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Home My WebLink About20150904AVU to Staff 150 Attachment B.pdf BUDGET MANUAL 2015 Last Updated: August 2014 Staff_PR_150 Attachment B Page 1 of 35 TABLE OF CONTENTS SUMMARY OF KEY BUDGET ASSUMPTIONS .... 4 BUDGET ASSUMPTIONS ................................................................................. 4 MULTI-YEAR BUDGET PROCEDURE: ........................................................ 5 2014 BUDGET KEY DATES .............................................................................. 6 BUDGET CONTACT BY ORGANIZATION .................................................. 7 NON-CAPITAL BUDGET ................................ 12 OVERVIEW ........................................................................................................12 Non-Capital Terminology ..................................................................................................... 12 Non-Capital Budget Elements............................................................................................... 13 Credit Policy (Centralized) ................................................................................................... 13 Centralization of Direct Charges Table ............................................................................... 15 Centralization of Loadings Table ......................................................................................... 15 Expenditure Type .................................................................................................................. 15 Spread Code .......................................................................................................................... 16 Expenditure Categories ........................................................................................................ 16 Labor Loadings (Centralized)............................................................................................... 16 Labor Information ................................................................................................................. 17 MAC (Master Activity Code) Table ...................................................................................... 17 FERC Non-Capital Account List .......................................................................................... 21 EXPENSE ............................................................................................................23 Charitable Donations and Corporate Donations ................................................................. 23 Sponsorships ......................................................................................................................... 23 In-Kind Contributions ........................................................................................................... 23 Corporate Dues ..................................................................................................................... 23 Other Dues ............................................................................................................................ 23 General Services (Centralized) ............................................................................................. 24 Information Services/Information Technology (Centralized) ............................................... 24 Material and Stores Loading (Centralized) .......................................................................... 24 Payroll Accrual (Centralized) ............................................................................................... 24 Postage, Couriers & Express Mail (Centralized) ................................................................. 24 Real Estate (Centralized) ...................................................................................................... 25 Small Tools Loading (Centralized) ....................................................................................... 25 Telecommunications (Centralized) ....................................................................................... 25 Training................................................................................................................................. 25 Travel Expense ...................................................................................................................... 25 CLEARING/OVERHEAD/BILLING ..............................................................27 Construction Overheads ....................................................................................................... 27 Facilities (Centralized) ......................................................................................................... 27 Materials ............................................................................................................................... 27 Miscellaneous Deferred Debits (Account 186200) ............................................................... 27 Miscellaneous Billings .......................................................................................................... 27 Incidental Revenues .............................................................................................................. 28 Spokane River Implementation ............................................................................................. 28 Staff_PR_150 Attachment B Page 2 of 35 Protection, Mitigation, and Enhancements (PM&E) ........................................................... 28 Small Tools............................................................................................................................ 28 Non-Billable Subsidiary Support .......................................................................................... 29 Transportation ...................................................................................................................... 29 Vehicle Classes ..................................................................................................................... 30 Transportation Allocation (Centralized) .............................................................................. 30 CAPITAL BUDGET ........................................ 31 Capital Budget Terminology ................................................................................................. 31 ER-BI-Capital Project Request Flowchart ........................................................................... 32 Categories Codes Table ........................................................................................................ 32 Capital FERC Functional Accounts ..................................................................................... 32 AFUDC ................................................................................................................................. 33 CAPITAL CONSTRUCTION ERS ..................................................................33 Electric and Gas Meter Installations .................................................................................... 33 PCB Capital Costs ................................................................................................................ 33 Preliminary Survey and Investigation (PS&I) ...................................................................... 34 Protection, Mitigation & Enhancements (PM&E) ............................................................... 34 NON-CONSTRUCTION ERS ..........................................................................34 TechnologyERs ..................................................................................................................... 34 Facilities ERs ........................................................................................................................ 34 Capital Tools & Testing Equipment and Stores Equipment ERs .......................................... 34 7000 – Transportation .......................................................................................................... 35 Staff_PR_150 Attachment B Page 3 of 35 SUMMARY OF KEY BUDGET ASSUMPTIONS BUDGET ASSUMPTIONS Capital Budget: We are targeting approximately a $350 million capital budget each year for 2015-2019 AFUDC: 7.32% Sales tax: 8.7% for Spokane, 8.7% for Spokane Public Transportation Benefit Area (PTBA), 8.1% for unincorporated Spokane County, 6% for Kootenai County, and 6.5% for Nez Perce County. Please visit the Sales & Use Tax memo posting in the Tax Info folder on the Outlook Bulletin Boards for specific tax rates. Construction overhead rates by function for 2014 are estimated to be (please note: Administration & Accounting rate will be added to the all other rates for a combined loading in the Budget application): Materials Loading will be 10.0% for the 2015 budget cycle. Labor Loadings Benefits loading 55.13% Payroll Tax loading 8.00% Incentive N.U. 13.00% Incentive Union 1.52% One Leave loading 16.75% Composite rate 64.41% Salary and Wage Increase Bargaining Unit: increase in April Non-Bargaining Unit: increase in March Merit increase Full Year Merit increase Full Year 2015 3.0% 2.25% 3.0% 2.5% 2016 3.0% 2.25% 3.0% 2.5% 2017 3.0% 2.25% 3.0% 2.5% Travel Information Mileage rate 56.0 cents per mile Company airplane incremental cost $40/minute Budget Manual for 2015.doc 4 Staff_PR_150 Attachment B Page 4 of 35 MULTI-YEAR BUDGET PROCEDURE: When entering multiple year budgets some of our more experienced Budgeteers have found the following procedure to work best to keep the budget year data straight. CAPITAL: Enter all of 2015 Capital Projects Roll your ongoing ERs - BIs to 2016 and enter all of your 2016 Capital Projects Roll your ongoing ERs - BIs to 2017 and enter all of your 2017 Capital Projects Enter Long Range (2018 and 2019) Budgets and Transfers NON-CAPITAL: Update your Organization’s 2015 Labor Management Enter your Organization’s 2015 Non-Capital Budget Roll your Organization’s Labor Management to 2016 Roll your Organization’s Non-Capital Budget to 2016 Update your Organization’s 2016 Labor Management Enter your Organization’s 2016 Non-Capital Budget Roll your Organization’s Labor Management to 2017 Roll your Organization’s Non-Capital Budget to 2017 Update your Organization’s 2017 Labor Management Enter your Organization’s 2017 Non-Capital Budget Currently we are not requiring 2018 and 2019 Non-Capital Budgets to be entered Budget Manual for 2015.doc 5 Staff_PR_150 Attachment B Page 5 of 35 2015 BUDGET KEY DATES Tentative 2014 Date Description Early Sep Budget Manual posted to Web July Capital Business Cases reviewed, updated and new cases prepared TBD Centralized Legal due date July Capital Business Cases will be Validated, Scored & Ranked August CPG Reviews Capital Business Cases and Make Funding Decisions Aug Budget Training Sessions for Capital and Non Capital Early Sep O&M Budget Memo and Allocation Early Sep Budget System Open for Capital entry for all years 2015-2019 Early Sep Non-Capital Budget entry 2015-2017 (Approve capital labor requests by 9/21) Sep 30 Capital Budget Due – all years Early Oct Capital Audit Process Oct 6 Non-Capital Budget Due (for 2015-2017) Mid Oct Non-Capital Audit Process Completed Nov 13 Finance Committee approval of Capital Budget BUDGET APPLICATION CONTACTS: Primary Budget Application Contacts Jeremiah Webster Ext. 2764 – Capital & Non-Capital Rosemary Coulson Ext. 2036 - Non-Capital Other available assistance Frank Johnson Ext. 8768 Margie Stevens Ext. 8978 Budget Manual for 2015.doc 6 Staff_PR_150 Attachment B Page 6 of 35 BUDGET CONTACT BY ORGANIZATION ORG ORG Name Budget Contact A01 Native American Relations Resource Accounting A02 HRIS/Payroll Financial Planning & Analysis A04 Environmental Affairs Heide Evans Ext. 4993 or Resource Accounting A07 Production & Generation Neil Thorson Ext. 4776 or Resource Accounting A08 Relay & Protection Design Steve Carrozzo Ext. 2985 A09 IS/IT Shared Services David Plut Ext. 4177 A50 Director of Ops Wa & Id Julie Lee Ext. 4356 A52 Service Dev and Marketing Financial Planning & Analysis A56 System Operations Steve Carrozzo Ext. 2985 A57 Energy Del Utility Accounting Amy Parsons Ext. 2080 A81 Medford Construction Neil Thorson Ext. 4776 A82 Roseburg Neil Thorson Ext. 4776 A83 Klamath Falls Neil Thorson Ext. 4776 B02 Benefits Financial Planning & Analysis B04 Clark Fork License Heide Evans Ext. 4993 or Resource Accounting B08 Business Process Improvement Julie Lee Ext. 4356 B09 Telecommunications Shop David Plut Ext. 4177 B16 Government Relations Steve Carrozzo Ext. 2985 B50 Spokane Electric Julie Lee Ext. 4356 B51 Gas Engineering Neil Thorson Ext. 4776 B52 Gas Engr Cathodic Protection Neil Thorson Ext. 4776 B53 Pullman Julie Lee Ext. 4356 B54 Gas Compliance Neil Thorson Ext. 4776 B56 Misc Transmission Expense Steve Carrozzo Ext. 2985 C02 Employee Engagement Financial Planning & Analysis C04 Spokane River License Heide Evans Ext. 4993 or Resource Accounting C06 Joint Project - CS2 Resource Accounting C07 Hydro Spokane River Neil Thorson Ext. 4776 C08 Engineering Technical Services Steve Carrozzo Ext. 2985 C09 Security Systems David Plut Ext. 4177 C50 Contact Center Spokane-Hiring & Training Steve Carrozzo Ext. 2985 C51 Electric Distribution Design Steve Carrozzo Ext. 2985 C53 Coeur d'Alene Gas Neil Thorson Ext. 4776 C54 Tax Services Financial Planning & Analysis C56 System Planning Steve Carrozzo Ext. 2985 C57 Spokane Electric Network Steve Carrozzo Ext. 2985 C83 LaGrande Neil Thorson Ext. 4776 D02 SR VP HR and Corp. Services Financial Planning & Analysis D08 Energy Del General Mgr Laura Vickers Ext. 2904 D09 SCADA Steve Carrozzo Ext. 2985 Budget Manual for 2015.doc 7 Staff_PR_150 Attachment B Page 7 of 35 ORG ORG Name Budget Contact D50 Meter Reading/Billing Steve Carrozzo Ext. 2985 D51 Vegetation Mgmt Julie Lee Ext. 4356 D52 DSM Policy, Planning and Analysis Mark Baker Ext. 4864 or Neil Thorson Ext. 4776 D53 Clarkston Julie Lee Ext. 4356 D54 Corp & Subsidiary Accounting Adam Munson Ext. 2471 D55 Natural Gas Resources Resource Accounting D56 Director Transmission Steve Carrozzo Ext. 2985 E01 Executive Administration Financial Planning & Analysis E02 Corp Organizational Development Financial Planning & Analysis E07 Generation Engineers Neil Thorson Ext. 4776 E09 Distributed Systems David Plut Ext. 4177 E14 Environmental Compliance Heide Evans Ext. 4993 or Resource Accounting E50 Contact Center-Spokane Steve Carrozzo Ext. 2985 E51 Asset Management Steve Carrozzo Ext. 2985 E52 Oregon DSM Neil Thorson Ext. 4776 E53 Contact Center-Lewiston Steve Carrozzo Ext. 2985 E54 Accounts Payable Financial Planning & Analysis E55 Power Supply Resource Accounting E56 Transmission Services Steve Carrozzo Ext. 2985 F08 Substation Support Neil Thorson Ext. 4776 F50 Contact Center-Credit & Collections Steve Carrozzo Ext. 2985 F52 Energy Solutions Financial Planning & Analysis F53 AM Lewiston/Clarkston Financial Planning & Analysis F54 Treasury & Trust Mngmt Serv Financial Planning & Analysis F55 Financial Planning & Analysis Financial Planning & Analysis G01 Officer Support Team Financial Planning & Analysis G02 Employee Safety Financial Planning & Analysis G08 Director Gas Neil Thorson Ext. 4776 G10 Credit Union Financial Planning & Analysis G50 Colville Julie Lee Ext. 4356 G51 Dir of Natural Gas Neil Thorson Ext. 4776 G53 AM Coeur d'Alene Financial Planning & Analysis G54 Finance Administration Financial Planning & Analysis H02 Occupational Health Financial Planning & Analysis H04 Hydro Compliance Heide Evans Ext. 4993 or Resource Accounting H07 Facilities Management Julie Lee Ext. 4356 H08 Energy Del Strategic Projects Julie Lee Ext. 4356 H14 Community Affairs Financial Planning & Analysis H50 Othello Julie Lee Ext. 4356 H51 Supply Chain Julie Lee Ext. 4356 H53 Kellogg/St Maries Julie Lee Ext. 4356 Budget Manual for 2015.doc 8 Staff_PR_150 Attachment B Page 8 of 35 ORG ORG Name Budget Contact H54 Remittance Services Financial Planning & Analysis I02 Craft Training Financial Planning & Analysis I08 Energy Del Ops Support Neil Thorson Ext. 4776 I50 Contact Center IT Steve Carrozzo Ext. 2985 I54 Taxes Other Than Income Financial Planning & Analysis J01 Executive VP & CFO Financial Planning & Analysis J02 Public Safety Financial Planning & Analysis J06 Joint Project-Jackson Prairie Resource Accounting J08 Gas Construction Quality Control Neil Thorson Ext. 4776 J09 Network Systems David Plut Ext. 4177 J50 Business and Public Affairs Financial Planning & Analysis J51 Warehousing Julie Lee Ext 4356 J53 Sandpoint/Bonners Ferry Julie Lee Ext. 4356 J54 Internal Auditing Financial Planning & Analysis K02 Compensation Financial Planning & Analysis K07 Kettle Falls Neil Thorson Ext. 4776 K08 GIS Editing Steve Carrozzo Ext. 2985 K51 Fleet Management Julie Lee Ext. 4356 K53 Contact Center-CDA Steve Carrozzo Ext. 2985 L02 Smart Grid Workforce Training Financial Planning & Analysis L07 Hydro Clark Fork River Neil Thorson Ext. 4776 L08 Transmission Design Steve Carrozzo Ext. 2985 L50 Spokane Gas Neil Thorson Ext. 4776 L51 Claims Financial Planning & Analysis L52 Claims Accrual Financial Planning & Analysis L53 Coeur d'Alene Julie Lee Ext. 4356 L54 Travel & Flight Operations Julie Lee Ext 4356 M07 Generation Shop Neil Thorson Ext. 4776 M08 Substation Design Steve Carrozzo Ext. 2985 M09 Central Systems David Plut Ext. 4177 M50 Deer Park Julie Lee Ext. 4356 M51 Test & Treat Julie Lee Ext. 4356 M53 AM Spokane Financial Planning & Analysis M54 Chief Strategy Officer Financial Planning & Analysis N06 Joint Project-Colstrip Resource Accounting N08 Drafting & Survey Steve Carrozzo Ext. 2985 N09 IS/IT Administration David Plut Ext. 4177 N50 Dir of Customer Service Steve Carrozzo Ext. 2985 N51 Write Off Accrual Resource Accounting N52 CSS Replacement Project Laura Vickers Ext. 2904 P01 Legal Expenses Financial Planning & Analysis Budget Manual for 2015.doc 9 Staff_PR_150 Attachment B Page 9 of 35 ORG ORG Name Budget Contact P07 Contract Construction Neil Thorson Ext. 4776 P08 Distribution Operation Sys Mgmt Steve Carrozzo Ext. 2985 P09 Infrastructure Technology David Plut Ext. 4177 P50 Davenport Julie Lee Ext. 4356 P51 Distribution Dispatch Steve Carrozzo Ext. 2985 P53 AM Moscow/Pullman Financial Planning & Analysis R09 Communication Systems David Plut Ext. 4177 R11 Rates & Regulations Financial Planning & Analysis R51 Joint Use Prj - Distribution Steve Carrozzo Ext. 2985 R54 Risk Management Financial Planning & Analysis R55 Resource Risk Management Financial Planning & Analysis R56 Insurance Management Financial Planning & Analysis S01 VP & Counsel Reg/Govt Affairs Financial Planning & Analysis S04 SPS CYOC Mgmt Oversight Resource Accounting S08 Strategic Projects Development Julie Lee Ext. 4356 S20 Director of Finance Financial Planning & Analysis S50 Construction Services Steve Carrozzo Ext. 2985 S51 Supply Chain Loadings Steve Carrozzo Ext. 2985 S54 Corporate Communications Financial Planning & Analysis T01 President & COO Avista Corp Financial Planning & Analysis T08 Electrical Engineering Steve Carrozzo Ext. 2985 T51 Operations Project Management Julie Lee Ext. 4356 T52 Demand Side Management Jennifer Smith Ext 2098 U01 Legal Staff Financial Planning & Analysis U50 Limited Income Financial Planning & Analysis V01 Sr VP & General Counsel Financial Planning & Analysis V08 Real Estate Financial Planning & Analysis V50 AM Oregon Financial Planning & Analysis W01 Compliance Financial Planning & Analysis W07 Wind Generation Neil Thorson Ext. 4776 W09 IS/IT Application Support David Plut Ext. 4177 W54 Finance Responsibility Financial Planning & Analysis W55 Wholesale Exposure Reserve Resource Accounting X01 CEO Financial Planning & Analysis X02 HR/Comp/Labor&Emp Relations Financial Planning & Analysis X08 Substation - Relay Shop Neil Thorson Ext. 4776 X54 Accounting Responsibility Adam Munson Ext. 2471 X55 Misc Deferrals Resource Accounting X57 Energy Del Acctng Responsibilities Amy Parsons Ext. 2080 Y01 Corporate Secretary Financial Planning & Analysis Y54 Strategic Corp Development Financial Planning & Analysis Budget Manual for 2015.doc 10 Staff_PR_150 Attachment B Page 10 of 35 ORG ORG Name Budget Contact Y55 Resource Accounting Resource Accounting Z08 Electric Meter Shop Steve Carrozzo Ext. 2985 Z09 Postage Centralization Neil Thorson Ext. 4776 Z57 Centralized Credits Amy Parsons Ext. 2080 Z87 Benefits Loaders Adam Munson Ext. 2471 Z88 Transportation Loaders Steve Carrozzo Ext. 2985 Z89 Payroll Accrual Adam Munson Ext. 2471 Z90 Incentive Compensation Adam Munson Ext. 2471 Z91 Other One Leave Adam Munson Ext. 2471 Carolyn Groome Ext. 4574 Tara Moses Ext. 2032 Budget Manual for 2015.doc 11 Staff_PR_150 Attachment B Page 11 of 35 NON-CAPITAL BUDGET OVERVIEW Non-Capital Terminology Administrative and General (A&G) Subset of O&M; accounts 920-935. Account Key Required fields used for budgeting include Project, Organization, Expenditure type, and Task (POET). Billing Account Billing items are recorded into a suspense account, which are then offset when the billing occurs, netting to zero. Clearing Account Specific cost accounts for the transportation expense, material and stores expense, and small tools that are accumulated and cleared to various capital and operating accounts. Construction Overheads Includes Supervision, Accounting and Engineering labor and expenses. Customer Payments Refunds, rebates, refund of line extensions, etc. Equipment Purchase, usage and O&M expense of equipment operated by company. These items are typically used on more than one project. Includes vehicles, heavy equipment, forklifts, small WA – Washington; ID – Idaho; OR – Oregon; MT – Montana; AN – Allocated North; accomplishing the activities. These costs are spread on a pre-determined basis to direct administrative group, section or department that provides a specific function for the Company. Accounting for the purpose of accumulating the costs of a capital project as described on the Capital Project Request form. A Non-Capital Project Request form is used to request project numbers to be assigned to other areas consisting of expense projects, customer billing, Allocation/Clearing used. Operation, maintenance, and repair costs associated with vehicles and power equipment are accumulated in vehicle class pooling accounts and then allocated from the pools to Budget Manual for 2015.doc 12 Staff_PR_150 Attachment B Page 12 of 35 Non-Capital Budget Elements For detailed information on accounting guidelines and policies, please refer to the Regulatory Accounting Guidelines and Policies in the “A. Accounting Guidelines and Policies” folder under Documents on the Budget Website. There you will find a PowerPoint training presentation on Invoice Coding along with the Regulatory Accounting Guidelines and Policies Manual. Account Key The key fields used for budgeting are made up of four unique parts: Project, Organization (ORG), Expenditure type, and Task. For example: Project Org Expenditure Type Task 09903640 F55 Labor 920000 Organization (ORG) An ORG represents the Organizational unit whose resource incurred the cost. Always charge your own ORG for all expenditures. Master Activity Code (MAC) and Project Number The Energy Delivery Accounting team issues project numbers for the purpose of accumulating the costs of non- capital items. Every non-capital project is assigned to a MAC when it is established. Although the MAC is not used when actual transactions are recorded, it is used during the budgeting process to accumulate costs by activity. If you have any questions concerning the MACs or project numbers, please call the Project & Fixed Asset Accounting Team (Janessa ext. 2538, Howard ext. 2936, or Kellee ext. 2893). Task (FERC Main and Sub Account) The three-digit Main account is primarily pre-defined by FERC to describe the work being performed. The three-digit Sub Account is a further breakdown of the main account. Some Sub Accounts are predefined by FERC while others have been defined by Avista Corp. to meet business requirements. Credit Policy (Centralized) All credits that result from the receipt of cash will be credited to a centralized Organization (Corp ORG below) so that the management team can view funds received in a centralized place and determine the most critical use for those funds. Credits resulting from non-cash events such as reclasses, corrections, transfers and reversals will continue to be credited to individual Organizations (Ind. ORG below). Identification of a transaction as cash or non- cash will depend on the source document used to create the transaction. For example, if the source document for a transaction is a cash-receipts memo, the credit that results from the transaction will be charged to Z57. Conversely, if the source document for a transaction is a transfer form, the credit that results from the transaction will be charged to an individual Organization. All employees responsible for budgeting to an individual Organization must: 1.) identify the total amount of each cash related credit charged to their Organization 2.) budget the gross amount (not including cash credits) by account to the individual Organization 3.) provide a list of any new credit items, amounts and accounts to the Financial Planning & Analysis Team so that these credits can be budgeted to Z57 Budget Manual for 2015.doc 13 Staff_PR_150 Attachment B Page 13 of 35 Financial Accountability Plan – Credit Project Credit Examples CIACs 203-Ciac Contributions must reduce Service Agreements Yes Corp.ORG Capital Cash Book Refunds/Rebates Misc. Revenues 605-Cash Book Product returned Unrecorded receivable Cash Receipts Memo Cash Receipts Memo Yes Yes Corp. ORG B/S Acct. Capital, Expense, O&B B/S Acct. Reclasses Voided Checks First Install-meters Equipment Transfers Transfers DSM Overheads Reversals (AFUDC, etc.) Payables 216-1st Install Meters 215-Equip Xfer 225-Transfers 212-DSM Overhead All meter installs charged to expense Jurisdictional transfers Corrections Transfer Corrections Excel spreadsheet METS Transfer form Excel spreadsheet Various No No No No No Ind. ORG Ind. ORG All Corp. ORG Ind. ORG Expense Capital All Expense Capital, Expense, O&B Damage Claims Bills 207-DC Billings Reimbursement for Expenditures Damage Claim bill form Yes Corp. ORG Capital, Expense, O&B Miscellaneous Bills Credit Union EDS Billings Orthophotography Pre-Line School Apprentice Training Utility Services Make-Readies 221 – Misc Billings Reimbursement for expenditures (plus a potential profit) Miscellaneous Bill form Yes Yes Yes Yes Yes Yes Yes Corp. ORG Corp. ORG Corp. ORG QXX ORG QXX ORG QXX ORG Corp. ORG O&B O&B O&B Operating Revenue Operating Revenue Operating Revenue O&B Sales Tickets Cash Sales Charge (CSS) Sales 605 – Cash Book CSSCAE Sale of goods & services to employees/customers Sales Tickets Sales Tickets Yes Yes Corp. ORG Corp. ORG O&B O&B Materials Mgmt System Salvage Returns/Exchanges Returns to storeroom of inventory, scrap or materials to be refurbished 904 Ticket (S) 904 Ticket (094) Yes No Corp. ORG Ind. ORG B/S Acct. O&B Subsidiary Billings 106-Sub Billing Reimburse Corp. for expenditures on subsidiary’s behalf Excel spreadsheet Yes Corp. ORG O&B Tariffed Activities DSM LIRAP Wind Power 213 – DSM/LIRAP Exp 213 – DSM/LIRAP Exp To reclass program expenditures to balance sheet Excel spreadsheet Excel spreadsheet Manual calculation Yes Yes Yes Corp. ORG Corp. ORG Corp. ORG O&B O&B O&B Accruals Year-end Cross-year Same year Actual pmt < accrual Actual pmt > accrual N/A To appropriately record balance sheet items Excel spreadsheet Individual request Individual request No No No B/S Acct. B/S Acct. B/S Acct. Corp. ORG Ind. ORG B/S Acct. B/S Acct. B/S Acct. Capital, Expense, O&B Capital, Expense, O&B Centralization Loadings (ML, PB, PL, PT, etc) N/A Allocation of pooled costs System No ZXX ORGs Capital, Expense, O&B Regulatory Items PM&E Hamilton St. Bridge PGE Monetization 484-CF PME ID 460-Hamilton ST 464-PGE Mon Required by regulatory agencies Cash Receipts memo Yes Corp. ORG Clearing Acct (1845XX) O&B O&B Budget Manual for 2015.doc 14 Staff_PR_150 Attachment B Page 14 of 35 Centralization of Direct Charges Table Type of Cost Types of Cost Outbound Charging Accountability AFUDC All interest costs associated with CWIP will be charged to Utility Finance’s Org proper Project number, Task and (J10) Planning & Analysis and Non-capital transactions (examples provided proper Project number, Task and (Z57) Fixed Asset Accounting operation will be charged to Facilities’ Org proper Project number, Task and (H07) Services Telecom) charged to IS/IT’s Org. This includes hardware, software, telephone, and telecommunication proper Project number, Task and centralized Org (B09, P09 or W09) (expenditure type 005) will be charged to Legal’s proper Project number, Task and (P01)& Chief Compliance Accrual Org under Corp. Accounting proper Project number, Task and (Z89)Accounting improvements will be charged to Real Estate proper Project number, Task and (V08) graphics and mail services will be charged to proper Project number, Task and (H51, Z09)Chain Centralization of Loadings Table Type of Loaders Outbound Charging Accountability WL –LOADERS Indirect Engineering 77700240 107010 –Admin /Accounting 77700241 107020 – Generation and Prod 77700241 107030 – Electric Transmission 77700241 107040 – Electric Distribution 77700242 107050 – Gas Distribution North 77700242 107060 The loadings would be charged to appropriate capital Project number, Task and centralized Org Energy Delivery Acctg Mgr (Z81) Gen & Prod Dir (Z82) Transmission Eng Mgr (Z83) Distribution Eng Mgr (Z84) Gas Eng Mgr (Z85) (Z86) capital, operating, or maintenance Project (Z88) Travel Mgr (L54) Small Tools Loading Stores/Material Loading capital, operating, or maintenance Project number, Task and centralized Org S51 (S51) Payroll Taxes capital, operating, or maintenance Project (Z87) capital, operating, or maintenance Project (B04) Expenditure Type Philosophy: The use of expenditure types will enable the summarization of types of costs that are charged to many different project/task combinations that occur during the year. For the non-capital budget process, the only expenditure types used will be Labor, Overtime (OT), and Non- Labor. Budget Manual for 2015.doc 15 Staff_PR_150 Attachment B Page 15 of 35 Spread Code 01 11 21 31 02 12 22 32 03 13 23 33 04 14 24 34 05 15 25 35 06 16 26 36 07 17 27 37 08 18 28 38 09 19 29 39 10 20 30 40 41 Expenditure Categories Capital Capital expenditures are incurred to create or purchase an asset that costs $1,000, or more, and has a useful life of more than one year. The costs are then recognized over the life of the asset in the form of depreciation or amortization expense. Generally, items that cost less than $1,000 or have a life of less than or equal to one year should not be capitalized. Non-capital Operating & Maintenance (O&M) – Including Administrative & General (A&G) O&M expenditures are the expenses recognized on the income statement in the period incurred to operate and maintain or support the operation and maintenance of company operating assets (those that support gas distribution and electric distribution, transmission and generation). O&M expenses are tracked using Task numbers in the range from 500xxx through 935xxx. A&G is a term commonly used to refer to the subset of O&M accounts in the range of 920xxx to 935xxx. Non-Operating (sometimes referred to as Other Income & Deductions) Non-operating expenditures are the expenses recognized on the income statement in the period incurred that do not support the primary operating activities of the business (gas distribution and electric distribution, transmission and generation). The Task number range is 415xxx to 426xxx. These items are not recoverable through rates. Clearing, Overhead & Billing Clearing and Overhead items may indirectly impact the income statement. These items are accumulated into pooling accounts on the balance sheet and then allocated on a predetermined basis as a loading on capital and/or O&M expenditures. Billing items are recorded into a suspense account, which is then offset when the billing occurs, netting to zero. For assistance in determining the classification of an expenditure category, contact the Project & Fixed Asset Accounting team. (Refer to Budget Contacts section for extensions.) Labor Loadings (Centralized) Direct costs will remain in the originating ORG for cost budgeting and variance reporting. The labor loadings, which include paid time off, payroll benefits, and payroll taxes, will be calculated by the budget application and charged to the appropriate capital, operating, or maintenance Project and Task numbers in ORG Z87. See “Summary of Key Budget Assumptions” for details The Casual Labor calculation takes into consideration the loading for payroll taxes (8.75%), the only loading applied to Casual and Student employees and overtime labor. Budget Manual for 2015.doc 16 Staff_PR_150 Attachment B Page 16 of 35 Labor Information Always charge your labor to your own ORG. You will need to budget your labor to the appropriate projects. The Budget/Forecast/Analysis group will budget paid time off for each ORG based upon each ORG’s historical percentage of paid time off taken during the year. When adding new employees into the budget input application, please use 99999 as the employee number. When adding (not replacing) new staff, be sure to also consider the peripherals that will be needed. Notify other departments, such as facilities and ET so that they can accommodate any extra expenses associated with additional staff. Temporary service or casual employees who are not on our payroll (Humanix, Kelly, Olsten, Volt, etc.) should not appear in the labor management section. Costs for these employees should be budgeted in your non-labor accounts. You will be billed for these services directly from the outside agency. Outside Agencies: (Not on Avista Corp.’s payroll) Representative costs from these providers are detailed below: Executive Secretary/Technical Skills $17.00 - $22.78/hr. Receptionist/Admin Assistant $14.00 - $17.42/hr. General Clerk $12.00 - $16.08/hr. Contact Human Resources at Ext. 2340 if you have any questions. MAC (Master Activity Code) Table MAC DESCRIPTION Investor Relations / Stock Expense / Annual Meeting / Annual Report / Outside Analyst Meetings Board of Director Activities Building Office Maintenance, Services Aircraft Operations & Travel Services Plane Lease, Travel Department Outsourced Activities Graphics Department, Postage, Records, Cafeteria Costs, Collections Department Administrative Activities Administrative Support Real Estate/Right of Way/Contract Services Joint Use IS/IT Activities Outside Contract Expenses and IS Avista Labor Software & SW Licensing Maintenance Hardware Maintenance Telecommunication Monthly Usage Charges 022 OVERHEAD ACTIVITIES Transportation Small Tools Equipment & Capital Tools Maintenance Small tools storeroom maintenance Budget Manual for 2015.doc 17 Staff_PR_150 Attachment B Page 17 of 35 023 Supply Chain labor and costs to buy/dispose of equip and material Procurement scheduling/inventory management Warehouse facility operation and control Traveling Storekeeper Investment Recovery-Buying, disposal, warehouse operations 024 PUBLIC AFFAIRS/COMMUNICATION ACTIVITIES 030 Level of corporate support/participation Charitable group activities Community relations policies, activities and programs 031 Association evaluation, Association activities, Association surveys and studies 033 External and internal communications programs External viewpoints Communications channels and media contacts Release information to the public and media Arrange or conduct tours of facilities Information for public appearances Public education programs Audio-visual productions ENVIRONMENTAL, LEGISLATIVE AND GOVERNMENT RELATIONS ACTIVITIES Native American Relations Participation, presentations, and meetings with Native American Organizations 051 Environmental policies and procedures Air quality, water quality, water treatment, vegetation, fish, wildlife, recreation, solid/hazardous waste disposal compliance with regulations Testimony at public hearings and before regulatory agencies 052 Legislative and governmental relations strategies Legislative and governmental proceedings Relationships with federal, state, and local government representatives Impact of legislation on the company 054 Represent the company’s position on various issues Commission orders and impacts on the company Relationships with commission members and staff Regulatory requirement associated with construction programs Regulatory applications Studies and inspections for compliance including FERC inspections Filing for construction permits, impact statements, and licenses Hearings related to regulatory requirements and compliance 055 CUSTOMER SERVICE, INFORMATION, AND MARKETING ACTIVITIES Customer Accounts Meter Reading or Meter Testing Customer Bill Processing, Customer Contact, Credit & Collections, CARE Activities, Utility Service Contracts, Radio Interference Work, Budget Manual for 2015.doc 18 Staff_PR_150 Attachment B Page 18 of 35 072 Customer Service & Information 073 Sales and Marketing Electric/Gas Meter Sales Business Market Development Natural Gas Penetration Utility Positioning Market Research Automated Meter Reading (AMR) Fairs, Homeshows, and Tradeshows Utility Newsletters 075 ELEC/GAS DISTRIBUTION, TRANSMISSION, GENERATION AND RESOURCES Storm/Weather Event Maintenance Electric distribution and transmission storm maint 202 Customer/government/public requested electric transmission & distribution maintenance and gas maintenance Electric and gas maintenance practices Electric and gas road relocates Electric and gas locates 203 New customer/revenue/growth related electric transmission & distribution maintenance and gas maintenance New customer locating Street and area lights 204 Failed or failing plant or condition/ electric transmission & distribution and gas maintenance Underground fault repair 205 Transmission and distribution substation maintenance Preventative transmission and distribution maintenance ERT installs, Test, treat, and stub Hydro generation plant maintenance Thermal generation plant maintenance Combustion turbine generation plant maintenance 206 Tree related transmission and distribution maintenance Tree trimming – planned and unplanned 210 Colstrip Operation & Maintenance, Colstrip Fuel 211 Distribution & transmission line, station, protection and control design Power plant, generation, hydro, and thermal design Metering and testing design 215 Budget Manual for 2015.doc 19 Staff_PR_150 Attachment B Page 19 of 35 220 Generation Planning Hydro Generating Plant Operations Thermal Generating Plant Operations Kettle Falls Fuel 245 Transmission, switching station and substation support Electric mapping and GIS development Distribution system support Electrical system operations, coordination and dynamics Steady state studies, Northwest Power Pool Electric operational system support ---------------------------------------------------------------------- Gas operations Gas deferrals and amortizations Gas new mapping, Build farm taps HUMAN RESOURCE ACTIVITIES 280 Compensation Administration Recruitment/Relocation Labor/Management Relations Orientation 281 Safety Meeting Required Training such (i.e. Apprentice/Craft Training) 291 Benefit Administration Post Retirement and FASB 106 292 Safety Administration 295 FINANCIAL AND CONTROL ACTIVITIES 331 337 Treasury Activities 341 Risk Management/Insurance Public Injury/Damages 342 343 Subsidiary Company Support Unbilled PLANNING, ANALYSIS AND REPORTING ACTIVITIES 364 369 Budget Manual for 2015.doc 20 Staff_PR_150 Attachment B Page 20 of 35 FERC Non-Capital Account List The following accounts are used in the budget system. It is not a comprehensive list of all FERC accounts. ASSETS AND OTHER DEBITS (Other) 182.3 Other reg assets 102 Property purch/sold 183 Preliminary survey and investigation 107 Capital overhead 184 Clearing accounts (fleet, small tools, PME) 163 Stores expense undistributed 186 Miscellaneous deferred debits LIABILITIES AND OTHER CREDITS (Other) OTHER INCOME AND DEDUCTIONS (Non-Operating) Other Income Other Income Deductions FERC Non-Capital Account List - Operating 556 System control and load dispatching Operation 557 Other expenses 500 Operation supervision and engineering 501 Fuel Consumed / Handling 502 Steam expenses Operation 503 Steam from other sources 560 Operation supervision and engineering 505 Electric expenses 560.3 Grid West 506 Miscellaneous steam power expenses 561 Load dispatching 507 Rents 562 Station expenses Maintenance 563 Overhead line expenses 510 Maint. Supervision and engineering 566 Miscellaneous transmission expenses 511 Maint. of structures 567 Rents 512 Maint. of boiler plant Maintenance 513 Maint. of electric plant 568 Maint. supervision and engineering 514 Maint. of miscellaneous steam plant 569 Maint. of structures 570 Maint. of station equipment Operation 571 Maint. of overhead lines 535 Operation supervision and engineering 572 Maint. of underground lines 536 Water for power 573 Maint. of miscellaneous transmission plant 537 Hydraulic expenses 538 Electric expenses Operation 539 Miscellaneous hydraulic power generation expenses 580 Operation supervision and engineering 540 Rents 582 Station expenses Maintenance 583 Overhead line expenses 541 Maint. Supervision and engineering 584 Underground line expenses 542 Maint. of structures 585 Street lighting and signal system expenses 543 Maint. of reservoirs, dams and waterways 586 Meter expenses 544 Maint. of electric plant 587 Customer installations expenses 545 Maint. of miscellaneous hydraulic plant 588 Miscellaneous distribution expenses 589 Rents Operation Maintenance 546 Operation supervision and engineering 590 Maint. supervision and engineering 548 Generation expenses 591 Maint. of structures 549 Miscellaneous other power generation expenses 592 Maint. of station equipment 550 Rents 593 Maint. of overhead lines Maintenance 594 Maint. of underground lines 551 Maint. Supervision and engineering 595 Maint. Of line transformers 552 Maint. of structures 596 Maint. of street lighting and signal systems 553 Maint. of generating and electric plant 597 Maint. of meters 554 Maint. of misc other power generation plant 598 Maint. of miscellaneous distribution plant Budget Manual for 2015.doc 21 Staff_PR_150 Attachment B Page 21 of 35 FERC Non-Capital Account List – Operating (continued) GAS UNDERGROUND STORAGE EXPENSES CUSTOMER SERVICE AND INFORMATIONAL EXPENSES Operation Operation 813 Other gas supply expenses 908 Customer assistance expenses 814 Operation supervision and engineering 908.61 LIRAP 824 Other expenses 908.99 DSM amortization 837 Maint. of other equipment 909 Informational and instructional advertising expenses 910 Miscellaneous customer service and informational exp Operation 870 Operation supervision and engineering Operation 874 Mains and services expenses 911 Supervision 875 Measuring and regulating station exp – General 912 Demonstrating and selling expenses 876 Measuring and regulating station exp – Industrial 913 Advertising expenses 877 Measuring and regulating station exp – City Gate 916 Miscellaneous sales expenses 878 Meter and house regulator exp 879 Customer installations exp 880 Other expenses Operation 881 Rents 920 Administrative and general salaries Maintenance 921 Office supplies and expenses 885 Maint. Supervision and engineering 922 Administrative expenses transferred – Credit 887 Maint. of mains 923 Outside services employed 889 Maint. of measuring and reg. Station equip – Gen 924 Property insurance 890 Maint of measuring and reg. Station equip – Industrial 925 Injuries and damages 891 Maint of measuring and reg. Station equip – City Gate 926 Employee pensions and benefits 892 Maint. of services 927 Franchise requirements 893 Maint. of meter and house regulators 928 Regulatory commissions expenses 894 Maint. of other equipment 930.1 General advertising expenses 930.2 Miscellaneous general expenses 931 Rents Operation Maintenance 901 Supervision 935 Maintenance of general plant 902 Meter reading expenses 929 903 Customer records and collection expenses 930 903.9 Customer records and collection expenses – A/R Sale 931 904 Uncollectible accounts 905 Miscellaneous customer accounts expenses Budget Manual for 2015.doc 22 Staff_PR_150 Attachment B Page 22 of 35 EXPENSE For more detailed information on accounting for these items within Oracle please refer to the Regulatory Accounting Guidelines and Policies in the “A. Accounting Guidelines and Policies” folder under Documents on the Budget Website. Charitable Donations and Corporate Donations Corporate contributions provide financial support to organizations and activities benefiting the various communities impacted by the company, while supporting business initiatives and fostering relationships with key stakeholders. Strategic areas of support for the company are programs/activities/organizations supporting education, economic/community development and low income/elderly citizens. These charges are “below the line” and should be budgeted to 77700300 426100. Sponsorships Sporting event sponsorships are considered part of marketing and brand identity efforts and should be budgeted “below the line” to 77700300 426100. In-Kind Contributions In addition to cash contributions, the company also endorses in-kind donations to organizations. All incremental expenses associated with volunteer activities should be recorded to 77700300 426100. Direct labor costs which are more than incidental and on a recurring basis, must also be recorded to a 77700300 426100. For example, if you are a loaned employee or executive, your time must be recorded Below the Line. For any questions regarding in kind contributions of labor, please contact Adam Munson, Director of Accounting. Corporate Dues Corporate memberships are usually made to organizations that are of a national or regional nature, i.e., EEI, AGA, Western Electric Power Institute, etc. These corporate dues/memberships are budgeted to 09800310 930200 (Electric) and 09900311 930200 (Gas). The lobbying portion of an Organization’s dues or memberships should be budget “below the line” to 77700300 426400. Other Dues Employees are encouraged to participate in community involvement opportunities and in professional organizations that are of strategic importance to the corporation. Dues in such organizations should be included in the budget only when participation in these types of activities are considered an essential part of an employee’s job responsibilities and will provide real benefits to the Company’s customers. Employee dues for individual memberships in professional organizations should be budgeted as individual expenses with appropriate expense distributions related to each employee’s job responsibility, i.e. if you charge A&G you should use one of the following: 02800162 921000 - Admin Activities- WA Common 03800162 921000 - Gas Ops Admin Activity – Idaho 06800161 921000 - Gas Oregon Admin Activity 09800162 921000 - Elect Admin Activity - A and G 09800163 921000 - Admin Activities-Common WA ID 09800166 921000 - Gas Ops No Admin Activity-Admin 09900160 921000 - Gas Ops Admin Activity – Admin 09900162 921000 - Admin Activities-Common to All Company or Employee dues for memberships in community organizations that provide a benefit to both the Company and the customers should be budgeted 50% to the Utility (see list above) and 50% “Below the Line” to 77700300 426100. Organizations that fall into this category include organizations that provide Avista employees an opportunity to meet with Avista customers that otherwise may be inaccessible to them. These opportunities provide Avista the opportunity to educate its customers on Utility issues such as energy efficiency, customer assistance programs available, rate activity, etc. and to listen to customer concerns. However, this is not the sole purpose of Budget Manual for 2015.doc 23 Staff_PR_150 Attachment B Page 23 of 35 these organizations, and therefore a sharing is appropriate. Examples include Chamber of Commerce, Rotary, Lyons Club, etc. Membership dues for the Spokane Club are budgeted in account 77700300 426100. EXCEPTION: The lobbying portion of dues or memberships should be budgeted to 77700300 426100. This accounting treatment is used because these costs are not recoverable for ratemaking purposes. General Services (Centralized) Basic graphic services, and mail services will be budgeted and charged to General Services (H51). Paper (for your printer, copier, and fax machines) ordered through Ricoh Graphics will be budgeted by and charged to H51. The majority of general printing is charged to a centralized account assigned to supply chain (H51). Specialty paper, finishing supplies, and /or work that must be performed by an outside printer, will be charged to your department ORG. In addition, printing jobs performed as a donation on behalf of Avista will be charged to your department ORG. Subsidiary/tenant operations (Credit Union, Advantage IQ, Ricoh, and HP) will continue to budget and be charged back for all services. Please contact Kristie Condosta (ext. 2447) if you have any questions. Enterprise Technology (Centralized) All costs for technology items will be budgeted by and charged to ET’s ORG. All charges will be directly coded to proper projects and task numbers and centralized ORG (B09, C09, E09, J09, M09, P09, R09, S09, or W09). Please refer to the ET Centralized memo and form located in the Capital Documents folder on the Budget website for detailed information. Contact the Technology Project Management Office at email address #Corp Technology Project Management Office with questions. Material and Stores Loading (Centralized) Individual ORGs should not budget for the material and stores loading. The loading will be budgeted and charged to the appropriate capital, operating, or maintenance project and task number, and to Supply Chain Loadings (S51). This will allow projects to be fully loaded, but will remove the material & stores loading from individual ORG variance reporting. This applies to both capital and non-capital expenditures. Please contact Cody Krogh (ext. 2085) or April Spacek (ext. 8537) if you have any questions. Payroll Accrual (Centralized) Monthly spreads in the Non-Capital Budget Input Application will not include payroll accruals. Labor will be based on actual pay dates. The payroll accrual will be budgeted by and charged to Accounting Responsibility (Z89). Please contact Adam Munson (ext. 2471) if there are any questions. Postage, Couriers & Express Mail (Centralized) Postage will be budgeted by and charged to Postage Centralization (Z09). Most courier and express mail charges are centralized to ORG H51. Services which have been established as part of a regular business operation may be charged to the sponsoring ORG. Common carrier freight related to materials and equipment shipments may be charged to the individual ORG. Actual costs for subsidiary/tenant operations (Credit Union, Ricoh, and HP) will be charged back to those ORGs. The OR Division should continue to budget for all of their postage needs. If you have any questions or need further information, please contact Kristie Condosta (ext. 2447). Budget Manual for 2015.doc 24 Staff_PR_150 Attachment B Page 24 of 35 Real Estate (Centralized) All costs will be budgeted by and charged to Real Estate (V08). This will include charges for easements, land purchases, land rights, easement maintenance, etc. All charges will be directly coded to proper project and task numbers, and the centralized ORG (V08). Small Tools Loading (Centralized) Small tools loading will be budgeted by and charged to Supply Chain Loadings (S51). This will allow projects to be fully loaded but will remove the small tool loading from individual ORG variance reporting. Please contact April Spacek (ext. 8537) or Cody Krogh (ext. 2085) if there are any questions. This applies to both non-capital and capital expenditures. Telecommunications (Centralized) Expenses related to operation of the Company’s telecommunications systems including dedicated circuits, frame relay, dark fiber, ISP, cable, local service, teleconferencing, fax lines, business lines, long distance, toll-free charges, wireless, pager, directory advertising, including those services delivered to non-Company locations such as community centers or employee residences, will be budgeted by and charged to Information Services (R09). Please contact Walter Roys (ext. 2878) if there are any questions. Training All training and development labor and expense is to be charged to MAC 281 with one of the designated projects (projects xxx0281x) and the task number for training expense related to the activity that the training primarily supports. Please contact the Project & Fixed Asset Accounting Team (Janessa ext. 2538, Howard ext. 2936, or Kellee ext. 2893) if you need assistance to identify the correct project and task. Explanation Training Use for all training that benefits the corporation (including apprentice training) but is not required by law or regulation. Required Training Use for all training that is required by law or regulations, including safety related skills training. Safety Meetings Use for regular safety meeting attendance. What's considered training and development? In-house workshops and seminars includes leadership training, customer service skills workshops, off-the-job apprentice training, team-building, facilitation skills, financial skills, safety or compliance related training, etc. Off-site workshops (local or distant), conferences, seminars and specialized courses includes American Management Association, Career Track, WSU Conferences, WEPI, AGA or EEI workshops, Conference Board, professional trade association workshops, and workshops/seminars sponsored by consulting firms. Travel Expense Commercial Air Fare: In order to promote consistency in travel cost estimating, please use the round trip air fares from the following table for the more commonly traveled destinations. Keep in mind; however, these fares are subject to change. If the proposed destination is not indicated, please use the Travel website on AVAnet to find other fares. Contact Kristie Condosta (ext. 2447) for further assistance. Budget Manual for 2015.doc 25 Staff_PR_150 Attachment B Page 25 of 35 Round Trip Airfare: Flight costs as of July 2014 on top 30 destinations in the last 12 months. Prices are per person and do not include baggage fees or fees charged directly by TSA or the airline. Spokane To Discount - Coach Spokane To Discount - Coach Albuquerque, NM $422 $748 Manchester, GB $2,025 $6,069 Anchorage, AK $678 $721 Medford, OR $298 $594 Asheville, NC $865 $1,050 Miami, FL $474 $1,019 Bangalore, India $3,245 $4,335 Munich, DE $3,101 $3,333 Boise, ID $242 $258 Oakland, CA $282 $362 Chicago-OHare, IL $365 $989 Phoenix, AZ $281 $361 Dallas-Ft Worth, TX $349 $685 Pittsburgh, PA $379 $779 Denver, CO $219 $387 Portland, OR $179 $187 Detroit City, MI $379 $627 Salt Lake City, UT $307 $757 Honolulu, HI $549 $710 San Antonio, TX $388 $621 Houston-Hobby, TX $398 $653 San Diego, CA $336 $474 Juneau, AK $685 $693 San Jose, CA $308 $378 Kahului, HI $586 $866 Seattle, WA $195 $205 Las Vegas, NV $278 $456 Vancouver, BC Canada $465 $753 Lihue, HI $657 $1,030 Washington-National, D.C. $403 $759 Company Airplane: The intent of the airplane pricing policy is to encourage economic utilization and therefore minimize the overall cost of air travel incurred by the Company. The corporate aircraft may be scheduled as an alternative to commercial travel when it is the most cost effective means of travel which is based on an economic cost model which takes into account employee productivity and other related costs or the importance of the meeting or timing is critical to warrant its use. Executive approval is required for all scheduling. All costs related to the Company airplane are budgeted and charged to L54 – Travel and Flight Operations. The usage charges based on the published allocation rate will be charged to individual organizations to fully load Projects; however they will not be reflected in non- capital variance reporting. For more detailed information on accounting for the Corporate Aircraft in Oracle please refer to the Regulatory Accounting Guidelines and Policies in the “A. Accounting Guidelines and Policies” folder under Documents on the Budget Website. Please contact Sue Fleming (ext. 4140) for questions. Vehicle Mileage Rate: The standard mileage rates for use by employees, self-employed individuals or other taxpayers in computing the deductible costs of operating a passenger vehicle for business purposes is currently at 56.0 cents per mile. Budget Manual for 2015.doc 26 Staff_PR_150 Attachment B Page 26 of 35 CLEARING/OVERHEAD/BILLING Construction Overheads All construction items that can be identified to a specific project under a specific or blanket ER should be charged directly to that project number. Budget for and charge the costs, which directly relate to construction but cannot be charged directly to a specific construction project number, in one of the following clearing work orders: PROJECT/TASK INDIRECT ENGINEERING 77700240 107010-ORG Administration & Accounting 77700241 107020-ORG Generation 77700241 107025-ORG Safety Clothing Production 77700241 107030-ORG Electric Transmission 77700241 107035-ORG Safety Clothing Transmission 77700241 107040-ORG Electric Distribution 77700241 107045-ORG Safety Clothing Distribution 77700242 107050-ORG Gas Distribution North 77700242 107060-ORG Gas Distribution South Please contact the Project & Fixed Asset Accounting Team (Janessa ext. 2538, Howard ext. 2936, or Kellee ext. 2893) if you have any questions. Facilities (Centralized) All operating and maintenance expenses incurred to operate and maintain the general office complex and outlying offices will be budgeted by and charged to Facilities Management (H07). This includes all utility invoices such as water, sewer, gas and electric bills. This also includes all facility remodeling. If you anticipate any remodeling needs for 2015, please coordinate with Facilities Management. Contact Marcial Laude (ext. 8454) or Margie Lundberg (ext. 4596) if you have any questions. Materials If your ORG anticipates incurring direct charges in the operation and/or supervision of a storeroom, you should budget for these charges using 77700233 163000. Labor charges associated with obtaining materials from storerooms or requisitioning direct purchase via a purchase order should not be budgeted or charged to this account, they should be budgeted and charged to specific projects or to a Project / Task within the requesting ORG. All material expenditures should be budgeted and charged to an appropriate operating, maintenance, or capital account. Please contact April Spacek (ext. 8537) or Cody Krogh (ext. 2085) if there are any questions. Miscellaneous Deferred Debits (Account 186200) The 186200 account is primarily used for charges of which final disposition is uncertain and are unusual or extraordinary in nature. This type of account is often referred to as a “suspense” account. If charges of this nature are anticipated, budget the costs using the appropriate suspense account (186200) with your department’s ORG. If the charges to be budgeted are new, contact Janessa Stromberger (ext 2538). For issuance of new suspense project numbers contact the Project & Fixed Asset Accounting Team (Janessa ext. 2538, Howard ext. 2936, or Kellee ext. 2893). Miscellaneous Billings Costs incurred on company premises (e.g., Credit Union, EDS, Union, etc.) should be budgeted to account 186200 with the appropriate project number and ORG. Credits for reimbursements should be budgeted and accounted for as indicated in the credit policy. Budget Manual for 2015.doc 27 Staff_PR_150 Attachment B Page 27 of 35 Incidental Revenues Incidental Revenues are operating revenues and should not be budgeted to individual ORGs. Profits, above and beyond reimbursable expenses, should never be budgeted as reductions (credits) to expense or capital accounts. Spokane River Implementation A condition of the current 50-year FERC license for Avista’s five hydroelectric developments located along the Spokane River in northern Idaho and eastern Washington outlines the protection and enhancement of fish, wildlife, water quality, recreation, cultural and aesthetic resources of the Spokane River. Costs related to these measures are accounted for in the 1844XX and 1849XX accounts. The charges are then cleared to a Deferral account or directly to expense accounts for Washington (537200 and 537300). A set amount is amortized from the Washington Deferral account to the 537200 and 537300 expense accounts. All costs, even those from other ORG’s, will be charged to these accounts for cost budgeting and variance reporting. The loadings will be charged to the appropriate capital, operating, or maintenance project and task numbers within ORG C04. For assistance contact Heide Evans (ext. 4993). Protection, Mitigation, and Enhancements (PM&E) The Protection, Mitigation, and Enhancement Measures of the Clark Fork Settlement Agreement outline the environmental, cultural, public recreation, fishery, wildlife, operational, and related measures which Avista is required to implement, for the term of 45 years, as a condition of the current FERC license for Avista’s Clark Fork Project (Cabinet Gorge and Noxon Rapids dams). Costs related to PM&E’s are accounted for in the 1845XX accounts. The charges are then cleared directly to expense accounts for Washington (537200 and 537300). A set amount is amortized from the Idaho Deferral account to the 537200 and 537300 expense accounts. All costs, even those from other ORG’s, will be charged to these accounts for cost budgeting and variance reporting. The loadings will be charged to the appropriate capital, operating, or maintenance project and task numbers within ORG B04. For assistance contact Heide Evans (ext. 4993). Small Tools Small tools are classified as hand-held or portable tools if: • The unit cost is equal to or less than $1,000 • The useful life is equal to or less than one year • The tool is used directly in the repair, maintenance, or installation of equipment or facilities Examples of charges that are not considered small tools include (but are not limited to): • Building Materials – cement, lumber, sand, gravel, tape, nails, etc. • Communications – cell phones, batteries; two-way radios, modems, accessories • Computer equipment and accessories • Fuel or Freight • Furniture • Labor – See Exception Below • Magazine subscriptions • Medical Supplies – aspirin, Sudafed, etc. • Paper Products – wiping rags, paper towels • Service & Leases – phone bills, fax leases, etc. • Squincher • Transportation Charges – mileage for company vehicles • Vehicle and Mobile Radio Accessories Please contact April Spacek (ext. 8537) if there are any questions. Budget Manual for 2015.doc 28 Staff_PR_150 Attachment B Page 28 of 35 Budget: The budget for small tools purchased and issued via the Tool Crib inventory is centralized to ORG J51 using Project/Task 77700218 184XXX as appropriate for your location. Departments making direct purchases from suppliers should budget for the small tools account (77700218 184250). If the purchase is safety related, please use task 184252. Expenditures: Any ORG that must make direct purchases (from a supplier) for small tools in the ordinary course of business should charge 77700218 184XXX as appropriate for your location (or task 184252 if safety related) with your ORG. Charges will appear on the department’s “Other” budget actual reporting. Material issue transactions from inventory are centralized to ORG J51. Departments are expected to purchase via the Spokane Tool Crib whenever possible before acquiring tools from other sources. Labor: Labor can only be charged to small tools with specific authorization by April Spacek (ext. 8537). Non-Billable Subsidiary Support Any work to be performed by upper management that provides an oversight function to the subsidiaries and is not properly billable should be charged to your ORG using Project 77703430 417120. Work that a subsidiary would have to purchase elsewhere, if it was not provided by Avista Corp., is always billable. Please contact Keri Meister (ext. 2102) for guidance. Transportation Fleet Management will budget for all out-of-pocket charges for servicing, maintenance, and parts (including oil, filters, tires, etc.) obtained directly from the Spokane maintenance facility. ALL FUEL AND LICENSING WILL BE BUDGETED BY FLEET MANAGEMENT. If an individual WA/ID Division ORG anticipates obtaining servicing, maintenance, and parts from outside sources they will need to budget for them in account 77700200 184100 with your ORG. Please contact Neil Thorson (ext. 4776) for guidance. This also applies to locations with on-site vehicle maintenance facilities who anticipate obtaining their maintenance and service items from outside sources. The Oregon Division should budget for all their fleet maintenance needs. REMEMBER: WHEN CHARGES ARE INCURRED, THEY SHOULD BE CHARGED TO THE APPROPRIATE PROJECT NUMBER, 1841xx (where “xx” represents the correct vehicle class), and your ORG. If you have any questions about budgeting for transportation, please contact Neil Thorson (ext. 4776), Debbie Tolliver (ext. 4617), Greg Loew (ext. 2072) or the Project & Fixed Asset Accounting Team (Howard ext. 2936, Kellee ext. 2893). Budget Manual for 2015.doc 29 Staff_PR_150 Attachment B Page 29 of 35 Vehicle Classes Vehicle Class Description Transportation Allocation (Centralized) Individual ORGs should not budget for the transportation allocation. The allocation will be budgeted and charged to appropriate capital, operating, and maintenance project and task numbers and to ORG Z88. This will allow projects to be fully allocated, but will remove the transportation allocation from individual ORG variance reporting. Please contact the Project & Fixed Asset Accounting Team (Janessa ext. 2538, Howard ext. 2936, or Kellee ext. 2893) if you have any questions. Budget Manual for 2015.doc 30 Staff_PR_150 Attachment B Page 30 of 35 CAPITAL BUDGET Capital Budget Terminology ** Capital allocations are done at this level, but capital budgeting is done at the ER/BI new specific and certain blanket construction budget items. After all signatory approvals, the Energy Delivery Accounting will assign a project number. The Capital Project Request form is also designed to accommodate presentation of estimated costs associated with maintenance, customer billing, suspense and ** construction costs, recommending necessary Capital Project Request action, and WA – Washington; ID – Idaho; OR – Oregon; MT – Montana; AN – Allocated by Energy Delivery Accounting for the purpose of accumulating the costs of a capital or expense project as described on the Project Request form. Project numbers are also assigned to other areas consisting of expense projects, cost of plant and equipment as of a specific date. *To access forms: Go to Avanet/Employee Resources/Forms/Finance Forms **To access ER/BI forms Go to Avanet/Administrative Resources/Budget/Documents/Capital/ERBI Request Form Budget Manual for 2015.doc 31 Staff_PR_150 Attachment B Page 31 of 35 ER-BI-Capital Project Request Flowchart Categories Codes Table Category Description realization through year-round innovation (excluded from annual planning, for in- Capital FERC Functional Accounts ELECTRIC GAS Intangible Transmission Intangible Transmission Steam production Distribution Manufactured gas Distribution Hydro production General Underground storage General Other production Other storage plant ER 1 NNNN-Lib Lake 115kv Transmission 2 NNNN-Electric Rev Blanket BI 1 XXXXX-Install 115kv Line Position 2 XXXXX-Colville Project 1 LLLNNNNN-Construction 2 LLLNNNNN-Colville BI 1 XXXXX-Construct Line 2 XXXXX-Spokane Project 1 LLLNNNNN-Design & Construct Project 1LLLNNNNN-Obtain Right of Way 2 LLLNNNNNN-Spokane Capital Project Request Form LEGEND ER - Expenditure Requisition N – number BI - Budget Item X – alpha-numeric LLL Three digit location 1 Example of specific ER flow 2 blanket Capital Project Request Form Form Actual charging requires a Capital Project #. An ER and BI are necessary for Capital Project set-up. Budget Manual for 2015.doc 32 Staff_PR_150 Attachment B Page 32 of 35 AFUDC AFUDC (Allowance for funds used during construction) is an amount capitalized relating to the cost of money used to finance projects during the construction period. For budget year 2015, this amount is 7.64%. AFUDC IS NOT accrued on the following: • Jobs that can be designed and constructed within a month or less. • Salvage, Retirement, and Removal Accounts. • Construction blanket ERs, which DO NOT require specific work orders and/or are automatically transferred to Plant-In-Service. • Work orders for the purchase of equipment, vehicles, furniture, etc. are automatically transferred to Plant-In-Service. Please keep in mind that all AFUDC will be centralized under one ORG J10. ER sponsors will be required to budget AFUDC into overall project costs associated with an ER but the budgeted ORG will be J10. CAPITAL CONSTRUCTION ERS Electric and Gas Meter Installations Capitalization of meter installation costs can only occur when a meter is first placed in service. Subsequent reinstalled meter charges should be expensed. All meter installation work is to be charged directly to capital. Subsequent installation costs for all electric and gas meters are recorded by the Project & Fixed Asset Accounting Team. If you have any questions regarding electric and gas meter accounting, call the Project & Fixed Asset Accounting Team (Janessa ext. 2538, Howard ext. 2936, or Kellee ext. 2893). Retired Equipment Costs Retired and disposed electrical equipment and oil costs are capitalized. Equipment purchased to replace retired oil- filled equipment should be capitalized. The following activities and costs are considered capitalized costs of disposal (removal) when associated with a retired piece of equipment: • Internal and external labor to remove, clean-up, transport, test, package, store equipment, pump fluids and maintain proper documentation and records. • Disposal costs at State and/or EPA-approved PCB incinerators and landfills • Field testing of oil filled active equipment if removed from service • Salvage costs at state and/or EPA-approved salvage operations • Laboratory testing costs relating to identifying PCBs and proper disposal of equipment containing PCBs • Chemical treatment costs from oil related to disposed equipment • Other costs of disposal of PCBs directly related to the retirement of a specific piece of equipment • Specific system removal projects • Rinsing costs • Infrastructure and handling system improvements, repairs and replacement If you have any questions regarding PCB accounting, call Darrell Soyars (ext 2860). Budget Manual for 2015.doc 33 Staff_PR_150 Attachment B Page 33 of 35 Preliminary Survey and Investigation (PS&I) Preliminary survey and investigation charges are for expenditures for preliminary surveys, plans, investigations, etc., for the purpose of determining the feasibility of contemplated utility projects that may be approved capital budget items in future years. The feasibility costs will be tracked with a suspense project and charged to suspense account (183000). If the project becomes an approved capital budget item, the costs are then transferred to a capital project. If the project is not approved the changes are expensed to the appropriate operating accounts. If you have any questions regarding preliminary survey and investigation coordination or prioritizations contact the Project & Fixed Asset Accounting Team (Janessa ext. 2538, Howard ext. 2936, or Kellee ext. 2893). Protection, Mitigation & Enhancements (PM&E) ER 6103 The Protection, Mitigation, and Enhancement Measures of the Clark Fork Settlement Agreement outline the environmental, cultural, public recreation, fishery, wildlife, operational, and related measures, which Avista is required to implement, for the term of 45 years, as a condition of the current FERC license for Avista’s Clark Fork Project (Cabinet Gorge and Noxon Rapids dams). B04 will be the only ORG budgeting to these capital accounts. For assistance, please contact Heide Evans (ext. 4993). Spokane River Implementation ER6107 A condition of the current 50-year FERC license for Avista’s five hydroelectric developments located along the Spokane River in northern Idaho and eastern Washington. License conditions are intended to protect and enhance fish, wildlife, water quality, recreation, cultural and aesthetic resources. C04 will be the only ORG budgeting to these capital accounts. For assistance, please contact Heide Evans (ext. 4993). NON-CONSTRUCTION ERS Technology ERs Please refer to the ET Centralized memo and form located in the Capital Documents folder on the Budget website for detailed information. Contact the Technology Project Management Office at email address #Corp Technology Project Management Office with questions. Facilities ERs Please refer to the Facilities Capital Request Form in the Capital Documents folder on the Budget website for detailed information. Contact Marcial Laude (ext 8454) or Margie Lundberg (ext 4596) with questions. Capital Tools & Testing Equipment and Stores Equipment ERs Please refer to the request forms in the Centralized Budgets folder under Capital Documents on the Budget website for detailed information. Contact the following individuals for information on standard or specialized tools and equipment: Gary Shrope (ext. 4100) Electric Tools, Testing and Lab Equipment Dan Wisdom (ext 4123) Gas Tools & Equipment April Spacek (ext. 5837) Stores Equipment Budget Manual for 2015.doc 34 Staff_PR_150 Attachment B Page 34 of 35 7000 – Transportation Budgeting for company vehicles and power-operated equipment is an ongoing process coordinated by the Fleet Services department. Please contact Greg Loew (ext. 2072) for questions related to ER 7000. Budget Manual for 2015.doc 35 Staff_PR_150 Attachment B Page 35 of 35