20141119AVU to Staff 1-10.pdf

Avista Corp.
1411 East Mission P.O.Box3727
Spokane. Washington 99220-0500
Telephone [phone]
TollFree 800-727-9170
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i.l T tLlTt is cc i/i ir.i I lisi oi{November 18,2014
Idaho Public Utilities Commission
472W. Washington St.
Boise,ID 83720-0074
Attn:Neil Price
Deputy Attorney General
Re: Production Request of the Commission Staff in Case Nos. AVU-E-14-07/AVU-G-14-02
Dear Mr. Price,
Enclosed are an original and thee copies of Avista's responses to IPUC Staffs production
requests in the above referenced dockets. Included in this mailing are Avista's responses to
production requests I - 10. The electronic versions of the responses were emailed on llll8ll4.
If there are any questions regarding the enclosed information, please contact Paul Kimball at
[phone] or via e-mail at [e-mail]
Sincerely,
,4-*%-
Paul Kimball
Regulatory Analyst
Enclosures
CC: all parties
AVISTA CORP.
RESPONSE TO REQUEST FOR TNFORMATTON
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-14-17
AVU-G-14-02
PUC Staff
Production Request
Staff - 01
DATE PREPARED: ll I l4l20l4WITNESS: Chris Drake
RESPONDER: Renee CoelhoDEPT: DSM
TELEPHONE: (s09) 49s-8607EMAIL: [e-mail]
Please provide a list in Excel format showing all expenses charged to the DSM Rider in 2013.
Please include a brief description of the expense, the date, vendor, amount, and the account to
which the charges were booked. Please include and identify any adjustments made in 2013 to
previously booked expenses. Please separate all expenses by program. If any amounts are
allocated to multiple programs or jurisdictions, please describe the allocation method. Please
identiff if each expense is an incentive payment, purchased service, labor/admin., materials, or
any other classification of expense.
RESPONSE:
Please see Staff PR 0l Attachment A.
Page I of I
AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO DATE PREPARED: llll4l20l4
CASE NO: AVU-E-14-17 WITNESS: Chris DrakeAVU-G-14-02 RESPONDER: Renee Coelho
REQUESTER: PUC StAff DEPT: DSMTYPE: Production Request TELEPHONE: [phone]
REQUEST NO.: Staff - 02 EMAIL: [e-mail]
REQUEST:
Please provide copies of the Con-Ed CAP reports provided through Avista during 2013.
RE,SPONSE:
Conservation Education for Idaho Avista Customers Report Template - CAP ConEd l't Quarter 2013
Agency Community Action Partnership
Name and Title of individual
completing the report
Maria Lacey,
Community Education Specialist
Report time period January 1 to April t,20L3
Date of report submission to
Avista
April 16,2013
Hours dedicated this quarter
to conservation education
for ldaho Avista customers
At least 30 hours per week, for a minimum of 390 hours.
Provide an overview of the
Avista service area reached
during the report period
(example: During the 3'd
quorter 2072, the educotion
specialist provided
workshops ond individual
interventions to Avisto
customers within 70 mile
rodius of Lewiston.l
During the l" quarter 20L3, the community education specialist provided
workshops and in-home client education to Avista customers within a 100-mile
radius of Lewiston.
Estimated numbers of ldaho
Avista customers reached
through general energy
efficiency public awareness
strategies (e.g. brochures,
flyers, posters, unmanaged
video/rotating presentation,
etc.)
f n our ldaho service area,2660 households were seen for energy assistance
services in first quarter 20L3. Of those households, 1917 were Avista customers.
Of the total number of households served by CAP in this time, 614, or 23%o,
declared Avista natural gas as their primary heating fuel and 1303, or 39%, stated
that they were Avista electrically heated homes. Each household that is seen for
energy assistance services receives exposure to energy conservation information
via ot leost one public awareness strategy.
ln addition, 76 Avista households received 376 CFLs in conjunction with
Weatherization services.
Describe the mediums used
for public awareness efforts
(per the examples above)
Public awareness strategies include brochures, rack cards, rotating presentation,
booklets, posters and deliverable items.
Page I of8
Number of ldaho Avista
customers reached through
energy efficiency
workshop(s)
5
list workshop sites, topic(s)
and number of attendees
per site
Whitman Elementary Head Start, compact fluorescent lighting, 5 attendees.
Number of ldaho Avista
customers that received 1-
on-l education in
coniunction with
weatherization
12 Avista households; 8 additional households in Avista's ldaho service area.
Describe challenges that
may have been encountered
during implementation
It is a challenge to combat the misperceptions that people who heat with natural
gas do not need to conserve electricity and "all [a household needs] are new
windows" to conserve energy. There's much to be said in favor of low cost/no
cost measures and behavioral chanee.
Describe implementation
improvements that have
been instituted based
experience or learning
ln the second quarter, the community education specialist is reviewing the prior
12 months electric consumption of all Avista electrically heated homes served by
CAP in the period spanning October t, 20L2 to April t, 20L3, and screening for
eligibility for Avista-funded weatherization measures. To qualify, households must
have an Avista R# of at least 4000.
Provide an overview ot
program evaluation
methods that have been
employed and the results,
i.e. workshop satisfaction
surveys, monitoring of
customer energy utilization
oost intervention
The program is evaluated by post-session satisfaction surveys with workshop
participants and those who have received in-home client education services. The
survey consists of four questions; two utilizing a Likert scale, and two utilizing
open-ended responses.
Please use this area to
summarize other activity,
learning or observation that
is not captured above but is
relevant for energy
conservation education
reporting and program
development
The community education specialist attended the ldaho Community Action
Agencies Annual Meeting and Training, held January 15-18, 2013,
On average, the community education specialist serves 5 people per week in
response to walk in and telephone enquiries.
Please complete and submit this form by the 156 of the month following each quarter (i.e. l't Quarter 2012, report
submitted by April 15, 2012)to Ana Matthews by email at: [e-mail].
The annual quarter timeframes are:
l" Quarter - January I through March 3 I
2nd Quarter - April I through June 30
3'd Quarter - July I through September 30
4th Quarter - October I through December 3l
Page 2 of8
Conservation Education for Idaho Avista Customers Report Template - CAP ConEd 2nd Quarter 2013
Agency Community Action Partnership
Name and Title of
individual completing the
report
Maria Lacey, Community Education Specialist
Report time oeriod Second quarter, 2013
Date of report submission
to Avista
July 15, 2013
Hours dedicated this
quarter to conservation
education for ldaho Avista
customers
375 hours
Provide an overview ot
the Avista service area
reached during the report
period
(example: During the 3'd
quarter 2072, the
educotion specialist
provided workshops and
i nd ivid u a I i nte rve ntio ns to
Avista customers within 70
mile rodius of Lewiston.l
During the 2"'quarter 2013, the community education specialist provided services to
Avista customers throughout ldaho's 10 northernmost counties.
Estimated numbers of
ldaho Avista customers
reached through general
energy efficiency public
awareness strategies (e.9.
brochures, flyers, posters,
unmanaged
video/rotating
presentation, etc.)
ln 2"" quarter 2013, CAP served 3920 households represenling9T2T individuals in
that portion of our service area which consists of Benewah, Bonner, Boundary,
Kootenai and Shoshone counties. 48.42% of those households, or 1898, are Avista
customers. Energy services were provided lo 2.58% of northern ldaho households
served in 2nd quarter; of them, 76 or 75.25% were Avista customers.
ln addition, CAP served 2773 households representing 6062 individuals in the portion
of the CAP service area consisting of Clearwater, ldaho, Latah, Lewis and Nez Perce
counties. 59.75%, or L657, of those households are Avista customers. Energy
services were provide d lo 4.47% of central ldaho households served in 2nd quarter;
of them, 25 or 20.16% were Avista customers.
Households seen for all CAP services view the energy conservation slide show in the
lobby, and energy conservation print materials are available to the community in the
lobbies of 9 of 10 CAP offices. ln the remaining office, the materials are located in
the community services area rather than the lobby. All community members who
receive energy-related services meet with a service coordinator and are offered
energy conservation materials.
ln 2nd quarter 2Ot3,72Avista households each received 6 CFLs in conjunction with
Weatherization services.
Describe the mediums
used for public awareness
efforts (per the examples
above)
Brochures, rack cards, mailing inserts, rotating presentation, posters, individual
intervention
Number of ldaho Avista
customers reached
through energy efficiency
workshop(sl
Based on the numbers provided above, I estimate that 517, or 53%o, of community
members who attended the below-listed community events in the CAP service area
are Avista customers.
List workshop sites,
topic(s) and number of
attendees per site
General enerBy conservation education & WX promotion.
May 9, Lewiston/Clearwater Casino, 150; May 16, Plummer/Benewah Medical
Center, 100; June 6, Lapwai/Pin-ee-waus, 300; June 11, Moscow/Palouse Empire
Mall, 200; June 21, Plummer/Benewah Medical Center, 225.
Page 3 of8
Number of ldaho Avista
customers that received 1-
on-1 education in
conjunction with
weatherization
7
Describe challenges that
may have been
encountered during
implementation
ln January 20L3, I sustained a rotator cuff injury and aggravated it on several in-
home visits. Since then, I have limited my time in the field until such time as my
shoulder is recovered and I am released by the doctor. I have instead focused on 1-
on-1 client education in conjunction with Weatherization enquiries and applications.
I had my blinders on, and at first did not track those sessions because they weren't
the "in-home" sessions I usuallv provide.
Describe implementation
improvements that have
been instituted based
experience or learnine
At community events, deliverable items such as magnets and thermometers are
bundled in clear polyethylene bags with informational materials. Those who take
deliverable items now also receive energy conservation print materials.
Provide an overview of
program evaluation
methods that have been
employed and the results,
i.e. workshop satisfaction
surveys, monitoring of
customer energy
utilization post
intervention
Our display receives good traffic and positive responses at community events. We
over-prepare deliverable items for every event and come home almost empty
handed each time.
Please use this area to
summarize other activity,
learning or observation
that is not captured above
but is relevant for energy
conservation education
reporting and program
development
I continue to build capacity for energy conservation knowledge among CAP staff via
email.
I am currently preparing a proposal for a client conservation education presentation
at the 2014 Energy Out West conference.
With a coworker, I represented the agency on the statewide database committee
and helped to select a new statewide database that has the capacity to significantly
improve referrals from Energy Assistance to Weatherization.
June 13-14, I attended the Casey Family Foundation's "Knowing Who You Are" ethnic
and racial identity training, sponsored by ldaho Dept of Health and Welfare.
Please complete and submit this form by the l5s of the month following each quarter (i,e. I't Quarter 2012,report
submitted by April 15,2012)to Ana Matthews by emailat: [e-mail],
The annual quarter timeframes are:
I't Quarter - January I through March 3l
2nd Quarter - April I through June 30
3'd Quarter - July I through September 30
46 Quarter - October I through December 3l
Page 4 of 8
Conservation Education for Idaho Avista Customers Report Template - CAP ConED 3'd Quarter 2013
Agency Community Action Partnership
Name and Title of
individual completing the
reoort
Maria Lacey, Community Education Specialist
Report time period Third quarter, 2013
Date of report submission
to Avista
October 15,2013
Hours dedicated this
quarter to conservation
education for ldaho Avista
customers
370 hours
Provide an overview of
the Avista service area
reached during the report
period
(example: During the i'd
quorter 2072, the
education speciolist
provided workshops and
i nd ivid u o I i nte rve ntio ns to
Avisto customers within 70
mile rodius of Lewiston.)
During the 2"u quarter 2013, the community education specialist provided services
to Avista customers throughout ldaho's 10 northernmost counties.
Estimated numbers of
ldaho Avista customers
reached through general
energy efficiency public
awareness strategies (e.g.
brochures, flyers, posters,
unmanaged
video/rotating
presentation, etc.)
ln 3'" quarter 2013, CAP served 3067 unique households in that portion of our
service area comprised of Benewah, Bonner, Boundary, Kootenai and Shoshone
counties. Ofthose households, 7420 or 46 percent, are Avista electric or natural gas
customers.
ln addition, CAP served 2205 unique households in that portion of the CAP service
area consisting of Clearwater, ldaho, Latah, Lewis and Nez Perce counties. Of them,
1106 households, or 50percent, Avista electric or natural gas customers.
Households seen for all CAP services view the energy conservation slide show in the
lobby, and energy conservation print materials are available to the community in the
lobbies of 9 of 10 CAP offices. ln the remaining office, the materials are located in
the community services area rather than the lobby. All community members who
receive energy-related services meet with a service coordinator and are offered
energy conservation materials.
ln 3nd quarter 20L3,24 Avista households each received 6 CFLs in conjunction with
Weatherization services.
Describe the medlums
used for public awareness
efforts (per the examples
above)
Brochures, rack cards, mailing inserts, rotating presentation, posters, individual
intervention
Number of ldaho Avista
customers reached
through energy efficiency
workshop(s)
Based on the information provided above, I estimate that 353, or 50Yo, of community
members who attended the below-listed community events in the CAP service area
are Avista customers.
List workshop sites,
topic(s) and number of
attendees per site
General energy conservation education and promotion of weatherization services.
175 attendees, Kamiah, ldaho; 100 youth attendees, Grangeville, ldaho; 100
attendees, LCSC campus, Lewiston, ldaho; 50 attendees, Orofino, ldaho; 30
attendees, Lewiston, ldaho; 250 attendees, Moscow, ldaho; 200 attendees, Nez
Perce Reservation, Lewiston, ldaho.
Number of ldaho Avista
customers that received 1-
on-l education in
conjunction with
weatherization
Two ldaho Avista customers received 1-on-1 in-home conservation education in
conjunction with Weatherization services.
Describe challenges that
may have been
encountered during
implementation
While it is frustrating to see a reduction in numbers this past quarter, I need to bear
in mind two important factors. First, the Agency served fewer households this past
quarter than in previous quarters this year. Secondly, due to receiving treatment for
my previously-mentioned shoulder injury, my own illness, and the illness of my
significant other, I have been on one form of leave or another for 94 of 504 possible
work hours this past quarter. Despite this, I met all but one program goal I set for
myself this past quarter. While I regret that fewer households received in-home
conservation education this past quarter than I would have liked, I felt it was more
acceptable to reduce performance in that area than to sacrifice another area such as
community outreach, in office assistance to clients and staff, or program
development for the upcoming season of peak demand.
Describe implementation
improvements that have
been instituted based
experience or learning
This past quarter, a "Hot Water Conservation" rack card was developed and put into
use. So far, it has received positive response. ln addition, a segment on energy
conservation education was included in the agency's annual LIHEAP training, which
CAP staff found informative and beneficial.
Perhaps the most significant change is in the way referrals from energy assistance to
weatherization are identified. As a result of prioritizing incoming weatherization
applications and assisting with applications for weatherization crisis services over the
course of this past year (October L,20L2, to September 30, 2013), four criteria
emerged for identifying situations in which interventions available through utility-
funded and publicly-funded weatherization programs are anticipated to result in
greater reduction in household energy consumption and less reliance upon utility
assistance programs. This information was shared with CAP staff at LIHEAP training,
and well-received bv all.
Provide an overview of
program evaluation
methods that have been
employed and the results,
i.e. workshop satisfaction
surveys, monitoring of
customer energy
utilization post
intervention
Our display receives good traffic and positive responses at community events. Post-
education client surveys indicate that those who receive in-home conservation
education feel that they learned something new about energy conservation and that
the new information will be useful to them.
Please use this area to
summarize other activity,
learning or observation
that is not captured above
but is relevant for energy
conservation education
reporting and program
develooment
The Community Education Specialist continues to offer client education to
community members and CAP staff in person, over the telephone and via email. ln
addition, the Community Education Specialist engages in ongoing education on
increasing participation in energy conservation and weatherization efforts from low-
to-moderate income participants via webinars offered by CFED and HUD. lt was also
beneficial to hear a presentation on Project Share during the agency's annual LIHEAP
training.
Please complete and submit this form by the l5th of the month following each quarter (i.e. 1't Quarter 2012,reporl
submitted by April 15,2012)to Ana Matthews by email at: [e-mail].
The annual quarter timeframes are:
I'r Quafter - January I through March 3 I
2nd Quarter - April I through June 30
3'd Quarter - July I through September 30
4'h Quarter - October I through December 3l
Page 6 of 8
Conservation Education for ldaho Avista Customers Report Template - CAP ConEd 4th Quarter 2013
Agency Community Action Partnership
Name and Title of
individual completing the
report
Maria Lacey, Community Education Specialist
Reoort time oeriod Fourth quarter, 2013
Date of report submission
to Avista
January 15,20L4
Hours dedicated this
quarter to conservation
education for ldaho Avista
customers
390 hours
Provide an overview of
the Avista service area
reached during the report
period
(example: During the 3'd
quorter 2012, the
education speciolist
provided workshops ond
i n d ivid u a I i nte rve ntio n s to
Avisto customers within 70
mile radius of Lewiston.l
During the 4'" quarter 2013, the community education specialist provided services to
Avista customers throughout ldaho's 10 northernmost counties.
Estimated numbers of
Idaho Avista customers
reached through general
energy efficiency public
awareness strategies (e.g.
brochures, flyers, posters,
unmanaged
video/rotating
presentation, etc,)
ln 4"'quarter 2013, CAP served 5120 unique households in that portion ofour
service area comprised of Benewah, Bonner, Boundary, Kootenai and Shoshone
counties. Ofthose households, 3080 or 60 percent, are Avista natural gas or
electrically heated homes.
ln addition, CAP served 2478 unique households in that portion of the CAP service
area consisting of Clearwater, ldaho, Latah, Lewis and Nez Perce counties. Of them,
1603 households, or 65 percent, are Avista natural gas or electrically heated homes.
Households seen for all CAP services view the energy conservation slide show in the
lobby, and energy conservation print materials are available to the community in the
lobbies of 9 of 10 CAP offices. ln the remaining office, the materials are located in
the community services area rather than the lobby. All community members who
receive energy-related services meet with a service coordinator and are offered
energy conservation materials.
ln 4th quarter 2013,lAvista household received 6 CFLs in conjunction with
Weatherization services.
Describe the mediums
used for public awareness
efforts (per the examples
above)
Brochures, rack cards, mailing inserts, rotating presentation, posters, individual
intervention
Number of ldaho Avista
customers reached
through energy efficiency
workshoo(s)
Estimated attendance at the below-listed events held within Avista's ldaho service
area was 829 adults. Based on the percentage of CAP customers who are also Avista
gas or electrically heated homes, we estimate 538 of those served were ldaho Avista
customers.
Page 7 of8
Number of ldaho Avista
customers that received 1-
on-1 education in
conjunction with
weatherization
Due to other workload, no ldaho Avista customers received 1-on-1 in-home client
education this quarter,
Describe challenges that
may have been
encountered during
implementation
No unusual or unexpected challenges were encountered during implementation, just
ordinary occurrences such as inclement weather and holiday schedules.
Describe implementation
improvements that have
been instituted based
experience or learning
lmproved communication with Weatherization applicants regarding the priority and
status of their application and concurrent implementation of a "What to Expect from
Weatherization" brochure. The objective is to raise awareness within the community
that the principal objective of Weatherization is to increase energy efficiency within
the homes of low to moderate income individuals, and reiterate that program efforts
focus on those qualified applicants who have the highest utility consumption,
greatest economic need, or are most vulnerable.
Provide an overview ot
program evaluation
methods that have been
employed and the results,
i.e. workshop satisfaction
surveys, monitoring of
customer energy
utilization post
intervention
The use of a post session survey in conjunction with in-home client education was
discontinued. The survey consisted oftwo Likert scale responses and one open
ended response. The responses to the open ended question were quite useful, as
they indicated which components of the in-home session were most interesting or
likely to be useful to the household served. However, the Likert scale responses
consistently indicated high and very high degrees of satisfaction/interest. Of over
100 surveys administered, fewer than five indicated other than a rating of 4 or 5. We
felt that these responses were a greater indication of how well the community
education specialist had established relationships with the household. This is
important and something we want to keep doing. However, what we are trying to
ascertain with the survey is whether the energy conservation information is likely to
be implemented by the household. When we can correct for this, we will reintroduce
the survey.
Please use this area to
summarize other activity,
learning or observation
that is not captured above
but is relevant for energy
conservation education
reporting and program
development
The community education specialist attended agency All Staff Training in October.
CAP offices in Bonners Ferry, Sandpoint, Coeur d'Alene, Kellogg, St. Maries, Moscow,
Orofino, Kamiah and Grangeville received energy conservation education materials,
which included energy conservation kits for LIHEAP program participants and an
updated rotating presentation.
lnformation developed by the community education specialist was included in the
conservation education calendars distributed to LIHEAP participants throughout the
state of ldaho.
The community education specialist's workshop proposal was accepted for
presentation at the Energy Out West conference, to be held in April 2014. At the
request of the CAPAI executive director, the content of this upcoming workshop was
scheduled to be presented to LIHEAP and WX program managers at Community
Action agencies throughout the state of ldaho in January 20L4 al the CAPAI annual
meetins.
Page 8 of8
AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E- l4- 17
AVU-G-14-02
PUC Staff
Production Request
Staff - 03
DATE PREPARED: ll I l4l20l4WITNESS: Chris Drake
RESPONDER: Renee CoelhoDEPT: DSM
TELEPHoNE: [phone]EMAIL: [e-mail]
Please explain why there were no refrigerators replaced for Idaho's Low lncome program during
2013.
RESPONSE:
The CAPs have flexibility in the manner in which they utilize their Avista funds. Although an
Energy Star refrigerator was on the list of approved measures in 2013, the CAP did not submit
any for reimbursement. Conversations with the Agency suggest this measure did not align well
with their existing infrastructure and their crew-based focus on weatherization. The Agency also
described additional administrative, logistical, as well as contractor costs with targeting
refrigerators. If they were to identify a failed unit, they would make the necessary arrangements
to ensure the client had an operable one for the home.
Refrigerator replacements not only involve removing the unit but also disposing of it in an
environmentally responsible manner. In Idaho, refrigerators are allowable measures with state
funding however, there is a background check requirement that needs to occur with any
contractor that would enter a low income residence. The agency would likely sub-contract this
type of project since their crews are focused on weatherization improvements. The economy of
scale may not be present to bring contractors on board just for refrigerator replacements. In
comparison, Washington agencies benefited from pipeline settlement funds in previous years that
established infrastructure and experience on refrigerator replacement programs.
Page I of 1
AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-14-17
AVU-G-14-02
PUC Staff
Production Request
Staff - 04
DATE PREPARED: lI ll4l20l4WITNESS: Chris Drake
RESPONDER: Renee CoelhoDEPT: DSM
TELEPHONE: (s09) 49s-8607EMAIL: [e-mail]
REQUEST:
Please explain why replacement of operating, but perhaps very inefficient, refrigerators through
Avista's Low Income program requires advance approval from the Company.
RESPONSE:
The TRC analysis for "replace upon, or immediately prior to, burnout" differs from "replace
prior to burnout". When the existing refrigerator is non-functioning, a customer would need to
purchase at least a standard efficient system. The TRC analysis therefore includes a non-energy
benefit of the cost of the standard efficient system. A simplified explanation of the TRC analysis
would compare the incremental savings between standard and high efficiency compared to the
incremental cost between the two systems. This a fairly homogenous savings and cost analysis
that can be analyzed and included on the approved list.
In contrast, a replace prior to burnout measure would not require a customer install a new system
and replacement would depend on how ineffrcient the system is. A simplified summary of the
TRC analysis includes potentially much higher savings than replace upon burnout (savings are
the difference between the old, inefficient system and a new, standard system) but also includes
the total cost of a new system as they could leave the functioning system in place. This latter
situation can vary dramatically depending on the usage of the existing refrigerator and an
individual analysis will help determine and support cost-effectiveness.
Page I of I
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
IDAHO DATE PREPARED: llll4l20l4
AVU-E-14-17
AVU-G-14-02
PUC Staff
Production Request
Staff - 05
WITNESS:Chris Drake
RESPONDER: Tom Lienhard
DEPT:DSM
EMAIL:
TELEPHONE: [phone]
tom. lienhard@avistacorp. com
REQUEST:
Please provide examples of the Top Sheets used in the revised process for non-residential site-
specific projects.
RESPONSE:
Please see Staff PR 05 Attachments A, B, C, D, and E.
Page I of I
AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E- l4-17
AVU-G-14-02
PUC Staff
DATE PREPARED: ll I l4l20l4WITNESS: Chris Drake
RESPONDER: Renee CoelhoDEPT: DSM
Production Request TELEPHONE: [phone]
Staff - 06 EMAIL: [e-mail]
REQUEST:
Please explain why the Standard Operating Procedures for the non-residential site specific
process do not include the "internal review of a subset of completed site-specific" projects,
particularly when this type of review is intended to inform the Company's oocontinuous process
improvement activities." Chris Drake Testimony, p. 17 .
RESPONSE:
The Standard Operating Procedures (SOP) were developed to further describe processes and
procedures for programs included in the DSM business plan. It bridges between the business
plan overview with customer facing communications to describe program design,
implementation and reporting. It also complements other documents such as Evaluation,
Measurement and Verification (EM&V) plans.
The "internal review of the completed subset of site-specific projects" occurred after the project
was completed. It offers one more input to assist with future program implementation
modifications. Reviews were conducted twice during the fall of 2013 primarily intending to
further inform the current version and process for completing and storing the Top Sheets. In
early 2014 a formal review was conducted by the Company's internal audit department. Future
review schedules need to be determined by the EM&V plan.
Page I of I
AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-14-17
AVU-G-14-02
PUC Staff
Production Request
Staff - 07
DATE PREPARED:
WITNESS:
RESPONDER:
DEPT:
TELEPHONE:
EMAIL:
tUt4l20t4
Bruce Folsom
Linda Gervais
State & Federal Regulation
(s09) 49s-497s
linda. gervais@avistacorp. com
REQUEST:
Please provide copies of the *2009 Avista Intemal Audit Department Review of DSM
Processes," the "July 2013 Avista Internal Audit Department Memo," the "April 2014 Internal
Audit Memo," and any other internal audits relating to DSM activities.
RESPONSE:
Please see Staff PR 07 Attachment A, B and C.
Page I of I
tup.
DATE;
TO:
FROM:
SUBJECT:
Internat Awdit Report
September 34, 2009
$e*tt Morris. Roger Wor:dworth, Dennis Vermitrlion"
Pat Lynch, i}ruce linlsum
'Ievesa Ca$er
Demand liide Management Audit
lni*rnal Auditing recently campleted an audit of our Demand Side Management (Dlih{)
programs. 'lhis reporl summarizes our findings and recommendxtions for improvernents
to existing prnctices.
Our objectives l+'*re tcr:r Evaluate the prudency of DSM expenditures and whether tl'ley were in
compliance with tarilt'riders and with specitie progrem guidelines.
r Verily that ensrgy savings ealculations, both pre-pruject and post-proicsl, &re
perfornr*d *onsi stentl y.
r Vrrify that charges to DShd. account ct"rdes are only for DSM-related prcrjcc:ls"
r Detem:ine whether incentir.,e/r*bate paymenls to custolners are appropriatc arrd
inlemol *ontrols ovrr such payments are adequate.
Our audit rvork **vered DSh.l pros&ur$ in ellect frorn January l, ?t]08 mrd thrr:ugh May
3 l, 200-q. For expenditure testing, rve selected all 32 acc*unts payahle ("4/p")
transactinns over $1U0,000 {totaling $5,t}82.t151) and a statistical sample of 83
rzursacti*ns (totaling $I 15,190) unrier that am*unt.
.(iummnry Conclusion
Internal controls over DSM cxpcnditures ndequntely rninirnir,e th* risk r:{'cmnrs or
irregularities. We finund programs ta be in compliance with tariflrcquirenrcnts nnd
ineentive rebates to be in compliance rvith specilic program requirements.
lf ith the large veilunre of site-speciiic and prescriptive c*mmerciaUindustrial prtiects and
residenfial customer rebate requests, we were irrrpressed that fbw errors were iound
during tur audit. Cood uurk DSM teaml
While no significant errors rvere lbunel, the following pages oirhis repor discu.ss a fbw
minor srrorli and improvement oppeirtunitics far manag*m$nt's consideration.
Staff_PR_O7 Attachment A Page 1 of I
Avist Utllities lnternal Audit Raport
Demand $ide klanagement - 2009
l. Accountiag Errors
(Jur review *f invnices *ver $ I 00,0tlt) revealed hvo nstrral gas-related expenditures
totaling $69,68.5 that were inceirrectly charged to el',:ctric project cotles.
W* also fbund, in our sample ol'8] invoice"s under $lt)0,(}0{), that ons Washingtnn
cuslomer incentivs payout was charged to an Idaho project ctlde, While the am*unt of
thix snor rvas small ($l ,475), extrapolating the error to the entire population ef invoices
rmri*r $10CI,0$0 indicates thnt appr:nximately $?94,000 in ctding {rrt}rs *nuld have
or:curred in the population. I'hose potentiril exrors would likely have been mad* in both
directions, resulting in some netting af errors.
I{ec*mmendxtion
I)Strril accor"mting records should be corrected t* reflsct correct kW'h's, thenns *nd dollar
&mounts fCIr the transaction in error. In addition, the Salesf.,ngix adminisretCIr should
ceinsider crssling a query in the program to search I'or prcject site states that da not nratch
up witli *cc*u"uting projcr:t stftte, arld shq:uld mah* any correstinns ss neoe$s&ry.
*{anagement Response: Bruce Folsom, Mauager Demrnd Side Manegement
Agreed. ''[he noted aceounting corrections u'ill be made ard the Saleslogix adnrinistrator
rvill creflte a "cro$s-linked" query t* detert future "iurisdic{ional acco*nt cc:ding errors.
Fage 3 of9
Staff PR 07 Attachment A Page 2 of 9
Avista Utilities lnternal Audit Report
Demand Side Management - 2009
2. All*cation sf Comman Costs B*fwecn Jurisdirtions
Certain DSM expenses affbct multiple jwisdictions. Because of this, special project
numbers have been set up" "l'hey are:
Project #098034S0 for WA and II] cornmon elec.tric prrijects
Ilr*ieci #098ff34$l ,or WA anrl ID comm$n gas projects
ln 2008 and years prior, Energ.v Snlutions used a manual 70130 split (lffM.D) tor
integrated resource planning purp)se$. Iiach year, DSM staft"wnuld kNrk retrospectivcly
al inr:entivu p*y*uts tu se.s if the 70r'30 split wa,t &ocurlrte. r\ccording to DSM stall the
aulu*l incentirres were always wilhin a percentage poinl or two frr:m the estinrate.
I]or 3S$9. our Rates &"I'ariffb departrnenl detennined that Dli&{ c*sts cnmmon to
Wash.ingtr:n and ldaho shoutd be split based on the Pnrductionl'fransmissian Ratio (fbr
eleclric prr:rjects) nnd on the System Contract Demand Rxio (for gxs projects). "the
Prr:rJuctionflianxntissinn R*t.ic is based on load and on *apacity used. The liystcm
Contrtrct Dernilrld Ratio ls hased on peak gas demantl.
"fhe Pnductionrllransmission Ratio i* 65.78896 tri Washington and 34.2\2Yo tn ldahn.
'i'h* liystem Ll*ntract Denrand Ratia is 70.9394 tu Washinglarr *nd ?9.(}7ry; t* lduho.
When I)SM employees cr:de costs ts the 098CI340X proiects, the correct allocations are
macle in trhe a*counting system,
AII of th* 2009 transaclions we tested were c.orrectly ecded using the 0980340X pmject
cndss" H$wever. vre beli*r,*: r:rrors could occur since we spoke rvith DSh,l team mernbers
w,h$ rt,*re unrrf iils nf the 30ilS change in allccalion psrcen sge$, and could potentia.lly
use tlrc rnanual 70/30 split.
I{ecommendcti$s
2009, and future, {illocation peroent,}gss should be corununicated to all DSM employees.
Iimployees shculd be instructed to use these allocation percentages when manually
spl itting expe,nses hetr*een j urisdicti*ns.
Management Rc*ponse: Ilruce F*lrcm, Man*ger llemand Side Maragement
.,\greed. DSM ernployees will be reminded to uss the automatically ullocated project
nun:b$rs trs appr*priale"
Page 3 ol9
Staff_PR_o7 Attachment A Page 3 of I
Avista Utilities lnternal Audit Report
Demand Side Managemant - 2009
3. Service Pr*vider Ccntruct.t
,4vista contracts with certain third parry vendors ta arJminisler some of our DSM
progr.rm$. lixanples are our c*nkacls nith Portland Hnergy Cunservatirrn. lnc. {PHCIi
and witlr tiCONS, tr,LC.
'l"hs Plicl-fldminister*d AirCar'* Plus program, narv conpleted, required PIiCi to Rran&Se
and process uustofiler incentive payments on Avista's behalf. PECI sent us detailed
spreadsheets shor+.ing incentives paid {br each mr:nth; }SM staft'compared incentives
paid per the spreadsheets to those invoiced by PECI. and then paid the invr:iced am*un1.
Withuut peri*dicelly validating incentive peyouts, third pr{y pr$grarn administrators
cnuld invoice Avisla frlr incr:ntives not paid, or euuld havc spreadshe*t errors that
continue undetected. l.]nscrupul*us IIVAC conrractors could likervise Greate flctjtious
cnstomer inr,oices to receive unearned incentive payments,
Itecommentlation
We do not beiieye there is a signitricant risk of errors or inegularities *"ith our {unent
sen ice provider-administered progren$. l-k:wever, D$M stafl *huuld ensurq that
incentive pay*uts by all current antl future vendors are periodically validated- This r:ould
be dr:ne by sp*t-checkir:g a fcw frr:rn each program administrator invoice, or bry selecting
a larger sampk liom invoiccs each quartcr ur each 1,ear"
Mau*gement R*sponse: Brum Folsorn, IVfrnag*r lkm*n*l Sid* *I*n*gcrnent
Agreud. DSItd stulYconsitlerx th* typc t:l v*rification standards requircd fbn third party
senicc pnrvidcr conract$. D$M stalTanticipates p*tential prohh*m* early in ils vendor
selection proces$. Cenerally. the DSI\,I stafl'seeks vendors with signiticant experience
and proven reputation. Due diligence is perf?rrmed prior to contract finalization and the
resulting agreenlent provides l'ur quality as$ur&nce in verilication and reporting. Itror
those that rvnxld benefil, the assigned DIiM progrnm manager will develop and clocument
testing proceclures"
Ilagr: 4 of I
Staff PR 07 Attachment A Page 4 of 9
Avists Utilities Internal Audit Report
Domand Side ilanagement - 2009
4. fiitr-Speeifi* Verific:rtion Proredures
Unqler our comrnercial and industrial energ.v savings programs (hnth site-speci*ic and
presrriptive), DliM technical leads or account executives calculate estimated erergy
savings, prcrject costs and potential incsntive p&youts. This is gcnarally rione using the
I.)ual-fuel lrr*entive C*lcuhrtnr ("DFIC") with inputs frr:m custon'ler$, contr&ct*rs and/or
Avista licld visits. Whcn a prnject has beeu completecl, calcul*lions are re-run ir:r the
DFIC hased *n act*al co$ts" {rctual energy savings, and resulting changes in payback
periods. I.ncentive payments are then issued hased on those final calculniions.
When a DSM employce prepares hoth the initial *nd final IIFIC crlculations. thrre is
pot*ntilll t'trr clerical errors or fbr deception. The site-specific prcgram mffnagers (a*d, in
m{rst cases, the assignerJ Account lixeeutive) looks at each project liom a reasen&bleness
hasis but may not discover irregularities.
No srrors were ftrund, but a firrrnal control procedure wnrrltl reduce the risk that errors or
irr*gularities ar* carrietl *rnugh undete*tecl fir:m initial to final inccntiue cnlculations"
t{.erornnrendotittn
ln:pler:rent a policy requiring all commercial and industrial inccntive payout 11nal
calculutions t* tre revierved by * lurnwledgeablc empl*yec oil:er thur the onrl perkrnnir:g
the initixl calculatians.
lll*nagenrent ltesponse: Bruce Folsom, Manager llemand Side Management
Agrted. .d policy will be firnnaiized estahlishing a sec,ond-persun {inal psyout vnlida ion
fcr c*nrn:lercial and indusrrial projccts.
Page 5 ol9
Staff_PR_07 Attachment A Page 5 of 9
Avista Utilities lnter*al Audit Report
Dem*nd $ide Illanagement - tSSg
5. Curt*r*er Ssrvice #pp*rtunity
$r:ring $ur ttsting, wc noted tlr*t * cust*mer (Avistn aeiiouill # 1709435) applied 'frx and
eccived an incentive rehnt* in Januarry ?SCI9 fnr a high *fficieney nntur*l gas fum*ce.
Thart eristr:rmer f*iled tei *lxo reque*t an *llt.rwed $10fi reb;rt* {br n vari*htre spced motor
whieh was specificsll-y listed *n ths cust*msr'$ s*les inveiire.
We und*rstand that it w'*uld be tirne-cansuming fnr DShI empluy*cs to $ils$rs that ntrl
qu*lifuirig retral*s are paid. We also understarrd rhat it is A,vista's prlicy to not tn grant
rcbates al't*r $fi days *f pr*j*ct cnmpletion, and this preiject wns *ornpleted in December.
!"leiwever, xinm thi* irn{rl*imed rebate has cqrme to eiur atlention, we belier,re th*t the
customer rv*uhi appreciate it i{'Avixta would grant an sxeeptian to poii*3'and issue the
variable spr*ed motor rebale.
Kecommsndnti*n
{,*xsidxr i"rsuing rtuv cusf$$}er a variable spe*d rnstur reh*t* *f $I0{i.
M*x*gement Re*ponse: Bruca !-olsom, hI*nager Demand liitlt Jlknrgcru*:nt
Agrertl. I)$M stall'will issur tke {::u},tornsr rebate *ed ${l} d* ** i* tlre futur* rvhen
di sr*vered duri*g rcbate pnrccssing prtxedure.
Pnge 6 of9
Staff_PR_07 Attachment A Page 6 of 9
Avista Utilities lrtornal Audit Report
Hemand $ide fillanagmnent - U00g
6. Iucentive Reb*tes Ptid for In*orrcct Amounts
Window incentive rebaies are paid based on window squers foCItage. Arista requires that
window squar€ fo*tage, or at least window sizes, be }isted on vendor invoices submitted
fur rebates,
Our tested samplc eif rebatc payments included two window rebates that *'ere incorrectly
caXrulate . ln boih $a$es, Avisttt paid the windnw rebate bassd on the squars footage the
customsr wrCIte on the reb$e requsst form. On one uf the rebates we overpaid a
customer $30 and on the other we overpaid $144.
Becomm*ndatisn
D$M employses responsible {i:r valitlating incentive rebate requests should be reminded
tei recaleul*te window $quare footage betbre approving rebate payrnents"
M*mngememt Re*panr*: Bruee Fotrsom, Manager Demand Side Msncgement
Agreed. Ilmploye*s will be reminded of the importance of calculating correct re?:ate
amounts. Irurth*r, we will pul oR th* rehate form a "how to calculate winrluw $quare
footnge" so that cruqtomers can betfer understand and praperly pre$eat their rebate
reque$t. '[his, in turn, will allow a new internal $ontrol to be established to be responsive
tn the reqrmrnentlation abqve.
Page 7 of$
Staff_PR_o7 Attachment A Page 7 of 9
Avi*ta Utilltiec lnternal Audit Report
Demard Side iianagement. 2009
7. Incentive Payments Bsrcd au Vendor Bids/Proposrls
DSM policy requires customers to suhmit vendor invsices to substantiate residential
customer incentive requests" "Ihis proves that the customer actually had the work done,
and it allows DSM staffto verift that the appliance purchased does qualiff for a reb*te"
Occa*ionally a customer will suhmit a vendor's proprxal sheet instcad of an actual
invoice. The reason ruay he thal the vendr:r doss not issue a finnl invoice, prefbrring ta
have their customer simply pay offthe nriginal proposal sheet.
With$ut n vsndnr invoic*, Avista *&m$t be sffis that the cu$tomer purchas*d the
apptriarlce.
Recommerdation
If a customer does nCIt hav{: n v*ndnr invoice to prove they purchased a qualifying
appliance, DSM staff should use alternative procsdures to verify the purch*se. A phone
call to the vendor would be nne method of verificntion. If arl altemalive method is utsd,
D$M staff should note so in the documentetion filed for the payment request.
Management Kesponse: Brute Folsom, Man*ger Demand Side Manegement
Agreed. This is the current p:licy and the DSM staffperforrns alternative verification
procedures on rebale requests that ure not accompanied by a vendor invoice.
Page I of9
Staff PR 07 Attachment A Page 8 of 9
Aviata l".ttilities lnternal Audit Report
D*r*and $ide Managament - 2009
8. CS$ $ecurity Actess for Oregon Reuideutial R*b*te.s
Oregon resiclential customer rebates are entered into the Customer Sqrvicc Systcm {CSS}
by one of ftva <iesignated Oregtrn employees. Perieldically. a report is run from L'$S and
faxed to A"r'1, {irr rebate check issuances.
'I hat perio*lic CSS reporl is n*t signrd by a DSM ernpl<)yee fl$ *uth*riimtion ltrr payment.
Therufore, ths rwt*mer rchates p*id frr:rm the report are nol properll'audrclrized
according to Company policy, An employee other than those wh* enter the rebiites into
CS$ should revi*w the dlSS rep{rt frrr reasonableness and sign a-s aut}rorized be,fire
subnrirting it to A,? f'or payment.
Also, we four:d that four employ*es other than th* two designated rebate entry empl*yees
have security aceess to cnter rebates into CSS. We believe this is n*t recessar,l' and
could pose the risk that unauthnrjzxd rebates could be sntered lbr p*yment. No inc*rrect
rebates u'cre id*ntified during our audit.
Ilecnmmen*Iation
Only the trv* ernployees d*signa{cd li}r rebate cntry into C$S sh*uld hnvu tlre ability ln
nrake those entries. All others shauld have their &sces$ rumoved"
flSS rcpolts should be reviewetl {br reasonableness by a separate DSM employee. That
employee sh*rld then sign tl":e rc;rort authorizing the rebate pa).meuts snd submit the
r6f)ctrt ta A/?.
M*n*gement Rerponre: llruee Folsom, Ma*agtr Dernsnd $ide Managernent
Agreed. tl will bc notified of the sccurity acce$s ch*nges and DSM nill designate
somsone *tl:cr than the CSS rebsle entry designees to review and authoriz.e rchale
payments.
Fag* I ol"9
Staff_PR_07 Attachment A Page I of I
Internsl A udit Department
Audit Report
T(}: Ilruce Ftlsom, llat Lyneh
CC: Jason Thac!*-,;ton, Dennis V*rmillion, Scott lllorris, Tracy Vln Orden
FROM: Lauren Prndergraft
DATE: ,luly I1).2013
fiUBJECT: Demand Sitle Mnnug*ment Audit Fnllow Up Repnrt
Brekground *ncl Purpose
In reslxrnse to the Washingtor:l l ltilities and Trunsportation Carnrnission's iWu"l'C) Ord*r No. 7
in Derckets UE- I 00-{67 and LIG- l 00463- Avista had a fhird peny sv&luertr:r, Moss Adzuns,
perform ;r revicr+'of thc Froces$es ancl procedures o{the l)emcnd Side Management (DIiMi
progrnrn. The h{riss Adffirs Review rvas completecl in 201I r+'ith the r:onclusion tirat, *varall. the
DSM prngrimr$ are wr:rrking *s intended. 'l"he manual nalure *f l"he DSM pracess was noted and
flreit^r \riore identifieii k:r irnpr*r,en:rynt. The DSM Prograrns zurd Ohscrvatinns a*d
Recrimmendations Report rvas presenteci to the WU'|C along with the Clompany's respnnses anel
stfltu$ upilatcs relat"qd to {hu report'l; refnmtnenclatirxs anrJ hndings.
'l'h* purpnse ol'lulern*l Audit's revier,v rvas to perlnnn a follorv up on th* rel){ld issued by lr..{oss
Adams in ?01 i and ensure cermn:nnicated action items filed have tr*en properly irnplemented.
ficope *ntJ llroredures
As the DSM progriurr is currently hring rsvie\r'ed by third parlies, ilre scrpe oi"this rcview is
limit*d to thc Cnmpany's rqsp,trnses *uld cnmmuricaled irction items inr:luded in the lvloss Adams
repen.
lnquiry ol'lmplementation "feam and Policy, Planning, and Analyxis (tlPA) slalr and review c,l
applicrble d*cumentation wors used to gather sufticiert evidcncc to verily thc Co*rpany"'s
resp$nse and sturtus updates.
Obrervafions *nd Recommendations
1) Several ilf tlre re$ponse$ tu Moss Adam's recommendations and ohsen'ations ore not
eicrurring as d*cumented in the filetl report" Irr general, new Frscesiitjs and proceelures hffr,e
been implernented to adclress thc recommendations and risks prssented by l\'foss Adams;
Staff_PR_07 Attachment B Page 1 of 3
hrlwever, they ar* ru{ consistent ruith the Clonipany's filed re$p$nss zurd status upd*tes.
\1'hile there ars ww manuat controls, there have heen no system or automated controls
irnplcruentcd as intlicatetl.
$[ecommend*ti*n: Update antl dor;runent the currenl status ol'the rscommrndaticns to
retlect [he current state of the D$h{ pn:gram. Adclitionaitry, hest pructicq is to implement o
.liystem {hat can ensurc prilper segrrgalion erf dutie.s and irnptrerxent svstsm eir automated
controls.
Mxnagement Rwponse: As nerted in the backgrounel section ill'this internal audit ltillcxv up
report, the $,f oss-Ad;uns' review in ?01 I concluded that ovcrell the DSM programs \rrere
wrlrking as intended. Rssidential rebate prclcessing continues to Lre quite m;utrul but
e$ective. Process impr*vements have heen implemented tn address the recommendations in
Lhe u'iew thnl allnlv firr *driitiein*l rcview,lnllow up on pending ret"rates and **rn*
aut$mation has been atided for rebotc suhmittals and co*rdi:ratior wi{h i:cr*unt* payable.
Autumaled contr*ls ar* plaurned &s part of rhe n$w custonler car{i and billing Fy$tiim that uill
repl*ce th* current CSS s;.,stem. The DSM team has treen rvorking closely with Prcject
Compass on residentinl rehate processing tools thal will include automation and segrcgation
of duties ftrr processing, reviewing and approving rehates.
The cument state *f DSN,I pontinurs lc evolve as il works *losely rt"ith *xtemxl prncess
rcvier,vers tc: further *nhancemgnts rtade as a result of the Moss-Adams review. "l-he current
st*te continues to meet thi) spirit anel intent u{'thase initicl recommsndations and the
surnmarv th*t rtas previausly comnrunicated externally. "l'he current state eontinues to be
r*nsprirently comnrunicatcd through aelvisory grolrps and commission stnffaudits including
a rerent revierl'bv !11"i'l'C stafl.
?,) $ipecitic oh"renalions erIproc*elurus thet have treen implemrnled. hut ars not operating
efT*ctir.ely rver* n*{*d:
' Only 6 ont of 18 projects gtreater thau $-10,000 were independently revierv*d by the l]l'}A
staff in 2017. (hk:tc; 'l"his independent review process has changed in 2013 duc to
structural lirnitations r:f the independent revie$'process. A peer review beltrre incentiv*
pirymsnt has becn imph:mented rvith thu independ*nt revi*w excurring as air lrudit *fler
incentive psymsnt.)
Recornruendation: Significant proiects should still obtail an independent review prior
to incentive peyout. Thc Implemenlation Team and PPA staff should determine the
thre sholds fcrr signilicant projccts based on risk ar:rd dollar amount.
Managem*nt lLesponse: As statcd, this indcpendent revicw procrs;r was ehanged in
?01 .l duc trr stmcturrl limiti*tians uf the independe nt revierv procuss. r\ peer review ha$
been inrplem,:nled with the indrpend*nt rcvierv occurring as Rrr andil afler incerrtive
paynler)t. '['hese ac{ions, combined with morc liequent rnntlomly-s*lccted revierls"
lrrcuses on thresholds fbr signiticant ;rrojects.
Review commeirts or questions n*led by I'l'A slaffare not aiu'ays c:orrected or addressed.
Staff PR 07 Attachment B
Iteerlmmendatirln: C*n:nrents {rom ht:th th* p*er rcvis$i unri irrdr:perrder}t revicw ueecl
to be apprapriately addresscd an,J docunrentetl. If therr is a disagrcement in anr:unt or
calculatitrn, rhis slioukj b* notrrtl witli n justilicrti*rr lbr the arrolrnt. Rcvieu; comn"r*nts
should uot be left open.
Management Rcxponm: Wc ngrcc lllat comlnenls nr questi*ns sh*uld tr* nr:t*d with
justilicetions and shuuld rrot be lcft r:perr.
r Post verilicirtion/installation verification (PVl tir: all non-resid*ntial prtr.iects is nat
documentecl *n n r*nsistent ha-ris.
Reeommenelation: Cl*nrly clefinc, docunrent, antl commrmicate to all Inrplementation
Te*m *nd PPA stnl'f rvhat projecl.s rerluire post verilir;*tion or install*tion ",crification.lniplem*nt a revievv contrul t$ t:nsure that posl vcrificntion/inst*liation verifiL.ation is
occurriRg and properly rlocumented *,ithin Salcslogix.
Mnnagement Resprnse: A stand alone clata extr*ct {ion: Sal*s}ogix rr:garding trlnst
verificatir:r: oIan ir:lstallecl measure is not eurrentiy sul'ficient to deterurine the P\r tlat*
he*ause tlr* tlate fii:ld rrns nrit consistently fillcd irr. IIV (instullation verifiq:ation)
inlbrmation is typicall-v hrund in the nr:tcs or attachments section, u,hich is nol included
in th* dnta.:x{ract. A prorcss irnpr*r'ent*nt is b*ing implen:ent*d to irnprove u*nsistency
*f the u;e ol'tlie PV dalr: fickl for 2013 and beyond to suppleme nt the installation
vs:'ificalir:n trittcn informnlirn alre*tly included with tl:c irr*livitlunl projei;r,
3) lllc roles zurd responsibilities ol'the In:plementation'I"eam and PPA staff an: not clearly
dcJined. Accauntnhility nnd aullxrrity lilr procr:ss or proc*dural reconu:rcn**tiotrs are nqlt tlrc
s*le responsibiliry ul'une Sroup.
Reeomm*ndation: Deiirie a.nd cnrnnunicate tlre rol*s *ncl resprNrsihilities o{'the
Implenrentation"i'eam and PPA stalTto ensure acceptance rf'the puryclse o['each f'unction.
Work u,ith staff to est*hlish clearly defined lincs of authnrity.
Mxnagenrtnt Re*ponse: Granul*rjty *f functions is being addresseil hy DSItf nranftgrmerlt
through RACI modcling 1o cl*arly esublish d*fiued lincs nf authorily.
Staff_PR_07 Attachment B
Internal Audit Department
Audit Report
TO: Bruce Folsom, Pat Lynch
CC: Jason Thackston,I)ennis Vermillion, Karen Feltes, Scott Morris, Tracy Van Orden
FROM: Lauren Pendergraft
DATE: April 3,2014
SUBJECT: Wild Rose Review and Demand Side Management Follow-up
Background and Purpose
The Demand Side Management (DSM) group is made up by two teams - the Policy, Planning,
and Analysis (PPA) team and the Implementation team. From an organizational perspective, the
teams report to different directors and executives; but are collectively referred to as the DSM
group. There have been organizational issues between the two groups as the roles,
responsibilities, purpose, and authority of each team are not understood and implemented by all.
In 2013, the PPA team became aware of the Implementation team's activities associated with the
Wild Rose Church and evaluated the prudency of the time and expenses associated with this
project. The PPA team's review resulted in a $22K adjustment to move the associated time and
expense below the line. The review of the Wild Rose activities was not conducted in a
transparent manner and was not communicated to Implementation team management in a timely
manner.
The purpose of this review was for Internal Audit to provide an independent assessment of the
Wild Rose activities. Additionally, Internal Audit performed other procedures over DSM
including detail testing of the Top Sheet process, a review of the installation verification dates of
completed projects in2014, and a review of third-party reports issued about DSM since July
2013.
Scope and Procedures
The following scope and procedures were performed during this review:
1. Wild Rose: Inquired of PPA and Implementation team employees in order to understand
the nature of the Wild Rose Church activities and calculate any necessary adjustments.
2. Top Sheets: The Top Sheet process was implemented in July 2013 to ensure compliance
with policy, procedures, and documentation in site-specific projects. Internal Audit
Staff_PR_O7 Attachment C Page 'l of 4
tested a sample of 25 site specific projects for the existence of Top Sheets. Projects were
randomly selected from the population of allsite-specific projects with a contract start
date and payment date after July 2013.
Installation Verification: Reviewed all completed projects in 2014 within Saleslogix to
determine installation verification rates in both prescriptive and site-specific projects.
Third-party Reports: Reviewed third-party reports issued since July 2013 including the
Cadmus Z}l2Process Evaluation memo and Idaho Staff Prudency Review Comments
(Case No. AVU-E-13-09 and AVU-G-13-02).
Observations and Recommendations
The following observations and recommendations were made based on the different procedures
performed:l. Wild Rose: The activity associated with Wild Rose appeared to be more than incidental
and on a recurring basis. As such, an adjustment to move the direct labor hours below
the line is appropriate given Avista's Regulatory Accounting Guidelines related to
community involvement activities. A range of possible adjustments calculated by
Internal Audit are below:
Direct labor (total hours worked
on oroiect)$ 20,944.59
Net Impact (direct labor less
additional "make-up" hours
worked (ie. weekends, after-
hours-etc.))
$ 12,279.63
Net Impact less 8 hours of team
buildins s 7,235.89
The calculations above are loaded at October's total payroll loading rates of 100.25%.
The actual adjustment made for labor was $21,485.60, but was only loaded at the payroll
benefits rate of 63.5% (had it been loaded at the 100.25% it would have resulted in an
adjustment of $26,3 l4). A $ I 67.88 adjustment for expenses was also made; however,
lnternal Audit did not find any needed adjustments for expenses associated with Wild
Rose.
The adjustments made for Wild Rose were conservative and more than
Intemal Audit' s adj ustment estimates.
Recommendation: The employee or manager of employees responsible for the initial
charges of time and expense should be included in the evaluation and calculation of any
needed adjustments to ensure the accuracy of adjustments.
Management Response:
Director of PPA Team response: I agree with the recommendation as written. The "in a
transparent manner" (as described in the "Background and Purpose") would benefit from
providing or establishing a policy in this regard.
3.
4.
of
Staff PR 07 Attachment C
Director of Implementation Team response: I agree with how the issue has been
presented and with the observations and recommendations.
2. Top Sheets: Out of a sample of 25 projects (75 top sheets total as each project should
have a Technical Review Top Sheet, Energy Efficiency Agreement Top Sheet, and an
Incentive Payment Top Sheet), 5 top sheets were missing or unable to be found.
Additionally, I other project was missing a Technical Review Top Sheet as the
engineering review was performed by an outside engineering firm. Based on inquiry of
DSM employees, it is unclear if there is a policy that requires Technical Review Top
Sheets for outside engineering analyses. All other Top Sheets were completed and saved
as attachments in Saleslogix.
There is evidence to suggest Top Sheets are implemented and being used on a consistent
basis. The timing and nature of the exceptions are reasonable given the recent
implementation of the Top Sheet process.
Recommendation: Perform an internal review in the next 6 months to test both the
effectiveness and existence of Top Sheets (as Internal Audit's review was limited only to
existence). Establish, communicate, and document the policy requiring Top sheets for
outside engineering evaluations for site-specific projects. Additionally, remind DSM
engineers that Technical Top Sheets are required for revised engineering evaluations.
Management Response:
We agree with the recommendations as written. The two areas noted could use clearer
guidelines. Any exceptions to current or revised policies should be communicated prior
to implementing those exceptions.
3. Installation Verification (IV): Based on Internal Audit's review of all projects
completed in2014 within Saleslogix, the following IV rates in both prescriptive and site-
specific projects were calculated:
Number of
projects
completed
Number of projects
w/ IV date in Sales
Losix IV rate
Site specific 56 54*96Yo*
Prescriotive 276 32 t2%
*The IV did occur for the two projects missing the IV date in SalesLogix. The account executive has since
updated Saleslogix and input the IV date. The IV rate is now 100% for site specific projects within
SalesLogix.
The tV rate for site-specific projects in 2014 is considerable improvement from the 2012
rate of 660/o presented in the 2012 Process Evaluation Memo by Cadmus. Based on
discussion with DSM employees, it is unclear what the policy or established goal of the
IV rate is for prescriptive programs.
Staff_PR_o7 Attachment C
Recommendation: Develop and document the policy or established goal for an IV rate
for prescriptive programs. Consider developing a specific goal for each prescriptive
program and include that information in the program plans.
Management Response:
We agree with the recommendations as written.
4. Third-party Reports: Internal Audit reviewed both the 2012Process Evaluation Memo
performed by Cadmus issued on August 2,2013 and the Idaho Staff Prudency Review
Comments issued on March 6,?014. Both reports contained observations, areas of
concern, and recommendations. There is not a centralized document utilized by both the
PPA and Implementation team addressing Avista's response to report findings or
recommendations.
Recommendation: Develop and implement a DSM "lssues Tracker" to document and
track all intemal and external report's findings and recommendations in a centralized
location. The Issues Tracker should list the findings and recommendations, document
Avista's response to the finding or recommendation, and provide an update on the status
of the remediation efforts of the finding. The Issues Tracker should be owned by both
the PPA and Implementation team and clearly document the responsibility for addressing
the item. On a recurring basis (quarterly, semi-annual etc.) the Issues Tracker should be
presented to a third party, like Internal Audit, to ensure findings and recommendations
are being addressed.
Management Response:
We agtee with the recommendations as written.
Statr_PR_o7 Attachment C
AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
IDAHO
AVU-E-14- 17
AVU-G-14-02
PUC Staff
Production Request
Staff - 08
DATE PREPARED: ll I l4l20l4WITNESS: Bruce Folsom
RESPONDER: Dan JohnsonDEPT: DSM
TELEPHONE: [phone]EMAIL: [e-mail]
REQUEST:
Please provide all reports, conclusions, recommendations, and 'next steps' that resulted from the
Roles and Responsibilities process conducted by Milepost Consulting. If any recommendations
or'next steps' were not implemented, please explain why.
RESPONSE:
Please see Staff PR_08 Attachments A and B.
The o'next steps" identified by Milepost Consulting resulting from the roles and responsibilities
process have been addressed as follows:l. Confirm Organizational Structure - The Company identified and established a central
decision maker for DSM. Under this leadership, the DSM organization has been fully
integrated.
Communicate structure changes to Jason and Dennis - Senior Management at Avista
were directly involved in the structure changes to DSM.
Meet with HR Representatives to review project and discuss next steps - During the
course of several meetings, many iterations were reviewed before settling on the DSM
structure that was ultimately approved and implemented.
Confirm transition of 3'd party impact evaluation to Intemal Audit - This
recommendation was reviewed for feasibility and effectiveness and although there is
merit in this approach, the team decided to leave this function in DSM to manage the
EM&V contract.
Create the change and implementation plan, including: confirm assumptions about people
in positions and develop new job descriptions as needed - Review ofjob descriptions and
positions is complete, however is subject to change as further organizational changes are
contemplated.
2.
J.
4.
5.
Page I of I
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JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
IDAHO
AVU-E-14-17
AVU-G-14-02
PUC Staff
Production Request
Staff - 09
DATE PREPARED: ll I l3l20l4WITNESS: Chris Drake
RESPONDER: David ThompsonDEPT: Demand Side Management
TELEPHONE: (s09) 49s-2821EMAIL: [e-mail]
REQUEST:
Please provide an electronic copy of Avista's Technical Reference Manual (TRM). If an
electronic copy cannot be provided, please provide the information necessary to access the TRM.
RESPONSE:
Please see Staff PR_09 Attachment A for the most recent compilation of the TRM database
associated with the measures in Avista's conservation portfolio. With the impact evaluation of
the 2013 program year now completed, an update to the TRM based on the verified unit energy
savings (UES) is a key task that will be completed by Avista's third-party evaluator.
As a function of the Washinglon Biennial Conservation Plan for 2014-2015, but still applicable
to planning and evaluation in Idaho, Avista also developed a Fixed UES List that captured the
Regional Technical Forum database of applicable measures as incorporated into the current
electric Conservation Potential Assessment and the 2014 and 2015 DSM Business Plans. This
Fixed UES List provides a similar function as the TRM, providing reference planning values and
defined UES values for verification. The Fixed UES List is contained in Staff PR 09
Attachment B.
Page I of I
AVISTA CORP.
RESPONSE TO REQUEST FOR INFORMATION
JURISDICTION: IDAHO DATE PREPARED: llll2l20l4
CASE NO: AVU-E-14-17 WITNESS: Chris DrakeAVU-G-14-02 RESPONDER: Tom Lienhard
REQUESTER: PUC StAff DEPT: DSMTYPE: Production Request TELEPHONE: [phone]
REQUEST NO.: Staff - l0 EMAIL: [e-mail]
REQUEST:
For any prescriptive programs not using Regional Technical Forum (RTF) deemed energy
savings, please explain how Avista's program delivery, customer base, service territory, or other
factors are different from the data sources or methods used in the RTF's analysis. As part of the
response, please explain how these differences justifu the Company using savings other than
those deemed by the RTF.
RESPONSE:
Program Delivery Calculation Assumptions Value of
UES
Justification
Residential
DHW Tanks Different -
We combine
all tank sizes
into one
incentive
We use RTF
savings
values
Same Same Too few units to
offer more
measures.
Air Source
Heat Pump
Different - we
do not require
RTF/BPA
installation
methodology
Different -
Impact
based versus
modeled
Same - both
require
resistance
electric heat as
a base and
similar SEER
increase.
Different Impact evaluation
of our customers
is preferred over
modeled values
Commercial
Grocery
Measures
Same Same Same Same Grocery measures
that are not RTF
UES due to mid-
year 2014 changes
will be performed
as custom
measures as of
UU2015
Page I of I