20260417Staffs Answer to Petition for Reconsideration.pdf

RECEIVED
April 17, 2026
JEFFREY R. LOLL IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83702
[phone]
IDAHO BAR NO. 11675
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION'S APPLICATION FOR A ) CASE NO.AVU-E-25-12
DETERMINATION OF 2024 ELECTRIC )
ENERGY EFFICIENCY EXPENSES AS )
PRUDENTLY INCURRED ) STAFF'S ANSWER TO
PETITION FOR
RECONSIDERATION
BACKGROUND
On August 29, 2025, Avista Corporation, doing business as Avista Utilities ("Company"),
filed an application with the Idaho Public Utilities Commission ("Commission") requesting
prudence determination of its 2024 Electric Expenses ("Application").
The Company requested an order designating its electric energy efficiency ("EE")
expenditures from January 1, 2024, through December 31, 2024, funded through the Company's
Schedule 91 Energy Efficiency Rider Adjustment in the amount of $17,276,972, as prudently
incurred.
On September 17, 2025, the Commission issued a Notice of Application and Notice of
Intervention Deadline establishing an October 8,2025 as the date for persons wishing to intervene
to file a Petition to Intervene. Order No. 36762. On October 9, 2025, the Commission issued a
Notice of Parties. The Commission did not receive any Petitions to Intervene in this case.
On November 13, 2025, the Commission issued a Notice of Modified Procedure setting
deadlines for interested persons to comment and for the Company to reply. Order No. 36844.
STAFF'S ANSWER TO 1 APRIL 17, 2026
PETITION FOR RECONSIDERATION

On March 3,2026,the Commission issued Final Order No. 36975, finding it"fair,just and
reasonable to approve $17,313,338 in electric EE Program expenditures" as prudently incurred
from January 1, 2024, through December 31, 2024.Id. at 4.
On April 10, 2026, Clearwater Paper Corporation ("Clearwater") filed a Petition for
Reconsideration ("Petition") arguing erroneous prudence findings and failure of due process and
basic notice requirements.
STAFF ANALYSIS
Staff responds to Clearwater's Petition below. Staff believes that the arguments supporting
Clearwater's Petition are unfounded and demonstrate a lack of understanding of the Company's
demand-side management ("DSM") program operational practices. Accordingly, the findings of
Order No. 36975 are reasonable, lawful, and based on accurate and adequate findings of fact while
Clearwater's arguments for reconsideration of prudence are based on erroneous conclusions.
Clearwater's claims regarding imprudently incurred expenses and failure of due process and basic
notice requirements are addressed in the sections below.
Erroneous Prudence Conclusions
In its Petition, Clearwater states that about $4.1 million in Small Business Lighting
("SBL") incentive payments were determined to be not cost-effective and it believes the approval
of these measures for ratepayer recovery is unreasonable, thus Order No. 36795 is "unreasonable,
unlawful, erroneous or not in conformity with the law." Petition at 6-7. Staff disagrees with this
interpretation of the results.
The prudence of an expense is not determined solely by its cost-effectiveness. It is common
for cost-effective programs to have individual measures that were not cost-effective at a point in
time. See Case No. IPC-E-25-12, Supplement 1 to 2024 DSM Annual Report. Excluding recovery
of costs for all measures that were not cost-effective every year would place a significant and
unreasonable burden on the utility. Specifically, when new programs are building participation on
launch or after an evaluation determines that savings were less than expected, a program may be
cost-ineffective even when expenses are prudently incurred in the pursuit of savings that were
forecasted to be cost-effective. Conflating determinations of expense prudency with year-specific
cost-effectiveness would create a strong disincentive for utilities to implement or maintain EE
STAFF'S ANSWER TO 2 APRIL 17, 2026
PETITION FOR RECONSIDERATION

measures—an outcome that is inconsistent with the Commission's longstanding practice of
"admonish[ing] electric utilities operating in the State of Idaho to develop and implement DSM
programs in order to promote energy efficiency." Order No. 32113 at 8.
As stated by the Company in Response to Clearwater's Production Request No. 4 in Case
No. AVU-E-26-01, the Company has taken several steps to ensure program cost-effectiveness,
including "eligibility tightening, product standard updates, incentive limitations, and cost
effectiveness mandates to slow the overall pace of program spending, increase cost-effectiveness,
and align with evolving efficiency standards." Consistent with its comments in AVU-E-26-01,
Staff believes the Company is taking the necessary steps to pursue cost-effective DSM programs
and manage program measures effectively.
Further, individual measures of a program that are not cost-effective do not necessarily
invalidate cost-effectiveness at the program level. Clearwater itself stated that the cost-
effectiveness threshold for SBL projects was$0.72 per kWh and the overall program per kWh cost
was $0.62, making the program cost-effective by Clearwater's own definition. Petition at 5. This
coincides with the results reported in the Company's 2024 Annual Conservation Report. In that
report, the Company states that the overall Utility Cost Test ratio of the non-residential portfolio
was 1.24, meaning the benefits to the Company and its ratepayers outweighed the costs of
administering the programs. Exhibit No. I to Application at 9. The Company also contracted with
a third-party evaluator to verify the accuracy of its claimed savings. The realization rate for the
portfolio was 96%, indicating that savings were accurately documented. Id. at 10.
Failure of Due Process and Basic Notice Requirements
Clearwater argued in its Petition that there was insufficient notice to ratepayers that the
Commission's ruling in this case would result in the rate increase requested by the Company in its
Application for Case No.AVU-E-26-01. It states that the:
de facto bifurcation of the two dockets to (1) determine the balance of the
underfunded EE programs and then the initiation of a completely separate and
ostensibly unrelated docket to(2)recover from the ratepayers the money necessary
to fully fund those EE programs results is a fundamental lapse of due process and
notice requirements. Petition at 7.
Staff disagrees with Clearwater's arguments and believes they are flawed in several ways.
STAFF'S ANSWER TO 3 APRIL 17, 2026
PETITION FOR RECONSIDERATION

The assertion that the results of the Commission's decision in this filing were a direct cause
of the rate increase requested in Case No.AVU-E-26-01 is unfounded.The Company's Application
in this case requested a prudence determination for 2024 electric expenses only. However, the rate
increase requested in Case No.AVU-E-26-01 was to address the Company's underfunded balance
as of December 31, 2025.Application for Case No.AVU-E-26-01 at 3.Avista's 2025 EE expenses
have not yet been reviewed in an annual DSM prudence filing. As stated in the Petition, the
underfunded balance was mainly driven by the Company's SBL program. Petition at 4.According
to the Company's 2024 Annual Conservation Report, the significant jump in SBL program
participation did not occur until May of 2024. Exhibit No. 1 to Application at 18. Thus, the
expenses for 2025 were higher than in 2024, making 2025 more impactful to the underfunded
balance the Company is seeking to address in Case No.AVU-E-26-01. December 2025 Quarterly
Report.
Further, the accounting nature of the EE rider balancing account disagrees with
Clearwater's presumptions. Incentives for DSM programs are expensed to the EE rider balance as
they occur, allowing the rider balance to become over or under funded without requiring a regular
rate change. Staff then reviews these expenses for accuracy in the annual DSM prudence filing and
makes any necessary adjustments. The Commission has an extensive history of making
determinations in DSM prudence filings that did not result in a rider rate change. See Case Nos.
IPC-E-25-12 and AVU-E-18-12.
Staff also disagrees with Clearwater's position that proper notice was not provided to
customers. The Company was not required to send customer notices or press releases in this case
because customer notices and press releases are only required when a company is requesting to
change rates. IDAPA 31.01.01.125.01. In this case, the Company was requesting a determination
that its expenses in 2024 were prudently incurred and not for authority to change its rates.
Application at 1. Thus, customer notice and press release rules under Rule 125 did not apply. The
Commission did, however, issue press releases about this case on September 19, 2025, and
November 18, 2025. The second press release provided a deadline for comments and provided
instructions on how to submit comments on the case.Additionally,the Commission issued a Notice
of Application(Order No. 36762) on September 17, 2025, a Notice of Parties on October 9, 2025,
and a Notice of Modified Procedure (Order No. 36844) on November 13, 2025, all of which
provided notice to the public of the Company's request in this case.
STAFF'S ANSWER TO 4 APRIL 17, 2026
PETITION FOR RECONSIDERATION

CONCLUSION
Staff believes the Commission's decisions on the issues in Clearwater's Petition for
Reconsideration were adequately supported by the record, reasonable, and in conformity with the
law. However, Staff is prepared to file additional comments on any issues the Commission wishes
to reconsider.
Respectfully submitted this 17th day of April 2026.
Jeffrey R. Loll
Deputy Attorney General
Technical Staff. Rebecca Cottrell
I:\Utility\UMISC\COMMENTS\AVU-E-25-12 Answer to Petition for Reconsideration.docx
STAFF'S ANSWER TO 5 APRIL 17, 2026
PETITION FOR RECONSIDERATION

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 17TH DAY OF APRIL 2026, SERVED
THE FOREGOING STAFF'S ANSWER TO PETITION FOR RECONSIDERATION , IN
CASE NO. AVU-E-25-12, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
DAVID J. MEYER SHAWN J. BONFIELD
VP & CHIEF COUNSEL SR. MGR., REGULATORY POLICY& STRATEGY
REGULATORY & GOV'T AFFAIRS AVISTA CORPORATION
AVISTA CORPORATION PO BOX 3727
PO BOX 3727 SPOKANE WA 99220-3727
SPOKANE WA 99220-3727 E-mail: shawn.bonfieldgavistacorp.com
E-mail: david.meyer(cavistacorp.com
avi stadockets(k avistacorp.com
PATRICIA JORDA1q, SECRETARY
CERTIFICATE OF SERVICE