20260731Direct Brandon.pdf

ANNI GLOGOVAC RECEIVED
COUNSEL FOR REGULATORY AFFAIRS J U LY 31, 2026
AVISTA CORPORATION IDAHO PUBLIC
1411 E. MISSION AVENUE UTILITIES COMMISSION
P.O. BOX 3727
SPOKANE, WASHINGTON 99220
PHONE: [phone]
[e-mail]
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE POWER COST ) CASE NO. AVU-E-26-05
ADJUSTMENT (PCA) ANNUAL RATE )
ADJUSTMENT FILING OF AVISTA ) DIRECT TESTIMONY OF
CORPORATION ) ANNETTE M. BRANDON
FOR AVISTA CORPORATION

I Q. Please state your name, present position with Avista Corporation, and
2 business address.
3 A. My name is Annette M. Brandon. I am employed by Avista Corporation as
4 Strategic Initiatives Manager in the Regulatory Affairs Department. My business address
5 is 1411 East Mission, Spokane, Washington.
6 Q. Would you briefly describe your educational background and
7 professional experience?
8 A. Yes. I earned a Bachelor of Arts in Business Administration—Professional
9 Accounting from Eastern Washington University in 2002. I began my career at Avista in
10 1999 as a Budget Analyst in the Transmission department. Over the years, I have held roles
11 in the Tax Department and Resource Accounting, where my responsibilities included
12 natural gas and power accounting, budgeting, and reporting. In 2012, 1 transitioned to
13 Regulatory Affairs, overseeing power supply recovery mechanisms in Washington and
14 Idaho (Washington Energy Recovery Mechanism, Idaho Power Cost Adjustment),
15 Purchase Gas Adjustments in all three of Avista's jurisdictions (Idaho, Oregon, and
16 Washington), labor and benefits issues, and served as Revenue Requirements Manager for
17 Avista's 2019 General Rate Case (GRC) in Oregon. In 2020, 1 moved to Power Supply as
18 a Wholesale Marketing Manager, in which my role included oversight and testimony for
19 the power supply recovery mechanisms,Request for Proposal(RFP)processes,and leading
20 key initiatives such as the Clean Energy Implementation Plan (CEIP) and Climate
21 Commitment Act (CCA). In mid-2025, I returned to Regulatory Affairs, focusing on
22 management, implementation and oversight of strategic issues and emerging policies.
23 Q. What is the scope of your testimony in this proceeding?
24 A. My testimony provides a summary of the accounting entries and account
Brandon, Di 1
Avista Corporation

I balances related to the PCA for the 12 months ended June 30, 2026. My testimony also
2 addresses the proposed surcharge to be effective October 1, 2026, which will replace the
3 existing rebate that went into effect on October 1, 2025.
4 Q. Are you sponsoring any Exhibits?
5 A. Yes. I am sponsoring Exhibit No. AMB-1. Page I of that exhibit details the
6 calculation of the proposed uniform cents per kilowatt-hour PCA surcharge of 0.1570, as
7 well as the impact of the proposed PCA surcharge rate by rate schedule. Page 2 is the
8 proposed PCA tariff, Schedule 66.
9 Q. Would you please provide an overview of the most recent history of
10 Avista's PCA methodology that has been approved by the Idaho Public Utilities
11 Commission ("IPUC")?
12 A. Yes. On June 29, 2007, the Commission issued Order No. 30361 in Case
13 No. AVU-E-07-01. That case dealt with the review of the PCA methodology and method
14 of recovery. The Commission approved a change in the PCA methodology from a"trigger
15 and cap" mechanism to a single annual PCA rate adjustment filing requirement.
16 The Commission also approved a change in the method of the PCA deferral rate
17 adjustment from a uniform percentage basis to a uniform cents per kilowatt-hour basis,
18 effective with the October 1, 2007, rate change. By Order No. 32206 in Case No. GNR-E-
19 10-03 dated March 15, 2011, the Commission modified the retail revenue credit
20 methodology and approved a Load Change Adjustment Rate(LCAR)based on the energy-
21 classified portion of embedded production revenue requirement effective April 1, 2011.
22 The Commission approved the following procedural schedule for administering the annual
23 PCA filings:
24 August 1: Company filing for prior July June deferral period
Brandon, Di 2
Avista Corporation

I September 1: Review and comments by Staff and other interested parties
2 October 1: Commission Order and effective date of PCA rate adjustment
3
4 Q. Would you please summarize the filing and Order associated with the
5 existing PCA rate?
6 A. Yes. On July 31, 2025, Avista filed its annual PCA rate adjustment for the
7 period July 1, 2024, through June 30, 2025, and requested a PCA rebate rate of 0.3010 per
8 kilowatt-hour effective October 1, 2025. The Commission approved that request in Case
9 No. AVU-E-25-07,by Order No. 36777, dated September 29, 2025.
10 Q. Does the present filing conform to the requirements of the prior
11 Commission Orders regarding the PCA?
12 A. Yes. Consistent with prior years,the proposed PCA rate adjustment is based
13 on the following:
14 • Deferrals for the period July 1,2025,through June 30,2026,including interest,
15
16 • Total remaining amortization balance from the period October 1,2025,through
17 June 30, 2026, including interest, and
18
19 • Forecast amortization and interest from July 1, 2026, through September 30,
20 2026.
21
22 Q. What were the amounts of deferrals and interest for the period July 1,
23 2025 through June 30, 2026?
24 A. Table No. 1 below summarizes the charges for this period:
25 Table No. 1 —Summary of Deferral Balance
26 Power Supply Deferrals(July 2025 - June 2026) $ 8,032,648
Energy Imbalance Market Operations and Maintenance Expense $ 194,495
27 Renewable Energy Credit Retirement Benefit $ (2,717,969)
Interest $ 56,428
28 Total Deferral Balance 5,565,602
29 Company witness Mr.Holland discusses the components and variances that resulted
Brandon, Di 3
Avista Corporation

I in a $5,565,602 surcharge shown above. In addition, Mr. Holland provides an explanation
2 for the inclusion of the Energy Imbalance Market (EIM) Operations and Maintenance
3 (O&M)expense of$194,495. The Renewable Energy Credit(REC)credit/rebate represents
4 Idaho's allocation of RECs that were retired to meet Washington's Renewable Portfolio
5 Standard (RPS) and the Clean Energy Transformation Act (CETA) that would have been
6 otherwise sold. This adjustment ensures Idaho customers are made whole from the loss of
7 any revenue resulting from the retirement of RECs which would have otherwise been sold,
8 absent the RPS and/or CETA needs. This amount has increased versus prior years given
9 the increasing REC retirement requirements of CETA. The $56,428 interest amount
10 represents interest for the 12-month period July 1, 2025 through June 30, 2026. Interest for
I I the 12-month period was calculated using the Customer Deposit Rate of 5% for the entire
12 review period,per prior Commission order.
13 Q. What surcharge rate is the Company proposing to be effective October
14 11 2026?
15 A. The Company is proposing a uniform cents per kilowatt-hour PCA
16 surcharge rate of 0.1570 to be effective October 1, 2026. Page 1 of Exhibit No. AMB-I
17 shows the calculation of the proposed rate. The proposed rate is designed to surcharge the
18 following as shown in Table No. 2 below:
Brandon, Di 4
Avista Corporation

I Table No. 2—Amortization Balance Calculation!
2 Power Supply Deferrals &EIM(July 2025 - June 2026) $ 8,227,143
Renewable Energy Credit Retirement Benefit $ (2,717,969)
3 Interest $ 56,428
4 Total Deferral Balance $ 5,565,602
5 Unamortized Balance from Previous Deferrals (prior to July 1, 2025) $ (11,302,437)
Amortization July 2025 - June 2026 $ 8,705,513
6 Interest $ (354,457)
Total Remaining Amortization Balance $ (2,951,381)
7
PCA Year Ending June 30, 2026 $ 2,614,221
8
9 Projected Amortization and Total Interest(July 2026-September 2026) $ 2,365,097
10
TOTAL BALANCE FOR AMORTIZATION $ 4,979,318
11
12 After applying the conversion factor related to Commission fees and uncollectible
13 customer accounts to the"Total Balance for Amortization"shown above,the resulting debit
14 balance of $5,001,017 is divided by forecasted kilowatt-hours to derive the proposed
15 surcharge of 0.1570 per kilowatt-hour.2
16 Q. What is the impact of the proposed PCA rate increase by rate schedule?
17 A. Table No. 3 below shows the effect of the proposed PCA rate increase by
18 rate schedule. The proposed surcharge rate is 0.1570 per kilowatt-hour, which is 0.04580
19 per kilowatt-hour more than the existing rebate rate of 0.3010 per kilowatt-hour. The
20 overall increase in revenue is approximately 4.2%, or$14.6 million.
21
1 Power Supply Deferrals like item 1 is a combination of Power Supply Deferrals of$8,032,648 + EIM
Operations and Maintenance of$194,495 as shown in Table No. 1 for a total of$8,227,143
2 Total Balance for Amortization$4,979,318 divided by conversion factor 0.955661 =$5,001,017.
Brandon, Di 5
Avista Corporation

I Table No. 3—Revenue Impact by Rate Schedule
2 Schedule Percent change
Type of Service Number on Billed Revenue
3 Residential 1 3.6%
General Service 11,12 4.3%
4 Large General Service 21,22 3.9%
Extra Large General Service 25 6.6%
5 Clearwater 25P 7.9%
Pumping Service 31,32 3.5%
6 Street&Area Lights 41-49 1.0%
Total 4.2%
7 Q. What will be the impact of the proposed change on an average
8 residential customer?
9 A. Residential customers using an average of 939 kilowatt-hours per month
10 would see their monthly bills increase from $119.52 to $123.83, an increase of$4.31 per
11 month, or 3.6%. This bill impact does not consider the effects of other filings Avista has
12 made that will go into effect on October 1, 2026.
13 Q. What programs are in place to help Avista customers pay or manage
14 their bills?
15 A. The Company has several programs available to assist customers with
16 managing their utility bills.Avista's Comfort Level Billing (CLB)plan,based on historical
17 charges or an estimate of future charges,3 approximates a monthly average of the
18 customer's estimated annual billings. The concept of this plan is to help the customer
19 budget for their Avista bill throughout the year by leveling out the seasonal highs and lows
20 of their monthly bills. Additionally, the Company's Customer Assistance Referral and
21 Evaluation Services (CARES) program provides specialized assistance to customers
22 encountering medical crises,unemployment, or other personal or financial hardships. This
s Estimates of future charges are only used when the premise does not have adequate usage history to
determine approximate annual average use.
Brandon, Di 6
Avista Corporation

I program offers customers access to specifically-trained CARES representatives who
2 provide support to the customer by way of payment arrangements, medical certificates, or
3 referrals to local Community Action Agencies (CAAs, or Agencies) or other organizations
4 for help with housing,utilities, and medical assistance.
5 Idaho customers who have children, elderly or infirmed persons living in the
6 household may also qualify for Winter Moratorium between the months of December
7 through February each year. From December 1 through February 28, customers are not
8 required to pay their bills in-full and can instead opt to defer payment throughout these
9 winter months or make partial payments. The Winter Payment Plan, offered from
10 November 1 through March 31 annually, provides for lower winter bill payments by
11 allowing customers to make monthly payments equal to one-half of the levelized bill
12 amounts, with the balance then due in-full, or a new payment arrangement established on
13 the balance, by April 1st. In addition, the Company also offers flexible due dates and both
14 short-term as well as long-term payment arrangements for customers having difficulty
15 paying their bills.
16 Avista also has many convenient billing and payment options available for its
17 customers. For billing purposes, all customers have the opportunity to designate their
18 preferred communication method for their billing and associated reminders including paper
19 copy,e-mail, or even text messaging. For payments,the Automatic Payment Service(APS)
20 allows customers to opt to have their monthly utility bill deducted directly from their
21 checking account or credit card automatically each month. Other payment services include
22 debit and credit card service,check-by-phone or over the web,preferred due date,electronic
23 billing, pay-by-text, as well as many local drop boxes or pay stations for cash or check
24 payments.
Brandon, Di 7
Avista Corporation

I For Avista's low-income customers, the Federal Low-Income Home Energy
2 Assistance Program(LIHEAP)provides funding to assist them in paying their electric and
3 natural gas bills. These funds are distributed through local CAAs. Additionally, Idaho's
4 Housing Preservation Program offers emergency assistance for utility and/or rental
5 payments for qualifying low-income households.4 Lastly, Avista's Project Share is a
6 voluntary contribution option allowing customers to contribute donations that are then
7 distributed through local Agencies to customers experiencing financial hardship.
8 Q. Does that conclude your pre-filed direct testimony?
9 A. Yes, it does.
4 The Housing Preservation Program,offered by Idaho Housing and Finance Association(by award from the
U.S.Department of the Treasury),can provide up to 15 months of utility and/or rental payment assistance for
Idaho renters who earn less than 80%of the Area Median Income(AMI).www.idahohousin .cg om/hpp/.
Brandon, Di 8
Avista Corporation