20260205Reply Comments.pdf

' 11
RECEIVED
Avista Corp.
February 5, 2026
1411 East Mission P.O. Box 3727 IDAHO PUBLIC
Spokane, Washington 99220-0500 UTILITIES COMMISSION
Telephone [phone]
Toll Free 800-727-9170
February 5, 2026
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Bldg. 8, Suite 201-A
Boise, Idaho 83714
Re: Case Nos. AVU-E-25-12 and AVU-G-25-09—Reply Comments of Avista Utilities
Dear Commission Secretary:
Pursuant to the Notice of Application and Notice of Modified Procedure issued by the
Idaho Public Utilities Commission (IPUC or Commission) on August 20, 2025,' Avista
Corporation, dba Avista Utilities (Avista or the Company), respectfully submits the following
reply comments in response to the written comments of Commission Staff(Staff) filed on January
15, 2026.
Avista appreciates Staff s thorough review of its 2024 Energy Efficiency Program
(Program) and the findings that nearly a112 of the Company's requested expenses were prudent.
The Company find Staff s comments to be comprehensive and articulate and is grateful for the
continued collaboration and oversight provided by Staff. While Avista does not agree with Staff s
assertion that billing analyses do not provide appropriate furnace measure savings estimates for
Program planning purposes as discussed later, the Company acknowledges the recommendations
1 Order No.36725.
2 In addition to other adjustments made in partnership with Staff and the Company to most accurately reflect the
prudent expenses for 2024, Staff also identifies in their comments(pg.4) $60 in gift cards allocated to Idaho,which
Staff believes"should be borne by shareholders"because they do"not consider employee recognition expenses to be
appropriate for recovery from customers."For purposes of this filing, Avista does not contest the removal of these
costs,but retains the right in future filings to justify all expenses related employee recognition for work performance
as prudent costs incurred in support of Company programs, not to be borne by shareholders, upon Company
demonstration that such costs have a benefit for customers.

provided by Staff are intended to only further strengthen Avista's Program. Avista appreciates the
ongoing collaboration with Staff over the past year to evaluate the likelihood of portfolio level
cost-effectiveness for the Company's natural gas programs and acknowledges that it is currently—
and may continue to be into the near future—very difficult to provide cost-effective incentives for
natural gas measures within the current avoided cost framework. Given the uncertainty of
sufficient customer participation in the face of reduced incentives, Avista supports Staff s
recommendation to file to suspend its natural gas programs following the Commission ruling in
this case.
With that,Avista recognizes the value that Idaho customers receive from natural gas energy
efficiency incentives, particularly within small businesses and low-income households seeking
weatherization services. The Company is also very cognizant of the potential disruption to
suppliers, distributors, and Community Action Partners that suspending its natural gas programs
may have. Avista is open to ideas or suggestions that could keep a path open to providing these
valuable services for its customers. However, if directed by the Commission to suspend its natural
gas programs — based off the information provided within this case and the knowledge that, if
required to utilize Staffs recommended evaluation assumptions, the Company will likely be
unable to plan for, or achieve, a cost effective portfolio for natural gas in the coming year(s) —
Avista will work with Staff and other interested parties to craft a thoughtful ramp-down plan that
ensures sufficient notification to customers and contractors,and is sensitive to the impact of market
disruptions.
While Avista acknowledges and supports the intention of many of Staff s audit findings,
there are particular conclusions made within Staff s comments that the Company would like to
provide clarification on, as there remains an incongruency between Avista and Staff s deductions,
as well as some additional details regarding Avista's programs and processes that the Company
feels compelled to address within this response. For ease of reference, these issues are presented
in the order in which they appear within Staff s comments.
1. Expense Allocations - Regarding Staff s financial review of Avista's 2024 expenditures,
the Company understands the scrutiny under which expense allocations are examined and
agrees with Staff s assertion that accuracy is "important regardless of magnitude."' With
s See Staff comments,page 4.

this in mind, we appreciate the acknowledgement of our efforts in reducing potential
misallocations and will continue striving for the expected excellence in the future.
2. Evaluation of natural gas savings -As provided in Staff comments,Avista contracted with
a third-party evaluator (Evaluator) to conduct an impact analysis of our 2024 energy
efficiency programs. As a part of this evaluation, and as stated by Staff, "the Evaluator
ultimately recommended that the Company estimate furnace savings based on the billing
analysis results". However, Staff stated that it"believes that this recommendation does not
provide an appropriate estimate of the furnace measure savings to be used for planning
future programs."4 Avista respectfully disagrees with Staff s assertion. The Evaluator's use
of billing analysis was utilized precisely because this approach provided savings results
that were most representative of Avista's service area (versus the intermediate estimates
for savings potential provided by the Regional Technical Forum), was done in good faith,
is consistent with natural gas furnace analyses of Avista customers from prior years, and
provides statistically reliable savings results. Billing analyses are a respected, common,
and cost effective methodology for evaluating savings, and Avista trusts the Evaluator's
decision to utilize this approach to evaluate claimed savings from natural gas furnaces.
3. Sampling Methodology - Staff also takes issue with the sampling method utilized by the
Evaluator. The selection of the sample by the Evaluator used industry standard sampling
methodologies to identify statistically significant savings. This very issue was addressed
in the Company's response to Staff s Production Request 16, where the Evaluator noted
both a key advantage and potential downside of the billing analysis method employed. The
Evaluator stated that this approach is an advantageous because it"relies entirely on actual
Avista customer data instead of requiring simplifying assumptions", then subsequently
acknowledged a potential downside being that these analyses often requiring large sample
sizes. To address this potential downside, the Evaluator combined billing data from
customers installing furnaces from 2022 to 2024 to produce a final statistically significant
annual savings estimate for Avista's Idaho households.
4. ENERGY STAR Homes - In response to Staffs recommendations related to ENERGY
STAR homes, Avista states here its obligation to maintain a cost-effective portfolio in
Idaho, and that the Company retains its discretion to offer measures as appropriate, even if
individual measures are not always cost-effective. Particularly for measures for which
volume is relatively low and therefore have minimal impact to the portfolio's cost-
effectiveness, Avista will sometimes elect to continue offering a given measure after that
measure's RTF values change. It should also be noted that RTF values change frequently,
and the Company holds firm to its belief that updating measures more frequently than on
an annual basis causes unnecessary confusion and potential disruption to the market. In the
case of mobile home incentives, these measures are one of several that typically see more
uptake in rural areas than in urban areas. ENERGY STAR homes measures therefore offer
a pathway to Program participation for rural households that may have otherwise been
a Id.at 6.

unable to, or had a hard time trying to, participate in other Avista energy efficiency
offerings due to lack of access to subcontractor/installer services. Avista recognizes that
the RTF approved changes to the NEEM mobile home workbook in November 2024;
however, the workbook wasn't released until February of 2025. To align with Avista's
annual planning cycle, which is based on any updates made to the RTF and published by
November of the preceding year, Avista implemented the following changes to Energy
Star/NEEM home incentives,which went live on January 1,2026 and align with the current
NEEM 2.0 standard rather than the previous NEEM 1.1 standard:
1. Incentives for Energy Star Manufactured homes for natural gas customers in
Idaho were eliminated.
2. Energy Star Certified Manufactured Home for Avista Electric customers were
reduced to the following incentive levels:
Measure 2026 incentive
New Home NEEM v2.0, electrically heated home Single section $800
New Home NEEM v2.0, electrically heated home Two sections $1,000
New Home NEEM v2.0, electrically heated home Three sections $1,200
If you have any questions regarding this filing, please contact Kim Boynton, Manager,
Energy Efficiency Analytics, at [phone] or kim.boynton(kavistacorp.com or me at (509)
495-2782 or shawn.bonfield(d),avistacorp.com.
Sincerely,
/s/s" F"deed
Shawn Bonfield
Sr. Manager, Regulatory Policy& Strategy