20260831APPLICATION.pdf

' 11
RECEIVED
Avista Corp. August 31, 2026
1411 East Mission P.O. Box 3727 IDAHO PUBLIC
UTII ITIES COMMISSION
Spokane, Washington 99220-0500
Telephone [phone] AVU-E-26-11
Toll Free 800-727-9170
August 31, 2026
Commission Secretary
Idaho Public Utilities Commission
11331 W. Chinden Blvd.
Bldg. 8, Suite 201-A
Boise, Idaho 83714
Re: Avista Corporation Application for Determination of 2025 Electric Energy Efficiency
Expenses as Prudently Incurred
Dear Commission Secretary:
Enclosed for filing with the Commission is the Application of Avista Corporation, dba
Avista Utilities (Avista or "the Company"), requesting a determination of prudence for the
Company's electric energy efficiency expenditures from January 1, 2025 through December 31,
2025. In support of its Application, Avista has provided Exhibit No. 1, which contains the
Company's 2025 Annual Conservation Report (ACR).
If you have any questions regarding this filing, please contact me at [phone] or
aid 'me.stpeter(�b,avistacop2.com.
Sincerely,
/j./ Peuue .5t ;Ve&n
Jaime St Peter
Regulatory Affairs Manager
Enclosures
cc: Avista Energy Efficiency Advisory Group

I ANNIGLOGOVAC
2 ISB #13010
3 COUNSEL, LEGAL DEPARTMENT
4 AVISTA CORPORATION
5 P.O. BOX 3727, MSC 33
6 1411 EAST MISSION AVENUE
7 SPOKANE, WASHINGTON 99220-3727
8 TELEPHONE: [phone]
9 EMAIL: [e-mail]
10
11
12 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
13
14 )
15 IN THE MATTER OF THE APPLICATION ) CASE NO. AVU-E-26-_
16 OF AVISTA CORPORATION FOR A )
17 DETERMINATION OF 2025 ELECTRIC ) APPLICATION OF
18 ENERGY EFFICIENCY EXPENSES AS ) AVISTA CORPORATION
19 PRUDENTLY INCURRED )
20 )
21
22 I. INTRODUCTION
23 Avista Corporation,doing business as Avista Utilities(Avista or the Company),at 1411
24 East Mission Avenue, Spokane, Washington, pursuant to Idaho Code § 61-524 and IDAPA
25 31.01.01, Rules of Procedure (RP), Rule 52 et seq., of the Idaho Public Utilities Commission
26 (IPUC or Commission), hereby respectfully requests that the Commission issue an order
27 designating Avista's electric energy efficiency expenditures from January 1, 2025 through
28 December 31, 2025, funded through the Company's Schedule 91 Demand Side Management
29 (DSM) Rider Adjustment (DSM Rider), in the amount of$20,688,852, as prudently incurred.
30 This filing will hereafter be referred to as the "Application".
31 The Company also requests that this filing be processed under the Commission's
32 Modified Procedure Rules (RP 201-204)through the use of written comments.
33 Avista is a utility that provides service to approximately 423,000 retail electric
34 customers and 383,000 natural gas customers in a 30,000 square-mile service territory covering
Application of Avista Corporation Page 1
Case No. AVU-G-26-

I portions of northern Idaho, eastern Washington, and Oregon. The largest community served
2 by Avista is Spokane, Washington, which is the location of its corporate headquarters. The
3 Company requests that all correspondence related to this Application be directed to:
4 Anni Glogovac Shawn Bonfield
5 Counsel for Regulatory Affairs Sr. Manager, Regulatory Policy & Strategy
6 Avista Corporation Avista Corporation
7 P.O. Box 3727 P.O. Box 3727
8 1411 E. Mission Avenue, MSC 27 1411 E. Mission Avenue, MSC 27
9 Spokane, Washington 99220-3727 Spokane, Washington 99220-3727
10 Telephone: [phone] Telephone: [phone]
11 E-mail: anni.glo og vackavistacorp.com E-mail: shawn.bonfieldkavistacorp.com
12
13 Avista Dockets (Electronic Only) -AvistaDockets(kavistacorp.com
14 Avista has included the following attachment in support of this filing, which is also
15 referenced throughout the Application below:
16 a) Exhibit No. 1 —Avista 2025 Idaho Annual Conservation Report
17 II. BACKGROUND
18 Avista has continuously offered energy efficiency services since 1978. Through these
19 offerings, the Company seeks to provide customers with programs and information that may
20 help them manage their energy use and to utilize cost-effective energy efficiency resources to
21 meet the energy and demand needs of the Company's electrical and natural gas systems. These
22 efforts are funded through Avista's Electric and Natural Gas DSM Riders (Schedule 91 and
23 Schedule 191, respectively).
24 The Company's Energy Efficiency Program(Program)includes options for residential,
25 commercial and industrial, and low-income customer segments. The Program includes
26 prescriptive, midstream, direct-install, site-specific, market transformation, and customer
27 education offerings. Each program within the Company's electric energy efficiency portfolio
28 (Portfolio)is designed and administered with consideration of cost-effectiveness and is subject
29 to independent evaluation, measurement, and verification (EM&V). The results of the
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I Company's and third-parry evaluator's 2025 assessments are contained in Avista's 2025
2 Annual Conservation Report (ACR). The 2025 ACR includes the following appendices and
3 supplements:
4 1) Appendix A—2025 Electric Impact Evaluation Report
5 2) Appendix B —2025 Natural Gas Impact Evaluation Report
6 3) Appendix C—2025 Cost-Effectiveness Tables
7 4) Appendix D—2025 Expenditures by Program
8 5) Appendix E—2025 Energy Efficiency Activity by Program
9 6) Appendix F—NEEA 2025 Annual Savings Report—Electric
10 7) Appendix G—NEEA 2025 Annual Savings Report—Natural Gas
11 8) Appendix H—NEEA 2025 Annual Savings Report Addendum
12 9) Appendix I—List of 2025 EEAG Meetings and Topics
13
14 III. ELECTRIC PROGRAM EXPENDITURES
15 The Company requests that the Commission determine that the expenditures incurred
16 during the 2025 Program year, totaling $20,688,852 for the electric Program, were prudent and
17 in the public interest. Of this amount, $15,777,768 was paid as customer incentives, $3,769,799
18 supported non-incentive and labor activities, and $1,141,285 supported market transformation,
19 conservation potential assessment (CPA), and EM&V activities. Actual electric expenditures
20 were approximately 195 percent of the planned electric budget of$10,594,013, consistent with
21 verified electric savings reaching double the annual target.
22 As noted within the ACR, the variance between planned and actual expenditures was
23 driven primarily by the level and mix of customer participation and the resulting cost of
24 delivering verified savings. Electric incentives increased from a planned level of$6,152,749
25 to $15,777,768. Higher incentive expenditures were primarily attributable to participation and
26 savings substantially exceeding planned levels in the Small Business Direct Install Lighting
27 and Commercial/Industrial Site-Specific programs, which were the largest contributors to
28 verified electric savings for the year. Eligible incentives were paid as customer projects were
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I completed in accordance with program requirements. Broader market conditions, including
2 elevated equipment, labor, and project costs, contractor availability constraints, tariff-related
3 uncertainty, and higher borrowing costs, also affected the cost, timing, and mix of completed
4 projects.
5 The Company reports the Schedule 91 balance on a quarterly basis to Commission Staff
6 and its Energy Efficiency Advisory Group(EEAG or Advisory Group). The electric tariff rider
7 began 2025 with an underfunded balance of$8,792,454. During 2025,the Company collected
8 $4,917,816 in electric energy efficiency rider revenue and incurred $20,688,852 in electric
9 Program expenditures, resulting in an underfunded year-end balance of$24,563,489.
10 The increased underfunded balance was primarily influenced by higher-than-expected
11 participation in the Small Business Direct Install Lighting program. Prescriptive Lighting also
12 experienced participation above forecasted levels, while Commercial/Industrial Site-Specific
13 projects contributed to higher incentive costs through large, savings-intensive projects. These
14 expenditures supported completed customer projects and verified energy savings that
15 substantially exceeded the Portfolio's annual target.
16 Table No. 1 —Schedule 91 Tariff Rider Activity for 2025
EV 17 TariffRider
i i I
Expenditures
18 January $417.667 $1,308,135
February $412,285 $2,396,922
Marra $363,516 $1,136,665
19 Aril $331,792 $2,478,438
Ma $294,010 $2,608,944
20 June $458,536 5605,736
J $335,759 $2,042.747
21 August $350,769 $1,269,811
September $346,092 $2,040,798
22 October $385,261 $1,180,157
November $532.274 $1,924,689
23 December $699,854 $1,695,910
Total $4 17 16 $20 688 2
24
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I IV. 2025 PROGRAM PERFORMANCE
2 The Company's energy efficiency targets are established annually through its electric
3 Integrated Resource Plan (IRP) and annual business planning processes. In 2025, the higher
4 expenditures encountered corresponded with substantial customer benefits. Local electric
5 programs delivered 35,456,276 kWh in independently verified savings against a planned target
6 of 17,696,834 kWh, or 200 percent of target. The increased spending therefore reflects strong
7 customer participation and delivery of verified cost-effective savings rather than an increase
8 in expenditures without corresponding Portfolio benefits. In addition, Commercial/Industrial
9 programs produced 32,678,682 kWh, Residential programs produced 2,635,482 kWh, and the
10 Low-Income Program produced 142,112 kWh. NEEA programs added 6,833 MWh, bringing
11 total 2025 electric savings, including regional market transformation, to 42,289 MWh. Table
12 No. 2 summarizes local verified savings by sector.
13 Table No. 2—2025 Electric Savings by Program Sector
14 Program Sector Planned Savings Verified Savings Percent of
Commercial/Industrial 12,890,865 32,678,682 254%
15 Residential 4,684,420 2,635,482 56%
Low-Income 121,549 142,112 117•%
16 Total Local Proum 17,696,834 35,456,276 200%
17 Avista evaluates the effectiveness of its electric Portfolio using the Utility Cost Test
18 (UCT), Total Resource Cost (TRC), Participant Cost Test (PCT), and Ratepayer Impact
19 Measure (RIM). The UCT assesses cost-effectiveness from the utility perspective, while the
20 TRC considers total resource costs and benefits regardless of who pays. For 2025, the electric
21 Portfolio achieved a UCT ratio of 1.40, a TRC ratio of 1.12, a PCT ratio of 2.09, and a RIM
22 ratio of 1.24 based on verified savings. While the Company quantifies all of these cost tests for
23 Portfolio evaluation, the primary measurement of cost-effectiveness for its Idaho DSM
24 Program is the UCT.
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I The electric Portfolio's UCT result was primarily supported by strong verified savings
2 from high-volume programs, particularly lighting and midstream offerings, where realization
3 rates were close to or slightly above 100 percent. Although some smaller programs produced
4 lower realization rates,' their effect was outweighed by the larger savings contributions from
5 cost-effective measures across the Portfolio.
6 Table No. 3 —2025 Electric Cost-Effectiveness
7Costs
Ratio
UtMy Cost Test C $26,734,655 $19,039,212 1.40
8 Total Resource Cost C $26,734,655 $23,820,458 1.12
Participant Cost Test $42,092,287 $20,138,877 2.09
9 Ratepayer La act Measure $26 734 655 $21 535 882 1.24
10 V. PROGRAM EVALUATION
11 In addition to the cost-effectiveness analyses conducted by the Company for the
12 Program, Avista also contracts with independent third-party consultants to provide Program
13 EM&V activities each year. These EM&V activities are used to validate and report verified
14 energy savings related to the Company's energy efficiency measures and Program offerings,
15 as well as provide viable recommendations to improve Program performance, enact changes
16 to Program components, and decide whether and when to phase out measures.
17 For the 2025 Program year, ADM, a Qualus Company, was retained by Avista to
18 perform the impact evaluation for Avista's electric Program, including residential, commercial
19 and industrial, and low-income components.2 The impact evaluation validates gross electric
20 and demand savings attributable to the Portfolio and identifies opportunities to improve
21 savings calculations, Program tracking, documentation, and evaluation methods.
1 Please see the 2025 Electric Impact Evaluation Report,Appendix A of the ACR,for the full list of realization
rates for each program.
2 Avista's EM&V contractors assess its Program on an annual basis,with the exception of low-income,which
undergoes EM&V every two years.
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I The 2025 electric impact evaluation concluded that the Portfolio achieved a 100 percent
2 realization rate and 35,456,276 kWh in annual verified savings.Program-level results included
3 realization rates of 102 percent for Small Business Direct Install Lighting, 102 percent for
4 Prescriptive Lighting, 100 percent for Residential Midstream, and 101 percent for the Home
5 Insulation Program. These results demonstrate that expected and independently verified
6 savings were closely aligned for the Portfolio's principal savings-producing programs.
7 Evaluators also identified opportunities to improve alignment with applicable Regional
8 Technical Forum (RTF) inputs and to strengthen measure-level documentation and tracking,
9 particularly for appliance and low-income measures. Avista will consider and implement
10 applicable recommendations through its ongoing program planning, documentation, and
11 quality-control processes.
12 VI. ADDITIONAL PROGRAM ACTIVITIES
13 CommerciaUIndustrial Sector
14 Avista's Commercial/Industrial electric Portfolio achieved 32,678,682 kWh in verified
15 savings,or 254 percent of its 2025 planned savings. The Small Business Direct Install Lighting
16 program completed 1,924 projects and delivered 18,962,969 kWh,representing more than half
17 of local electric savings, with a 102 percent realization rate. The Site-Specific program
18 completed 15 projects and delivered approximately 9.5 million kWh through large, savings-
19 intensive custom projects. Prescriptive Lighting delivered 3,900,750 kWh with a 102 percent
20 realization rate.
21 During 2025, Avista actively managed the Small Business Direct Install Lighting
22 program to address higher-than-expected demand, manage spending, improve cost-
23 effectiveness, and align participation with program intent. The Company refined customer
24 eligibility, excluded certain customer and project types, established a program-wide cost-per-
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I kWh threshold, tightened product eligibility in response to updated efficiency standards, and
2 coordinated with trade allies to balance installation capacity and address equipment
3 availability. The Company continued to provide commercial and industrial customers multiple
4 participation pathways, including Midstream, Prescriptive, Direct Install Lighting, Site-
5 Specific, Building Operator Certification, and Business Partner Program offerings. The
6 Business Partner Program supported rural small businesses through no-cost high-level energy
7 assessments, contractor connections through the Trade Ally Bid program, and assistance
8 navigating available efficiency incentives. Evaluation findings showed that the largest
9 commercial and industrial programs generally produced verified savings closely aligned with
10 expected values, supporting the Portfolio's overall cost-effectiveness.
11 The Site-Specific pathway supported unique or complex projects requiring custom
12 savings calculations or technical assistance from Avista's energy engineering team. The
13 program's custom approach allowed evaluators to apply project-appropriate verification
14 methods and capture substantial savings opportunities not addressed by standard prescriptive
15 offerings.
16 Residential Sector
17 In 2025, nearly $2.1 million in rebates and direct benefits were provided to Idaho
18 residential customers. Residential electric programs achieved 2,635,482 kWh in verified
19 savings, or approximately 56 percent of the sector's planned savings. The Residential
20 Midstream program was the primary savings driver,producing 2,234,477 kWh and more than
21 84 percent of verified residential electric savings, with a 100 percent realization rate.
22 Additional verified savings were provided by Residential Shell, Home Energy Audit, Fuel
23 Conversion,ENERGY STAR/NEEM Manufactured Homes,Appliances, and Home Insulation
24 offerings.
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I In August 2025,Avista transitioned residential insulation measures from a prescriptive
2 pathway to a direct-install model to simplify participation, improve customer experience, and
3 strengthen contractor oversight and documentation. The change followed quality-assurance
4 work concerning contractor practices and installation quality. Under the new model,
5 participating contractors assess the home, confirm eligibility, install qualifying measures, and
6 handle required documentation,with rebates applied upfront to reduce customer costs.
7 The Low-Income Program delivered 142,112 kWh in verified electric savings, or 117
8 percent of its planned savings, through Avista's partnership with the Community Action
9 Partnership (CAP) agency serving its Idaho service territory. Avista provided $875,000 in
10 weatherization funding and an additional $75,000 for conservation education and customer
11 outreach during 2025. The program supported comprehensive weatherization, energy
12 efficiency, health and safety, and customer education activities for income-qualified
13 households.
14 VIL CONCLUSION AND REQUEST FOR RELIEF
15 As described above and in the 2025 ACR, Avista respectfully requests that the
16 Commission issue an Order designating Avista's 2025 total electric Energy Efficiency
17 Program expenditures of $20,688,852 as prudently incurred and in the public interest. The
18 expenditures supported 35,456,276 kWh in independently verified local savings, equal to 200
19 percent of the annual target; the electric Portfolio achieved a 100 percent realization rate and a
20 UCT benefit-cost ratio of 1.40; and most expenditures were associated with customer
21 incentives and the delivery of completed energy efficiency projects. The higher-than-planned
22 expenditures were therefore accompanied by substantially higher-than-planned verified
23 savings and continued Portfolio cost-effectiveness. Avista actively managed program
24 eligibility, delivery, documentation, and cost controls during 2025 and incorporated evaluator
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I and stakeholder feedback through its ongoing program planning and quality-control processes.
2 The Company also requests that this Application be processed under the Commission's
3 Modified Procedure Rules through the use of written comments.
4 Dated this 3 1'day of August 2026.
5 AVISTA CORPORATION
6
7 By WYV"'O__
8 Patrick Ehrbar
9 Director of Regulatory Affairs
10 Avista Corporation
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