20260423Staff Comments.pdf

RECEIVED
April 23, 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 ANNUAL RATE ) CASE NO. AVU-E-26-02
ADJUSTMENT FILING FOR ITS ELECTRIC )
LINE EXTENSION SCHEDULE 51 )
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 March 6, 2026, Avista Corporation, doing business as Avista Utilities ("Company")
applied("Application") to the Commission requesting an order approving the update in costs and
administrative changes to the Company's Electric Line Extension Schedule 51 ("Schedule 51").
Application at 1. The Company requested a May 15, 2026, effective date. Id.
The Company's Schedule 51 electric line extension tariff establishes the estimated costs
for electrical infrastructure regularly used in extending electrical service, such as transformers and
conduit. Id. at 2. The Company represents the estimated costs set forth in Schedule 51 are
determined from the recent average costs of the infrastructure. Id. The Company does not propose
changing the average costing principle used to determine the estimated costs in Schedule 51. Id.
The Company represents it will also update allowances for incoming commercial,
industrial, and residential customers. Id. at 3. The Company represents that it calculated the
STAFF COMMENTS 1 APRIL 23, 2026

revised allowances under the "embedded-cost methodology approach." Id. The embedded-cost
methodology approach works to make sure the cost for distribution/terminal facilities for each new
customer is similar to the costs of the same infrastructure already allocated for in base rates. Id.
New customers will have to pay for costs that exceed the updated allowances. Id. The Company
represents it based the embedded cost calculation on the "Cost of Service study" from its most
recent general rate case filing, Case No. AVU-E-25-01. Id. The Company represents that the
contributing factors for the increase in average costs for primary circuits, secondary circuits,
service circuits,and transformers are"higher overheads and vehicle costs." Id. at 4. The Company
represents the increased vehicle costs are due to expenses for maintenance and repair of the
Company's fleet vehicles and higher fuels costs. Id. The Company represents the higher overhead
costs are due to increased costs for labor and benefits. Id. at 5.
The Company will remove language from the tariff to clarify that developers who pay for
extension costs described in 4.b.1 can apply for a refund annually for each permanent customer
that is connected in the development in the first five (5) years following the start of construction.
Id.
STAFF ANALYSIS
Staff reviewed the Application and workpapers, and compared the Company's proposed
costs to the costs approved by the Commission in Order No. 36613 for Case No. AVU-E-25-04.
Based on its review, Staff recommends that the Commission:
1. Approve the proposed average costs and construction allowances;
2. Approve the administrative change, as filed; and
3. Approve the proposed Schedule 51 tariff included as filed with an effective date of May
15, 2026, or date of the final Commission Order, whichever is later.
Construction Allowances
The Company proposed to update the allowances applicable to new residential,
commercial, and industrial customers' services, as shown in Table No. 1 below. Application at 3.
STAFF COMMENTS 2 APRIL 23, 2026

Table No. 1. Proposed Allowance Changes
Service Schedule Existing Proposed
Schedule 1 Individual Customer (per unit) $2,545 $2,755
Schedule 1 Duplex (per unit) $2,035 $2,205
Schedule 1 Multiplex (per unit) $1,530 $1,655
Schedule 11/12 (per kWh) $0.19912 $0.21041
Schedule 21/22 (per kWh) $0.18388 $0.20083
Schedule 31/32 (per kWh) $0.32929 $0.35568
Id. Staff reviewed the calculation workpapers filed with the Application to ensure that the
proposed allowances are based on the embedded cost of distribution/terminal facilities that is
reflected in the Cost-of-Service study that was in the settlement agreement approved by the
Commission in Order No. 36741. Through its review, Staff believes that the allowances are
correctly calculated using the embedded cost methodology and that the inputs used for the
allowance calculation are identical to the Cost-of-Service study approved in Order No. 36741.
Staff recommends that the Commission approve the Company's proposed allowances.
Average Costs
The Company proposed updating the primary circuit, secondary circuit, service circuit,and
transformer average costs. Application at 4. As described in Table No. 2 below, Staff compared
the Company's proposed average costs to the existing average costs that were approved in Order
No. 36613 for Case No. AVU-E-25-04.
STAFF COMMENTS 3 APRIL 23, 2026

Table No. 2: Proposed Average Cost Changes
Costs Existing Proposed Increase Rate
Overhead Primary Circuit
Fixed Cost $5,536 $5,952 7.51%
Variable Cost $11.20 $12.04 7.50%
Underground Primary Circuit
Fixed Cost $2,583 $2,754 6.62%
Variable Cost $13.55 $14.31 5.61%
Underground Secondary Circuit
Fixed Cost $647 $688 6.34%
Variable Cost $12.75 $13.18 3.37%
Overhead Secondary Circuit
Fixed Cost $2,279 $2,466 8.21%
Overhead Service Circuit $5.06 $5.56 9.88%
Underground Service Circuit $10.29 $10.78 4.76%
Overhead Transformer $5,308 $5,222 -1.62%
Padmount Transformer $10,003 $9,134 -8.69%
Based on the comparison, Staff believes that the higher overhead and tool costs caused the
increase in average costs from the Company's filing in Case No. AVU-E-25-04. Staff reasons that
the increase in overhead was caused by increasing labor costs and that tool costs resulting from
accelerated repair costs and fuel costs for the Company's vehicles. For those reasons, Staff
believes that the proposed average costs are reasonable and recommends that the Commission
approve the proposed average costs.
When the updated average costs are compared with the current average costs, Staff
identified that overhead costs have increased by 20.20% from the Company's filing in Case No.
AVU-E-25-04. As a result of the 15%increase in labor overhead,which accounts for the majority
of overhead, Staff believes that the increase led to the higher proposed average costs, as stated on
page 4 of the Application. Staff believes that two categories in the labor overhead, specifically,
incentive and labor benefits, have increased by 73.14% and 18.36% from the Company's filing in
Case No. AVU-E-25-04, respectively. Response to Staff s First Production Request at No. 2.
STAFF COMMENTS 4 APRIL 23, 2026

Based on this comparison, Staff agrees with the Company that the increasing labor overhead cost
is one of primary drivers of the increase in the average costs.
Staff calculated that the tool costs, which represents vehicle costs, have increased by
21.01% from the Company's filing in Case No. AVU-E-25-04. As exemplified in the Response
to Staff s First Production Request at No. 1, the high-cost repairs for double bucket trucks and
tandem digger trucks have increased by 69.30% and 53.30%, respectively, and the higher repair
costs have increased the costs for both vehicles by 26.70%and 26.30%,respectively. Additionally,
due to a weather event last winter, fuel usage increased by 22.85%,resulting in a 26.03%increase
in fuel costs. Response to Staffs First Production Request at No. 1. Based on that information
supplied by the Company, Staff agrees with the Company that the increase in vehicle costs is due
to higher maintenance and repair costs, and increased fuel usage.
In the Company's filing in Case No. AVU-E-25-04,one of the main drivers of the increase
in cost was the cost of transformers due to a national supply issue. However, as the Company's
overhead transformer and padmount transformer costs have decreased, as shown in Table No. 2
above, Staff believes that the transformer national supply issue has been resolved.
Residential Developments
The Company proposed updated residential development costs. Application at 5. As
shown in Table No. 3 below, the developer responsibility cost decreased by 1.68%.
Table No. 3: Proposed Residential Development Cost Changes
Residential Development Existing Proposed Increase Rate
Total Cost per Lot $3,849 $3,818
Less: Service Cost $516 $541 4.84%
Developer Responsibility $3,333 $3,277 -1.68%
Developer Refundable Payment $2,545 $2,755
Builder Non-Refundable Payment $1,304 $1,063
Allowance $2,545 $2,755
Staff believes that the decrease in developer responsibility cost is a result of the updated
changes in development costs to reflect decreasing material costs, despite increasing overhead and
tool costs. While the overhead costs and tool costs allocated as the developer's responsibility have
STAFF COMMENTS 5 APRIL 23, 2026

increased by 15.9% and 17.4%, respectively, material costs, which are the majority of the
developer's responsibility, have decreased by 8.7%. Based on its investigation of the filed
information on residential development cost changes, Staff believes that the decrease in the cost
allocated as the developer's responsibility is reasonable.
Administrative Changes
The Company proposed a change to tariff sheet 51 G. Id. Staff recommends for
clarification purposes, that the Commission should approve removing "after the extension is
completed" from the tariff language to clarify that the five-year look back period begins with the
start of construction. Id.
Customer Notice
The Company's customer notice was included in the Application. Id. Staff reviewed the
notice and determined that it met the requirements of Rule 125 of the Commission's Rules of
Procedure. IDAPA 31.01.01.125. The notice was mailed to the impacted customers on April 6,
2026. Id. Staff believes the mailing date of April 6, 2026, provided a reasonable opportunity for
the public to file comments with the Commission by the comment deadline of April 23, 2026. As
of April 23,2026,the Commission has not received any comments from customers about this case.
STAFF RECOMMENDATION
Staff recommends that the Commission:
1. Approve the proposed average costs and allowances;
2. Approve the administrative change, as filed; and
3. Approve the proposed Schedule 51 tariff included as filed with an effective date of
May 15, 2026, or date of the final Commission Order, whichever is later.
Respectfully submitted this 23rd day of April 2026.
Kelsea E. Ross
Deputy Attorney General
Technical Staff. Seungjae Lee, Leena Gilman, Curtis Thaden
I:\Utility\UMISC\COMMENTS\AVU-E-26-02 Comments.doex
STAFF COMMENTS 6 APRIL 23, 2026

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 23RD DAY OF APRIL 2026, SERVED
THE FOREGOING COMMENTS OF THE COMMISSION STAFF , IN CASE NO.
AVU-E-26-02, BY E-MAILING A COPY THEREOF TO THE FOLLOWING:
ANNI GLOGOVAC SHAWN BONFIELD
COUNSEL FOR REGULATORY SR. MGR., REGULATORY POLICY& STRATEGY
AFFAIRS AVISTA CORPORATION
AVISTA CORPORATION PO BOX 3727, MSC-27
PO BOX 3727, MSC 33 SPOKANE WA 99220-3727
SPOKANE WA 99220-3727 E-mail: shawn.bonfieldkavistacorp.com
E-mail: anni.glo og vac(cavistacorp.com
avistadocketskavistacorp.com
4
PATRICIA JORDA1q, SECRETARY
CERTIFICATE OF SERVICE