructure Platform Enhancements
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Dynamic Infrastructure Platform
Enhancements Business Case and agree with the approach it presents. Significant changes to this
will be coordinated with and approved by the undersigned or their designated representatives.
Signature: Date: May-02-2024 8:01 AM PDT
�s2ozasassmmam_
Print Name: Mike Beil
Title: Manager System Engineering
Role: Business Case Owner
Signature: Date: May-06-2024 6:07 PM PDT
[I.tpis Qlayw.clu^
Print Name: Alexis Alexander
Title: Director IT Infrastructure
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 12 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 195 of 351

DocuSign Envelope ID:81A2EA84-0321-4D89-9D4D-2308DF359130
Endpoint Compute and Productivity Systems
EXECUTIVE SUMMARY
The Endpoint Compute and Productivity Program Business Case sponsors the tools and systems
used by the technology teams to support business application automation. Business processes
require automated technology solutions to meet the overwhelming need for data and information
to make decisions. All industries, including the utility industry, are reliant on the ability to produce,
transmit, analyze, and store information to meet various business requirements. Avista's office,
call center, and field staff require on-demand information to meet customer expectations when
providing gas and electric service to customers across our service territory. The information can
be critical to prevent, reduce, affect, or optimize an outcome that benefits our customers.
Technology investments in the Endpoint Compute and Productivity Systems business case
enable our staff with information to optimize our business and be responsive to our customers.
The primary driver of this business case is performance and capacity, whereby the Company
balances the need to meet performance standards and system reliability for the various
technologies under this program with annual budget allocations, and their respective technology
lifecycles. This is a true balancing act that requires historical trend analyses, technology road-
mapping, and cost-control measures.
Technology solutions under this program include, but are not limited to, technology required day-
to-day to automate and enable business processes, such as Personal Computer (PC) hardware
and their operating systems, various handheld devices, printers, configuration and management
systems for all endpoints and productivity tools (e.g., Office 365, etc.). The costs associated with
each solution can vary by the scale of the solution deployed, as well as vendor licensing models.
Therefore, each technology under this program undergoes regular review of the levels of
utilization and performance to determine if it is meeting the expected performance standards and
capacity requirements to maintain system reliability under the established budget constraints.
These reviews can result in calling for additional investment under this program from time to time
for technology either falling behind technology lifecycles or predetermined performance
standards, which can pose cyber-attack risk, and risk to computing system reliability that may
only be resolved with the reinstatement of manual processes replacing automation with workforce,
thereby increase labor costs, human error, and overall processing delays.
In order to maintain these business tools and systems supported by this business case, the
recommended funding amount is $27,613,061 over the next five years, averaging $5,522,612
each year.
Business Case Justification Narrative Template Version: February 2023 Page 1 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 196 of 351

DocuSign Envelope ID:81A2EA84-0321-4D89-9D4D-2308DF359130
Endpoint Compute and Productivity Systems
VERSION HISTORY
Version Author Description Date
1.0 Walter Roys Initial BCJN Draft 612017
1.1 Walter Roys Update Investment Driver 712019
2.0 Walter Roys Revision of BCJN to new template 712020
3.0 Walter Roys Revision of BCJN 812022
4.0 Walter Roys Revision of BCJN to new template 412023
5.0 Walter Roys Updated template and content review for new years 412024
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements
Member
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $6,153,029 $6,153,029
2026 $5,874,146 $5,874,146
2027 $3,354,115 $3,354,115
2028 $5,938,449 $5,938,449
2029 $6,293,322 $6,293,322
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology/Systems Engineering
Business Case Owner I Sponsor Walter Roys I Alexis Alexander
Sponsor Organization/Department Enterprise Technology/Systems Engineering
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Endpoint compute and productivity technology is not only subject to the traditional mortality rate
or lifecycle, but it is compounded by planned obsolescence, also known as technology
obsolescence. That is, whereby, the technology asset although within its functional lifespan is
technologically flawed or no longer meets the need of users or customers, as expectations
increase due to newer and more powerful technology (with greater performance and capacity)
that is available in the market.
Additionally,with the rapid pace of technological change,technology vendors require continuous
upgrades to maintain system maintenance and support, which can include security patching,
bug fixes, version upgrades, interoperability, and compatibility with other technologies.
Business Case Justification Narrative Template Version: February 2023 Page 2 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 197 of 351

DocuSign Envelope ID:81A2EA84-0321-4D89-9D4D-2308DF359130
Endpoint Compute and Productivity Systems
1.2 Discuss the major drivers of the business case.
The Endpoint Compute and Productivity Systems Business Case is driven by managing
technology replacement according to manufacturer product roadmaps or changes in business
requirements with an objective to maintain infrastructure performance and align infrastructure
assets with business demand for capacity. Therefore, the major driver for this business case is
Performance & Capacity.
All Avista customers benefit from maintaining endpoint compute and productivity systems, as
this technology enables the Avista workforce to perform their day-to-day job functions in
delivering gas and electric service to our customers.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Avista's office, call center, and field staff require on-demand information to meet customer
expectations when providing gas and electric service to customers across our service territory.
The information can be critical to prevent, reduce, affect, or optimize an outcome that benefits
our customers. Additionally, the endpoint compute and productivity technology are necessary
to enable the capabilities that align with our strategic goals of putting our customers at the
center.
Reliance on obsolete technology for automated business processes presents significant risk
that may only be solved with the reinstatement of manual processes. Sustaining automated
business processes by replacing automation with workforce would increase labor expenses,
and delay response times to meet customer needs. Therefore, staying as current as possible in
the most timely way benefits the Company and customers.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
The technology investments under this business case program align with Avista's vision to
deliver `better energy for life' to our customers and in the area of`Perform', which calls for"our
focus on performance today to serving our customers well and unlocking pathways to growth."
Each investment under this business case program allows Avista to deliver electric and gas
services to our customers.
Vendor roadmaps and technology asset lifecycles are data points that inform on how best to
plan replacements,while meeting business value and strategic alignment, within the constraints
of resource capacity and funding, which in turn can result in deferred replacement introducing
the risk of technology failure.Ongoing reviews of vendor roadmap and technology asset lifecycle
alignment provide necessary information to track how much of our investment in technology is
lagging the vendor roadmap, and thereby introducing risk. Additionally, assets that fail due to
not being replaced within their technology lifecycle are replaced by the Technology Failed Asset
business case,which tracks technology asset failures, and is also used as a data point to inform
the technology lifecycles under this business case.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 198 of 351

DocuSign Envelope ID:81A2EA84-0321-4D89-9D4D-2308DF359130
Endpoint Compute and Productivity Systems
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
The Enterprise Technology team references various technology vendors and third-party
resources to stay informed and recommend decisions on the various technology investments.
A few sample sources are included below:
Directions on Roadmaps, Independent IT Planning Information and Advisory Service focused
exclusively on Microsoft enterprise software and services. Retrieved from
https://www.directionsonmicrosoft.com/
Gartner Industry Research and Reference Material. Retrieved from
https://www.gartner.com/en/information-technology
Investments under this business case are to maintain performance and capacity standards in
each respective endpoint compute and productivity technology. For example, when the product
manufacturer terminates maintenance and support for specific devices or solutions, an asset
therefore becomes incompatible with other advancing technologies. This introduces the risk of
cyber-attack, and this business case will change or upgrade the asset.
2. PROPOSAL AND RECOMMENDED SOLUTION — Describe the proposed solution
to the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
This program will manage technology replacement according to manufacturer product
roadmaps with an objective to maintain infrastructure performance and align infrastructure
assets with business demand for capacity.
Address 100%of obsolete products and capacity constraints
This is the optimal solution. This option fully addresses and minimizes the likelihood of
technology impact to automated business process.
The funding requested under the Endpoint Compute and Productivity Business Case will be
invested in, but not limited to, technology, such as:
o Personal Computer(PC) systems
o Vehicle PC mounting systems
o Tablets
o Print, Scan, & Fax systems
o Global Positioning Systems (GPS)
o Digital scale systems
o Uninterruptable Power Supplies (UPS)
o Other endpoint computer systems
o PC Operating Systems (OS)
o Virtual PC Systems
o Virtualized application systems
o End user PC productivity tools
o Remote PC management systems
' Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 199 of 351

DocuSign Envelope ID:81A2EA84-0321-4D89-9D4D-2308DF359130
Endpoint Compute and Productivity Systems
o Configuration management systems
o Mobile computing systems
Investment in these technologies can increase or decrease O&M expenses. These can include
licensing increases from time to time or decreases in workload for O&M resources. However,
not funding this business case may result in removing automated business functions,which will
either cause delay in meeting business and customer demands or completely change whether
we can even respond to business and customer demands. There are no O&M reductions or
direct offsets resulting from these investments, as this technology enables the Avista workforce
to perform their day-to-day job functions in delivering gas and electric service to our customers.
Reliance on obsolete technology for automated business processes presents significant risk
that may only be solved with the reinstatement of manual processes. Sustaining automated
business processes by replacing automation with workforce would increase labor expenses.
Additionally,with the rapid pace of technological change,technology vendors require continuous
upgrades to maintain system maintenance and support, which can include security patching,
bug fixes, version upgrades, interoperability, and compatibility with other technologies. These
upgrades can in turn drive subsequent system replacements, creating a cascading event of
change.Therefore,vendor roadmaps and technology asset lifecycles are data points that inform
on how best to plan replacements,while meeting business value and strategic alignment,within
the constraints of resource capacity and funding, which in turn can result in deferred
replacement introducing the risk of technology failure.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
The funds request was based on a calculation of the performance and capacity associated with
each technology asset, the scope of the technology footprint across our service territory, and
historical project costs for technologies previously refreshed under this business case. Through
regular reviews, the program balances the need to meet system performance and reliability
standards for the various technologies under this program within annual budget allocations.
These reviews can result in calling for additional investment under this program from time to
time for technology either falling behind technology lifecycles or predetermined performance
and reliability standards.
The Business Case Governance group, consisting of Technology Domain Architects and ET
Management and Project Management Office, maintains technology roadmaps to inform the
Business Case of investment demand. Investment demand is assessed against funding
constraints each year and prioritized based on risk of technology impact to the business. Various
data points inform the team's decisions and recommendations, which include, but are not limited
to vendor-driven obsolescence,compute capacity and storage, historical project costs for similar
type projects, etc.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 200 of 351

DocuSign Envelope ID:81A2EA84-0321-4D89-9D4D-2308DF359130
Endpoint Compute and Productivity Systems
2.3 Summarize in the table and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
There are no direct offsets of this Business Case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $N/A $N/A $N/A $N/A $N/A
0&M $N/A $N/A $N/A $N/A $N/A
2.4 Summarize in the table and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
When endpoint devices break down it can result in the inability of an employee to access
essential technology systems such as our meter data, customer billing and our mapping data.
This can result in a productivity reduction across all areas of the business. Savings related to
avoiding these downtime issues could range from $100k -$10M a year representing at least 1
full-time employee up to 100 full-time employees needed to implement manual processes.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $N/A $N/A $N/A $N/A $N/A
00 $100k $100k $100k - $100k $100k
-$10M -$10M $10M -$10M -$10M
2.5 DESCRIBE IN DETAIL THE ALTERNATIVES, INCLUDING PROPOSED COST
FOR EACH ALTERNATIVE, THAT WERE CONSIDERED, AND WHY THOSE
ALTERNATIVES DID NOT PROVIDE THE SAME BENEFIT AS THE CHOSEN
SOLUTION. INCLUDE THOSE ADDITIONAL RISKS TO AVISTA THAT MAY
OCCUR IF AN ALTERNATIVE IS SELECTED.
Option Capital Cost Start Complete
Recommended Solution —Address 100% of obsolete $27,613,061 01 2025 122029
products and capacity constraints (recommended)
Alternative #1 — Address 75% obsolete products and $20,709,796 01 2025 122029
capacity constraints
Alternative #2 — Address 50% obsolete products and $13,806,531 01 2025 122029
capacity constraints
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 201 of 351

DocuSign Envelope ID:81A2EA84-0321-4D89-9D4D-2308DF359130
Endpoint Compute and Productivity Systems
Alternative 1:
Address 100%of obsolete products and capacity constraints
This option assumes the assets would be replaced upon end of life and would be removed from
service due to product incompatibility, business risk or safety risk.
The basis for measuring the business impact of not funding this business case is realizing the
loss of business process automation. As products reach the manufacturer-defined planned
obsolescence, business process automation is jeopardized, and business risk is increased as
manufacturers cease product maintenance and support. This condition would drive action. The
alternative could lead to a mitigation plan of having to re-instate manual business process or
eliminate the business process.
Alternative 2:
Address 50% of obsolete products and capacity constraints
This will introduce risk associated with technology systems reliability, interoperability, and
capacity. The investment required to address obsolete technology products is deferred to
subsequent years. The likelihood of technology impact to business is increased. Interoperability
constraints may force unplanned funding requests. Multi-year, complex projects are at risk of
completion prior to product obsolescence. This option impacts the workforce
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
The reason that the technology investment under this program business case is prudent is
because the Avista workforce requires this technology every day to deliver gas and electric
service to our customers either in an office, customer service center or in the field. Alternatives
to each technology are considered, yet not investing in it is not an option as automated business
process would either stop or be removed, thereby crippling our workforce's ability to deliver gas
and electric service to our customers, respond to compliance requirements, and conduct
business operations and reporting. Additionally, a two-tiered governance structure overseeing
this business case program meets regularly to oversee and make decisions on the needs,
benefits, costs, and risks of each investment.
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
This business case is a program that transfers to plant the total cost of each project at the
completion of every project, which can straddle calendar years. Quarterly forecasts capture
changes in transfers to plant based on project status.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Endpoint Compute & Productivity Systems Business Case has two levels of governance:
The Program Steering Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
Business Case Justification Narrative Template Version: February 2023 Page 7 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 202 of 351

DocuSign Envelope ID:81A2EA84-0321-4D89-9D4D-2308DF359130
Endpoint Compute and Productivity Systems
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
Enterprise Technology(ET) Project Management Office (PMO) Department. The project queue
will be reviewed periodically and will consist of projects needed to maintain the reliability and
performance of all endpoint compute & productivity systems.
Technology product roadmaps identify investment demand that is generally not fully funded.
Technology product investments are prioritized in this manner:
1. Safety Systems
2. Control Systems
3. Customer Facing Systems
4. Back Office Systems
Project Steering Committee
Project Steering Committees act as the governing body over each individual project within the
program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible to provide guidance and make
decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the ET PMO
Department.
The governance structure under this business case program is responsible for decision-making,
prioritization,and change requests.Through the regular Program Steering Committee Meetings,
the team reviews and balances planned work versus unplanned work to determine prioritization,
as well as pending project change requests. Any change request requiring either an increase or
decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is
submitted to the Capital Planning Group for consideration
Business Case Justification Narrative Template Version: February 2023 Page 8 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 203 of 351

DocuSign Envelope ID:81A2EA84-0321-4D89-9D4D-2308DF359130
Endpoint Compute and Productivity Systems
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Endpoint Compute and Productivity Systems
Business Case and agree with the approach it presents. Significant changes to this will be
coordinated with and approved by the undersigned or their designated representatives.
Signature: w C fey Date: Apr-29-2024 1 10:44 AM PDT'a�a
Print Name: .......Walter Roys
Title: Sr Manager System Engineering
Role: Business Case Owner
Signature: al�p� Date: May-02-2024 10:51 AM PDT
�z
Print Name: Alexis Alexander
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 9 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 204 of 351

DocuSign Envelope ID:A3CF17A2-CE52-4065-BF59-1FD01F31A7F9
Enterprise Communication Systems
EXECUTIVE SUMMARY
The Enterprise Communication Program Business Case sponsors the tools and systems used by
all areas of the company to support business operations and delivery of safe and reliable energy.
Communication is of the very essence of human interaction, and thus a pillar of business
processes. Communication enables business processes across systems that communicate and
exchange data in near-real time, such as phone calls, chats, presence indicators, work location,
contact information, meetings, video calls, organization structure, job titles, and emails all
accessible regardless of location.
The primary driver for the Enterprise Communication Systems business case is performance and
capacity, whereby the Company balances the need to meet performance standards and system
reliability for the various technologies under this program with annual budget allocations, and their
respective technology lifecycles.
Being no different than most businesses, Avista requires continuous communication among our
staff and customers throughout our service territory. However, to do it effectively, we require
communication technology for greater agility, flexibility, and scalability to enable many business
processes, such as 24 x 7 x 365 communication with our gas and electric customers by telephone,
fax, or email. Additionally, email, instant messaging, text, and collaboration platforms support a
digital workforce that has the ability to work from any location.
In order to maintain these business tools and systems supported by this business case, the
recommended funding amount is $11,487,025 over the next five years, averaging $2,297,405
each year. The costs associated with each solution can vary by the scale of the solution deployed,
as well as vendor licensing models. Therefore, each technology under this program undergoes
regular review of the levels of utilization and performance to determine if it is meeting the expected
performance standards and capacity requirements to maintain system reliability under the
established budget allocations. These reviews can result in calling for additional investment under
this program from time to time for technology either falling behind technology lifecycles or
predetermined performance standards, which can pose risk to communication system reliability
and cyber-attacks or degradation that may delay communication channels and result overall
processing delays.
VERSION HISTORY
Version Author Description Date
1.0 Walter Ro s Initial draft of original business case 612017
1.1 Walter Ro s Update Investment Driver 712019
2.0 Walter Ro s Revision of BCJN to new template 712020
3.0 Walter Ro s Revision of BCJN 712022
4.0 Walter Ro s Revision of BCJN 412023
5.0 Walter Ro s Updated template and content 412024
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements
Member
Business Case Justification Narrative Template Version: February 2023 Page 1 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 205 of 351

DocuSign Envelope ID:A3CF17A2-CE52-4065-BF59-1FD01F31A7F9
Enterprise Communication Systems
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $2,414,205 $2,414,205
2026 $2,299,205 $2,299,205
2027 $2,354,205 $2,354,205
2028 $2,185,205 $2,185,205
2029 $2,234,205 $2,234,205
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology/System Engineering
Business Case Owner I Sponsor Walter Roys I Alexis Alexander
Sponsor Organization/Department Enterprise Technology/System Engineering
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
This business case funds Communication technology that enables business processes beyond
people exchanging information, but across systems that communicate with one another to
exchange data in near-real time. Cell phones, desk phones, and Microsoft Teams voice are
examples of the many technologies supported by this business case.
Communications technology is not only subject to the traditional mortality rate or lifecycle, but it
is compounded by planned obsolescence, also known as technology obsolescence.Technology
obsolescence is defined as when the technology asset, although within its functional lifespan,
is technologically flawed or no longer meets the need of users or customers, as expectations
increase due to newer and more powerful technology (with greater performance or capacity)
that is available in the market.
Additionally,with the rapid pace of technological change,technology vendors require continuous
upgrades to maintain system maintenance and support, which can include security patching,
bug fixes, version upgrades, interoperability, and compatibility with other technologies.
1.2 Discuss the major drivers of the business case.
The Enterprise Communications Systems Business Case is driven by managing technology
replacement according to manufacturer product roadmaps or changes in business requirements
with an objective to maintain infrastructure performance and align infrastructure assets with
Business Case Justification Narrative Template Version: February 2023 Page 2 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 206 of 351

DocuSign Envelope ID:A3CF17A2-CE52-4065-BF59-1FD01F31A7F9
Enterprise Communication Systems
business demand for capacity.Therefore,the major driver for this business case is Performance
& Capacity.
All Avista customers benefit from maintaining communication systems, as this technology
enables the Avista workforce to perform their day-to-day job functions in delivering gas and
electric service to our customers.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
All Avista customers benefit from maintaining communication systems, as this technology
enables the Avista workforce to perform their day-to-day job functions in delivering gas and
electric service to our customers.
Investments under this business case are to maintain performance and capacity standards in
each respective enterprise communications technology. For example, when the product
manufacturer terminates maintenance and support for specific devices or solutions, an asset
therefore becomes incompatible with other advancing technologies. This introduces the risk of
cyber-attack, and this business case will change or upgrade the asset.
All Avista business functions are affected by this business case, as it enables all day-to-day
work activities and automated business processes around communications. From service center
to call center to field work, every worker requires communications systems technology to
perform their business function and deliver gas and electric service to our customers.
Communications technology has been critical in keeping our workforce connected, while many
of our staff have the ability to work remotely or are in the field.
Reliance on obsolete communications technology for automated business process presents
significant risk that may only be solved with the reinstatement of manual processes, which can
result in delayed response times to meet business demands and customer needs. Additionally,
in some cases there is no manual solution that can replace automated communication systems
that provide near-real time communication solutions.
Vendor roadmaps and technology asset lifecycles are data points that inform on how best to
plan replacements,while meeting business value and strategic alignment, within the constraints
of resource capacity and funding, which in turn can result in deferred replacement introducing
the risk of technology failure.Ongoing reviews of vendor roadmap and technology asset lifecycle
alignment provide necessary information to track how much of our investment in technology is
lagging behind the vendor roadmap, and thereby introducing risk.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
The technology investments under this business case program align with Avista's vision to
deliver `better energy for life' to our customers and in the area of`Perform,' which calls for"our
focus on performance today to serving our customers well and unlocking pathways to growth."
Each investment under this business case program allows Avista to deliver electric and gas
services to our customers.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 207 of 351

DocuSign Envelope ID:A3CF17A2-CE52-4065-BF59-1FD01F31A7F9
Enterprise Communication Systems
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
The Enterprise Technology team references various technology vendors and third-party
resources to stay informed and recommend decisions on the various technology investments.
A few sample sources are included below:
Directions on Roadmaps, Independent IT Planning Information and Advisory Service focused
exclusively on Microsoft enterprise software and services. Retrieved from
https://www.directionsonmicrosoft.com/
Gartner Industry Research and Reference Material. Retrieved from
https://www.gartner.com/en/information-technology
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
This program will manage technology replacement according to manufacturer product
roadmaps with an objective to maintain infrastructure performance and align infrastructure
assets with business demand for capacity.
The recommended solution is to address 100% of obsolete products and capacity
constraints
This is the optimal solution. This option fully addresses and minimizes the likelihood of
technology impact to automated business process.
Option Capital Cost Start Complete
Recommended Solution -Address 100% $11,487,025 01/2025 12/2029
technology that no longer meets performance and
capacity requirements
Alternative#1 —Address —75% of technology that $8,615,269 01/2025 12/2029
no longer meets performance and capacity
requirements
Alternative#2-Address 50% of technology that no $5,743,513 01/2025 12/2029
longer meets performance and capacity
requirements
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 208 of 351

DocuSign Envelope ID:A3CF17A2-CE52-4065-BF59-1FD01F31A7F9
Enterprise Communication Systems
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
The funds request was based on a calculation of the performance and capacity associated with
each technology asset, the scope of the technology footprint across our service territory, and
historical project costs for technologies previously refreshed under this business case. Through
regular reviews, the program balances the need to meet system performance and reliability
standards for the various technologies under this program within annual budget allocations.
These reviews can result in calling for additional investment under this program from time to
time for technology either falling behind technology lifecycles or predetermined performance
and reliability standards.
The Business Case Governance group, consisting of Technology Domain Architects and ET
Management and Project Management Office, maintains technology roadmaps to inform the
Business Case of investment demand. Investment demand is assessed against funding
constraints each year and prioritized based on risk of technology impact to the business. Various
data points inform the team's decisions and recommendations, which include, but are not limited
to vendor-driven obsolescence,compute capacity and storage, historical project costs for similar
type projects, etc.
2.3 Summarize in the table and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A N/A N/A N/A N/A N/A
0&M N/A N/A N/A N/A N/A N/A
The funding requested under the Enterprise Communication Systems Business Case will be
invested in, but not limited to, the following technologies:
• Instant messaging systems
• Contact Center automatic call distribution system
• Contact Center scheduling and QA systems
• Voice recording systems
• Electronic mail and calendar system
• Voicemail system
• Telephone systems
• Teleconferencing systems
• Video conferencing systems
• Conference room technology
• Media Walls
• Enhanced 911 emergency services
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 209 of 351

DocuSign Envelope ID:A3CF17A2-CE52-4065-BF59-1FD01F31A7F9
Enterprise Communication Systems
• Electronic fax systems
• Paging systems
• Application systems to manage enterprise communication technology
Investment in these technologies can increase or decrease O&M expenses. These can include
licensing increases from time to time or decreases in workload for O&M resources. However,
not funding this business case may result in removing automated business functions, which will
either cause delay in meeting business and customer demands or completely change whether
we can even respond to business and customer demands. There are no O&M reductions or
direct offsets resulting from these investments, as this technology enables the Avista workforce
to perform their day-to-day job functions in delivering gas and electric service to our customers.
Reliance on obsolete technology for automated business processes presents significant risk
that may only be solved with the reinstatement of manual processes. Sustaining automated
business processes by replacing automation with workforce would increase labor expenses.
In addition, when endpoint devices break down it can result in the inability of an employee to
access essential technology systems such as our meter data, customer billing and our mapping
data. This can result in a productivity reduction across all areas of the business. Savings related
to avoiding these downtime issues could range from $100k -$10M a year representing at least
1 full-time employee and up to 100 full-time employees needed to implement manual processes.
Additionally,with the rapid pace of technological change,technology vendors require continuous
upgrades to maintain system maintenance and support, which can include security patching,
bug fixes, version upgrades, interoperability, and compatibility with other technologies. These
upgrades can in turn drive subsequent system replacements, creating a cascading event of
change.Therefore,vendor roadmaps and technology asset lifecycles are data points that inform
on how best to plan replacements,while meeting business value and strategic alignment,within
the constraints of resource capacity and funding, which in turn can result in deferred
replacement introducing the risk of technology failure.
All Avista business functions are affected by this business case, as it enables all day-to-day
work and communications activities and automated business processes. From service center to
call center to field work, every worker requires enterprise communication technology to perform
their business function and deliver gas and electric service to our customers. This technology is
even more important in a work from home environment to keep employees and departments
connected while minimizing risk to essential employees.
2.4 Summarize in the table and describe below the INDIRECT offsets4
(Capital and OW) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A N/A N/A N/A N/A N/A
OW Operating Expenses $100k- $100k- $100k- $100k- $100k-
$10M $10M $10M $10M $10M
Savings related to avoiding these downtime issues could range from $100k -$10M a year
representing at least 1 full-time employee and up to 100 full-time employees needed to
implement manual processes.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 210 of 351

DocuSign Envelope ID:A3CF17A2-CE52-4065-BF59-1FD01F31A7F9
Enterprise Communication Systems
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Address 100%of obsolete products and capacity constraints (Recommended)
This option assumes the assets would be replaced upon end of life and be removed from service
due to product incompatibility, business risk or safety risk.
The basis for measuring the business impact of not funding this business case is realizing the
loss of business process automation. As products reach the manufacturer-defined planned
obsolescence, business process automation is jeopardized, and business risk is increased as
manufacturers cease product maintenance and support. This condition would drive action. The
alternative could lead to a mitigation plan of having to re-instate manual business process or
eliminate the business process.
Alternative 2:
Address approximately 75% of obsolete products and capacity constraints.
This will introduce risk associated with technology systems reliability, interoperability, and
capacity. The investment required to address obsolete technology products is deferred to
subsequent years. The likelihood of technology impacting business is increased. To minimize
the impact of this risk,the Program Steering Committee will manage project sequence according
to the investment priority documented in section 2.8
Alternative 3:
Address 50% of obsolete products and capacity constraints
This will introduce risk associated with technology systems reliability, interoperability, and
capacity. The investment required to address obsolete technology products is deferred to
subsequent years.The likelihood of technology impacting business is increased. Interoperability
constraints may force unplanned funding requests. Multi-year, complex projects are at risk of
completion prior to product obsolescence. This option impacts the workforce.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
The reason that the technology investment under this program business case is prudent is
because communication is at the very essence of human interaction, and thus a pillar of
business processes.As such,the Avista workforce requires this technology every day to deliver
gas and electric service to our customers either in an office, customer service center or in the
field. Alternatives to each technology are considered, yet not investing in it is not an option as
automated business process would either stop or be removed, thereby crippling our workforce's
ability to deliver gas and electric service to our customers, respond to compliance requirements,
and conduct business operations and reporting. Additionally, a two-tiered governance structure
overseeing this business case program meets regularly to oversee and make decisions on the
needs, benefits, costs, and risks of each investment.
Nearly all Avista's workforce interface with the technology investments under this business case.
Selected leaders in organizational business units, known as technology stakeholders, work
closely with the technology teams to help with business roadmaps, use case definition, gather
non-functional requirements, test design, and deployment approaches to inform technology
investments.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 211 of 351

DocuSign Envelope ID:A3CF17A2-CE52-4065-BF59-1FD01F31A7F9
Enterprise Communication Systems
The technology investment under this business case requires deployment and use of outputs
from other business cases, specifically delivery on personal computers and servers, connecting
to a virtual private network or cloud service, security updates and patching, etc.
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
This business case is a program that transfers to plant the total cost of each project at the
completion of every project, which can straddle calendar years. Quarterly forecasts capture
changes in transfers to plant based on project status.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Enterprise Communication Systems Business Case has two levels of governance: The
Program Steering Committee and the Project Steering Committee.
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
Enterprise Technology(ET) Project Management Office (PMO) Department. The project queue
will be reviewed periodically and will consist of projects needed to maintain the reliability and
performance of all enterprise communication systems.
Technology product roadmaps identify investment demand that is generally not fully funded.
Technology product investments are prioritized in this manner:
1. Safety Systems
2. Control Systems
3. Customer Facing Systems
4. Back Office Systems
Project Steering Committee
Project Steering Committees act as the governing body over each individual project within the
program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible to provide guidance and make
decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the ET PMO
Department.
The governance structure under this business case program is responsible for decision-making,
prioritization,and change requests.Through the regular Program Steering Committee Meetings,
Business Case Justification Narrative Template Version: February 2023 Page 8 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 212 of 351

DocuSign Envelope ID:A3CF17A2-CE52-4065-BF59-1FD01F31A7F9
Enterprise Communication Systems
the team reviews and balances planned work versus unplanned work to determine prioritization,
as well as pending project change requests. Any change request requiring either an increase or
decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is
submitted to the Capital Planning Group for consideration.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Enterprise Communication Systems
Business Case and agree with the approach it presents. Significant changes to this will be
coordinated with and approved by the undersigned or their designated representatives.
Signature: S Date: Apr-29-2024 10:43 AM PDT
Coos o s�9��0
Print Name: Walter Roys
Title: Sr. Manager System Engineering
Role: Business Case Owner
Signature: asp:aup Date: May-02-2024 9:49 AM PDT
C = �,
Print Name: Alexis Alexander
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 9 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 213 of 351

DocuSign Envelope ID:25755E82-E5E3-46B6-9266-C7304D9D7E4A
Enterprise Network Infrastructure
EXECUTIVE SUMMARY
The Enterprise Network Infrastructure Program[1] Business Case provides back office and
customer-facing communication network access and infrastructure investments for all enterprise-
wide business productivity applications and corporate systems. The network services in this
technology area ensure secure and reliable access to the systems needed daily to support
customer billing and call center activities, in addition to internal enterprise systems that support
the delivery of electric and gas services. In the last few years, changes in technologies have
shown us the criticality of business continuity as we transform how and where we get work done.
Secure and reliable enterprise network access, along with management of network
communications capacity, is maintained through this business case and directly affects business
productivity. Without these investments, the employee and customer experience would be
negatively affected as the data required to perform everyday ordinary and necessary tasks might
not reach employees or customers.
For this business case, funding is being requested for$12,500,000 over five years to upgrade or
replace network communication systems within the enterprise environment. Each individual
network infrastructure asset is tracked throughout its active presence using several systems.
Collectively these systems track lifecycle, manufacturer warranty, maintenance, and support
(contract) status, licensing, capacity, and replacement cost. Manufacturer lifecycles drive a
considerable portion of the required work within this request. Concurrently, a sizable portion of
work is driven by the ongoing technological advancement of business solutions and the need for
resilient and reliable access to the Internet.
Avista customers across all jurisdictions will benefit from the projects in this program by having a
robust network that has capacity and reliability to transport real-time data on system status and
performance. Proactive updates to assets or timely placement of assets to locations will reduce
possible service interruptions or delays. This translates to the safe and reliable delivery of energy
to customers across the Avista service territory.
Currently, there are no direct cost savings. Indirect offsets may be realized with fewer truck roles,
staff efficiency, etc.
VERSION HISTORY
Version Author Description Date
3.0 Shawna Kiesbuy Update content and new template 412023
4.0 Shawna Kiesbuy Update content and new template 412024
BCRT Heide Evans Has been reviewed by BCRT and meets necessary requirements 4130124
Business Case Justification Narrative Template Version: February 2023 Page 1 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 214 of 351

DocuSign Envelope ID:25755E82-E5E3-46B6-9266-C7304D9D7E4A
Enterprise Network Infrastructure
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $2,500,000 $2,500,000
2026 $2,500,000 $1,500,000
2027 $2,500,000 $1,500,000
2028 $2,500,000 $1,500,000
2029 $2,500,000 $1,500,000
Project Life Span 5 years+
Requesting Organization/Department Enterprise Technology/Network Services
Business Case Owner I Sponsor Shawna Kiesbuy I Alexis Alexander
Sponsor Organization/Department Enterprise Technology/Network Services
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Assets included in this business case have a finite lifecycle. And, given the pace of change in
technology, constant threats from bad actors, growth of the Avista network and need to have
suitable performance and capacity, the project work done within this program will help maintain
a robust and reliable network. This business case provides back office and customer-facing
communication network access and infrastructure investments for all enterprise-wide business
productivity applications and corporate systems. These systems include investments required
to access and move data across email, Teams, myavista.com, AFM (Avista Facilities
Management), OMT (Outage Management Tool), CC&B (Customer Care & Billing), Maximo,
and EIM (Energy Imbalance Market), to name a few, along with secure and reliable access to
the Internet wherever our people might be working.The network services in this technology area
ensure secure and reliable access to the systems needed daily to deliver electric and gas
services to customers.
In the last few years, changes in technologies have highlighted the criticality of business
continuity as we transform how and where we get work done. Secure and reliable enterprise
network access, along with management of network communications capacity, is maintained
through this business case and directly affects business productivity.Without these investments,
the employee and customer experience would be negatively affected because the data required
to perform everyday ordinary and necessary tasks might not reach employees or customers.
Depending on the affected asset, this could result in limited or no email, limited or no ability to
Business Case Justification Narrative Template Version: February 2023 Page 2 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 215 of 351

DocuSign Envelope ID:25755E82-E5E3-46B6-9266-C7304D9D7E4A
Enterprise Network Infrastructure
take in customer phone calls, no ability to buy or sell power, no ability to reach offices or other
sites away from HQ, limited or no ability to inform customers via our MyAvista website, etc.
1.2 Discuss the major drivers of the business case.
The main driver for this business case is Performance and Capacity. Since the enterprise
network communication assets are tied to employee and customer systems within Avista's
infrastructure, creating and managing this business case is important to supporting the
employee and customer experience. Specifically, allowing for timely network communications
between core business productivity application systems and back-office functions, such as the
data center(s), cloud services, the internet, and remote service offices, along with giving
customers accurate and timely information about their utility services including outage
management. With Performance and Capacity, the network communication assets are
managed in alignment with technology lifecycles that are based on manufacturer product
roadmaps and planned obsolesces to proactively reduce the risk of failing assets affecting
enterprise systems, processes, and infrastructure reliability.
The network infrastructure investments in this business case are necessary to sustain our
business by using technology to automate business processes. This business case specifically
addresses network infrastructure requirements for the back office and customer channels. The
business case considers business impact vs. likelihood/probability when sequencing and
prioritizing resource allocations and responds to vendor-manufactured product obsolescence
risks as well as cyber security risks.
This business case catalog of use cases includes the network infrastructure requirements for
customer contact centers, customer mobile and web site contact, all office functions, field
workforce functions, fleet systems, dispatch operations, EIM functions, and security systems.
The key performance indicator for network availability and reliability is 99.9%, 24x7. The
investment sequencing is based on three drivers, 1) Compliance, 2) Initiatives, 3) Reliability.
The Compliance driver should be regulation, Initiatives are executive sponsored (current
example is a cybersecurity vulnerability risk on out-of-support assets), and the Reliability driver
is often the highest volume of work.
The sequencing of the Reliability projects is driven first by the network asset end-of-support date
for cybersecurity patching, then the performance and capacity to meet the business
requirement, and lastly product obsolescence date.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
The project work captured in this business case enables network communications for all
corporate systems. With Avista's vision of delivering better energy for life, this business case is
key to supporting the gas and electric service delivery to our customers in a safe and reliable
manner by allowing access to core customer and employee systems. The work is needed daily
and is ongoing with a direct tie to customer satisfaction.
The risks of not approving this business case could result in unplanned failures, inability to
expand services and cyber vulnerabilities. The result is tied to the following risks: an increase in
employee and customer system outages, unplanned labor and non-labor costs, risk of delay to
procure and replace the failed asset as well as downtime to the core enterprise systems and
exposure of outdated or unsupported devices to external cyber vulnerabilities.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Business Case Justification Narrative Template Version: February 2023 Page 3 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 216 of 351

DocuSign Envelope ID:25755E82-E5E3-46B6-9266-C7304D9D7E4A
Enterprise Network Infrastructure
This business case provides network communications for all corporate systems.These systems
include email, Microsoft Teams, myavista.com, AFM (Avista Facilities Management), OMT
(Outage Management Tool), CC&B (Customer Care & Billing), Maximo, and EIM (Energy
Imbalance Market),to name a few,along with secure access to the Internet wherever our people
might be working. These network system examples, and many others, move and present data
that drive operational decisions and support customer account management, tying back to all
four strategic goals affecting our customers, people, performance, and invention with the
customer being the most important.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
Gartner is an industry leader in Enterprise Technology providing valuable insights, guidance,
tools, and consulting opportunities that Avista's technical architects use regularly. OEMs
(Original Equipment Manufacturer) also provide valuable information about industry trends and
the evolution of technology. Avista uses these tools to accurately project growth and develop
strategies for scaling new use cases.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The projects within this business case should refresh assets or install new instances of
technology to enhance and increase performance and capacity needs. If the failure rate
associated with the network systems in the business case remains low, then the project work is
adding value by proactively reducing the risk of failing assets affecting critical operations
systems, processes, and infrastructure reliability. In addition, expanding network assets in
advance of Avista adding services ensures business operations are not delayed and the system
is proactively increasing capacity.
2.2 Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
Each individual network infrastructure asset is tracked throughout its active presence using
several systems. Collectively these systems track lifecycle, manufacturer warranty,
maintenance, and support (contract) status, licensing, capacity, and replacement cost.
Manufacturer lifecycles drive a considerable portion of the required work within this request.
Concurrently, a sizable portion of work is driven by the ongoing technological advancement of
business solutions and the need for resilient and reliable access to the Internet. Subject Matter
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 217 of 351

DocuSign Envelope ID:25755E82-E5E3-46B6-9266-C7304D9D7E4A
Enterprise Network Infrastructure
Experts in Enterprise Technology are regularly consulted with in technical cadences so that a
real-world, collaborative approach is taken to evaluate each asset's risk of failure, as well as the
impact of a given failure. Capacity and performance planning activities occur in the same forum,
the result of which is a robust enterprise communications network that will enable Avista to
efficiently and effectively deliver timely information and services to customers.
2.3 Summarize in the table and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
There are no direct savings related to this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
2.4 Summarize in the table and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
There are no direct savings related to this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $ $ $ $
0&M $ $ $ $ $
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Fund the business case at an amount which is less than the original request
Funding of this business case at an amount less than the full request will reduce expansion of
enterprise network communication systems to meet business needs in multiple offices, ensuring
secure and reliable access to the systems needed daily to support customer billing and call
center activities, in addition to internal enterprise systems that support the delivery of electric
and gas services. This reduction in projects will also lessen the ability for a proactive approach
refreshing devices prior to failure creating a loss of communications which increases the risk of
failure of critical customer systems or cyber security vulnerability because assets will no longer
be supported by their manufacturers.
Alternative 2:
Do not fund the business case
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 218 of 351

DocuSign Envelope ID:25755E82-E5E3-46B6-9266-C7304D9D7E4A
Enterprise Network Infrastructure
Removing all funding for this business case would be challenging for Avista since this business
case provides enterprise network communications to offices ensuring secure and reliable
access to the systems needed daily to support customer billing and call center activities, in
addition to internal enterprise systems that support the delivery of electric and gas services., If
the projects in this business case cease to exist, there will be no funding to proactively upgrade
or refresh enterprise network communications devices prior to a loss of communications at new
offices, These failures translate to a lack of access and support to back-office and customer
systems that support the delivery of gas and electric services.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Executing and completing planned projects within this business case should refresh assets or
install new instances of technology to enhance and increase performance and capacity needs.
If the fail rate associated with the enterprise network systems in the business case remains low,
then the project work is adding value by proactively reducing the risk of failing assets affecting
critical operations systems, employee and customer processes, and infrastructure reliability. In
addition, expanding enterprise network assets in advance of Avista adding services ensures
business operations are not delayed and the system impacted with increased capacity.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The project work captured in this business case enables network communications for all
corporate systems. With Avista's vision of delivering better energy for life, this business case is
key to supporting the gas and electric service delivery to our customers in a safe and reliable
manner by allowing access to core customer and employee systems. The projects occur
throughout the year in a cadence based on priority and resource availability.
The risks of not approving this business case could result in unplanned failures, inability to
expand services and cyber vulnerabilities.The result is tied to the following risks: an increase in
employee and customer system outages, unplanned labor and non-labor costs tied to system
scope changes not clearly defined, risk of delay to procure and replace the failed asset as well
as downtime to the core enterprise systems and exposure of outdated or unsupported devices
to external cyber vulnerabilities.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
Steering Committee members are invaluable to the project and will provide approval on scope,
schedule, and budget related changes. Additionally, they will provide approval on issues and
risks pertaining to project deliverables outlined in this document, which also typically have an
impact on the scope, schedule, or budget of a project. Steering Committee members will also
provide approval on Change Requests, Go-Live, and the Approval to Close documents. For the
Enterprise Network Infrastructure business case, the Steering Committee will consist of the
Directors and Managers within ET, Energy Delivery, GPSS, Customer Solutions, and the
Business Case Owner.
The Enterprise Network Infrastructure Business Case has two levels of governance: The
Program Steering Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
Business Case Justification Narrative Template Version: February 2023 Page 6 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 219 of 351

DocuSign Envelope ID:25755E82-E5E3-46B6-9266-C7304D9D7E4A
Enterprise Network Infrastructure
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
PMO. The project queue will be reviewed periodically to plan and sequence work to the levels
of funding allocation received.
Project Steering Committee
Project Steering Committees function as the governing body over each individual project within
the program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible for providing guidance and
making decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the PMO.
Project prioritization is evaluated by the management team monthly. Each program and project
steering committee meet regularly and oversee scope, schedule and budget within their
respective programs and projects and inform the Business Case owner of any changes needing
escalation to the Technology Planning Group (TPG) or Capital Planning Group (CPG) for
decision-making around resource or funding constraints.
Any changes in funding or scope are documented at the Business Case level, via a Change
Request document that is presented to the CPG monthly and evaluated by the CPG for
approval.
Changes in scope, schedule, or budget are also documented through a `Change Request' at
the project level and reviewed and approved through a formal workflow process.All ET projects
in this business case are managed through the PMO, which follows the Project Management
Institute (PMI) standards. Projects initiate with a 'Charter' to begin the planning process. When
planning is complete, a `Project Management Plan (PMP)' is created and approved as the
project baseline for scope, schedule, and budget. At the end of execution, an 'Approval to Go
Live' is submitted and approved prior to implementation (Transfer to Plant). After the technology
is in service and out of the warranty period, the Project Manager will hold a Lessons Learned,
and subsequently submit an 'Approval to Close' prior to finishing the project. All Monitor and
Control documentation and Change Requests are documented and stored to ensure a
comprehensive audit trail.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 220 of 351

DocuSign Envelope ID:25755E82-E5E3-46B6-9266-C7304D9D7E4A
Enterprise Network Infrastructure
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Enterprise Network Infrastructure business
case and agree with the approach it presents. Significant changes to this will be coordinated with
and approved by the undersigned or their designated representatives.
5g d by.
Ma
Signature: �� Date: y-02-2024 1 6:22 AM PDT
Print Name: Shawna Kiesbuy
Title: Sr. Manager, Network Engineering
Role: Business Case Owner
Signature: Sig- Ma
Date: y-06-2024 3:42 PM PDT
[(�,p[-sQl',p#w,,d�v.
E—BABA76-67
Print Name:
Alexis Alexander
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 8 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 221 of 351

DocuSign Envelope ID:840D34EF-135E-43A9-A354-24E9627E8274
Environmental Control and Monitoring Systems
EXECUTIVE SUMMARY
Technology that enables Avista's safety, control, customer-facing, and backoffice systems is
critical to the operations that serve our gas and electric customers. It is found in many different
environments from office locations to mountaintop sites to call centers across our service area to
Substations and Generation Plants. Managing the facility and power environments to optimally
run the systems housed in these locations is extremely important, as environmental condition
changes can adversely affect them. The parameters monitored and controlled include but are not
limited to temperature, humidity, fire protection, and backup power supply systems. If these
parameters should fall outside of the device specification levels, it can cause damage to the
technology equipment impacting business automation processes.
The technology solutions under the Environmental Control & Monitoring Systems business case
will vary by site location and systems supported in each facility or environment. They may include
uninterrupted power sources to allow systems to continue operating while waiting for an auxiliary
power source to come online, such as an emergency generator. In fact, on a mountain top, heated
and cooled enclosures are critical to assuring technology housed in that facility is maintained at
the proper temperature despite changes in outside weather. The cost of each solution will vary
with the type of solution identified for each site. However, location can also affect cost based on
the remoteness and extreme conditions affecting that particular location. Avista and its customers
can experience the benefits through ongoing system reliability.
The main driver behind this program is asset condition aligned with asset management strategies
driven by technology Iifecycles that are based on manufacturer product roadmaps, which can
compound planned obsolescence. The asset management strategy is critical to optimize the
overall Iifecycle value of the product and reduce potential for failure or unplanned outages. The
technology solutions under this program undergo regular review to balance the asset
management strategy within the predetermined budget allocations. The risks of not approving this
business case at the level to which it can maintain the balance of meeting its asset management
strategy can result in unplanned failures, which result in unplanned labor and non-labor costs,
risk of delay to procure and replace the failed asset, increase safety risk to send field staff in
extreme weather conditions to remote locations, as well as downtime to the critical operations
and safety systems that it supports. The likelhood of these assets failing is exponentially more
likely when they are allowed to run pasted their life cycle. They contain components that wear out
and are not replaceable without replacing the entire asset. This program will plan to normalize
replacements by replacing an equal number of assets by asset type a year. This may increase
the risk of failures but provides a normalized annual funding level requirement. Engineering,
Technicians, and Management will annually review the portfolio of assets, and their current
condition, against this program to ensure optimization of funding and risk of failures.
This program will need a minimum funding level of $950,000 per year for a total of $4,750,000
over the 5 years to maintain the business risk of these assets failing and impacting safety and
control systems our Operations personal rely on to support our Customers.
Business Case Justification Narrative Template Version: February 2023 Page 1 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 222 of 351

DocuSign Envelope ID:840D34EF-135E-43A9-A354-24E9627E8274
Environmental Control and Monitoring Systems
VERSION HISTORY
Version Author Description Date
1.0 Michael Busby Original business case request 712017
1.1 Michael Beil Updated investment driver 712019
2.0 Michael Busby Narrative added to new template 712020
3.0 Michael Busby Update to new template 512022
4.0 Michael Update to new template, CPG short description 412023
Busby/Mike Lan
5.0 Shawna Kiesbuy Update to new template and revised financial data 412024
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements 412024
Member
Business Case Justification Narrative Template Version: February 2023 Page 2 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 223 of 351

DocuSign Envelope ID:840D34EF-135E-43A9-A354-24E9627E8274
Environmental Control and Monitoring Systems
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $950,000 $950,000
2026 $950,000 $950,000
2027 $950,000 $950,000
2028 $950,000 $950,000
2029 $950,000 $950,000
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology
Business Case Owner I Sponsor Shawna Kiesbuy I Alexis Alexander
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Technology that enables Avista's safety, control, customer-facing, and back office systems are
critical to the operations that serve our gas and electric customers. It is found in many different
environments from office locations to mountaintop sites to call centers across our service area.
Managing the facility and power environments to optimally run the systems housed in these
locations is extremely important,as environmental condition changes can adversely affect them.
The parameters monitored and controlled include, but are not limited to temperature, humidity,
fire protection, and backup power supply systems. If these parameters should fall outside of the
device specification levels, it can cause damage to the technology equipment impacting
business automation processes.
1.2 Discuss the major drivers of the business case.
The main driver behind this program is asset condition aligned with asset management
strategies driven by technology lifecycles that are based on manufacturer product roadmaps,
which can compound planned obsolescence. The asset management strategy is critical to
optimize the overall lifecycle value of the product and reduce potential for failure or unplanned
outages.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 224 of 351

DocuSign Envelope ID:840D34EF-135E-43A9-A354-24E9627E8274
Environmental Control and Monitoring Systems
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
The technology solutions under this program undergo regular review to balance the asset
management strategy within the predetermined budget allocations. The risks of not approving
this business case at the level to which it can maintain the balance of meeting its asset
management strategy can result in unplanned failures, which result in unplanned labor and non-
labor costs, risk of delay to procure and replace the failed asset, increase safety risk to send
field staff in extreme weather conditions to remote locations, as well as downtime to the critical
operations and safety systems that it supports.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
This is a program with discrete projects that align with Avista's vision, mission, and strategic
objectives:
To provide Better Energy for Life, you need systems that function at an optimal level to deliver
electricity and gas in a safe and reliable manner. The team supporting the environmental control
and monitoring systems is highly skilled and responsive to the needs of these systems so critical
business services continue to be delivered without interruption.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
EMERGENCY GENERATORS (EGEN)
Emergency Generator assets are at facilities where critical technologies are located. We
currently have 24 generators in portfolio. They have a 30-year life cycle. Average cost of
replacement is estimated around $150k per generator system. This estimate doesn't take into
account any unique environmental constraints some site may have. We will plan to replace 1
per year, if the generator is having reliability issues or at significant risk of failure.
Age Count
0-5 Yrs. 3
5-10 Yrs. 9
10-15 Yrs. 6
15-20 Yrs. 0
20-25 Yrs. 3
25-30 Yrs. 1
> 30 Yrs. 2
Total 24
We have 2 generators that are past their end of life and need to be refreshed. We have 1
generators that will reach their end of life over the next 5 years. As of 5/2022, over the next 5
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 225 of 351

DocuSign Envelope ID:840D34EF-135E-43A9-A354-24E9627E8274
Environmental Control and Monitoring Systems
years we are planning on replacing these 3 generators that will be past their end of life, as well
as 1 generator that is having reliability and maintenance issues.
UNINTERRUPTIBLE POWER SYSTEMS (UPS)
Uninterruptible power systems used to provide AC or DC power voltages to equipment during
the loss of utility power events and/or during emergency generator startup. We currently have
60 UPS systems in portfolio. They have a 5-year life cycle. Average cost of replacement is
estimated around $25k per UPS system. This estimate doesn't take into account any unique
environmental constraints some site may have. We will plan to replace 12 per year, if the UPS
is having reliability issues or at significant risk of failure.
Age Count
0-1 Yrs. 0
1-2 Yrs. 8
2-3 Yrs. 7
3-4 Yrs. 11
4-5 Yrs. 6
> 5 Yrs. 28
Total 60
We have 28 UPS systems beyond their end of life. If we get funding to replace 12 a year for the
next 5 years, we can significant reduce the risk of UPS failures.
DC RECTIFIERS
DC Rectifier systems are used to convert AC power to DC power. Some of Avista's technology
assets have DC power supply requirements. We have 78 DC Rectifiers in portfolio. They have
a 15-year life cycle.Average cost of replacement is estimated around$70k per DC system.This
estimate doesn't take into account any unique environmental constraints some site may have.
We will plan to replace 5 per year, if the DC System is having reliability issues or at significant
risk of failure.
Age Count
0-3 Yrs. 7
3-6 Yrs. 10
6-9 Yrs. 9
9-12 Yrs. 28
12-15 Yrs. 1
> 15 Yrs. 23
Total 78
We have 23 DC Systems beyond their end of life.We will have 26 more DC Systems reach their
end of life within the next 5 years. If we get funding to replace 5 systems a year for the next 15
years, we can significantly reduce the risk of DC System failures.
DC BATTERIES
DC Batteries store electrical energy used to provide power to technology equipment during loss
of AC power event. We have 2 types of DC batteries in our portfolio. A "Standard Life" and a
"Long Life" Valve Regulated Lead Acid (VRLA) battery. The Standard VRLA battery has a 10-
year life cycle. The "Long Life" VRLA battery has a 15-year life cycle and will be replaced with
the DC Plant replacement project.We currently have 11 "Long Life" DC Battery systems and 66
"Standard Life" DC Battery systems. The"Standard Life" DC Battery systems will be replaced if
they fail performance testing during maintenance activities. Average cost of replacement for
Business Case Justification Narrative Template Version: February 2023 Page 5 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 226 of 351

DocuSign Envelope ID:840D34EF-135E-43A9-A354-24E9627E8274
Environmental Control and Monitoring Systems
"Standard Life" battery systems is estimated to be around $7.5k per DC system.We will plan to
replace 6 "Standard Life" DC battery systems per year, if the system is having reliability issues
or at significant risk of failure.
10 Year Lifespan
Age Count
0-2 Yrs. 29
2-4 Yrs. 14
4-6 Yrs. 9
6-8 Yrs. 8
8-10 Yrs. 1
> 10 Yrs. 5
Total 66
5 of the"Standard Life" DC Battery systems are beyond their end of life.We will replace the DC
Batteries when we replace the DC Rectifier system. If we see DC Batteries not passing
performance testing during maintenance activities,we will plan to replace the DC Battery system
before replacing the whole rectifier system.
HVAC SYSTEMS
HVAC Systems monitor and control the environment's temperature and/or humidity. Avista's
technology assets may experience physical damage if operated in temperatures and/or humidify
outside of their specifications.We have 23 HVAC systems in our portfolio. They have a 20-year
life cycle. The average cost of replacement is estimated around $55k per HVAC system. This
estimate doesn't take into account any unique environmental constraints some site may have.
We will plan to replace 1 per year, if the HVAC System is having reliability issues or at significant
risk of failure.
Age Count
0-5 Yrs. 7
5-10 Yrs. 9
10-15 Yrs. 4
15-20 Yrs. 0
> 20 Yrs. 3
Total 23
We have 3 HVAC Systems beyond their end of life. If we get funding to replace 1 HVAC system
a year, we can manage and maintain the risk of HVAC system failures.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
Option Capital Cost Start Complete
Optimized Asset Replacement (Proposed Solution) $4,750,000 012024 012028
Asset Replacement when Obsolete $6,162,500 012024 012028
Asset Replacement upon Failure $4,621,875 012024 012028
Business Case Justification Narrative Template Version: February 2023 Page 6 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 227 of 351

DocuSign Envelope ID:840D34EF-135E-43A9-A354-24E9627E8274
Environmental Control and Monitoring Systems
The proposed solution would maintain an even and manageable replacement program to
maintain Avista's ability to monitor and control various environments where other technology
systems are deployed. This solution will maintain the reliability of the technology systems used
to automate our business.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
The assets managed in this business case are manufactured with components that wear out.
As the assets age, they will start to degrade and fail. We strive to replace the asset before they
start to fail and cause outages to the technology that runs automation for the business.
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
There are no offsets to report at this time.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $ $ $ $ $
00 $ $ $ $ $
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
There are no offsets to report at this time.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $ $ $ $ $
00 $ $ $ $ $
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Asset Replacement When Obsolete
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 228 of 351

DocuSign Envelope ID:840D34EF-135E-43A9-A354-24E9627E8274
Environmental Control and Monitoring Systems
This alternative maintains all Environmental Control and Monitoring systems in alignment with
product lifecycles. This is not the recommended option because it would result in high variability
in funding and staffing levels throughout the 5-year plan.
Alternative 2:
Asset Replacement Upon Failure
This alternative replaces equipment only upon failure. This option introduces high risk to the
company because failed assets will create significant loss of automated business processes.
Mitigating this loss will result in increased asset management costs to maintain spare inventory.
These costs are not accounted for in the estimate. This option assumes;
• 50% of all obsolete assets will fail or become incompatible.
• 50% of the project costs is Labor
• Labor would be 200% more expensive due to the urgency to replace a failed asset
These costs would be refected in the IT Failed Assets Business case. The IT Failed Assets
business case would not forecast these costs.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
The Environmental Control and Monitoring Systems business case can measure the failure
rates of these assets. If the failure rates increase or decrease,we can re-evaluate the frequency
at which we plan to replace them. This business case can also measure the number of assets
that are replaced each year to see if goals are met.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The Environmental Control and Monitoring Systems business case is managed as a program
of projects planned yearly which align with asset lifecycles that are based on manufacturer
product roadmaps. All individual projects are managed through the PMO, which follows the
Project Management Institute (PMI) standards. Throughout the year, the business case's
projects are Initiated, Planned, Executed, and then Completed with a Transfer to Plant for the
installed assets which over the course of a calendar year equates to the funded budget. Within
this business case, there is one blanket project for battery refreshes which Transfers to Plant
on a monthly basis.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Environmental Control and Monitoring systems Business Case has two levels of
governance; The Program Steering Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
Business Case Justification Narrative Template Version: February 2023 Page 8 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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Environmental Control and Monitoring Systems
The Program will be facilitated and administrated by an assigned Program Manager within the
Enterprise Technology(ET) Project Management Office (PMO) Department. The project queue
will be reviewed periodically and will consist of projects needed to maintain the reliability and
performance of all Environmental Control and Monitoring systems.
Product roadmaps identify investment demand that is generally not fully funded. Product
investments are prioritized in this manner:
1. Safety Systems
2. Control Systems
3. Customer Facing Systems
4. Back Office Systems
Project Steering Committee
Project Steering Committees act as the governing body over each individual project within the
program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible to provide guidance and make
decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the ET PMO
Department.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 230 of 351

DocuSign Envelope ID:840D34EF-135E-43A9-A354-24E9627E8274
Environmental Control and Monitoring Systems
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Environmental Control and Monitoring
Systems business case and agree with the approach it presents. Significant changes to this will be
coordinated with and approved by the undersigned or their designated representatives.
Signature: �i�sLuH Date: Apr-29-2024 1 5:34 PM PDT
Print Name: Shawna Kiesbuy
Title: Sr. Manager Network Engineering
Role: Business Case Owner
Signature: g Date: May-02-2024 1 10:19 AM PDT
Qltpis Ql�pau.dtir
�EAZu9ARASFaS
Print Name: Alexis Alexander
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 10 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 231 of 351

DocuSign Envelope ID:3B6E77AE-6C6F-4686-B51E-93DDBC016CA0
ET Modernization and Operational Efficiency
EXECUTIVE SUMMARY
The Enterprise Technology Modernization and Operational Efficiency (ETMOE) Program'
Business Case sponsors the tools and systems used by the technology teams to support
business application implementation, development, operations, support, automation, and data
to deliver solutions to the rest of the organization. Avista's Enterprise technology systems like
those listed below, are a necessity, as they provide essential functionality to our employees
and customers throughout all service territories. Employees benefit from greater efficiency
and automation and customers benefit indirectly from this as well. These vital systems require
systematic upgrades and enhancements to maintain reliability, compatibility, and reduce
security vulnerabilities. Examples of these systems include:
• Service Now, a workflow and asset management software
• Azure DevOps, used for code version control, testing and release management and work
tracking
• Various other integration and reporting systems used to help improve workflow
productivity and report visualization
• Clarity, a project and portfolio management software
In order to maintain these business processes and systems supported by this Program, the
historical annual funding has been approximately $1.6M/year. The proposed costs are
approximately $4.4M for 2025 and $3.8M for 2026. This level is higher in these years primarily
due to the inclusion of the larger IT Service Management Project as well as license renewals.
Overall, this funding level will provide the appropriate technology and development to meet
the periodic upgrades and enhancements prioritized by the ET Modernization
Governance Committee. This funding level also considers the development staff required to
maintain these core technology solutions.
As the utility industry undergoes transformation into digitalization, the growth of business
application technology continues to enable automation and manual business processes to
strengthen our ability to perform, which impacts our capacity to achieve stated financial objectives
and affordably operate and maintain safe, and reliable generation and energy delivery
infrastructure. This growth in business application technology creates an intricate tapestry
that requires ancillary tools and systems to deliver and support company-wide solutions.
Essentially, business application technology requires shared platforms and management
tools to increase the quality, stability, and velocity to meet business goals and customers'
expectations.
' "A Program is defined as related projects, subsidiary programs, and program activities managed in a coordinated
manner to obtain benefits not available from managing them individually. Managing projects, subsidiary programs,
and program activities as a program enhances the delivery of benefits by ensuring that the strategies and work plans
of program components are responsively adapted to component outcomes,or to changes in the direction or strategies
of the sponsoring organization.", Project Management Institute Global Standard, The Standard for Program
Management,Fourth Edition.Page 3 (Copyright 2017)
Business Case Justification Narrative Template Version: February 2023 Page 1 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 232 of 351

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The cost of these solutions varies by scale of footprint and vendor licensing models. The
technology under this program undergoes regular utilization and performance reviews to
determine expected standards and capacity requirements to maintain system reliability under the
established budget allocations and respective technology lifecycles. These reviews can result in
periodic supplementary investment demands as a result of technology lagging behind its lifecycle
or predetermined performance standards. The technology, tools, and systems under this program
benefit all Avista customers, as they support company-wide business application systems
that empower employees to perform at a more strategic level. An example of this includes Adobe
acrobat and Tableau applications which all employees have access to, to be able to work more
efficiently.
Failure to approve the recommended funding would cause the deferment of upgrades and
enhancements, resulting in unsupported applications, security liability, non-compliance, and
significantly higher costs. It would also risk the reduction of skilled resources that support these
systems, resulting in the loss of institutional business process and technology skillset in an
exceptionally competitive market. Investments in these technology upgrades, enhancements
and licenses provide indirect savings by quantifying the efficiencies based on assumptions on
minutes of efficiency, percent of users, etc. The amount of estimated indirect savings will vary
from year to year given this is a program with many different projects happening each year. The
estimated annual savings are expected to range from $382,000 to$632,000 over the next 5 years.
VERSION HISTORY
Version Author Description Date
1.0 L. Ra mond Initial draft of original business case(post BCRT review 04.06.2023
1.1 K. Schuh Updates 04.30.2023
2.0 K. Schuh Template and content update for new planning cycle 412024
BCRT Jeff Holter Has been reviewed by BCRT and meets necessary requirements 312024
Business Case Justification Narrative Template Version: February 2023 Page 2 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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ET Modernization and Operational Efficiency
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $4,420,000 $4,320,000
2026 $3,830,000 $3,660,000
2027 $1,710,000 $1,540,000
2028 $1,315,000 $1,730,000
2029 $3,245,000 $3,245,000
Project Life Span Program Business Case
Requesting Organization/Department Enterprise Technology
Business Case Owner I Sponsor Karen Schuh I Wayne Manuel
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
Business Case Justification Narrative Template Version: February 2023 Page 3 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
What is the current or potential problem that is being addressed?
The growth in business application technology, as part of the digital transformation of the utility
industry, requires ancillary tools and systems, such as API and workflow management systems,
to deliver and support company-wide technology solutions. Essentially, business application
technology requires shared platforms and management tools to increase the quality, stability,
and velocity to meet business goals and expectations from our customers. These platforms
and tools fit into two categories, those shared across the entire Avista Organization and
those specific to the needs of the Enterprise Technology (ET) department as tools to support
business applications.
Discuss the major drivers of the business case.
The Enterprise Technology Modernization and Operational Efficiency (ETMOE)Business
Case is primarily driven by Performance and Capacity to support business application
implementation, development, operations, support, delivery automation, and data delivery.
This business case focuses on the tools and systems used by the technology teams to deliver
solutions to the rest of the organization and is mainly comprised of product licenses,
hardware, upgrades, and enhancements. The technology tools and systems under this
program benefit all Avista customers, as they support business application systems
throughout the Company that produce indirect savings and/or productivity gains. Employees
having access to updated and efficient systems can result in customers who are provided more
timely support and resolution for their issues, as well as information and data that is less prone
to errors.
Some examples of those components are as follows: The funding requested under the ETMOE
Business Case will be invested in technology, such as:
o Content and Workflow Platforms — Enhancement and upgrades for platforms that
allow for content storage and sharing, such as ECM (Enterprise Content Management),
as well as organizational workflows.
o Non-production Environment & Data Management — Enhancements and new system
implementations required to support continuous integration, Quality Assurance (QA)
and , and new development environments (which improves developer efficiency and
overall systems security).
o ET Portfolio Management — Ongoing enhancements to portfolio and project
management systems to support the evolving needs of technology investment planning
and delivery, while capturing contemporaneous project artifacts that document
governance.
o Application Lifecycle Management Tools — Ongoing enhancements to the systems
and platforms that support application development, delivery, and integration for
consistent deployment and delivery of changes and upgrades on a multitude of business
application systems that enable business processes across the organization.
o Shared Systems and Tooling — Ongoing enhancements to and expansion of
automation and tracking tools (such as AppDynamics) that provide Operations and
Software Development teams with insight into application usage, issues, network
connectivity, and more. Also includes integration of systems across Avista utilizing
Microsoft Biztalk to assist in process and information sharing for platforms supported by
other business cases such as CC&B (Customer Care & Billing)and Maximo.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 235 of 351

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ET Modernization and Operational Efficiency
o Managed File Transfer— Ongoing enhancements to and expansion of Avista's managed
file transfer system (GlobalScape), which allows for the secure transfer of data from
one location to another, both internally and externally. This can include transactions with
sensitive and highly sensitive information.
Reliance on obsolete technology for automated business processes presents significant
risk that may only be solved with the reinstatement of manual processes. In some cases,
reinstating manual processes is not even an option, as technology has completely
introduced system requirements in information storage, access, and transactions among
systems greater and faster than any human being is able to store, access, or transact.
Sustaining automated business processes by replacing automation with workforce would
increase labor expenses in the few areas where removing business process automation is
possible.
Additionally,with the rapid pace of technological change,technology vendors require continuous
upgrades to maintain system maintenance and support, which can include security patching,
bug fixes,version upgrades, interoperability, and compatibility with other technologies. These
upgrades can in turn drive subsequent system replacements. Therefore, vendor
roadmaps and technology asset lifecycles are data points that inform on how best to plan
replacements, while meeting business value and strategic alignment, within the constraints of
resource capacity and funding, which in turn can result in deferred replacement introducing the
risk of technology failure.
Identify why this work is needed now and what risks there are if not approved
or if deferred or risks being mitigated by the request.
If the investments under this business case are not approved, it would result in technology
platforms and tools falling behind their required upgrades. This would hinder support for
business applications used dailyfor investment planning and delivery, managed file transfers,
pre-production testing, and technology Iifecycle management. The technology teams would
be hindered in their ability to assist or repair business applications and their respective
information storage and workflows when they become unresponsive or inoperable,
especially for reoccurring issues where root cause analysis is necessary to prevent future
events or incidents.
Upgrading to the recommended or latest software versions is important to maintain the overall
health of our technology. There are many reasons that upgrades are necessary, from
enhanced security, to increases in employee productivity (and lower costs). Upgrading
business software is an economical decision compared to the cost of maintaining outdated
software that suffer breakdowns and places a massive burden on Operations (and the budget).
Upgrades exist to avoid common risks, such as:
• Security - Outdated or unpatched software increases the risk of vulnerabilities or security
exploits.
• Incompatibilities - Outdated software can disrupt workflow or fail to work with other (duly
updated) software.
• Degradation - Software can experience a slow deterioration of quality over time or
diminished responsiveness that could eventually become faulty or unusable, if not
upgraded.
• Deficiencies - No matter how well the software is tested, many times it is deployed with
defects that need to be remediated.
• Obsolescence - Software updates do not always solely address security issues or
deficiencies. Sometimes they are there to add necessary functionality or optimize existing
features, such as new regulatory requirements or industry guidelines. There is a
heightened risk of losing vendor support from choosing not to install software updates
and the latest improvements.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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Software enhancements are just as critical, as demands change so rapidly, we must look for
ways to extend functionality of our software investment rather than go through full replacement
cycles. The Software Development Life Cycle (SDLC) describes the process of planning,
analysis, design, build, test and implementation, but it does not stop there. It has further
steps into maintenance, enhancement, and progression. Software enhancements help to
improve system efficiency, anomalies, and better cross-platform compatibility.There are also
unavoidable governance and compliance changes that may drive the need for software
optimization, thus why continuous delivery and continuous integration are common practices
within the SDLC.
Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Avista Focus Areas
• Mature our customer experience, both internal &external
El Our 0 Support affordability,equity,and economic vitality
Customers • Understand and address the evolving customer needs by offering products,
services,&solutions
• Evolve our employee experience with a focus on engagement,development,
Our resiliency&well-being
❑ Improve safety&training systems to reduce injuries,expand learning&
People understand risks
• Strengthen equity, inclusion,&diversity within systems, practices, & behaviors
• Affordably operate&maintain safe,clean, reliable generation&energy delivery
0 Perform infrastructure
• Achieve stated financial objectives
• Foster&apply an innovation culture to benefit employees,customers,
communities,&shareholders
El Invent 0 Create the utility of the future with our stakeholders,optimizing for cost,
carbon, & reliability
This is a program with discrete projects and packages that align with Avista's vision, mission
and strategic objectives. Specific Focus Areas include:
Our People: Technology plays a critical role in how employees feel about their day to day
experience. Employees that are more productive and efficient by using technology, allows them
to focus on more strategic objectives that help to propel the company forward. These types of
activities naturally promote more resilient, engaged employees that are more performance and
results driven.
1.1 Perform: The technology in this business case provide increased employee efficiency through
the reduction of steps required to complete a task and make better use of Avista resources.
They shift efforts from inefficient processes to more value-driven activities by leveraging
technology to meet business needs. The efficiency and reduction of steps creates a cost
savings from automating manual processes and utilizing tools that can be utilized across the
enterprise. The majority of our ET applications are also used by other business areas or support
the department specific tools. The ability to consolidate applications to meet multiple business
needs avoids the incremental costs of licensing, contracting, training, delivery, support, etc.
These back office applications are necessary to achieve our stated financial objectives and
impact our ability to affordably operate and maintain generation and energy delivery.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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1.2 Supplemental Information — please describe and summarize the key findings
from any relevant studies, analyses, documentation, photographic evidence, or
other materials that explain the problem this business case will resolve.2
Vendor roadmaps and technology asset lifecycles are data points that inform on how best to
plan replacements for existing technology under the ETMOE program, while meeting
business value and strategic alignment, within the constraints of resource capacity and
funding, which in turn can result in deferred replacement introducing the risk of technology
failure. Ongoing reviews of vendor roadmap and technology asset lifecycle alignment provide
necessary information to track how much of our investment in technology is lagging behind
the vendor roadmap, and thereby introducing risk to supporting business application
systems and their corresponding and respective automated business processes.
ET Modernization and Operational Efficiency Monthly Stakeholder and Steering Committee
teams references various technology vendor and third-party resources to stay informed and
recommend decisions on the various technology investments. A few sample sources are
included below:
• Vendor roadmaps for specific platforms and tools, such as Opentext (for Enterprise
Content Management) Biztalk (for Enterprise Service Bus, ServiceNow (for IT Service
Management) are examples of vendor roadmaps regularly referenced.
• ET utilizes Gartner for Information Technology insights, analysis, research and reference
materials. Gartner is an industry leader in IT research, benchmarking, and consulting
practices and provides Avista the ability to understand market trends, best practices and
make more informed technology decisions. For example, Gartner's `Magic Quadrant',
provides a graphical positioning of technology providers in the market, with the ability to
home in on critical capabilities based on requirements and specific use cases. This
capability alone significantly reduces the time and effort of researching, evaluating, and
reference checking.
Some examples of recent Gartner references include:
• ServiceNow / IT Service Management — Evaluation of IT Service Management tools,
vendors, System Implementors, and licensing models.
• Clarity PPM — Evaluating Project, Portfolio Management systems to determine the benefit
of upgrading vs. replacement.
Link: Gartner for Information Technology(IT) Leaders.
1. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
Please summarize the proposed solution and how it helps to solve the
business problem identified above.
As the utility industry undergoes transformation into digitalization, the growth of business
application technology continues to enable automation and manual business processes
to strengthen our ability to perform. Business application technology requires shared
platforms and management tools to increase the quality, stability, and velocity to meet
business goals and customers'expectations. In order to maintain the business processes and
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 238 of 351

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systems supported by this business case, the recommended funding is necessary to deliver
the technology and development to maintain application lifecycle support, security risks,
compliance requirements, and cost savings. The cost of these solutions varies by scale of
footprint and vendor licensing models. These reviews can result in periodic supplementary
investment demands as a result of technology lagging behind its lifecycle or predetermined
performance standards.
The proposed solution would upgrade, replace, or enhance the technology that is used by all
areas of the organization, or tools used by the technology team to support other business
application systems. The business functions or processes that may be impacted to solve the
business problem(s) include, but are not limited to:
• Workflow management - used daily for Accounts Payable invoice processing and
approvals.
• Investment planning and delivery for technology investments across the organizations,
including project management and artifact storage and approval workflows.
• Near real time transaction of data from enterprise systems, such as our customer
care billing and asset management system.
• Managed file transfers for internal and external movement of information among systems
and third parties.
• Root cause analysis is a tool to identify the cause for faster operational remediation.
• Information storage for technology lifecycle management, and
• Workflow processes for technology incident management and change approval.
Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).3
Impacts to O&M can occur and be both positive and negative as a result of multi-year, pre-pay
license agreements that are capitalized under this business case. However,these changes
can vary from year to year depending on the system or tool for license renewal and the licensing
model being offered by the technology vendor. This makes forecasting product license
renewal costs quite challenging. The following are examples of indirect benefits based
on projects that will transfer to plant in 2025:
• Service Now—the Service Now platform will streamline the ET Approval process, a known
pain point in our current ET workflow system Tracker. The project team estimates an annual
indirect labor offset of $225,000 as a result of this. The project is expected to bring in
additional labor to support this new product though, which will have a $60,000 annual
increase in capital and $240,000 annual increase in expense. However, this project is still
in the planning phase and additional workflow efficiencies and labor offsets could be
discovered which would further offset the expected increase of the support team.
• MuleSoft API (Application Programming Interface) Licenses — The annual indirect labor
offset is estimated at $132,000. MuleSoft is our Application Programming Interface
(API) service provider. An API is a type of software interface that allows
3 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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communication between computers in a more simplified fashion. It only exposes objects
or actions the developer needs. An API would provide the ability for a developer to use a
function that copies a file from one location to another without requiring the developer to
understand the file system operations occurring behind the scenes. It provides a much
more efficient process for creating an interface without having to fully migrate into
the ecosystem. Offsets or efficiencies gained would have been realized upon the initial
installation of the software. App Dynamics — The Company calculated the potential
indirect offsets of the upgrade to App Dynamics and represents an avoided cost should
the system be abandoned and go back to manual processes of approximately
$750,000. AppDynamics is a technology solution that provides system monitoring,
root cause analysis automation and provides end-to-end business transaction-centric
management of complex and distributed applications. When AppDynamics was originally
implemented, it was deemed to allow the Operations team to maintain the current level
of service to the enterprise, and improve it, due to the ability to quickly isolate and
resolve production performance issues. In addition to tangible operations benefits, the
implementation of this software allows for an internal rate of return (IRR) range of 23.22%
to 143.17%, as well as significant Operation&Maintenance(O&M)savings. These savings
were realized upon the initial implementation of App Dynamics and would not be realized
again for this upgrade.
• Clarity Upgrade— In 2023 the company started a project to upgrade the current on-premise
version of Clarity to a cloud version of Clarity with less customizations. The project team
calculated the potential indirect offsets for items like improved resource planning and
automation for items like status reports and timecards to be approximately $500,000 per
year. Direct savings of hardware and support costs are estimated to be between $35,000-
$45,000 per year.
In summary, investments in these technology upgrades, enhancements and licenses
provide indirect savings by quantifying the efficiencies based on assumptions on minutes of
efficiency, percent of users,etc. noted in the above projects. The above projects do not include
all the projects included in this business case; these were provided as a sample of
indirect savings that represent the entire business case. Therefore, these are high-level
estimates, and the Company does not have a way to track if these estimates will be realized.
These estimates were derived from calculated employee and contract labor costs for the
primary teams working in this business case area, as well as historical trends, product
roadmaps and high-level industry estimates for technology products. High level estimates are
collected by the business level subject matter expert(s), technology domain architect(s),
and delivery management team(s). Upstream investment in enhancements and upgrades to
these platforms can result in savings by not incurring downstream costs when applications
break, or simply stated, avoid costs associated with system inoperability that can hinder
worker productivity. Non-production systems (such as Azure DevOps) allow the
organization to test enhancements, upgrades, and new implementations prior to deployment
in production. This results in reduced errors in production systems, which could also affect
employees and customers negatively, from untested changes or upgrades.
Summarize in the table, and describe below the DIRECT offsets4 or savings
(Capital and O&M) that result by undertaking this investment.
The upgrade of Clarity from on-premise to a cloud application is expected to result in
approximately$35,000 in hardware (server) and vendor support costs per year.
Offsets I Offset Description 1 2025 1 2026 1 2027 1 2028 1 2029
4 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 240 of 351

DocuSign Envelope ID:3B6E77AE-6C6F-4686-B51E-93DDBC016CA0
ET Modernization and Operational Efficiency
Capital $ $ $ $ $
0&M $35,000 $35,000 $35,000 $35,000 $35,000
Summarize in the table, and describe below the INDIRECT offsets5 (Capital
and O&M) that result by undertaking this investment.
The following table represents examples of projects that will have indirect offsets.These types
of offsets occur in this business case annually. There are no capital offsets for this program.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital Clarity $500,000 $500,000 $500,000 $500,000 $500,000
0&M IT Asset Management $250,000 $500,000 $$500,000 $$500,000 $$500,000
System
0&M Mulesoft API Licenses $132,000
DESCRIBE IN DETAIL THE ALTERNATIVES, INCLUDING PROPOSED COST
FOR EACH ALTERNATIVE, THAT WERE CONSIDERED, AND WHY
THOSE ALTERNATIVES DID NOT PROVIDE THE SAME BENEFIT AS THE
CHOSEN SOLUTION. INCLUDE THOSE ADDITIONAL RISKS TO AVISTA
THAT MAY OCCUR IF AN ALTERNATIVE IS SELECTED.
Option Capital Cost
Recommended Solution — Maintain application lifecycle support, $14,520,000
security risks, compliance requirements, and cost savings at the
requested funding level
Alternative 1 —Fund at a reduced level by removing future phases o $10,075,000
ITSM.
Alternative 2 — Partially funding the Program (or Lifecycle $7,900,000
Mana ement
Alternative 3—change in license renewal pattern No reduction
overall but less
to 2025 and
2026
5 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 10 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 241 of 351

DocuSign Envelope ID:3B6E77AE-6C6F-4686-B51E-93DDBC016CA0
ET Modernization and Operational Efficiency
Alternative 1: This alternative solution would require future phases of the ITSM project to be
delayed or eliminated from the funding. Future phases of this project are planned to bring in the
Software and Hardware Asset Management systems(two items that are currently being tracked
manually in spreadsheets) as well as Facilities management and IT Operations workflows. If
this work is deferred, we will continue to exacerbate the risks associated with custom and
antiquated technology and delay the efficiency gains expected of this investment. We have
deferred this project for many years already, and it has become evident that we must address
the business problems at this time.
Alternative 2: Failure to approve funding at the recommended level would cause the
deferment of upgrades and enhancements, resulting in unsupported applications, security
liability, non-compliance, and significantly higher costs. It would also risk the reduction of skilled
resources resulting in the loss of institutional business process and technology skillset in an
exceptionally competitive market. Investments in these technology upgrades,
enhancements and licenses provide indirect savings by quantifying the efficiencies based on
assumptions on minutes of efficiency, percent of users, etc.
Alternative 3: The Software License Analyst team is constantly searching for ways to reduce
the impact of license renewal costs. Changes to patterns of license renewal could be made.
They would likely not provide a reduction in the overall funding need of the program, but they
could lessen the impact to certain years that have a high amount of license costs.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
Vendor roadmaps and technology asset lifecycles are data points that inform on how best to
plan replacements for existing technology under the ETMOE program, while meeting
business value and strategic alignment within the constraints of resource capacity and
funding, which in turn can result in deferred replacement introducing the risk of technology
failure. Ongoing reviews of vendor roadmap and technology asset lifecycle alignment provide
necessary information to track how much of our investment in technology is lagging behind
the vendor roadmap, and thereby introducing risk to supporting business application
systems and their corresponding and respective automated business processes.
These technology platforms and tools provide functional enhancements that address ongoing
changes in the workplace, provide increased employee efficiency through the reduction of steps
required to complete a task, and make better use of Avista resources. They shift efforts to more
value-driven activities by leveraging technology to meet both planned and unplanned business
needs. Larger projects, such as Clarity and ITSM, will measure stakeholder satisfaction with
these efforts by surveying end users at project completion.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
This Business Case is a program with approximately 25-30 discrete projects and product
packages for applications that typically run annually and Transfer to Plant at different times
within that same year. There are times that a project may start in Q3/Q4 of one year
and Transfer to Plant the following year. Typically, application projects will Transfer to Plant
about 60 days prior to the project completion date (due to the post implementation warranty
period and to capture the trailing charges). Quarterly forecasts capture changes in
transfers to plant based on project status. The goal is to break out large/complex projects
into smaller projects (phases)to avoid scope creep, budget overages, and ensure the work can
be properly prioritized. The first phase of every project would be scoped at the Minimum
Viable Product (MVP), and subsequent phases would be scoped accordingly, based on
the next highest priority after MVP. This also allows for more accurate Transfer to Plant
forecasts.
Business Case Justification Narrative Template Version: February 2023 Page 11 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 242 of 351

DocuSign Envelope ID:3B6E77AE-6C6F-4686-B51E-93DDBC016CA0
ET Modernization and Operational Efficiency
Work related to products that are similar in nature will be grouped into"packages" that can run
up to 5 years, or until a major contract ends. A regular transfer to plant schedule (annually,
monthly or quarterly) will be determined for these packages with Project Accounting and the
value delivered in these packages will be documented on an annual basis.
Examples of application projects included in this business case can be found in section 2.2
where offsets are discussed. Please see section 2.8 for the prudency review that takes place
during the Business Case Program Steering Committee meetings.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The ET Modernization and Operational Efficiency Business Case has four levels of
governance: The Executive Technology Steering Committee (ETSC); Technology Planning
Group (TPG) of Directors; Integrated Oversight Committee (IOC) of Managers, and
Program/Project Steering Committees that includes stakeholders to the individual projects.
Applicable stakeholders and disciplines meet regularly to govern the business case and
subsequent programs and projects. The TPG sets priority across the technology investment
portfolio, balancing: strategic alignment, business value, and customer benefits, as driven
by the strategic initiatives established by the ETSC. The Capital Planning Group (CPG), an
independent body of Directors, establishes funding allocations for each Business Case across
the enterprise. The IOC evaluates and compares all the application portfolio project
priorities , utilizing risk, capacity, and other situational factors to ensure each planned
project is meeting critical milestones. The ETSC, TPG and IOC all have charters detailing
their mission and governance structure, etc.
The Business Case is largely limited by the funding allocation and resource capacity (staff) to
meet its goals. The funding is generally established at the Business Case level by the CPG. The
resource capacity constraint is generally managed by the TPG and the Business Case owner.
Once the two constrains are established, the Business Case owner will work with steering
committee(s) to set project priority and sequence over a five-year planning period, subject to
additional funding changes as directed by the CPG
Project prioritization is evaluated by the management team on a weekly basis by the IOC. Each
program and project steering committee meets monthly (at a minimum) and oversees scope,
schedule and budget within their respective programs and projects and inform the Business
Case owner of any changes needing escalation to the TPG or CPG for decision-making around
resource or funding constraints.
Any changes in funding or scope are documented at the Business Case level, via Change
Request document that is presented to the CPG on a monthly basis and evaluated by the CPG
for approval.
Changes in scope, schedule, or budget are also documented through a 'Change Request' at the
project level and reviewed and approved through a formal workflow process. All Enterprise
technology projects in this business case are managed through the Project Management Office
(PMO), which follows the Project Management Institute (PMI) standards. Projects initiate with a
'Charter'to begin the planning process.When planning is complete, a'Project Management Plan
(PMP)' is created and approved as the projects baseline for scope, schedule and budget. At the
end of execution, an 'Approval to Go Live' is submitted and approved prior to implementation.
After the technology is in service and out of the warranty period, the Project Manager will hold a
Lessons Learned, and subsequently submit an 'Approval to Close' prior to finishing the project.
All Monitor and Control documentation and Change Requests are documented and stored to
ensure a comprehensive audit trail.
Business Case Justification Narrative Template Version: February 2023 Page 12 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 243 of 351

DocuSign Envelope ID:3B6E77AE-6C6F-4686-B51E-93DDBC016CA0
ET Modernization and Operational Efficiency
2. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the ET Modernization and Operational Efficiency
and agree with the approach it presents. Significant changes to this will be coordinated with and
approved by the undersigned or their designated representatives.
o ss any:
Signature: k .S" Date: May-07-2024 1 9:31 AM PDT
Print Name: Karen Schuh
Title: Manager, ET PMO
Role: Business Case Owner
o usg—by:
Signature: Date: May-07-2024 10:05 AM PDT
CF�IIRC6P8F9Fi
Print Name: Wayne Manuel
Title: VP, Chief Information & Security Officer
Role: Business Case Sponsor
Signature: Sig—by: Date: May-07-2024 10:22 AM PDT
[(kossu v'Wd
Print Name: Hossein Nikdel
Title: Director, Applications & System Planning
Role: Steering/Advisory Committee Review
o ss.a By
Signature: Q(k,p,s Q�tpatndtY Date: May-07-2024 9:34 AM PDT
EAPiBA3Ri E+fli+
Print Name: Alexis Alexander
Title: Director, IT Infrastructure
Role: Steering/Advisory Committee Review
o s by.
Signature: (Ll1 Sfb" Date: May-10-2024 1 6:03 AM PDT
Print Name: Clay Storey
Title: Director, Enterprise Security
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 13 of 13
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 244 of 351

DocuSign Envelope ID:6F909DCE-8452-4714-A3E4-D288E025F808
Fiber Network Leased Service Replacement
EXECUTIVE SUMMARY
The Fiber Network Leased Service Replacement Program[1] Business Case is focused on
transitioning Avista's control and safety network off of leased fiber optic cable lines onto privately
owned fiber optic cable. Avista utilizes leased fiber optic cable to transport primarily safety and
control data between offices, substations, and generation facilities. The leased fiber incurs an
operating expense with lease rates that were established during the sale of an Avista
Communication's subsidiary. An Indefeasible Right to Use (IRU)was established to benefit Avista
Utilities with rates well below market value. The IRU expires in 2027 with an option to renew for
an additional five years, through 2032. Currently, Avista is planning to renew the IRU for the
additional five years, at no additional cost, which will ultimately expire in 2032.
For this business case, the project work includes 37 fiber optic backbone segments and a total of
approximately 78 miles of leased fiber left to be replaced with Avista-owned private fiber no later
than 2032. By owning the fiber backbone, Avista can align maintenance activities with the overall
bulk electric system outage schedule and eliminate any conflicts. Since Avista is an energy utility,
it is positioned well to build a fiber network and leverage assets already o wned like poles, panel
houses, and vaults so leasing a service should be the last resort.
For this business case, funding is being requested for $7,500,000 over five years to remain on
track to complete the installation of Avista fiber by 2032. Transitioning Avista's safety and control
network data from leased network services to private network infrastructure aligns with the long-
term network strategy and will reduce risk to the company of having control and safety data on a
leased network along with O&M (Operating & Maintenance) costs to the utility. When these
services traverse a leased network, Avista is at risk of outages out of our control, scheduled
vendor maintenance affecting Avista operations, and significant increases in monthly lease costs,
based on an estimate from 2020 which could be refreshed, once the IRU expires.
Avista customers across Washington, Idaho and Montana will benefit from the projects in this
program by having a robust network that has capacity and reliability to transport real time data on
system status and performance. Having privately owned fiber will reduce O&M cost and remove
reliance on third parties to maintain and operate critical fiber segments Avista relies on for control
and safety.
Currently, there are no direct or indirect cost savings until the IRU leased segments are replaced
by Avista fiber and the leases terminated.
VERSION HISTORY
Version Author Description Date
5.0 Shawna Kiesbuy Annual Update and new Template 412023
6.0 Shawna Kiesbuy Annual Update 412024
Business Case Justification Narrative Template Version: February 2023 Page 1 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 245 of 351

DocuSign Envelope ID:6F909DCE-8452-4714-A3E4-D288E025F808
Fiber Network Leased Service Replacement
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements
Member
Business Case Justification Narrative Template Version: February 2023 Page 2 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 246 of 351

DocuSign Envelope ID:6F909DCE-8452-4714-A3E4-D288E025F808
Fiber Network Leased Service Replacement
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $1,500,000 $1,400,000
2026 $1,500,000 $1,000,000
2027 $1,500,000 $1,600,000
2028 $1,500,000 $1,000,000
2029 $1,500,000 $1,500,000
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology/Network Services
Business Case Owner I Sponsor Shawna Kiesbuy I Alexis Alexander
Sponsor Organization/Department Enterprise Technology/Network Services
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Avista utilizes leased fiber optic cable to transport primarily safety and control data between
offices, substations, and generation facilities. The leased fiber incurs an operating expense with
lease rates that were established during the sale of an Avista Communication's subsidiary. An
Indefeasible Right to Use (IRU)was established to benefit Avista Utilities with rates well below
market value. The IRU expires in 2027 with an option to renew for an additional five years,
through 2032.
This business case is a program to transition Avista's safety and control network data from
leased network services to private network infrastructure and aligns with the long-term network
strategy and will reduce risk to the company of having control and safety data on a leased
network along with O&M (Operating & Maintenance) costs to the utility. When these services
traverse a leased network, Avista is at risk of outages out of our control, scheduled vendor
maintenance affecting Avista operations, and significant increases in monthly lease costs once
the IRU expires.
For this business case, the project work started in 2018 and identified at least 51 segments and
a total of approximately 115 miles of leased fiber to be replaced with Avista-owned private fiber.
To date, approximately 24 miles of fiber has been replaced equating to 14 segments being
transferred to Avista. This equates to approximately 78 (recently reduced) miles and 37
segments of fiber remaining to be installed. The anticipated complexity associated with right of
ways, permitting, construction and coordination with other parties such as city/county planning
Business Case Justification Narrative Template Version: February 2023 Page 3 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 247 of 351

DocuSign Envelope ID:6F909DCE-8452-4714-A3E4-D288E025F808
Fiber Network Leased Service Replacement
departments, contractors and internal Avista departments, or to partner with complementary
projects, will influence the pace of work to complete the transition to private fiber ahead of the
2032 deadline.
1.2 Discuss the major drivers of the business case.
The main driver for this business case is Performance and Capacity. Investment in private
network transport and technology to service and support safety and control communication
systems is an established industry standard. The technology improvements invested under this
business case benefits all customers across our service territory by investing in privately-owned
fiber optic cable segments thereby mitigating the potential of increased O&M costs for leased
fiber in the future. By owning the fiber, Avista will be able to better maintain it since they will be
the only ones using the strands versus joint-use of the fiber through a leased-based contract.
Since Avista is an Energy Utility, it is positioned well to build a fiber network and leverage assets
already owned like poles, panel houses,and vaults so leasing a service should be the last resort.
Owning fiber is also cheaper in the long run and will ultimately keep Avista rates lower for our
customers.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
The work to move from leased fiber to private fiber is timebound by the expiration of lease
agreements all of which are due to end by 2027. As noted above, any delays in executing this
work would risk the ability to finalize work by 2027. A contract extension is available through
2032, but any extension beyond 2032 would increase leased costs of this aging infrastructure.
Also as noted above, there is benefit to the company by having full control over fiber segments
for these critical communication paths. Full control allows Avista to schedule maintenance and
support activities in conjunction with other maintenance activities across the organization, such
as in GPSS, and System Operations. With leased fiber assets, we are at the mercy of the
provider's own schedule of maintenance & support activities which may come at inopportune
times for Avista business process and the potential interruption of system operations
While the current agreements may allow for extension of the lease terms, there are increased
O&M costs associated with any extensions. Avista is proactively working to prevent any
additional O&M costs by implementing privately owned fiber prior to having to execute on any
lease extensions.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
The FNLSR business case investments align with Avista's commitment to invest in its
infrastructure to achieve optimal lifecycle performance — safety, reliability, and at a fair price.
Data communications that monitor and control Avista systems are critical in the support of
energy delivery. The move from leased to privately owned fiber will continue to enable and
support critical communications in a manner that increases reliability and manages costs.
Network technologies that allow for communication with field area assets and workforce in the
field are critical in support of the bulk electric system. The implementation of these network
technologies will continue to enable and support these critical communications in a manner that
is much safer for all workers and at all locations across Avista.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 248 of 351

DocuSign Envelope ID:6F909DCE-8452-4714-A3E4-D288E025F808
Fiber Network Leased Service Replacement
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
The leased fiber terms detail costs associated with the expiration date.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
These projects replace segments of leased fiber with Avista owned private fiber infrastructure
per the business problem addressed in Section 1.1.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
The requested amount of $7,500,000 reflects the total estimated cost of implementing Avista
privately owned fiber optic cable for all applicable IRU miles through the year 2027 with the
option to extend through 2032. Yearly allocation and project prioritization are set based on the
output of annual budget planning activities. These activities consider estimated completion
dates of in-flight work, areas of elevated risk,and length of the construction season.Adjustments
are requested and approved by the Steering Committee throughout each calendar year to
accommodate any changes to the plan.
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and OW) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
Direct Savings- This program is currently scheduled to be completed in 2032 which means the
current$60,000 per year cost will continue. At the end of 2032, we do have an option to renew
the contract, with a large up-front cost estimated to be $3M as of a Zayo renegotiation
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 249 of 351

DocuSign Envelope ID:6F909DCE-8452-4714-A3E4-D288E025F808
Fiber Network Leased Service Replacement
conversation in June of 2021. This $3M is for the existing, aging leased fiber optic segments
and does not include any new assets.
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
No indirect offsets for this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Fund the business case at an amount which is less than the original request
Funding the FNLSR business case minimally each year would result in missing the 2032 target
date to be off the IRU leased cable and ad-hoc funding requests to the Capital Planning Group
(CPG) for work approved outside of the 5-year capital planning process. Risks related to the
FNLSR work, such as proactively working to reduce O&M costs and providing the private fiber
to carry safety and control communications, would be mitigated at a much slower pace than if
the program were funded as requested, and may result in higher unplanned O&M annual costs
if the 2027 deadline is missed.
Alternative 2:
Do not fund the business case
Removing all funding for this business case would result in all projects being halted and no new
projects starting to move from leased fiber to privately owned fiber. The impact would be an
increase in O&M which equates to$60,000 in annual IRU lease payments lease costs on those
fiber segments.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
Timely implementation and transfer to plant such that all segments are completed prior to an
IRU, or segment lease expiration will determine success. The completion and transfer to plant
will occur over time as each segment/project is completed.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The work to move from leased fiber to private fiber is timebound by the expiration of lease
agreements all of which are due to end by 2027 with the aforementioned extension through
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 250 of 351

DocuSign Envelope ID:6F909DCE-8452-4714-A3E4-D288E025F808
Fiber Network Leased Service Replacement
2032. As noted above, any delays in executing this work would risk the ability to finalize work
by 2027. A contract extension is available through 2032, but any extension beyond 2032 would
increase leased costs of this aging infrastructure. Also as noted above, there is benefit to the
company by having full control over fiber segments for these critical communication paths. Full
control allows Avista to schedule maintenance and support activities in conjunction with other
maintenance activities across the organization, such as in GPSS, and System Operations.With
leased fiber assets, we are at the mercy of the provider's own schedule of maintenance &
support activities which may come at inopportune times for Avista business process and the
potential interruption of system operations
While the current agreements may allow for extension of the lease terms, there are increased
O&M costs associated with any extensions. Avista is proactively working to prevent any
additional O&M costs by implementing privately owned fiber prior to having to execute on any
lease extensions.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
Steering Committee members are invaluable to the project and will provide approval on scope,
schedule, and budget related changes. Additionally, they will provide approval on issues and
risks pertaining to project deliverables outlined in this document, which also typically have an
impact on the scope, schedule, or budget of a project. Steering Committee members will also
provide approval on Change Requests, Go-Live, and the Approval to Close documents. For the
FNLSR business case,the Steering Committee will consist of the Directors and Managers within
ET, Energy Delivery, GPSS (Generation Production and Substation Support) and the Business
Case Owner.
The FNLSR Business Case has two levels of governance: The Program Steering Committee
and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
PMO. The project queue will be reviewed periodically to plan and sequence work to the levels
of funding allocation received.
Project Steering Committee
Project Steering Committees function as the governing body over each individual project within
the program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible for providing guidance and
making decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
Business Case Justification Narrative Template Version: February 2023 Page 7 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 251 of 351

DocuSign Envelope ID:6F909DCE-8452-4714-A3E4-D288E025F808
Fiber Network Leased Service Replacement
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the PMO.
Project prioritization is evaluated by the management team monthly. Each program and project
steering committee meet regularly and oversee scope, schedule and budget within their
respective programs and projects and inform the Business Case owner of any changes needing
escalation to the Technology Planning Group (TPG) or Capital Planning Group (CPG) for
decision-making around resource or funding constraints.
Any changes in funding or scope are documented at the Business Case level, via a Change
Request document that is presented to the CPG monthly and evaluated by the CPG for
approval.
Changes in scope, schedule, or budget are also documented through a `Change Request' at
the project level and reviewed and approved through a formal workflow process.All ET projects
in this business case are managed through the PMO, which follows the Project Management
Institute (PMI) standards. Projects initiate with a 'Charter' to begin the planning process. When
planning is complete, a 'Project Management Plan (PMP)' is created and approved as the
project baseline for scope, schedule, and budget. At the end of execution, an 'Approval to Go
Live' is submitted and approved prior to implementation (Transfer to Plant).After the technology
is in service and out of the warranty period, the Project Manager will hold a Lessons Learned,
and subsequently submit an 'Approval to Close' prior to finishing the project. All Monitor and
Control documentation and Change Requests are documented and stored to ensure a
comprehensive audit trail.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 252 of 351

DocuSign Envelope ID:6F909DCE-8452-4714-A3E4-D288E025F808
Fiber Network Leased Service Replacement
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the <Business Case Name> and agree with the
approach it presents. Significant changes to this will be coordinated with and approved by the
undersigned or their designated representatives.
DocuSigned by:
Signature: S6.&" �i�s� Date: Apr-29-2024 1 3:17 PM PDT
Print Name: �iawnajesbuy
Title: Sr. Manager, Network Engineering
Role: Business Case Owner
DocuSigned by:
Signature: rat"is A(q-aA&j V' Date: May-03-2024 11:09 AM PDT
Print Name: AAfexlsAA(e467
xander
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 9 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 253 of 351

DocuSign Envelope ID:8A2A326B-5D17-4779-A386-A1FA7F76DC6B
Land Mobile Radio & Real Time Communication Systems
EXECUTIVE SUMMARY
The Land Mobile Radio& Real Time Communication Systems Program Business Case sponsors
the tools and systems used by gas and electric crews to communicate. This communication is
with Dispatch and System operations as well as direct communication between crews. Avista's
service territory consists of urban and rural environments with topologically difficult to reach areas.
The remoteness of some locations, along with the temperature variances through the annual
seasons can present additional challenges to field staff required to work under those conditions.
Additionally, commercial cellular or telecommunication services are not offered in some of these
locations, as they are not cost effective for commercial vendors to deploy. Finally, during
unplanned emergency events, commercial telecommunication services are overloaded with the
public reaching friends and family members affected by the event, thereby exacerbating the need
for a separate land mobile radio and real-time communication system, much like those used by
emergency service personnel.
As a Company that maintains critical infrastructure for gas and electric systems, we are required
to do it safely and reliably to provide essential services to our customers. This requires that our
staff communicate with one another in real time across our service territory to establish situational
awareness and reduce the risk of a safety incident. The Land Mobile Radio & Real Time
Communications System business case consists of mobile radio and communication technology
solutions that enable our staff to communicate with each other in the field and office in real time.
The investments under this program provide the communication technology that enables real time
24 x 7 x 365 communication with our gas and electric field staff in ever changing conditions. The
Land Mobile Radio (LMR) program deploys several solutions depending on the application.
Deployments supporting a large geographical area require Microwave site development, while
vehicle deployments require a mobile radio solution or a construction office or Operation dispatch
center requires a console radio deployment. Due to the remoteness and topology of our service
territory, some of the technology investments in field radio sites on mountain tops can be costly
yet provide a valuable service to our customers in unplanned weather events, and most
importantly bring safety to our field staff. Not investing in increasing radio coverage across our
service territory can result in `dead zones' with no radio coverage that may increase the safety
risks of our field staff who rely on radio communication to perform their jobs.
To support the above work, this business case is requesting a total of $10,000,000 for the five
year period. Funding at a lessor amount will result in delays to providing new coverage areas
putting crews and assets at risk but also introduce the possibility of system failures due to aging
equipment.
There are no direct offsets however, there is potential indirect offsets anywhere between $100k-
$10M due to employee productive gains or ability to communicate during outages to get systems
back up and in service much faster.
Business Case Justification Narrative Template Version: February 2023 Page 1 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 254 of 351

DocuSign Envelope ID:8A2A326B-5D17-4779-A386-A1FA7F76DC6B
Land Mobile Radio & Real Time Communication Systems
VERSION HISTORY
Version Author Description Date
1.0 Walter Roys Initial draft of original business case 6/2017
1.1 Walter Roys Updated Investment Driver 7/2019
2.0 Walter Roys Revision of BCJN to new template 7/2020
2.1 Walter Roys Error in calculation of Alt.#2 8/2020
3.0 Walter Roys Updated BCJN 8/2022
4.0 Walter Roys Updated BCJN 4/2023
5.0 Shawn Kiesbuy Update narrative and add funding for 2025-2029 412024
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements
Member
Business Case Justification Narrative Template Version: February 2023 Page 2 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 255 of 351

DocuSign Envelope ID:8A2A326B-5D17-4779-A386-A1FA7F76DC6B
Land Mobile Radio & Real Time Communication Systems
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $2,000,000 $2,500,000
2026 $2,000,000 $2,000,000
2027 $2,000,000 $2,000,000
2028 $2,000,000 $2,000,000
2029 $2,000,000 $2,000,000
Project Life Span 5 years+
Requesting Organization/Department Enterprise Technology/
Business Case Owner I Sponsor Shawna Kiesbuy I Alexis Alexander
Sponsor Organization/Department Enterprise Technology/System Engineering
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Avista's service territory is approximately 30,000 square miles across four northwestern states
with nearly 7,800 miles of natural gas distribution mains, 19,000 miles of electric distribution
lines, and 2,750 miles of electric transmission lines. Although many of these miles of gas and
electric infrastructure run through urban and suburban areas to heat and power homes and
businesses, some infrastructure travels across remote and hard to reach locations, such as
steep canyons and mountain tops. As a pacific northwest region with four seasons, some of
these remote locations can be even more difficult to reach in harsh weather conditions yet must
be maintained safely and reliably. To add to it, commercial cellular or telecommunication
services are not offered in these remote locations,thereby leaving communication service gaps.
In other words, if there were commercial offerings, during an unplanned emergency event, the
services could be overloaded with customers trying to reach friends or family members affected
by the event and resulting in communication latency or unavailability.
The lack of radio communication coverage in these remote locations presents risk to our field
workers who are required to respond to events throughout the year and must communicate with
one another in real time across our service territory to establish situational awareness and
reduce the risk of a safety incident.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 256 of 351

DocuSign Envelope ID:8A2A326B-5D17-4779-A386-A1FA7F76DC6B
Land Mobile Radio & Real Time Communication Systems
1.2 Discuss the major drivers of the business case.
The Land Mobile Radio & Real Time Communications Systems Business Case funds manage
technology replacements according to manufacturer product roadmaps or expand coverage in
areas with limited or no coverage in our service territories allowing for the safe and reliable
delivery of Electric and Gas services.
All Avista customers benefit from maintaining communication systems, as this technology
enables the Avista workforce to perform their day-to-day job functions in delivering gas and
electric service to our customers. Additionally, assets that fail due to not being replaced within
their technology lifecycle are replaced by the Technology Failed Asset business case, which
tracks technology asset failures, and is also used as a data point to inform the technology
lifecycles under this business case.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Mobile radio coverage is an essential safety requirement for field staff working throughout our
service territory to maintain a safe and reliable gas and electric infrastructure, and even more
so in remote and hard to reach locations. Every day that goes by of lacking radio coverage can
result in a safety incident, whereby field staff requiring emergency assistance could not
communicate with either dispatch, a nearby co-worker, or emergency services. In some of these
hard-to-reach locations, small logging roads can be buried in deep snow a few miles in from a
paved road, thereby extensively prolonging any response should an emergency incident occur.
Deferring the investments under this program puts field staff's lives at risk by lacking radio
coverage in high-risk areas.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
This investment aligns with our strategy of delivering safe and reliable energy. Critical crew
communications are key to ensuring timely resolution of outages and safe operations. Vendor
roadmaps and technology asset lifecycles are data points that inform on how best to plan
replacements, while meeting business value and strategic alignment, within the constraints of
resource capacity and funding, which in turn can result in deferred replacement introducing the
risk of technology failure. Ongoing reviews of vendor roadmap and technology asset lifecycle
alignment provide necessary information to track how much of our investment in technology is
lagging the vendor roadmap, and thereby introducing risk.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
The Enterprise Technology team references various technology vendor and third-party
resources to stay informed and recommend decisions on the various technology investments.
A few sample sources are included below:
Gartner Industry Research and Reference Material. Retrieved from
https://www.gartner.com/en/information-technology
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 257 of 351

DocuSign Envelope ID:8A2A326B-5D17-4779-A386-A1FA7F76DC6B
Land Mobile Radio & Real Time Communication Systems
Investments under this business case are to maintain performance and capacity standards in
each respective land mobile radio technology. For example, when the product manufacturer
terminates maintenance and support for specific devices or solutions, an asset therefore
becomes incompatible with other advancing technologies. This introduces the risk of cyber-
attack, and this business case will change or upgrade the asset.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The Land Mobile Radio & Real Time Communications Systems business case will represent
projects that are driven by performance and capacity for the following technology systems:
• Private 2-way Land Mobile Radio (LMR) System for field operations; and
• Radio Telephone Command and Control System (RTCCS) used by Dispatch and
System Operations to perform critical radio and telephone communication to field
personnel.
The Land Mobile Radio(LMR)system facilitates critical communication between field personnel,
dispatch, system operations, and other end users. This radio system is used for normal day to
day operation work, coordinating responses to outage events, switching, and tagging
procedures, communication with external agencies including Public Safety entities, and several
other uses. It is a business-critical system used to maintain day to day operations and respond
to emergency situations.
This program is in place to provide reliable LMR functionality at all times throughout Avista's
service territory. The system contributes to the health and safety of employees, contractors, and
the public.
The funds request was based on a calculation of the performance and capacity associated with
each technology asset, the scope and scale of the technology, and the project costs for
technologies previously refreshed under this business case. Additionally, funds requested
include coverage expansion costs for additional radio sites based on coverage analyses, and
historical site acquisition costs.
Through regular reviews, the program balances the need to provide radio coverage across our
service territory and maintain performance and reliability standards for the various technologies
under this program within annual budget allocations, which can result in calling for additional
investment under this program from time to time for technology either falling behind technology
lifecycles or predetermined performance, coverage, and reliability standards.
2.2 Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
The funding requested under the Land Mobile Radio & Real Time Communications Systems
business case provides communications between our Operations Centers, Remote offices and
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 258 of 351

DocuSign Envelope ID:8A2A326B-5D17-4779-A386-A1FA7F76DC6B
Land Mobile Radio & Real Time Communication Systems
field personnel for the safe delivery of Gas and Electric services including the operation of the
bulk Electric system.
Investment in these technologies can increase or decrease O&M expenses. These can include
licensing increases from time to time or decreases in workload for O&M resources. However,
not funding this business case will place field workers at risk by not having radio
communications across our service territory. There are no O&M reductions or direct offsets
resulting from these investments, as this technology enables the Avista workforce to perform
their day-to-day job functions in delivering gas and electric service to our customers.
Reliance on obsolete technology for automated business processes presents significant risk,
and in this case cannot be achieved manually. For example, when land mobile radio devices
break down it can result in the inability of an employee to communicate with the dispatch and
system operations teams. This could potentially put crews and the public at risk. In addition,
when endpoint devices break down it can result in the inability of an employee to access
essential technology systems such as our meter data, customer billing and our mapping data.
This can result in a productivity reduction across all areas of the business. Savings related to
avoiding these downtime issues could range from $100k -$10M a year representing at least 1
full-time employee up to 100 full-time employees needed to implement manual processes.
Additionally,with the rapid pace of technological change,technology vendors require continuous
upgrades to maintain system maintenance and support, which can include security patching,
bug fixes, version upgrades, interoperability, and compatibility with other technologies. These
upgrades can in turn drive subsequent system replacements, creating a cascading event of
change.Therefore,vendor roadmaps and technology asset lifecycles are data points that inform
on how best to plan replacements,while meeting business value and strategic alignment,within
the constraints of resource capacity and funding, which in turn can result in deferred
replacement introducing the risk of technology failure.
All Avista field operations, dispatch, and system operations are affected by the technology
invested under this business case program, as it is a critical tool that is heavily relied on for
communication across our service territory.
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
There are no direct offsets at this time.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A N/A N/A N/A N/A N/A
0&M N/A N/A N/A N/A N/A N/A
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
Indirect offsets include the following and are based on savings related to avoiding these
downtime issues could range from $100k -$10M a year representing at least 1 full-time
employee up to 100 full-time employees needed to implement manual processes.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 259 of 351

DocuSign Envelope ID:8A2A326B-5D17-4779-A386-A1FA7F76DC6B
Land Mobile Radio & Real Time Communication Systems
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A N/A N/A N/A N/A N/A
0&M Operating Expenses $100k- $100k- $100k- $100k- $100k-
$10M $10M $10M $10M $10M
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Funding the Land Mobile Radio business case at the requested level fully addresses and
minimizes the likelihood of technology failure and impact to automated business process. It
also expands the radio coverage area, adding value for employees, contractors, and the public
by enabling safe and reliable radio communications throughout the Avista gas and electric
service territory.
Alternative 2:
Funding the business case at an amount less than the full request will increase the likelihood of
technology failure and impact the ability to communicate with workers in the field and introduces
risk to employees, contractors, and the public in areas where radio communications are
unavailable.
Alternative 3:
Removing all funding for this business case would result in critical communications systems not
being available when needed between our Operations & Dispatch centers, Remote offices and
field workers to support safe and reliable energy delivery to generation, substation,
transmission, and distribution sites.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
The technology investments under this business case program align with Avista's vision to
deliver `better energy for life' to our customers and in the area of`Perform', which calls for"our
focus on performance today to serving our customers well and unlocking pathways to growth."
Each investment under this business case program allows Avista to deliver electric and gas
services to our customers.
The reason that the technology investment under this program business case is prudent is
because the Avista workforce requires this technology every day to deliver gas and electric
service to our customers either in dispatch and system operations, and in the field. Alternatives
to each technology are considered, yet not investing in it is not an option as automated business
process, such as radio communication could not be replicated manually, thereby crippling our
workforce's ability to deliver gas and electric service to our customers in a safe and reliable way.
Additionally, a two-tiered governance structure overseeing this business case program meets
regularly to oversee and make decisions on the needs, benefits, costs, and risks of each
investment.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 260 of 351

DocuSign Envelope ID:8A2A326B-5D17-4779-A386-A1FA7F76DC6B
Land Mobile Radio & Real Time Communication Systems
Nearly all operations and field staff interface with the Land Mobile Radio (LMR) system, which
facilitates critical communication between field personnel, dispatch, system operations, and
other end users.
There are no related business cases associated with this business case.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
This business case is a program that transfers to plant the total cost of each project at the
completion of every project, which can straddle calendar years. Quarterly forecasts capture
changes in transfers to plant based on project status.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Land Mobile Radio (LMR) & Real Time Communication Systems Business Case has two
levels of governance: The Program Steering Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
Enterprise Technology(ET) Project Management Office (PMO) Department. The project queue
will be reviewed periodically and will consist of projects needed to maintain the reliability and
performance of all LMR and real time communication systems.
Project Steering Committee
Project Steering Committees act as the governing body over each individual project within the
program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible to provide guidance and make
decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the ET PMO
Department.
The governance structure under this business case program is responsible for decision-making,
prioritization,and change requests.Through the regular Program Steering Committee Meetings,
the team reviews and balances planned work versus unplanned work to determine prioritization,
as well as pending project change requests. Any change request requiring either an increase or
decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is
submitted to the Capital Planning Group for consideration.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 261 of 351

DocuSign Envelope ID:8A2A326B-5D17-4779-A386-A1FA7F76DC6B
Land Mobile Radio & Real Time Communication Systems
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Land Mobile Radio & Real Time
Communication Systems business case and agree with the approach it presents. Significant changes
to this will be coordinated with and approved by the undersigned or their designated representatives.
°°°°s'°"""Y Apr
-30-2024 1:29 PM PDT
Signature: Date:
�Gawina �it,sbuy
Print Name: 98 Shawna Kiesbuy
Title: Sr. Manager Network Engineering
Role: Business Case Owner
Signature: Date: May-03-2024 1 1:26 PM PDT
E—t-"s Ql.�,paaad�v
Print Name: E1,1OAs,F Alexis Alexander
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 9 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 262 of 351

DocuSign Envelope ID:522A62A3-A752-4E72-B1DF-BF7AD5C88928
Network Backbone Infrastructure
EXECUTIVE SUMMARY
The Network Backbone Infrastructure Program[1] Business Case includes investment in
communication network infrastructure for expansion requirements and periodic refresh of our
mixed service (for controls, safety, corporate and internet data) transport solutions. The assets
provided by this business case include fiber optic cable, Optical Ground Wire (OPGW),
mircrowave sites along with network switching and routing equipment to aggregate and transport
substantial amounts of data across miles of geography and locations, including substations,
district offices, Mission headquarters, and mountaintop communication sites. Network Systems
in this business case are evaluated to ensure Avista is employing the most cost-efficent methods
to improve performance and reliability while expanding the network's capacity. The risks of not
approving this business case at the level to which it can maintain the balance of meeting its asset
management strategy and scale for future technology could result in unplanned failures and
outages to our communication network system.
For this business case, funding is being requested for$12,800,000 over five years to upgrade or
replace network communication systems within the network backbone infrastructure. Collectively
these systems track lifecycle, manufacturer warranty, maintenance, and support(contract)status,
licensing, capacity, and replacement cost. Manufacturer lifecycles drive a considerable portion of
the required work within this request. Concurrently, a sizable portion of work is driven by the
ongoing modernization of energy delivery infrastructure and by the rapid technological
advancements of business applications and systems.
Avista customers across all jurisdictions will benefit from the projects in this program by having a
robust network that has capacity and reliability to transport real time data on system status and
performance. Proactive updates to assets or timely placement of assets to locations will reduce
possible service interruptions or delays. This translates to the safe and reliable delivery of energy
to customers across the Avista service territory.
Currently, there are no direct cost savings. Indirect offsets may be realized with fewer truck roles,
staff efficiency, etc.
VERSION HISTORY
Version Author Description Date
3.0 Shawna Kiesbuy Update content and new template 412023
4.0 Shawna Kiesbuy Annual Update 412024
Business Case Justification Narrative Template Version: February 2023 Page 1 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 263 of 351

DocuSign Envelope ID:522A62A3-A752-4E72-B1DF-BF7AD5C88928
Network Backbone Infrastructure
BCRT Heide Evans Has been reviewed by BCRT and meets necessary requirements 4130124
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $2,800,000 $2,500,000
2026 $2,500,000 $2,000,000
2027 $2,500,000 $2,500,000
2028 $2,500,000 $2,000,000
2029 $2,500,000 $2,500,000
Project Life Span 5 years+
Requesting Organization/Department Enterprise Technology/Network Services
Business Case Owner I Sponsor Shawna Kiesbuy I Alexis Alexander
Sponsor Organization/Department Enterprise Technology/Network Services
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Assets included in this business case have a finite lifecycle or there is need for adding assets
to support Avista growth and transformation. Given the pace of change in technology, constant
threats from bad actors, and need to have suitable performance and capacity, the project work
done within this program will help maintain a robust and reliable network by proactively building
out communication paths while updating equipment and systems per vendor roadmaps.
This business case includes investment in communication network infrastructure for expansion
requirements and periodic refresh of our mixed service transport backhaul solutions. Systems
in this technology area include those designed to aggregate and transport substantial amounts
of data across miles of geography and locations, including substations, district offices, Mission
headquarters, and mountaintop communication sites.
Over time with new business productivity application system requirements, communication
network loads. demand for network paths and capacity will continue to increase. For example,
communication requirements at substations are changing, including access needs for enterprise
services (email and phones), transmission and distribution SCADA (Supervisory Control and
Data Acquisition), and safety services such as high-definition cameras and badge access. This
business case will focus on proactively identifying and fulfilling such needs.
Business Case Justification Narrative Template Version: February 2023 Page 2 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 264 of 351

DocuSign Envelope ID:522A62A3-A752-4E72-B1DF-BF7AD5C88928
Network Backbone Infrastructure
1.2 Discuss the major drivers of the business case.
The main driver for this business case is Performance and Capacity. Each year, systems have
been identified for updating to take advantage of newer technologies by expanding the high-
speed backbone to improve performance and reliability further and increase the network's
capacity. Specifically allowing for communications in the field, the network backbone
infrastructure facilitates the ability to transport corporate traffic such as email and day-to-day
business productivity traffic, as well as generation, substation, transmission, and distribution
control data, plus carry safety communications to crews in outage events and across hard-to-
reach locations. With Performance and Capacity, the network communication assets are
managed in alignment with technology lifecycles that are based on manufacturer product
roadmaps and planned obsolesces to proactively reduce the risk of failing assets affecting
critical operations systems, processes, and infrastructure reliability.
The network infrastructure assets in this business case are necessary to operate our critical
business assets by using technology to automate business processes and leverage
communication networks for remote visibility and operations. This business case specifically
addresses network infrastructure requirements for all company business requirements. The
business case considers business impact vs. likelihood/probability when sequencing and
prioritizing resource allocations and responds to vendor-manufactured product obsolescence
risks as well as cyber security risks.
This business case provides intentional funding for a network backbone infrastructure for the
geographical transmission of corporate and controls data. The key performance indicator for
network availability and reliability is 99.99%,24x7.The investment sequencing is based on three
drivers, 1) Compliance, 2) Initiatives, 3) Reliability.
The sequencing of the Reliability projects is driven first by the network asset end-of-support date
for cybersecurity patching, then the performance and capacity to meet the business
requirement, and lastly product obsolescence date.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
The communications network projects captured in this business case deliver on expansion
requirements and periodic refresh of our multi-service transport backbone solutions. With
Avista's vision of delivering better energy for life, this business case is key to enabling the gas
and electric service delivery to our customers in a safe and reliable manner by ensuring required
data and communications over the network infrastructure are reliable and available when
needed. The work of transporting data across the network backbone is critical to core systems
and operations.
The risks of not approving this business case at the level to which it can maintain the balance
of proactively upgrading systems to stay within product lifecycles and scale for future technology
could result in unplanned failures and outages to our communication network system.The result
is tied to the following risks: an increase in employee, contractor and/or public safety risks due
to the inability to see and remotely operate the electric and gas systems. This has the potential
to increase labor and non-labor costs tied to unplanned system outages, where delays to
procurement can be realized to replace the failed asset, as well as downtime to the critical
systems supported. This could also lead to additional exposure of outdated or unsupported
devices to external cyber vulnerabilities.
Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Business Case Justification Narrative Template Version: February 2023 Page 3 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 265 of 351

DocuSign Envelope ID:522A62A3-A752-4E72-B1DF-BF7AD5C88928
Network Backbone Infrastructure
In this business case, the network enables the aggregate and transport of substantial amounts
of data across miles of geography and locations, including substations, district offices, Mission
headquarters, and mountaintop communication sites. These network system examples, and
many others, move and present data over long-distances that drive operational decisions and
controls,tying back to all four strategic goals affecting our customers, people, performance, and
invention.
1.4 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
Reference materials that support the needed changes in Network technology are maintained by
Technology Domain Architects within each respective technology area.These materials include
Utility Cluster Studies, External Service Provider Memorandums, Electric Distribution and
Transmission Management Technology Roadmaps, etc.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
Executing and completing planned projects within this business case should refresh assets or
install new instances of technology to enhance and increase performance and capacity needs.
If the fail rate associated with the network systems in the business case remains low, then the
project work is adding value by proactively reducing the risk of failing assets affecting critical
operations systems, processes, and infrastructure reliability. In addition, expanding network
assets in advance of Avista adding services ensures business operations are not delayed and
the system impacted with increased capacity.
2.2 Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
Overall network backbone transport system reliability is reviewed bi-monthly with key
stakeholders in cyber security and energy delivery with the goal of reducing single points of
failure for critical infrastructure. A backlog of work is generated with this key stakeholder group
and a risk matrix is leveraged to score and validate the order of projects so that we reduce the
largest business risk first.
Each individual network infrastructure asset is tracked throughout its active presence using
several systems. Collectively these systems track lifecycle, manufacturer warranty,
' Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 266 of 351

DocuSign Envelope ID:522A62A3-A752-4E72-B1DF-BF7AD5C88928
Network Backbone Infrastructure
maintenance, and support (contract) status, licensing, capacity, and replacement cost.
Manufacturer lifecycles drive a considerable portion of the required work within this request.
Concurrently, a sizable portion of work is driven by the ongoing modernization of energy delivery
infrastructure and by the rapid technological advancements of business applications and
systems. Subject Matter Experts in Utility Transport Network Architecture are regularly
consulted within technical cadences so that a real-world, collaborative approach is taken to
evaluate the resiliency and redundancy requirements of the backbone network. Capacity and
performance planning activities occur in the same forum, the result of which is a scalable, high-
performing, and reliable communications network that will enable the reliable and safe delivery
of energy.
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
There are no direct savings related to this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
There are no indirect savings related to this business case.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Fund the business case to an amount which is less than the original request
Funding of this business case at an amount less than the full request will reduce expansion of
network communication systems to meet business needs across multiple areas of the business.
This reduction in projects will also lessen the ability for a proactive approach refreshing the
number of network communications systems which increases the risk of failure or cyber security
vulnerability because assets will no longer be supported by their manufacturers.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 267 of 351

DocuSign Envelope ID:522A62A3-A752-4E72-B1DF-BF7AD5C88928
Network Backbone Infrastructure
Alternative 2:
Do not fund the business case
Removing all funding for this business case would be challenging for Avista since this business
case provides our mixed service transport backhaul solutions. Systems in this technology area
include those designed to aggregate and transport substantial amounts of data across miles of
geography and locations, including substations, district offices, Mission headquarters, and
mountaintop communication sites. If the projects in this business case cease to exist, other
funding sources are required to upgrade and refresh critical backbone network communications
between substations, on transmission or distribution poles, or the network systems that age
beyond their vendor lifecycles .and avoid potential failure. These failures translate to a lack of
visibility and control into critical systems that deliver gas and electric services. Additionally, the
company would be forced back to manual on site work and truck roles, instead of leveraging
remote visibility and control.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Executing and completing planned projects within this business case should refresh or install
new assets and/or functionality to enhance and increase performance and capacity needs. If
the fail rate associated with the network systems in the business case remains low, then the
project work is adding value by proactively reducing the risk of failing assets affecting critical
operations systems, processes, and infrastructure reliability. In addition, expanding network
assets in advance of Avista adding services ensures business operations and the delivery of
safe, reliable, and affordable energy are not delayed or impacted from the increased capacity.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The Network Backbone Infrastructure business case is managed as a program of projects
planned yearly. Throughout the year, the business case's multiple projects are Initiated,
Planned, Executed, and then Completed with a Transfer to Plant for the individual projects in
this business case. Therefore, investments become used and useful on a project-by-project
basis and happen frequently throughout the year.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
Steering Committee members are invaluable to the project and will provide approval on scope,
schedule, and budget related changes. Additionally, they will provide approval on issues and
risks pertaining to project deliverables outlined in this document, which also typically have an
impact on the scope, schedule, or budget of a project. Steering Committee members will also
provide approval on Change Requests, Go-Live, and the Approval to Close documents. For the
Network Backbone Infrastructure business case, the Steering Committee will consist of the
Directors and Managers within ET, Energy Delivery, GPSS and the Business Case Owner.
The Network Backbone Infrastructure Business Case has two levels of governance: The
Program Steering Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
Business Case Justification Narrative Template Version: February 2023 Page 6 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 268 of 351

DocuSign Envelope ID:522A62A3-A752-4E72-B1DF-BF7AD5C88928
Network Backbone Infrastructure
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
PMO. The project queue will be reviewed periodically to plan and sequence work to the levels
of funding allocation received.
Project Steering Committee
Project Steering Committees function as the governing body over each individual project within
the program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible for providing guidance and
making decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the PMO.
Project prioritization is evaluated by the management team monthly. Each program and project
steering committee meet regularly and oversee scope, schedule and budget within their
respective programs and projects and inform the Business Case owner of any changes needing
escalation to the Technology Planning Group (TPG) or Capital Planning Group (CPG) for
decision-making around resource or funding constraints.
Any changes in funding or scope are documented at the Business Case level, via a Change
Request document that is presented to the CPG monthly and evaluated by the CPG for
approval.
Changes in scope, schedule, or budget are also documented through a 'Change Request' at
the project level and reviewed and approved through a formal workflow process.All ET projects
in this business case are managed through the PMO, which follows the Project Management
Institute (PMI) standards. Projects initiate with a 'Charter' to begin the planning process. When
planning is complete, a 'Project Management Plan (PMP)' is created and approved as the
project baseline for scope, schedule, and budget. At the end of execution, an 'Approval to Go
Live' is submitted and approved prior to implementation (Transfer to Plant).After the technology
is in service and out of the warranty period, the Project Manager will hold a Lessons Learned,
and subsequently submit an `Approval to Close' prior to finishing the project. All Monitor and
Control documentation and Change Requests are documented and stored to ensure a
comprehensive audit trail.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 269 of 351

DocuSign Envelope ID:522A62A3-A752-4E72-B1DF-BF7AD5C88928
Network Backbone Infrastructure
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Network Backbone Infrastructure
business case and agree with the approach it presents. Significant changes to this will be
coordinated with and approved by the undersigned or their designated representatives.
Signature: 'A Date: May-02-2024 6:23 AM PDT
Col,a
Print Name: Shawna Kiesbuy
Title: Sr. Manager, Network Engineering
Role: Business Case Owner
Signature: S Q�p Date: May-06-2024 2:53 PM PDT
LZQ�p--"9-�
Print Name: Alexis Alexander
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 8 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 270 of 351

DocuSign Envelope ID:889151FC-345E-4DC2-A140-574C1DD39EA1
NexGen Control System Networks
EXECUTIVE SUMMARY
This NexGen Control System Networks (NCSN) Program Business Case will administer projects
specifically scoped to replace products and services on our control system communication
networks that have been designed and provisioned over time division multiplexing (TDM)
methodologies. TDM based products and services are end-of-life, end-of-support and are at the
end-of-manufacturing.
As vendors continue ramping down on the manufacturing and support of TDM based products
and services, LECs and other telecommunication service providers continue removing these
services from their own product portfolios, recognizing that these services are no longer viable
products to maintain. Local exchange carriers and vendors alike have both issued notices to
Avista to sunset these products and services. If we do not address the existing services before
they are disconnected or out of support, we risk losing communication network services that carry
control and telemetry traffic; data that is critical to our ability to operate our gas and electric
systems. The services to be scoped for removal as part of this business case are:
• Leased public interconnections with local exchange carriers via TDM services, i.e., Digital
Signal 0 (DSO) and Digital Signal 1 (DS1) circuits Avista is leasing. Through a series of
Declaratory Rulings and Orders from 2014 thru 2018, the FCC allowed for a local
exchange carrier (LEC) to discontinue TDM services and permitted LECs to leverage
universal service funding support for investment in more modern and efficient software
defined IP (Internet Protocol) based networks.
• Private TDM services for public interconnections, i.e., our Synchronous Optical Network
(SONET) network and circuits provisioned specifically for Supervisory Control and Data
Acquisition (SCADA) communications via interconnection agreements with Bonneville
Power Authority (BPA) and others across the bulk electric system.
• Private TDM services for private communication services, i.e., our SONET network and
circuits provisioned specifically to transport Avista control and telemetry traffic for our own
purposes.
The primary focus of this business case for 2024-2025 will provide alternatives to the LEC
disconntinued product lines by leveraging LTE, fiber placement and 700Mhz. As the LEC
discontinuance work ramps down, the project and cost focus will turn to SONET replacement as
it is another aging infrastructure.
For this business case, funding is being requested for $25,000,000 over 5 years to upgrade or
replace all remaining circuits and node sites that carry traffic for the above listed use cases.
Avista customers in Washington and Idaho will benefit from the projects in this program by having
a robust network that has capacity and reliability to transport real time data on system status and
performance. Proactive updates to assets or timely placement of assets to locations will reduce
possible service interruptions or delays. This translates to the safe and reliable delivery of energy
to customers across the Avista service territory.
Business Case Justification Narrative Template Version: February 2023 Page 1 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 271 of 351

DocuSign Envelope ID:889151FC-345E-4DC2-A140-574C1DD39EA1
NexGen Control System Networks
VERSION HISTORY
Version Author Description Date
1.0 Shawna Kiesbuy Initial draft of original business case 312023
2.0 Shawna Kiesbuy Annual Update 412024
BCRT BCAT Review Has been reviewed by BCRT and meets necessary requirements
Team
Business Case Justification Narrative Template Version: February 2023 Page 2 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 272 of 351

DocuSign Envelope ID:889151FC-345E-4DC2-A140-574C1DD39EA1
NexGen Control System Networks
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $5,000,000 $5,000,000
2026 $5,000,000 $4,000,000
2027 $5,000,000 $4,500,000
2028 $5,000,000 $4,000,000
2029 $5,000,000 $4,500,000
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology
Business Case Owner I Sponsor Shawna Kiesbuy I Alexis Alexander
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
TDM based products and services are end-of-life, end-of-support and are at the end-of-
manufacturing.As vendors are ramping down on the manufacturing and support of TDM based
products and services, local exchange carriers and other telecommunication service providers
are also removing these services from their own product portfolios, recognizing that these
services are no longer viable products to maintain. Local exchange carriers and vendors alike
have both issued notices to Avista to sunset these products and services. If we do not address
the existing services before they are disconnected or out of support, we risk losing
communication network services that carry control and telemetry traffic, critical to our ability to
operate our gas and electric systems.
1.2 Discuss the major drivers of the business case.
The telecommunications industry continues to move through its own series of disruptive
transformations, much of which is centered around the move from circuit-based networks and
TDM technologies to IP, or packet-based networks. As a significant portion of our
communication network also leverage TDM technologies, if we do not act faster to implement
this new architecture and the move to IP based networks for our control communications, we
run a very real risk of not being able to view, manage or control our systems, which could
negatively impact real time decisions needed to deliver safe and reliable services to our
customers.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 273 of 351

DocuSign Envelope ID:889151FC-345E-4DC2-A140-574C1DD39EA1
NexGen Control System Networks
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
This work is needed to ensure that our workers have reliable data to control our systems.
SCADA telemetry data, generation control data, protection circuit communications and
capabilities are at risk If this work is not approved/deferred. The loss of remote control and data
acquisition also means that personnel could be required to drive out to specific sites to manage,
operate and support controls, which removes the efficiencies and real time decisions the
company has been used to operating with. By having these communication systems updated
through this program,we can increase our productivity by receiving real time data that will allow
us to control our systems in real time and increase the safety of our employees.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
If we do nothing and decide to either de-prioritize and/or not fund this work, all four of the Focus
Areas will be impacted, which would directly and indirectly impact the alignment to our values,
mission & vision statements:
Our Customers—Our customers could see a negative impact to the reliable delivery of energy
when the delivery of telemetry data which gives us situational awareness and control of the
systems and devices that serves their energy is not delivered in real time.
Our People—Our employees could see a negative impact in their ability to operate and control
the system on a real-time basis, adding safety risks and in-efficiencies to normal operating
procedures.
Perform -We have built these real time data efficiencies into our daily operations and budgets.
Sending crews to man locations without telemetry or control circuits would be cost prohibitive,
inefficient and extremely disruptive to existing operations. We would be moving in the wrong
direction of progress.
Invent—We are on the back end of the product lifecycle curve with TDM technologies.We must
increase our cadence of deployments with current/newer network technologies to keep pace
with markets, carriers, suppliers, vendors and other energy companies with whom we have
interconnections and service relationships. Otherwise, we risk misalignments, obsolescence
and an inability to move data, communicate and control.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
The carriers we interconnect with to move control and telemetry data across our geographic
region have recently issued written statements that they will begin disconnecting services in Q3
2024 and that they have already received regulatory approval to do so. Lumen is the first carrier
in this region to issue a written disconnect statement and serves the largest number of circuits
to be redesigned at 51 Avista circuits. While Avista waits for other LEC's in our service territory
to provide official product disconntinuance notifications, Avista continues to work towards
transitioning critical control circuits away from aging technology.
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 274 of 351

DocuSign Envelope ID:889151FC-345E-4DC2-A140-574C1DD39EA1
NexGen Control System Networks
Additionally, GE has served us with a written email that also provides an end of service, end of
manufacturing and end of support date for TDM based equipment that we use on network
designs that carry traffic to and from interconnected entities, as well as our own control and
telemetry traffic.
For the reasons above, and the risks to business operations, an exceptionally large portion of
this programmatic business case is schedule driven.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
We will a) disconnect leased carrier services provisioned over TDM technologies and design
solutions-including placing fiber, deploying LTE or leveraging 700Mhz that integrate into our
existing private utility Multiprotocal Label Switching MPLS network that is served via current and
standard internet protocol solutions.
We will also disconnect our own SONET networks provisioned over TDM technologies and
design solutions that integrate into our existing private utility MPLS network that is served via
current and standard internet protocol solutions.
These two simple statements capture the large body of work to remove TDM technologies from
our portfolio, thus removing the risk of misalignments, obsolescence and an inability to move
data, communicate and control.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
The work in this business case supports and enables our ability to reliably operate our systems,
providing remote visibility and telemetry data, as well as remote control capabilities.
According to Avista's form 10-K filed for the fiscal year ending December 31, 2022, the
company's top Operational Risks highlight operational impacts related to wildfires, severe
weather or natural disasters, incidents related to mechanical breakdowns, blackouts or
disruptions of interconnected transmission systems, and even cyber-attacks which disrupt our
technology systems. All these risks are monitored, and in some cases, even mitigated via the
network communications technologies found in substations, on the distribution lines coming into
and out of the substations and the transmission lines related to those same systems. This
technology provides the remote visibility to realize a risk and take action when needed.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 275 of 351

DocuSign Envelope ID:889151FC-345E-4DC2-A140-574C1DD39EA1
NexGen Control System Networks
2.3 Summarize in the table, and describe below the DIRECT offsets3 or
savings (Capital and O&M) that result by undertaking this investment.
Monthly Reccuring Change MRC savings that will be realized once these leased services are
disconnected.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital LightRiver Envision Plus ($54,081) ($54,081) ($54,081) $ $
Licensing
00 Carrier MRCs ($20,000) ($20,000) ($20,000) $ $
2.4 Summarize in the table, and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
There are no indirect offsets at this time.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital $0 $0 $0 $0 $0
0&M $0 $0 $0 $0 $0
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Alternative 1:
Funding the business case at an amount less than the full request will increase the likelihood of
a communications failure translating to a loss of visibility and control into critical systems that
deliver Gas and electric services.
Alternative 2:
Removing all funding for this business case would allow the circuits to be disconnected resulting
in a loss of communications into many of our substations.This loss of communications translates
to Supervisory Control and Data Acquisition (SCADA) Engineers and System Operators not
having visibility and control into critical systems.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
Success will be measured by the continued, uninterrupted ability to transmit and receive data
that allows for remote SCADA,so that we can make expeditious and real time system operations
decisions.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 276 of 351

DocuSign Envelope ID:889151FC-345E-4DC2-A140-574C1DD39EA1
NexGen Control System Networks
No loss of communications because of carrier disconnects or lack of vendor support is the
success metric to be met. Throughout this multi-year initiative, we will continue to work with the
carriers and vendors to stay/delay the disconnect of circuits and maintain hardware support in
order to deliver uninterrupted communications that enable the operation of our system and the
delivery of safe and reliable energy to our customers.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The SCADA Comms Refresh_01 project, which is winding down, is the first design iteration
project, intended to deliver design standards and implement those designs at two locations.
Future projects will be forecasted to replace the TDM leased circuits at the remaining 51 sites,
sequenced based on the risk of losing communications and the impact to the business if
communications are lost. A timeline and/or burndown chart will be created and maintained to
show progress towards the goal of removing all leased carrier TDM circuits. Similar metrics will
be created in future projects as we begin to remove TDM based SONET services from our
private network and replace with current MPLS based networks.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
Steering Committee members are invaluable to the business case and individual projects, and
will provide approval on scope, schedule, and budget related changes. Additionally, they will
provide approval on issues and risks pertaining to outlined project deliverables, which also
typically have an impact on the scope, schedule, or budget of a project. Steering Committee
members will also provide approval on Change Requests, Go-Live, and the Approval to Close
documents. For this NexGen Control Systems Network business case, the Steering Committee
will consist of the Directors and Managers within ET, Energy Delivery, GPSS and the Business
Case Owner.
The NexGen Control Systems business case has two levels of governance: the Program
Steering Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for the financial
performance of this program. The Program Steering Committee will have regular meetings to
review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
ET PMO. The project queue will be reviewed periodically to plan and sequence work to the
levels of funding allocation received against the risks being mitigated.
Project Steering Committee
Project Steering Committees function as the governing body over each individual project within
the program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible for providing guidance and
making decisions on key issues that affect the following topics:
• Scope
• Schedule
Business Case Justification Narrative Template Version: February 2023 Page 7 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 277 of 351

DocuSign Envelope ID:889151FC-345E-4DC2-A140-574C1DD39EA1
NexGen Control System Networks
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter
of the project and will be facilitated by an assigned Project Manager from within the PMO.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 278 of 351

DocuSign Envelope ID:889151FC-345E-4DC2-A140-574C1DD39EA1
NexGen Control System Networks
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the <Business Case Name> and agree with the
approach it presents. Significant changes to this will be coordinated with and approved by the
undersigned or their designated representatives.
Signature: Date: May-03-2024 1 6:13 AM PDT
a�F
Print Name: Shawna Kiesbuy
Title: Sr. Manager, Network Engineering
Role: Business Case Owner
o ss ate:
Signature: 11(k)kS Q�pa, v Date: May-06-2024 1 4:17 PM PDT
-cE ]Bn6n]6]FE6�
Print Name: Alexis Alexander
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 9 of 9
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 279 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
EXECUTIVE SUMMARY
The Technology Failed Assets Program Business Case sponsors the tools and systems used by
the technology teams to support business applications. Technology assets enable automated and
necessary business processes in a modern innovative world. These technology assets range
widely from computers to handheld radios, from printers to networking equipment, and beyond.
Sometimes these technology assets fail prior to being refreshed as part of a lifecycle management
program. These failures can be caused by manufacture defects, human error, natural disasters,
malicious actors, or age/runtime of equipment. In any case, the failed asset can cause downtime
for an employee or system resulting in significant disruption to daily operations across our service
territory. Such failures even have the potential to disrupt service to customers. The ability to
replace failed assets in a timely manner results in decreased downtime for the business and
customers alike.
The Technology Failed Assets business case was established to address unplanned technology
failures. It consists of in-portfolio technology assets which allow rapid replacement of assets when
they fail beyond the ability for repair. A technology inventory is maintained to quickly restore
business functionality. Inventory includes, but is not limited to laptops, mobile phones and tablets,
printers, field area network (FAN) equipment, monitors, audio-visual equipment, routers,
switches, servers, and fiber cable. The cost of each technology solution varies depending on the
type of asset. Additional impacts to budget allocation in this business case are scope of failure,
required lead time, and location. Funding for this business case has been calculated based on
historical technology asset failure rates.
In order to deliver necessary tools and systems to workers, the recommended funding amount for
this business case is $5,175,000 over the next five years, averaging $1,035,000 each year. This
budget allocation enables technology teams to quickly replace failed assets, thereby restoring
business functions and critical to the daily operations of the Company. Absent appropriate
funding, the Technology Failed Assets business case could not deliver replacement technology
items to support business continuity. Impacts would vary based on which technology items fail.
An individual with a failed laptop, for example, could no longer perform their daily job duties
efficiently. More significant impacts may arise from failed network hardware, such as an inability
to transmit data across our networks. This could lead to loss of productivity, or worse, safety risks
if visibility were lost over a generation site.
Business Case Justification Narrative Template Version: February 2023 Page 1 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 280 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
VERSION HISTORY
Version Author Description Date
1.0 Mike Beil Initial draft of original business case 0712019
2.0 Mike Beil BCJN 2.0 Revised 0712020
3.0 Kaitlyn Richardson BCJN 3.0 Revised 0712022
4.0 Kaitlyn Richardson BCJN 4.0 Revised 0412023
5.0 Dave Husted Updated to revised template and content 0412024
BCRT BCRT Team Has been reviewed by BCRT and meets necessary requirements
Member
Business Case Justification Narrative Template Version: February 2023 Page 2 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 281 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $1,035,000 $1,035,000
2026 $1,035,000 $1,035,000
2027 $1,035,000 $1,035,000
2028 $1,035,000 $1,035,000
2029 $1,035,000 $1,035,000
Project Life Span 5 years
Requesting Organization/Department Enterprise Technology
Business Case Owner I Sponsor Dave Husted I Alexis Alexander
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Failed Plant& Operations
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Technology assets enable automated and necessary business processes in a modern
innovative approach. These technology assets range from computers and mobile devices to
radio systems and pole-mounted network devices. Sometimes these technology assets fail prior
to being refreshed as part of a lifecycle management program. These failures can be caused by
manufacture defects, human error, natural disasters, malicious actors, or age/runtime of
equipment. In those cases, the failed asset can cause downtime and loss of performance for an
employee or system resulting in significant disruption to daily operations across our service
territory depending on where and to what asset the failure occurred. Such failures even have
the potential to disrupt service to customers. The ability to replace failed assets in a timely
manner will result in decreased downtime potential for customers.
1.2 Discuss the major drivers of the business case.
The main driver for this program is Failed Plant & Operations, which is also related to asset
management strategies being driven by technology lifecycles and technology
obsolescence. As outlined in section 1.1 of this Business Case Justification Narrative, at times
technology may unexpectedly fail. This program provides a technology inventory to restore
business functionality and reduce the downtime caused by the failure. On-hand inventory allows
for a rapid replacement of failed items, allowing swift restoration of business processes. This is
particularly important today as we have observed greater uncertainty regarding the availability
of technology items due to supply chain issues. Investment in the Technology Failed Asset
Business Case Justification Narrative Template Version: February 2023 Page 3 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 282 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
program business case is prudent because the Avista workforce depends on this technology to
deliver gas and electric service to our customers.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Since technology asset failures will happen across Avista's territory, having budget allocation
available to quickly replace a failed asset is critical to the daily operations of the company. If the
Technology Failed Assets business case funding is not approved, replacement of failed assets
will result in individual requests for funding each time an asset fails. This could extend the
downtime of a system until the funding is approved and the asset is replaced. This funding also
provides spare technology inventory, which is maintained to replace failed assets in a timely
manner.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives and mission statement of the
organization. See link.
Avista Strategic Goals
Since the main driver behind this program is Failed Plant & Operations, the success of this
program can be measured by the timely replacement of failed technology assets and restoration
of automated business processes and overall productivity.The investment aligns with the focus
areas of "our people" and "perform." This program allows for the ability to quickly restore the
functionality of a failed technology device that is causing downtime and interrupting our
employee's ability to work. This program also aligns with our value of being "collaborative." By
having the technology functionality working properly, our employees can collaborate and come
up with innovative solutions.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.'
Funding requests are made based on average failure rates across the categories listed below.
As it is not possible to predict when an asset will fail, funding requirements could change and
may result in an increase or decrease in annual funding amounts. The table below represents
the annual amount proposed for 2024 based on the average 2022 and 2023 failures.
2023
Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 283 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
Category 2023 Order Count 2023 Failure Count Avg Cost
Repeaters 10 0 $ 8,527
AV Blanket 8 6 $ 7,853
Comms&LMR Devices 33 28 $ 1,684
Network,FAN,&Storage 17 17 $ 19,742
PC Tablets Laptops 117 101 5 3,352 -
Apple iDevices 90 66 $ 1,814
Printers 23 14 $ 7,504
Monitors 16 8 $ 851
Other Projects:Pullman Network Grid,Auditorium Lift&Screen,Mt.Spokane Siding,
Shawnee/N Lewiston Fiber Break
YTD Actuals $1,409,454
2022
Category 2022 Failure Count Avg Cost Fulfillment
AV Blanket 2 $ 6,857
Comm Devices 3 $ 19,085
FAN Blanket 6 $ 14,663
Mobile Devices 135 $ 1,062
Monitors 6 $ 2,280
Network Devices 17 $ 6,383
Personal Computer 10 $ 7,463
Printers 7 $ 8,274
Repeaters 15 $ 5,929
Storage Devices 2 $ 6,877
YTD Fullfillment: $ "659,761
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
This program includes a range of solutions from computers to hand-held radios carried by field
staff, to printers in remote offices, to networking equipment. Sometimes technology assets fail
prior to being refreshed. Any failed asset can cause downtime for an employee or system
resulting in significant disruption to daily operations across the service territory depending on
where and to what asset the failure occurred. To support these types of unplanned failures, the
Technology Failed Assets program was established and consists of technology assets meant
for rapid deployment as failures occur and when repairs are not feasible.A technology inventory
is maintained to quickly restore business functionality. This program provides benefits to
customers by providing a technology inventory to quickly restore functionality and reduce the
downtime caused by the failure.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 284 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).2
The requested capital cost amount per year has been calculated to replace failed assets based
on a three-year failure history. This level of funding is critical to maintain an inventory of in-
portfolio assets to be available for rapid replacement during failures or unplanned outages (i.e.,
laptops, mobile phones, field area network equipment, etc.). The funding amounts within this
program undergo regular review to balance the asset failure forecast within the predetermined
budget allocations. Since technology asset failures will happen across Avista's territory, having
budget allocation available to quickly replace a failed asset is critical to the daily operations of
the Company.
An example of some assets that Avista needs to replace these technology assets for cost
avoidance related to significant risk downtime related to failures:
• Printers
• Monitors
• Mobile phones
• Personal computers
• Field Area network devices
• Other devices
2.3 Summarize in the table and describe below the DIRECT offsets3 or
savings (Capital and OW) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A N/A N/A N/A N/A N/A
00 N/A N/A N/A N/A N/A N/A
There are no direct offsets in this business case, though the ability to replace failed assets in a
timely manner will prevent extended impacts to employee productivity. Therefore, not funding a
failed asset replacement inventory would result in an increase in O&M costs.
2 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
3 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 285 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
2.4 Summarize in the table and describe below the INDIRECT offsets4
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital N/A N/A N/A N/A N/A N/A
0&M Operating Expenses $100k- $100k- $100k- $100k- $100k-
$10M $10M $10M $10M $10M
Investments in these technology asset replacements provide indirect savings to our customers
by cost avoidance related to downtime issues and loss of productivity due to potentially
implementing manual business processes. Without spare inventory, this would increase the
amount of time to resolve these breakdown issues, reducing the efficiency of employees and
our infrastructure systems. The amount of indirect savings would depend on the site and
associated business process systems impacted by failure. Current trends indicate that the
Company is running assets longer than recommended.
Indirect savings related to operating expenses could range from $100k - $10M a year
representing at least 1 full-time employee up to 100 full-time employees needed to implement
manual processes. This is also assuming we do not replace these assets when they fail. This is
a high-level estimate that the Company does not have a way to track.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Option Capital Cost Start Complete
Funding based on an average of previous two $1,035,000 01/2025 12/2029
years failure rates (Recommended)
Funding based on 80% of the recommended $828,000 01/2025 12/2029
solution
Request funding when needed $0 01/2025 12/2029
Alternative 1:
Funding would be based on the average failure rates from the previous two years. The failure
rates have been variable and difficult to predict from year to year. There is an ongoing need to
develop a mechanism to track failure rates more effectively and better understand failure rate
trending. Until better failure rate data is known, the business case has been tracking against
fulfillment needs once an asset has failed beyond repair. This methodology aligns with the chart
in Section 1.5 which details specific assets and failure counts for 2022 and 2023.
Alternative 2:
Alternative#2 is to fund 80% of the recommended solution and seek alternative ways to reduce
costs to deliver technology and return during the year for additional funds to meet business
demand, if not successful. If these additional funds are not fulfilled, the business case will not
4 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 286 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
be able to deliver necessary technology items to workers, thereby rendering them unable to
work effectively and efficiently.
Alternative 3:
Funding will only be requested once an asset fails beyond repair. The risk with this alternative
is additional downtime of our automation systems due to the time needed to request/approve
funding to replace the failed asset. This alternative also puts additional pressure on other
business cases or expense budgets due to manual work, delays, or having to absorb capital
costs elsewhere.
2.6 Identify any metrics that can be used to monitor or demonstrate how
the investment delivered on remedying the identified problem (i.e., how will
success be measured).
The Technology Failed Assets business case is managed as a program of blanket projects
which manage the replacement of failed assets tracking their used and usefulness on a monthly
cadence. All individual projects set up for unplanned asset failures are managed through the
PMO, which follows the Project Management Institute (PMI) standards. These projects are
Initiated, Planned, Executed, and then Completed with a Transfer to Plant for the installed
assets. Over a calendar year, the blanket projects and individual projects equate to the funded
budget.
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
This business case is a program of blanket technology projects that transfers to plant monthly.
Quarterly forecasts capture changes in transfers to plant based on trends of fulfillment requests.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Technology Failed Assets Business Case has two levels of governance; The Program
Steering Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists
of members in management positions that are identified and responsible for prioritizing the
projects within this program. The Steering Committee is also held accountable for
the financial performance of this program. The Program Steering Committee will have regular
meetings to review the progress of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
Enterprise Technology(ET) Project Management Office (PMO) Department.
Product roadmaps identify investment demand that is generally not fully funded. Product
investments are prioritized in this manner:
1. Safety Systems
2. Control Systems
3. Customer Facing Systems
4. Back Office Systems
Business Case Justification Narrative Template Version: February 2023 Page 8 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 287 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
Project Steering Committee
Project Steering Committees act as the governing body over each individual project within the
program and will consist of key members in management positions that are identified as
responsible for the successful completion of the scope of work identified in the Charter document
for the Project. The Project Steering Committee is responsible to provide guidance and make
decisions on key issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of
the project and will be facilitated by an assigned Project Manager from within the ET PMO
Department.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 288 of 351

DocuSign Envelope ID:078D5754-BCD4-499F-99F6-8BA3A04D1E79
Technology Failed Assets
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Technology Failed Assets Business Case
and agree with the approach it presents. Significant changes to this will be coordinated with and
approved by the undersigned or their designated representatives.
s9 dby Ma -02-2024 12:30 PM PDT
Signature: hsV Date: y
C
Print Name: Dave Husted
Title: Manager Technology Services
Role: Business Case Owner
o "Sgnl by:
Signature: �l�p�s Qlc �uAr Date: May-03-2024 1:36 PM PDT
eereis�ierrao;
Print Name: Alexis Alexander
Title: Director Information Technology
Role: Business Case Sponsor
Business Case Justification Narrative Template Version: February 2023 Page 10 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 289 of 351

DocuSign Envelope ID: D6A6961E-16DD-4127-A5CC-A8171CB7A8CF
Disaster Resiliency
EXECUTIVE SUMMARY
Recovery is a critical business capability for Avista, as we have witnessed after a major weather event
when time is of the essence to recover from a storm. Avista's Disaster Resiliency program business case
(formerly Enterprise Business Continuity) is similar, whereby readiness is critical before, during, and after
an incident. Although many of Avista's technology systems have built-in redundancy or high availability
requirements, there are some gaps that necessitate further investment. To identify these gaps, Avista
conducts an annual disaster recovery exercise that evaluates the effectiveness of its program, which
includes people, process, and systems. The results of these exercises, along with peer collaboration with
utility industry partners, provides Avista with a strong baseline from which to measure its recovery
capabilities and channel the appropriate level of investment to address any identified issues or risks.
Investments may include secondary systems required to respond when primary systems are not available,
additional compute and storage in offsite backup data centers to increase capacity, and network and
security enhancements to increase security and network reliability. The cost associated with identified
solutions can average between $100-$200k per year, depending on the identified solution. Alternatives
considered vary by the recovery need and interoperability of systems in place.
The Colonial Pipeline ransomware event of 2021 highlighted the dependency between the company's
corporate technology systems, such as accounting and billing systems, and operational technology system
that control the flow of gas in their pipeline. These interdependencies between systems are creating a
complex technology architecture, whereby one set of systems requires the other set to fully operate.
Additionally, regulators are focusing more on recovery requirements for critical infrastructure organizations.'
Using a cost estimate for a PH (Personal Identity Information) and/or a PCI (Payment Card Industry) data
breach, based on the number of records under our stewardship, the indirect offset ranges from $5.2M to
$20.7M,or average$12.9M, per incident. In this data breach example,the risk avoidance cost far outweighs
the per annual investment under this business case to maintain resiliency and recovery capabilities. This is
a tremendous benefit to Avista and our customers. If we do not invest in our Disaster Resiliency continuity
program, it can lead to our inability to recover from an incident affecting technology systems required to
deliver safe and reliable energy. So, while the date and time of an incident cannot be predicted, prudency
lies in the company's ability to timely recover from an incident.
Our business continuity and disaster recovery capabilities must be ready to ensure critical business
processes and systems continue to operate under crisis conditions. Avista customers benefit from
investments in this program, as the solutions provide redundancy and availability of critical systems that
allow the delivery of electricity and gas securely, safely, and reliably to our customers.
VERSION HISTORY
Version Author Description Date
Draft Andru Miller Initial draft of original business case 613012020
1.0 Andru Miller Updated 5-year funding request 8/9/2022
2.0 Andy Lei"a Updated 5-year funding request 5/15/2023
BCRT Jeff Smith Has been reviewed by BCRT and meets necessary requirements 5/30/2023
3.0 Andru Miller Updated 5-year funding request 411912024
BCRT Jeff Smith Has been reviewed by BCRT and meets necessary requirements 5/3/2024
' Colonial Pipeline May Face$1 Million Penalty for"Operational"Lapses in 2021 Ransomware Attack-CPO
Ma a1� zirie
Business Case Justification Narrative Template Version: February 2023 Page 1 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 290 of 351

DocuSign Envelope ID: D6A6961E-16DD-4127-A5CC-A8171CB7A8CF
Disaster Resiliency
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2025 $100,000 $100,000
2026 $100,000 $100,000
2027 $100,000 $100,000
2028 $100,000 $100,000
2029 $100,000 $100,000
Project Life Span 5 years
Requesting Organization/Department System Engineering
Business Case Owner I Sponsor Walter Roys I Alexis Alexander
Sponsor Organization/Department Infrastructure
Phase Execution
Category Program
Driver Performance & Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.Ke6-
1.1 What is the current or potential problem that is being addressed?
Severe storms, natural disasters, major technology failures, and significant security events are risks
that Avista operates under.They are usually unpredictable and can have a high consequence. These
high consequence events can impact the technology systems Avista relies on to operate the delivery
of gas and electricity to our customers. For example, a data breach incident can average $12.9M.
Many of Avista's critical business processes are now more than ever dependent on data,
communication networks, and computer systems. Prolonged failure or disruption of any of these
systems could have a significant impact on Avista's ability to deliver gas and electric service to its
customers.
1.2 Discuss the major drivers of the business case.
Performance & Capacity is the primary driver for the Disaster Resiliency business case as the
investments enhance or address performance or technology capacity constraints. The availability of
each application and network system is assessed annually during an annual disaster recovery
exercise to determine their reliability and recovery capabilities. This in turn determines the level of
performance or capacity requirements needed for systems that underperform.
Business Case Justification Narrative Template Version: February 2023 Page 2 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 291 of 351

DocuSign Envelope ID: D6A6961E-16DD-4127-A5CC-A8171CB7A8CF
Disaster Resiliency
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
The ability to maintain uninterrupted services and/or quickly recover from a major event or disaster
is critical to serving our customers. Technology investments are needed annually to continue to
enhance the resiliency of our systems that support critical business processes. Not approving or
deferring investments in this business case could limit Avista's disaster recovery capabilities.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives, and mission statement of the
organization. See link. Avista Strategic Goals
This business case best aligns with Avista's focus area of Perform "...to serve our customers well
and unlocking pathways to growth."Avista conducts an annual disaster recovery exercise to evaluate
the effectiveness of its program, which includes people, process, and systems. The results of these
exercises, along with peer collaboration with utility industry partners, provides Avista with a strong
baseline from which to measure its recovery capabilities and channel the appropriate level of
investment to address any identified issues or risks.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.
As mentioned in the security business case narratives, the number and level of complexity in cyber
security attacks is significantly growing, as well as attacks by Domestic Violent Extremists (DVEs)on
physical infrastructure.2 A recently released report by the North American Electric Reliability
Corporation (NERC) tilted Cyber-Informed Transmission Planning, calls for the integration of cyber
and physical protections into transmission planning to increase reliability and security.3 The report
emphasizes both prevention and the ability to recover from an event as a goal for system resiliency.
Avista's EBC program works with all business units to identify business processes through regular
business impact analysis (BIA), establishes process criticalities and dependencies, and develops
procedures for how to continue business operations when systems, people and facilities are not
available. Also, the technology department conducts an annual disaster recovery exercise to review
areas of excellence and improvement. An after-action report is often produced from the annual
exercises,which highlight gaps.These gaps can vary between people, processes, and systems.This
business case focuses on the investment needed in systems to close those gaps. Examples of
previously funded investments include additional data storage and compute to support growing
backup demand. Also, a new security system was purchased to improve production system
redundancy during the annual exercise.
2 Electric grid is'attractive target'for domestic violent extremists in US,intel brief says I CNN Politics
s Cyber-Informed Transmission Planning Report.NERC.May
Business Case Justification Narrative Template Version: February 2023 Page 3 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 292 of 351

DocuSign Envelope ID: D6A6961E-16DD-4127-A5CC-A8171CB7A8CF
Disaster Resiliency
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
Investments under this business case support technology gaps identified during Avista's annual
disaster recovery exercises. The solutions have included additional compute and storage for backup
data center capacity, additional network devices to increase system failover reliability, and secondary
security systems to support redundant protection schemes. There is no one solution that addresses
this complex problem. Instead, the solutions will vary by the identified gaps. Further assessment and
investment are required in operational technology areas where different operational requirements
exist.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).4
Much like investing in strong cybersecurity protection, investments in system redundancy, availability,
and recovery are risk-based and just as critical to continue to operate during a crisis. Based on the
consistent annual allocation over the past five years to strategically deliver disaster recovery
solutions, there is a high level of confidence the requested amount will be fully utilized. According to
a recently published article, the average ransomware attack results in 19 days of downtime.5 The
average cost for downtime for companies of all sizes is $4,500 per minute or $1,410 per minute for
small businesses.6 This is an average of$2,955 per minute.Assuming the event was like the Colonial
Pipeline incident, the downtime was 6 days or approximately $25.5M. The risk avoided, is the
downtime associated with a potential incident.
2.3 Summarize in the table and describe below the DIRECT offsets' or
savings (Capital and OW) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital Not Applicable $0 $0 $0 $0 $0
00 Not Applicable $0 $0 $0 $0 $0
4 Please do not attach any requested items to the business case, be sure to have ready access to
such information upon request.
s After a Decline in 2020,Data Breaches Soar in 2021 1 Nasdaq
6 20+Business Data Loss Statistics&Recovery F2022 New Data] (businessdit.com1
7 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work under this business case.
Such savings could include reductions in labor, reduced maintenance due to new equipment,or other.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 293 of 351

DocuSign Envelope ID: D6A6961E-16DD-4127-A5CC-A8171CB7A8CF
Disaster Resiliency
There are no direct offsets associated with risk-based investment in disaster recovery solutions.
While an incident cannot be fully prevented,the prudent decision to invest in recovery solutions brings
confidence that when an incident occurs,Avista can recover from it.With the number of cybersecurity
incidents growing in number and complexity, there is no utility business that would not invest in
disaster recovery solutions as part of ongoing investment and accept it as the cost of doing business.
2.4 Summarize in the table and describe below the INDIRECT offsets8
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2025 2026 2027 2028 2029
Capital Security Solutions $104,000 $104,000 $104,000 $104,000 $104,000
00 Data Breach Cost Estimates $936,000 $936,000 $936,000 $936,000 $936,000
Using a data breach cost estimates for a PII (Personal Identity Information) and/or a PCI (Payment
Card Industry) data breach, the indirect offsets range from $5.2M to $20.7M per incident or on
average $12.9M. Additionally, the costs associated with incident response, customer notification,
crisis management, regulatory fines and penalties, and class action lawsuits are mostly operational
expense costs. There is an assumption that the vulnerabilities or gaps identified during the incident
will require immediate investment in recovery solutions to mitigate the existing and/or future events.
The potential indirect offsets are 90% operation and maintenance and 10% capital using the lowest
cost of a data breach with only PII data and no class action lawsuit. However,they can be significantly
higher, such as$18.63M in operation and maintenance and$2.1 M in capital, respectively, should the
incident be on the high end. Also, not knowing when or how often a data breach would occur, the
conservative estimate with the assumption that the incident only happened once, amortized over 5
years, the cost would be$936k in operation and maintenance and $104k in capital, respectively. The
indirect benefit or reduction of risk is mostly in operation and maintenance costs associated with
recovering from a data breach incident.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, which were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
The requested funding level will address the highest risks that are identified in the after-action reports
first following each annual disaster recovery exercise or those that cannot wait until the next
technology refresh cycle. It is recommended that this level of funding continue rather than potentially
deferring the work 3-5 years since this program is meant to address high-risk deficiencies in a shorter
cycle than a typical refresh cycle.
Option Capital Cost Start Complete
Address disaster recovery gaps identified in after- $500,000 01 2024 122029
action reports outside of technology refresh or
expansion projects
Alternatives under this business case vary by identified need and solution, based on after action
reports from annual disaster recovery exercises. Historically, solutions have included additional
hardware to increase performance and capacity of existing systems or network and security systems
$Indirect offsets are those items that do not directly reduce the current costs of the Company, but may serve to reduce future
hirings,improve efficiencies,reduces risk(cost or outage),or allows current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 294 of 351

DocuSign Envelope ID: D6A6961E-16DD-4127-A5CC-A8171CB7A8CF
Disaster Resiliency
to develop alternative paths to provide network redundancy and failover capabilities. Only in the case
of a significant need or an incident, will this business case require additional funding. Therefore, no
alternatives are being presented. And doing nothing is not an option, as we continue to find gaps in
each year's disaster recovery exercises to make our systems more resilient.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Success under this business case can be measured by the number of after-action report findings that
can be completed annually based on current funding levels.Additionally,the annual disaster recovery
exercise should have less and less findings each year assuming the investments are creating a
strong, secure, and resilient environment.
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
The Disaster Resiliency business case is a program that consists of multiple projects per year that
run concurrently, and at times over multiple years. They follow all phases of the project lifecycle,
facilitated by a project manager, and governed by a steering committee to determine scope,
schedule, and budget forecasts, including transfers-to-plant.
2.8 Please identify and describe the Steering Committee/governance team that
are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
The Disaster Resiliency Business Case has two levels of governance; The Program Steering
Committee and the Project Steering Committee.
Program Steering Committee
This business case is a program of related projects. The Program Steering Committee consists of
members in management positions that are identified and responsible for prioritizing the projects
within this program. The Steering Committee is also held accountable for the financial performance
of this program. The Program Steering Committee will have regular meetings to review the progress
of the program and to make decisions on the following topics:
• Project prioritization and risk
• Approving business case funding requests
• New project initiation and sequencing
The Program will be facilitated and administrated by an assigned Program Manager within the
Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will
be reviewed periodically and will consist of projects needed to maintain Disaster Resiliency.
Technology product roadmaps identify investment demand that is generally not fully funded.
Technology product investments are prioritized in this manner:
1. Safety Systems
Business Case Justification Narrative Template Version: February 2023 Page 6 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 295 of 351

DocuSign Envelope ID: D6A6961E-16DD-4127-A5CC-A8171CB7A8CF
Disaster Resiliency
2. Control Systems
3. Customer Facing Systems
4. Back Office Systems
Project Steering Committee
Project Steering Committees act as the governing body over each individual project within the
program and will consist of key members in management positions that are identified as responsible
for the successful completion of the scope of work identified in the Charter document for the Project.
The Project Steering Committee is responsible to provide guidance and make decisions on key
issues that affect the following topics:
• Scope
• Schedule
• Budget
• Project Issues
• Project Risks
The Project Steering Committee will meet at the defined intervals documented in the Charter of the
project and will be facilitated by an assigned Project Manager from within the ET PMO Department.
The governance structure under this business case program is responsible for decision-making,
prioritization, and change requests. Through the regular Program Steering Committee Meetings, the
team reviews and balances planned work versus unplanned work to determine prioritization, as well
as pending project change requests.Any change request requiring either an increase or decrease of
funds is reviewed at the upcoming Technology Planning Group meeting before it is submitted to the
Capital Planning Group for consideration.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Disaster Resiliency business case and agree
with the approach it presents. Significant changes to this will be coordinated with and approved by
the undersigned or their designated representatives.
D...Sig-d by:
Signature: �(�1a t v P,s Date: May-08-2024 1 2:55 PM PDT
ee9e,es�eEaee...
Print Name: Walter Roys
Title: Systems Engineering Manager
Role: Business Case Owner
by:
Signature: ED-USil"Id
( L;,av Date: May-09-2024 1 4:37 AM PDT
Exraasur€rFas�..
Print Name: Alexis Alexander
Title: Director of Infrastructure
Role: Business Case Sponsor
Signature: Date:
Print Name:
Business Case Justification Narrative Template Version: February 2023 Page 7 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 296 of 351

DocuSign Envelope ID: D6A6961E-16DD-4127-A5CC-A8171CB7A8CF
Disaster Resiliency
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 8 of 8
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 297 of 351

DocuSign Envelope ID: 1281174C-255F-48A4-8C3F-68F64D863706
Enterprise Security
EXECUTIVE SUMMARY
Cybersecurity threats continue to grow in numbers and complexity. In response to this growing
trend,federal agencies overseeing the reliability of electrical and gas infrastructure are increasing
their call for utilities like Avista to step up their requirements around security best practices to
mitigate the eminent risk. These risks can affect both Information Technology systems and
Industrial Control Systems that can potentially impact the ability to provide energy in a secure,
safe, and reliable manner to our customers.
Appropriate measures are expected by customers of businesses today to protect the
confidentiality, integrity, and availability of the information under their stewardship. This is even
more essential to utilities deemed critical infrastructure and required to meet strong reliability
standards. Protecting vital electric and gas services from cyber threats requires continued risk-
based investment in a myriad of security solutions that defend, detect, and protect Avista's
networks and information. Success metrics for each security investment are unique as it is
determined by the capability of the implemented security solution and the cost avoidance
associated with responding to an incident. For example, Distributed Denial of Service (DDoS)
attacks occur daily on Avista's network and vary in size from 15 to 1,300 or more per day. This
would result in 11 to 24 hours of downtime each day our network is unavailable, affecting our
customer facing website,which has been prevented by investing in a security protection solution.
The average cost of a data breach is also growing along with the number of incidents.The cost of
a data breach incident at Avista is estimated to range from $5.2M to $20.7M depending on the
number of records and type of data stolen, respectively. This estimate does not include the
reputational damage or cascading consequences the incident may have on our customers,
especially if it affects the delivery of electric or gas service for any period. For example, should
the data breach incident cause Avista to bill customers more than once or incorrectly,this would
not only put pressure on the customers who cannot pay more, but also create an operational
nightmare in crediting or reimbursing customers as quickly as possible, all while trying to
maintain current usage and billing information.
The 5-year capital budget request of $14,300,000 for Enterprise Security funds a diverse set of
security solutions that benefit all Avista customers to maintain and enhance Avista's security
posture to minimize the risks associated with growing cyber threats. Not approving this business
case or its recommended funding level can pose risks to the many systems that Avista depends
on to conduct business and deliver safe and reliable energy.
VERSION HISTORY
Version Author Description Date
Draft Andru Miller Initial draft of original business case 7/012020
1 Andru Miller Updated 5-year funding request R10912022
2 Andy Lei'a Updated 5-year funding request 412712023
BCRT Jeff Smith Has been reviewed by BCRT and meets necessary requirements 5/30/2023
Business Case Justification Narrative Template Version: February 2023 Page 1 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 298 of 351

DocuSign Envelope ID: 1281174C-255F-48A4-8C3F-68F64D863706
Enterprise Security
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2024 $2,860,000 $2,860,000
2025 $2,860,000 $2,860,000
2026 $2,860,000 $2,860,000
2027 $2,860,000 $2,860,000
2028 $2,860,000 $2,860,000
Project Life Span 5 years
Requesting Organization/Department Security
Business Case Owner I Sponsor Andy Leija I Clay Storey
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Threats from cyberspace, including viruses, phishing, and spyware, continue to test our
industry's capabilities to identify, protect, detect, respond, and recover from them. And
while these malicious intentions are often unknown, the methods are becoming more
advanced and the attacks more persistent. Additionally,the vulnerabilities in hardware and
software systems continue to increase at times faster than a vendor can provide a
mitigation patch to be applied, especially with industrial control systems such as those
supporting the delivery of energy. This can result in an increase or exposure to risk. To
assure that our industry maintains its vigilance, federal agencies, such as the U.S. Federal
Energy Regulatory Commission (FERC) through the North American Electric Reliability
Corporation (NERC), and the Transportation Security Administration (TSA) are increasing
their cybersecurity requirements for best practice across our industry'. For these reasons,
'Federal Energy Reliability Commission—Cyber and Grid Security.Cyber and Grid Security I Federal Energy
Regulatory Commission (ferc.gov) and recent updates to North American Electric Reliably Corporation
(NERC) Reliability Standard CIP-003-9, Cyber Security Management Controls for supply chain risk
management for low impact bulk electric system (BES) cyber systems. E-1 RD23-3-000 I Federal Enerev
Regulatory Commission (ferc.gov). Transportation Security Administration (TSA) for Pipeline Owner and
Operators. TSA revises and reissues cybersecurity requirements for pipeline owners and operators
Transportation Security Administration
Business Case Justification Narrative Template Version: February 2023 Page 2 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 299 of 351

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Avista must continue to advance its cybersecurity program and invest in security controls
to prevent, detect, and respond to these increasingly frequent and sophisticated threats.
Avista's customers benefit from the protection of Avista's network, data, and information.
1.2 Discuss the major drivers of the business case.
Performance & Capacity is the primary driver for this business case as the projects it funds
address security risks with the use of technology that keeps our systems secure and reliable.
The security of our electric and natural gas infrastructure is a significant priority at a national
and regional level and is of critical importance to Avista customers across our service
territory.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Addressing security risks has been and will continue to be an ongoing need. Also, as
cybersecurity threats continue to grow in frequency and complexity, preventative and
defensive measures are necessary and require an increase in investment. If the requested
funding level is not approved or is deferred, it will prevent Avista from maintaining the
security systems that protect from and detect cyberthreats. Alternatives may include
moving multiyear capital license renewals, which often come with discounts, to annual
renewals at higher operational expense costs,as well as increase the potential for a security
event that could impact Avista's operations.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives, and mission statement of the
organization.
Investments funded under this business case protect Avista's information and reduce the
risk of a security event occurring. Additionally, Avista utilizes third party assessments to
evaluate the effectiveness of its security posture. These assessments, along with utility
industry forums, councils, and organizations provide Avista with a strong baseline from
which to measure its security capabilities and determine the appropriate level of
investment to mitigate identified risks.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.
Ongoing case studies, articles, reports, and government guidance illustrate continuous
cyberthreats to our industry and growing trends in cybercrime. Some even quantify the
Business Case Justification Narrative Template Version: February 2023 Page 3 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 300 of 351

DocuSign Envelope ID: 1281174C-255F-48A4-8C3F-68F64D863706
Enterprise Security
average cost associated with each of these events.Z Not only have complexity and
frequency of attacks grown, but so too have the attack vectors as businesses post-pandemic
increased remote work environments as a retention strategy to provide employees
flexibility and reduce turnover and moved more business capabilities to cloud services to
gain efficiencies and continuous improvements from technology vendors at scale. These
evolutions result in continuous investment in security systems that protect data in the cloud
and while an employee is working remotely. According to a recent Security Spending Guide,
published by the International Data Corporation (IDC), "worldwide spending on security
solutions and services is forecast to be $219 billion in 2023, an increase of 12.1% compared
to 2022.113
Much like other technology solutions, security systems, such as firewalls, intrusion
prevention, anti-virus, and endpoint protection must be regularly updated or replaced as
they reach their end of life, as well as license or subscription renewals to continue to receive
product support and security updates as they are released. These investments are tracked
via lifecycle planning for the hardware, the operating system, the database, the software
version, and the license term or count.
Security system vendors drive product lifecycles to continue improving their product.Avista
Security Subject Matter Experts track vendor lifecycle roadmaps with each specific vendor
on upcoming product versions or system models for compatibility and to plan system
upgrades. Future models are not always backwards compatible to previous operating
systems, as illustrated in the example below, where not each firewall can run the same
operating system that this vendor is releasing. 4
a The average cost of a data breach in 2022 was$9.44 million in the United States, and is expected to grow in
2023, according to a 2022 IBM Report. Cost of a data breach 2022 1 IBM. Ransomware payments averaged
$1.85 million in 2022 with almost 236.7 million attacks in the first half of that year, alone, according to Astra
Security. l 00+Ransomware Attack Statistics 2023:Trends&Cost(getastra.com).According to Cybersecurity
Ventures,the cost of cybercrime is predicted to hit$8 trillion in 2023 and will grow to$10.5 trillion by 2025.
eSentire 12022 Official Cybercrime Report.
3 New IDC Spending Guide Forecasts Worldwide Security Investments Will Grow 12.1% in 2023 to $219
Billion.
a Example of vendor roadmap for hardware and operating system compatibility. Palo Alto Networks Next-
Generation Firewalls
Business Case Justification Narrative Template Version: February 2023 Page 4 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 301 of 351

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Palo Alto Networks Next-Generation Firewalls
STRATA
O PREVIOUS NEXT Q
The following table shows the PAN-OS*releases supported for each of the Palo Alto Networks Next-Generation Firewall hardware,and VM-Series,and CN-Series
models.You can also review PAN-OS support for PA-7000 Series cards and PA-S450 firewall cards as well as for Palo Alto Networks appliances.
FIPEWALL MODEL
Hardware Firewalls
PA-200 Firewall(EoS-••)
PA-220 Firewall - 6 v' • v -
PA-220R Firewall - I -
PA-410 Firewall - - . v
10.1.2&later
PA-415 and PA-445 Firewalls - - --
PA-440,PA-450,and PA-460 - -
Firewalls
PA-500 Firewall(EoS•••) v -
PA-800 Series Firewalls -
PA-1400 Series Firewalls -
PA-3000 Series Firewalls -
(EoS•••)
Moreover, with over two dozen different security solutions required to protect Avista's
network, each system has various hardware and software requirements that are tracked
and managed for replacement and renewal.To add to the complexity,the security solutions
are peppered across various networks that protect Avista's data in our back-office systems,
as well as our industrial control systems that provide energy to our customers. Security
systems cannot be run beyond their useful life, as the operating system and software may
no longer be compatible with the hardware, and the vendor will cease offering software
upgrades or patches. Maintaining the lifecycle for security systems is critical to reducing
cybersecurity vulnerability risks.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The Enterprise Security Systems business case funds cybersecurity investments to reduce
risks by protecting against cybersecurity threats. Investments in security systems vary but
fall into protection, detection, identity, authentication, and access to on-premises and cloud
resources. Securing Avista's data and information to provide energy safely and reliably to
each of our customers is of utmost importance. As the utility industry continues to undergo
Business Case Justification Narrative Template Version: February 2023 Page 5 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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DocuSign Envelope ID: 1281174C-255F-48A4-8C3F-68F64D863706
Enterprise Security
digital transformation and reliance on technology, so will the security investments needed
to go side by side. The projects funded by this business case protect Avista's people, assets,
and information. Without proper security protection the risk to Avista's people, assets, and
information increases.
2.2 Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits, or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).
Avista conducts regular analyses on the security posture of our networks through third-party
penetration tests, monitors, and addresses system vulnerabilities through a vulnerability
management program, and subscribes to government agency information sharing platforms
that inform of emerging threats. Moreover, our risk management team also collects data
points to determine the risk and mitigating control associated with a potential data breach.
The risk management team uses a third-party cybersecurity insurance broker to benchmark
Avista's limit of liability and self-insured retention (deductible) in comparison to utility and
energy companies of our revenue size. 5 Compared to other utilities, Avista's liability
coverage falls within the median and self-insured retention. Although data breach insurance
coverage continues to go up analogous to data breaches, the utility industry in general has
not had a major cybersecurity incident to date, thus keeping the rates reasonable.
Additionally, based on the records within our stewardship, the cost of a data breach or risk
avoidance estimates for Personal Identifiable Information (PII), or Payment Card Industry
(PCI) data can vary from as low as $5.2M to as high as $20.7M for the first incident. 6 This
calculation includes the costs associated with:
• Incident Investigation
• Customer Notification/Crisis Management
• Regulatory Fines and Penalties
• PCI Specific Fines if it includes PCI data
• Class Action Lawsuit
s Annual cybersecurity data breach peer benchmarking performed by McGriff Insurance Company.
6 Calculation estimates for a data breach of PII, or PCI data is based on number of data records exposed,
assuming it's the first breach,the data is stored in a centralized system, no fraud is expected, there is a class
action lawsuit,and having data breach insurance coverage. eRiskHub-NetDiligenceOO Mini Data Breach Cost
Calculator
Business Case Justification Narrative Template Version: February 2023 Page 6 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 303 of 351

DocuSign Envelope ID: 1281174C-255F-48A4-8C3F-68F64D863706
Enterprise Security
It does not include the cost associated with reputational damage from the event or the
extent to which the event has other implications on Avista or its customers who may
experience a ripple effect associated with the initial data breach. The annual recommended
investment in security solutions is less than the cost of one data breach incident, let alone
the cost associated with ransomware or subsequent incidents.
2.3 Summarize in the table and describe below the DIRECT offsets or savings
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Not Applicable $0 $0 $0 $0 $0
00 Not Applicable $0 $0 $0 $0 $0
There are no direct offsets associated with risk-based investment in security solutions. It is
much like investing in life insurance to offset the probability and impact in the event of
death. While it cannot be fully prevented, the prudent decision to invest in life insurance
brings confidence that when it does occur, the impact or consequence will be manageable.
With the number of cybersecurity incidents growing in number and complexity, there is no
utility business that would not invest in security solutions as part of ongoing investment and
accept it as the cost of doing business. The question is not whether to invest or not, but how
much to invest to reduce the risk of a cybersecurity incident occurring.
2.4 Summarize in the table and describe below the INDIRECT offsets (Capital
and O&M) that result by undertaking this investment.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Security Solutions $104,000 $104,000 $104,000 $104,000 $104,000
0&M Data Breach Cost Estimates $936,000 $936,000 $936,000 $936,000 $936,000
Based on the data breach cost estimates above for a PI and/or a PCI data breach,the indirect
offsets range from $5.2M to $20.7M per incident or on average $12.9M. Additionally, the
costs associated with incident response, customer notification, crisis management,
regulatory fines and penalties, and class action lawsuits are mostly operational expense
costs. There is an assumption that the vulnerabilities or gaps identified during the incident
will require immediate investment in security solutions to mitigate the existing and/or future
events. Therefore, the potential indirect offsets are 90% operation and maintenance and
10% capital using the lowest cost of a data breach with only PII data and no class action
lawsuit. However, they can be significantly higher, such as $18.63M in operation and
maintenance and $2.1M in capital, respectively, should the incident be on the high end.Also,
not knowing when or how often a data breach would occur, the conservative estimate with
Business Case Justification Narrative Template Version: February 2023 Page 7 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 304 of 351

DocuSign Envelope ID: 1281174C-255F-48A4-8C3F-68F64D863706
Enterprise Security
the assumption that the incident only happened once, amortized over 5 years, the cost
would be $936k in operation and maintenance and $104k in capital, respectively.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not provide
the same benefit as the chosen solution. Include those additional risks to
Avista that may occur if an alternative is selected.
Alternatives under this business case vary by security solution,vendor offerings, and internal
capabilities. They may include several alternatives, such as: security as a managed service,
security as a service subscription, or internal implementation or replacement of the security
solution.
Alternative 1: Security as a managed service is whereby a third-party vendor performs
security on Avista's behalf. The most common services provided by a managed service
vendor includes managed security monitoring, vulnerability risk assessment, threat
intelligence, security consultation, security program development, perimeter management,
penetration testing, product resale, and compliance monitoring. Common reasons for hiring
a third party are lack of internal resources, talent, or expertise; cost savings; moving to 247
security coverage; compliance; and speed of response to incidents.' We have used security
as a managed service for third-party penetration tests to identify weaknesses, as well as for
Distributed Denial of Service (DDoS) protection for internet traffic, where we have seen
significant protection from massive attacks on Avista's network that would have caused
major disruptions on our customer facing website and internal back-office services. If not
mitigated, these attacks can result in subsequent ransomware attacks.
Alternative 2: Security as a Service (SECaaS) is often a subscription-based model whereby
we leverage a security solution vendor's expertise and scalability on a particular solution and
capability. Some examples include continuous monitoring, data loss prevention, business
continuity and disaster recovery, email security, antivirus management, spam filtering,
identity and access management, intrusion protection, security assessment, network
security, web security, and vulnerability scanning.'This can include ongoing patching, virus
definitions, and system upgrades that free up internal resources to work on higher priority
work or work assignments specific to an electric and gas utility.There are a few cases where
we have outsourced for this work, such as managed detection and response, which has
reduced our operational overhead in antivirus management and provides up to date threat
detection, resulting in high value for endpoint security 247.
7 The 9 most common MSSP security services(exi ence.io)
a What is Security as a Service(SECaaS)? I Forcepoint
Business Case Justification Narrative Template Version: February 2023 Page 8 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 305 of 351

DocuSign Envelope ID: 1281174C-255F-48A4-8C3F-68F64D863706
Enterprise Security
Alternative 3: Internal implementation or replacement of the security solution is often
selected as the alternative of choice given that we are a highly regulated utility, that is
required to meet many compliance requirements and thus require tailored
implementations. Because much of Avista's data is stored in our data centers, it is critical
that we invest in the verification of people who authenticate using their accounts and
devices to access our networks, as well as in security protection and detection tools to deter
and detect when unauthorized activity is detected.
Lastly, while there are opportunities to leverage the capabilities and economies of scale of a
third-party vendor in alternative 1 and 2, the costs typically fall under recurring operational
expenses. And the services may not always be tailored enough to meet Avista's specific
needs or stringent compliance requirements. Therefore, we are very selective and
intentional when we pursue security as a managed service or a service subscription.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Each security solution investment under this business case reduces security risk in a unique
way and therefore measuring their success is also unique. For example, in the case of a
protection solution, the system will act as a wall or shield to prevent access to Avista
networks from unauthorized users or devices. A success measure that shows the solution's
value is the number of prevented unauthorized attempts or attacks on Avista's networks,
including the size and frequency, which could have resulted in a sustained network outage.
This translates into downtime for systems, as well as an increase in operational resources to
troubleshoot the issue and determine root cause.
Similarly,for a vulnerability scanning solution,the system will identify and catalog by risk the
number of vulnerabilities found on several types of systems that require patching. This
includes servers, personal computers, and applications. Success can be measured by the
number of identified vulnerabilities per scan, their risk score, and the ability for technology
teams to patch pre and post scanning cycles to reduce vulnerability risks.
Each security solution performs a different and unique security function, and its success is
determined by how well the solution accomplishes it. This implies that to increase its
success, the implemented solution is running in accordance with vendor specifications and
has been fully optimized to extract the greatest value.
Business Case Justification Narrative Template Version: February 2023 Page 9 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 306 of 351

DocuSign Envelope ID: 1281174C-255F-48A4-8C3F-68F64D863706
Enterprise Security
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The Enterprise Security Systems business case is a program that consists of multiple security
projects per year that run concurrently, and at times over multiple years. They follow all
phases of the project lifecycle, facilitated by a project manager, and governed by a steering
committee to determine scope, schedule,and budget forecasts, including transfers-to-plant.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
There are two levels of governance to the Enterprise Security business case and the
investments within it. They consist of a business case governance team and project specific
steering committees for in-flight projects.
Business Case Governance Team: The Enterprise Security Governance Team provides
monthly oversight of this program business case and makes recommendations based on
forecasted inactive planned investments, the pace of in-flight investments, and any new
unplanned activity that surfaces from an emerging security threat. The team also tracks
business case risks and issues that can affect the portfolio of planned investments.
Monthly governance meetings consist of a full review of each in-flight investment, reasons
for any delays or deviation to proposed completion and transfers to plant schedules and
recommends necessary steps to bring the investments back into schedule or defer inactive
work, when possible, to offset delays. However, should a security risk be increased by
deferring a planned or unplanned investment into future years, the Enterprise Security
Governance Team will recommend a Capital Planning Group (CPG) In-Year Change Request
to surface the impending need.The Change Requests are presented at a monthly Technology
Planning Group meeting to inform the Director members who are also members of the CPG
where the request will be considered and weighed against other pending requests.
The Enterprise Security Governance Team consists of Avista's Enterprise Security Director,
Cybersecurity Manager, Physical Security Manager, Security Delivery Manager, and the
Project Management Office Manager. The sessions are facilitated by the Security Program
Manager who manages the standing agenda.
Project Steering Committees: Additionally, each security investment is governed by a
project steering committee that consists of the Enterprise Security Director, Cybersecurity
Manager, and Security Delivery Manager, as well as ancillary management team members
required for the successful implementation of the security solution. Steering committee
meetings are facilitated by a Project Manager and held monthly to review scope, schedule,
budget, and risks and issues surfaced from each in-flight project.
Business Case Justification Narrative Template Version: February 2023 Page 10 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 307 of 351

DocuSign Envelope ID: 1281174C-255F-48A4-8C3F-68F64D863706
Enterprise Security
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Enterprise Security business case and
agree with the approach it presents. Significant changes to this will be coordinated with and
approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: „ Date: 3un-12-2023 1 10:58 AM PDT
Print Name: �naly Lelja
Title: Security Delivery Manager
Role: Business Case Owner
DocuSigned by:
Signature: Sfo Date: Tun-12-2023 111:28 AM PDT
Print Name: °a�yFfbr�y
Title: Director of Security
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 11 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 308 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
EXECUTIVE SUMMARY
The reliability of Avista's electric and gas infrastructure is maintained and operated by people.
Our highly skilled staff require equipment and material readily available to respond to customer
needs, conduct preventative routine maintenance, and recover from storm caused outages. To
cover Avista's service territory of gas and electric customers across three states, we operate out
of over two dozen office and storage locations where people plan and prepare daily to safely
make sure electricity and gas service is delivered to our customers. The equipment, tools, and
material required to do this is also critical. Therefore, Avista maintains a fleet of vehicles, tools,
and equipment in working order, as well as spare material to reduce any unnecessary downtime
in case of an unplanned event. For example, it can take up to 18 months to replace a bucket truck,
and during the replacement period, Avista would need a rental to keep the crews working.
To protect people and assets at these various locations, Avista must invest in layered physical
security enhancements that denies, deters, detects, or delays an intruder or attack. The current
security measures are either inadequate or have run their useful life. The physical security
hardening measures proposed include replacing and centralizing an outdated access
management system to deny access to unauthorized people; replacing doors, gates, and fencing
to deter and delay threats; and replacing or upgrading cameras, alarms, and motion detection
systems to capture video surveillance evidence to aid in law enforcement investigations.The cost
estimate associated with this program investment is $2M over 5 years. While this may not be
adequate to address all the identified risks, it is enough to begin addressing the highest priority
risks first. For example, all of the previous year allocations have gone into replacing the outdated
access management system at multiple Avista facilities. There are 4-5 facilities left that are
planned for replacement in 2024. Only after that will the program begin replacing other security
technology.
Investments in physical security hardening at Avista's office and storage locations will reduce
ongoing risk of theft, vandalism, or sabotage, as well as improve the safety and security of staff
at these facilities. There is no dollar amount estimated to replace the loss of life or inflicted
trauma to any of our staff from a physical injury due to an assault at one of our facilities. So, while
these events do not happen often, the consequences can be high depending on the damage or
theft, which can range from stolen material or tools to damaging or theft of specialized
replacement parts, approximately $5K to $50K, respectively. The cost is greater for irreparable
damage to or theft of a fleet vehicle, including the operational costs associated with renting
equipment or fleet vehicles during the replacement period. These investments have direct
benefit to Avista and our customers, as they secure and protect our people and assets required
to operate and timely recover from an outage event. Not approving the recommended funding
amount can pose risks to the people and assets Avista depends on to conduct business and
deliver safe and reliable energy.
VERSION HISTORY
Version I Author I Description Date
Business Case Justification Narrative Template Version: February 2023 Page 1 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 309 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
Draft Andru Miller Initial draft of original business case 7/01/2020
1 Andru Miller Updated 5-year funding request 8/09/2022
2 Andy Leija Updated 5-year narrative&funding request 5/10/2023
BCRT Jeff Smith Has been reviewed by BCRT and meets necessary requirements 5/30/2023
Business Case Justification Narrative Template Version: February 2023 Page 2 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 310 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2024 $400,000 $400,000
2025 $400,000 $400,000
2026 $400,000 $400,000
2027 $400,000 $400,000
2028 $400,000 $400,000
Project Life Span 5 years
Requesting Organization/Department Security
Business Case Owner I Sponsor Andy Leija I Clay Storey
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
Avista office facilities and storage locations house staff and store equipment, tools, and
materials. These locations are critical to support our day-to-day operations to deliver gas
and electricity safely and reliably to our customers. The office facilities and storage
locations are in strategic areas across our service territory to be available for prompt
response to customer requests, preventative maintenance, or storm recovery. The office
facilities and storage locations require investment in physical security enhancements to
deter, detect, and delay physical security threats to protect our people and assets.
People use these facilities to operate and maintain our infrastructure. They consist of small
one-person construction offices with crews that come and go in rural towns, to call centers,
to our company headquarters in Spokane, WA. Each of these office locations is critical to
our operation. In some cases, the same campus facility may host multiple functions that
serve both gas and electric customers, such as call center services, construction office
services, and as equipment and materials storage location.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 311 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
Additionally, these locations store millions of dollars in equipment, tools, and materials
required to operate and maintain our infrastructure. In some cases, the equipment, tools,
and materials stored are unique to the gas and electric services we provide and specific to
certain locations. So, while the probability is low of an event occurring, the consequence
may be high. For example, should any of these assets be damaged or stolen, replacing them
can take weeks, to months, to years, depending on the uniqueness of the equipment and
whether it is made to order or specifications versus an easier to find commodity. Estimated
costs can vary between $51K to $50K, respectively, and depending on the theft or damage.
However, and while it does not often occur, the cost of irreparable damage or theft of a
fleet vehicle is much higher.
A physical security incident at any of these locations may harm people, damage tools and
equipment, or even restrict our ability to respond to our customers, if the required tools,
equipment, or material are not readily available. Also, a physical breach can give intruders
access to Avista's network, which can then lead to a cybersecurity event. Not investing in
the security of Avista's facilities and storage locations would pose a significant risk in our
ability to maintain and operate our electric and gas infrastructure. For example, a few years
ago one of Avista's storage locations was broken into that had a forklift vandalized causing
damage to various equipment.The only way Avista was made aware of the intrusion during
the weekend was from the neighbors. While the neighborhood watch plays a role, it does
not promote confidence to our customers that Avista can maintain the security and
reliablilty of the infrastructure under our stewardship. Physical security enhancements,
such as gates, fencing, and access controls will aim to deter and delay a threat while
cameras, alarms, and motion detection systems will capture evidence to aid law
enforcement investigations.
1.2 Discuss the major drivers of the business case.
Performance &Capacity is the primary driverforthe Facilities and Storage Location Security
program business case as the projects it funds address security risks by protecting our
people, equipment, tools, and material that are critical to support our day-to-day
operations. Replacing an outdated access management system to deny access to
unauthorized people at five additional facilities will centralize access management for all of
Avista's facilities. Camera replacements and enhancements will be the next phase at these
facilities to provide visibility at each of these locations.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Addressing security risks in our office or storage facilities has been and will continue to be
an ongoing issue. We have had theft and vandalism incidents that have resulted in
equipment damage and tools and material theft. Also, in some of these smaller facilities,
once the crews are out for the day, there is a lone worker that is available to respond to
Business Case Justification Narrative Template Version: February 2023 Page 4 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 312 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
operational needs that arise throughout the day, such as responding to walk-in customers,
coordinating out of town contractor crews, or receiving deliveries.The office facilities must
provide adequate safety and security to the lone workers, especially in the winter season
when sunlight is limited during the workday. Additionally, Avista suffers from theft and
vandalism at various facilities and storage locations. In recent years, homeless have
vandalized our downtown location several times resulting in clean up fees of druguse
paraphernalia and prompting calls to the law enforcement to stop an altercation essentially
a glass window away from our employees. Deferring or not approving this investment
increases the likelihood of a security event that could impact our people, equipment,tools,
or materials that are critical to support operations.
1.4 Discuss how the proposed investment, whether project or program,
aligns with the strategic vision, goals, objectives, and mission statement of
the organization. See link. Avista Strategic Goals
The Facilities and Storage Location Security program business case provides funding for
security-related projects and aligns with Avista's strategic goal to "affordably operate and
maintain,safe, clean, reliable generation and energy delivery infrastructure."A focus under
this strategic goal is to mature Avista's physical security program and emergency response.'
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation, photographic
evidence, or other materials that explain the problem this business case will
resolve.
According to the Department of Homeland Security in 2022, Domestic Violence Extremists
(DVEs) adhering to a range of ideologies will likely continue to plot and encourage physical
attacks against electrical infrastructure. By extension, office facilities and storage locations
are also at risk, if delaying a response by damaging equipment, tools, or material is part of
a coordinated attack. Additionally, should an attack include any gas infrastructure, the
equipment, tools, and material must be readily available to aide the immediate response
as it presents a safety risk to the public. Therefore, the Cybersecurity & Infrastructure
Security Agency (CISA) and the Department of Energy (DoE) call for utilities to step up their
physical security posture and take mitigating steps that include physical protective security
measures to reduce or minimize the impact of an attack. The physical security
enhancement should include a risk based, layered approach that dissuades a potential
attacker through visible security measures.2
' Strategy Scorecard.Board of Directors Meeting.February 2023.
2 Sector Spotlight:Electricity Substation Physical Security(cisa.gov)
Business Case Justification Narrative Template Version: February 2023 Page 5 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 313 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
2. PROPOSAL AND RECOMMENDED SOLUTION - Describe the proposed solution
to the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The Facilities and Storage Location Security business case provides funding for cyber and
physical security enhancement projects, such as gates, fencing, and access control systems
that are aimed to deter and delay a threat while cameras, alarms, and motion detection
systems will capture evidence to aid law enforcement investigations. With over two dozen
office and storage facilities across Oregon, Idaho, and Washington, the recommended
solutions will vary by location based on the criticality of the location, the known threats or
history of vandalism activity to determine the level of risk-based layered physical security
response. At a minimum, all Avista facilities will have upgraded to a centralized access
control system at all perimeter doors and gates to manage authorized access. Brass keys
are not a solution for this, as they can be easily lost, stolen, or misused. Second, some
facilities require a video/intercom system with remote switch or pin pad to authorize gate
access for ad-hoc or recurring services, such as delivery of mail, parts, tools, material,
garbage pickup, occurring throughout the workday and off hours. Proper video surveillance
at specific facilities is necessary to keep eye on materials, tools, and equipment that has in
years past gone missing from unmanned locations.
2.2 Describe and provide reference to CIRRARR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other information
that was considered when preparing this business case (i.e., samples of
savings, benefits, or risk avoidance estimates; description of how benefits to
customers are being measured; metrics such as comparison of cost ($) to
benefit (value), or evidence of spend amount to anticipated return).3
The funding request is based on previous year funding levels, except for an acceleration of
replacing an end-of-life access management systems at five remaining office facilities.
Addressing these remaining locations will reduce a cybersecurity risk and daily operational
challenges in the first year, while layering physical security measures to subsequent
locations of highest risk. The estimates are based on historical values from previous access
management system conversion projects to date, as well as the cost of video surveillance
replacements in several locations. Continuous investment reduces the risk of unauthorized
access to our facilities and storage locations.The risk avoidance estimate can vary between
$5K to $50K in theft or damage to tools, material, equipment or fleet vehicles. There is no
cost estimated to replace the loss of life or inflicted trauma to any of our staff from a
physical injury due to an assault at one of our facilities.
3 Please do not attach any requested items to the business case, rather be sure to have ready access
to such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 314 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
2.3 Summarize in the table and describe below the DIRECT offsets4 or
savings (Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital N/A $0 $0 $0 $0 $0
0&M N/A $0 $0 $0 $0 $0
There are no direct offsets associated with investments in physical security enhancements
in facilities and storage locations. Doing nothing is not an option, as Avista staff safety and
the security of equipment, tools, and material is critical to operations.
2.4 Summarize in the table and describe below the INDIRECT offsets5
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Equipment,Tools, Material replacement $594,000 $594,000 $594,000 $594,000 $594,000
0&M Damage repairs $6,000 $6,000 $6,000 $6,000 $6,000
Indirect offsets include the cost avoidance from lost, stolen, or damage equipment, tools,
and material.Typical stolen material includes copper wire and tools right out of parked fleet
vehicles. In a recent event,the intruder started a forklift and drove it through a storage yard
fence,damaging the forklift and some material along the way. In a separate event, intruders
assumed that digging up cable would result in a windfall of copper. They instead what they
dug up and damaged was fiberoptic cable that provided communication signals from our
facility to our central office systems. The repair work to damaged assets and replacement
of equipment,tools, and material not only cost time and money, but it also makes the asset
unavailable for use when needed. Based on these examples, the estimated cost of each
event can range from $5K to $50K, depending on the theft or damage. Using these
estimates, the average cost of an incident is $27.5K each occurrence. With over two dozen
office and storage yard locations, assuming one incident per location, the cost per year is
approximately $660K in stolen or damaged equipment, tools, or material. Assuming the
asset is either stolen or deemed irreparable, the cost is capital to replace. However, the
cost of repairing cut fences, dug up ditches, and vandalized equipment is operation and
maintenance expense. Therefore, the assumption is 85% capital for replacements and 15%
in 0&M repairs.
4 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
5 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 315 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, that were considered, and why those alternatives did not provide
the same benefit as the chosen solution. Include those additional risks to
Avista that may occur if an alternative is selected.
The program business case contains both cyber and physical security projects that protect
our people, assets, and information from growing risks. The layered risk-based physical
security enhancements consider the most cost-effective solutions and alternatives to
address the risk at each location. The alternatives presented are listed in order of
addressing identified risk.
Option Capital Cost Start Complete
Alternative 1:Address centralized access management $2,000,000 012024 122028
replacement in 2024 only at office locations,then
proceed to other measures as funding is available
(Recommended)
Alternative 2:Address layered risk-based security $2,000,000 012024 062031
enhancements at office facilities and storage locations in
7 years, as appropriate
Alternative 3:Address layered risk-based security $2,200,000 012021 122033
enhancements at office facilities and storage locations in
10 years, as appropriate
Alternative 1: The recommended option includes accelerating the completion of a slow-
going effort to replace Avista's centralized access management system in office locations
by the end of 2024. This replacement is necessary to remove a legacy system that is at risk
of cybersecurity threats and causes daily operational challenges. The subsequent years will
continue physical security enhancements at both office and storage locations, as well as
camera and video surveillance system replacements based on lifecycle to deter, detect,and
delay physical security threats, as funding is available.
Alternative 2: This approach will also complete the replacement of Avista's centralized
access management system in office locations by the end of 2024. However, $400K of the
funds are needed in 2024, followed by the remaining $1.6M over the subsequent 6 years.
Continued investments in layered physical security enhancements at office and storage
locations will continue in subsequent years with the goal of completing them over the same
period.
Alternative 3: This option will also complete the replacement of Avista's centralized access
management system in office locations by the end of 2024. However, $400K of the funds
are needed in 2024, followed by the remaining $1.8M over the subsequent 9 years.
Continued investments in layered physical security enhancements at office and storage
Business Case Justification Narrative Template Version: February 2023 Page 8 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 316 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
locations will continue in subsequent years with the goal of completing them over the same
period.
Doing nothing is not an option or presented as an alternative, as called out by Avista's senior
leadership in the 2023 Strategic Goals, as well as identified as one of the highest risks in
Avista's recent Securities and Exchange Commission, 10-Qfiling'.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Physical security enhancements at office and storage locations are necessary to maintain
the identified high-risk locations safe, secure, and reliable. Metrics to demonstrate the
success of the investments under this program business case include averted physical
threats, reduction in problem location incidents, and keeping this equipment available and
reliable to aid in deterring, detecting, and delaying an intrusion. Avista tracks physical
security incidents and will monitor for a reduction in incidents, especially at historically high
risk and problem locations that have implemented physical security enhancements.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The Facilities and Storage Location Security business case is a program that consists of
multiple security projects per year that run concurrently, and at times over multiple years.
They follow all phases of the project lifecycle, facilitated by a project manager, and
governed by a steering committee to determine scope, schedule, and budget forecasts,
including transfers-to-plant.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
There are two levels of governance to the Generation, Substation, and Gas Location
program business case and the investments within it. They consist of a business case
governance team and project specific steering committees for in-flight projects.
Business Case Governance Team: The Enterprise Security Governance Team provides
monthly oversight of this program business case and makes recommendations based on
forecasted inactive planned investments, the pace of in-flight investments, and any new
6 SEC Filing I Avista Corporation
Business Case Justification Narrative Template Version: February 2023 Page 9 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 317 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
unplanned activity that surfaces from an emerging security threat. The team also tracks
business case risks and issues that can affect the portfolio of planned investments.
Monthly governance meetings consist of a full review of each in-flight investment, reasons
for any delays or deviation to proposed completion and transfers to plant schedules and
recommends necessary steps to bring the investments back into schedule or defer inactive
work, when possible, to offset delays. However, should a security risk be increased by
deferring a planned or unplanned investment into future years, the Enterprise Security
Governance Team will recommend a Capital Planning Group (CPG) In-Year Change Request
to surface the impending need. The Change Requests are presented at a monthly
Technology Planning Group meeting to inform the Director members who are also
members of the CPG where the request will be considered and weighed against other
pending requests.
The Enterprise Security Governance Team consists of Avista's Enterprise Security Director,
Cybersecurity Manager, Physical Security Manager, Security Delivery Manager, and the
Project Management Office Manager. The sessions are facilitated by the Security Program
Manager who manages the standing agenda.
Project Steering Committees: Additionally, each security investment is governed by a
project steering committee that consists of the Enterprise Security Director, Cybersecurity
Manager, Physical Security Manager, and Security Delivery Manager, as well as ancillary
management team members required for the successful implementation of the security
enhancement at the respective location. Steering committee meetings are facilitated by a
Project Manager and held monthly to review scope, schedule, budget, and risks and issues
surfaced from each in-flight project.
Business Case Justification Narrative Template Version: February 2023 Page 10 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 318 of 351

DocuSign Envelope ID: C0304779-1367-4DF5-BA8C-2EA427216AA1
Facilities and Storage Location Security
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Facilities and Storage Location
Security business case and agree with the approach it presents. Significant changes to this
will be coordinated with and approved by the undersigned or their designated
representatives.
DocuSigned by:
Signature: „ Date: '"n-12-2023 110:58 AM PDT
6 56C EEF402467_.
Print Name: n y Lelja
Title: Security Delivery Manager
Role: Business Case Owner
DocuSigned by:
Signature: Sfe Date: Jun-12-2023 111:28 AM PDT
Print Name: (flayF orey
Title: Security Director
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 11 of 11
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 319 of 351

DocuSign Envelope ID:0277B2B6-3D28-4D61-BBDO-97CBD7EAD6A8
Generation, Substation & Gas Location Security
EXECUTIVE SUMMARY
Generation, substation, and gas facilities are difficult to protect from physical threats, as they are
typically in remote, rural, and unmanned locations. This is a known risk to utilities across the
country. However, the risk has been growing over the past few years with an increase in attacks
to electric and gas infrastructure driven by domestic violent extremism and cyberattacks, as
reported by federal agencies.' Reported incidents at substations range from general observation
of suspicious activity to a direct and significant impact to the electric grid. In 2021, an oil pipeline
incident targeted by cybercriminals impacted pipeline operations and resulted in significant
challenges on dependent businesses on the east coast. Current security measures at critical
electric and gas locations across the country are not enough.
Security of Avista's generation, substation, and gas locations remains a concern. These locations
contain equipment that is critical to the delivery of gas and electricity safely and reliably to our
customers across our service territory. A security incident at any of these locations could deny,
degrade, or disrupt the delivery of energy. Therefore, Avista's senior leadership has called for an
immediate and suitable response to this growing risk. To respond accordingly, the proposed
investment is $13.3M over 5 years, with $10.8M in the first two years.
Avista has assessed the criticality of its electric and gas infrastructure and tiered them by risk to
apply physical security enhancements under this program business case. The risk-based layered
security enhancements consist of ballistic shielding, fencing, gates, doors, cameras, sensors, and
access management systems. They vary by location and intend to deter, detect, or delay a
potential attack and provide law enforcement with immediate measures to assess, interrupt
and/or apprehend an intruder. The recommended solutions include physical security
enhancements at all Tier 1, 2, and problem substation locations and selected generation facilities
over the next five years, addressing the most critical sites in the first two years. Doing only a
fraction of them or extending the schedule to the most critical locations does not reduce the
identified risk in the period called for by Avista's senior leadership.
As typical of physical or cyber security incidents, costs are estimated based on previous incidents
at other utilities or similar sized companies. For example, estimates of firearms attacks on
electrical infrastructure since March 2022, range from as little as$12K to over$3.5M per incident
at each location and can result in long lead times to replace damaged equipment.2 Based on the
number of incidents growing, it is wise to assume that Avista is not shielded from this risk without
taking appropriate security measures. Take-aways from previous incidents are the known
vulnerability of each asset, the cost and time to repair or replace the damage, and the hindsight
of known physical security enhancements that could have reduced the risk. Not funding the
recommended amount to address this eminent risk may increase the likelihood of not being
prepared for when a physical security incident happens at a critical Avista generation, substation,
or gas location.
Sector Spotlight:Electricity Substation Physical Security(cisa.gov)
(UHFOUO).U.S.Department of Homeland Security, Office of Intelligence and Analysis,April 2023.
Business Case Justification Narrative Template Version: February 2023 Page 1 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 320 of 351

DocuSign Envelope ID:0277B2B6-3D28-4D61-BBDO-97CBD7EAD6A8
Generation, Substation & Gas Location Security
VERSION HISTORY
Version Author Description Date
Draft Andru Miller Initial draft of original business case 7/02/2020
1 Andru Miller Updated 5-year funding request 8/09/2022
2 Andy Leija Updated 5-year funding request 5/5/2023
BCRT Jeff Smith Has been reviewed by BCRT and meets necessary requirements 5/30/2023
Business Case Justification Narrative Template Version: February 2023 Page 2 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1, Page 321 of 351

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Generation, Substation & Gas Location Security
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2024 $6,460,000 $6,000,000
2025 $4,290,000 $4,000,000
2026 $1,450,000 $1,200,000
2027 $635,000 $600,000
2028 $500,000 $500,000
Project Life Span 5 years
Requesting Organization/Department Security
Business Case Owner I Sponsor Andy Leija I Clay Storey
Sponsor Organization/Department Enterprise Technology
Phase Execution
Category Program
Driver Performance& Capacity
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.Ke6-
1.1 What is the current or potential problem that is being addressed?
Security remains a concern at Avista's generation, substation, and gas locations. These
locations contain equipment that is critical to the delivery of gas and electricity safely and
reliably to our customers. Many of these locations are remote, unmanned, and vulnerable,
which makes them difficult to protect. A cyber or physical security incident at any of these
locations could deny, degrade, or disrupt the delivery of energy. Although the probability
of an incident occurring at these locations is low, it has been steadily growing in possibility
and proximity.The impact or consequence at any of these locations would be high, directly
affecting our customers.
Criminal activity, such as vandalism, theft, and individual sabotage are no longer the only
threat. There is a rise in domestic violent extremist (DVE) agendas that plot and encourage
physical attacks against electrical and gas infrastructure. Federal officials report of an
increase in DVE activity based on a rise in online discussions about plans for attacking and
disrupting electrical and gas infrastructure, suspicious behavior that includes taking
Business Case Justification Narrative Template Version: February 2023 Page 3 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 322 of 351

DocuSign Envelope ID:0277B2B6-3D28-4D61-BBDO-97CBD7EAD6A8
Generation, Substation & Gas Location Security
photographs or video from unmanned flying devices, disruption of perimeter fencing and
video surveillance systems, and firearms attacks at specific electrical infrastructure.3
Recent firearms attacks on electrical utility infrastructure throughout the country, and
specifically in Western Oregon and Washington have heightened the urgency to increase
Avista's physical security measures specifically at electrical substation facilities.4
Furthermore, a recently released movie (Apr 7, 2023) titled, How to Blow Up a Pipeline
sensationalizes and socializes DVE ideology to a wider audience that can easily trigger
copycat behavior and inspire more criminal activity thereby increasing further threat to
both electrical and gas infrastructure.
In most cases, electrical and gas facilities have had little physical security investment over
the years outside of original perimeter fencing and locked gates, as the probability of a
security threat had been low. However, with the number of incidents growing over the past
few years, their proximity to our service territory, and the public's knowledge of the
inherent vulnerability of electric and gas infrastructure, initial physical security protections
are not enough and require further investment.
1.2 Discuss the major drivers of the business case.
Performance & Capacity is the primary driver for this program business case as the projects
it funds address security risks protecting Avista's generation, substation, and gas locations
that are critical to deliver energy to our customers. The security of our electric and natural
gas infrastructure is a significant priority at a national and regional level and is of critical
importance to Avista customers across our service territory. Keeping the systems at these
locations performing is critical to delivering electric and gas service to our customers.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Addressing security risks at Avista's generation, substation and gas locations has been and
will continue to be an ongoing issue. However, Avista takes a 'risk-based and layered
approach' to physical security investments as called out by the North American Electric
Reliability Corporation (NERC) in response to emerging physical security threats.' The risk-
based and layered approach consists of understanding the risk and criticality for each
location, followed by installing physical security measures that deter, detect, and deny an
intruder or attack. So, while Avista may operate and maintain twelve generation facilities,
over 180 substations, and many miles of distribution gas pipeline serving our customers,
the investments under this business case address only the most critical sites.
s Electric grid is'attractive target'for domestic violent extremists in US,intel brief says I CNN Politics
a 2 Charged in Attacks on Substations in Washington State-The New York Times(nytimes.com)
5 NERC Announces Actions Addressing Physical Security
Business Case Justification Narrative Template Version: February 2023 Page 4 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 323 of 351

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Generation, Substation & Gas Location Security
The current approved amount is not sufficient to adequately and immediately address the
identified critical sites to deter, detect, or delay an intruder or attack.This includes facilities
that generate high electric load or are used regularly to meet peak demand for essential
services. While the overall performance of each generation, substation, and gas location
will stay intact, physical security hardening measures, such as gates, fencing, and ballistic
shielding will aim to deter and delay a threat while cameras, alarms, and motion detection
systems will capture video surveillance evidence to aid investigations.
1.4 Discuss how the proposed investment, whether project or program,
aligns with the strategic vision, goals, objectives, and mission statement of
the organization. See link. Avista Strategic Goals
The Generation, Substation, and Gas Location Security program business case provides
funding for security-related projects and aligns with Avista's strategic goal to "affordably
operate and maintain, safe, clean, reliable generation and energy delivery infrastructure."
The focus under this strategic goal is to mature Avista's physical security program and
emergency response. In response to the emerging threats, Avista's senior leaders have
requested that this risk be mitigated adequately and immediately.'
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation, photographic
evidence, or other materials that explain the problem this business case will
resolve.
In 2022, four electric substations in Western Washington operated by Tacoma Public
Utilities (TPU) and Puget Sound Energy were vandalized causing an initial power loss to
more than 14,000 customers in the affected communities. Perpetrator(s) cut the chain link
fence and manipulated high side breakers, causing power outages. Combined, the damage
cost to two of the TPU substations (Elk Plain and Graham) was estimated at over$3 million
—as damaged transformers require replacement and a lengthy lead time to replace.'
Much like the government response following the Colonial Pipeline incident, where by
federal agencies issued urgent directives to mitigate the risk of subsequent attacks, the
Cybersecurity and Infrastructure Security Agency (CISA) and the Department of Energy
(DoE) have highlighted an increasing trend of physical attacks on electric substations and
customer impact to escalate awareness.' Avista is in alignment with what is described in
the federal agency sector highlights, which calls for utilities to take a risk-based and layered
approach to physical security enhancements that is tailored to each facility based on a
threat and vulnerability assessment conducted at each facility and ranked by criticality.
6 Our Goals 2023 -Perform(sharepoint.com)
2 Charged in Attacks on Substations in Washington State-The New York Times(nytimes.com)
a Sector Spotlight: Electricity Substation Physical Security(cisa.gov)
Business Case Justification Narrative Template Version: February 2023 Page 5 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 324 of 351

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Generation, Substation & Gas Location Security
2. PROPOSAL AND RECOMMENDED SOLUTION - Describe the proposed solution
to the business problem identified above and why this is the best and/or least cost alternative(e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
Any of Avista's infrastructure facilities are prone to a physical security threat. However, the
proposed investments that address the risks under this program business case assessed
each location and tiered them according to criticality from high to low.
Tier 1 Critical Asset—supports essential local, state, and national services.
Tier 2 Very Important Asset—outage impacts would be significant
Tier 3 Important Asset—outage impacts minimal to critical services and customers
(Higher customer impacts than Tier 4)
Tier 4 Important Asset—outage impacts minimal to critical services and customers
(Lower customer impacts)
Based on tier level rating for each substation, generation, and gas facility, appropriate
layered security enhancements are recommended for each location. In a few cases, a
company wide solution is required, such as replacing unsupported camera and access
management systems that while working, are prone to cyberthreats and suffer from
continued operational challenges. So, as physical security threats evolve, Avista's
investments under this program business case will also protect Avista's people, assets, and
information in generation, substation, and gas facilities.
The recommended solution accounts for physical security enhancements at generation and
substation locations that fall within Tier 1, 2, and Problem Substation Locations, and a
steady asset lifecycle camera and access system replacement in generation locations. All
Tier 1 and problem substation locations would be addressed in the first two years; followed
by Tier 2 locations addressed in four years and maintaining an asset lifecycle camera and
access system replacement for short lifecycle assets.
Investments under this program business case are risk based and therefore a layered
response is proposed for each location. Physical security enhancements consist of ballistic
shielding, fencing, gates, doors, cameras, sensors, and access management systems. The
proposed enhancements will vary by location but will implement new or replace
inadequate security measures to mitigate the increasing risk.
Tier and Location Type Layered Enhancement 2024 2025 2026 2027 2028
Tier 1 Substations Ballistic Screening x x
Perimeter detection/cameras x x
Business Case Justification Narrative Template Version: February 2023 Page 6 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 325 of 351

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Generation, Substation & Gas Location Security
Perimeter T-Wall and Gate x x
Asset Lifecyle Camera x
Replacement
Tier 2 Substations Ballistic Screening x x
Perimeter detection/cameras x x x x
Asset Lifecyle Camera x
Replacement
Problem Substation Perimeter detection/cameras x
Locations
Asset Lifecyle Camera x
Replacement
Selected Generation Perimeter detection/cameras x x x x x
Locations
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other information
that was considered when preparing this business case (i.e., samples of
savings, benefits, or risk avoidance estimates; description of how benefits to
customers are being measured; metrics such as comparison of cost ($) to
benefit (value), or evidence of spend amount to anticipated return).
Estimates of firearms attacks on electrical infrastructure since March 2022, range from as
little as $12K to over $3.5M per incident at each location.9 The investment under this
program business case is to respond to the growing threat in the next 2-4 years by
addressing critical and vulnerable infrastructure locations. Ongoing investment thereafter
is for physical security technology lifecycle replacements.
2.3 Summarize in the table and describe below the DIRECT offsets10 or
savings (Capital and OW) that result by undertaking this investment.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital N/A $0 $0 $0 $0 $0
O&M N/A $0 $0 $0 $0 $0
y(UHFOUO).U.S. Department of Homeland Security, Office of Intelligence and Analysis,April 2023.
10 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 326 of 351

DocuSign Envelope ID:0277B2B6-3D28-4D61-BBDO-97CBD7EAD6A8
Generation, Substation & Gas Location Security
There are no direct offsets associated with investments in physical security enhancements
in generation, substation, and gas locations. Doing nothing is not an option, especially as
attack incidents are growing.
2.4 Summarize in the table and describe below the INDIRECT offsets"
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Electric $316,800 $316,800 $316,800 $316,800 $316,800
Infrastructure
replacement
O&M Electric Minor $35,200 $35,200 $35,200 $35,200 $35,200
repairs
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Gas Infrastructure $35,000 $35,000 $35,000 $35,000 $35,000
replacement
O&M Gas Minor repairs $140,000 $140,000 $140,000 $140,000 $140,000
and relights
Indirect offsets are achieved through cost avoidance associated with a physical security
incident at a generation, substation, and gas location. Existing physical security investments
at generation, substation, and gas locations are minimal and while they may deter
vandalism or minor theft, it will not deter a more strategic DVE attack. Moreover, it will not
detect or provide forensics to investigate or prevent future attacks, as little to no physical
surveillance technology is currently in place.
An indirect offset cannot be estimated without assuming the avoidance of a physical
security incident at each type of generation, substation, and gas location. Using costs from
attacks at other electrical substation locations across the country,the average incident cost
is approximately $1.76M and can result in long lead times to replace damaged equipment.
Assuming one incident over 5 years, with a 90% capital and 10%expense costs,the indirect
offset would be $1.58M in capital and $176K in operation and maintenance, respectively.
Reported pipeline incidents at gas locations do not distinguish the cause of the incident. On
average,three incidents were reported in the last 5 years in gas distribution systems across
Idaho, Oregon, and Washington. During the same 5-year period, the average cost for those
11 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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incidents was $876k, as reported to the U.S. Department of Transportation, Pipeline and
Hazardous Materials Safety Administration for all pipelines.12
Extrapolating estimated average costs for one event at a gas location over 5 years, assuming
20%capital cost associated with infrastructure replacement and 80%associated with minor
repairs and relights, the cost would be $175K in capital and $700k in operation and
maintenance, respectively.
No data is available to estimate the cost of a physical security incident at a generation
location. However, depending on its location and damage, the cost could exceed that of a
substation or gas location incident, including the cost associated with the period it is offline
not generating power or revenue.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, which were considered, and why those alternatives did not provide
the same benefit as the chosen solution. Include those additional risks to
Avista that may occur if an alternative is selected.
The program business case contains many cyber and physical security projects that protect
our people, assets, and information from growing risks. The risk-based layered physical
security enhancements consider the most cost-effective solutions and alternatives to
address the risk at each location. The alternatives presented are listed in order of
addressing identified risk.
Options Capital Cost Start Complete
Alternative 1: Physical security enhancements at Tier $13,335,000 012024 122028
1, 2 and Problem Substation locations and selected
Generation locations, including asset lifecycle camera
replacement (Recommended)
Alternative 2: Physical security enhancements at Tier $12,985,000 012024 122028
1 and 2 Substations and selected Generation
locations only, including asset lifecycle camera
replacement
Alternative 3: Physical security enhancements at $10,200,000 012024 122028
'Tier 1' Substations and selected Generation
locations only, including asset lifecycle camera
replacement
Alternative 1: The recommended solution is where all Tier 1, 2 and problem substation
locations and selected generation locations are addressed in the first four years to
12 Pipeline Incident 20 Year Trends I PHMSA(dot.gov).Oracle BI Interactive Dashboards-SC Incident Trend
dot. ov
Business Case Justification Narrative Template Version: February 2023 Page 9 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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respond to the eminent risk and asset lifecycle camera replacements. Estimates include
ballistic screening, perimeter detection and camera systems, and perimeter walls with
fortified gates at identified locations.
Alternative 2:The second alternative includes physical security enhancements at Tier 1 and
2 substations, selected generation locations, and asset lifecycle camera replacement only,
leaving out problem substation locations. The handful of problem locations are in areas
with higher crime reports and a history of incidents. Not addressing these sites will continue
ad-hoc incidents that cause system outages, vandalism, theft, and can present a safety risk
to intruders or emergency responders.
Alternative 3:The third alternative reduces the scope by leaving out Tier 2 substations and
problem locations and focusing only on Tier 1 substation locations, selected generation
locations, and asset lifecycle camera replacements only. Risk assessments have identified
Tier 2 substations,selected generation locations,and problem sites as also at risk of physical
security threats based on their criticality to generate and deliver energy to our customers.
Not addressing the subsequent tier of substations and known problem locations limits
Avista and law enforcement's ability to address the growing threat by not having video
surveillance evidence to identify intruders and their tactics to mitigate future attacks.
Doing nothing is not an option or presented as an alternative,as called out by Avista's senior
leadership in the 2023 Strategic Goals, as well as identified as one of the highest risks in
Avista's recent Securities and Exchange Commission, 10-Qfiling."
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Physical security enhancements at generation, substation, and gas locations are necessary
to maintain the identified high-risk locations safe, secure, and reliable. Metrics to
demonstrate the success of the investments under this program business case include
averted physical threats, reduction in problem location incidents, and keeping this
equipment available and reliable to aid in deterring, detecting, and delaying an intrusion.
Avista tracks physical security incidents and will monitor for a reduction in incidents,
especially at historically high risk and problem locations that have implemented physical
security enhancements.
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
The Generation, Substation, and Gas Location Security business case is a program that
consists of multiple security projects per year that run concurrently, and at times over
13 SEC Filml Avista Corporation
Business Case Justification Narrative Template Version: February 2023 Page 10 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 329 of 351

DocuSign Envelope ID:0277B2B6-3D28-4D61-BBDO-97CBD7EAD6A8
Generation, Substation & Gas Location Security
multiple years. They follow all phases of the project lifecycle, facilitated by a project
manager, and governed by a steering committee to determine scope, schedule, and budget
forecasts, including transfers-to-plant.
2.8 Please identify and describe the Steering Committee/governance team
responsible for the initial and ongoing approval and oversight of the business
case and how such oversight will occur.
There are two levels of governance to the Generation, Substation, and Gas Location
program business case and the investments within it. They consist of a business case
governance team and project specific steering committees for in-flight projects.
Business Case Governance Team: The Enterprise Security Governance Team provides
monthly oversight of this program business case and makes recommendations based on
forecasted inactive planned investments, the pace of in-flight investments, and any new
unplanned activity that surfaces from an emerging security threat. The team also tracks
business case risks and issues that can affect the portfolio of planned investments.
Monthly governance meetings consist of a full review of each in-flight investment, reasons
for any delays or deviation to proposed completion and transfers to plant schedules and
recommends necessary steps to bring the investments back into schedule or defer inactive
work, when possible, to offset delays. However, should a security risk be increased by
deferring a planned or unplanned investment into future years, the Enterprise Security
Governance Team will recommend a Capital Planning Group (CPG) In-Year Change Request
to surface the impending need. The Change Requests are presented at a monthly
Technology Planning Group meeting to inform the Director members who are also
members of the CPG where the request will be considered and weighed against other
pending requests.
The Enterprise Security Governance Team consists of Avista's Enterprise Security Director,
Cybersecurity Manager, Physical Security Manager, Security Delivery Manager, and the
Project Management Office Manager. The sessions are facilitated by the Security Program
Manager who manages the standing agenda.
Project Steering Committees: Additionally, each security investment is governed by a
project steering committee that consists of the Enterprise Security Director, Cybersecurity
Manager, Physical Security Manager, and Security Delivery Manager, as well as ancillary
management team members required for the successful implementation of the security
enhancement at the respective location. Steering committee meetings are facilitated by a
Project Manager and held monthly to review scope, schedule, budget, and risks and issues
surfaced from each in-flight project.
Business Case Justification Narrative Template Version: February 2023 Page 11 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 330 of 351

DocuSign Envelope ID:0277B2B6-3D28-4D61-BBDO-97CBD7EAD6A8
Generation, Substation & Gas Location Security
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Generation, Substation & Gas
Location Security business case and agree with the approach it presents. Significant changes
to this will be coordinated with and approved by the undersigned or their designated
representatives.
DocuSigned by:
Signature: „ Date: "'-12-2023 1 10:s7 AM PDT
Print Name: Andy FL'elja
Title: Security Delivery Manager
Role: Business Case Owner
DocuSigned by:
Signature: st6q, Date: 3un-12-2023 I 11:29 AM PDT
Print Name: ay FSforey
Title: Security Director
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 12 of 12
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 331 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
EXECUTIVE SUMMARY
Avista's current Identity and Access Governance (IAG) program is highly manual,time consuming,
cumbersome, and prone to human error. This has led to consistent failures of related controls
around access to systems or facilities for individuals who have either changed roles in the
Company or left the Company and should no longer have previous role access.The external audit
scrutiny over the continued failures of these controls has also increased. The recommended
solution will implement an IAG program that includes a technical solution while revising and
improving processes for validating, auditing, and reporting system privileges for individuals
across the company.
The initial cost of the solution included software licenses, integration with Avista's Sarbanes-
Oxley (SOX) applications, and certification of individuals requiring access to them.
Implementation was estimated at $1.1M in the first two years, followed by continuous
investment of$195K per year, except in the case of license subscription renewals every third year
when the investment will go up to $350K.The IAG program will create role-based profiles, define
system privileges, automate access management, and facilitate regular user access review and
validation. Continuous investment is required to integrate all company systems and validate
system access and privileges. The risks avoided by implementing this solution are allowing over-
permissive accounts that can result in a data breach and penalties from noncompliance. The cost
of a physical or cyber-attack can average $1.76M or $12.9M, respectively. Noncompliance
penalties can average $40-60K per finding per day. The avoided indirect costs associated with
either a physical or cyber-attack, or avoided penalties is a significant benefit to Avista and our
customers. Not approving funding for this program will continue the challenge of controlling
identity and access to maintain compliance and the over-permissive risk.
Additionally, the growing threat landscape preys on over-permissive access. According to a
recent IBM Security Report, the most common attack vector in 2022 was stolen or compromised
credentials.' This solution will benefit Avista and its customers by adhering to the security
principle of 'least privilege,' whereby individuals are limited only to information and resources
necessary to perform their current and intended job functions. It also reduces the risk associated
with individuals having broad access to systems or to facilities their roles no longer require.
Security threats continue to become more sophisticated, such as ransomware attacks, which can
force system outages, financial losses, ransomware payments, and reactive investments.
The alternative to further implementing an IAG program, is to only onboard some applications
onto the new system and continue to perform the rest manually.This approach increases human
error due to the continuous permission changes required by employees newly hired or
transitioning to other job functions. As stewards of critical infrastructure and customer data,
appropriate permission levels are a requirement to protect our people, assets, and information.
' Cost of a Data Breach Full Report 2022-IBM.pdf
Business Case Justification Narrative Template Version: February 2023 Page 1 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 332 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
VERSION HISTORY
Version Author Description Date
1.0 Andy Leija Initial draft of original business case 71612021
2.0 Andru Miller Updated 5-year funding request 8/09/2022
3.0 Andy Leija Updated 5-year funding request 5/18/2023
rBCRT Jeff Smith Has been reviewed by BCRT and meets necessary requirements 513012023
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2024 $195,122 $195,122
2025 $658,284 $658,284
2026 $195,122 $195,122
2027 $350,000 $350,000
2028 $350,000 $350,000
Project Life Span 5 years
Requesting Organization/Department C09/Enterprise Security
Business Case Owner Sponsor Andy Leija Clay Storey
Sponsor Organization/Department Enterprise Security/Accounting
Phase Execution
Category Program
Driver Mandatory& Compliance
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
1. BUSINESS PROBLEM - THIS SECTION MUST PROVIDE THE
OVERALL BUSINESS CASE INFORMATION CONVEYING THE
BENEFIT TO THE CUSTOMER, WHAT THE PROJECT WILL DO
AND CURRENT PROBLEM STATEMENT.
1.1 What is the current or potential problem that is being addressed?
Avista's existing Identity and Access Governance (IAG) program is highly manual, time
consuming, cumbersome, and prone to human error. This has led to consistent failures of
related controls around access to systems or facilities for individuals who have either
changed roles in the Company or left the Company and should no longer have previous role
Business Case Justification Narrative Template Version: February 2023 Page 2 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 333 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
access. Generally, when an employee leaves the Company, their account is inactivated and
thus all their systems and facilities access is removed. However, when an employee moves
into a different job role within the Company, their previous access can remain for a period
as the open position is being backfilled. This period is unknow, as no user access reviews
are conducted for systems outside of those needing to meet compliance requirements.
Additionally, cyber threats continue to grow and center on breeching compromised
credentials to gain access to internal network with over-permissive accounts, the external
audit scrutiny over the continued failures of these controls has also increased.
1.2 Discuss the major drivers of the business case.
Mandatory&Compliance is the main driver behind the IAG program in response to meeting
Sarbanes-Oxley (SOX) compliance requirements. It ensures that Avista has the internal
controls to limit access to individuals only to information and resources necessary to
perform their current and intended job functions. After the initial phase of meeting SOX
compliance, additional integrations will fall under the Customer Service Quality and
Reliability investment driver. Avista and its customers benefit from continued investment
in this solution that reduces the risk of broad system access, adhering to the security
principle of'least privilege' and segregation of duties. The investment will allow for review
and validation of appropriate system permissions, which in turn will improve the reliability
of delivering electricity and gas to our customers.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Maturing Avista's IAG program requires further investment in an Identity and Access
Management (IAM) solution to manage access and permissions to hundreds of applications
and systems required to deliver gas and electric service safely and reliably. Phase one of the
IAG program included the initial implementation of an IAM platform and the integrations
to meet SOX compliance requirements. For the IAG program to mature, continued
integrations of other applications and systems are necessary to reduce the risk that comes
with an increase in cybersecurity breaches that are due to compromised credentials with
over-permissions.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives, and mission statement of the
organization. See link. Avista Strategic Goals
Investment in the Company's IAG program aligns with Avista's customer-centric vision by
reducing the Company's risk exposure, strengthening security, improving compliance and
audit performance, and delivering fast and efficient access to all business users.
Business Case Justification Narrative Template Version: February 2023 Page 3 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 334 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
Maintaining a culture of compliance and strong security posture allows our employees to
focus on delivering value to our customers and the communities we serve.
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.2
As mentioned in other security business case justification narratives, cybersecurity threats
are growing in numbers and complexity and utilities are especially vulnerable. For example,
the U.S. Intelligence Community Annual Threat Assessment (2023) highlights that "China
almost certainly is capable of launching cyber-attacks that could disrupt critical
infrastructure services with the United States, including against oil, and gas pipelines..."3
The effects of cyberattacks on critical infrastructure, which consists of aging operational
technology can have costly and physical consequences, such as shutdowns, outages,
leakages, and explosions.'The expansive and geographical nature of utilities' attack surface
increases its vulnerability, as well as its interdependence between physical and cyber
infrastructure protections.5
There are various attack vectors that attackers leverage more than others. According to
IBM Security Cost of a Data Breach Report 2022, "The most common data breach attack
vector in 2022 was stolen or compromised credentials...[and had] the longest mean time to
identify and contain..."' Regardless of how an employee's credentials are acquired by a
threat actor, the risk exposure is greater when those employee's credentials have broad
permissions to various applications and systems across the organization. Therefore,
managing identity and access for all our staff is as critical as providing them keys to only
what they require to perform their job.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
Automating the existing identity and access provisioning business process is critical to
meeting compliance requirements and securing the Company's systems. The solution
2 Please do not attach any requested items to the business case, be sure to have ready access to
such information upon request.
s ATA-2023-Unclassified-Report.12df(odni.gov)
a Enhancing Operational Technology(OT)cybersecurity I McKinsey
s The energy sector threat:How to address cybersecurity vulnerabilities I McKinsey
6 Cost of a Data Breach Full Report 2022 -IBM.pdf
Business Case Justification Narrative Template Version: February 2023 Page 4 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 335 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
requires a centralized tool for provisioning user accounts to Company systems, as well as
revising and introducing new processes for identified efficiencies. This may include pre-
approved role base profiles, automated workflows, email notifications/alerting, and regular
privilege verifications by system owners. This will ensure that user identities and system
access is always current to minimize risk.
The current highly manual identity and access provisioning business process consists of 2-3
staff, lacks a centralized system, is bogged down with approval delays, and cannot scale to
meet compliance requirements or enhanced business practices requiring account
provisioning and access changes on various fronts (e.g., rapid growth system light apps,cloud
computing, etc.) Leveraging a single platform for all account and system provisioning will
result in huge efficiencies and leverage system automation capabilities for auto-provisioning
pre-approved roles.This means that the cost over time will continue to drop to a point where
the program investment will only support license renewals and system enhancements and
improvements.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).'
There are various data points that were considered in preparing this capital investment
request. However,the primary driver for the request is to invest in a technology solution that
reduces the Company's risk exposure, strengthens security, improves compliance and audit
performance, and delivers fast and efficient access to business users who require it to
perform their job function.
So, while the initial implementation addressed SOX compliance requirements, the major
benefit to Avista and its customers is avoiding the risk of a data breach due to stolen or
compromised credentials with over-permissive access. As mentioned in other security and
business continuity business cases, the cost of a data breach and associated downtime can
be costly and significantly impactful. Therefore, taking the average cost estimate for a data
breach of $12.9M and the average number of days (19) of downtime multiplied by the
average cost of$2,955 per minute,the total cost can reach nearly$93.7M.This would be the
risk avoidance cost associated with continuous investment in maturing an IAG program.
Please do not attach any requested items to the business case, be sure to have ready access to
such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 5 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 336 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
The solution allows for automation and user access verification that reduces the risk of over-
permissive access. So, while the consequence of a data breach is high due to over permissive
access, the ability to verify user access on a regular basis will decrease the impact of a data
breach to only the systems to which the compromised account was allowed to access.
2.3 Summarize in the table and describe below the DIRECT offsets$ or
savings (Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Not Applicable $0 $0 $0 $0 $0
00 Not Applicable $0 $0 $0 $0 $0
There are no direct offsets associated with risk-based investment in an identity and access
solution. It is a prudent decision to invest in a centralized solution that can automate
approvals and audit access to bring confidence that staff have the right level of permissions
to perform their job functions and nothing more. With the number of cybersecurity
incidents growing, there is no better way to prevent an attack than with investment in a
centralized solution that tracks the right level of access. So, while efficiencies will result
from automating and centralizing the existing manual process, any labor savings are offset
by new subscription fees associated with the new platform.
2.4 Summarize in the table and describe below the INDIRECT offsets9
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Security Solutions $104,000 $104,000 $104,000 $104,000 $104,000
0&M Data Breach Cost Estimates $936,000 $936,000 $936,000 $936,000 $936,000
Using a data breach cost estimates for a PH (Personal Identity Information) and/or a PCI
(Payment Card Industry) data breach, the indirect offsets range from $5.2M to $20.7M per
incident or on average $12.9M. Additionally, the costs associated with incident response,
customer notification, crisis management, regulatory fines and penalties, and class action
lawsuits are mostly operational expense costs. There is an assumption that the
vulnerabilities or gaps identified during the incident will require immediate investment in
recovery solutions to mitigate the existing and/or future events.
8 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance due
to new equipment, or other.
9 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 337 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
The potential indirect offsets are 90% operation and maintenance and 10% capital using
the lowest cost of a data breach with only PII data and no class action lawsuit. However,
they can be significantly higher, such as$18.63M in operation and maintenance and $2.1M
in capital, respectively, should the incident be on the high end. Also, not knowing when or
how often a data breach would occur, the conservative estimate with the assumption that
the incident only happened once, amortized over 5 years, the cost would be $936k in
operation and maintenance and $1O4k in capital, respectively. The indirect benefit or
reduction of risk is mostly in operation and maintenance costs associated with recovering
from a data breach incident. The reason that this risk still stands is because while the
solution is being implemented, there is very little visibility to the permission levels of each
employee and therefore the risk exposure is not reduced or changed until after further
implementation occurs.
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, which were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
The requested funding level allows for further maturity of the IAG program and specifically,
the IAM platform. Enhancement projects will continue to integrate the rest of Avista's
applications to automate pre-approved provisioning of staff accounts based on role-based
access profiles. The alternatives presented below offer a steady implementation over the
next 5, 7, or 10 years, with ongoing license subscription renewals every three years. This
program automates an existing manual business process. The longer the implementation
period, the longer the existing manual process will continue, which is highly manual, time
consuming, cumbersome, and prone to human error.
Option Capital Cost Start Complete
Alternative 1: Continue IAG Program Implementation beyond SOX $1.75M 012024 122028
systems over 5 years(Recommended)
Alternative 2:Continue IAG Program Implementation beyond SOX $2.76M 012024 122030
systems over 7 years
Alternative 3:Continue IAG Program Implementation beyond SOX $4.4M 012024 122034
systems over 10 years
Alternative 1: This approach is recommended to reduce the period that staff will need to
use two separate processes for provisioning account access to hundreds of applications and
systems.The 5-year implementation period includes a license subscription renewal in 2025.
However, the remaining allocation is mostly labor associated with integration of the rest of
Avista's applications and systems to the IAM platform.
Alternative 2: This approach adds two years to the implementation of the IAM solution to
all Avista's existing applications and systems. This option will extend the period whereby
Business Case Justification Narrative Template Version: February 2023 Page 7 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 338 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
staff will need to use two separate processes for provisioning account access, which can
lead to more human error. The 7-year period of implementation includes two license
subscription renewals: one in 2025 and the next one in 2028. The remaining allocation is
labor associated with integration of the rest of Avista's applications and systems to the IAM
platform.
Alternative 3: This final approach doubles the implementation period from the
recommended alternative. It is the least favorable option, as it extends implementation the
longest and results in staff needing to use two separate processes for provisioning account
access, which can lead to more human error. This option includes four license subscription
renewals (2025, 2028, 2031, 2034) over the 10-year implementation period.The remaining
allocation is labor associated with integration of the rest of Avista's applications and
systems to the IAM platform.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will
success be measured).
Simple measures that can be used to determine the investment successfully delivered on
the desired objectives will include: 1) a semi-annual review and certification of Avista's SOX
applications and appropriate user permission levels; 2) annual validation and reporting in
preparation for external audit requirements; and 3) semi-annual review and certification of
additional applications onboarded onto system.
2.7 Please provide the timeline of when this work is scheduled to commence
and complete, if known.
Avista's IAG program began in 2022 and implemented the IAM platform, integrating SOX
applications, to meet compliance requirements. Following the initial implementation, all
other Company systems will begin their journey onto the new platform. The solution
became used and useful in 2023 when the platform went live. However, each new system
that is integrated onto the platform will become used and useful at the time each is 'go-
live' certified. This means that full implementation will have multiple transfers to plant
dates as more systems come online over the course of the program maturity.
2.8 Please identify and describe the Steering Committee/governance team
that are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 339 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
There are two levels of governance to the Identity and Access Governance business case
and the investments within it.They consist of a business case governance team and project
specific steering committees for in-flight projects.
Business Case Governance Team: The Enterprise Security Governance Team provides
monthly oversight of this program business case and makes recommendations based on
forecasted inactive planned investments, the pace of in-flight investments, and any new
unplanned activity that surfaces from an emerging security threat. The team also tracks
business case risks and issues that can affect the portfolio of planned investments.
Monthly governance meetings consist of a full review of each in-flight investment, reasons
for any delays or deviation to proposed completion and transfers to plant schedules and
recommends necessary steps to bring the investments back into schedule or defer inactive
work, when possible, to offset delays. However, should a security risk be increased by
deferring a planned or unplanned investment into future years, the Enterprise Security
Governance Team will recommend a Capital Planning Group (CPG) In-Year Change Request
to surface the impending need. The Change Requests are presented at a monthly
Technology Planning Group meeting to inform the Director members who are also
members of the CPG where the request will be considered and weighed against other
pending requests.
The Enterprise Security Governance Team consists of Avista's Enterprise Security Director,
Cybersecurity Manager, Physical Security Manager, Security Delivery Manager, and the
Project Management Office Manager. The sessions are facilitated by the Security Program
Manager who manages the standing agenda.
Project Steering Committees: Additionally, each security investment is governed by a
project steering committee that consists of the Enterprise Security Director, Cybersecurity
Manager, and Security Delivery Manager, as well as ancillary management team members
required for the successful implementation of the security solution. Steering committee
meetings are facilitated by a Project Manager and held monthly to review scope, schedule,
budget, and risks and issues surfaced from each in-flight project.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Identity and Access Governance
business case and agree with the approach it presents. Significant changes to this will be
coordinated with and approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: �► Date: Jun-12-2023 1 10:57 AM PDT
6456C8EEF402467...
Print Name: Andy Leija
Business Case Justification Narrative Template Version: February 2023 Page 9 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 340 of 351

DocuSign Envelope ID:7B5DA3F2-6A3B-4DD4-BE31-54DF5168D2DB
Identity and Access Governance (IAG) Program
Title: Security Delivery Manager
Role: Business Case Owner
DocuSigned by:
Signature: Sfb Date: Jun-12-2023 111:29 AM PDT
870F95F7961
Print Name: Clay Storey
Title: Director of Security
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 10 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 341 of 351

DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
Security Compliance
EXECUTIVE SUMMARY
Avista, as a regulated utility, is required to meet many different security compliance
requirements. These security requirements evolve to address emerging threats across the utility
industry. Physical and cyber security threats have increased over the past few years from
Domestic Violence Extremists (DVEs) and nation states, such as China, respectively. Therefore,
various federal agencies have called for utilities to invest in stronger security requirements in
both physical and cyber protections.
Depending on the issued security compliance requirements, Avista will consider in and out of
scope requirements and propose risk-based alternatives that meet the requirement and address
the security risk. Investment costs can vary based on the scope of the compliance requirement.
The costs have ranged from $100-$500K. Investments under this business case will fund new
physical and cyber security improvements to achieve and maintain North American Electric
Reliability Corporation Critical Infrastructure Protection (NERC CIP), Western Electricity
Coordinating Council (WECC), Transportation Security Administration (TSA), Payment Card
Industry (PCI), Federal Energy Regulatory Commission (FERC), Sarbanes-Oxley (SOX), and other
emerging security compliance-driven requirements.
Being compliant with industry standards and government agency directives benefits customers
by reducing the risk of electric and gas service interruptions associated with physical or cyber-
attacks, as well as any assessed penalties associated with noncompliance. The cost of a physical
or cyber-attack, can average$1.761VI or$12.91VI, respectively, while noncompliance penalties can
average $40-60K per finding per day.The avoided indirect costs associated with either a physical
or cyber-attack, or avoided penalties is a significant benefit to Avista and our customers.
While not being able to estimate the exact cost associated with a forthcoming or unissued
compliance standard or directive, it is prudent and necessary to keep a business case available to
capture costs associated with meeting new security compliance requirements as they become
available. Once a new requirement is implemented, subsequent improvements to maintain
compliance will fall under other security business cases. Not being compliant and accepting fines
is not considered a viable alternative, as it puts Avista's cyber and physical security posture at
risk and increases costs due to penalties.The recommended solution is to implement or enhance
the systems or controls necessary to achieve compliance.
VERSION HISTORY
Version Author Description Date
Draft Andru Miller Initial draft of original business case 6/29/2020
Updated Andru Miller Reduction of funds request in 2021 8/28/2020
Updated Andru Miller Changed focus from NERC to all industry compliance standards 6/30/2021
1 Andru Miller Updated 5-year funding request 8/09/2022
2 Andy Leija Updated 5-year funding request 5/12/2023
Business Case Justification Narrative Template Version: February 2023 Page 1 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 342 of 351

DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
Security Compliance
BCRT Jeff Smith Has been reviewed by BCRT and meets necessary requirements 5/30/2023
GENERAL INFORMATION
YEAR PLANNED SPEND AMOUNT PLANNED TRANSFER TO
($) PLANT ($)
2024 $100,000 $100,000
2025 $100,000 $100,000
2026 $100,000 $100,000
2027 $100,000 $100,000
2028 $100,000 $100,000
Project Life Span 5 years
Requesting Organization/Department C09/ Enterprise Security
Business Case Owner I Sponsor Andy Leija Clay Storey
Sponsor Organization/Department Enterprise Technology
Phase Planning
Category Program
Driver Mandatory& Compliance
Definitions for the Category and Driver can be found on the Business Case Review Team Team's site see link.
Investment Drivers
Business Case Justification Narrative Template Version: February 2023 Page 2 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 343 of 351

DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
Security Compliance
1. BUSINESS PROBLEM - This section must provide the overall business case information
conveying the benefit to the customer, what the project will do and current problem statement.
1.1 What is the current or potential problem that is being addressed?
In the battle against cyber and physical threats, government agencies and industry
regulators issue security requirements to gas and electric utilities to increase protections.
These new requirements typically follow best practice improvements, or an incident that
calls for stronger measures. In the case of industry regulators, such as NERC CIP, there is a
formal process to either revise or introduce a new requirement, giving utilities time to
assess the impact of the new guidance, including the cost and operational overhead
associated with meeting it. However, in a more recent example, following the Colonial
Pipeline incident, TSA issued security directives to pipeline owners and operators for
immediate implementation as a matter of national security.' Therefore, compliance
requirements can be issues proactively or reactively by regulatory agencies. For proactive
requirements, Avista's NERC CIP Compliance team stays engaged with industry partners to
prepare and plan for forthcoming requirements and their anticipated costs to implement.
Reactive requirements are not as easily foreseen.
Regardless of what drives the new security compliance requirements, Avista is expected to
comply. However, because there is little coordination among the various organizations that
oversee the security of critical electric and gas infrastructure, security compliance
requirements can at times have overlapping components. Therefore, Avista assesses all
newly issued security compliance requirements before adopting them as a matter of
prudency.Assessments include a review of the scope of the requirement,the potential cost
associated with the available solutions, a peer check with industry partners on how they
are approaching the new requirement, and by participating in Question-and-Answer
sessions with those issuing the new requirements to get a better understanding and intent.
So, while meeting these new standards is required, Avista must audit what existing
compliance requirements are already in place before adopting new ones.
New security compliance requirements typically call for stronger protection postures to
deny, deter, detect, or delay a physical or cyber threat, as well for resiliency measures to
recover from an incident. The protection and resiliency measures can include investment
in new security systems, redesigning or enhancement of existing systems, or process
changes. After formal adoption, the new requirements are audited by the issuing agency
for compliance or validated by a third-party organization, such as in the case of PCI and SOX.
Through the audit process, Avista learns the expectations of the compliance issuing
authority and will revise our approach to maintain compliance.
'feline Cybersecurity Protecting Critical Infrastructure I Transportation Security Administration(tsa.gov)
Business Case Justification Narrative Template Version: February 2023 Page 3 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 344 of 351

DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
Security Compliance
1.2 Discuss the major drivers of the business case.
Mandatory & Compliance is the primary driver for the Security Compliance business case
to meet the new demands of the compliance issuing authority. However, once a new
compliance requirement is implemented, subsequent improvements to maintain
compliance would fall under other security business cases with a Performance & Capacity
driver. Performance and capacity measurements are determined by Avista's ability to meet
compliance requirements assessed regularly by Avista's compliance team and through
regulator audits. The security of our electric and natural gas infrastructure is a significant
priority at a national and regional level and is of critical importance to Avista customers
across our service territory.
1.3 Identify why this work is needed now and what risks there are if not
approved or if deferred or risks being mitigated by the request.
Meeting newly issued compliance standards for physical and cyber security are an absolute
necessity and will be for the near future in response to emerging threats. Avista must
maintain the Security Compliance business case funded at a modest level to respond to
immediate and emerging requirements. For example,a recent TSA issued security directive,
consisting of sixteen pages, and over forty new security compliance requirements called for
immediate (within 7 days) and long term (within 180 days) action. The call for immediate
action required that an active funding source be available to rapidly respond.
1.4 Discuss how the proposed investment, whether project or program, aligns
with the strategic vision, goals, objectives, and mission statement of the
organization. See link. Avista Strategic Goals
The Security Compliance business case provides funding for security-related projects to
meet newly issued compliance requirements and aligns with Avista's strategic goal to
"affordably operate and maintain, safe, clean, reliable generation and energy delivery
infrastructure."
1.5 Supplemental Information — please describe and summarize the key
findings from any relevant studies, analyses, documentation,
photographic evidence, or other materials that explain the problem this
business case will resolve.2
Physical and cyber security incidents continue to grow and impact critical infrastructure,
such as electric and gas utilities. Evolving security measures are necessary to meet the
2 Please do not attach any requested items to the business case, be sure to have ready access to
such information upon request.
Business Case Justification Narrative Template Version: February 2023 Page 4 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 345 of 351

DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
Security Compliance
threat. Therefore, compliance issuing authorities, such as federal agencies or industry
regulators, implore utilities to comply or face hefty fines, as non-compliance can be a
matter of national security.
The Enron-Anderson Consulting Scandal introduced the Sarbanes-Oxley (SOX) Act in 2002,
imposing severe penalties for destroying, altering, or fabricating financial records.3 Annual
SOX audits verify and validate Avista's internal controls, which include security
requirements to manage system permissions. In 2010, the Stuxnet virus, which targeted
Supervisory Control and Data Acquisition (SCADA) systems and Programmable Logic
Controllers (PLCs) via an infected USB flash drive quickly resulted in updates to network
security requirements under NERC CIP.4 To meet the new requirements, Avista invested in
new security systems and redesigned existing systems. Following the 2013 attack on the
Metcalf transmission substation in California, NERC CIP introduced physical security
requirements. This new requirement resulted in enhanced physical security measures at
specific Avista facilities, as called for by the new requirement. More recently,the May 2021
Colonial Pipeline ransomware attack, which resulted in a shutdown of the gas pipeline for
over a week, immediately resulted in TSA issuing security directives for selective pipeline
owners and operators.5 The directives
Additionally, in a recently released report, NERC calls for cyber-informed transmission
planning in response to "the rapidly evolving threat landscape is characterized by
increasingly sophisticated cyber-attacks..." Additionally, the report highlights the need for
Security Integration, which is "to incorporate cyber and physical security aspects into
conventional system planning, design, and operations engineering practices.116 While this
is currently only published in a NERC white paper, it is an example of what may become
future security compliance requirements.
2. PROPOSAL AND RECOMMENDED SOLUTION -Describe the proposed solution to
the business problem identified above and why this is the best and/or least cost alternative (e.g., cost benefit
analysis).
2.1 Please summarize the proposed solution and how it helps to solve the
business problem identified above.
The Security Compliance business case provides funding for cyber and physical security
related projects and supports Avista's safe and reliable infrastructure strategy.The projects
funded by this business case are driven by new security compliance requirements as issued
by various compliance authorities. All future replacement efforts after the initial
s Enron scandal -Downfall and legislation I Britannica
a The Real Story of Stuxnet-IEEE Spectrum
s Pipeline Cybersecurity:Protecting Critical Infrastructure I Transportation Security Administration(tsa.gov)
e Cyber-Informed Transmission Planning Report,NERC,May
Business Case Justification Narrative Template Version: February 2023 Page 5 of 10
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Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 346 of 351

DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
Security Compliance
implementation to meet compliance will be funded under other security business cases.
Depending on the issuing organization and the security vulnerability they are choosing to
mitigate, all new security compliance requirements will need to be fully assessed before
developing a solution to implement. Following the assessment, solutions will be surfaced
on how best to mitigate the vulnerability and be compliant. Therefore, no solution can be
proposed until a new security requirement is issued and assessed.
2.2 Describe and provide reference to CIRR/IRR analyses, relevant studies,
documentation, metrics, data, analysis, risk reduction, or other
information that was considered when preparing this business case (i.e.,
samples of savings, benefits or risk avoidance estimates; description of
how benefits to customers are being measured; metrics such as
comparison of cost ($) to benefit (value), or evidence of spend amount to
anticipated return).'
Meeting newly issued compliance requirements is imperative and a benefit to our
customers, as it allows Avista to deliver electric and gas service safely, securely, and reliably.
The security compliance requirements are issued to protect critical infrastructure and
customer data. Therefore, electing noncompliance increases the risk of a cyber or physical
incident taking place, in addition to the hefty penalties from issuing authorities. Either of
these options would provide no value to Avista or its customers, as rectifications would still
need to be implemented to mitigate the incident, satisfy the audit findings, or reduce the
penalties. As an example, and further discussed below, a physical or cyber-attack can
average $1.76M or $12.9M, respectively, while noncompliance penalties can average $40-
60K per finding per day.The modest annual investment to maintain a funding source focused
on meeting new security compliance can avoid the risk of a physical or cyber-security
incident, or noncompliance penalties.
2.3 Summarize in the table and describe below the DIRECT offsets$ or savings
(Capital and O&M) that result by undertaking this investment.
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Not Applicable $0 $0 $0 $0 $0
00 Not Applicable $0 $0 $0 $0 $0
Please do not attach any requested items to the business case, be sure to have ready access to
such information upon request.
8 Direct offsets are defined as those hard cost savings Avista customers will gain due to the work
under this business case. Such savings could include reductions in labor, reduced maintenance
due to new equipment, or other.
Business Case Justification Narrative Template Version: February 2023 Page 6 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 347 of 351

DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
Security Compliance
There are no direct offsets associated with investment in meeting newly issued security
compliance requirements. With the number of cybersecurity incidents growing in number
and complexity and coordinated and egregious physical security incidents, there is no utility
business that would not elect to meet newly issued compliance requirements.This is part of
ongoing investment and the cost of doing business. The question is not whether to invest in
compliance or not, but how much to invest to reduce the risk of evolving threats and fines
associated with being noncompliant.
2.4 Summarize in the table and describe below the INDIRECT offsets9 (Capital
and O&M) that result by undertaking this investment.
Cyber Security Incident:
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Security Solutions $104,000 $104,000 $104,000 $104,000 $104,000
0&M Data Breach Cost Estimates $936,000 $936,000 $936,000 $936,000 $936,000
Physical Security Incident:
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Equipment,Tools, Material replacement $594,000 $594,000 $594,000 $594,000 $594,000
0&M Damage repairs $6,000 $6,000 $6,000 $6,000 $6,000
Cyber+ Physical Security Incident:
Offsets Offset Description 2024 2025 2026 2027 2028
Capital Equipment,Tools, Material replacement $698,000 $698,000 $698,000 $698,000 $698,000
0&M Damage repairs $942,000 $942,000 $942,000 $942,000 $942,000
With the assumption that if implementing newly issued security compliance requirements
would reduce the likelihood of a cyber or physical security incident,the avoided indirect costs
associated with a cyber ($12.9M) and physical ($1.76M) incident from happening would be
approximately $698k in capital and $942k in operations and maintenance based when
amortized over 5 years.10 This assumption does not include fines or penalties associated with
noncompliance, which can average $40-60K per finding per day.11
9 Indirect offsets are those items that do not directly reduce the current costs of the Company, but
may serve to reduce future hirings, improve efficiencies, reduces risk (cost or outage), or allows
current employees to focus on higher priority work.
10 Using the data breach cost estimates from the Enterprise Security Solutions business case of$12.9M per incident and the
average cost estimate for an attack on an electrical substation from the Generation, Substation and Gas Locations Security
business case of$1.76M.
11 Average cost of noncompliance penalties is based on previously assigned fees for NERC CIP audit findings,although they
were mitigated through proposed controls,improvements,and enhancements.
Business Case Justification Narrative Template Version: February 2023 Page 7 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
Security Compliance
2.5 Describe in detail the alternatives, including proposed cost for each
alternative, which were considered, and why those alternatives did not
provide the same benefit as the chosen solution. Include those additional
risks to Avista that may occur if an alternative is selected.
Option Capital Cost Start Complete
Alternative 1: Address new security compliance $500,000 01 2024 122028
requirements as they become available
(Recommended)
Alternative 1: Since the projects within this business case are compliance driven, no
alternative solutions are available. Being noncompliant is not an option.
2.6 Identify any metrics that can be used to monitor or demonstrate how the
investment delivered on remedying the identified problem (i.e., how will success
be measured).
Metrics to demonstrate the success of the investments under this program business case
include meeting the new compliance requirement, averting fines, and keeping the installed
system or equipment available and reliable to aid in deterring, detecting, and delaying a
threat. Success is determined by compliance team verifications, as required by the new
requirement, and by undergoing regulatory audits conducted by compliance issuing agencies.
2.7 Please provide the timeline of when this work is schedule to commence
and complete, if known.
The Security Compliance business case is a program that consists of security projects per year
that run concurrently, and at times over multiple years when security compliance
requirements or directives are issued. They follow all phases of the project lifecycle,
facilitated by a project manager, and governed by a steering committee to determine scope,
schedule, and budget forecasts, including transfers-to-plant.
2.8 Please identify and describe the Steering Committee/governance team that
are responsible for the initial and ongoing approval and oversight of the
business case, and how such oversight will occur.
There are two levels of governance to the Security Compliance program business case and
the investments within it. They consist of a business case governance team and project
specific steering committees for in-flight projects.
Business Case Justification Narrative Template Version: February 2023 Page 8 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
Schedule 1,Page 349 of 351

DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
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Business Case Governance Team: The Enterprise Security Governance Team provides
monthly oversight of this program business case and makes recommendations based on
forecasted inactive planned investments, the pace of in-flight investments, and any new
unplanned activity that surfaces from an emerging security threat. The team also tracks
business case risks and issues that can affect the portfolio of planned investments.
Monthly governance meetings consist of a full review of each in-flight investment, reasons
for any delays or deviation to proposed completion and transfers to plant schedules and
recommends necessary steps to bring the investments back into schedule or defer inactive
work, when possible, to offset delays. However, should a security risk increase by deferring a
planned or unplanned investment into future years, the Enterprise Security Governance
Team will recommend a Capital Planning Group (CPG) In-Year Change Request to surface the
impending need. The Change Requests are presented at a monthly Technology Planning
Group meeting to inform the Director members who are also members of the CPG where the
request will be considered and weighed against other pending requests.
The Enterprise Security Governance Team consists of Avista's Enterprise Security Director,
Cybersecurity Manager, Physical Security Manager, Security Delivery Manager, and the
Project Management Office Manager. The sessions are facilitated by the Security Program
Manager who manages the standing agenda.
Project Steering Committees: Additionally, each security investment is governed by a project
steering committee that consists of the Enterprise Security Director, Cybersecurity Manager,
Physical Security Manager, and Security Delivery Manager, as well as ancillary management
team members required for the successful implementation of the security enhancement at
the respective location. Steering committee meetings are facilitated by a Project Manager
and held monthly to review scope, schedule, budget, and risks and issues surfaced from each
in-flight project.
3. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Security Compliance business case
and agree with the approach it presents. Significant changes to this will be coordinated with
and approved by the undersigned or their designated representatives.
DocuSigned by:
Signature: „ Date: Jun-12-2023 1 10:56 AM PDT
Print Name:
ncc�yFLeiJa
Title: Security Delivery Manager
Role: Business Case Owner
Business Case Justification Narrative Template Version: February 2023 Page 9 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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DocuSign Envelope ID:33FF57F8-BC4E-4696-9B1D-16BAF94CBF1D
Security Compliance
DocuSigned by:
Signature: sfbn Date: Tun-12-2023 I 11:29 AM PDT
Print Name: Bdjay9Storey
Title: Security Director
Role: Business Case Sponsor
Signature: Date:
Print Name:
Title:
Role: Steering/Advisory Committee Review
Business Case Justification Narrative Template Version: February 2023 Page 10 of 10
Exhibit No. 12
Case Nos.AVU-E-25-01/AVU-G-25-01
W.Manuel,Avista
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