20260501Final_Order_No_37025.pdf

Office of the Secretary
Service Date
May 1 st,2026
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AVISTA )
CORPORATION'S APPLICATION TO ) CASE NO.AVU-E-26-01
INCREASE ITS SCHEDULE 91 ENERGY )
EFFICIENCY TARIFF RIDER )
ADJUSTMENT ) ORDER NO. 37025
On February 13, 2026, Avista Corporation, d/b/a Avista Utilities ("Company") applied to
the Idaho Public Utilities Commission ("Commission") requesting authority to increase its,
Schedule 91, Energy Efficiency Rider Adjustment ("Schedule 91") rates by approximately 7.4%,
effective May 1, 2026 ("Application"). Application at 1.
On March 5,2026,the Commission issued a Notice of Application and Notice of Modified
Procedure establishing a March 27, 2026, deadline for public comments, and an April 3, 2026,
deadline for Company reply comments. Order No. 36953.
On March 16, 2026, the Commission issued an Order Vacating Comment Deadlines set
forth in Order No. 36953 and issued an Amended Notice of Modified Procedure establishing an
April 10,2026, deadline for public comments, and an April 17,2026, deadline for Company reply
comments. Order No. 36964.
On April 2, 2026, the Commission granted intervention to Clearwater Paper Corporation
("Clearwater"). Order No. 36987.
Based on our review of the record, we issue this Final Order approving the Company's
proposal to increase Schedule 91 tariff rates subject to the modifications described below,effective
May 1, 2026.
BACKGROUND
Schedule 91 is designed to recover costs of energy efficiency programs offered to electric
customers, such as behavioral programs, low-income weatherization, and energy efficiency
measures. These programs provide customers with financial incentives or rebates for participating.
THE APPLICATION
The Company requested approval to increase its Schedule 91 rates to fund its Electric
Energy Efficiency Program for 12 months and minimize the amount of future under- or over-
ORDER NO. 37025 1

collections. Application at 1. As of December 31, 2025, the Schedule 91 tariff rider was
underfunded by approximately $24.6 million. Id. at 3. The Company represented that the
underfunded balance was due to an unprecedented level of customer participation in the
Company's Small Business Lighting direct-install program and increased participation in its Site
Specific program.Id. at 3-4.
To address the underfunded rider balance, the Company proposed an increase in the
Schedule 91 rates that was based on a 30-month forecast and recovery period of Schedule 91
revenues and demand-side management("DSM")expenditures.Id.at 4-5.If the proposed increase
was approved,the Company estimated an annual revenue increase of approximately$25.2 million
in Schedule 91, or 7.4% in overall billed rates. Id. at 5. The Company stated that residential
customers using an average of 939 kilowatt-hours ("kWh") per month would see a monthly
increase of$8.90, or 7.7% in their monthly bill.Id.
STAFF COMMENTS
After reviewing the Company's Application and supporting workpapers, Staff
recommended that the Commission approve an increase in the Company's Schedule 91 rates of
6.6%, based on Staff's recommended 36-month forecast and recovery period of Schedule 91
revenues and DSM expenditures rather than the Company's proposed 30-month forecast and
recovery period. Staff Comments at 6. Staff also recommended that the Commission consider any
late-filed comments from the Company's customers.Id.
I. Schedule 91 Adjustment Recommendations
The Company represented to the Energy Efficiency Advisory Group that prior to adding
the Small Business Lighting Direct-Install ("SBLDI") program in 2023, participation was stable
in the Company's DSM program. Id. at 4. In 2024, participation in the SBLDI program exceeded
the Company's forecast. Id. The Company stated that its early 2025 forecasts identified 2024's
participation as an outlier for the SBLDI program and revenue collection was set accordingly. Id.
at 5. The Company represented that 2025 participation in the SBLDI program far outpaced its
forecasts, and as a result program costs have continued to exceed revenues. Id. at 4. Staff
represented that in the Company's 2024 DSM Annual Report filed in Case No.AVU-E-25-12, the
SBLDI program made up 50% of the total kWh savings for the Company's electric portfolio in
2024.Id.
ORDER NO. 37025 2

Staff believed that the Company was taking appropriate steps to forecast and appropriately
manage the SBLDI program moving forward by tightening the parameters of the program and
reducing costs where the Company could.Id. at 5. Staff also noted it understood that it is difficult
to predict future performance of the SBLDI program in Idaho.Id.
After reviewing the revenues and expenditures included in the Application, Staff
recommended a 6.6%increase in the Schedule 91 rates,based on a 36-month forecast and recovery
period to better align Schedule 91 revenues and DSM expenditures to address the underfunded
balance.Id. at 2. Staff represented its proposed change would result in residential customers using
an average of 939 kWh per month seeing "an average monthly bill of$123.55, or an increase of
$8.10 per month."Id. at 3. Staff presented Table No. 1 below outlining the recommendation.
Table No. 1: Schedule 91 Rates
SCHEDULE EXISTING 30 MONTHS 36 MONTHS
RATE RATE RATE
Residential Customers - Sch. 1 0.2980 per kWh 1.2450 per kWh 1.152¢per kWh
General Service - Sch. 11 & 12 0.1560 per kWh 0.6580 per kWh 0.6080 per kWh
Large General Service-Sch.21 0.8240 per kWh 3.4880 per kWh 3.2240 per kWh
&22
Extra Large Customers - Sch. 0.15 10 per kWh 0.6420 per kWh 0.5940 per kWh
25
Clearwater Paper- Sch. 25P 0.1230 per kWh 0.5220 per kWh 0.4830 per kWh
Pumping Service - Sch. 31 & 0.2870 per kWh 1.2160 per kWh 1.1240 per kWh
32
Street Light Service - Sch. 41- 1.0970 per kWh 4.6720 per kWh 4.3190 per kWh
49
Id. at 3.
Staff did not validate nor question the prudence of the Company's DSM expenses or its
actual cost-effectiveness calculations for any of its energy efficiency programs because a prudence
determination was not requested in this Application.Id.
II. Forecast and Recovery Period.
The Company filed a 30-month forecast of Schedule 91 revenues and DSM expenditures.
Id. Staff believed that the Company's 30-month forecast differed from the 36-month forecast
period typically used in DSM filings. Id. While Staff supported the recovery of the underfunded
balance, and thought that the Company's workpapers indicated that the Company's proposed rate
ORDER NO. 37025 3

increase would generate sufficient revenue to cover forecasted expenses, and gradually return the
underfunded balance to nearly$0 by the end of September 2028, Staff argued that a 6.6%increase
for Schedule 91 and a 36-month forecast and recovery period would improve consistency,provide
a more comprehensive evaluation of program costs and rate impacts, and reduce the underfunded
balance to nearly $0 by March 31, 2029.Id.
CLEARWATER PAPER
On April 10, 2026, Clearwater filed comments that opposed the proposed rate increase,
opposed processing the Application via modified procedure, and petitioned for reconsideration of
Case No. AVU-E-25-12. Clearwater Comments at 2. Clearwater argued that it was inappropriate
to use modified procedure to process the Application because the Company's proposed rate
increase was based on the $17 million in energy efficiency expenditures deemed prudent in Case
No. AVU-E-25-12 that Clearwater argues were not prudent in its petition for reconsideration of
that case. Id. at 9. Clearwater represented that because of its "beneficial load factor," and the
prudence determination made in Case No. AVU-E-25-12, Clearwater would face a higher rate
increase than the overall average of 7.4%under the Company's proposed change.Id. at 2.
For those reasons,Clearwater requested that the Commission reject the Company's request
to process the Application via modified procedure and requested that the Commission establish a
schedule to evaluate the prudent determination made in Case No.AVU-E-25-12 for the Company's
energy efficiency programs. Id. at 10. If a rate increase to Schedule 91 rates was approved in this
case,Clearwater requested that the increase be amortized over a longer period and be no more than
2%per year.Id. Clearwater argued that because the Company received approval seven months ago
in Case No.AVU-E-25-10 to increase the rates for Schedule 91 by 1.2%,but said rate increase did
not bring the forecasted underfunded balance close to$0 by September 30,2028 like the Company
forecasted, that the Company should be required to ensure its miscalculation has minimal impact
on rate payers. Id. at 11. Clearwater represented that a rate increase over a longer period, and not
more than 2%per year, would lessen the impact of the increase on rate payers. Id.
PUBLIC COMMENTS
The Commission received 71 timely filed customer comments.Of the timely filed customer
comments, 70 opposed the Company's proposed rate adjustment, and one comment supported the
ORDER NO. 37025 4

proposed rate adjustment.As of April 24, 2026, the Commission received five late-filed customer
comments opposing the Company's proposed rate adjustment.
Customer comments opposing the proposed rate adjustment were concerned about the
affordability and financial impact of the rate increase on rate payers as cost of living continues to
rise in the area. Further, customers were frustrated and concerned that the cost allocation of the
Company's miscalculation was being forced on customers who do not participate in energy
efficiency programs. Customers also felt the funds to recover the underfunded balance should
come from the Company's profits and not through rates. Customers were also frustrated that the
rate increase filed in this case was coming shortly after a prior rate increase. Customers also
questioned the justification of the program and its metrics. Customers shared concerns regarding
the lack of alternative energy providers in the area, and how customers have no choice but to use
the Company as their energy provider. The customer comment in support of the Application
supported the Company's operation and felt that it had modest rate increases, and also criticized
Kootenai Electric Cooperative and argued that the Commission should regulate it.
COMPANY REPLY COMMENTS
The Company did not contest Staff s recommendation of a 36-month forecast and recovery
period. Company Reply Comments at 1. Further, the Company filed updated tariff sheets and
supporting workpapers with its reply that reflected the extended forecast and recovery period
recommended by Staff. Id. at 1. The Company requested that the Commission approve its
Application and tariff sheets, in accordance with Staffs recommended modifications, effective
May 1, 2026.Id. at 2.
While the Company acknowledged Clearwater's concerns regarding the impact the
Company's filing had on rates, it represented that the purpose of the rate increase was to "ensure
appropriate recovery of expenses required to maintain a cost-effective energy efficiency portfolio,"
which it represented provides a benefit for all its Idaho customers, including Clearwater. Id.
Further, the Company represented that Clearwater had received "over $2.9 million in direct
incentives from the Company's energy efficiency programs since 2021," and that Clearwater was
"saving approximately 14.2 million kWh in energy usage per year as a result of these efficiency
upgrades." Id. The Company represented that the rate adjustment helps reconcile actual
ORDER NO. 37025 5

expenditures for the previous period and establish a sufficient rate that will appropriately fund
energy efficiency programs as forecasted.Id.
Additionally, the Company represented that its proposed rate adjustment was in line with
how public utilities historically true up prior periods and forecast future needs. Id. The Company
explained that its energy efficiency programs go through rigorous planning, evaluation,
collaboration, and Commission approval. Id. The Company represented that it addressed
Clearwater's request for reconsideration of Case No. AVU-E-25-12 by filing an answer in that
case.Id.
COMMISSION FINDINGS AND DECISION
The Commission has jurisdiction over the Company's Application and the issues in this
case under Title 61 of the Idaho Code including, Idaho Code §§ 61-501, -502, and -503, and the
Commission's Rule of Procedure, IDAPA 31.01.01.000, et seq. The Commission is empowered
to investigate rates, charges,rules,regulations,practices, and contracts of all public utilities and to
determine whether they are just, reasonable, preferential, discriminatory, or in violation of any
provisions of law, and to fix the same by order.Idaho Code §§ 61-501, -502, and-503.
The Commission has reviewed the record in this case. Based on our review,we find it fair,
just, and reasonable to authorize the Company to recover the current underfunded balance in the
Energy Efficiency Rider account by increasing the Schedule 91 rates by 3.3% in billed rates.
The Company requested to increase Schedule 91 rates by 7.4% based on a 30-month
forecast and recovery period, to recover the underfunded balance and ensure revenues met
forecasted expenditures. Staff recommended increasing the Schedule 91 rates by 6.6% in billed
rates, based on a 36-month forecast and recovery period. Lastly, Clearwater, despite its general
objections to any increase, requested that if an increase to Schedule 91 rates was approved, that
the increase be no more than 2%.
Based upon our review, we find that the Electric Energy Efficiency Rider account is
underfunded by approximately $24.6 million as of December 31, 2025, largely due to an
unprecedented level of customer participation in the Company's SBLDI program. We agree that
Schedule 91 needs to be adequately funded. However, to avoid a large increase in customer rates,
we find it just, reasonable, and in the public interest to increase the Schedule 91 rates by 3.3%
effective on May 1, 2026 to recover the underfunded balance. We note that our decision here is
ORDER NO. 37025 6

not a prudence determination and the Company must file a separate application with the
Commission for such determination.
This Commission has historically supported cost-effective DSM because of its ability to
save customers money when implemented correctly. In this case, we appreciate the Company's
efforts to evaluate and tighten the metrics for its DSM programs, specifically,the SBLDI program
which has been met with robust participation. Because Schedule 91 is underfunded by
approximately $24.6 million, SBLDI program changes are being made, and ongoing DSM
expenditures are being incurred,we strongly encourage the Company to file its 2025 DSM annual
report and the Company's evaluation of its DSM programs with the Commission as soon as
possible. Forecasting and recovery for ongoing expenditures may be evaluated in the future
following one of these future evaluation filings. If needed a supplemental accounting order for the
remaining unrecovered balance from this case may also be requested at that time.
With respect to Clearwater's request for reconsideration in Case No. AVU-E-25-12, that
was filed simultaneously with its comments in this case,we note that Clearwater's request will be
reviewed and evaluated separately by the Commission in Case No. AVU-E-25-12 and will not be
addressed in this Order. Further, we emphasize that the Commission's findings,recommendation,
and Order in this case in no way indicates or establishes a determination or decision by the
Commission on Clearwater's request for reconsideration in Case No. AVU-E-25-12 and nothing
in this Order is meant to indicate otherwise.
ORDER
IT IS HEREBY ORDERED that the Company's Application to increase its electric
Schedule 91 is granted subject to the modification that the increase is a 3.3% increase in overall
billed rates, effective May 1, 2026.
IT IS FURTHER ORDERED that the Company make a compliance filing documenting
that tariff Schedule 91 reflects an increase of 3.3% in billed rates, effective May 1, 2026.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within 21 days of the service date of this Order regarding any matter decided in
this Order. Within seven (7) days after any person has petitioned for reconsideration, any other
person may cross-petition for reconsideration.Idaho Code § 61-626.
ORDER NO. 37025 7

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 1" day of
May 2026.
G
EDWARD LODGE, PR „ DENT
JO R. HAMMOND JR., COMMISSIONER
DAYN HAKDIE, COMMISSIONER
ATTEST:
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Commission Secretary
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ORDER NO. 37025 8