20250228AVU to Staff 5 Attachment A - 2024 OR 3rd Qtr - OPUC Order No. 24-254 7-29-24.pdf

ORDER NO. 24-254
ENTERED Jul 29 2024
BEFORE THE PUBLIC UTILITY COMMISSION
OF OREGON
LC 81
In the Matter of
AVISTA CORPORATION, dba, AVISTA ORDER
UTILITIES,
2023 Integrated Resource Plan.
DISPOSITION: STAFF'S RECOMMENDATION ADOPTED AS MODIFIED
This order memorializes our decision, made and effective at our July 23, 2024 Regular
Public Meeting, to adopt Staff s recommendation subject to the following modifications:
(1)Avista Corporation, dba Avista Utilities, shall seek acknowledgement of its action
plan in the 2025 IRP Update and(2)Avista shall respond to the directives of Order
No. 24-256 for the 2023 IRP in its 2025 IRP Update filing. The Staff Report with the
recommendation is attached as Appendix A.
Made, entered, and effective Jul 29 2024
Megan W. Decker Letha Tawney
Chair Commissioner
1,1TY COS Les Perkins
Commissioner
a z
OF•OREGO�
A party may request rehearing or reconsideration of this order under ORS 756.561.A request
for rehearing or reconsideration must be filed with the Commission within 60 days of the date
of service of this order. The request must comply with the requirements in OAR 860-001-
0720.A copy of the request must also be served on each party to the proceedings as provided
in OAR 860-001-0180(2). A party may appeal this order by filing a petition for review with
the Circuit Court for Marion County in compliance with ORS 183.484.

ORDER NO. 24-254
ITEM NO. RA1
PUBLIC UTILITY COMMISSION OF OREGON
STAFF REPORT
PUBLIC MEETING DATE: July 23, 2024
REGULAR X CONSENT EFFECTIVE DATE N/A
DATE: July 15, 2024
TO: Public Utility Commission
FROM: Nick Sayen
THROUGH: JP Batmale and Kim Herb SIGNED
SUBJECT: AVISTA UTILITIES:
(Docket No. LC 81)
Request for Temporary Exemption from OAR 860-027-0400(3),
Requesting a Ten-Month Extension to its May 31, 2026 IRP Filing.
STAFF RECOMMENDATION:
The Public Utility Commission of Oregon (Commission or PUC) should grant Avista
(Company) a temporary exemption to OAR 860-027-0400(3) extending the due date of
Avista's next Natural Gas Integrated Resource Plan (IRP) to April 1, 2027, and require
the Company to file a second IRP Update to the 2023 IRP by May 31, 2026.
DISCUSSION:
Issues
1. Whether Avista should be granted a temporary exemption from OAR 860-027-
0400(3), providing an extension of the due date of Avista's next Natural Gas
Integrated Resource Plan (IRP) to no later than April 1, 2027.
2. Whether the Commission should direct Avista to file a second IRP Update to the
2023 IRP by May 31, 2026.
Applicable Rule or Law
Under ORS 756.040, the Commission is authorized to supervise and regulate every
Oregon public utility, and to do all things necessary and convenient in the exercise of
such power and jurisdiction.
APPENDIX A
PAGE 1 of 7

ORDER NO. 24-254
Docket No. LC 81
July 15, 2024
Page 2
OAR 860-027-0400(1) provides that the Commission may waive any obligation in
OAR 860-027-0400, including OAR 860-027-0400(3), upon application by the utility and
for good cause.
Under OAR 860-027-0400(3) an energy utility must file an IRP within two years of its
previous IRP acknowledgement order or as otherwise directed by the Commission.
OAR 860-027-0400(11) places an obligation on the utility to file an IRP Update of its
most recently acknowledged IRP on or before the one-year anniversary of the
acknowledgement date.
Analysis
Background
Avista's most recent IRP, the 2023 Natural Gas Integrated Resource Plan, filed in
Docket No. LC 81, concluded with an acknowledgment decision at the
February 22, 2024, Public Meeting. The decision was memorialized May 31, 2024, in
Commission Order No. 24-156. Order No. 24-156 acknowledged Avista's near-term
action plan but did not acknowledge Avista's long-term plan and preferred resource
portfolio.'
The Company's IRP schedule in both Washington and Idaho is a fixed 24-month
timeline, and so Avista's next IRP in both states is due no later than April 1, 2025, and
then again no later than April 1, 2027, after that.2 Thus, Avista's default IRP schedule is
as follows:
• April 1, 2025 — 2025 IRP (WA, ID)
• May 31, 2025 — 2023 IRP update (OR)
• May 31, 2026 — 2026 IRP (OR)
• April 1, 2027 — 2027 IRP (WA, ID)
IRP Filing Date Request:Avista's Reasoning
In its request, Avista provided the following reasons for delaying its next IRP filing:
1. With the next IRP process already underway and the timing and contents of
Climate Protection Program (CPP) rules uncertain, the Company is not able to
include CPP compliance obligations in its base case or Preferred Resource
Strategy.
Docket No. LC 81, Avista's Revised 2023-2024 Action Plan, February 15, 2024.
z Docket No. LC 81, Avista Application for an Extension to File Its Next Natural Gas Integrated Resource
Plan, p. 3, April 18, 2024 (hereinafter Application).
APPENDIX A
PAGE 2 of 7

ORDER NO. 24-254
Docket No. LC 81
July 15, 2024
Page 3
2. Staff plans to update IRP guidelines in 2024, which will impact future IRPs, but
will not be completed in time for the 2025 IRP.
3. With the schedule of Avista's next two IRPs in Idaho and Washington, extending
the Company's next Oregon IRP due date to April 1, 2027, aligns the filing dates
in all three states and reduces duplicative and overly burdensome efforts.
4. If the Commission approves of the Company's request to extend the due date, in
the interim, Avista will submit an update to its 2023 IRP within 12 months of the
Commission's acknowledgement order.
Based on its request, Avista's proposed IRP schedule would be as follows:
• April 1, 2025 — 2025 IRP (WA, ID)
• May 31 , 2025 — 2023 IRP update (OR)
• April 1, 2027 — 2027 IRP (OR, WA, ID)
At the time of the writing of this memo, no stakeholders have submitted comments.
Staff's Responses to Avista's Reasoning
Staff agrees that the current CPP rulemaking process would not likely be sufficiently
complete to include precise compliance obligations in the 2025 IRP base case or
Preferred Resource Strategy. This would require the Company to make important
assumptions to comply with a yet to be finalized regulatory regime. Staff agrees
planning with this level of uncertainty is less than ideal. However, the certainty that
would come with a completed rulemaking, while helpful, is not essential. Indeed, it is
Staff's understanding that other investor-owned gas utilities are proceeding with
planning at this time.
Staff also agrees that IRP guideline updates will not be completed in time to be reflected
in the 2025 IRP. Similar to CPP rulemaking, the certainty that would come with a
completed IRP guideline update process, while helpful, is not essential. Other
investor-owned utilities (both electric and gas) are proceeding with integrated resource
planning at this time, even as IRP guideline updates are being contemplated.
Staff agrees with the potential of an adjusted filing date to reduce duplicative efforts. If
this request were not granted, the default IRP schedule calls for three IRPs in a
24-month window. Staff acknowledges the burden this would place on the Company,
Staff, and stakeholders.
Staff understands the default IRP schedule presents challenges to meeting IRP
Guideline 10, which notes that multi-state utilities should plan their gas supply and
delivery systems on an integrated-system basis that achieves a best cost/risk portfolio
APPENDIX A
PAGE 3 of 7

ORDER NO. 24-254
Docket No. LC 81
July 15, 2024
Page 4
for all their retail customers.3 In the Company's filing, Avista states the default schedule
would require moving away from a system plan to an Oregon specific plan.4
Avista states that it will submit an update to the 2023 IRP by within12 months of the
Commission's acknowledgement order.5 Staff notes that in the Company's request, it
positions such an update as voluntary, stating it is not technically required as the
Commission chose not to acknowledge the Company's 2023 IRP. The Company cites
OAR 860-027-0400(11) and again states in footnote 1 that because the Commission did
not acknowledge the Company's 2023 IRP, an update to the 2023 is not technically
required.
While not germane to the requests of this filing, Staff believes it is important to note that
it disagrees with the Company's interpretation of this aspect of the rule; as IRP updates
are not voluntary. OAR 860-027-0400(11) states that "Each energy utility must submit
an annual update on its most recently acknowledged IRP. The update is due on or
before the acknowledgement order anniversary date." (Emphasis added.) Staff notes
that in Order No. 24-156 the Commission acknowledged some of Avista's IRP but did
not acknowledge the entirety of the 2023 IRP. Nevertheless, Avista is required to
provide an IRP Update in compliance with OAR 660-027-0400(11).
Staff's Recommended Filing Dates
In Order No.11-346 the Commission expressed "that a person seeking waiver of any
rule under any generic waiver provision adopted here must establish a sufficient reason
for the waiver, and that the Commission will only grant the request if waiver of the rule is
in the public interest."6 Staff recommends that the Commission should grant a
temporary waiver allowing for an extension of the due date of Avista's next Natural Gas
IRP to April 1, 2027, and, in addition to the non-voluntary IRP Update due no later than
May 31, 2025, require the Company to file a second IRP Update to the 2023 IRP, due
no later than May 31, 2026. Staffs proposed IRP schedule would be as follows:
• April 1, 2025 — 2025 IRP (WA, ID)
• May 31, 2025 — 2023 IRP Update (OR)
• May 31, 2026 — 2023 IRP Update 2 (OR)
• April 1, 2027 — 2027 IRP (OR, WA, ID)
3 Order No. 07-047, In the Matter of an Investigation Into Integrated Resource Planning, Docket
No. UM 1056, p. 7, February 9, 2007.
4 Application, at p. 3.
5 Application, at p. 4.
6 Order No. 11-346, In the Matter of a Rulemaking to Update Waiver Provisions in the Commission's
Administrative Rules, Docket No. AR 554, p. 1 (2011).
APPENDIX A
PAGE 4 of 7

ORDER NO. 24-254
Docket No. LC 81
July 15, 2024
Page 5
Staff's recommendation to include a second IRP Update is grounded in three main
points. First, IRP Guideline 3(g) notes basic expectations of an IRP Update:'
• Describe what the utility has done to implement the action plan,
• Provide an assessment of what has changed since the acknowledgment order
that affects the action plan, and
• Justify any deviations from the acknowledged action plan.
Avista's proposed schedule creates a 22-month gap (from June 1, 2025, to
March 31, 2027) between IRP filings in Oregon. Without the proposed 2026 Update 2,
Staff, stakeholders, and the Commission would lack these insights into Avista's core
planning activities for nearly two years, during which Staff expects it will be taking action
to comply with the CPP.
Second, Order No. 24-156 includes a number Recommendations adopted by the
Commission, including:
• Staff Recommendations 3 and 4 regarding alternative resource portfolios, and
stress testing of those portfolios;
• Staff Recommendation 6, regarding development of additional scenarios and
sensitivities;
• Staff Recommendation 2, as modified by the Order, regarding an update of the
load forecast, for the next IRP filing, using appropriate downscaling methodology;
• Staff Recommendation 5, as modified by the Order, regarding modeling of
distribution system costs and capacity costs; and
• Expectation 22, regarding distribution system planning practices, adopted as a
Recommendation.
Further, Staff identified in Final Comments several Expectations and Requests specific
to an IRP Update. These include:
• Expectation 2, regarding a RNG procurement update;
• Request 4, regarding inclusion of the latest information on possible distribution
projects, including any proposed traditional investments or proposed Non-Pipe
Alternatives; and
• Request 10, regarding inclusion of a table of any expected CPP compliance
costs.
Order No. 07-047, at p. 4.
APPENDIX A
PAGE 5 of 7

ORDER NO. 24-254
Docket No. LC 81
July 15, 2024
Page 6
Avista's response to Recommendations, as well as the Company's consideration of, and
work on, Staff's Expectations and Requests, will require effort spanning multiple years.
As such, Staff, stakeholders, and the Commission would benefit from the proposed
2026 Update 2 as an additional opportunity to review the Company's progress
responding to these issues in the run up to the 2027 IRP.
Third, as of July 2024, the Oregon Department of Environmental Quality's (DEQ)
Climate Protection Program (CPP) rulemaking will reestablish the CPP. At this time, the
CPP will retain declining limit on greenhouse gas emissions from fossil fuels used in
Oregon, including diesel, gasoline, natural gas, and propane beginning in 2025.8
Compliance will require immediate and substantive action by mid-2025 and again in
2026.
Avista's proposed 22-month gap comes at a crucial juncture given the relaunched
CPP's first compliance period. Staff expects Avista will be making key planning
decisions and actual investments to meet DEQ's compliance obligations. This planning
and spending will represent a significant deviation from the acknowledged 2023 IRP.
Staffs proposed 2026 Update 2 serves as an opportunity for Staff and stakeholders to
review and vet Avista's key planning decisions and assumptions for CPP compliance,
and for Avista to seek acknowledgement of compliance related actions. Staff
emphasizes that should Avista seek acknowledgement of actions in either the 2025 or
2026 IRP Updates, the update will need to include a full discussion and support of those
actions per current guidelines. Staff also anticipates the update will demonstrate how
the actions address either Recommendations adopted by the Commission in Order
No. 24-156, or Expectations and Requests raised by Staff.
Staff believes that the proposed 2026 Update 2 strikes a balance between the default
schedule and Avista's proposed schedule by reducing duplicative efforts and overall
burden, while also providing opportunities for the Company, Staff, and stakeholders to
focus on the most important planning processes, at critical times.
Conclusion
Staff supports granting Avista a temporary exemption to OAR 860-027-0400(3) and
extend the due date of the Company's next Natural Gas IRP to April 1, 2027. In addition
to filing an IRP Update to the 2023 IRP by May 31, 2025, Staff recommends Avista be
required to file a second IRP Update to the 2023 IRP by May 31, 2026.
8 See Oregon DEQ Climate Protection Program 2024, accessed July 5, 2024, available at
https://www.oregon.gov/deg/rulemaking/Pages/CPP2024.aspx.
APPENDIX A
PAGE 6 of 7

ORDER NO. 24-254
Docket No. LC 81
July 15, 2024
Page 7
PROPOSED COMMISSION MOTION:
Grant an exception for Avista from OAR 860-027-0400(3), extending the due date of
Avista's next Natural Gas Integrated Resource Plan to April 1, 2027, and require the
Company to file a second IRP Update to the 2023 IRP by May 31, 2026.
RA1 LC8120240715.docx
APPENDIX A
PAGE 7 of 7