20250828EX 7 Attachment B - Avista Dec 13 2023 Letter on Audit Findings.pdf

Exhibit 7
Attachment B - Avista's Dec. 13 2023 Letter
on Audit Findings

December 13, 2023
RE: 2023 Pole Attachment Inventory True-Up
Dear Licensee,
In December of 2022,Avista sent your firm correspondence informing you of, and welcoming your
participation in, Avista's 2023 Pole Attachment Inventory Project. At our project kickoff you were invited
to attend in January 2023, with many of our licensees and our inventory vendor VentureSum in
attendance, we shared our project approach and emphasized that periodic inventories are industry
standard and an important part of prudent asset management. Avista and VentureSum successfully
completed the inventory late this spring and have been working to analyze and verify inventory counts
and associated processes, systems, contractual and financial impacts.
The inventory results illuminated impacts in a couple of areas. First, the change in pole and
attachment totals are driving a change in our rental rates.This change is necessary due to the regulatory
formulae Avista must use to calculate rental rates. These factors have resulted in a rental rate increase
and will be reflected on your current invoices.
Second, the unexpected increase in attachment counts has identified certain "unauthorized"
attachments, which are attachments that, pursuant to our license agreements, should have been (i)
applied for and recorded in our system, and (ii) included in rental invoices from the date of attachment,
but were not. With respect to these unauthorized attachments, Avista is issuing a true-up invoice to its
licensees going back five(5)years.The five(5)year look-back aligns with standard industry practice, our
contract with you, and state law. Although we are permitted to apply interest to these true-up charges,
Avista has chosen not to apply interest to your true-up invoice.
We are including the following information for your ease of reference:
• A snapshot of our contract language applicable to inventory true-up billing.
• The true-up invoice for five (5) years of past rent.
• A comparison of your pre and post audit attachment inventory.
In the event that you have any questions or concerns, please do not hesitate to reach out to
Avista's Joint Use Team. We are committed to working with you to address and resolve questions
regarding these charges.
Sincerely,
Avista Joint Use Team
Enclosures:
CONFIDENTIAL WOW000013

• Please refer to excerpt below of our contract with you. This is a snapshot your contract
language that is applicable to the inventory true-up.
f license Agteertleni
Exf"G
Rev Aogusi,2013
Page 9 of 13
(t) Lkam may pwt rm U or sanpte a� of Ucauee's fads covewl try
M s,taitd Use Master license V*nW fom time b tane.licensor wM r4'
ty Lk$M a pror to the 5 SW Of the t4 allow UMr6M tO PX i-
l.ice m Wig repot"audit ms€Ms to Utensee Wffm fill d*of U*
emoeom,
(2) ff d*n mft of Atfadrneslis reported is less hM 95%of the asxist results,
On the*WeM wd be rNoW b UcEtW at no more than UM times
the moW Attachment rate W"the rarW of mWM Af[aft*Ns
Um the mmber of years sm the fast NW. Such Woloe for to w0d
ACachmefrfs A be pad by Uoensee wft 30 days aft receipt.
(3) licensor may mgraae Umnsw b prW&maps or egm-j1 nt dmntertt m
of the btation of Uceruce tames,kWrq ttesd p0j OmUsft on ti-
C.EtlSot StnlCglreS.
CONFIDENTIAL WOW000014

INVOICE
INVOICE INVOICE CUSTOMER AMOUNT OWED
_NUMBER DATE NUMBER
234479 14-DEC-23 9516 $334,288.80
r2E1=ERENCE w . r_ -ME MATE
..
13-JAN-24 NET 30 DAYS
BILL TO: REMIT TO:
WIRED OR WIRELESS i AIRPIPE AVISTA UTILITIES
ATTN WILLIAM GEIBEL MSC-57
17813 E APPLEWAY AVE PO BOX 3727
SPOKANE VALLEY,WA 99016 SPOKANE,WA 99220-3727
PLEASE DETACH AND RETURN TOP PORTION WITH PAYMENT
COMMENTS:
5 YEAR BACK-BILL FOR UN-AUTHORIZED POLE CONTACTS FOUND DURING AVISTA'S 2023 SYSTEM-WIDE AUDIT-PER
ENCLOSED INFORMATION
,''; �s '�YiESG•RIR�i'ti��l -'..'. _ ..`_°... .'�, '-
1 YEAR 1 -TOTAL UN-AUTHORIZED POLE CONTACTS 8.00 62.91 503,28
AT THREE TIMES THE CURRENT ATTACHMENT RATE
(PER EXHIBIT G OF CONTRACT)WA
2 YEAR 1 -TOTAL UNAUTHORIZED POLE CONTACTS 314.00 211.32 66,354.48
AT THREE TIMES THE CURRENT ATTACHMENT RATE
+;PER EXHIBIT G OF CONTRACT! ID
3 YEAR 2-TOTAL UN-AUTHORIZED POLE CONTACTS 8.00 62.91 503.28
AT THREE TIMES THE CURRENT ATTACHMENT RATE
(PER EXHIBIT G OF CONTRACT)WA
4 YEAR 2-TOTAL UN-AUTHORIZED POLE CONTACTS 314.00 211.32 66,354.48
AT THREE TIMES THE CURRENT ATTACHMENT RATE
PER EXHIBIT G OF CONTRACT ID
5 YEAR 3-TOTAL UNAUTHORIZED POLE CONTACTS 8.00 62.91 503.28
AT THREE TIMES THE CURRENT ATTACHMENT RATE
(PER EXHIBIT G OF CONTRACT)WA
6 YEAR 3-TOTAL UN-AUTHORIZED POLE CONTACTS 314.00 211.32 66,354.48
AT THREE TIMES THE CURRENT ATTACHMENT RATE
(PER EXHIBIT G OF CONTRACT) ID
7 YEAR 4-TOTAL UN-AUTHORIZED POLE CONTACTS 8.00 62.91 503.28
AT THREE TIMES THE CURRENT ATTACHMENT RATE
(PER EXHIBIT G OF CONTRACT)WA
8 YEAR 4-TOTAL UWAUTHORIZED POLE CONTACTS 314.00 211.32 66,354.48
AT THREE TIMES THE CURRENT ATTACHMENT RATE
(PER EXHIBIT G OF CONTRACT) ID
9 YEAR 5-TOTAL UN-AUTHORIZED POLE CONTACTS 8.00 62.91 503.28
AT THREE TIMES THE CURRENT ATTACHMENT RATE
(PER EXHIBIT G OF CONTRACT)WA
10 YEAR 5-TOTAL UN-AUTHORIZED POLE CONTACTS 314.00 211.32 66,354.48
AT THREE TIMES THE CURRENT ATTACHMENT RATE
(PER EXHIBIT G OF CONTRACT;) ID
;TOTAL: $334.288.80
DEBIT/CREDIT CARD PAYMENTS ACCEPTED-CONVENIENCE FEES MAY APPLY
CHECKS RETURNED FOR NON-SUFFICIENT FUNDS(NSF)WILL BE REDEPOSITED AND A FEE MAY BE ASSESSED BY AVISTA
INTEREST CHARGES MAY BEGIN TO ACCRUE 30 DAYS FROM INVOICE DATE
FOR GENERAL BILLING INQUIRIES:CALL(509)495-2939 OR(800)727-9170,EXT 2939.
DAMAGE CLAIMS:CALL(509)496-4552 OR(800)727-9170,EXT 4552,SELECT YOUR CLAIM REP.INCLUDE CLAIM NUMBER&INVOICE NUMBER ON YOUR PAYMENT.
COMMUNICATIONS CONCERNING DISPUTED DEBTS,INCLUDING ATTEMPTS TO MAKE PARTIAL PAYMENT AS FULL SATISFACTION OF A DEBT ARE TO BE SENT TO:
CLAIMS DEPARTMENT,MSC-22,P.O.BOX 3727,SPOKANE WA.99220-3720
Page 1 of 1
CONFIDENTIAL WOW000015

AVISTA AUDIT RESULTS
WOW—Wired or Wireless
Pre-Audit Total Un-Authorized Post-Audit
Inventory Attachments Found Inventory
Total During Audit Total
r"
380 322 702
CONFIDENTIAL WOW000016

EXHIBIT B
l' Computation of Rate per Attachment for
Telecommunication Attachments
on Avista Utilities poles
In the State of Idaho
for contact year 2023
IDAHO
ITEM IDESCRIPTION SOURCE AMOUNT SUBTOTAL ITOTAL
USE FACTOR
A SPACE OCCUPIED BY ATTACHMENT FCC 1
B TOTAL USABLE SPACE UTC 12.0
C AVERAGE POLE HEIGHT UTC 37.5
D AVERAGE NUMBER OF ATTACHERS DATA(AL) 2.0
E USE FACTOR A/C+C-B x 2/3/C/D 0.253
DEPRECIATION EXPENSE
F DEPRECIATION CARRYING CHARGE DATA(AA) 2.6900%
G GROSS TO NET INVESTMENT RATIO DATA(AB) 1.820
H DEPRECIATION EXPENSE FxG 4.90%
ADMINISTRATIVE AND GENERAL EXPENSE
I TOTAL APPLICABLE A&G DATA(Z) 128,535,008
J NET APPLICABLE PLANT DATA(V) 2,669,622,632
K ADMIN CARRYING CHARGE I/J 4.81%
MAINTENANCE EXPENSE
L ITOTAL APPLICABLE MAINTENANCE DATA(AJ) 10,451,684
M I NET DIST PLANT IN STATE DATA(Y) 212,629,854
N MAINT CARRYING CHARGE LIM 4.92%
NORMALIZED TAXES
O TOTAL ALLOCATED TAXES DATA(AI) 65,466,972
P NET ELECTRIC PLANT DATA(V) 2,669,622,632
Q TAX CARRYING CHARGE O/P 2.45%,
RATE OF RETURN
R ROR CARRYING CHARGE UTC 7.91
S TOTAL CARRYING CHARGE F+K+N+Q+R 24.99%
NET INVESTMENT PER BARE POLE
T NET INVESTMENT IN POLES DATA(X) 100,549,833
U RATIO FOR BARE POLE FCC 0.85
V NUMBER OF POLES DATA AK 76,810
W NET INVESTMENT PER BARE POLE T*UN 1112.71
X 2023 CALCULATED RATE PER POLE ATTACHMENT E*S*W $70.44
Y 2023 BILLING RATE PER POLE ATTACHMENT $70.44
Ut, Digitally signed by Jesse Butler
Source of Data is FERC Form 1 dated 12/31/22 Jesse B e r Date:2023.06.14 07:58:46
Prepared By: -07'00'
Title: Joint Use Manager
Date: June 9,2023
CONFIDENTIAL WOW000017