20260410Staff Comments.pdf

RECEIVED
April 10, 2026
KELSEA E. ROSS IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83702
[phone]
IDAHO BAR NO. 12050
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION'S APPLICATION TO ) CASE NO. AVU-E-26-01
INCREASE ITS SCHEDULE 91 ENERGY )
EFFICIENCY TARIFF RIDER ADJUSTMENT )
COMMENTS OF THE
COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"),by and through its attorney of record,Kelsea E. Ross,Deputy Attorney General,
submits the following comments.
BACKGROUND
On February 13, 2026, Avista Corporation, dba Avista Utilities ("Company") applied to
the Commission requesting authority to increase its I.P.U.C. No. 28, Schedule 91, "Energy
Efficiency Rider Adjustment" rates by approximately 7.4%, effective May 1, 2026
("Application").
Schedule 91 is designed to recover costs of energy efficiency services and programs offered
to customers. Application at 1. The Company's energy efficiency measures provide customers
with financial incentives or rebates for participating in programs, such as behavioral programs,
low-income weatherization, and energy efficiency measures. Id. at 2-3.
STAFF COMMENTS 1 APRIL 10, 2026

The Company is seeking to establish tariff riders sufficient to fund the next 12 months'
expenditures for the Company's Electric Energy Efficiency Program while also minimizing the
amount of future under-or over-collections.Id. at 1.
As of December 31, 2025, the Schedule 91 tariff rider was underfunded by approximately
$24.6 million. Id. at 3. According to the Company, the underfunded balance is primarily
attributable to an unprecedented level of customer participation in the Company's Small Business
Lighting direct-install program and increased participation in the Site-Specific program. Id. at 3-
4.
To address the underfunded rider balance, the Company proposes an increase in the
Schedule 91 rates over the next 30-months. Id. at 4-5. If the Application is approved as filed, the
Company estimates an annual revenue increase of approximately $25.2 million in Schedule 91, or
7.4% in overall billed rates. Id. at 5. The Company states that residential customers using an
average of 939 kilowatt hours ("kWh") per month would see a monthly bill increase of$8.90, or
7.7%under the Company's proposal. Id.
STAFF ANALYSIS
Staff reviewed the Application and supporting workpapers. Based on its review, Staff
supports the Company's request to increase Schedule 91 rates but recommends modifications
including adopting a 36-month forecast and recovery period, and for an overall rate increase of
6.6%. Staff anticipates that the new increase will align Schedule 91 revenues with the Company's
projected Demand Side Management("DSM") expenditures and reduce the underfunded balance.
As of December 31,2025,the Company's Schedule 91 was underfunded by approximately
$24.6 million. Application at 3. An underfunded balance indicates that the current Schedule 91
tariff rider rate is not sufficient to cover the yearly expenses of the Company's DSM programs.Id.
The Company describes two (2) main contributors to the underfunded balance. Id. First,
the Company had an unanticipated level of participation in the Company's Small Business
Lighting Direct-Install program. Id. With participation much higher than forecasted, the program
achieved a greater amount of conservation savings in Idaho than expected. Id. Second, the
Company's Site-Specific program also had higher-than-expected customer participation, which
doubled"the incentive spend from Program Year 2024."Id. at 4.
STAFF COMMENTS 2 APRIL 10, 2026

The Company provided with its Application a forecast of Schedule 91 revenues and DSM
expenditures for the next two (2) and a half (1/2) years, which Staff reviewed along with the
associated rates to confirm the revenues and expenditures were calculated correctly. The
Company's workpapers indicate that its proposed Schedule 91 rates would generate sufficient
revenue to cover forecasted expenses for existing programs while gradually returning the
underfunded balance of Schedule 91 to nearly $0 by September 30, 2028. Id. If approved, a
residential customer who uses an average of 939 kWh per month would see an increase in their
monthly bill from $115.54 to $124.44, or an increase of$8.90 per month. Id. at 5. By extending
the recovery period, "the Company is attempting to align the collection of revenue in Schedule 91
more closely with the annual Energy Efficiency Program budget,"thereby"minimizing future rate
impact to customers."Id.
Staffs review indicates that the Company's two (2) and a half (1/2) year (30-months)
forecast differs from prior DSM rider filings in Idaho, which have typically used a three (3) year
(36-months)forecast period. In response to Staff Production Request No. 1,the Company provided
a 36-month forecast. Staff believes that using the 36-month forecast would improve consistency
and provide a more comprehensive evaluation of program costs and rate impacts. Staff supports
recovery of the approximately $24.6 million underfunded balance but recommends that the
Company extend the recovery period to 36-months, which would reduce the balance to nearly $0
by March 31, 2029. Staff s proposed change would result in an average monthly bill of$123.55,
or an increase of$8.10 per month.The Company's proposed adjustments to customer classes under
Schedule 91, along with Staffs recommended adjustments, are presented in Table No. 1 below.
Table No. 1: Schedule 91 Rates
SCHEDULE EXISTING RATE 30 MONTHS RATE 36 MONTHS RATE
Residential Customers-Sch. 1 0.298¢per kWh 1.245¢per kWh 1.152¢per kWh
General Service-Sch. 11 & 12 0.156¢per kWh 0.658¢per kWh 0.608¢per kWh
Large General Service-Sch.21 &22 0.824¢per kWh 3.488¢per kWh 3.224¢per kWh
Extra Large Customers-Sch.25 0.151¢per kWh 0.642¢per kWh 0.594¢per kWh
Clearwater Paper-Sch.25P 0.123¢per kWh 0.522¢per kWh 0.483¢per kWh
Pumping Service-Sch. 31 &32 0.287¢per kWh 1.216¢per kWh 1.124¢per kWh
Street Light Service-Sch.41-49 1.097¢per kWh 4.672¢per kWh 4.319¢per kWh
STAFF COMMENTS 3 APRIL 10, 2026

Cost-effective DSM, including energy efficiency and load management programs, is a
significant resource that helps customers better control their utility bills, reduces the need for
higher-cost supply-side resources, and increases system reliability. DSM offerings are evaluated
before, during, and after implementation using a Utility Cost Test to determine whether a
program's load reduction benefits outweigh its costs to the utility for administering the program.
When DSM programs are cost-effective, they allow utilities to meet the growing demand of the
system without having to invest in higher-cost resources such as market purchases or generation
and transmission equipment, which helps lower the costs recovered through customer rates and
reducing bills in the long term. Though programs are tailored to specific customer classes, the
benefits of reduced power supply costs affect the grid as a whole and are therefore seen by all
customer classes. Recognizing the need to mitigate potential rate increases and provide customers
with avenues to reduce consumption,the Commission requires companies to pursue cost-effective
DSM as a resource.
At this time, Staff is not validating or questioning the prudence of Company's DSM
expenses or its actual cost-effectiveness calculations for any of its energy efficiency programs.
Such validation and additional review were not requested in this case and will occur in the
Company's annual DSM prudence filing.
Small Business Lighting
A significant driver of the Company's growing underfunded Schedule 91 balance has been
the unprecedented performance of the Small Business Lighting Direct-Install program.
Application at 3. This program provided 50% of the total kWh savings for the entire electric
portfolio in 2024. Case No. AVU-E-25-12, 2024 DSM Annual Report at 3. In discussions with its
Energy Efficiency Advisory Group ("EEAG"), the Company reported that electric DSM program
participation was relatively flat in the years prior to launching the Small Business Lighting
program in 2023. The program had a minor impact on the portfolio during its first year but
experienced an unexpected jump in participation in 2024. The Company's forecasts developed in
early 2025 originally identified this increased performance as an outlier, thus the revenue
requirement was set accordingly. However, participation continued to far outpace expectations in
2025, resulting in an increasingly underfunded rider balance.
STAFF COMMENTS 4 APRIL 10, 2026

The Company has updated its forecasts to include the high savings trends achieved by the
Small Business Lighting program in recent years and taken several steps to tighten parameters
around the program and reduce costs where possible. A maximum cost per lighting project has
been implemented and certain non-downlight specialty fixtures have been excluded from the
program due to changes in ENERGY STAR certification guidelines. Id. at 19. The Company is
also re-focusing the program on the intended small business customer segment by removing
municipalities, universities, schools, and hospitals from eligibility.Id. The Company explained to
its EEAG that it tentatively expects the participation growth rate to flatten beginning in 2027 as
lighting efficiency in Idaho catches up to other states. Staff acknowledges the difficulty in
predicting performance of the Small Business Lighting program in Idaho and believes the
Company has taken steps to forecast and manage the program appropriately.
Customer Notice and Press Release
The Company's press release and customer notice were included in its Application. Staff
reviewed the documents and determined that both met the requirements of Rule 125 of the
Commission's Rules of Procedure. See IDAPA 31.01.01.125. The notice was included with bills
mailed to customers from March 9 through April 6, 2026. For customers enrolled in paperless
billing, the notice was emailed during the same period and included a link to an online version of
the notice. The Commission initially set a comment deadline for March 27, 2026, but later
extended the deadline to April 10,2026,to allow additional time for public input.Order No. 36964.
The additional time allows customers who received their bills later in the billing cycle to have
adequate time to submit comments before the comment deadline. Customers should have the
opportunity to file comments and have those comments considered by the Commission. Staff
recommends that the Commission consider late filed comments from customers.
As of April 9, 2026, 71 customer comments had been received opposing the Company's
proposed rate adjustment, with one comment expressing a differing view. Many customers share
similar concerns, and their comments included a variety of reasons for opposing the Company's
proposal. One customer supports the proposal, noting that Avista has maintained modest rate
increases and rewarding their "reasonably good behavior," while criticizing Kootenai Electric
Cooperative as a profiteer that the Commission was intended to regulate but does not.
Staff reviewed all comments and provides the following summary of submitted comments:
STAFF COMMENTS 5 APRIL 10, 2026

Overall Opposition & Pricing Concerns
a. Opposed to the increase: 71 comments (98.6%)
b. Proposed increase is too high: 4 comments (5.6%)
Affordability& Financial Impact
a. High cost of living/financial strain: 28 comments (38.9%)
b. Impact on retirees or those with fixed/limited income: 13 comments (18.1%)
c. Concerns about the economy/inflation: 7 comments (9.7%)
Company Responsibility & Cost Allocation
a. Company should absorb costs or cut programs/poor budgeting concerns: 37
comments (51.4%)
b. Businesses should fund their own upgrades: 3 comments (4.2%)
c. Concerns about subsidizing other customers: 17 comments (23.6%)
Timing & Market Structure Concerns
a. Too soon since the last rate increase: 27 comments (37.5%)
b. Lack of alternative providers: 9 comments (12.5%)
Program Validity& Justification
a. Unclear justification for the request(e.g., duplicative charges or structural issues): 15
comments (20.8%)
b. Request to audit energy programs & funding or address flawed"Energy Star"
metrics: 7 comments (9.7%)
STAFF RECOMMENDATION
Staff recommends the Commission approve an increase to Schedule 91 Customer
Efficiency Service Rates of 6.6%, subject to Staff s recommended modifications, including
adoption of a 36-month forecast and recovery period. Additionally, Staff recommends the
Commission consider any late-filed customer comments.
STAFF COMMENTS 6 APRIL 10, 2026

Respectfully submitted this 1 Oth day of April 2026.
Kelsea E. Ross
Deputy Attorney General
Technical Staff. Rebecca Cottrell, Ty Johnson, Curtis Thaden
I:\Utility\UMISC\COMMENTS\AVU-E-26-01 Comments.docx
STAFF COMMENTS 7 APRIL 10, 2026

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS loth DAY OF APRIL 2026 SERVED THE
FOREGOING COMMENTS OF THE COMMISSION STAFF,IN CASE NO. AVU-E-26-01,
BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
ANNI GLOGOVAC SHAWN BONFIELD
COUNSEL FOR REGULATORY SR. MGR., REGULATORY POLICY&
AFFAIRS STRATEGY
AVISTA CORPORATION AVISTA CORPORATION
PO BOX 3727, MSC 33 PO BOX 3727, MSC-27
SPOKANE WA 99220-3727 SPOKANE WA 99220-3727
E-mail: anni. lg_o og vackavistacorp.com E-mail: shawn.bonfieldgavistacom.com
avistadockets(ae,avistacorp.com
Intervenor:
Clearwater Paper Corporation
Peter J. Richardson
Richardson Adams PLLC
515 N. 271h Street
Boise, ID 83702
peter(a),richardsonadams.com
Carol Haugen, VP, Deputy General Counsel
carol.haugen(kclearwaterpaper.com
Randi Johnson, Sr. Corporation Counsel
randi.j ohnson(k clearwaterpaper.com
Jamie McDonald, VP, Purchasing
j amie.mcdonald(kclearwaterpaper.com
Keri J. Haikker, Legal Assistant
STAFF COMMENTS 8 APRIL 10, 2026