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HomeMy WebLinkAbout20160906AVU to Staff 136 Attachment A.pdfThe Power of Shared Value Avista’s Report on Our Performance 2015 Staff_PR_136 Attachment A Page 1 of 94 Table of Contents A Directory for Avista’sReport on Our Performance A Message from Our Leadership 2 About the Report 4 Our Company 7 Utility Operations 22 Environmental Stewardship 46 Community Partnership 59 Global Reporting Initiative 74 1 The Power of Shared Value Staff_PR_136 Attachment A Page 2 of 94 2 2014 was a milestone year for Avista that created powerful possibilities. Not only did we celebrate our 125th anniversary and dedicate a new park to our home city, but we built upon the power and legacy of our commitment to creating shared value for those we serve and Avista. With this, we’re proud to present our 2015 Shared Value Report, the seventh report on our operations, that provides a comprehensive view into our business and the work done that demonstrates this commitment. Change remains a constant in our industry, and we continue to focus on the role we play in helping our stakeholders navigate through it. Our success in accomplishing this is driven by the foundation we’ve built of intentionally making the connection between Avista’s business strategies and the benefits our actions can have for customers and the communities we serve. We continue to listen to our stakeholders and communicate about the topics they tell us are important. Dear Friends: A Message from Our Leadership Staff_PR_136 Attachment A Page 3 of 94 3 Creating shared value means aligning our strategic business interests, including philanthropy and community involvement, in powerful ways that create the opportunity to bring value to our stakeholders. The key drivers are the links between our corporate strategic plans — opportunities that create economic value for our company — and the positive outcomes that also address societal needs and challenges. Our activities and shared value opportunities throughout 2014, many of which you will read about, highlight the investments we continue to make in our systems, infrastructure, employees and communities and align with our company strategies: •Customer Engagement and Value — Deliver more value to more customers and strengthen engagement for mutual understanding; •Community Vitality — Act through partnerships and service to enhance community vitality; •Safe and Reliable Infrastructure — Invest in our infrastructure to achieve optimum life-cycle performance — safely, reliably and at a fair price; •Responsible Resources — Control a portfolio of resources that responsibly meet our long- term energy needs; •People and Performance — Reinforce a values-driven culture of employees who do the right thing to help us succeed; •Financial Performance — Strengthen financial performance to remain a healthy company and an attractive investment; and •Effective Regulatory Outcomes — Drive positive regulatory outcomes at the local, state, regional and federal levels. The stories highlighted in this report underscore the power of working together for a shared outcome — one that is meaningful and has a lasting impact but also serves to move Avista and our communities toward our goals. Throughout the following pages, you’ll gain an understanding of the values that are fundamental to our operations that ensure we recognize that the energy we provide powers the lives of those we serve. Thank you for your interest in Avista and this report. We hope that you will give us your feedback on the report and that you will share it with others. Dennis P. Vermillion President, Avista Utilities A Message from Our Leadership Staff_PR_136 Attachment A Page 4 of 94 4 This is our seventh annual voluntary report on our operations, with an emphasis on corporate social responsibility and shared value opportunities. The information in this report is based on the Global Reporting Initiative (GRI) G3 Guidelines and the Electric Utility Sector Supplement (EU). The most recent previous report was published in July 2014. We have considered the G4 Guidelines and you will see an emphasis on materiality throughout this report. We may report based on G4 Guidelines in the coming years. This report maintains a consistent format and structure as in previous years and a continued focus on shared value — how we create and bring value for our company and our stakeholders. Content and stories are informed not only by the G3 Guidelines but by what our stakeholders have told us is important and relevant to them. Information contained here is focused solely on Avista Utilities, a regulated business unit of Avista Corporation. In 2014, Avista Corp. sold Ecova and acquired Alaska Energy and Resources Company (AERC) and its primary subsidiary Alaska Electric Light and Power Company (AEL&P), in Juneau, Alaska, but Avista Utilities had no significant changes in size or structure. Data in the report is current as of Dec. 31, 2014, except where otherwise noted. This report is available for review online as well as for download in PDF at avistautilities.com. About the Report Staff_PR_136 Attachment A Page 5 of 94 About The ReportA Message From Our Leadership 5 LOW HIGH HIG H Relevance for Avista SYSTEM RELIABILITYConsistency of energy delivery CORPORATE CITIZENSHIP Community relations, volunteerism, philanthropy, sponsorships CUSTOMER SATISFACTION Company performance in ways that meet customer needs ENVIRONMENTAL PERFORMANCE Stewardship of environmental elements impacted by operations RESOURCE PLANNING Short and long-term outlook to meet customers’ energy needs Stakeholder Materiality About the Report Materiality Materiality involves identifying those topics and issues that matter most to Avista and our stakeholder groups. We balance providing content that meets GRI guidelines and industry expectations with content that is stakeholder- relevant. Throughout this report, we’ve included and highlighted those items that have been identified as material. You will notice the icons on this page that call attention to these items. The materiality of information included in this report is determined by the level of significance each issue has in terms of: • Stakeholder interest, as measured by surveys, focus groups, formal and informal discussions and anecdotal information; • Its impact on our business today and in the future, as determined by state and federal regulatory and voluntary data reporting, and financial significance; • Society’s interest, in terms of its impact on the communities we serve and its importance, relevance or perception in part as reflected by coverage through traditional and social media channels; and • Materiality checks conducted with two external groups that were asked to rate 25 specific topics in terms of their perceived impact on stakeholders and their relevance to Avista. The list of topics is available in the online Shared Value Report at avistautilities.com. The analysis of all available information resulted in five material topics which informed the majority of content for this report: • System Reliability • Customer Satisfaction • Resource Planning • Environmental Performance • Corporate Citizenship Staff_PR_136 Attachment A Page 6 of 94 About The ReportA Message From Our Leadership 6 Review of the Report While this report was not reviewed by outside stakeholders prior to its publication, we anticipate sharing it with the stakeholder groups we regularly interface with throughout the coming year. In doing so, we hope to engage individuals and organizations in an ongoing dialogue about our business operations and solicit suggestions about opportunities to further build shared value. Forward-Looking Statement This report contains forward-looking statements regarding the company’s current expectations. Forward-looking statements are all statements other than historical facts. Such statements speak only as of the date of the report and are subject to a variety of risks and uncertainties, many of which are beyond the company’s control, which could cause actual results to differ materially from the expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in Avista Corp.’s Annual Report on Form 10-K for the year ended Dec. 31, 2014. Acknowledgements This report is produced through a partnership of knowledgeable and talented Avista employees, stakeholders and creative vendors within our service territory. We thank all of them for their time, contributions and support. Managing Editor: Casey Fielder Communications Manager Assistant Editor: Jessie Wuerst Sr. Communications Manager Design: Klündt | Hosmer Cover photo: Dean Davis On the cover: Summer storms hitting 10 days apart caused extensive damage throughout Avista’s Washington/Idaho service area in 2014, knocking out power to nearly 100,000 customers. Crews and office staff worked around the clock, restoring power quickly and safely, keeping customers informed through traditional and social media channels. This report is available online at avistautilities.com For additional information about this report, or to give us feedback on our performance, please contact us at: SharedValue@avistacorp.com We welcome your questions and comments. About the Report Staff_PR_136 Attachment A Page 7 of 94 77 Our Company The People and Processes that Make Avista Successful Organizational Profile Avista generates and transmits electricity and distributes natural gas, while providing innovative energy solutions for our residential, commercial and industrial customers. We are a regulated business unit of Avista Corp., an investor-owned corporation headquartered in Spokane, Wash. As one of the largest taxpayers in the region, paying approximately $100 million in taxes annually, our economic impact supports family-wage jobs in rural, suburban and urban communities in our 30,000 square-mile service territory in eastern Washington, northern Idaho and parts of southern and eastern Oregon and Sanders County, Montana. Staff_PR_136 Attachment A Page 8 of 94 About The 8 Our Company Selected Company Statistics (as of Dec. 31, 2014) Avista Corp. total annual revenue $ 1,472,562,000 Avista Corp. net income* $ 192,041,000 Avista Utilities net income* $ 113,263,000 Avista Utilities number of employees 1,658 Number of customer accounts Retail — electric 367,092 Commercial/industrial — electric 42,373 Retail — natural gas 326,267 Commercial/industrial natural gas 34,348 Population of service area 1.6 million * attributable to Avista Corp. shareholders Our Purpose To improve life’s quality with energy — safely, reliably, responsibly. Our Lasting Principles Certain principles have stood the test of time and remain deeply rooted in our company. Every aspect of what we do is aligned with these principles. At Avista we are: Trustworthy: Our word is reliable; we do what is right. Innovative: We continuously improve and find better ways to get things done. Collaborative: We are respectful and are at our best when working together. Our Commitment to Diversity Avista is enriched by the diversity of our employees. We are committed to the goals of Equal Employment Opportunity and Affirmative Action, maintaining an environment of acceptance and inclusion for everyone in all aspects of our daily operations. Our employees and our company value diversity and mutual respect, and the workplace is free from harassment and discrimination for employees, customers, suppliers and other stakeholders. Pullman Clarkston La Grande Moscow Lewiston Grangeville Coeur d’Alene Kettle Falls Sandpoint Noxon Klamath Falls Medford Roseburg OthelloOlympia Salem Boise GoldendaleStevenson Jackson Prairie Natural Gas Storage HelenaMissoula Portland Seattle Spokane Avista Service Territory AVISTA SERVICE TERRITORY Electric Natural Gas Electric and Natural Gas as of 12/31/2014 WASHINGTON IDAHO MONTANA OREGON Staff_PR_136 Attachment A Page 9 of 94 9 Our Company Our Employees The culture at Avista is based on integrity and respect. We offer employees the chance to enrich their careers through challenging and meaningful work assignments and ongoing training and development — all in an equal opportunity workplace that is surrounded by a supportive environment. Our success lies in hiring talented people and setting them free to pursue great ideas — ideas that engage the imagination, stretch us all and ensure that Avista continues to provide exemplary and cost-effective service to our customers. Approximately seven percent of our employees system-wide identify themselves as minority. Spokane County, home to our headquarters and 1,195 of our employees, has approximately 10 percent minority population in the workforce. Roughly 36 percent of our employees will be eligible to retire in the next five years, and 50 percent will be eligible to retire in the next 10 years. However, we’ve been planning for this shift in our demographics for many years. Through robust professional development programs along with careful succession planning and targeted and intentional recruitment efforts, we continue to develop our workforce to keep ideas fresh and leadership strong. Avista does periodic assessments of future retirement scenarios to anticipate how to attract, retain and develop critical talent needed for the continued effective operation of the company. Working at Avista Local Hiring In an ongoing effort to recruit qualified local employees, we post positions on local job websites such as Worksource (Washington) and Idahoworks (Idaho) as well as through traditional and social media channels (Facebook, Craigslist and LinkedIn) and on our company website. In addition, we submit our external job postings to more than 100 agencies across Washington, Idaho, Oregon and Montana. As appropriate, we also notify local schools of student employment opportunities. Of the 13 executive level officers employed by Avista, nine were hired locally (from within the Inland Northwest region). Collective Bargaining At Avista, 40 percent of employees are covered by collective bargaining agreements. Avista employees are represented by the International Brotherhood of Electrical Workers, Local 659 (Oregon) and Local 77 (Washington/Idaho). Performance Reviews All regular, non-bargaining unit employees receive formal performance reviews on an annual basis and updates at mid-year. Our union employees receive periodic evaluations as needed. Supporting Military Service It is Avista’s policy to grant military absence and military time off without a break in service time or benefits, as required by law and in accordance with the needs of employees who are members of the military service. Currently, Avista has approximately 66 self-declared veterans of military service, about four percent of our work force. As the number of veterans returning home from service increases, Avista is actively working with local organizations to identify opportunities to support veterans-to-work initiatives. In 2014, Avista staff attended the following career fairs: Hero 2 Hired, Airman and Family Readiness Center at Fairchild Airforce Base and the Inland Northwest Hiring Heroes. Staff also attended the Washington Women’s Veterans Summit and a Congressional Military Family Caucus while also continuing Avista’s strong relationship with the Eastern Washington University Veterans Resource Center. The Avista recruiting team speaks to local veterans groups and communicates about job openings with local veterans organizations. Staff_PR_136 Attachment A Page 10 of 94 Our Company 10 Our Company Engaging Our Employees Avista employee engagement — their level of commitment to and satisfaction with employment at Avista — has been measured every two years, beginning in 2006, in partnership with the independent consulting firm Mercer. Over time, we’ve seen a high level of engagement from participating employees. The final survey with Mercer was completed in 2014, and Avista will continue the established commitment to employee engagement with a new research partner in future years. Employee Engagement *This level of employee engagement is 8 percent higher than the norm for all industries as measured by Mercer. Employee engagement efforts seek to provide a venue for employees to meaningfully participate in our business. A wide array of communication tools are used to keep our employees informed about our company, our industry and current trends in the energy industry. These include electronic and print newsletters and emails, issue- specific information sheets, pre-packaged information tools for managers, communications leadership training, videos and quarterly town hall meetings with executives. Who We Are Board of Directors • 4 females, 40 percent female* • One of the 10 directors identifies as minority Corporate Officers • 3 females, 23 percent female • No officers identify as a minority • Of the top 6 executive officers, 2 are female Employees • 29 percent female, 71 percent male • 7.0 percent identify as a minority * While the national activist group 2020 Women on Boards call for at least 20 percent of public company directors to be women by the year 2020, Avista already exceeds that standard. (Puget Sound Business Journal, May 25-31, 2012) Programs and Processes to Ensure the Availability of Skilled Workforce Avista Scholars Program Avista partners with colleges and universities throughout our three-state service territory to provide several different scholarship opportunities for students. The mission of the Avista Scholars program is to promote excellence in the fields of math, science, technology and engineering, leading students to become innovators, problem solvers and diverse, talented employees of our future. Through this program, Avista is helping to ensure there is a skilled workforce for the future. Six Avista Scholars have been hired at Avista since the program’s inception in 2007. Staff_PR_136 Attachment A Page 11 of 94 Our Company 11 Our Company A Training Partnership with the Community College Avista continues a more than 20-year partnership with Spokane Community College to offer a course that provides an introduction to the electric lineman field through the Line Pre- Apprentice Program. It is held at Avista’s Jack Stewart Training Center, a 10-acre training facility, and is open to individuals interested in entry-level positions leading to careers in the electric line worker craft and other utility-related professions. Participants learn, through hands-on and classroom experience, the skills and knowledge required for the position of a line crew helper. Apprenticeship Programs As part of Avista’s commitment to ensuring we have a skilled workforce now and into the future, we provide 11 active apprenticeship programs. The programs, which typically take 2-4 years to complete, provide participants living-wage jobs along with the opportunity to advance within their field and at Avista. There are a wide-range of focus areas, ranging from electric mechanic and lineman to hydro and substation operator and communications technician. There were 64 apprentices registered in 2014, 10 of whom completed their programs. Powering Shared Value Student Engineering Development Program As a part of ensuring a skilled workforce for the long-term, Avista offers a Student Engineering Development Program (SEDP) that provides a variety of opportunities for engineering students to develop their engineering skills, gain an insight into the energy industry, gain valuable real-world experience and explore future professional opportunities. Students spend the summer working at Avista, where they participate in meaningful projects, experience focused mentorship and prepare for the next steps in their career. In 2014, 10 students participated in the SEDP and two of these students were hired. The program is mutually beneficial for local and regional students and Avista as it provides us with employees who can contribute to the overall success of the department they are working for, bringing in fresh new ideas while giving us the link to the latest technology being taught in our colleges. This program provides students with an overview of what it’s like to work at Avista and helps Avista build a strategic pipeline into our Engineering Development Program (EDP). Staff_PR_136 Attachment A Page 12 of 94 Our Company Ongoing Training and Development Opportunities We support a culture of continuous learning at Avista. Our development opportunities are created to prepare employees at all levels to ensure we have the skilled workforce we need now and into the future to identify customer challenges and how we can continue to meet their needs. We develop training that is relevant, necessary and in demand within the organization to help employees find success within their jobs. Training for employees at Avista is delivered through instructor-led, self-service, computer- based, field and workshop models that include topics such as: craft, customer service, environmental, natural gas, desktop, warehouse, project management, gas for non-gas workers, health and safety, leadership development, electric, flagging/ forklift, line, apprentice, journeyman, power resources, hydro and power supply. Opportunities for Continued Learning and Professional Development Aspiring Leaders Program In its 13th year, the Aspiring Leaders Program provides development for those employees preparing to be considered for future leadership roles. This one-year program provides qualified employees exposure to a variety of departments, training, leadership, mentoring and includes a team project. College Tuition Aid The company provides tuition assistance of up to $5,250 each year for undergraduate and master’s level studies in programs that add to employees’ performance and effectiveness in present or foreseeable jobs within the company. Learning Center Avista’s Learning Center was established in 1998 to promote lifelong learning for all employees. The center focuses on being proactive rather than reactive in terms of training and learning opportunities. Resources available include audio/ video media, books, journal/periodicals and self- study courses. Workshops, Classes and Development Programs Avista offers a series of workshops and classes that are open to all employees as part of an overall professional and leadership development program. Topics include leadership enhancement, business process improvement and leading change for understanding more about the role of leadership, utility strategies and operations. In addition to in-house courses, we also send staff to classes offered through the Western Energy Institute, American Gas Association, Edison Electric Institute, University of Idaho, Willamette University, Gonzaga University and others. Safety and Health A safe and healthy work environment is an essential part of our commitment to all our employees. Fortunately, we had no employee fatalities as part of our 2014 operations. Our focus continues to be on keeping employees well and on the job because we want every employee to go home safely to his or her family at the end of a shift. Avista’s Central Safety Council is committed to providing the safest workplace possible and a safe environment for all of our employees, their families and the communities we serve. The Central Safety Council’s mission is to: • Act as a forum to provide leadership and direction to the safety efforts; • Advocate the steps needed to achieve safety goals; • Coordinate, monitor and focus on safety and prevention; • Ensure proper action will be taken to provide a safe and healthy work environment for all our employees. There are 37 location-specific safety committees and safety chairpersons throughout the company. Safety information is reported quarterly to Avista’s board of directors; and • Ensure the resources are provided to achieve the above. 12 Our Company Staff_PR_136 Attachment A Page 13 of 94 Our Company Employee Health Preparedness and Assistance In the event of widespread illness, Avista has a pandemic emergency plan in place that includes workforce, community and family assistance elements. The plan was created to provide employees with information, support and policy guidance prior to, during and following a regional pandemic event that impacts our ability to provide services to our communities. Coordinated response procedures are instrumental in effectively maintaining our customer services during a long-term pandemic event. In addition, employees and families receive education, training, counseling, treatment and prevention/risk control opportunities through the Occupational Health Department and the company health and wellness programs. Avista maintains an on-site clinic in the main office with occupational and safety professionals available to serve all locations. The company provides an Employee Assistance Program and a Health Reimbursement Arrangement (HRA). Onsite exercise facilities are provided in many work locations throughout our service territory to foster ongoing health and wellness. Health and Safety Topics Covered in Formal Agreements with Trade Unions Avista follows all federal, state and local health and safety regulations and compliance programs. We work with our craft representatives to promote safety from the foremen to their crews. Our Labor/Management Committee meets quarterly or as needed to address problems and concerns. The union contracts also include grievance and arbitration language to deal with safety concerns or complaints. Policies and Requirements for Health and Safety Avista follows the requirements and guidance of numerous regulatory agencies for employee safety, including the United States Occupational Safety and Health Administration (OSHA), Washington Division of Occupational Safety and Health (DOSH), Oregon Department of Occupational Safety and Health (Oregon OSHA), and the Department of Transportation (DOT). Our Incident Prevention Manual (IPM) includes an accident prevention plan as well as safety rules and practices for the different operating units. In addition, Avista has developed standards manuals that include safe work practices materials and procedures. We conduct numerous training programs internally and externally as required for employee and contractor safety by OSHA, DOT, DOSH and Oregon OSHA. A combination of instructor-led, third-party and online training programs are used throughout the year to keep employees properly trained and safe. Avista supplies personal protective equipment for employees as needed for their work, including the tools, equipment and machinery required to perform their jobs safely. Ergonomic equipment is used whenever possible to reduce potential injuries. Contractors and sub-contractors are required to follow all regulatory rules and regulations as they relate to personal protective equipment when working on Avista systems. Other programs that ensure a safe workplace include: • A substance abuse prevention program, including pre-employment, random, for-cause and post-incident segments; • Operator Qualification training for gas employees to ensure safe operation of gas systems; • OSHA required training in craft work areas; and • Pre-job review and orientation for contractors awarded bids on Avista properties. 13 Staff_PR_136 Attachment A Page 14 of 94 Our Company Governance Governance Structure The board of directors of Avista Corp. has long adhered to governance principles designed to assure the continued vitality of the board in the execution of its duties. The board is responsible for management oversight and providing strategic guidance to the company. The board believes that it must continue to renew itself to ensure that its members understand the industry and the markets in which the company operates. The board also believes that it must remain well informed about the positive and negative issues, problems and challenges facing the company and markets so that the board members can exercise their fiduciary responsibilities to the company’s investors and other shareholders. The board has six standing committees: Audit Committee, Governance/Nominating Committee, Compensation & Organization Committee, Finance Committee, Environmental & Operations Committee and Executive Committee. Information about these committees is available online at avistacorp.com. Composition of the Board According to the company’s Articles of Incorporation, the board will consist of no more than 11 directors, as determined by the board from time to time. The board included 10 directors as of Dec. 31, 2014. The majority of the board will consist of directors who meet applicable independence requirements of the New York Stock Exchange, which will be determined by the board on an annual basis. Members of the board are elected annually. The board does not have a policy as to whether the role of CEO should be separate from that of chairman. The board selects the chairman in a manner that it determines to be in the best interests of the company and its shareholders. This flexibility has allowed the board to determine whether the role should be separated based on the individuals serving and circumstances existing at that time. The board believes that it needs to retain the ability to balance the independent board structure with the flexibility to appoint as chairman someone with hands-on knowledge of and experience in the operations of the company. The board periodically examines its governance practices, including the separation of the offices of chairman and CEO. Awards and Recognition • Business Development Award — Coeur d’Alene Chamber of Commerce • A+ Education Award — Coeur d’Alene Chamber of Commerce • BOMA 360 Performance Program Certification — Building Owners and Managers Association • Recognition for collaborative efforts of the Clark Fork Management Committee and commitment to stewardship — Idaho Department of Fish and Game • Proclamations recognizing Avista’s 125th anniversary: – U.S. House of Representatives — Resolution – State of Washington Legislature — Joint Resolution – Washington Secretary of State – City of Clarkston, Wash. – City of Coeur d’Alene, Idaho – City of Lewiston, Idaho – City of Medford, Oregon – City of Moscow, Idaho – City of Post Falls, Idaho – City of Pullman, Wash. – City of Spokane Valley, Wash. 14 Staff_PR_136 Attachment A Page 15 of 94 Our Company Independence It is the policy of the board that a majority of the directors will be independent from management. Independence determinations are made on an annual basis at the time the board approves nominees for election at the next annual meeting and, if a director joins the board between annual meetings, at that time. As of Dec. 31, 2014, of the 10 members of the board, nine are independent. The chairman of the board is the president and CEO of Avista Corp. Code of Ethics We strive to achieve the highest business and personal ethical standards, as well as compliance with the laws and regulations that apply to our business. Business practices focused on Avista’s values of integrity and principle-based conduct are essential for Avista’s board and employees. The company’s Code of Business Conduct and Ethics provides the framework for our decisions and our operations. It is the obligation of every member of the board and each officer and employee of Avista to become familiar with the goals and policies of the company and integrate them into every aspect of our business. Our standard has been, and will continue to be, that of the highest ethical conduct. Communicating with the Board Shareholders and other interested parties may send correspondence to the board or individual directors through the Avista Corporate Secretary’s office. All communications will be forwarded to the person(s) to whom it is addressed unless it is determined that the communication does not relate to company or board business, is an advertisement or other solicitation, is frivolous or offensive, or is otherwise not appropriate to deliver. Shareholder proposals, in writing, may be delivered to the company’s Corporate Secretary. Specific information about the process to do this can be found in the company’s proxy statement. Reporting Suspected Violations The message hotline number (877-861-6690) provides an alternate point of access for serious concerns regarding possible breaches of the Code of Business Conduct and Ethics, corporate policies, business ethics or environmental practices (except environmental spills, for which a specific phone number is provided). Compensation of Directors Directors’ compensation is determined by the board, based on recommendations of the Governance/Nominating Committee. Members of management who are also directors will not receive additional compensation for their service as directors. The board believes that it is important for the interests of the board to be aligned with the company’s shareholders and, accordingly, a portion of directors’ compensation will be provided and must be held in company stock. Conflicts of Interest The company requires its board of directors, officers, employees, consultants, representatives and agents to avoid conflicts of interest, or even the appearance of such, between their obligations to the company and their personal affairs. None of these persons shall have an interest, position or relationship with any person, firm or corporation with whom the company does business or competes, if such interest, position or relationship would influence or might be likely to influence the actions of such individual in the performance of his or her duties. 15 Staff_PR_136 Attachment A Page 16 of 94 Our Company Board Membership Criteria The Governance/Nominating Committee annually reviews with the board the composition of the board as a whole and recommends, if necessary, steps to be taken so that the board reflects the appropriate skills, experience, attributes and characteristics required of board members all in the context of an assessment of the needs of the board and the company at the time. In conducting this assessment, the committee considers diversity, retirement age, skills, experience, expertise and such other factors as it deems appropriate. Say-On-Pay Shareholders voted in 2011 to have the non-binding advisory vote on the company’s executive compensation program appear annually in the company’s proxy statement. At the May 2014 annual meeting, Avista’s shareholders approved the company’s executive compensation program. Every six years shareholders will have the opportunity to determine how frequently the vote on “say on pay” will be included in the company’s proxy statement. 16 Staff_PR_136 Attachment A Page 17 of 94 Our Company — By the Numbers Strategic Objectives An integral part of our work at Avista is to establish a clear line of sight for employees from the work they do every day to the outcomes that bring the most value to our customers, our shareholders and our communities. The following objectives have been established to meet that goal. Initiatives Target Goal Actual Action Customer Satisfaction Consistently maintain customer satisfaction as measured through Voice of the Customer 90% satisfied and very satisfied Exceeded — 95% System Reliability Reliability Index — three common industry indices: Customer Average Interruption Duration — (CAIDI), System Average Interruption Frequency Index (SAIFI) and Customer Experiencing Multiple Interruptions (CEMI3) Reliability index of 1.0 or better Exceeded — 2.2 Electric Energy Efficiency Achieve efficiency target to meet Washington and Idaho Integrated Resource Plan Goals 52,649,000 kWh saved Exceeded — 58,714,955 kWh saved Preliminary numbers Natural Gas Energy Efficiency Acquire cost-effective conservation to align with the Washington Integrated Resource Plan efficiency target 1,310,000 therms saved Not met — 615,418 therms saved Numbers expected to be lower due to lower costs of natural gas 17 Staff_PR_136 Attachment A Page 18 of 94 Our Company — By the Numbers Initiatives Target Goal Actual Action Generation Plant Efficiency Ensure that generation, transmission and distribution systems reliably and cost-effectively meet customer energy requirements 93% availability Not met — 87% Complete generation plant projects currently underway Employee Engagement Maintain engagement drivers that keep our employees involved and committed to Avista 75% engagement Exceeded — 81% engagement Employee Injuries Reduce the number of incidents as compared to 2013 actual 5% reduction Exceeded — 26% Reduction Lost Time Incidents Reduce the number of incidents as compared to 2013 actual 5% reduction Exceeded — 50% Reduction Vehicle Incidents Reduce the number of incidents as compared to 2013 actual 5% reduction Exceeded — 42% Reduction Employee Volunteerism Be an integral part of the communities we serve and a contributor in mutually beneficial ways 50,000 hours Not met — 48,000 hours New volunteer engagement website tool will be implemented Natural Gas Dig-Ins Maximize awareness and adoption of safe practices that support our response to public safety Reduce to less than or equal to 6 per 1,000 locates Exceeded — 5.16 Dig-Ins/1,000 Locates Strategic Objectives Continued 18 Staff_PR_136 Attachment A Page 19 of 94 Our Company — By the Numbers Strategic Objectives Continued Initiatives Target Goal Actual Action Natural Gas Public Safety Education Maximize awareness and adoption of safe practices that support our response to public safety Improve performance as compared to 2009 baseline 2014 Performance continues to improve as compared to 2009 baseline Natural Gas Emergency Response Maximize awareness and adoption of safe practices that support our response to public safety Meet natural gas response targets on 93% of calls Exceeded — 97% 19 Staff_PR_136 Attachment A Page 20 of 94 Our Company — By the Numbers Total Workforce by Employment Type as of Dec. 31, 2014 2014 2013 2012 2011 2010 2009 Full time 1,487 1,475 1,518 1,441 1,401 1,390 Part time 101 97 77 84 75 76 Temporary 42 35 43 44 47 27 Student 16 23 25 9 12 18 Other 6 13 9 16 19 22 1,652 1,643 1,672 Company contributions to defined benefit plan (pension) $32 million $44.26 million $44 million $26 million $21 million $48 million Safety 2014 2013 2012 2011 2010 2009 Vehicle incidents per million miles driven 4.16 8.23 7.31 6.15 7.8 9.16 Recordable injuries per 200,000 hours worked 4.47 4.49 6.67 7.45 3.73 4.27 Lost-time incidents per 200,000 hours worked 1.10 1.75 2.18 2.58 1.68 1.62 Employee fatalities 0 0 0 0 0 0 Injuries to the public 1 5 1 3 2 20 Staff_PR_136 Attachment A Page 21 of 94 Our Company — By the Numbers Training Programs 2014 2013 2012 2011 2010 2009 Pre-Line School Total students graduated 73 74 73 73 70 64 Hours of training 45,552 46,176 45,552 45,552 43,680 39,936 Credits awarded per student 49 49 49 49 49 49 Apprentices — All Crafts* Total number of apprentices trained 80 64 59 41 48 57 Number of active programs 10 11 10 9 10 10 Hours of training on the job 166,400 133,120 120,640 85,280 99,840 118,560 Hours of classroom training 14,101 8,236 3,961 2,269 4,310 6,172 Journeyman Training Electric/Generation 10,404 6,217 7,587 3,540 8,773* 1,880 Gas refresher — hours 2,251 2,248 1,417 1,565 1,840 1,824 *In 2010 Avista added crane operator training and certification, and fork lift training, dramatically increasing the number of training hours for apprentices 21 Staff_PR_136 Attachment A Page 22 of 94 22 Utility Operations Customer Service Customer satisfaction is an essential element in all we do at Avista. From our Call Center representatives who seek to provide answers in 60 seconds or less, to the line workers and servicemen in the field, and from finance to environmental, every Avista employee has an impact on our interactions with customers. We are committed to their satisfaction. We set clear customer satisfaction goals for our company, have established metrics for tracking this and provide our employees the tools needed to be successful. One way we measure customer satisfaction is through a quarterly survey — “Voice of the Customer” — to measure and track the satisfaction of customers who have contact with Avista through the Call Center and/or work performed through an Avista construction office. Customers are asked to rate the importance of several key service attributes (time for connection to a representative, representative being courteous and friendly, representative being knowledgeable, being informed of job status, leaving property in condition found, etc.) and then to rate Avista’s performance with respect to the same attributes. Customers are also asked to rate their satisfaction with the overall service received from Avista. Customer verbatim comments are also captured and recorded. Customer satisfaction ratings have exceeded 90 percent in each of the past 15 years. People and Technologies that Power the Possible Staff_PR_136 Attachment A Page 23 of 94 23 They have always done what they said they were going to do. I’ve never had any problems with Avista. I’ve always been very satisfied. Whenever I have needed service they get back to me immediately. They are very prompt and helpful. Avista gets to my needs promptly. Utility Operations 20132014 20102012 20119595 9393 94 Staff_PR_136 Attachment A Page 24 of 94 24 Utility Operations Electricity Generation Resource Mix As of Dec. 31, 2014 Excludes AEL&P Serving Our Customers Electricity A Diverse Generation Mix Avista maintains a diversified generation portfolio, including hydroelectric, biomass, natural gas, coal and wind. The company complies with renewable portfolio standards in Washington’s Energy Independence Act (EIA) by using qualified renewable resources, renewable energy credits (RECs) or a combination of both to meet the following annual targets: 3 percent of energy used to meet customer load in Washington by Jan. 1, 2012, 9 percent by Jan. 1, 2016, and 15 percent by Jan. 1, 2020. Avista met the 2014 targets with qualifying hydroelectric upgrades. In addition, to meet future requirements, we helped facilitate a change to the EIA in 2012 to qualify energy generated from biomass at our Kettle Falls plant beginning in 2016. COAL 9% WIND 6% HYDRO (40% AVISTA & 8% CONTRACTS) BIOMASS 2% NATURAL GAS 35% Staff_PR_136 Attachment A Page 25 of 94 25 Utility Operations Modernizing Our Grid to Enhance Reliability and Energy Efficiency Over the past few years, Avista has built a new foundation for our energy future. Avista is one of a handful of utilities across the country to receive multiple grants from the Department of Energy through the American Reinvestment and Recovery Act. By investing more than $80 million of combined federal matching funds and Avista capital, we’ve successfully modernized portions of our grid with upgraded substations and new software, sensors and switches that allow us to operate our distribution systems more efficiently and reliably. Spokane Smart Circuits Project One-third of Avista’s electric customers are already seeing the benefits of our Smart Circuits project, which upgraded the electric distribution system throughout Spokane, Wash. Federal funding allowed us to accelerate the pace of upgrades that reduce system losses, and improve reliability and efficiency in the electric distribution system. Pullman Smart Grid Demonstration Project Avista joined with regional partners, led by Battelle Northwest, to implement smart grid technology across the Pacific Northwest. Avista’s Smart Grid Demonstration project transformed Pullman, Wash., into the region’s first “smart city.” Work Force Training Program Avista partnered with utilities and colleges in the Inland Northwest to develop the Smart Grid Workforce Training Program to recruit and train the workforce of the future. Avista’s training facility was upgraded for smart grid technology. Online curriculum was developed to share among utilities and colleges in four states. We’re already seeing tangible results: Improved Reliability: Our customers are experiencing fewer and shorter power outages because the upgrades Avista’s made allow outages to be restored in minutes, instead of hours. New software automatically identifies and isolates faults on our system and safely restores power to surrounding customers. We’ve already avoided over 1.5 million outage minutes for our customers. That improved reliability translates into a better customer experience with Avista. Improved Energy Efficiency: We’re also reducing losses and improving the energy efficiency of Avista’s entire system. Sensors that constantly monitor voltage levels, combined with substation technology that adjusts voltage levels, saved 42,000 MWh during a 12-month period. Applying Lessons Learned: We’re now automating activities that have been performed manually. The lessons we learn are now informing how we design, operate, maintain and upgrade our systems as we continue to invest in modernizing our grid. Staff_PR_136 Attachment A Page 26 of 94 26 Utility Operations Powering Shared Value Avista’s Energy Storage Project in Pullman Avista’s $7 million Energy Storage Project builds upon the technology upgrades in Pullman, Wash., and is part of our investment into research that will improve power system reliability by addressing one of the biggest challenges facing the energy industry — how to integrate power generated from intermittent renewable sources such as wind and solar into the electrical grid. The 1 MW, 3.2 MWh large-scale battery storage system uses batteries manufactured by Washington-based UniEnergy Technologies in a real-world setting at Schweitzer Engineering Laboratories in Pullman. The system went online in 2015, and over an 18-month period Avista will test seven use- case scenarios. It will store power generated by renewable sources when it’s abundant, for example when the wind is blowing, and distribute energy when it’s needed, regardless of weather patterns. Avista’s Energy Storage Project is possible thanks to a $3.2 million grant from Washington Governor Jay Inslee and the Washington State Department of Commerce’s Clean Energy Fund and another $3.8 million in Avista matching funds. Electric And Magnetic Fields — A Public Health Discussion As Avista prepares to join many other utilities across the country to deploy advanced meters in Washington, some people may wonder whether or not exposure to the electromagnetic fields (EMF) associated with radio frequencies (RF) emitted by wireless smart grid technologies pose health risks. It’s important to understand that we now live in a wireless world. Many devices emit RF transmission in our homes, public buildings and private businesses, so we’re exposed to these EMF fields in varying intensity all day long. Based on current research, Avista is confident that the advanced metering and other smart technologies do not pose additional safety or health hazards to our customers. The advanced metering equipment is installed outside the home. The RF power level of advanced meters is comparable to and in most cases significantly lower than those used by many common wireless devices, such as cell phones, baby monitors, garage door openers, wireless routers (Wi-Fi), cordless telephones or other common electronic devices inside homes today. The RF level of advanced meters also falls well below state and federal safety standards, including the exposure standards for wireless devices adopted in 1996 by the Federal Communications Commission. Staff_PR_136 Attachment A Page 27 of 94 27 Utility Operations Avista is committed to providing safe and reliable electric service for our customers and a safe work environment for our employees. We have an ongoing commitment to not just comply with local, state and federal safety standards in our operations, but to lead by example doing more than just what’s required of us. Serving Our Customers Natural Gas Avista provides natural gas services to more than 330,000 customers in eastern Washington, northern Idaho and parts of southern and eastern Oregon. The natural gas pipeline replacement program currently underway is a result of Avista’s commitment to maintain a safe and reliable natural gas pipeline system. Over the life of the 20-year program, we will replace approximately 737 miles of natural gas pipeline, which was installed prior to 1987. In addition, we are performing preventative maintenance on more than 16,000 service taps over the next 5 years through a structured replacement program in Washington, Idaho and Oregon. These kinds of stepped programs help control impacts to neighborhoods and manage construction resources more effectively than simply repairing leaks as they occur or are discovered through annual leak surveys. Natural Gas Customer Safety — Gas Leak Response Since 2011, Avista has reduced its overall response to customer gas safety concerns by an average of 1.25 minutes per event. We consider response time to be the window between when a customer first calls us about a gas safety concern and when an Avista gas employee arrives on site. This improved speed is the direct result of fine-tuning dispatch and work order processes and more accurate tracking of work completed. Powering Shared Value Avista’s School Outreach Program Educates about Natural Gas and Electric Safety Safety is an important part of the work Avista does, and each year, we implement public awareness outreach programs aimed at keeping our customers safe around electricity and natural gas. As part of the public awareness program in 2014, we launched a focused school outreach program to promote safety among teachers, students and families. The outreach includes multi- grade-level direct mail, booklets and curriculum, and online safety resources and education that all audiences can leverage to share and learn more about electric and natural gas safety. In 2014, 18,958 third-sixth grade students (nearly 30 percent of all students in our service territory) were reached through this program with electric and natural gas safety education. Teachers were satisfied with the materials provided and found the education valuable and beneficial for their students. This kind of outreach and collaboration allows Avista to share important safety information and serve as a trusted partner in safety education for those we serve. Staff_PR_136 Attachment A Page 28 of 94 28 Utility Operations Resource and Business Continuity Planning Planning to Ensure Short and Long-Term Energy Availability and Reliability Avista’s biennial Integrated Resource Plans (IRP) for electric and natural gas services guide the utility’s resource acquisition strategies and the overall direction of resource procurements for a 20-year planning horizon. The IRPs provide a snapshot of the company’s resources and forecasted loads and guidance regarding resource needs and acquisitions. Avista’s management, along with stakeholders from the Technical Advisory Committee (TAC), play a key role in guiding the development of the IRP. TAC members include customers, commission staff, consumer advocates, academics, utility peers, government agencies, and other interested parties. The TAC provides significant input on modeling, resource assumptions and the general direction of the planning process. The 2013 Electric IRP Over the next 20 years, Avista anticipates adding almost 90,000 retail customers with a 1 percent annual growth in electric demand. The utility plans to meet this growth with a mix of new natural gas-fired generation resources, demand response, efficiency upgrades at existing generation facilities and various energy efficiency measures. The IRP describes strategies to meet projected energy demand and renewable portfolio standards through energy efficiency and a careful mix of energy resources. This plan helps us balance meeting customers’ needs for safe, reliable energy with satisfying renewable portfolio standards over the next 20 years. The plan calls for Avista to continue system upgrades and improvements to deliver energy to our customers more efficiently and reliably. It calls for Avista to obtain new resources in a responsible and environmentally sound manner and at a reasonable cost to our customers. Each IRP is a thoroughly researched and data-driven document to guide responsible resource planning for the utility. The IRP is updated every two years and looks 20 years into the future. Some highlights of the 2013 plan include: • Demand response (temporarily reducing the demand for energy) is included in the preferred resource strategy (PRS) for the first time and could provide 19 MW of peak energy reduction in the 2022–2027 timeframe. • Energy efficiency (using less energy to perform activities) reduces load growth by 42 percent over the next 20 years. • 575 MW of additional clean-burning natural gas-fired generation facilities are required between 2020 and 2033. • Transmission upgrades will be needed to carry the output from new generation. Avista will continue to participate in regional efforts to expand the region’s transmission system. Planning to Meet Long-Term- Need Electricity The 2013 Preferred Resource Strategy (PRS) is a plan for a mix of additional energy efficiency, demand response, upgrades at existing generation and distribution facilities and new natural gas-fired generation. A contract for the power from the Palouse Wind project located near Oakesdale, in southeast Washington, and the addition of Kettle Falls as a qualified renewable energy facility, will fulfill Avista’s PRS obligations through the end of this IRP. Avista’s first thermal acquisition would be a natural gas- fired peaking plant in 2019; total natural gas- fired acquisition is expected to be 575 MW over the IRP timeframe. The 2013 plan splits natural gas-fired generation between simple- and combined cycle plants in anticipation of a growing need for system flexibility to integrate variable resources such as wind. Estimated total capital needs for generation resources in the PRS are $782 million over the next 20 years. Conservation and system efficiency spending will increase over time; a total of $711 million will acquire 164 aMW over 20 years. Staff_PR_136 Attachment A Page 29 of 94 29 Utility Operations The 2015 Electric Integrated Resource Plan The 2015 Electric IRP is currently in process and will be published in August 2015. It will be available on our website at www.avistautilities.com. Planning For Natural Gas The Integrated Resource Plan (IRP) for our natural gas operations was filed in August of 2014. The IRP identifies a strategic natural gas resource portfolio that includes both supply-side and demand-side resources to meet customer’s needs for the next 20 years in a safe, reliable and least cost manner considering multiple levels of uncertainty. To meet this goal, our philosophy is to develop a plan that incorporates an appropriate balance of price certainty and prudent cost management utilizing our portfolio of supply contracts, storage and firm pipeline capacity rights. We are fortunate to be able to work collaboratively with our Technical Advisory Committee (TAC), which is comprised of members from regulatory staff, industry stakeholders, customers, peer utilities, and company representatives from several departments. The experience with this group provides a robust forum for the exchange of ideas and discussion of issues and risks that affect the planning process. Avista’s 2014 natural gas IRP was filed with the Washington, Idaho and Oregon state commissions on Aug. 29, 2014. Highlights of the plan include: • Avista has sufficient natural gas resources to meet customer needs well into the future. • There are no expected resource needs in Washington, Idaho or Oregon during the 20- year planning horizon. • Demand continues to be lower than previous plans, driven by lagging economic recovery and declining use per customer across our service territory. • This prolonged flat demand poses a risk that should load growth increase sooner or greater than expected the need for additional resources would accelerate. • The long-term forecasted price of natural gas remains relatively low, and while this is good for customers, it challenges the cost- effectiveness of natural gas demand-side management programs. Planning to Ensure Continuation of Services Avista operates in a part of the country where heavy snows, ice storms, fire storms, volcanoes, floods and earthquakes are genuine probabilities. In addition to these natural threats to normal business operations, Avista must also consider possible man-made threats such as sabotage, terrorism and cyber-related issues. To ensure our continued utility and business operations, we have implemented an enterprise incident management response program. Our incident response, business continuity and disaster recovery plans are designed to safeguard life and property. They are also designed to provide for the restoration of electric and natural gas services and the continuation of business functions critical to the support of Avista operations in case of natural disasters, accidents or other realized threats to the company. Staff_PR_136 Attachment A Page 30 of 94 30 Utility Operations Incident Management Avista has formally adopted and implemented the Incident Command System (ICS) as the means by which all emergencies will be managed. In recent years, the ICS methodology has been widely adopted across many utilities and is required among local, state and federal agencies. Use of this standardized incident management process ensures Avista is better prepared for and better positioned for rapid response, restoration and recovery during an interruption, whether a service outage or a disruption to business. Avista is also able to integrate with local emergency responders as well as partner utilities under the ICS framework. Emergency Operating Plan (EOP) Critical departments that provide essential services as part of the company’s business have developed Emergency Operating Plans (EOP). These plans are designed to enable Avista operations to successfully respond to an emergency or severe disruption, resuming operations in a timely and orderly fashion. Emergency response activities are focused on responding to the initial event and subsequent impacts in an effort to prevent further damage to life, property, and the environment, and to stabilize the situation by activating recovery and back-up processes and procedures. Enterprise Business Continuity Program (EBCP) Avista has developed an Enterprise Business Continuity Program (EBCP) to facilitate and administer emergency operating plans, business continuity and disaster recovery plans and activities simultaneously across multiple departments in response to any scope of disruption to normal business operations. It serves as the governing structure for the coordination of Avista’s EOPs during an emergency response situation, using ICS for enhanced coordination, planning and response execution. Business continuity and disaster recovery activities may occur concurrently with the emergency response activities of the EOPs and are focused on sustaining Avista’s critical business processes. Our EBCP ensures that emergency response activities occur in a coordinated and timely fashion, maximizing resources and reducing further disruption to normal business operations. Emergency Action Plans (EAPs) Even though the probability of a major structural emergency at any Avista hydroelectric facility is remote, we have developed Emergency Action Plans (EAPs) to help ensure public safety at our hydroelectric facilities. The plans are designed to minimize potential dangers to people and property downstream of the dams. Based on computer simulations of catastrophic failures at each site, the EAPs provide guidelines for notification and early warning in the event of an actual or potential dam breach. Each EAP is evaluated annually, and exercised and revised every five years. Business Continuity Plans Avista prepares and regularly updates Business Continuity Plans (BCP) for its critical business functions. The BCPs include incident response, crisis communications and business specific recovery procedures. Disaster Recovery Avista has established system and data backup and recovery capabilities to support the recovery of critical business functions. Exercising the Plans Avista exercises its Business Continuity Plans and conducts testing of the disaster recovery site and strategy annually. Alternate Facilities/Work Area Recovery Strategy Avista has implemented an alternate facilities recovery strategy as part of the EBCP to support the relocation of staff and resumption of business should one or more facilities be impacted by an event. Staff_PR_136 Attachment A Page 31 of 94 31 Utility Operations Enterprise Business Continuity Program Management Avista employs a cross-section of subject matter experts, including a Certified Business Continuity Professional, that participate in the maintenance, exercise and review of the program and specific plan elements to ensure that Avista maintains the highest standards for business continuity. Board of Directors Updates The EBCP objectives and results are reported to the board of directors annually. Energy Efficiency and Conservation Programs Avista has more than 30 years of experience in offering energy efficiency programs, building shared value and shared success for our residential, commercial/industrial and limited income customers. Our approach to energy efficiency is based on two key principles: to pursue cost-effective electric and natural gas energy savings by offering financial incentives for limited qualifying energy saving measures, and to use the most effective means to deliver energy efficiency services to customers. These mechanisms are varied and include: • Prescriptive programs or “standard offers” such as high efficiency equipment rebates; • Site-specific or “customized” analyses at commercial and industrial customer premises; • “Market transformational”, or regional, efforts with other utilities; • Low-income weatherization services through local Community Action Agencies; • Robust multichannel communication efforts to build awareness of programs and low-cost/no- cost advice. Powering Shared Value Wattson the Energy Watchdog and avistakids.com Avista is helping educate elementary school students across the Northwest about natural gas and electricity conservation and safety with the Avista Kids program and website. Kids can visit avistakids.com to see Wattson, the energy watchdog and explore, play games, download puzzles and learn while teachers and parents can access lesson plans, activities and experiments for school or home. To help share the value of this site and educate about the learning opportunities found there, we implemented a competition in 2014, where 2,633 elementary school students learned how to be more energy efficient and safe around energy in their daily lives through youth curriculum developed for the classroom. The 117 teachers who participated each received a $100 grant from Avista to use in their classrooms. Teachers have been enthusiastic in their reviews of the site and content overall and educational tools remain available on the website for ongoing use. Staff_PR_136 Attachment A Page 32 of 94 32 Utility Operations Washington and Idaho DSM Programs and Outcomes Avista’s Demand-Side Management (DSM) services provide energy efficiency programs to the company’s Washington electric and natural gas customers and Idaho electric customers funded through the DSM Tariff Rider. In preliminary results, Avista’s DSM programs delivered 67.9 MWh and more than 691,000 therms in efficiency savings in 2014. This achieved 129 percent of the company’s electric Integrated Resource Planning (IRP) goal and 40 percent of Avista’s natural gas IRP goal. Idaho natural gas programs were discontinued prior to 2014 due to not being cost effective. Approximately 59 percent of the 2014 local program expenditures of $17.5 million were returned to customers in the form of rebates toward energy efficiency measures installed. In addition to these local programs, Avista funds regional programs, in partnership with other utilities, through the Northwest Energy Efficiency Alliance (NEEA) to deliver additional savings to the company’s customers. Including NEEA funds, 2014 energy efficiency funding was over $19.6 million. We work in partnership with our Advisory Group, which is comprised of a wide variety of industry and regulatory professionals, and the dedication of experienced, talented and professional staff. During 2014, nearly 7,000 rebates for residential energy efficiency projects were processed, benefiting approximately 4,300 households. Over $5.7 million in rebates were provided directly to residential customers to offset the cost of implementing energy efficiency upgrades. Residential programs, including third party vendor programs, contributed 43.5 MWh and approximately 429,000 therms in energy savings. For non-residential customers, the company processed approximately 1,100 energy efficiency project submissions in 2014, resulting in the payment of $4.6 million in rebates paid directly to customers to offset the cost of their energy efficiency projects. These projects contributed 24.4 MWh and 262,000 therms in savings. Powering Shared Value Spokane Public Schools Energy Efficiency Avista has partnered with Spokane Public Schools (SPS), the second largest school district in the state of Washington, for more than a decade to identify energy efficiency opportunities and incentives that benefit the district as well as Avista. In 2014, SPS received incentives from Avista totaling $237,189 for all energy efficiency projects SPS completed throughout the year. Those projects are estimated to save over 500,000 annual kWh and almost 40,000 annual therms, saving the district approximately $65,000 annually in energy costs. As a result of the ongoing partnership between Avista and SPS, the school district has received more than $2.7 million in energy efficiency incentives since 2005. Staff_PR_136 Attachment A Page 33 of 94 33 Utility Operations Oregon DSM Programs and Outcomes Avista provides only natural gas to customers in our Oregon service territory. The company’s DSM portfolio is divided between three segments: residential weatherization, residential equipment and commercial/light industrial. Of the total DSM goal, residential weatherization is 24 percent, residential equipment is 36 percent and commercial/light industrial is 40 percent. The 2014 target from the Oregon Public Utility Commission (OPUC) called for savings of 250,000 therms. The combined results for all programs totaled 192,069 therms — an 11.6 percent decrease over 2013 results and approximately 23.2 percent under the 2014 OPUC goal. Approximately 61.1 percent of Avista’s 2014 DSM expenditures were returned to customers in the form of direct incentive payments. In addition, program participants received the benefits of over $55,000 in commercial and residential energy audits, which raises the value of the return to customers to 63.6 percent. Energy Efficiency in Avista’s Facilities — Walking the Talk Avista practices energy conservation and efficiency in our buildings and facilities. The focus of these efforts is to reduce energy consumption and manage energy costs while providing comfort to building occupants. Over the last few years, Avista has made great strides in improving energy efficiency and reducing annual energy usage in our facilities through a number of different projects. Some of these projects include: • Lighting retrofit projects in a number of areas to reduce kWh usage and take advantage of more efficient lighting fixtures; • Replacing aging HVAC systems to improve energy efficiency and take advantage of the controls that new technology offers; and • Upgrading to high efficiency windows, providing better insulation and helping to reduce heat gain in the summer months. Leading the Way in Energy Efficiency Avista is in the midst of a multi-year program to renovate the corporate headquarters building, constructed in 1958. This is the first major renovation the building has undergone. The project includes asbestos removal, new HVAC and lighting systems and reconstruction of office space to meet Leadership in Energy and Environmental Design (LEED) standards. LEED is an internationally recognized green building certification system, providing third-party verification that a building or community was designed and built using strategies aimed at improving performance across all the metrics that matter most: energy savings, water efficiency, carbon dioxide emissions reduction, improved indoor environmental quality, and stewardship of resources and sensitivity to their impacts. Following completion of construction on the building’s third through fifth floors, Avista received LEED Gold Certification for each floor of the project. As the building renovation is completed, floor-by-floor, the second floor work was submitted for LEED certification in 2014 and the first floor will be submitted in 2015. Staff_PR_136 Attachment A Page 34 of 94 34 Utility Operations Much of the reconstruction and redefining of this space has included making the most of existing materials and replacing original construction and items that were past their useful life. When appropriate, repurposed or reused materials have been utilized to reduce waste and create cost efficiencies. Through improving Avista’s facilities with energy efficiency projects, we have reduced our annual energy usage and costs. From 2007 to May of 2014, we saw savings of over a million dollars in energy costs. Powering Shared Value Avista Renovations Reach Milestone Part of being a good corporate citizen involves efforts both inside and outside of our organization. Not only do we encourage our customers and community to be more energy efficient, but we also take great pride in reducing our own energy consumption through energy efficient practices. The first HVAC renovation at Mission Campus main building took place in 2006. Since that time, we’ve made a concerted effort to measure our energy savings. As of May 2014, Avista was able to report energy savings of over $1 million which is equal to reducing more than 10,141,000 kWh. The remodeling projects that have been taking place throughout the organization reflect our commitment to energy efficiency. The HVAC renovation is projected to save 2.8 million kWh per year, which is enough to power 233 homes annually. In addition, the upgrades are expected to save Avista an estimated $275,000 every year in reduced energy costs. Staff_PR_136 Attachment A Page 35 of 94 35 Utility Operations Supply Chain Approach Avista is committed to maximizing the value created through timely and effective supply chain services to meet our needs and the needs of the customers and communities we serve. We strive to ensure a competitive contracting environment while developing strong partnerships with our suppliers. We engage with suppliers who meet our requirements, with a particular interest in their capabilities, price and the overall value they provide for our organization and customers. We focus on building and maintaining diverse supplier relationships, keeping things local when possible and providing opportunities for our contractors to develop their capabilities that align with our business needs. Supplier Relationship Management Program Avista’s Supplier Relationship Management (SRM) program allows us to manage suppliers in a more efficient way through the use of a consistent process and set of metrics for evaluating performance. The program measures the performance of our tier one suppliers — those who we spend significant dollars with and are critical to our business — and the data collected is used to manage ongoing performance and expectations. The program includes a supplier score card that was implemented in 2014. This process has created a great avenue for establishing mutual expectations and facilitating constructive feedback. The score card measures suppliers in seven areas including: safety, quality, delivery, cost/budget, responsiveness/customer service, value and risk. The scorecard is used to evaluate supplier performance annually. It is a means through which Avista can create sustainable, long-term relationships with those who provide goods and services to our company, while facilitating two-way communication between the supplier and Avista. Outcomes Avista’s Supply Chain efforts recognized over $21 million in value in 2014, through effective competitive RFP processes, strategic sourcing and contract negotiations. The SRM program has driven increased supplier delivery performance that is now tracking at 95 percent. Additional expected outcomes through the SRM program include reduced costs, reduced risks and increased value and service levels as the program matures. IN 2014 WE SPENT$145,708,323 32.79%or AND SERVICES SPEND IN OUR COMMUNITY OF OUR TOTAL GOODS IN 2014 WAS$11,618,221 2.66%or SERVICES TOTAL SPENDOF OUR GOODS AND DIVERSITY SPEND Staff_PR_136 Attachment A Page 36 of 94 36 Utility Operations Engaging Our Stakeholders Identification of Stakeholders Avista’s stakeholders are numerous and as varied as the people they represent and serve. We engage a widely diverse array of stakeholders, in different settings, depending on the specific need or business context. We are focused on balancing our relationships with all of our stakeholders, which helps us communicate more effectively and develop services and partnerships that are beneficial and appropriate. Effective stakeholder engagement improves our business decisions and our overall performance. Our stakeholders include residential, commercial and industrial customers; investors, financial analysts, credit rating and financial institutions; active and retired employees; residents of the communities we serve and those of neighboring cities and towns; non-profit and low income advocates; federal and state regulators; vendors; elected officials; media channels; and other companies in the energy industry. Approaches to Stakeholder Engagement Across the company, Avista values the interaction we have with our stakeholders. Some of these interactions are: Powering Shared Value Avista Community Academy During the fall of 2014, a group of community leaders from around Avista’s Washington and Idaho service territory gathered at Avista to learn about the company and discuss their role in shaping our energy future. This group was the first class to participate in the Avista Community Academy, a program designed to engage with stakeholders in a deeper way, educate about the complexities of the utility business and provide insight into the ways Avista is planning for and influencing the future. Attendees were onsite for nearly two days, where they had the opportunity to hear from Avista’s internal experts on a variety of topics, meet leadership, tour Huntington Park and view the Monroe Street Hydroelectric Development. In addition, Avista was able to engage in a dialogue with this group, identify gaps in understanding, answer questions and learn more about the issues that are important to our stakeholders in these areas. The Avista Community Academy was successful, and participants expressed appreciation for the opportunity and a greater understanding of utility operations and the industry. • Issue-focused meetings with key groups e.g. Technical Advisory Committees, Energy Efficiency Advisory Group, community town hall meetings, etc.; • Customer outreach with two-way communications — issue-focused emails, social media channels (Facebook, Twitter, Avista blog), listening posts, focus groups, surveys, community meetings, print and electronic media channels, electronic and print newsletters, bill stuffers, call-in information lines, etc.; Staff_PR_136 Attachment A Page 37 of 94 37 Utility Operations • Customer satisfaction surveys — asking 1,600 residential and business customers each year who have completed a transaction with the company to report on components of the interaction as well as their overall satisfaction. In addition, we subscribe to J.D. Power for customer satisfaction information, and Avista conducts an annual survey to assess perceptions and attitudes about the company. • Regular meetings with media editors and staff to discuss industry and utility issues and a commitment to responding to media inquiries within 30 minutes. Key Topics Raised by Stakeholders Customers have told us their key concerns include electric pricing, natural gas pricing and executive compensation. We have developed a comprehensive, multi-channel customer communication program which is intended to increase customers’ awareness of the rate- making process, rate components, energy efficiency, energy assistance and what Avista is doing to manage our costs. Stakeholder Participation in Decision Making for Energy Planning and Infrastructure Development We seek out and encourage stakeholder involvement in our activities on a regular basis on a variety of issues, including transmission and distribution projects, implementing vegetation management programs and the requirements of our hydroelectric licenses. Avista works with federal and state agencies, conservation organizations, and area tribes to bring a variety of perspectives and interests to the table in implementing federal and state mandated environmental measures associated with our dams on the Spokane and Clark Fork rivers. Representatives of federal and state agencies address issues such as water quality, endangered species and fish passage. Tribal representatives are concerned with protecting the area’s cultural and natural resources. Other stakeholders represent local non-profits, community groups and customers. For our energy planning and infrastructure development, the electric and natural gas Technical Advisory Committees (TAC) provide opportunities for input from three main groups of stakeholders. These groups include 1) those who provide technical input and review of the resource options, modeling and results (utility commission staff, other utilities, academics and consultants); 2) those who have an interest in a particular aspect of our Integrated Resource Plan (environmental groups, resource developers and government agencies); and 3) members from regional planning organizations (Northwest Power and Conservation Council). In addition, we are in partnership with our energy efficiency Advisory Group which is comprised of a wide variety of industry and regulatory professionals, as well as Avista staff members. This group advises us on planning and implementing a broad range of energy efficiency programs. Staff_PR_136 Attachment A Page 38 of 94 38 Utility Operations — By the Numbers Installed Capacity, Generation Capability Net Energy Output by Primary Energy Source Present Generating Nameplate Rating Net Energy Capability (MW) (Installed Capacity) (MW) Output (MWh) Hydro Projects Upper Falls 10.2 10.0 67,000 Monroe Street 15.0 14.8 103,000 Nine Mile 17.5 26.4 56,000 Post Falls 18.0 14.8 84,000 Little Falls 35.2 32.0 195,000 Long Lake 89.0 81.6 467,000 Cabinet Gorge 270.5 265.2 1,194,000 Noxon Rapids 610.0 518.0 1,968,000 Total Hydro 1,065.4 962.8 4,143,000 Thermal Projects Kettle Falls GS 50.0 50.7 259,000 Kettle Falls CT 6.9 7.2 4,000 Boulder Park 24.0 24.6 15,000 Coyote Springs 2 278.3 287 1,495,000 Northeast CT 56.3 61.8 2,000 Rathdrum CT 149.0 166.5 13,000 Colstrip Units 3 & 4 222.0 233.4 1,464,000 Total Thermal 786.5 831.2 3,252,000 Total Generation Properties 1,851.9 1,794.0 7,395,000 Staff_PR_136 Attachment A Page 39 of 94 39 Utility Operations — By the Numbers Plant Name Energy Source Heat Rate (Btu/kWh) Boulder Park Natural Gas 9,025 Colstrip Units 3 & 4 Coal 11,950 Coyote Springs 2 Natural Gas 6,827 Kettle Falls Biomass 13,500 Kettle Fall CT Natural Gas 8,750 Northeast Natural Gas 12,825 Rathdrum Natural Gas 11,950 2014 Average Plant Availability by Energy Source Plant Energy Source 2014 Availability Boulder Park* Natural gas 81.4% Colstrip Units 3 & 4 Coal 82.3% Coyote Springs 2 Natural Gas 95.3% Kettle Falls Biomass 82.1% Kettle Falls CT Natural gas 94.2% Rathdrum* Natural Gas 94.4% Northeast CT* Natural gas 79.6% *Peaker unit — used only in times of significant energy demand Average Generation Efficiency of Thermal Plants by Energy Source Thermal generation is approximately 44 percent of Avista’s total generation capability. Each facility has a specific purpose in Avista’s diversified generation portfolio — whether it is for economic or load demand efficiencies. Staff_PR_136 Attachment A Page 40 of 94 40 Utility Operations — By the Numbers Electric Miles Transmission Lines 230kV 676 115kV 1,553 500kV 500 Distribution lines 19,000 Natural Gas Miles Natural gas distribution mains 7,700 Avista does not own any interstate natural gas transportation pipelines, only contractual rights, and receives natural gas at over 60 points along interestate pipelines. Electric And Natural Gas Loads Electric average hourly load (aMW) 1,062 Peak electric native load (aMW) Summer (retail) 1,606 Winter (retail) 1,715 Peak natural gas day demand (Dth) 292,539 Length of Above and Underground Transmission and Distribution Lines Staff_PR_136 Attachment A Page 41 of 94 41 Utility Operations — By the Numbers Total Water Discharge by Quality and Destination — Thermal Generation Plant 2014 Annual Water Use Discharge Per NPDES* Permit Boulder Park — Natural Gas Domestic use only Zero discharge facility Colstrip Units 3 & 4 — Coal 5.0 billion gallons Zero discharge facility Coyote Springs 2 — Natural gas 34.4 million gallons Port of Morrow, Ore. discharge Kettle Falls — Biomass/Natural Gas 178 million gallons 30.9 million gallons Northeast — Natural Gas Domestic use only Zero discharge facility Rathdrum — Natural Gas Domestic use only Zero discharge facility * National Pollution Discharge Elimination System Reliability 2014 2013 2012 2011 2010 Average outage restoration time (minutes) 125 132 121 108 118 Average outages per customer 1.11 1.05 1.14 1.48 1.23 Staff_PR_136 Attachment A Page 42 of 94 42 Utility Operations — By the Numbers Direct and Indirect Energy Consumption of Thermal Generating Resources Source Fuel Equity/Control Total Units Gigajoules Kettle Falls Boiler Wood 100% 433,546.00 Tons 3,891,029.83 Colstrip Units 3 & 4 Coal 15% 925,391.00 Tons 16,635,001.43 Colstrip Units 3 & 4 Oil 15% 2,411.00 Bbl 14,968.73 Rathdrum Natural Gas 100% 161.05 MMscf 174,804.86 Northeast Natural Gas 100% 29.60 MMscf 32,125.60 Boulder Park Natural Gas 100% 138.58 MMscf 150,421.66 Coyote Springs 2 Natural Gas 100% 10,197.29 MMscf 11,068,485.69 Kettle Falls Combustion Turbine (CT) Natural Gas 100% 45.74 MMscf 49,651.02 2013 Preferred Resource Strategy Resource By the End of Year Nameplate (MW) Energy (MW) Simple Cycle Natural Gas 2019 83 76 Simple Cycle Natural Gas 2023 83 76 Combined Cycle Natural Gas 2026 270 248 Simple Cycle Natural Gas 2027 83 76 Rathdrum Upgrade 2028 6 5 Simple Cycle Natural Gas 2032 50 46 Total 575 529 Efficiency Improvement By the End of Year Peak Reduction Energy (aMW) Energy Efficiency 2014-2033 221 164 Demand Response 2022-2027 19 0 Distribution Efficiencies 2014-2017 <1 <1 Total 240 164 Staff_PR_136 Attachment A Page 43 of 94 43 Utility Operations — By the Numbers Public Safety Dig-Ins 2014 2013 2012 2011 2010 Locates 99,635 92,190 80,629 69,547 75,113 Dig-Ins to Avista Underground Gas Lines 514 494 517 550 690 Goal of Number/1,000 Locates 6 6 7.1 8.26 Actual Number/1,000 Locates 5.2 5.4 6.4 7.9 9.18 National Average 3.4 3.2 3.8 3.7 Energy Efficiency — Avista Facilities — Spokane, WA Electric (kWh) Use Reduction kW h ( i n t h o u s a n d s ) 900,000 800,00 700,000 600,000 500,000 400,000 300,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 Avista has achieved efficiencies and reduction of electric use in its facilities over time. In 2013, electric use did not decline as much as years past due to the operation of a new warehouse and utilization of previous warehouse space, which increased the heating and cooling load. Staff_PR_136 Attachment A Page 44 of 94 44 Utility Operations — By the Numbers Energy Efficiency Programs — Customer Savings Washington/Idaho 2014 2013 2012 2011 2010 Electric (kWh Saved) Residential 43.5 million 13.5 million 18.8 million 12.8 million 26 million Non-Residential 24.4 million 45.2 million 59.1 million 49 million 43 million Natural Gas (Therms Saved) Residential 429,416 255,211 440,000 911,811 1.1 million Non-Residential 261,888 337,939 400,000 975,704 791,993 2014 OPUC Target Achieved Savings % of Oregon (Therms) (Therms) Target Existing Residential State-Mandated Weatherization 60,000 25,901 43% Prescriptive Residential Equipment 90,000 80,697 90% Residential DSM Portfolio Total 150,000 106,598 71% Existing Commercial/Industrial Commercial/Industrial DSM 100,000 85,471 85% Grand Total 250,000 192,069 77% 2013 OPUC Target Achieved Savings % of Oregon (Therms) (Therms) Target Staff_PR_136 Attachment A Page 45 of 94 45 Utility Operations — By the Numbers Energy Efficiency Programs — Customer Savings 2013 OPUC Target Achieved Savings % of Oregon (Therms) (Therms) Target Previous Residential State-Mandated Weatherization 76,257 62,382 82% Prescriptive Residential Equipment 49,996 83,189 166% Residential DSM Portfolio Total 126,253 145,571 115% Previous Commercial/Industrial Commercial/Industrial DSM 98,746 71,606 73% Grand Total 224,999 217,177 97% 2012 IRP Target Achieved Savings % of Oregon (Therms) (Therms) Target Previous Residential State-Mandated Weatherization 98,402 85,771 87% Prescriptive Residential Equipment 98,402 98,355 100% Residential DSM Portfolio Total 196,804 184,126 94% Previous Commercial/Industrial Commercial/Industrial DSM 119,998 93,276 78% Grand Total 316,792 277,402 88% Staff_PR_136 Attachment A Page 46 of 94 Avista’s Commitment to Protect and Enhance Natural Resources is as Strong as Ever Renewable Innovation Founded on clean, renewable hydropower in 1889, Avista’s vision of environmental stewardship has always shaped our operations. From being one of the first utilities in the nation to hire a biologist, to building the first biomass power generating plant of its kind in 1983, to the agreements and licenses that shaped our operations for the Clark Fork and Spokane River hydroelectric projects, our commitment to being good stewards has been our constant guide. Our preferred approach employs collaboration and partnership with a wide range of stakeholders, including state and federal agencies, non-profit advocacy organizations, community, educational and civic groups, Native American Tribes and other interested citizens. The environmental work we do each year is as core to our business and who we are as the wires and pipes that deliver energy directly to customers. Environmental Stewardship 46 Staff_PR_136 Attachment A Page 47 of 94 Environmental Stewardship Stewardship of the Waterways Spokane River Project Avista owns and operates six hydroelectric plants on the Spokane River. On June 18, 2009, the Federal Energy Regulatory Commission (FERC) issued Avista a 50-year operating license for our Spokane River Hydroelectric Project, which is comprised of five of Avista’s Spokane River plants (Post Falls, Upper Falls, Monroe Street, Nine Mile and Long Lake). The license includes a variety of measures, many based on multi-stakeholder agreements, designed to protect and enhance natural resources connected with the project and the Spokane River. The sixth plant, Little Falls, is operated under separate authority from the U.S. Congress and an agreement with the Spokane Tribe. Avista, with key stakeholders, continues to implement the FERC license conditions. These collaborative efforts will help protect and enhance fish and their habitat, wetlands, water quality, recreational opportunities, wildlife habitat, and cultural and aesthetic resources connected to the Spokane River. Under the terms of a settlement agreement, Avista and the Coeur d’Alene Tribe are working together over the term of the new license and beyond to ensure continued efficient operation of an important hydroelectric resource, as well as to protect and enhance the Tribe’s natural and cultural resources. Avista’s commitment to enhancing relationships with the area’s Native American tribes is reflected in the company’s appointment of a full-time Tribal liaison. Clark Fork Project Avista’s Clark Fork Hydroelectric Project includes the Cabinet Gorge and Noxon Rapids dams, located on the Clark Fork River in northern Idaho and northwestern Montana. 2014 marked the 16th year of successful, collaborative implementation of the Clark Fork Settlement Agreement, a multi-stakeholder agreement for managing and protecting the natural resources of the area. The agreement resulted in a 45-year operating license from FERC to operate Cabinet Gorge and Noxon Rapids. The license was unprecedented both for incorporating a settlement agreement for a major project in its entirety and for being issued a year ahead of the expiration of the existing Cabinet Gorge license. As part of the Clark Fork Settlement Agreement, and with the oversight of the Clark Fork Management Committee, we began implementing protection, mitigation and enhancement measures in March 1999. In the first 15 years of implementation, 23 recreational facilities have been upgraded and six new facilities created, over 45 stream habitat restoration projects have occurred on 25 different tributaries, bull trout populations are increasing and nearly 89,000 acres of bull trout, wetlands, riparian and associated upland habitat have been protected. In addition, water quality and cultural resource protection continue. Improving Water Quality Avista protects and improves water quality in our watersheds as a part of our ongoing operations, as well as part of implementing the Clark Fork and Spokane hydroelectric project licenses. We participate in the Washington Department of Ecology’s Total Maximum Daily Load (TMDL) process to improve dissolved oxygen levels (DO) in the Spokane River and Lake Spokane. Under our license, and in coordination with area wastewater dischargers, we developed a plan to improve dissolved oxygen levels in Lake Spokane. In addition, we carry out construction and maintenance activities in ways that protect surface and ground waters and which prevent storm water run-off. We handle and store oils and other chemicals in a responsible manner and follow best management practices in our day-to- day operations. 47 Staff_PR_136 Attachment A Page 48 of 94 Environmental Stewardship Specific 2014 water quality activities on the Spokane River Project included: • Completed nutrient monitoring in Lake Spokane; • Continued implementing the Lake Spokane Dissolved Oxygen Water Quality Attainment Plan, which focuses on reasonable and feasible measures to improve dissolved oxygen in Lake Spokane; • Provided funding to Idaho Department of Environmental Quality and the Coeur d’Alene Tribe for water quality improvement projects and monitoring in Coeur d’Alene Lake; and • Continued implementing draft tube aeration at Long Lake Dam to improve dissolved oxygen (DO) levels downstream to meet or exceed the highest standards in the United States. In 2014, Avista completed the following work on aquatic weeds for the Spokane River Project: • Surveyed Coeur d’Alene Lake’s shoreline and partnered with the Idaho Department of Environmental Quality to survey four bays for milfoil. As part of this project we treated 37 acres of milfoil on Thompson Lake, adjacent to the Coeur d’Alene River. This work was completed outside the Coeur d’Alene Indian Reservation and was done in accordance with the Coeur d’Alene Lake Aquatic Weed Management Plan for Non-Tribal Waters; • Worked collaboratively with the Coeur d’Alene Tribe to control milfoil growth on approximately 83 acres within the Reservation; and • Treated approximately 20 acres of aquatic weeds with herbicide and completed pre- treatment surveys for the winter reservoir drawdown in Lake Spokane. Removed approximately 500 individual flowering rush plants in Lake Spokane and Nine Mile Reservoir. In 2014, Avista completed the following work on wetlands related to the Spokane River Project: • Monitored the survival rate of the trees and shrubs that were planted in 2013 within the 124 acre Shadowy St. Joe Wetland Area; • Planted approximately 780 trees in the Hangman Creek wetland area in Idaho, in cooperation with the Coeur d’Alene Tribe; and • Began implementing the management plan for the 109 acre Sasheen Wetland Area, located in Powering Shared Value Enhanced Access to the River and Recreation The Spokane River provides a range of recreation opportunities for those seeking to access all the river has to offer. A stretch of the river and natural white water feature near Avista’s Post Falls Dam, called Trailer Park Wave, has long been an area where kayakers, floaters, boaters, anglers and paddlers have gone to enjoy their activities. Access to this valued spot on the river has been challenging, with no approved parking, people having to navigate without a trail, hiking down steep banks while carrying their equipment and then paddling upstream. Seeing the need for better access to support recreation and as a result of agreements made in relicensing the Spokane River dams, Avista purchased private land and invested in upgrades to enhance the experience for those on the river, which have been welcomed by those who use the site. The improvements include restroom facilities, paved trail construction, parking, tree planting and other landscaping, all for the public to enjoy for years to come. 48 Staff_PR_136 Attachment A Page 49 of 94 Environmental Stewardship the little Spokane River drainage in Washington, by treating 26 acres of reed canarygrass. In 2014, Avista completed the following work on fisheries related to the Spokane River Project: • Partnered with the Washington Department of Fish and Wildlife to complete the fifth year of a 10-year population assessment of redband trout in the lower Spokane River; • Stocked 6,000, 9,000 and 155,000 rainbow trout in Upper Falls, Nine Mile and Lake Spokane, respectively, for family fishing opportunities; • Completed a fish passage project for bull trout and west slope cutthroat trout in Idaho by removing portions of two splash dams on Marble Creek; and • Partnered with the Idaho Department of Fish and Game to create Spicer Pond, a family fishing area near St. Maries, Idaho. In 2014, Avista completed the following recreation projects related to the Spokane River Project: • Developed 10 boat-in-only campsites on Lake Spokane; • Created a non-motorized boat take-out on Nine Mile Reservoir upstream of the dam; and • Completed the Trailer Park Wave Whitewater Access Site downstream of the Post Falls HED to provide access to the Spokane River. 2014 Clark Fork River Project work included: • Continued participation with various federal, state and local partners to address invasive aquatic noxious vegetation in the Noxon Rapids and Cabinet Gorge reservoirs. Herbicide was applied in 2014 to approximately 10 acres on Noxon Reservoir and 190 acres on Cabinet Gorge Reservoir. These areas were surveyed following treatment and showed a high level of mortality of aquatic invasive species, with little impact to native vegetation; • Participated in the acquisition and placement of 20,000 square feet of aquatic vegetation barriers at key locations within the project; • Partnered with the Montana Fish, Wildlife and Parks in the operation of a mandatory watercraft inspection station; • Constructed a parking lot for the newly acquired Trestle Recreation Area on Noxon Reservoir; • Worked with Boy Scouts of America, Montana Conservation Corps., and U.S. Forest Service to construct two picnic shelters at Finley Flats on Noxon Reservoir; • Captured and handled 3,059 bull trout in Montana and Idaho; • Transported adult bull trout captured downstream of Cabinet Gorge Dam that originated from Montana tributaries back to their natal tributaries, with a record 63 fish transported. This was the 14th year adult bull trout were transported upstream; • Completed the fourth basin-wide pathogen survey conducted in the lower Clark Fork River. This survey has taken place every 5-years since1999; • Continued funding water quality monitoring in the lower Clark Fork River in conjunction with other active participants throughout the river basin; • Completed planning, permitting, contracting, and material acquisition for two future bank stabilization/fish habitat enhancement projects along the mainstem Pack River and on one of its tributaries, Grouse Creek. These continued efforts to improve fish habitat conditions and reduce sediment are cooperative efforts with state, federal and private landowner partners; • Installed an automated snow/rain data site (Snotel station) on Chicago Ridge in cooperation with the U.S. Forest Service; • Reached last stage of construction of the Cabinet Gorge Fish Handling and Holding Facility. The collaborative effort of contractors and agencies allowed for in-water work to be 49 Staff_PR_136 Attachment A Page 50 of 94 Environmental Stewardship quickly redesigned, significantly reducing the cost of the project and reducing potential environmental impacts during construction; •Commissioned a song about bull trout called, “The Stream That I Call Home,” which was written and performed by the band The Whizpops! at the first annual Trout and About Festival held in Idaho. The song was developed as an educational tool targeted to younger school-aged children and their families; •Implemented the lake trout suppression project on Lake Pend Oreille for the ninth year. As predicted when the program was initiated, lake trout populations have diminished significantly, allowing kokanee populations to rebound, which are now open to fishing; •Continued the northern pike suppression program on Box Canyon Reservoir, implemented by the Kalispel Tribe. After three- years of suppression efforts, northern pike abundance is at or below the Tribe’s management goals for the species, improving conditions for native fish; •Completed and tested structural modifications to the total dissolved gas abatement structures on Cabinet Gorge spillway number two, allowing the design of abatement structures for the remaining spillway bays to begin; •Acquired a conservation servitude on the Bull River after 10 years of negotiation. The project resulted in the protection of 105-acres of stream, riparian and associated upland habitat along, an important wildlife migratory corridor, on one of two bull trout spawning tributaries to the Cabinet Gorge Reservoir; •Completed an acquisition of 65 acres of undeveloped property along Trestle Creek, an important bull trout spawning tributary to Lake Pend Oreille. This parcel is adjacent to 115 acres of habitat purchased and protected in 2001. Together these properties protect approximately 1,600 feet of creek frontage, as well as associated mature stands of timber; •Completed eight years (2007-2014) of the Non-Native Fish Suppression Project in the East Fork Bull River. Suppression efforts successfully maintained a greater than 70 percent reduction of non-natives; however, native species have not yet rebounded. It is anticipated that juvenile bull trout abundance will increase due to recent higher redd counts; and •Completed a fisheries survey of the Bull River drainage within the Fish Abundance Program. This represented the third such survey of this drainage. Periodic surveys have been completed on all major lower Clark Fork River tributaries and are used to monitor fish populations in response to ongoing mitigation and enhancement efforts. Fish abundance can vary widely in their dynamic habitats; but in general, native trout populations remain stable in lower Clark Fork River tributaries. From natural gas delivery extensions to new electrical service, when we are performing on- the-ground construction, we follow best practices related to storm water management and water quality protection. Avista also implements the requirements of several National Pollution Discharge Elimination System (NPDES) permits. In 2013, we eliminated one of these discharges completely subsequent to installing an injection well at our main business campus. This well now returns non-contact cooling water back to the aquifer to protect the water quality of the Spokane River. For specific details on land managed, protected habitats, biodiversity impacts and strategies, see our Spokane River Project FERC License and Clark Fork Project FERC License online at avistautilities.com. Our protection, mitigation and enhancement expenditures in 2014 for implementing the Spokane River Project License were approximately $6.5 million. For the Clark Fork River license implementation, we spent $6.9 million. These totals reflect environmental affairs activities associated with license implementation only. Avista practices environmental stewardship in all of our daily operations, including generation and production, and the costs of doing so are included in our capital and operations, and maintenance budgets. 50 Staff_PR_136 Attachment A Page 51 of 94 Environmental Stewardship Climate and Environmental Impacts The latest report of the National Resources Defense Council, “Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States,” has ranked Avista among the cleanest power producers in the country when it comes to greenhouse gases. With 48 percent of our net generation capability from hydroelectric resources, a majority of our thermal generation fueled with natural gas, wind and biomass, and a long-standing commitment to energy efficiency, Avista is one of the lowest utility emitters of greenhouse gases in the country. Climate Policy Council Avista’s Climate Policy Council is an interdisciplinary team of management and other employees from key departments across the company. The council meets regularly to report on various issues including climate policy, federal, state and regional climate initiatives and legislation. The council also facilitates internal and external communications regarding climate change issues, analyzes policy impacts, anticipates opportunities and evaluates relevant strategies for Avista, and develops recommendations on climate-related policy positions and action plans. Avista also tracks and reports greenhouse gas emissions according to federal and state requirements. In addition to engaging in regulatory and legislative policy and making recommendations regarding climate change policies, we are preparing for future opportunites related to innovations in electric transportations, distributed generation and more that can reduce our carbon footprint. While climate change and potential impacts are difficult to predict, Avista continues to focus on providing a responsible generation resource mix for our customers, including a wide range of conservation and efficiency measures. Greenhouse Gas Emissions Avista reduces greenhouse gas emissions through conservation and improving the efficiency of our operations, transmission and distribution system and generation capacity. We are avoiding associated greenhouse gas emissions through the 125 average megawatts of energy efficiency on our system, as well as through system upgrades as a result of our smart grid projects, green fleet program and commute trip reduction participation. While Avista has not established specific greenhouse gas emissions reduction goals, we are undertaking voluntary efforts that provide both environmental and economic benefits. In two of the states where we have operations — Washington and Oregon — greenhouse gas reduction goals have been enacted, but the states have not passed legislation to implement the goals. We will align our program with state and federal requirements as they evolve. CO2 Emissions Allowances and Reporting Avista is not currently obligated by any federal or state regulatory agencies to provide or purchase allowances through any carbon trading network. Mandatory greenhouse gas emissions reporting to the EPA and the Oregon Department of Environmental Quality started in 2011, and reporting to the Washington Department of Ecology started in 2012. We have a greenhouse gas monitoring plan in place that documents data collection and emission calculations and specifies quality assurance procedures to be used prior to submitting greenhouse gas data to these agencies. We have met all applicable regulatory reporting requirements and will report greenhouse gas emissions for 2014 to the appropriate agencies in 2015. 51 Staff_PR_136 Attachment A Page 52 of 94 Environmental Stewardship Reducing Vehicle Impacts Avista’s Commute Trip Reduction (CTR) Program educates and encourages employees to make informed decisions about reducing their “drive alone” miles — the miles an employee travels to their work site as a solo occupant in a vehicle. Washington’s Commute Trip Reduction (CTR) law, adopted in 1991, and incorporated into the Washington Clean Air Act, seeks to improve air quality, reduce traffic congestion, and minimize energy consumption. The subsequent Commute Trip Reduction Efficiency Act requires employers with 100 or more employees at a single worksite, in counties with 150,000 or more residents, to promote eco-friendly transportation options including: riding the bus, carpooling, vanpooling, bicycling, walking, working from home, compressed work weeks and flexible work schedules. For the year 2014, Avista employees reduced their drive-alone miles by 189,776 miles and eliminated 182,185 pounds of carbon dioxide. These results are in line with the prior year’s performance, although slightly decreased due to the changing economic environment and the fluctuating price of gasoline. Avista’s Green Fleet and Alternative Fuel Program Avista’s Compressed Natural Gas (CNG) Initiative aims to reduce fuel costs and reduce our carbon footprint by implementing Natural Gas Vehicles (NGVs) throughout our Fleet. CNG is a safe, clean and efficient alternative fuel that serves Avista and a growing number of vehicles on the road. Since 2011, Avista has intentionally integrated CNG into our operations. Since 2012, we have completed the construction of three new CNG refueling stations, with fast-fill and time-fill capability in Spokane, Wash., and Coeur d’Alene, Idaho. Over time, we anticipate the installation of CNG refueling stations and the development of contractual relationships for back-up and supplemental fueling. CNG refueling stations are one more way we are providing choices and value to our customers and community members. Adopting alternative fuel options and cleaner forms of transportation allows us the opportunity to save on fuel costs, as well as provide a safer, healthier working environment. Avista’s Fleet and Alternative Fuel Program focuses on activities within the following areas: • Maintaining company vehicles to maximize efficiency, eliminating the unnecessary use of inefficient vehicles, and purchasing and using the “right-sized” vehicle for a particular job or service; Drive-alone miles eliminated Drive-alone miles eliminated Drive-alone miles eliminated Drive-alone miles eliminated Carbon Dioxide pounds eliminated Carbon Dioxide pounds eliminated Carbon Dioxide pounds eliminated Carbon Dioxide pounds eliminated20 1 1 2 0 1 2 2 0 1 3 2 0 1 4 196,310 191,027 188,458 186,513 182,185 189,776 191,262 185,249 52 Staff_PR_136 Attachment A Page 53 of 94 Environmental Stewardship • Exploring alternative-fuel vehicle purchasing practices that include the use of cleaner fuels and technologies, including CNG, and Plug-In Hybrid Electric vehicles (PHEVs); and • Educating employees to drive fewer and more efficient miles, use the most efficient vehicle to perform the job and reduce unnecessary idling time. Since our CNG integration began, Avista has added 84 CNG bi-fueled half-ton, three quarter- ton and one-ton pick-up trucks to our fleet. As Avista evaluates the feasibility of fueling stations in the future, increasing customer demand for cost-effective, reduced carbon CNG will continue to be an important consideration. In addition to our NGVs, we operate a small but growing number of electric vehicles. In 2014, Avista signed on to the Edison Electric Institute’s pledge to put five percent of our vehicle spend toward electrified vehicles. We continue to operate two PHEVs and one battery electric vehicle (BEV). The use of these vehicles helps to provide more information on the performance of electric vehicles as well as future purchasing decisions. Additionally, we have placed three Level 2 charging stations in our community for the public’s use. In 2014, we added an all electric puller-tensioner, a tool for installing conductor by our electric operations crews. This device sets a new standard for both a clean vehicle as well as worksite safety. Our Spokane night crew operates a bucket truck with an electric power take-off (ePTO) that provides electric power to the boom so that the engine can be turned off and the bucket can operate on batteries instead of the diesel engine. This truck also has an in-cab comfort system so that when the operator is in the cab, the A/C and heater will run on batteries, reducing excessive idling. As technology presents new opportunities, we will continue to look at plug-in electric vehicles for our fleet mix and our overall alternative fuel focus. Avista’s fleet consists of more than 1,200 assets, including trucks, trailers, backhoes and other pieces of equipment. Our Fleet Department works closely with supply chain to incorporate new purchasing strategies that help ensure Avista receives the best value for our investments. Managing PCBs Manufacture of Polychlorinated Biphenyls (PCBs) was banned in the United States in 1979 due to concerns about the toxicity of these chemicals. However, until that time, manufacturers incorporated PCBs in a wide range of products and materials, many of which are still in use across the country. Ongoing concerns regarding PCBs, including their persistence in the environment, have resulted in extensive regulation. Avista manages PCBs and mineral oil that contains low levels of PCBs in a manner that meets or exceeds the standards of the federal Toxic Substances Control Act (TSCA) and Washington state’s stringent regulations. Our goal is to minimize risk associated with PCBs, to avoid spills or releases, and to clean up any releases to levels of non-detection. Federal and state regulations allow the ongoing use of PCB-containing electrical equipment. However, we decided to take a more conservative and proactive approach to reducing risks associated with PCBs. The vast majority of the equipment in service at Avista is non-PCB. Our first wave of removal efforts focused on equipment with levels at 500 ppm or greater of PCBs. This type of equipment, as identified, was removed and properly disposed of during the 1980s. During the 1990s and early 2000s, we focused on removal of equipment containing between 50 and 500 ppm of PCBs. We are now in the midst of a multi-year project to remove and replace all electrical overhead distribution equipment with detectable levels of PCBs, an approach that exceeds any regulatory requirement. We are, once again, conducting these efforts in concert with system and efficiency upgrades and in coordination with our wood pole management plans. In this way, we are achieving increased environmental protection along with reliability improvements in a cost-effective manner, benefitting our customers and our communities. 53 Staff_PR_136 Attachment A Page 54 of 94 Environmental Stewardship Preliminary analysis shows that 2.61 pounds of PCB wastes were incinerated in accordance with the Toxics Substance Control Act (TSCA). This is an expected decline from 2012 as there was a reduction in the amount of contaminated equipment received. Managing Hazardous Waste Streams “RCRA waste” represents hazardous waste as defined in the federal Resource Conservation and Recovery Act and applicable state laws. We try to avoid generating hazardous waste through careful product selection, and we look for other ways to reduce the generation of hazardous waste. For those wastes we do generate, we manage them carefully. Until 2011, our largest source of hazardous waste was from aerosol cans that were collected from throughout the company. We achieved a 98 percent reduction of this waste stream through 2014 due to an increased emphasis on using the full content of aerosols and a newly purchased device to capture residual content from cans. We manage all federal hazardous waste to meet or exceed regulations. This includes, as appropriate, treatment or disposal at permitted disposal facilities. “Non-RCRA” wastes include waste streams that are not deemed “hazardous,” but which we manage as special wastes. These include waste oils, greases, antifreeze, and a range of miscellaneous wastes that can be recycled, blended into fuels, or responsibly disposed. These are managed and disposed of in ways that meet or exceed state and federal regulations. “Universal wastes” include specific waste streams designated by federal and state law that are excluded from being treated as “hazardous” if they are managed according to specific standards. These include items such as fluorescent light bulbs. We manage all universal wastes in accordance with these standards. Spill Response/ Pollution Prevention Avista takes its responsibility to protect the environment seriously, and we hold ourselves accountable to this responsibility. That’s why the Environmental Compliance Group at Avista is on call 24 hours a day, seven days a week to respond immediately to environmental emergencies. In the case of an oil spill originating from any of our facilities, lines or poles, we immediately implement emergency spill procedures and begin working with the appropriate local, state and federal agencies to assess the situation and begin clean-up. Avista responds to all spills, regardless of size, location or oil type. The goal is to safely and efficiently eliminate any potential harm to fish, wildlife, natural resources, water supplies or people. Avista crews and personnel respond directly to typical, smaller spills, such as those that happen when a car hits a utility pole. For larger spills, Avista has on-call contracts with emergency spill response companies. These firms specialize in clean up and are able to mount appropriate responses. Avista is also a voluntary member of the Spokane River Response Group, organized by the Washington Department of Ecology, a collaborative effort made up of local, state, and federal oil spill responders as well as members of industry. This group was developed to address the need for oil spill preparedness and response along the Spokane River. Members of the group share resources and collaborate on training to make coordination on spill responses efficient and effective. We also participate in local emergency planning committees in Washington, Idaho and Montana. Pollution prevention matters at Avista. We’re continuously looking for process modifications and ways to improve housekeeping, maintenance and training that reduce the amount of hazardous or any regulated waste we generate. Recycling A good steward pays attention to the details — and when it comes to recycling, Avista is truly focused. Through a 25-year partnership with a community non-profit organization, Avista’s recycling program employs full-time a number of developmentally disabled workers who help us 54 Staff_PR_136 Attachment A Page 55 of 94 Environmental Stewardship recycle paper, corrugated cardboard, aluminum cans, plastic and glass bottles, magazines, newspapers, wood reels, phone books and batteries. Avista is also committed to recycling nonhazardous electrical equipment and materials. Working closely with recycling companies, aluminum, copper, lead, and other ferrous and non-ferrous metals are reclaimed and recycled. Not only is it good for the environment, but our recycling efforts have saved Avista refuse disposal costs. Environmental Fines and Sanctions Avista accepted and paid a civil penalty in the amount of $2,000 to Spokane Regional Clean Air Agency (SRCAA) for exceeding air permit standards on Nov. 18, 2014. This penalty was assessed after a failed particulate matter (PM) stack test in March 2014 at our Northeast Combustion Turbine Generating Station in Spokane, Wash. The particulate test was repeated and passed in September after further investigation and maintenance was performed. 55 Staff_PR_136 Attachment A Page 56 of 94 Environmental Stewardship — By the Numbers Carbon Footprint Rate of CO2 Emissions of Company-Owned Generation 100 Largest U.S. Electric Power Producers CO 2 L b s / M W h Source: Natural Resources Defense Council “Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the U.S.” 2011 Avista ID A C O R P Pu g e t H o l d i n g s 2,000 1,500 1,000 500 0 Gr a n t C o u n t y P U D Ch e l a n C o u n t y P U D 56 Staff_PR_136 Attachment A Page 57 of 94 Environmental Stewardship — By the Numbers Avista’s CO2e Emissions Avista’s CO2e Emission Intensity Source: Avista FERC Form 1; World Resources Institute/World Business Council on Sustainable Development mi l l i o n m e t r i c t o n n e s C O 2e lb s C O 2e/ M W h 19 9 0 19 9 1 19 9 2 19 9 3 19 9 4 19 9 5 19 9 6 19 9 7 19 9 8 19 9 9 20 0 0 20 0 1 20 0 2 20 0 3 20 0 4 20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 20 1 3 20 1 4 4.00 3.00 2.00 1.00 0.00 19 9 0 19 9 1 19 9 2 19 9 3 19 9 4 19 9 5 19 9 6 19 9 7 19 9 8 19 9 9 20 0 0 20 0 1 20 0 2 20 0 3 20 0 4 20 0 5 20 0 6 20 0 7 20 0 8 20 0 9 20 1 0 20 1 1 20 1 2 20 1 3 20 1 4 1200 1000 800 600 400 200 0 57 Staff_PR_136 Attachment A Page 58 of 94 Environmental Stewardship — By the Numbers Significant Air Emissions by Type and Weight per MWh — 2013 Facility Fuel Type CO2+CO2e SO2 NOx Hg voc Kettle Falls Wood 11,454 3 333 0.0 11 Colstrip Units 3 & 4 Coal 1,453,520 629 2,573 0.1 43 Colstrip Units 3 & 4 Oil 1,042 3 1 0.0 0 Rathdrum Natural Gas 8,725 0 5 0.0 0 Northeast Natural Gas 1,604 0 5 0.0 1 Boulder Park Natural Gas 7,508 0 2 0.0 5 Coyote Springs 2 Natural Gas 552,488 3 95 0.0 4 Kettle Falls CT Natural Gas 2,478 0 1 0.0 0 Totals 2,038,819 638 3,014 0.1 64 Note: CO2e = Total CO2 and CO2 equivalents of all greenhouse gases emitted by generating units, CO2 generated from biomass at Kettle Falls is carbon neutral and not inlcuded in totals Emissions per MWh MWh CO2+CO2e SO2 NOx Hg voc Total Energy Electricity Generation 7,395,385 607 0.19 0.90 0.0 0.2 Fossil Fuel Electricity Generation 2,992,701 1,499 0.47 2.22 0.0 0.5 Note: All values in lbs parameter/MWh except where noted 58 Staff_PR_136 Attachment A Page 59 of 94 Giving Back For more than 125 years, Avista has been an active partner, ally and advocate for our customers in the communities we serve — both as a utility that provides essential energy services and as the people who live, play and work just down the street. Our history is intertwined with that of our communities and the spirit of community — partnership and collaboration — has always fueled us. We believe that bringing value to our customers and attaining our business goals go hand-in- hand. And when we can provide assistance to people and organizations that are making a difference, all the better. Community Partnership We are Invested in Our Customers and the Communities We Serve 59 Staff_PR_136 Attachment A Page 60 of 94 Community Partnership Powering Shared Value Huntington Park And The Gathering Place On Friday, May 2, 2014, representatives from Avista and the local Spokane, Wash., community gathered together to dedicate City Hall Plaza (now officially called The Spokane Tribal Gathering Place) and Avista’s newly renovated Huntington Park. The sun was shining and the river was roaring in one of the most scenic parts of downtown Spokane. The Gathering Place is the connection point between Riverfront Park and Huntington Park — a conduit of community gathering spaces. Avista developed the plaza as a gift to Spokane in celebration of our 125 years of dedication to our community. The plaza invites people to enjoy the river in new ways and provides a great venue for community events with plenty of seating and aesthetic views. At the heart of Avista is the Spokane River, and at the heart of the Spokane River is Huntington Park. The park is named for David L. Huntington, the company’s third president, who served from 1910 to 1927. Huntington led the company during a time of unprecedented expansion. He is an example of Avista’s proud legacy of innovation and service. Avista redeveloped the park to invite visitors to a close-up look of the awesome power of this great river. Located on the south bank of the Spokane River, within the shadow of the original Washington Water Power Post St. substation and the spray zone of the Lower Falls, Huntington Park is a tribute to Spokane and to the leadership that made Avista what it is today. Avista community investments are made through corporate and foundation donations and are not included in customer rates. Avista gives back a portion of the profits it is allowed to earn, reinvesting in the communities we serve through donations of all kinds. Investments are also made through the time, talent and treasure that our employees put into the organizations in the towns they call home throughout our service territory — eastern Washington, northern Idaho, southern and eastern Oregon, and Sanders County, Montana. Advocating for and facilitating the availability of energy assistance for those most in need is an important part of our role in the community. In addition, we are actively involved with chambers of commerce and other civic groups to enhance the economic vitality and the quality of life in the communities we serve. Philanthropy In 2014, Avista was named as one of the top 75 corporate philanthropists in the state of Washington by the Puget Sound (Wash.) Business Journal for the fourth consecutive year. Giving through Avista corporate and Avista Foundation donations in 2014 totaled $2.03 million. Huntington Park and The Gathering Place Dedication Event 60 Staff_PR_136 Attachment A Page 61 of 94 Community Partnership Employee Giving The heart and soul of Avista can be found in our employees. They are not only devoted to doing an exceptional job for our customers but they dedicate themselves to community service in a way that is inspirational and downright contagious. In 2014, their generosity resulted in more than 48,000 hours of volunteer service to more than 800 organizations, both large and small, across our service territory. Employee Volunteerism Hours Four-Year Trend in Volunteering Powering Shared Value Avista Answers ALS Ice Bucket Challenge As individuals and organizations across the country participated in the ALS Ice Bucket Challenge, Avista jumped in to meet the challenge, support the cause and acknowledge our 125th anniversary at the same time. Powering Shared Value Decorating Festive Holiday Sweaters for the Boys and Girls Club of Spokane County Engaging our communities to help support organizations that provide important services to those we serve is nothing new for Avista. For the second year, in 2014 we created our Festive Sweater Generator, an online and interactive tool for decorating festive holiday sweaters. While simply a fun online activity, the Festive Sweater Generator did more by raising money for the Boys and Girls Club of Spokane County. For every sweater decorated through the site, Avista donated a dollar to the Boys and Girls Club of Spokane County. Through 2014 2013 48,000 hours 46,500 hours 2012 2011 52,738 hours50,700 hours More than 125 employees turned out to either dump a bucket on themselves or cheer on their coworkers in support of the ALS organization. Avista Utilities President Dennis Vermillion and Avista Corp. CEO Scott Morris also participated, demonstrating Avista’s values of giving back. Avista also provided a monetary donation to ALS. promotion using Avista’s social media and online channels, grassroots and viral sharing and engaging a local broadcast news station, the Festive Sweater Generator earned a $7,500 donation for the Boys and Girls Club of Spokane County. 61 Staff_PR_136 Attachment A Page 62 of 94 Community Partnership Increasing the Impact of Employee Gifts Avista’s matching gifts program is a tangible way for our company to support and recognize the “treasure” that employees generously donate to non-profit organizations. As our employees invest in the community, the company is able to increase the impact of that investment to those non-profit organizations valued by our employees through the matching gifts program of the Avista Foundation. All eligible gifts up to $200 each year receive a dollar-for-dollar match — doubling the benefit and the impact for community organizations. Funding for this program is from the Avista Foundation and is not included in rates. A Legacy of Community Support — the Avista Foundation The Avista Foundation was formed in 2002 to create a legacy of investment for the communities served by Avista and to serve as the primary charitable vehicle for the company. The foundation focuses its giving on grants that strengthen communities and enhance the quality of lives of the people served by our company. Emphasis is in the areas of: • Education — supporting K-12 education particularly in the fields of science, math and technology; and higher education including scholarships; • Vulnerable and limited income populations — providing assistance to those on limited incomes and support for initiatives to reduce poverty; • Economic and cultural vitality — supporting projects that help our communities and citizens to grow and prosper. Avista corporate donations focus primarily on energy assistance and economic vitality-related initiatives that benefit our customers and communities. Total 2014 Health and Human Services Giving — $765,111 Community Partner Highlight The North Idaho Violence and Prevention Center (NIVPC) is the only resource in Kootenai County that provides safety education and empowerment to victims of violence, specifically a shelter for victims of domestic abuse and sexual assault. Each year, the NIVPC provides client services and emergency shelter to over a thousand victims. Kootenai County has the highest rate of domestic violence in Idaho, so the opportunity to support these critical services and help NIVPC connect survivors to important resources stood out to Avista. Through supporting the NIVPC, Avista is helping NIVPC support 150 survivors of domestic violence with basic necessities such as safe shelter, clean bedding, nutritious food, clothing and more, in addition to the resources that will help them move toward the change they need. Total 2014 Education Giving — $486,543 Community Partner Highlight The Martin Luther King, Jr. Family Outreach Center in Spokane, Wash., aims to improve the quality of life for children, youth and families. As the Center looked to provide opportunities for children to participate in science, technology, engineering and math (STEM) activities through the summer months when not in school, Avista became a partner to provide support of a Youth Summer Science Program. The STEM curriculum and emphasis on educating and creating opportunities for those most in need are aligned with the values and focus areas of Avista. The science program helped address the educational gap experienced by many students in lower-income schools through a 10-week program where students engaged in continued learning in the summer rather than a break in education. The program built on existing school curriculum and extended the education and 62 Staff_PR_136 Attachment A Page 63 of 94 Community Partnership support of those already engaged at the center, helping those who needed it most to learn about a critical field and be prepared for the following school year. Total 2014 Youth Giving — $195,724 Community Partner Highlight For nearly 40 years, Kairos has provided vital youth mental health services to the greater Grants Pass, Ore., area. As the need for these services has grown, Kairos looked to Avista to assist in expanding its campus and long-term ability to continue to serve the children and families that need access to this kind of care. The comprehensive and partnership approach taken by Kairos and the focus on meeting the community need resonates with Avista. Through this support, Kairos will build its capacity where there is a clear need, serving 200 children and families challenged with severe mental illness annually. By expanding the campus, the organization will be able to provide crisis services while also addressing the need for community- based, intensive children’s mental health services. As a result of this work, Kairos will be able to continue and expand its mission and services, including emergency response, family coaching, case management, therapy, outpatient services, and school-based mental health prevention and promotion services. Total 2014 Community Vitality Giving — $417,198 Community Partner Highlight A project being led by the Friends of the Whitman County Library, the Bettie Steiger Community Enrichment Center in Colfax, Wash., was supported by Avista in 2014. The Whitman County Library’s support of and investment in strengthening the communities it serves has made it an ideal partner for Avista over the years. Avista has long-supported library projects, including sponsoring county-wide summer reading programs and open hours in the Malden Library. We have also assisted with a number of energy upgrades and funded major building renovations in Endicott, Colfax and other branch locations. Whitman County Library’s contributions to the community range beyond traditional library services, including high speed Internet access and public computing, technical, educational and cultural classes, job skills training workshops, the incubation of small business and the hosting of community events. The goal of the Bettie Steiger Community Enrichment Center is to create a place where people gravitate to meet their educational, cultural, entrepreneurial and social needs. It will provide space for educational classes and job skills training workshops, a fully- equipped, high tech office space for those just starting a business or needing a professional space to meet with clients or investors, a vending space featuring local products to attract shoppers, a space for gallery exhibits, sales and events, spaces for community events and programs, and a Chamber of Commerce office to direct people to local businesses and regional attractions. Avista’s support of the Bettie Steiger Community Enrichment Center brings the Friends of the Whitman County Library closer to providing a hub for the Colfax community. Total 2014 Arts and Culture Giving — $151,974 Community Partner Highlight The Spokane Tribal College serves the greater Spokane area, offering access to students of any heritage who want to pursue higher education in a small, mentorship-based environment. It is one of the only colleges of its kind in the region. With Avista’s support, the Spokane Tribal College 63 Staff_PR_136 Attachment A Page 64 of 94 Community Partnership will work to expand its offerings through implementation of a Running Start program for high school students. With a Running Start program in place, Spokane Tribal College will be able to build relationships with area high schools and offer culturally appropriate, physically and financially accessible dual-credit course work to high school students. Initial offerings will be in partnership with a rural and an urban school that have high Native American populations to provide these students with education and materials that explore their own culture, history and learning styles. Total 2014 Environmental Giving — $20,886* Community Partner Highlight Avista’s 2014 Cabinet Gorge Timber Stand Improvement Project is one that provided benefits both to Avista and the Cabinet Gorge, Mont., community. The key goal of the project was to improve timber stand health on 70 acres around Cabinet Gorge Dam, work that would need to be completed anyway, and create the opportunity to give back to the community. Through the project, fire danger was reduced, timber stand health was improved, danger trees near the road and houses were removed, untreated areas were left to increase wildlife habitat and six semi-truck loads of firewood were donated to the community. The money Avista generated in selling the remainder of the removed timber was donated back to the community through the Montana Community Foundation where it could have a long-term impact. * The majority of Avista’s support for environmental stewardship comes through the millions spent each year in meeting the federal license requirements for our projects on the Clark Fork and Spokane rivers. See the Environmental Stewardship section of this report for more information. Low Income and Senior Outreach Assistance Families living on limited incomes and seniors whose fixed incomes have been negatively affected by the lingering effects of the downturned economy or medical costs rely on assistance to maintain essential needs such as food on the table or gasoline in their vehicles, access to healthcare or utility services in their homes. Avista is committed to reducing the burden of energy costs for our customers most affected by rising energy prices, including low income individuals and families, senior citizens, and disabled and vulnerable customers. To assist our customers, we focus on actions and programs in four primary areas: advocacy for and support of energy assistance programs that provide direct financial assistance; low income and senior outreach programs; energy efficiency and conservation education; and support of community programs that increase customers’ ability to meet the basic costs of living. Energy Assistance In 2001, the Washington Utilities and Transportation Commission (UTC) approved Avista’s innovative Low Income Rate Assistance Program (LIRAP). Through this tariff surcharge program, customers currently pay an average $0.68 per month on their electric bill and an average of $0.74 per month on their natural gas bill, with the monies designated for rate assistance programs in Washington. A similar program was approved in Oregon in 2002 (where Avista provides solely natural gas), currently collecting 0.05 percent of the total charge per therm on Avista customers’ bills. LIRAP is not available in Idaho. In Oregon and Washington, we partner with community action agencies to distribute the funds to our vulnerable customers. Avista also is an active partner in advocating for and facilitating the distribution of federal Low Income Heating Assistance Program (LIHEAP) funds, which are distributed through our community action agency partner programs. 64 Staff_PR_136 Attachment A Page 65 of 94 Community Partnership Avista is the significant contributor to the regional Project Share program that provides emergency energy assistance for residential customers. Project Share is primarily funded through contributions from Avista customers, Avista employees and an annual donation from Avista Corp. In 2014, Avista helped to raise more than $494,000 to assist some 1,130 households, helping more than 6,400 individuals in need in Washington, Idaho and Oregon. Energy Efficiency and Conservation Education Energy Fairs Throughout the year, our customers ask for help in managing their energy use and costs, but most particularly through the cold winter months. During the fall of 2014, Avista hosted four energy fairs in select communities in our service area in Washington and Idaho. The fairs were held in neighborhood community centers and other locations that are recognized as core to a given neighborhood, and each fair had a focus on serving those in need, though they were open to the general public. Approximately 1,250 people attended the fairs in 2014. Avista’s energy fairs offer a broad range of ideas and demonstrations that help residents keep the warm air inside and the cold air outside their homes. They’re also a great way for customers to conveniently access information about utility payment options, energy assistance and energy efficiency as well as valuable community resources, including home weatherization, safety and independence resources for seniors, and employment and financial counseling services. Fair attendees see first-hand how to install such things as rope caulk, window plastic and door sweeps. And following each demonstration, they receive free samples of each item used in the demonstration. Free admission to the fair includes all demonstrations, free samples of energy efficiency materials, complimentary food and beverages, and door prizes. Workshops Senior citizens on fixed incomes and low income families often are struggling to make tight budgets cover all the household expenses, including energy costs. Avista’s workshops are specifically targeted to these vulnerable groups, which are held in convenient locations, such as senior centers and meal sites. Of the 31 workshops we facilitated in 2014, we equipped 745 people with information and resources to help them effectively manage their energy use. At workshops and outreach events, customers learn about energy efficiency and conservation topics such as controlling household drafts, managing the efficient use of major appliances and home lighting, no-cost tips for weatherization, and information on bill payment options and resources for assistance. Recognizing that a significant portion of our target audience may be reliant on medical equipment or living with a chronic health condition, our team provided a new presentation that focused on power outage preparedness so that individuals could have a plan should an outage occur. Mobile Outreach Avista’s Energy Resource Van provides mobile outreach to improve access to energy assistance services/information, home energy information and efficiency resources for low-income, senior and vulnerable Avista customers. Partnership has been a key component for reaching these audiences. The primary partner in 2014 was the Second Harvest Food Bank Mobile Pantry. By working together, Avista was able to access nearly 6,300 individuals in more remote areas including: • Washington: Ritzville, Elk, and Othello • Idaho: Clark Fork, Bolvill, Juliaetta, and Bonners Ferry 65 Staff_PR_136 Attachment A Page 66 of 94 Community Partnership Energy Resource Van visitors are provided with samples of low-cost energy saving items such as weather stripping, plastic window seal kits, refrigerator coil cleaners and energy tips. Energy Use Guides are distributed to help provide continued learning and references about tips that help manage energy and informational materials about bill options and bill assistance are also available. Lowering the Barriers to Service Percentage of Population Unserved in Service Areas The opportunity for electric and/or natural gas service is available by law to all who request it within the areas Avista serves in Washington, Idaho and Oregon. Breaking Through the Language Barrier Through our Customer Contact Center, Avista provides a complimentary language line with quick access to an interpreter 24 hours a day. It works by way of a three-person conference call between our non-English speaking customer, our customer service representative and an interpreter. We can accommodate dozens of languages, including Cambodian, Laotian, Russian, Spanish and Vietnamese. In addition, one of Avista’s engineers who speaks Spanish serves as communication support at community events and through direct customer outreach to ensure we can communicate effectively with our customers and provide them a high level of customer service. Part of the Fabric of the Community When there is a major event in our communities, it’s a given that Avista is there. From January through December, Avista employees are active in events that bring people together for camaraderie, for fun and for service to others. As one of the founding supporters of Hoopfest, the world’s largest 3-on-3 basketball tournament, Bloomsday, one of the largest timed road races in the country, and the Avista NAIA World Series, Avista’s employee volunteers are everywhere — from the score board to the court, from the set- up to the cleanup — and they are active participants, as well. Powering Shared Value Avista Sponsors Stevens Elementary in a Bite 2 Go In 2014, Avista began a sponsorship of Stevens Elementary in Spokane, through Second Harvest, to provide weekend food kits for children in need during the school year. The “Bite 2 Go” kits include two breakfast and two lunch meals, and healthy snacks. Every Friday, staff members at participating schools put the packages of kid-friendly food discreetly in the backpacks of students in need. According to Second Harvest, throughout Spokane County, 47 percent of students — and 55 percent of students in Spokane Public Schools alone — qualify for free and reduced-price meals. Many more don’t always have enough food at home. Children who don’t get enough to eat have less energy and struggle to focus in the classroom. Avista’s sponsorship follows its legacy of action in the communities it serves. Stevens Elementary is near Avista’s Mission Campus. 66 Staff_PR_136 Attachment A Page 67 of 94 Community Partnership Powering Shared Value Continuing Support of March of Dimes The March of Dimes helps give all babies a healthy start and Avista is an ongoing supporter of the organization. In 2014, Avista’s March of Dimes team fundraising goal was $28,000. The team marched past that goal by $4,000 to raise a total of $32,000. Employees implemented dynamic and unique fundraising efforts with widespread engagement and participation across the company. Support of March of Dimes comes from the top down, with senior executives’ leading-by-giving example. Avista’s employees consistently step up to support a cause that plays such an important role in our communities. Powering Shared Value A Long-Standing Partnership with the Arc of Spokane In 2014, Avista and The Arc of Spokane celebrated 25 years of working together in an innovative program that provides persons with developmental disabilities meaningful work, while resulting in effective and cost-saving materials management practices for Avista. The partnership, which began in November 1989, was the first of its kind in this region to fully integrate, on a day-to-day basis, “differently-abled” individuals with company employees and provide the opportunity for them to be part of a regular employment environment, perform meaningful work and receive fair compensation 67 Staff_PR_136 Attachment A Page 68 of 94 Community Partnership Economic Vitality Avista employees help build value for our communities through their active involvement in organizations that are growing jobs and improving the quality of life in our region. Company leadership encourages employees to engage in external relationships throughout the regions we serve. Hundreds of staff members are in volunteer leadership roles in Washington, Idaho, Oregon and Montana. These include health and human services organizations, civic organizations, environmental and non-governmental groups (NGOs), economic development organizations, educational institutions and industry groups. Powering Shared Value National Guard Youth Challenge Academy The National Guard Youth Challenge Academy in Pierce, Idaho, has been a resounding success through its first year of operation, helping cadets improve an average of three grade levels in just 22 weeks. Avista played a role in development of the academy through monetary donations, the donation of a cargo van and in-kind work by local representatives. The Youth Challenge Academy helps Idaho high school dropouts ages 16 to 18 get their lives back on track, preparing them either to return to school or find employment. The academy has also aided in the economic development of Clearwater County, a county that traditionally has one of the highest unemployment rates in the state of Idaho. Since launching, approximately 50 jobs have been added in Clearwater County as a result of the academy opening. 68 Staff_PR_136 Attachment A Page 69 of 94 Community Partnership Powering Shared Value Entrepreneurial Ecosystem and Startup Spokane Avista played a leading role in developing the strategy and initiating the execution for establishing a region-wide entrepreneurial ecosystem. The primary goals of this initiative include: organizing all of the elements of the ecosystem so that they work in unison, building pathways and waypoints to support resources; and measuring, monitoring, and assisting entrepreneurs through the ecosystem. Efforts in 2014 included integrating Connect Northwest, an organization supporting local entrepreneurs, with Greater Spokane Incorporated (GSI), the Spokane region’s chamber of commerce and economic development organization. This also included establishing an entrepreneur stakeholder group, hiring a GSI Entrepreneur program director, and launching startupspokane.com as an online community of support resources for entrepreneurs. Nearly 100 opportunities for entrepreneurs have been identified and organized, including networking events, idea formation programs, mentorship programs, coworking and accelerator programs and business funding programs. Combining these results with the outcomes from Spokane Community College’s seven years of delivering entrepreneurship education, more than 65 businesses and over 125 jobs have been created thus far. This work and focus on building entrepreneurship and driving economic vitality across the region aligns with the Avista Business Entrepreneurship Network, a consortium of four community colleges across Avista’s three-state service territory. To date, the network has enrolled more than 300 students, and more than 80 businesses have been launched. 69 Staff_PR_136 Attachment A Page 70 of 94 Community Partnership Powering Shared Value Avista Awards 4-H Scholarship in Asotin County Avista believes today’s youth are tomorrow’s leaders. With this as a foundational driver, the organization began a 4-H scholarship program that awarded its second scholarship in 2014. The program reaches 4-H students in Whitman and Asotin (Wash.) counties. The program recognizes 4-H members that personify the 4-H mission throughout the entire process of their 4-H project, are outstanding in their communities and are college bound. It gives Avista the ability to recognize 4-H juniors and seniors for a combination of skills and core values. Avista supports the life skill development and career preparation that are inherent in the common 4-H experience. The Washington state 4-H Foundation has been instrumental in developing the program in partnership with Avista. The foundation manages the scholarship process including soliciting and scoring student applications, making the award selection from a set of criteria that was developed to represent the values shared by 4-H and Avista. Powering Shared Value Jobs Plus, CDA Jobs Plus is the economic development engine of Kootenai County in the Coeur d’Alene, Idaho, area. Avista serves a critical leadership role in this organization to strategically move area economic development forward. Efforts in 2014 included a formal strategic planning process and formation of a Technology Task Force through an action committee of Jobs Plus. These groups, with Avista’s leadership, are refreshing the mission and core goals as well as identifying trends in technology, current available resources and gaps in workforce, infrastructure and funding to help draw technology companies to Kootenai County. 70 Staff_PR_136 Attachment A Page 71 of 94 Community Partnership Powering Shared Value Palouse LED Street Lights The city of Palouse, Wash., was selected as one of six communities within the state to participate in a pilot LED street lighting program sponsored by the State of Washington Transportation Improvement Board. The focus of the LED pilot program was to research and evaluate regulatory requirements, identify opportunities and barriers to LED deployment, and assess performance of LED street and area lighting technology. As a community participant in the pilot program, the City of Palouse worked with Avista in converting existing street and area lighting to the LED technology. With funding provided in part by the state, this work included replacing city-owned lighting along Main Street, as well as Avista-owned street and area lighting throughout the city. Alongside the work being completed on this project, Avista used this as an opportunity to find efficiencies and made certain upgrades to its electric distribution system at the same time. Avista’s commitment and investment has created value for the community by reducing the energy used by street lights, reducing maintenance costs since LED lights last up to three times longer than the previous lights and continuing to ensure reliable power. Palouse was the first community in eastern Washington to receive this energy-saving technology. 71 Staff_PR_136 Attachment A Page 72 of 94 Community Partnership Public Policy Participation Public policy has an important role in shaping the economic environment in which we work and live. As an energy company, we are affected by the decisions made by federal, state and local officials. In turn, these decisions also affect our customers, employees and shareholders. It is essential that we have a voice in the public policy arena and that we participate in the process for the benefit of all our stakeholders. Avista actively participates in local, state and national legislative and governmental activities. We work to develop trusting and credible relationships with elected and appointed office holders who determine public policy affecting our company. It is appropriate and responsible for the company, through shareholder dollars and the employee- funded political action committee, to be supportive of those individuals through political contributions as one part of a comprehensive government relations program. Lobbying and Political Contributions In 2014 we spent $397,091 on reportable lobbying expenses at the federal and state levels to help promote sound energy policy. In addition, $99,372 of our 2014 federal trade association dues were used for lobbying. Avista, using general treasury funds, is legally prohibited from contributing directly to political candidates for elected federal offices and is also prohibited from making such contributions in certain states. In 2014, we contributed $286,098 in the states where we serve customers and where such contributions are allowed. Many of our employees are members of the Avista Employees for Effective Government Political Action Committee. It is a voluntary, non-partisan committee for non-craft member employees. Through this PAC, our employees contributed $29,338 to state and federal candidates and political organizations in 2014. Powering Shared Value Southern Oregon Angel Investment Network Avista is credited with founding the Southern Oregon Angel Investment Network in 2010 and helping establish the Roseburg Area Angel Investment Network in 2013. The utility continues to provide leadership and active support to these angel networks. In four years, the angel networks have invested $1,965,000 in eight startup companies from among 80 accredited investors. This economic development initiative is focused on creating access to capital for entrepreneurs and startups poised for an angel fundraising round. For investors this is an opportunity to invest money locally with rate of return in mind. The outcome is the establishment of new businesses, new employers and new customers in the utility’s Oregon service territories. 72 Staff_PR_136 Attachment A Page 73 of 94 Community Partnership — By the Numbers Philanthropy — Avista Foundation & Avista Corporation 2014 2013 2012 2011 2010 Health & Human Services $765,111 $633,472 $624,966 $575,967 $1,431,613 Education $486,543 $249,605 $389,683 $227,073 $336,737 Arts & Culture $151,974 $152,765 $129,032 $178,202 $138,874 Community Vitality $417,198 $373,745 $300,650 $345,593 $218,292 Youth Development $195,724 $122,890 $144,392 $105,102 $112,803 Environmental $20,886 $42,000 $37,687 $42,373 $33,322 Total Giving $2,037,436 $1,574,477 $1,626,410 $1,474,310 $2,271,641 Low Income and Senior Outreach — Energy Assistance Energy Assistance 2013/2014 2012/2013 2011/2012 2010/2011* 2009/2010 LIRAP Grants Made** $4.49 million $4.68 million $5.8 million $2.7 million $4.7 million Project Share Grants Made $569,042 $375,064 $269,380 $504,389 $543,000 Avista Contributions to Project Share $494,313 $215,000 $215,000 $215,000 $400,000 LIHEAP Grants Made*** $4.79 million $5,137,160 $9.2 million $10.8 million $9.4 million * LIRAP energy assistance program year changed to Oct. 1 to Sept. 30 to align with federal LIHEAP program year ** LIRAP is only available in Washington and Oregon *** Avista is an active partner in advocating for and facilitating the distribution of federal Low Income Heating Assistance (LIHEAP) funds 73 Staff_PR_136 Attachment A Page 74 of 94 Global Reporting Initiative The 2015 Shared Value Report aligns with the Global Reporting Initiative G3 and Electric Utility Sector Supplement. The standard disclosures and indicators have not been verified externally by GRI, but they are consistent with previous reports that have been verified by GRI as application Level B. 74 Staff_PR_136 Attachment A Page 75 of 94 Global Reporting Initiative Indicator Description Reported Report Section(s) 1.1 Statement from the most senior decision-maker of the organization Fully A Message from Our Leadership 1.2 Description of key impacts, risks, and opportunities Fully A Message from Our Leadership Organizational Profile 2.1 Name of the organization Fully Our Company — Organizational Profile 2.2 Primary brands, products, and/or services Fully Our Company — Organizational Profile 2.3 Operational structure of the organization, including main divisions, operating companies, subsidiaries, and joint ventures Fully Our Company — Organizational Profile 2.4 Location of organization's headquarters Fully Our Company — Organizational Profile 2.5 Number of countries where the organization operates, and names of countries with either major operations or that are specifically relevant to the sustainability issues covered in the report Fully Our Company — Organizational Profile 2.6 Nature of ownership and legal form Fully Our Company — Organizational Profile 2.7 Markets served (including geographic breakdown, sectors served, and types of customers/beneficiaries) Fully Our Company — Organizational Profile 2.8 Scale of the reporting organization Fully Our Company — Organizational Profile 2.9 Significant changes during the reporting period regarding size, structure, or ownership Fully About the Report 2.10 Awards received in the reporting period Fully Our Company — Awards & Recognitions 2014 EU1 Installed capacity, broken down by primary energy source and by regulatory regime Fully Utility Operations — By the Numbers EU2 Net energy output broken down by primary energy source and by regulatory regime Fully Utility Operations — By the Numbers Strategy And Analysis 75 Staff_PR_136 Attachment A Page 76 of 94 Global Reporting Initiative EU3 Number of residential, industrial, institutional and commercial customer accounts Fully Our Company — Organizational Profile EU4 Length of above and underground transmission and distribution lines by regulatory regime Fully Utility Operations — By the Numbers EU5 Allocation of CO2e emissions allowances or equivalent, broken down by carbon trading framework Fully Environmental Stewardship — By the Numbers Report Parameters 3.1 Reporting period (e.g., fiscal/calendar year) for information provided Fully About the Report 3.2 Date of most recent previous report (if any)Fully About the Report 3.3 Reporting cycle (annual, biennial, etc.)Fully About the Report 3.4 Contact point for questions regarding the report or its contents Fully About the Report 3.5 Process for defining report content Fully About the Report 3.6 Boundary of the report (e.g., countries, divisions, subsidiaries, leased facilities, joint ventures, suppliers) Fully About the Report 3.7 State any specific limitations on the scope or boundary of the report Fully About the Report 3.8 Basis for reporting on joint ventures, subsidiaries, leased facilities, outsourced operations, and other entities that can significantly affect comparability from period to period and/or between organizations 3.9 Data measurement techniques and the bases of calculations, including assumptions and techniques underlying estimations applied to the compilation of the Indicators and other information in the report. Explain any decisions not to apply, or to substantially diverge from, the GRI Indicator Protocols. Fully About the Report Indicator Description Reported Report Section(s) 76 Staff_PR_136 Attachment A Page 77 of 94 Global Reporting Initiative 3.10 Explanation of the effect of any re-statements of information provided in earlier reports, and the reasons for such re-statement (e.g., mergers/acquisitions, change of base years/periods, nature of business, measurement methods) 3.11 Significant changes from previous reporting periods in the scope, boundary, or measurement methods applied in the report Fully About the Report 3.12 Table identifying the location of the Standard Disclosures in the report Fully Global Reporting Initiative 3.13 Policy and current practice with regard to seeking external assurance for the report Fully About the Report Governance, Commitments And Engagements 4.1 Governance structure of the organization, including committees under the highest governance body responsible for specific tasks, such as setting strategy or organizational oversight Fully Our Company — Governance 4.2 Indicate whether the chair of the highest governance body is also an executive officer Fully Our Company — Governance 4.3 For organizations that have a unitary board structure, state the number of members of the highest governance body that are independent and/or non-executive members Fully Our Company — Governance 4.4 Mechanisms for shareholders and employees to provide recommendations or direction to the highest governance body Fully Our Company — Governance Indicator Description Reported Report Section(s) 77 Staff_PR_136 Attachment A Page 78 of 94 Global Reporting Initiative 4.5 Linkage between compensation for members of the highest governance body, senior managers, and executives (including departure arrangements), and the organization's performance (including social and environmental performance) Fully Our Company — Governance 4.6 Processes in place for the highest governance body to ensure conflicts of interest are avoided Fully Our Company — Governance 4.7 Process for determining the qualifications and expertise of the members of the highest governance body for guiding the organization's strategy on economic, environmental, and social topics Fully Our Company — Governance 4.8 Internally developed statements of mission or values, codes of conduct, and principles relevant to economic, environmental, and social performance and the status of their implementation Fully Our Company — Organizational Profile 4.9 Procedures of the highest governance body for overseeing the organization's identification and management of economic, environmental, and social performance, including relevant risks and opportunities, and adherence or compliance with internationally agreed standards, codes of conduct, and principles Fully Our Company — Governance 4.10 Processes for evaluating the highest governance body's own performance, particularly with respect to economic, environmental, and social performance Fully Our Company — Governance 4.11 Explanation of whether and how the precautionary approach or principle is addressed by the organization Fully 2014 Annual Report Form 10-K, Item I-A 4.12 Externally developed economic, environmental, and social charters, principles, or other initiatives to which the organization subscribes or endorses Fully Community Partnership — Economic Vitality Indicator Description Reported Report Section(s) 78 Staff_PR_136 Attachment A Page 79 of 94 Global Reporting Initiative 4.13 Memberships in associations (such as industry associations) and/ or national/international advocacy organizations in which the organization: Has positions in governance bodies; Participates in projects or committees; Provides substantive funding beyond routine membership dues; or Views membership as strategic Fully Community Partnership — Economic Vitality 4.14 List of stakeholder groups engaged by the organization Fully Community Partnership — Economic Vitality 4.15 Basis for identification and selection of stakeholders with whom to engage Fully Utility Operations — Engaging Our Stakeholders 4.16 Approaches to stakeholder engagement, including frequency of engagement by type and by stakeholder group Fully Utility Operations — Engaging Our Stakeholders 4.17 Key topics and concerns that have been raised through stakeholder engagement, and how the organization has responded to those key topics and concerns, including through its reporting Fully Utility Operations — Engaging Our Stakeholders About the Report Disclosure On Management Approach EC Aspects Economic performance Fully Avista Corp. 2014 Annual Report Market presence Fully Avista Corp. 2014 Annual Report Indirect economic impacts Fully Avista Corp. 2014 Annual Report Availability and reliability EU6 Management approach to ensure short and long-term electricity availability and reliability Fully Utility Operations — Resource and Business Continuity Planning Demand-side management EU7 Demand-side management programs including residential, commercial, institutional and industrial programs Fully Utility Operations — Energy Efficiency and Conservation Programs EU7 System efficiency Fully Utility Operations — Smart Grid Initiatives Research and development Indicator Description Reported Report Section(s) 79 Staff_PR_136 Attachment A Page 80 of 94 Global Reporting Initiative EU8 Research and development activity and expenditure aimed at providing reliable electricity and promoting sustainable development Fully Utility Operations — Smart Grid Initiatives Plant decommissioning EU9 Provisions for decommissioning of nuclear power sites No Nuclear Power Disclosure On Management Approach EN Aspects Materials Fully Environmental Stewardship; Environmental Policy Energy Fully Utility Operations — Energy Efficiency and Conservation Programs Water Fully Environmental Stewardship — Biodiversity Fully Emissions, effluents and waste Fully Stewardship of the Waterways Environmental Stewardship — Stewardship of the Waterways Environmental Stewardship — Climate and Environmental Impacts Products and services Fully Environmental Stewardship — Climate and Environmental Impacts Compliance Fully Environmental Stewardship — Climate and Environmental Impacts Transport Fully Environmental Stewardship — Climate and Environmental Impacts Overall Indicator Description Reported Report Section(s) 80 Staff_PR_136 Attachment A Page 81 of 94 Global Reporting Initiative Disclosure On Management Approach LA Aspects Employment EU14 Programs and processes to ensure the availability of a skilled workforce Fully Our Company — Our Employees EU15 Percentage of employees eligible to retire in the next 5 and 10 years broken down by job category and by region Fully Our Company — Our Employees EU16 Policies and requirements regarding health and safety of employees and employees of contractors and subcontractors Fully Our Company — Our Employees Labor/management relations Fully Our Company — Our Employees Occupational health and safety Fully Our Company — Our Employees Training and education Fully Our Company — Our Employees Diversity and equal opportunity Fully Our Company — Our Commitment to Diversity Disclosure On Management Approach HR Aspects Investment and procurement practices Fully Utility Operations — Supply Chain Non-discrimination Fully Our Company — Our Commitment to Diversity Freedom of association and collective bargaining Fully Our Company — Our Employees Child labor Forced and compulsory labor Security practices Indigenous rights Partially Environmental Stewardship — Stewardship of the Waterways Disclosure On Management Approach SO Aspects Community EU19 Stakeholder participation in the decision making process related to energy planning and infrastructure development Fully Utility Operations — Engaging Our Stakeholders About the Report Indicator Description Reported Report Section(s) 81 Staff_PR_136 Attachment A Page 82 of 94 Global Reporting Initiative EU20 Approach to managing the impacts of displacement Corruption Fully Our Company — Governance Public policy Fully Community Partnership — Public Policy Participation Anti-competitive behavior Fully Code of Business Conduct Compliance Fully Code of Business Conduct Disaster/Emergency planning and response Fully Utility Operations — Planning to Ensure Continuation of Services EU21 Contingency planning measures, disaster/emergency management plan and training programs, and recovery/ restoration plans Fully Utility Operations — Planning to Ensure Continuation of Services Disclosure On Management Approach PR Aspects Customer health and safety Fully Utility Operations — Serving Our Customers — Electricity Product and service labelling Fully Utility Operations — Engaging Our Stakeholders Marketing communications Fully Utility Operations — Engaging Our Stakeholders Customer privacy Fully Avista Utilities Website Compliance Access EU23 Programs, including those in partnership with government, to improve or maintain access to electricity and customer support services Fully Community Partnership — Low Income and Senior Outreach Assistance Provision of information EU24 Practices to address language, cultural, low literacy and disability related barriers to accessing and safely using electricity and customer support services Fully Community Partnership — Low Income and Senior Outreach Assistance Indicator Description Reported Report Section(s) 82 Staff_PR_136 Attachment A Page 83 of 94 Global Reporting Initiative Economic Economic Performance EC1 Direct economic value generated and distributed, including revenues, operating costs, employee compensation, donations and other community investments, retained earnings, and payments to capital providers and governments Fully Our Company — Organizational Profile; Community Partnership — Philanthropy EC2 Financial implications and other risks and opportunities for the organization's activities due to climate change Fully Environmental Stewardship — Climate and Environmental Impacts EC3 Coverage of the organization's defined benefit plan obligations Fully Avista Corp 2014 10-K EC4 Significant financial assistance received from government Market Presence EC5 Range of ratios of standard entry level wage compared to local minimum wage at significant locations of operation EC6 Policy, practices, and proportion of spending on locally-based suppliers at significant locations of operation Fully Utility Operations — Supply Chain EC7 Procedures for local hiring and proportion of senior management hired from the local community at significant locations of operation Fully Our Company — Our Employees Indirect Economic Impacts EC8 Development and impact of infrastructure investments and services provided primarily for public benefit through commercial, in-kind, or pro bono engagement Fully Community Partnership — Economic Vitality EC9 Understanding and describing significant indirect economic impacts, including the extent of impacts Indicator Description Reported Report Section(s) 83 Staff_PR_136 Attachment A Page 84 of 94 Global Reporting Initiative Availability and Reliability EU10 Planned capacity against projected electricity demand over the long term, broken down by energy source and regulatory regime Fully Utility Operations — Planning to Ensure Continuation of Services System Efficiency EU11 Average generation efficiency of thermal plants by energy source and regulatory regime Fully Utility Operations — By The Numbers EU12 Transmission and distribution losses as a percentage of total energy Environmental Materials EN1 Materials used by weight or volume Fully Utility Operations — By The Numbers Energy EN3 Direct energy consumption by primary energy source Fully Utility Operations — By The Numbers EN4 Indirect energy consumption by primary source EN5 Energy saved due to conservation and efficiency improvements Fully Utility Operations — Energy Efficiency and Conservation Programs EN6 Initiatives to provide energy-efficient or renewable energy based products and services, and reductions in energy requirements as a result of these initiatives Fully Utility Operations — Energy Efficiency and Conservation Programs EN7 Initiatives to reduce indirect energy consumption and reductions achieved Water EN8 Total water withdrawal by source EN9 Water sources significantly affected by withdrawal of water Indicator Description Reported Report Section(s) 84 Staff_PR_136 Attachment A Page 85 of 94 Global Reporting Initiative EN10 Percentage and total volume of water recycled and reused Biodiversity EN11 Location and size of land owned, leased, managed in, or adjacent to, protected areas and areas of high biodiversity value outside protected areas Fully Environmental Stewardship — Stewardship of the Waterways EN12 Description of significant impacts of activities, products, and services on biodiversity in protected areas and areas of high biodiversity value outside protected areas Fully Environmental Stewardship — Stewardship of the Waterways EU13 Biodiversity of offset habitats compared to the biodiversity of the affected areas EN13 Habitats protected or restored Fully Environmental Stewardship — Stewardship of the Waterways EN14 Strategies, current actions, and future plans for managing impacts on biodiversity Fully Environmental Stewardship — Stewardship of the Waterways EN15 Number of IUCN Red List species and national conservation list species with habitats in areas affected by operations, by level of extinction risk Emissions, Effluents and Waste EN16 Total direct and indirect greenhouse gas emissions by weight Fully Environmental Stewardship — By the Numbers EN17 Other relevant indirect greenhouse gas emissions by weight Fully Environmental Stewardship — By the Numbers EN18 Initiatives to reduce greenhouse gas emissions and reductions achieved Fully Environmental Stewardship — Climate and Environmental Impacts EN19 Emissions of ozone-depleting substances by weight Indicator Description Reported Report Section(s) 85 Staff_PR_136 Attachment A Page 86 of 94 Global Reporting Initiative EN20 NOx, SOx, and other significant air emissions by type and weight Fully Environmental Stewardship — By the Numbers EN21 Total water discharge by quality and destination Fully Utility Operations — By The Numbers EN22 Total weight of waste by type and disposal method EN23 Total number and volume of significant spills EN24 Weight of transported, imported, exported, or treated waste deemed hazardous under the terms of the Basel Convention Annex I, II, III, and VIII, and percentage of transported waste shipped internationally EN25 Identity, size, protected status, and biodiversity value of water bodies and related habitats significantly affected by the reporting organization's discharges of water and runoff Products and Services EN26 Initiatives to mitigate environmental impacts of products and services, and extent of impact mitigation Fully Environmental Stewardship EN27 Percentage of products sold and their packaging materials that are reclaimed by category Compliance EN28 Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with environmental laws and regulations Fully Environmental Stewardship — Environmental Fines and Sanctions Transport EN29 Significant environmental impacts of transporting products and other goods and materials used for the organization's operations, and transporting members of the workforce Fully Environmental Stewardship — Climate and Environmental Impacts Indicator Description Reported Report Section(s) 86 Staff_PR_136 Attachment A Page 87 of 94 Global Reporting Initiative Overall EN30 Total environmental protection expenditures and investments by type Fully Environmental Stewardship — Stewardship of the Waterways Social: Labor Practices And Decent Work Employment LA1 Total workforce by employment type, employment contract, and region Fully Our Company — Our Employees LA2 Total number and rate of employee turnover by age group, gender, and region EU17 Days worked by contractor and subcontractor employees involved in construction, operation and maintenance activities EU18 Percentage of contractor and subcontractor employees that have undergone relevant health and safety training LA3 Benefits provided to full-time employees that are not provided to temporary or part-time employees, by major operations Labor/Management Relations LA4 Percentage of employees covered by collective bargaining agreements Fully Our Company — Our Employees LA5 Minimum notice period(s) regarding significant operational changes, including whether it is specified in collective agreements Indicator Description Reported Report Section(s) 87 Staff_PR_136 Attachment A Page 88 of 94 Global Reporting Initiative Occupational Health and Safety LA6 Percentage of total workforce represented in formal joint management-worker health and safety committees that help monitor and advise on occupational health and safety programs Fully Our Company — Our Employees LA7 Rates of injury, occupational diseases, lost days, and absenteeism, and number of work-related fatalities by region Fully Our Company — By the Numbers LA8 Education, training, counseling, prevention, and risk-control programs in place to assist workforce members, their families, or community members regarding serious diseases Fully Our Company — Our Employees LA9 Health and safety topics covered in formal agreements with trade unions Fully Our Company — Our Employees Training and Education LA10 Average hours of training per year per employee by employee category Partially Our Company — By the Numbers LA11 Programs for skills management and lifelong learning that support the continued employability of employees and assist them in managing career endings Fully Our Company — Our Employees LA12 Percentage of employees receiving regular performance and career development reviews Fully Our Company — Our Employees Diversity and Equal Opportunity LA13 Composition of governance bodies and breakdown of employees per category according to gender, age group, minority group membership, and other indicators of diversity Fully Our Company — Our Employees LA14 Ratio of basic salary of men to women by employee category Indicator Description Reported Report Section(s) 88 Staff_PR_136 Attachment A Page 89 of 94 Global Reporting Initiative Social: Human Rights Investment and Procurement Action HR1 Percentage and total number of significant investment agreements that include human rights clauses or that have undergone human rights screening HR2 Percentage of significant suppliers and contractors that have undergone screening on human rights and actions taken HR3 Total hours of employee training on policies and procedures concerning aspects of human rights that are relevant to operations, including the percentage of employees trained Non-Discrimination HR4 Total number of incidents of discrimination and actions taken Freedom of Association and Collective Bargaining HR5 Operations identified in which the right to exercise freedom of association and collective bargaining may be at significant risk, and actions taken to support these rights Child Labor HR6 Operations identified as having significant risk for incidents of child labor, and measures taken to contribute to the elimination of child labor Indicator Description Reported Report Section(s) 89 Staff_PR_136 Attachment A Page 90 of 94 Global Reporting Initiative Forced and Compulsory Labor HR7 Operations identified as having significant risk for incidents of forced or compulsory labor, and measures to contribute to the elimination of forced or compulsory labor Security Practices HR8 Percentage of security personnel trained in the organization's policies or procedures concerning aspects of human rights that are relevant to operations Indigenous Rights HR9 Total number of incidents of violations involving rights of indigenous people and actions taken Fully Environmental Stewardship — Stewardship of the Waterways Social: Society Community SO1 Nature, scope, and effectiveness of any programs and practices that assess and manage the impacts of operations on communities, including entering, operating, and exiting EU22 Number of people physically or economically displaced and compensation, broken down by type of project None has occurred Corruption SO2 Percentage and total number of business units analyzed for risks related to corruption SO3 Percentage of employees trained in organization's anti-corruption policies and procedures Fully All employees and new hires receive a copy of the Code of Ethics, which is annually reviewed and updated. SO4 Actions taken in response to incidents of corruption Public Policy SO5 Public policy positions and participation in public policy development and lobbying Fully Community Partnership — Public Policy Participation Indicator Description Reported Report Section(s) 90 Staff_PR_136 Attachment A Page 91 of 94 Global Reporting Initiative SO6 Total value of financial and in-kind contributions to political parties, politicians, and related institutions by country Fully Community Partnership — Public Policy Participation Anti-Competitive Behavior SO7 Total number of legal actions for anti-competitive behavior, anti- trust, and monopoly practices and their outcomes Compliance SO8 Monetary value of significant fines and total number of non- monetary sanctions for non-compliance with laws and regulations Social: Product Responsibility Customer Health and Safety PR1 Life cycle stages in which health and safety impacts of products and services are assessed for improvement, and percentage of significant products and services categories subject to such procedures PR2 Total number of incidents of non-compliance with regulations and voluntary codes concerning health and safety impacts of products and services during their life cycle, by type of outcomes EU25 Number of injuries and fatalities to the public involving company assets, including legal judgments, settlements and pending legal cases of diseases Product and Service Labeling PR3 Type of product and service information required by procedures, and percentage of significant products and services subject to such information requirements Indicator Description Reported Report Section(s) 91 Staff_PR_136 Attachment A Page 92 of 94 Global Reporting Initiative PR4 Total number of incidents of non-compliance with regulations and voluntary codes concerning product and service information and labeling, by type of outcomes PR5 Practices related to customer satisfaction, including results of surveys measuring customer satisfaction Fully Utility Operations — Customer Service PR6 Programs for adherence to laws, standards, and voluntary codes related to marketing communications, including advertising, promotion, and sponsorship Marketing Communications PR7 Total number of incidents of non-compliance with regulations and voluntary codes concerning marketing communications, including advertising, promotion, and sponsorship by type of outcomes None Customer Privacy PR8 Total number of substantiated complaints regarding breaches of customer privacy and losses of customer data Compliance PR9 Monetary value of significant fines for non-compliance with laws and regulations concerning the provision and use of products and services None Access EU26 Percentage of population unserved in licensed distribution or service areas Fully Community Partnership — Low Income and Senior Outreach Assistance EU27 Number of residential disconnections for non-payment, broken down by duration of disconnection and by regulatory regime EU28 Power outage frequency Fully Utility Operations — By the Numbers Indicator Description Reported Report Section(s) 92 Staff_PR_136 Attachment A Page 93 of 94 Global Reporting Initiative EU29 Average power outage duration Fully Utility Operations — By the Numbers EU30 Average plant availability factor by energy source and by regulatory regime Fully Utility Operations — By the Numbers Indicator Description Reported Report Section(s) 93 Staff_PR_136 Attachment A Page 94 of 94