20250213Final_Order_No_36462.pdf

Office of the Secretary
Service Date
February 13,2025
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATIONS ) CASE NOS. AVU-E-24-09
OF AVISTA CORPORATION FOR A ) AVU-G-24-03
DETERMINATION OF 2022-2023 ELECTRIC )
AND NATURAL GAS ENERGY ) ORDER NO. 36462
EFFICIENCY EXPENSES AS PRUDENTLY )
INCURRED )
On August 1, 2024, Avista Corporation, doing business as Avista Utilities ("Company"),
filed two applications with the Idaho Public Utilities Commission ("Commission") requesting
prudence determinations of its 2022-2023 Electric and Natural Gas Energy Efficiency Expenses
(collectively"Applications").
The Company requests an order designating its electric energy efficiency ("EE")
expenditures from January 1, 2022, through December 31, 2023, funded through the Company's
Schedule 91 Energy Efficiency Rider Adjustment in the amount of $15,972,882, as prudently
incurred.
The Company also requests an order designating its natural gas EE expenditures from
January 1, 2022, through December 31, 2023, funded through the Company's Schedule 191
Energy Efficiency Rider Adjustment in the amount of$4,149,757, as prudently incurred.
STAFF COMMENTS
Commission Staff("Staff') reviewed the Company's Application, attached reports, and
discovery responses. Based on its review, Staff recommended the Commission approve
$15,866,304 in electric EE expenditures and $4,146,586 in natural gas EE expenditures as
prudently incurred from January 1, 2022, through December 31, 2023. Staff Comments at 2.
Staff audited the Company's Demand Side Management ("DSM") expenses, which
included a sampling and review of over 100 transactions across all the Company's programs. Id.
at 3. Based on Staff s audit and review of the Company's DSM rider expenses, Staff believed that
the expenses were prudent; however, Staff discovered that some expenses were incorrectly
recorded. Id.
Based on Staffs audit findings in its samples of program years 2022 and 2023, Staff
believed an internal audit must also be conducted for the program years 2022 and 2023. Id. at 4.
ORDER NO. 36462 1

Staff recommended the Company provide a report detailing the corrective steps the Company will
take during its internal audit,which would include a copy of the employee training curriculum,the
internal audit report and findings for program years 2022-2024, and outline any changes made to
the authorization levels in the accounting system. Id. Staff also recommended the Commission
reserve the right to make further adjustments to the rider account balances in the next DSM
prudence filing based on the findings of the Company's internal audit.Id.
Ultimately, Staff recommended that the Commission issue an order:
• approving $15,866,304 in electric and $4,146,586 in natural gas expenditures as
prudently incurred from January 1, 2022, through December 31, 2023;
• directing the Company to provide a report on the results of the Company's training,
authorization level review, and internal audit results of program years 2022-2024 as a
compliance filing to this case; and
• reserving the right to make further adjustments to the rider account balances in the next
DSM prudence filing based on the findings of the Company's internal audit.
Id. at 11.
COMPANY REPLY COMMENTS
The Company agreed with Staffs recommendation to continuously improve the
workpapers utilized in the calculation of cost effectiveness. Company Comments at 1. In response
to Staffs audit findings, the Company indicated that it undertook several remedial actions
including: (1) reviewing all 2022-2023 invoices related to vendors from which initial errors were
discovered;(2)reviewing the existing authorization and approval rights within its invoicing system
to ensure proper oversight and approval of invoices; (3) developing mandatory training for all
individuals that deal directly with energy efficiency tariff funds; and (4) issuing a request for an
audit of general ledger transactions impacting the energy efficiency tariff funds for program year
2024 from the Company's Internal Audit department. Id. at 2. The Company indicated that the
results of such an audit will be provided, along with program years 2022 and 2023, within the
Company's compliance filing as requested within Staffs comments.Id.
As a result of the steps taken, the Company represented that it identified an additional
$2,901 in electric expenditures, and $1,431 in natural gas expenses, both related to funds paid to
the NEEA, that required reallocation.Id. The Company requested that those amounts be removed
ORDER NO. 36462 2

from the $15,866,304 (electric) and $ 4,146,586 (natural gas) in prudent expenditures
recommended in Staffs comments, for a total of$15,863,403 and $4,145,155, respectively.Id.
COMMISSION FINDINGS AND DECISION
The Company is both an electrical and gas corporation, and the Commission has
jurisdiction over it and the issues in this case under Title 61 of the Idaho Code and the
Commission's Rules of Procedure, IDAPA 31.01.01.000, et seq.
The Commission appreciates Staff s thorough audit of the Company's EE expenses, and
Staff s recommendations that protect customers from paying for any expenditures that were
improperly allocated or unreliable. The Commission also appreciates the remedial actions the
Company has taken to ensure the accuracy of the expenditure calculations both in this case and
future cases.
Having reviewed the Applications, the record, and all submitted comments, the
Commission Ends it fair, just, and reasonable to approve $15,863,403 in electric EE Program
expenditures and$4,145,155 in Natural Gas EE Program expenditures as prudently incurred from
January 1, 2022, through December 31, 2023. The Company is directed to provide a report on the
results of the Company's training,authorization level review,and internal audit results for program
years 2022-2024, as noted in Staff and the Company's comments, as a compliance filing in this
case. The Commission also finds it fair,just, and reasonable, to reserve the right to make further
adjustments to the rider account balances in the Company's next DSM prudence filing based on
the findings in the Company's report.
ORDER
IT IS HEREBY ORDERED that the Company's 2022/2023 EE expenditures are approved
as prudently incurred in the amounts of$15,863,403 for its Electric Programs, and$4,145,155 for
its Natural Gas Programs.
IT IS FURTHER ORDERED that the Company shall provide the Commission with a report
on the results of the Company's training, authorization level review, and internal audit results for
program years 2022-2024, as noted in Staff and the Company's comments, as a compliance filing
in this case.
IT IS FURTHER ORDERED that the rider account balances in the Company's next DSM
prudence filing may be adjusted based on the Company's report filed as a compliance filing in this
case.
ORDER NO. 36462 3

THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date upon this Order regarding any
matter decided in this Order. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. Idaho Code §§ 61-626
and 62-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this 131" day of
February 2025.
Gv� _
DWARD LODG , P IDENT
_
*HN HAMMOND JR., COMMISSIONER
DAYN H IE, COMMISSIONER
ATTEST:
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Commission Secret
I:\Legal\ELECTRIOAV UE2409_G2403_prudence\orders\FO_cb.docx
ORDER NO. 36462 4