20160715AVU to Staff 44.doc

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/05/2016
CASE NO.: AVU-E-16-03 WITNESS: Mark Thies
REQUESTER: IPUC RESPONDER: Bob Brandkamp
TYPE: Production Request DEPARTMENT: Risk Management
REQUEST NO.: Staff - 044 TELEPHONE: [phone]

REQUEST:

Please provide records of any insurance settlements received associated with the 2015 wind storm. If no insurance settlements were received, please explain why not.

RESPONSE:

There were no insurance settlements received associated with the 2015 wind storm.

Our property insurance program does not cover electrical transmission and distribution lines, line transformers, towers, poles, cables, pipes and pipelines, or any connected equipment that are situated over 1,000 feet from our facilities (buildings and substations) scheduled on our insurance policy. Almost all damage to our lines, poles, and associated equipment occurred at locations outside of this 1,000 foot exclusionary zone, and therefore were excluded from coverage under our property insurance program. It is common practice within the utility industry to exclude coverage for these typs of assets given the cost prohibitive nature of insuring them.

Damages that occurred within the 1,000 foot zone were eligible for coverage but subject to the $1 million retention threshold established on our property insurance program. Total loss amounts would have to exceed this threshold in order to qualify for reimbursement. Damages that occurred within the 1,000 foot coverage zone were primarily related to our substation locations. Our engineering department indicated that total damages incurred at our substation locations would not rise above the $1 million retention threshold, thereby eliminating any such damages from eligibility for insurance reimbursement.

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