20260430Final_Order_No_37022.pdf

Office of the Secretary
Service Date
April 30,2026
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA ) CASE NOS.AVU-E-25-12
CORPORATION'S APPLICATIONS FOR A ) AVU-G-25-09
DETERMINATION OF 2024 ELECTRIC AND )
NATURAL GAS ENERGY EFFICIENCY )
EXPENSES AS PRUDENTLY INCURRED ) ORDER NO. 37022
On August 29, 2025, Avista Corporation, doing business as Avista Utilities ("Company"),
filed two applications with the Idaho Public Utilities Commission ("Commission") requesting
prudence determinations of its 2024 Electric Energy Efficiency(`BE") expenses ("Application").
The Company requested an order designating its electric 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 Applications and Notice of
Intervention Deadline. Order No. 36762. No parties intervened. On November 13, 2025, the
Commission provided notice that the Applications would be processed under Modified Procedure
and set comment deadlines.Order No. 36844.Commission Staff("Staff')filed comments to which
the Company replied. The Commission received no public comments.
On March 23, 2026, the Commission issued a Final Order approving $17,313,338 in
Company electric EE expenditures from January 1, 2024, through December 31, 2024, as
prudently incurred. Order No. 36975.
On April 10, 2026, Clearwater Paper Corporation ("Clearwater") filed a Petition for
Reconsideration of Order No. 36975 ("Petition").' Staff and the Company filed answers opposing
the Petition.
We now issue this Order denying the Petition.
CLEARWATER'S PETITION
Clearwater stated that the Commission's finding of more than $17 million in Company
electric EE expenditures as prudently incurred was erroneous because more than$4 million of that
amount was attributable to measures that were not cost effective, necessitating reconsideration of
'While the Commission found both the Company's electric and natural gas 2024 EE expenditures prudently incurred
in Order No.36975,Clearwater's Petition focused on the electric EE costs.
ORDER NO. 37022 1

Order No. 36975. Petition at 3. Clearwater also argued reconsideration is required because there
was a failure of due process and notice requirements concerning the Company's prudence filing.
Id. at 7.
According to Clearwater, it is unreasonable to approve recovery of costs from ratepayers
when the associated EE measures are not cost-effective. Id. at 4. Clearwater represented that
approximately half of the expenditures from the Company's Small Business Lighting program(the
largest of the Company's EE programs and the only program Clearwater examined in detail)were
incurred for measures that exceeded the program's 65 cents per kilowatt-hour cost effectiveness
threshold.2 Id. While Clearwater acknowledged that the program is cost effective overall, it argued
that incentive payments made under individual measures to achieve kilowatt-hour savings
exceeding the cost effectiveness threshold should be disallowed for recovery.Id. at 5-6.
Clearwater further argued that the Company's ratepayers were not provided sufficient
notice that a prudence determination would form the basis of a requested rate increase in a
subsequent docket.3 Id. at 7. According to Clearwater, if not for the Petition, "there would be
absolutely no opportunity for any[Company]ratepayer to challenge the prudence of the underlying
rate increase being requested in the [AVU-E-]26-01 Docket."Id. at 8. Clearwater contended that
the fact that no public comments were filed in the prudence determination docket while over 70
public comments were filed in the requested rate increase docket was evidence of the failure of
notice.Id.
STAFF'S ANSWER TO THE PETITION
Staff argued that the findings of Order No. 36975 were reasonable, lawful, and based on
accurate findings of fact. Staff s Answer to Petition at 2. Staff alleged Clearwater's Petition was
based on a faulty understanding of the Company's demand-side management("DSM")operational
practices.Id.
According to Staff, the prudence of EE program expenditures is not dependent solely on
individual measures' cost-effectiveness, and it is common for cost-effective programs to include
measures that were not always cost-effective. Id. Staff contended that disallowing recovery of
2 Clearwater noted that pursuant to the Company's response to a discovery request in a separate docket, the cost
effectiveness threshold for the Company's Small Business Lighting program recently increased to 72 cents per
kilowatt-hour,but Clearwater stated that this change did not affect the analysis included in the Petition.
3 On February 13,2026,the Company filed an application in Case No.AVU-E-26-01,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.
ORDER NO. 37022 2

costs for all EE measures that failed to prove cost-effective in a year would unreasonably burden
utilities and create a strong disincentive for implementing or maintaining EE programs.Id. at 2-3.
Staff believed that the Company was taking steps to maintain program cost-effectiveness and to
achieve cost-effectiveness at a measure-specific level.Id. at 3.
Staff also argued that Clearwater's allegation of a failure to provide adequate notice was
faulty for several reasons. Id. Staff noted that the Application sought, and Order No. 36975
conferred, a prudence determination for 2024 electric EE expenses, while the rate increase sought
in Case No. AVU-E-26-01 was due to an underfunded balance accumulated primarily in 2025a
fact that belies Clearwater's argument that Case No. AVU-E-26-01 was the direct result of Case
No. AVU-E-25-12. Id. at 4. According to Staff, "[t]he Commission has an extensive history of
making determinations in DSM prudence filings that did not result in a rider rate change."Id. Staff
further contended that Company press releases and customer notices were not required in this case,
because the Application did not request a rate increase, and that the Commission properly issued
a Notice of Application and multiple press releases regarding the Company's request for a
prudence determination. Id.
THE COMPANY'S ANSWER TO THE PETITION
In arguing against Clearwater's request for reconsideration, the Company argued that
Order No. 36975 represented a reasonable and consistent application of the Commission's
prudence determination standards that was supported by the evidentiary record. Company's
Answer to Petition at 1-2.
The Company asserted that a prudence determination calls for an evaluation of the
reasonableness of costs when incurred and does not include a requirement of later-determined
measure-by-measure cost effectiveness, as Clearwater desires.Id. at 3. The Company argued that
should the Commission adopt Clearwater's proposed approach to determining EE program cost
prudence, "utilities would be unable to administer Commission-approved programs with
confidence that approved costs will remain recoverable."Id. at 4-5. According to the Company,
the Petition fails to identify any methodological errors, unsupported fact findings, inconsistent
calculations, or misapplication of Commission-approved cost-effectiveness tests relied upon in
Order No. 36975 that would justify reconsideration.Id. at 3-4.
The Company believed Clearwater's contention regarding a failure of customer notice
requirements rested on a faulty conflation of the process for seeking prudence determination with
ORDER NO. 37022 3

that for pursuing rate recovery. Id. at 5. The Company represented that the Application did not
concern how or when the Company would recover 2024 electric EE program costs and instead
sought only a determination that those costs had been prudently incurred.Id. The Company argued
that there were several components to the Schedule 91 Tariff Rider Adjustment rate increase
sought in Case No. AVU-E-26-01 that were distinct from 2024 electric EE program expenditures.
Id. at 6. The Company noted that the Petition did not identify any requirement for notice of
potential future rate increases triggered by applications seeking prudence determinations.Id.
COMMISSION FINDINGS AND DECISION
The Commission has the authority to grant or deny reconsideration pursuant to Idaho Code
§ 61-626(2). Reconsideration allows any interested person to bring to the Commission's attention
any question previously determined, and it affords the Commission an opportunity to rectify any
mistakes or omissions. Washington Water Power Co., v. Kootenai Environmental Alliance, 99
Idaho 875, 879, 591 P.2d 122, 126 (1979). Commission Rule of Procedure 331.01 provides:
Petitions for reconsideration must set forth specifically the ground or grounds why
the petitioner contends that the order or any issue decided in the order is
unreasonable, unlawful, erroneous or not in conformity with the law, and a
statement of the nature and quantity of evidence or argument the petitioner will
offer if reconsideration is granted.
IDAPA 31.01.01.331.01 (emphasis added).Any person may petition the Commission to clarify an
order under Rule 325, IDAPA 31.01.01.325.
Following our review of the Petition and the previously filed materials in the case record,
the Commission declines to grant reconsideration of Order No. 36975. Clearwater has failed to
adequately demonstrate that the Order"is unreasonable, unlawful, erroneous or not in conformity
with the law."
Clearwater's contention that each measure comprising an EE program must prove cost-
effective in a given year to justify the utility's recovery of expenditures in those measures for the
year is inconsistent with Commission precedent and the Commission's stated goal of encouraging
utilities to develop cost-effective EE programs. While the Commission maintains a commitment
to ensuring EE programs remain a net positive to ratepayers, as Staff noted in its answer to the
Petition, "[i]t is common for cost-effectiveness programs to have individual measures that were
not cost-effective at a point in time." Staff s Answer to Petition at 2. If the Commission were to
automatically disallow costs when individual measures failed to achieve cost-effectiveness—even
when, as here, those measures were part of an overall cost-effective EE program or portfolio of
ORDER NO. 37022 4

programs—we would be actively encouraging utilities to discontinue EE programs that benefit
customers. Rather, as stated by the Company, the prudency of costs is evaluated at the time
incurred. Clearwater failed to demonstrate any unreasonableness or error in the Commission's
determination that the Company's 2024 electric EE expenditures were prudent when they were
incurred.
Clearwater's position that notice of a proposed rate increase is required when a utility
applies for a prudency determination is similarly untenable. As staff pointed out, the Commission
has often made DSM prudency determinations that did not result in a corresponding rate increase.4
The Company is correct in its assertion that the Application in did not request a rate increase,either
explicitly or implicitly. The Commission provided proper notice of the issues being evaluated in
this case (i.e. the prudency of the Company's 2024 EE program expenditures)by way of a Notice
of Application, with an accompanying Notice of Intervention Deadline, and multiple press
releases. The Commission also provided public comment and Company reply deadlines to allow
interested individuals or entities the opportunity to comment on the Company's Application.
ORDER
IT IS HEREBY ORDERED that Clearwater's Petition for Reconsideration is denied.
THIS IS A FINAL ORDER. Any party aggrieved by this Order or other final or
interlocutory Orders previously issued in this case may appeal to the Supreme Court of Idaho under
the Public Utilities Law and the Idaho Appellate Rules.
4 In multiple instances,the Commission has ordered decreases to tariff riders funding EE programs(e.g. Order Nos.
35539 and 36337) despite preceding findings that costs incurred in the administration of those programs were
prudently incurred(e.g.Order Nos. 35313,35663,and 36245).
ORDER NO. 37022 5

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 30th day of
May 2026.
G
EDWARD LODGE, PRF,51DENT
17-IL
qJR- HAMMOND JR-, COMMISSIONER
DAYN HAKDIE, COMMISSIONER
ATTEST:
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MQ'I'A a o chez
Commission Secretary
I ALegal\ELECTRIC WW-E-25-12_G2509_prudence\orders\FO_reconj.docx
ORDER NO. 37022 6