20250916Reply Comments.pdf

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Avista Corp.
1411 East Mission P.O. Box 3727 RECEIVED
25
Spokane, Washington 99220-0500 September 20
p � P g IDAHO PUBLIC
Telephone [phone] UTILITIES COMMISSION
Toll Free 800-727-9170
September 16, 2025
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd. Bldg. 8, Ste. 201-A
Boise, Idaho 83714
RE: Case No. AVU-E-25-06 and AVU-G-25-04 — REPLY COMMENTS OF AVISTA
(Application of Avista Corporation For an Order Authorizing Deferred Accounting and
Ratemaking Treatment of Costs Associated with Investment in an Enterprise Resource
Platform)
Dear Secretary:
On July 1, 2025, Avista Corporation, dba Avista Utilities (Avista or the Company), filed an
application for an order authorizing deferred accounting and ratemaking treatment of costs Associated
with investment in an Enterprise Resource Platform (ERP). In Order No. 36713, the Idaho Public
Utilities Commission(IPUC or Commission) issued a Notice of Application and Notice of Modified
procedure, establishing a comment deadline of September 3, 2025, and a reply comment deadline of
September 17, 2025. On September 3, 2205, IPUC Staff (Staff) filed comments relating to the
Company's application, where Staff supported the following:
1. Authorize deferral treatment for the existing undepreciated enterprise software being retired
as a result of implementing the ERP system;
2. Authorize amortization of the existing software recorded as a regulatory asset beginning
immediately upon retirement matching the current depreciation schedule, and making the
balance and amortization schedule subject for review and potential modifications in a future
rate proceeding;
3. Authorize deferral treatment for the undepreciated balance of additional capital expenditures
necessary to continue operations of existing enterprise systems to be retired with a carrying
charge equal to the authorized ROR;
4. Authorize a depreciable life of the ERP system to be equal to the contract term and if a
contract term is not defined, allow for the Company to depreciate over a 15 year useful life;
5. Deny deferral of depreciation expense associated with the ERP, but allow project related
operating expenses on the ERP system to be deferred when the project is placed into service
without a carrying charge; and
6. Authorize deferral of the ERP costs in the cloud as a regulatory asset with amortization to
begin immediately, and without a carrying charge until the Company's next general rate case.

The Company appreciates Staff s diligent review of the Company's Application. For the six items
noted above, Avista supports Staffs positions on Item Nos. 1, 2, 3, and 6.
Item No. 4 —For this item, Staffs position is that the Commission "(a)uthorize a depreciable life of
the ERP system to be equal to the contract term and if a contract term is not defined, allow for the
Company to depreciate over a 1 S year useful life". Avista respectfully requests that the Commission
approve Avista's request as originally-filed, with an unqualified 15-year useful life for
implementation costs. As part of the ERP project, Avista will be incurring implementation costs as
well as ongoing hosting fees after the implementation period. While the hosting fees have a defined
benefit period equal to the contract term, implementation costs have historically - and will continue
to - provide benefits over a longer time period, at least 15 years. Implementation costs typically
include, but are not limited to design, configuration, software interfaces, coding, installation of
hardware and testing, and those items will be utilized over initial and future hosting arrangement
contract terms (not just the first 5 year contract term, for example). Since the Company will continue
to renew hosting arrangements throughout the proposed 15-year period, this useful life more
accurately represents the pattern Avista expects to benefit from the ERP implementation costs, as
noted in ASC 350-40-35-13. Therefore, the Company believes that a 15-year life for implementation
costs is appropriate. And perhaps as equally as important is that the use of a 15-year life is more
beneficial for customers, as the cost impact of this investment would be spread over a longer period
of time, causing less overall rate pressure.
Item No. 5 — For this item Staffs position is that the Commission "(d)eny deferral of depreciation
expense associated with the ERP, but allow project related operating expenses on the ERP system to
be deferred when the project is placed into service without a carrying charge". While Avista would
typically argue that its original request is appropriate,it is far more important to the Company to have
Item No. 4 described above approved as originally filed. Therefore, as a part of the give and take of
the regulatory process and to give a resolution perhaps more acceptable to the Commission, Avista
will accept Staffs position on this item related to deferral of depreciation expense after project
completion.
The Company appreciates Staffs review of its application and the Commission acting on the
application within the Company's desired timeframe.If you have any questions relating to these reply
comments, please contact me at(509) 495-2782 or [e-mail].
Sincerely,
/S/s" vaqr. u
Shawn Bonfield
Sr. Manager of Regulatory Policy & Strategy
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