20160906AVU to Staff 132.doc

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 08/31/2016
CASE NO.: AVU-E-16-03 WITNESS: Jim Kensok
REQUESTER: IPUC RESPONDER: Matt Reding
TYPE: Production Request DEPARTMENT: IT Delivery
REQUEST NO.: Staff – 132 TELEPHONE: [phone]

REQUEST:

In AVU-E-15-05, the Company did not estimate any costs for the Next Generation Radio Refresh project for 2016 or 2017. This project now has 2016 expenditures listed at $6 million. Please provide a detailed explanation of these costs, including why costs for this project were not anticipated in the prior rate case.

RESPONSE:

The scope of the Next Generation Radio (NGR) project is to deploy a single Land Mobile Radio (LMR) system in Avista’s service territory. This project fulfills a mandate from the Federal Communications Commission that all licensees in the Industrial/Business Radio Pool migrate to spectrum efficient narrowband technology. This project is allocated to all territories regardless of the specific area being installed, as it is network communication equipment serving all jurisdictions.

The project work schedules for calendar years 2015, 2016, and 2017 were prepared in Q2 of 2014. At that time, the project focus was on completing work for the LMR system in the WA-ID-MT operating territory.

In Q1 of 2015, the plan was updated to include the southern Oregon territory LMR system (expected to be placed in service in 2015). At this time, the projected cost to deploy the LMR system was estimated at $4.2 million, as illustrated in AVU-E-15-05. Subsequent to the filing of AVU-E-15-05, the scheduled transfers were delayed from 2015 to Q1 of 2016 due to delays associated with negotiations for a mountain top site as well as service center facility communication network construction. However, just as in this case, this delay was reflected in the September 2015 transfer to plant update provided to Staff, which included expected 2015 transfers of only $241,000 related to NGR. $289,000 was ultimately transferred to plant in service for NGR in 2015.

In Q2 of 2015, the NGR project steering committee identified the following gaps in the design of the WA-ID-MT section of the LMR system:
Providing radio communication abilities while working outside and around the cab of a vehicle.
Providing radio communication abilities to a medical evacuation helicopter in the event of an emergency
Providing radio point-to-point communication for Avista line stringing crews

A scope change was approved to address these issues. After considering the expected cost to build out the Oregon territory LMR system and the additional scope to address the gaps in the LMR system, the expected transfers to plant for 2016-2017 as of the filing of AVU-E-16-03 were $6.4, with $6.0 million expected to be placed in service in 2016 and approximately $0.4 million expected to be placed in service in 2017. The 2016 components are currently scheduled to be placed in service in Q4 of 2016.

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