20250829APPLICATION.pdf

"U-G-25-09
A
Avista Corp. RECEIVED
1411 East Mission P.O. Box 3727 August 29, 2025
IDAHO PUBLIC
Spokane, Washington 99220-0500 UTILITIES COMMISSION
Telephone [phone]
Toll Free 800-727-9170
August 29, 2024
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Bldg. 8, Suite 201-A
Boise, Idaho 83714
Re: Avista Corporation Application for Determination of 2024 Natural Gas Energy
Efficiency Expenses as Prudently Incurred
Dear Commission Secretary:
Enclosed for filing with the Commission is the Application of Avista Corporation, dba
Avista Utilities (Avista or "the Company"), requesting a determination of prudence for the
Company's natural gas energy efficiency expenditures from January 1, 2024 through December
31, 2024. In support of its Application, Avista has provided Exhibit No. 1, which contains the
Company's 2024 Annual Conservation Report(ACR).
If you have any questions regarding this filing, please Kim Boynton, Manager, Energy Efficiency
Analytics, at(509) 495-4744 or kim.bo. ntongavistacorp.com.
Sincerely,
/0,/ �4� st. ;VC&T
Jaime St. Peter
Regulatory Affairs Manager
Enclosures
cc: Avista Energy Efficiency Advisory Group

DAVID J. MEYER, Esq.
Vice President and Chief Counsel
Regulatory & Governmental Affairs
Avista Corporation
1411 E. Mission Avenue, MSC 27
P. O. Box 3727
Spokane, Washington 99220
Telephone: [phone]
david.me er&avistacorp.com
Attorney for Avista Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
AVISTA CORPORATION FOR A ) CASE NO. AVU-G-25-_
DETERMINATION OF 2024 NATURAL GAS )
ENERGY EFFICIENCY EXPENSES AS ) APPLICATION OF
PRUDENTLY INCURRED ) AVISTA CORPORATION
In accordance with IDAPA 31.01.01 (Rules of Procedure, or RP), RP 052 and RP 201, et
seq., Avista Corporation, dba Avista Utilities (Avista or the Company), at 1411 East Mission
Avenue, Spokane, Washington, hereby applies to the Idaho Public Utilities Commission
(Commission) for an order designating Avista's natural gas energy efficiency expenditures from
January 1,2024 through December 31,2024,funded through the Company's Schedule 191 Energy
Efficiency Rider Adjustment in the amount of $2,279,817, as prudently incurred (hereinafter
Application).
The Company also requests that this filing be processed under the Commission's Modified
Procedure Rules (RP 201-204) through the use of written comments.
APPLICATION OF AVISTA- 1

All communications,pleadings, and orders with respect to this Application should be directed to:
David J. Meyer, Esq. Shawn J. Bonfield
Vice President and Chief Counsel Senior Manager, Regulatory Policy& Strategy
Regulatory& Governmental Affairs Avista Corporation
Avista Corporation P. O. Box 3727
P. O. Box 3727 1411 E. Mission Avenue, MSC 27
1411 E. Mission Avenue, MSC 27 Spokane, Washington 99220-3727
Spokane, Washington 99220-3727 Telephone: [phone]
Telephone: [phone] E-mail: shawn.bonfield(d),avistacorp.com
E-mail: david.me er&avistacorp.com
Avista Dockets (Electronic Only) - AvistaDocketsgavistacorp.com
Avista has included the following attachment in support of this filing, which is also
referenced throughout the Application below:
a) Exhibit No. 1 —Avista 2024 Idaho Annual Conservation Report
I. BACKGROUND
Avista has continuously offered energy efficiency services since 1978. Through these
offerings, the Company seeks to provide customers with programs and information that may help
them manage their energy use and to utilize cost-effective energy efficiency resources to meet the
energy and demand needs of the Company's electrical and natural gas systems. These efforts are
funded through Avista's Electric and Natural Gas Energy Efficiency Rider Adjustments(Schedule
91 and Schedule 191, respectively), or tariff riders.
The Company's Energy Efficiency Program (Program) consist of options for residential,
non-residential and low-income customer segments. The Program includes offerings through
traditional prescriptive channels along with site-specific projects and upstream buy-down
programs. Additionally, Avista introduced a midstream program in 2023, which continues to be a
significant contributor to savings achieved within the 2024 Program year. Each program within
the Company's natural gas Energy Efficiency Portfolio (Portfolio) is designed to meet cost-
APPLICATION OF AVISTA-2

effectiveness requirements and is evaluated by a third-parry evaluator each year (with the
exception of low-income program, which is on a 2-year evaluation cycle). The results of both the
Company's and the third-parry evaluator's annual assessments of the Program are contained within
Avista's Annual Conservation Report (ACR). The list below provides a more comprehensive
summary of all Appendices and Supplements included within the 2024 ACR:
1) Appendix A—2024 Electric Impact Evaluation Report
2) Appendix B 2024 Natural Gas Impact Evaluation Report
3) Appendix C—2024 Cost-Effectiveness Tables
4) Appendix D—2024 Expenditures by Program
5) Appendix E—2024 Energy Efficiency Activity by Program
6) Appendix F—NEEA 2024 Annual Savings Report—Electric
7) Appendix G—NEEA 2024 Annual Savings Report—Natural Gas
8) Appendix H—Idaho Furnace Billing Analysis Memorandum
IL NATURAL GAS PROGRAM EXPENDITURES
The Company requests Commission determination that the expenditures incurred during the
2024 Program year, totaling $2,279,817 for its natural gas Program, were prudent and in the public
interest. It should be noted that this amount is comprised of the $2,282,282 in expenditures noted
within the 2024 ACR, minus additional adjustments in the amount of$2,465. These adjustments
were made in accordance with the Company's 2022-2023 prudence determination, Final Order No.
36462 in the Case Nos. AVU-E-24-09 and AVU-G-24-03, and the resulting compliance filing
submitted by Avista on August 25, 2025 in those cases. Of the total amount spent, $1,604,312, or
70%, of total expenditures were paid out to customers in direct incentives. This percentage does not
include additional benefits such as technical analyses provided to customers by the Company's
Energy Efficiency engineering staff or regional market transformation efforts through the Northwest
Energy Efficiency Alliance (NEEA).
APPLICATION OF AVISTA-3

The Company reports the Schedule 191 balance on a quarterly basis to Commission Staff
and its Energy Efficiency Advisory Group(EEAG or Advisory Group). At the beginning of 2024,
the natural gas tariff rider balance was slightly overfunded (by approximately $52,658), meaning
that more tariff rider funding was being collected than actually needed to fund the ongoing
Program operations. This overfunding only further grew throughout the 2024 Program year —
primarily due to lower-than-anticipated participation in both commercial and residential natural
gas programs, as described within the 2024 ACR—which resulted in an ending balance of almost
$1.81 million overfunded by the end of the year. On July 31, 2025, the Company filed to true-up
this balance with new rates requested effective October 1, 2025 (see Case No. AVU-G-25-06).
Table No. 1 —Schedule 191 Tariff Balances By Month,January 2024-December 2024
Accounting Period Beginning Balance Program Expenditures Tariff Collections Ending Balance
Jan-24 $ (52,658) $ 240,321 $ 723,768 $ (536,105)
Feb-24 $ (536,105) $ 163,960 $ 640,992 $ (1,013,137)
Mar-24 $ (1,013,137) $ 215,268 $ 525,274 $ (1,323,143)
Apr-24 $ (1,323,143) $ 108,937 $ 360,646 $ (1,574,852)
May-24 $ (1,574,852) $ 147,287 $ 242,121 $ (1,669,686)
Jun-24 $ (1,669,686) $ 173,039 $ 155,230 $ (1,651,877)
Jul-24 $ (1,651,877) $ 232,876 $ 101,701 $ (1,520,702)
Aug-24 $ (1,520,702) $ 99,261 $ 81,225 $ (1,502,666)
Sep-24 $ (1,502,666) $ 183,655 $ 94,067 $ (1,413,078)
Oct-24 $ (1,413,078) $ 220,654 $ 151,336 $ (1,343,760)
Nov-24 $ (1,343,760) $ 263,801 $ 358,315 $ (1,438,274)
Dec-24 $ (1,438,274) $ 233,175 $ 600,574 $ (1,805,673)
2024 Adjustments (Completed) $ (1,805,673) $ 49 $ - $ (1,805,624)
2024 Adjustments(Pending) $ (1,805,624) $ (2,465) $ - $ (1,808,089)
III. 2024 PROGRAM PERFORMANCE
The Company's energy efficiency targets are established on an annual basis through the
process of developing its natural gas Integrated Resource Plan (IRP). The targets derived through
the resource planning efforts provide a starting point for Program planning,which is accomplished
through the annual business planning process where Program offerings are optimized for the
APPLICATION OF AVISTA-4

Company's service territory based on current economic and market conditions. Program savings
for 2024 were 220,279 therms,which fell short of the natural gas savings target of 392,021 therms,
achieving 56%of the target. This shortfall is,unfortunately, in alignment with the trend Avista has
experienced over the past several years, with the Company achieving 59% and 50% of its natural
gas targets in 2022 and 2023, respectively. Contributing factors to these lower-than-anticipated
savings are discussed within the 2024 ACR.
Table No. 2 below details the natural gas savings by residential, non-residential and low-
income sectors, which make up the Company's natural gas Portfolio.
Table No. 2—2024 Natural Gas Savings by Program Sector
Planned Savings Achieved Sa-t-ings 06 of Planned
(Therms) (Therms) Savings Achieved
Commercial-Industrial 101,325 33,187 33%
Residential 290,201 185,712 64%
Lo«r-Income 496 1,380 278%
Total 392 021 220,279 56%
i
Avista continued to see diminished participation in commercial/industrial natural gas
programs throughout 2024, as pressure on capital expenditures remained high and interest rates
and inflation contributed to uncertainty for customers looking to pursue energy efficiency
upgrades. While the Midstream Program helped to lift both the residential and
commercial/industrial programs, the savings achieved were still well below the planned savings.
Site-specific projects, however, met 94% of their savings targets,but these projects account for a
small portion of the overall savings achieved for 2024.
Avista evaluates the effectiveness of its natural gas Portfolio based upon a number of
metrics, including analyses utilizing four specific measurements to evaluate the cost-effectiveness
of a given program from both the Company's and from customers' perspectives: the Utility Cost
APPLICATION OF AVISTA-5

Test (UCT),1 the Total Resource Cost (TRC), the Participant Cost Test (PCT), and the Ratepayer
Impact Test (RIM). The most commonly applied metrics to provide insight into the net value to
all customers are the UCTa benefit-to-cost test from the utility perspective that includes
incentives and excludes net costs and non-energy benefits (NEBs)—and the TRC, which
represents the customer perspective by including all measure costs and NEBs, excluding
incentives. Per Commission Staff recommendations in previous prudence reviews, Avista has
shifted, in recent years, to conducting its own cost-effectiveness calculations in-house,rather than
relying on a third party. Avista's calculations are based on values within the Company's reporting
structure, specifically,units installed,unit energy savings, and per-unit incentives. Avista has also
improved its quality control process for cost-effectiveness calculations and for overall accuracy of
the Company's work papers by developing cost-effective workbooks that utilize active formulas,
implementing peer reviews and reconciling Portfolio savings totals against the systems of record.
The Company will continue to refine its processes,as needed,to ensure the appropriate and concise
reporting of its Program. For 2024, the overall Portfolio achieved a UCT ratio of 1.05 and a TRC
ratio of 1.24 based on verified savings. These cost-effectiveness metrics are included in Table No.
3 below:
Table No. 3 —2024 Natural Gas Cost-Effectiveness
Cost-Effectiveness Test 2024
Utility Cost Test (UCT) 1.05
Total Resource Cost TRC 1.24
As noted within its 2022-2023 prudence Application in Case No. AVU-G-24-03, Avista
spend much of 2024 working with both its midstream implementor and the evaluator to better align
'Also known as the Program Administer Cost(PAC)test.
APPLICATION OF AVISTA-6

baseline assumptions on both residential and commercial measures to improve the resulting cost-
effectiveness to an outcome more appropriately reflective of Avista's service territory. In addition,
after Avista's 2024 evaluations were completed, further cost-effectiveness efforts were pursued in
relation to natural gas furnace savings. Information regarding this work is included in the"Natural
Gas Cost Effectiveness" section of this Application.
IV. PROGRAM EVALUATION
In addition to the cost-effectiveness analyses conducted for the Program, Avista also
contracts with independent, third-party consultants to provide program Evaluation, Measurement,
and Verification (EM&V) activities each year. These EM&V activities are used to validate and
report verified energy savings related to the Company's energy efficiency measures and Program
offerings, as well as provide viable recommendations to improve Program performance, enact
changes to Program components, and decide whether and when to phase out measures.
For the 2024 Program year, ADM and Associates, Inc. (ADM) was retained by Avista to
perform the impact evaluation for Avista's natural gas Energy Efficiency Program, inclusive of the
residential, non-residential, and low-income components of the Program. The primary goal of the
impact evaluations is to provide an accurate summary of the gross natural gas and demand savings
attributable to Avista's Portfolio,while the main purpose of a process evaluation is to identify any
improvements needed at the Program level to increase Program effectiveness, and efficiency while
improving the participation experience for customers.
As part of its 2024 evaluation, the evaluator concluded that Avista's natural gas Program
achieved a 185%realization rate and 220,279 therms in annual verified savings.
APPLICATION OF AVISTA-7

V. NATURAL GAS COST-EFFECTIVENESS
Natural Gas cost-effectiveness is heavily dependent on a few key measures that make up
the bulk of both participation and savings. For Avista, furnaces have always been a strong savings
measure within its natural gas Portfolio. In fact, since the launch of the Midstream program in
2023, natural gas furnaces have been the highest contributing measure to therm savings
achievements for the Company. Savings assumptions for furnaces, therefore, have an enormous
impact on the Company's natural gas conservation achievement, as well as on the overall cost
effectiveness of the natural gas Program in Idaho.
When it came time to evaluate Avista's 2024 savings achievements, the Company's third-
party evaluator initially utilized a deemed savings methodology to evaluate savings for furnace
measures, simply because midstream programs often utilize deemed savings as the standard.
However, because deemed savings derived from the Regional Technical Forum (RTF) did not
accurately reflect the climate zone and hours of operation found within Avista's specific Idaho
service territory, and because information associated with each furnace purchase was available to
evaluators, it was determined that billing analysis was a more appropriate verification
methodology for the Company.After performing billing analysis,the evaluator discovered that the
average therms savings per furnace was actually 90 therms, rather than the 30 therms assigned
through use of RTF values. Explanation of this adjustment is detailed within Appendix H of the
Company's 2024 ACR.
VI. REQUEST FOR RELIEF
As described in greater detail above,Avista respectfully requests that the Commission issue
an Order designating Avista's 2024 total natural gas Energy Efficiency Program expenditures of
APPLICATION OF AVISTA-8

$2,279,817 as prudently incurred,with this Application being processed under Modified Procedure
through the use of written comments.
DATED this 291h day of August 2025.
Respectfully submitted,
Avista Utilities
By: Is/David Meyer
David J. Meyer, Vice President and Chief
Counsel for Regulatory and Governmental Affairs
APPLICATION OF AVISTA-9