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HomeMy WebLinkAbout20260831Reconsideration Reply Comments.pdf ' 11. RECEIVED August 31, 2026 Avista Corp. IDAHO PUBLIC 1411 East Mission P.O. Box 3727 UTILITIES COMMISSION Spokane, Washington 99220-0500 Telephone 509-489-0500 Toll Free 800-727-9170 August 31, 2026 Monica Barrios-Sanchez Commission Secretary Idaho Public Utilities Commission 11331 W. Chinden Blvd Building 8, Suite 201-A Boise, ID 83714 RE: Case No. AVU-E-25-15 —Avista Corporaiton's 2026 Wildfire Mitigation Plan Dear Commission Secretary: Enclosed for electronic filing with the Commission is Avista's Reconsideration Reply Comments in Case No. AVU-E-25-15. Please direct any questions regarding these comments to Liz Andrews at 509-495-8601 or liz.andrews@avistaco!p.com. Sincerely, l sl 'F*k'ai '4W*ew Elizabeth Andrews Sr. Manager of Revenue Requirements liz.andrews@avistacoEp.com 509-495-8601 ANNI GLOGOVAC, ISB #13010 COUNSEL FOR REGULATORY AFFAIRS AVISTA CORPORATION 1411 E. MISSION AVENUE P.O. BOX 3727 SPOKANE, WASHINGTON 99220 PHONE: (509) 495-7341 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IN THE MATTER OF AVISTA ) CASE NO. AVU-E-25-15 CORPORATION'S APPLICATION FOR ) APPROVAL OF THE 2026 WILDFIRE ) AVISTA CORPORATION MITIGATION PLAN ) REPLY COMMENTS TO RECONSIDERATION ORDER NO. 37106 COMES NOW, Avista Corporation ("Avista" or "Company"), in accordance with the Idaho Public Utilities Commission("Commission" or"IPUC")Rule of Procedure' ("RP") 52 and the Commission's order granting reconsideration of Order No. 36927, dated July 28, 2026 ("Reconsideration Order No. 37106"), respectively, submits the following Reply Comments regarding Avista's Application for Approval of the 2026 Wildfire Mitigation Plan ("WMP", "Wildfire Plan" or"Plan"). I. INTRODUCTION On December 9, 2026, Avista Corporation ("Avista" or the "Company") filed for Commission approval its 2026 WMP (the "Application").2 The 2026 WMP is Avista's fifth 'Idaho Administrative Procedures Act(IDAPA)31.01.01. 2 See IPUC Case No.AVU-E-25-15. AVISTA REPLY COMMENTS Page 1 edition of the Plan, though, its Application was the first filed pursuant to the Wildfire Standard of Care Act ("WSCA"), Idaho Code § 61-1801, et seq. PotlatchDeltic Forest Holdings, LLC ("PotlatchDeltic") filed, and the Commission granted on December 31, 2025, a Petition to Intervene in Avista's Application 3. Bennett Lumber Products, Inc. ("Bennett Lumber"), Manulife Investment Management, Molpus Woodlands Group, and Stimson Lumber Company (together with PotlatchDeltic, the "Petitioners") did not intervene in Avista's Application, nor did they provide comments under the Notice of Modified Procedure Order No. 36927 issued by the Commission on February 4, 2026. On June 9,2026,the Commission issued Final Order No. 37064,approving the Company's 2026 WMP, and on June 30, 2026, PotlatchDeltic and Bennett Lumber, et. al. (together the "Petitioners") filed petitions for reconsideration. Reconsideration was granted by the Commission on July 28, 2026, in Reconsideration Order No. 37106. Avista appreciates the opportunity to provide these comments in response to Reconsideration Order No. 37106 and the response comments filed by the Petitioners. As noted in the Commission's Reconsideration Order No. 37106,the Idaho Department of Lands("IDL")submitted public comments on Avista's Application,"one filed timely and the other filed after the deadline. ,4 Given that IDL's May 20, 2026, comments were filed after the deadline, Avista was not afforded the opportunity to address the Idaho State Forester's recommendations through IDL's additional comments on the record. The basis of Bennett Lumber's response comments that, "the Company's 2026 WMP failed to meaningfully consider the recommendations of the Idaho State Forester" through the IDL is not entirely accurate and fails to account for the Commission's responsibility to make determinations based on evidence in the record before it. 3 IPUC Intervention Order No.36888. 4 IPUC Reconsideration Order No. 37106,at p. 1. AVISTA REPLY COMMENTS Page 2 Presumptively, the purpose of the supplemental comment process established in Reconsideration Order No. 37106 is to promote a complete and balanced record upon which the Commission can conduct its independent review.' Although one of IDL's comments was filed after the original deadline, Avista uses this opportunity to address the recommendations raised in that filing, so that the Commission may evaluate them thoroughly. Such an approach is consistent with the Commission's obligation to reach its decision based on a full and fair consideration of all relevant arguments rather than on unrebutted assertions. Avista encourages the Commission to consider both the recommendations themselves and Avista's response herein to evaluate whether Petitioners have met their burden to demonstrate that Final Order No. 37064 is unreasonable, unlawful, erroneous, or not in conformity with law. We believe they have not. II. BACKGROUND As noted in its Application,Avista's WMP is the product of the Company's ongoing efforts to reduce wildfire risk for the safety of Avista's customers and communities, and the continued delivery of reliable electricity to approximately 150,000 retail electric customers in Idaho. In line with WSCA requirements, Avista employs a risk-informed approach to select and prioritize various wildfire mitigations carried out to reduce the risk of wildfire while balancing wildfire risk and cost of mitigation. As more thoroughly discussed in the Plan, and summarized within Avista's Application, Avista's WMP identifies the methods and means for mitigating wildfire risk that reflect a reasonable balancing of mitigation costs with the resulting reduction of wildfire risk,while complying with the requirements of Idaho Code § 61-1801 et. seq., and the additional directives 5 See also, Bennett Lumber's response comments at p. 3, "Furthermore, IDAPA 31.01.01.013 provides that Commission rules are to be liberally construed to secure a just determination of issues....". AVISTA REPLY COMMENTS Page 3 from the Commission as set forth in Order No. 36774, issued in Case No. GNR-E-25-02 on September 30, 2025. III. LEGAL STANDARDS A. PotlatchDeltic's Procedural Argument PotlatchDeltic asserts that its Petition for Reconsideration("Petition") is "uncontested and unchallenged"because neither Avista nor Commission Staff filed an answer within seven(7)days of filing its Petition. That argument both misinterprets the Commission's Rules of Procedure and misstates the Commission's order granting reconsideration.6 Rule 331 governs petitions for reconsideration, cross-petitions, and answers thereto. Nothing in Rule 331 provides that a party waives its right to participate in reconsideration proceedings by not filing an answer within the time contemplated by the rule, nor does the rule provide that a petition for reconsideration is deemed admitted if no answer is filed. Further, pursuant to Rule 57(b), "The complainant or petitioner must offer evidence of its allegations regardless of whether the complaint or petition is answered or denied." Seemingly, PotlatchDeltic's position is that this is merely a procedural dispute, which is inconsistent with the Commission's role on reconsideration and is contrary to the Commission's chosen reconsideration procedure in Reconsideration Order No. 37106. The Commission retains discretion to determine how reconsideration will proceed. Rule 332 expressly provides that, after reconsideration is granted, the Commission may consider the matter through "briefs, memoranda, written interrogatories or written statements, or otherwise." Importantly,the Commission exercised that authority in its Reconsideration Order No. 37106. The Commission not only granted reconsideration for the limited purpose of supplementing the record, 6 See,PotlachDeltic's Response to Reconsideration Order No. 37106,at p.4. AVISTA REPLY COMMENTS Page 4 but as PotlatchDeltic also identified in its Response Comments, the Commission expressly found it reasonable to grant Avista"an opportunity to file responsive comments." In its Petition, PotlatchDeltic declines to provide additional information or arguments in support of its position, instead relying on the existing record.' Consistent with the Commission's authority cited above,while the Commission has the discretion to reconsider matters based on the record before it,"[g]rounds for,or issues,on reconsideration not supported by specific explanation may be dismissed."RP 332. Ultimately,PotlatchDeltic's contention that its reconsideration arguments are"uncontested and unchallenged" on its face provides no legal basis for denying Avista's WMP, and should be disregarded. Rule 332 expressly authorizes the Commission, after granting reconsideration, to determine the procedure to be followed, including consideration of the matter through briefs, memoranda,written comments,written statements, or other submissions.Avista now properly and timely submits these responsive comments pursuant to the procedure established by the Commission in Reconsideration Order No. 37106. B. Bennett Lumber's Statutory Liability Argument Bennett Lumber, et. al., requests that the Commission reverse its determination in Final Order No. 37064, and require the Company to "fully incorporate[] the Idaho State Forester's recommendations as a condition to its [WMP] approval."9 Without such recommendations incorporated into the WMP, Bennett Lumber asserts that Avista enjoys "significant statutory protection against liability".10 Avista addressed a similar argument on page 21 of its Reply Comments to PotlatchDeltic filed on April 30, 2026: 7 Id.at pp. 3-4(quoting Reconsideration Order No. 37106). $Id.at p.4. 9 Bennett Lumber,et. al.,Response Comments at 7. 10 Id. at 3. AVISTA REPLY COMMENTS Page 5 ...[T]he WSCA provides a rebuttable presumption only when the utility "reasonably implemented" the Commission-approved plan with respect to the cause of the wildfire. That is not blanket immunity, but rather, a conditional, rebuttable presumption. The WSCA expressly anticipates that a utility may be found liable and provides the framework applicable in that circumstance." (emphasis added, footnotes omitted) Further, Bennett Lumber appears to take the position that any recommendation advanced by IDL must be incorporated into Avista's WMP to satisfy the WSCA requirements. That is not the standard established by Idaho Code § 61-1803, which requires a utility to develop and implement a wildfire mitigation plan that balances wildfire risk reduction with customer costs and system reliability. The statute does not require adoption of every recommendation offered by interested stakeholders, nor does it establish that a plan is legally deficient whenever a recommendation is not incorporated. Rather, the Commission must evaluate whether the Plan, taken as a whole, reasonably satisfies the statutory objectives. As determined by the Commission in Final Order No. 37064, Avista's 2026 WMP does so. The mere existence of alternative recommendations, including recommendations not adopted by Avista, does not demonstrate that the Plan is unreasonable, unlawful, or otherwise inconsistent with Idaho law. The Commission's task is not to determine whether additional wildfire mitigation measures could be adopted, but whether Avista's proposed Plan satisfies the requirements of Idaho Code § 61-1803. Wildfire mitigation planning inherently involves choices regarding the appropriate balance between incremental risk reduction and the costs borne by customers. A recommendation's absence from an approved WMP is not evidence that the plan is legally deficient or inadequate. To the contrary,the statute contemplates utility judgment and Commission oversight in determining which mitigation measures are reasonable and cost-effective under the circumstances. Accordingly, Avista believes its 2026 WMP has met its statutory obligations. AVISTA REPLY COMMENTS Page 6 Notwithstanding the foregoing, Avista does not contend that the Idaho State Forester's recommendations are unreasonable or inappropriate,nor does Avista contend that IDL's late-filed recommendations should be disregarded altogether. The Company reasons that fundamental procedural fairness requires that parties be afforded a meaningful opportunity to respond to arguments and recommendations before they form the basis for Commission action. By granting reconsideration and establishing a responsive comment schedule, the Commission has provided the process necessary to ensure that all relevant viewpoints are considered on an equal footing. Thus, Avista addresses IDL's recommendations herein, so that the Commission may evaluate those recommendations in light of the complete record. IV. AVISTA'S RESPONSES TO PETITIONERS AND IDL'S RECOMMENDATIONS On May 20, 2026, IDL provided supplemental comments related to "data inputs to be included in future evaluations of wildfire risk."11 On August 11, 2026, Bennett Lumber Products, Inc.12, Manulife Investment Management, Molpus Woodlands Group, and Stimson Lumber Company ("Bennett Lumber, et. al.") submitted response comments to supplement the record following the Commission's grant of reconsideration in Order No. 37106, including sworn declarations of Andrew Stockwell(Stimson Lumber Company), Patrick Morolla(Manulife Forest Management), and Halli Hemingway (Bennett Lumber Products, Inc.).13 Consolidated issues raised by these parties relate to risk modeling inputs, formal timber valuation procedures, cost- benefit analysis of mitigation measures, wildfire-specific worker qualifications and vegetation " See Idaho Department of Lands Supplemental Comments "2026.05.20 AVU-E-25-15 IDL Supplemental Comments-Avista Wildfire Mitigation Plan 2026"filed on May 20,2026. 12 See Bennett Lumber,et. al.,Response Comments at 1. 13 See"20260811 Declaration of A. Stockwell ISO Response","20260811 Declaration of P.Marolla ISO Response" and"20260811 Declaration of H.Hemingway ISO Response",filed on August 11,2026. AVISTA REPLY COMMENTS Page 7 inspection practices, activities intended to reduce damage from wildfire events, and county fire planning group input.14 Avista addresses these issues as follows: A. Risk Modeling The Bennett Lumber, et. al. response comments contend that Avista's Plan lacks detail regarding modeling inputs, such as fuel loads, vegetation density, and terrain, and that although Avista had previously addressed a future updated risk analysis approach that compliments that used by the State of Idaho, no further detail or clarification was provided as to the current model which the Company is currently using.15 Avista recognizes the importance of transparent wildfire risk assessment. As described in Avista's April 30, 2026 reply comments in Case No.AVU-E-25-15,the Company is implementing an updated geographic risk analysis that uses multiple data inputs, including information complementary to data used by the State of Idaho in its State Forest Action Plan risk analysis. Future Avista Wildfire Mitigation Plan filings will provide such additional detail on the model and its inputs. Avista's new ATS Wildfire Risk Analysis and Management (AWRAM) model has now been implemented and is currently live. The Company is in the process of evaluating this new model,understanding its overall functions,determining the required processes and procedures,and verifying outputs that will result in required actions. The new AWRAM model includes the following inputs in its analysis: 14 Ibid. 15 Bennett Lumber,et.al.,Response Comments at 4-5. AVISTA REPLY COMMENTS Page 8 �Category ModelInputs Weather Wind speed and direction, temperature, humidity, precipitation, weather forecasts, and real-time weather observations Fuels ANDFIRE fuel models, vegetation type and condition, and live and dead fuel moisture Topography Digital elevation models Barriers Roads,rivers, lakes, and other natural or constructed features that affect fire spread Ignition source Utility asset locations used as starting points for simulated ignitions Fire propagation ire spread across 20-meter hexagons using weather,fuels,topography,an barriers to estimate fire growth potential utility Asset locations, system topology, outages, asset condition and mitigations For its 2026 WMP, Avista used a static risk model in its legacy Fire Weather Dashboard. That model considered the following factors: • Fuel types, including shrubs, grasses, and trees • Topography • Community risk • Historical summer outage performance • Severe Fire Danger Index (SFDI) • Fire Preparedness Level • Percentage of overhead spans in treed areas The factors assessed through Avista's legacy risk model established baseline circuit wildfire risk. Avista then combined the baseline risk with forecast and real-time wind, temperature, and humidity data to calculate the dynamic Fire Risk Index used to assess operational decisions. During the review of the 2026 WMP, Avista discussed its modeling approach with both Commission Staff and an IDL representative.Avista also described the model inputs used to assess wildfire risk associated with overhead electrical equipment in response to Staff Production Requests and as provided to the parties in this case. As noted, future Avista Wildfire Mitigation Plan filings will provide additional detail on the AWRAM model, which includes factors above AVISTA REPLY COMMENTS Page 9 and beyond its legacy risk model. Regardless of the risk model used, Avista's current Plan and associated model inputs are compliant with the current legislative and regulatory requirements. B. Fair Market Value of Timber The response comments from Bennett Lumber, et. al. indicate that Avista's Plan lacks a formal, consistent procedure for compensating landowners for the removal of merchantable timber.16 As described in the Company's April 30, 2026 reply comments, Avista will continue to refine its standard operating procedures,consistent with recommendations from the IDL,regarding the treatment of marketable timber when trees or other vegetation must be removed from industrial lands. This includes coordination with state and federal land management agencies or large private industrial landowners, as applicable, in circumstances where fair market valuation, appraisal, and permitting requirements may apply." Furthermore, Avista has taken steps to address concerns regarding payment for merchantable timber and is continuing to formalize its procedures. Avista will continue to refine a more formal process to ensure landowners receive appropriate payment when wildfire mitigation activities require tree removal. C. Cost-Benefit Analysis and Mitigation Prioritization The response comments from Bennett Lumber, et. al. note concern that without a clear cost-benefit analysis for mitigation categories, there is a risk that Avista is failing to prioritize the most effective mitigation work in the highest-risk locations."As described in the Company's April 30, 2026 reply comments, the Company completed a robust and detailed cost-benefit analysis for 16 Bennett Lumber,et.al.,Response Comments at 5. 11 As previously stated,Avista does not intend to establish procedures requiring the application of fair market timber valuation when vegetation management activities are conducted within existing easements or other rights-of-way that the Company has previously acquired and which secure the Company's right to trim or remove vegetation;vegetation management within these areas is performed pursuant to the Company's established property rights or other prior agreements and is necessary to maintain system safety,reliability,and wildfire risk reduction objectives. 18 Bennett Lumber,et.al.,Response Comments at 6. AVISTA REPLY COMMENTS Page 10 undergrounding distribution facilities to better understand the feasibility,risk-reduction value,and customer cost implications of that mitigation option. Other wildfire mitigation measures,including vegetation management and grid hardening,will be evaluated using Avista's new risk model going forward, with investments focused on areas identified as having elevated wildfire ignition risk. This model will support risk-based budgeting and mitigation planning by identifying spending efficiency, comparing risk before and after treatment, and simulating potential fire spread under pre-treatment and post-treatment conditions. Avista expects to apply these capabilities across multiple mitigation options and provide additional details in future annual WMP updates. D. Worker Qualifications and Vegetation Management Bennett Lumber, et. al., argues that Avista's Plan is missing critical worker qualification requirements, and that vegetation inspections must be conducted by individuals with specific training in wildfire risk, ladder fuels, and site-specific terrain.19 As described in the Company's April 30, 2026 reply comments, Avista is not recommending any changes to the certifications required for its Vegetation Management staff or contractors at this time. Avista's vegetation management contractor qualifications conform to applicable industry standards, including American National Standards Institute(ANSI)A300,the National Electrical Safety Code(NESC), and North American Electric Reliability Corporation (NERC) vegetation management requirements. These standards provide comprehensive requirements related to vegetation clearance, pruning practices, and system safety, and appropriately address the Company's objective to reduce tree-to-wire conflicts and the potential for overhead electrical equipment to cause an ignition. 19 Ibid. AVISTA REPLY COMMENTS Page I I Avista supports hazardous fuels reduction and funds priority projects through its Vegetation Management program. Landscape-scale hazardous fuels treatments, however, are outside the primary scope of utility vegetation management. Therefore, requiring additional qualifications designed for landscape-scale fuels treatment would not materially improve Avista's execution of utility vegetation-management activities, as those activities have a different scope, purpose, and governing standards. Imposing unrelated qualification requirements could reduce contractor availability and increase costs without a corresponding reduction in utility-related wildfire risk. E. Local Coordination Bennett Lumber, et. al. argues that obtaining input from county fire planning groups is important because these groups often have practical, specific local knowledge regarding fire history, access routes, suppression constraints, seasonal fuel conditions, and community vulnerabilities.20 Avista agrees. As described in the Company's April 30, 2026 reply comments, Avista recognizes the importance of county-level wildfire preparedness planning and the value of coordination through established county fire planning groups. The Company currently engages in local wildfire planning efforts and has participated in recent Community Wildfire Protection Plan (CWPP) development activities in Latah County through attendance at planning meetings and coordination with local partners. Avista values local expertise and agrees that continued collaboration with county planning groups supports alignment among wildfire mitigation efforts, improves information sharing,and enhances the effective use of available resources.The Company intends to continue participating in these collaborative forums and to pursue additional 20 Bennett Lumber,et.al.(Stimson Lumber),Response Comments at 5. AVISTA REPLY COMMENTS Page 12 opportunities to support coordination with Ere agencies, local governments, landowners, and community stakeholders, where appropriate. The Company also works with Latah, Bonner, and Nez Perce Counties to support fuels-reduction treatments near overhead electrical facilities. Additionally, Avista has an agreement with IDL to coordinate on broader statewide fuels- reduction priorities and is currently supporting a hazardous fuels-reduction project in Shoshone County. These activities demonstrate that local and county-level input is already incorporated into Avista's wildfire mitigation efforts, even though the WMP does not prescribe a separate formal consultation process for every county in Idaho. F. External Wildfire Considerations and Coordination The Petitioners suggest that Avista's Wildfire Mitigation Plan does not clearly identify activities intended to reduce damage from external wildfire events. However, Avista's wildfire mitigation program addresses both utility-related ignition risk and the impacts of wildfires originating outside utility corridors, rights-of-way, or Company facilities. Through wildfire situational awareness, emergency response planning,vegetation management, grid hardening, and infrastructure resiliency investments, the Company works to reduce wildfire risk and improve system resilience regardless of ignition source. These measures include monitoring wildfire conditions throughout the fire season, coordinating with fire agencies and emergency management organizations, supporting fuels reduction activities near electrical facilities, and implementing infrastructure improvements intended to withstand wildfire exposure. As described throughout the Wildfire Mitigation Plan, Avista's resiliency investments include measures such as installation of fire-resistant steel poles, fire mesh, and other system hardening improvements designed to reduce infrastructure damage from external wildfire events and support more rapid restoration when fire impacts occur. AVISTA REPLY COMMENTS Page 13 Avista also collaborates with county fire planning groups (as noted above), the IDL, and other local stakeholders to improve coordination, information sharing, and overall wildfire preparedness. These partnerships help identify emerging wildfire threats and support coordinated response efforts when wildfires threaten utility facilities or surrounding communities. Accordingly, Avista does not agree that external wildfire threats are omitted from the Company's wildfire mitigation program simply because they are not identified under a separate standalone section of the Plan. Rather, as discussed extensively in Avista's comments in this case, external wildfire considerations are incorporated throughout the Company's wildfire preparedness, operational response, vegetation management, and resiliency strategies. V. CONCLUSION Avista remains committed to engaging with stakeholders, considering constructive feedback, and continually improving its wildfire mitigation efforts while maintaining safe, reliable, and affordable service.In approving Avista's 2026 Wildfire Mitigation Plan,the Commission carefully considered the record and exercised its discretion in determining that Avista's Plan meets the statutory requirements. Upon reconsideration, the Petitioners have failed to meet their burden of demonstrating that Final Order No. 37064 is unreasonable, unlawful, erroneous, or otherwise not in conformity with the law. Accordingly, the Commission should reject the Petitioners' contentions, and affirm Final Order No. 37064 in all respects. Respectfully submitted this 3Pt day of August, 2026. ( Wt �9�, ni Glogovac, ISB #13010 Counsel for Regulatory Affairs AVISTA REPLY COMMENTS Page 14 CERTIFICATE OF SERVICE I HEREBY CERTIFY that I have this 31st day of August, 2026, served the foregoing Reconsideration Reply Comments upon all parties to Case No. AVU-E-25-15, through electronic mail: Commission Staff: Potlatch: Jeff Loll Peter J. Richardson Deputy Attorney General Richardson Adams, PLLC Idaho Public Utilities Commission 515 N. 27th Street P.O. Box 83720 Boise, ID 83702 Boise, ID 83702-0074 peter(a),richardsonadams.com Jeff.lollkpuc.idaho.gov Michele Tyler, Esq. Monica Barrios-Sanchez Wade Semeliss Idaho Public Utilities Commission Brian Schlect, Esq. 11331 W. Chinden Blvd Anna Torma Building 8, Suite 201-A michele.tyler(a),potlatchdeltic.com Boise, ID 83714 wade.semeliss&potlatchdeltic.com secretary�a,puc.idaho.gov brian.schlect(&,potlatchdeltic.com anna.tonnagpotlatchdeltic.com Idaho Department of Lands: Bennett Lumber, et al.: J.J. Winters Tara Malek John A. Richards Smith+Malek, PLLC 300 N. 6th St., Ste. 103 601 E. Front Ave., Ste. 304 Boise, ID 83702 Coeur d' Alene, ID 83814 jwinterskidl.idaho.gov servicegmalekattome. s 'richards idl.idaho. ov Is/Athena Allen Athena Allen Regulatory Affairs Analyst