20200724Avista to Staff 1.pdf

Page 1 of 5
AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION

JURISDICTION: IDAHO DATE PREPARED: 07/27/2020
CASE NO: AVU-E-20-05 WITNESS: N/A
REQUESTER: IPUC RESPONDER: David James
TYPE: Production Request DEPARTMENT: Electric Operations
REQUEST NO.: Staff-PR-001 TELEPHONE: [phone]

REQUEST:
Please provide all workpapers used to calculate Attachment C – Wildfire Resiliency Cost Forecast
in Excel format with all formulas intact. Also provide, if any, a list of other applications used to
calculate the expected costs. (Please provide these as soon as possible before the other responses.)

RESPONSE:
Please see Staff_PR_001 – Attachment A - WFRES_Cost_est_72320_PR01_AVA for the excel
workbook file, program risk and cost calculator.

Avista’s 2020 Wildfire Resiliency Plan recommends 28 actions to reduce the risk of wildfire
caused by transmission & distribution operations or to that infrastructure by wildfires. Those
recommendations are summarized in four categories:

1. Grid Hardening and Dry Land Mode operations
2. Enhanced Vegetation Management
3. Situational Awareness
4. Operations and Emergency Response

This request is specific to the cost evaluation of recommended actions. In January 2020, a report
was published internally entitled “Wildfire Resiliency Cost Forecast” (provided as Attachment C
to the Deferral Application).

That document details a 10-year strategy (2020-2029) to mitigate the risk of wildfires by targeting
the high fire threat districts and by decoupling reliability-based vegetation tactics from risk-based
measures. That document was the precursor to the general release of the 2020 Wildfire Resiliency
Plan.

To fully understand the cost evaluation process and therefore the calculation of the final estimated
cost assumptions, a description of the overall process for determining which actions were
ultimately adopted in the Plan follows.

In May of 2019, a series of wildfire workshops were held to generate, discuss, and evaluate
mitigation strategies associated with transmission and distribution operations, maintenance, and
engineering related activities. Those workshops generated over 160 ideas to reduce system risk. A
screening process was used to evaluate the relative benefits and costs associated with each activity
and approximately 100 ideas were eliminated. Of the remaining 60, a risk matrix was developed to
quantify the 10-year financial consequence associated with each activity. The risk matrix included
an evaluation of:

RECEIVED
2020 July 24, AM 10:32
IDAHO PUBLIC
UTILITIES COMMISSION
Page 2 of 5
• Worker and Public Safety – injuries to Avista workers and the public associated with
wildfire events.
• Customer interruption – the cost to electric customers based on the Department of Energy’s
Interruption Cost Estimator tool. This practice aligns with Asset Management risk
evaluation methods.
• Direct Financial Cost – the cost to replace damaged infrastructure including fire
suppression costs and damage claims from 3rd parties.

Risk is quantified by assessing the probability of occurrence times the cost of an event’s
consequence. During the wildfire workshops, both risk costs and the costs to implement were
addressed. This request focuses solely on the costs to implement strategies.
Though the plan indicates 28 recommended actions, most of the investment reflects efforts to
effectively ‘harden’ the grid to reduce equipment failures and thus, reduce spark ignition events,
and to protect critical assets from the impact of wildfires. Though the plan recommends a 10-year
investment of $330 million, nearly 75% of that investment reflects upgrades to T&D infrastructure
($245.6 million).

1. Grid Hardening and Dry Land Mode (DLM).

Transmission – Avista adopted a ‘steel only’ strategy in 2006, in large part, due to the
replacement costs associated with wildfire events but also reflecting the reliability advantages of
steel transmission lines. As noted, Avista wildfire strategy is targeted in the high fire threat
districts as depicted in the Wildland Urban Interface (WUI) map (provided as Attachment D to the
Company’s Deferral Application).

This map indicates that approximately 20% of Avista’s Transmission lines are in WUI Tiers 2 and
3 and are subject to accelerated wood to steel conversion. Based on a cost per structure estimate of
$25,000 per 230 kV structure and $15,000 for 115 kV structure, a feasibility cost estimate of $44
million was rendered to convert existing wood structures to steel. Additional transmission related
costs include annual aerial inspections and the costs to effect maintenance repairs and costs
associated with protective fire wraps on wood poles located in grassland areas. Again, these costs
are based on parametric estimates of the line miles included in the patrol and FR wrap program.
These costs include $3 million dollars to effect capital replacements and $4.45 of maintenance
related expense over the 10-year program life.

Distribution – while the focus on transmission hardening is to protect critical infrastructure from
the impact of wildfires, the strategy for distribution hardening is centered on reducing the number
of spark ignition events. Reliability data from the 5-year period between 2013 and 2018 indicates
that, on average, Avista’s distribution lines experience 92 pole fires per year. Pole fires are
common throughout the industry and are generally the result of insulator ‘leakage current’ being
channeled through small contact surfaces. It is acknowledged that wood crossarm to wood pole
interfaces are subject to ignition and, as a result, Avista adopted a fiberglass crossarm standard in
the mid 2000’s. By accelerating the conversion of wood to fiberglass crossarms in the high fire
threat districts (WUI Tiers 2&3), pole fires will be significantly reduced in these areas. In addition
to crossarm replacement, distribution grid hardening includes other potential spark-ignition
sources such as:

Small copper conductor (targeting the replacement of 75-100-year-old #6 CU and smaller
wire).
Page 3 of 5
Wildlife covers (guarding against animal contacts at fuse lines, transformers, and other live
hardware points).
Open wire secondary districts (the removal of bare wire 120-240 volt wires and replaced with
insulated secondary conductors).
High value steel poles (converting wood to steel at ‘high value sites’ such as highway and river
crossings and heavily guyed structures).
Conversion to underground (select overhead lines will be converted to underground as
evaluated on a case by case basis).

The costs to harden distribution lines was based on a per mile allocation of $55,000-$60,000 and
reflects a generalized system cost based on the number of wood crossarms and the amount of small
copper wire in the high fire threat districts. This single recommendation accounts for $193.2
million or approximately 60% of the estimated Plan costs.

Dry Land Operating Mode – since the early 2000’s, Avista has used a ‘non-reclosing’ strategy
for distribution lines located in high fire threat zones. The Plan includes recommendations to
review this program and to enhance it’s effectiveness through additional deployment of midline
circuit reclosers, a fire threat dashboard system, and a transition to a risk based, dynamic operation
of dry land mode so that as fire threat conditions warrant, the sensitivity of system protection is
aligned to mitigate the perceived risk. The most significant cost is the addition of midline circuit
reclosers in high fire threat districts. $5.4 million dollars is allocated for this activity and reflects
the costs to install 100 additional circuit reclosers.

Total costs in the Grid Hardening & DLM category include a capital investment of $245.6 million
and associated operating and maintenance expenses of $5.014 million (76% of Plan total).

2. Enhanced Vegetation Management

Tree contacts with distribution lines generate approximately 400 customer outage events per year.
Avista tracks outage events and causes via a spatial GIS program, or, Outage Management System
(OMS), which includes tracking of both tree fall-in and tree grow-in events. This is separate and
distinct from weather related tree contacts such as winter storms and strong wind events. Those
too often result in tree contacts with overhead powerlines. Traditionally, tree contacts were
viewed from the lens of customer reliability with utilities balancing the expense of tree trimming
and removals with customer service reliability. As wildfires have become more numerous and
more impactful, utilities throughout the western United States are developing risk-based
approaches to vegetation management. Avista’s 2020 Wildfire Resiliency Plan indicates a
bifurcation of the traditional, cycle-based approach to support electric reliability objectives and a
risk-based approach to reduce the probability of tree fall-in events and tree grow-ins associated
with high fire threat areas. Fire-informed, or enhanced vegetation strategies account for $51.175
million of the Plan’s $59.586 million estimated operating and maintenance expenses (86%).
These include:

• Annual digital data capture of vegetation encroachment and fall-in risk potential (LIDAR
surveys and high-resolution aerial photography).
• Annual treatment of fall-in risk trees (removal of dead, dying, and diseased trees).
• Customer outreach to remove incompatible trees (targeted ‘right tree right place’
program).

This risk-based approach is a marked departure from cycle-based tree trimming where facilities
are treated every 5 years. Arborists indicate that forest health is declining as a result of a warming
Page 4 of 5
climate, insect infestation, and a lack of fire on the landscape. They also assert that trees can die in
as little as 6-months and become a fall-in risk to nearby powerlines.

The largest cost driver in this category is the removal of risk trees at an estimated cost of $25.5
million over 10 years. This estimate was derived from the wildfire risk workshops and is informed
by subject matter experts and the anticipated rate of forest decline. Costs to perform digital data
capture flights and data processing account for $14.575 million, and will inform vegetation
planners on the rate of encroachment, the number of fall-in risk trees, and the effectiveness of past
year vegetation treatments.

Again, these estimates reflect mileage-based costs to effect treatments and are based on historical
norms and system averages. The risk cost associated with vegetation contacts is the most
significant component of the overall wildfire mitigation plan and is estimated in excess of $6.2
billion dollars over a 10-year period (2020-2029). Mitigating the risk of tree contacts reflects a
tremendous opportunity to reduce the risk of utility involved wildfires.

Cost estimates to identify and remove dead and dying trees adjacent to powerlines are based on
historical averages. However, forest health is in general decline and we anticipate responding to
higher rates of risk tree removals. Some elements of the vegetation plan are new to Avista such as
acquiring LIDAR and high-resolution digital imagery, participating with fire protection agencies
in fuel reduction activities, and actively encouraging customers in high risk areas to remove tall
growing trees underneath powerlines.

Total costs in the Enhanced Vegetation Management category include a capital investment of
$5.100 million and associated operating and maintenance expenses of $51.175 million (17% of
Plan total).

3. Situational Awareness

A major tenet of Avista’s Wildfire Plan is to enhance system protection and to align circuit
protection with forecasted fire conditions. This effort requires an expansion of equipment
automation and communications systems such as substation ‘supervisory control and data
acquisition’ (SCADA) and distribution management systems (DMS). These systems enable direct
control and monitoring of circuits and equipment in the high fire threat districts. Adding these
systems and equipment is expected to cost $18 million dollars over 10 years and require nearly $1
million dollars of maintenance and operating support. The bulk of that expense is associated with
adding SCADA systems to so-called ‘dark’ substations where no communications systems exist.
The SCADA system effort is expected to cost $17 million dollars and is based on historical costs to
add SCADA equipment and software to existing stations. Again, the number of
non-communication stations located in high fire threat districts is known, but the engineering
design effort is in a planning phase. Cost estimates will be refined.

Total costs in the Situational Awareness category include a capital investment of $17.965 million
and associated operating and maintenance expenses of $1.019 million (6% of Plan total).

4. Operations and Emergency Response

Wildfires will continue to occur throughout the western United States. Though many utilities are
making investments to reduce the number of spark-ignition events, powerline caused outages only
account for 4-6% of wildfires. Most wildfires are human caused and related to transportation,
open burning, arson, and other activities such as camping. Avista is committed to reducing the
Page 5 of 5
number of powerline involved wildfires, but recognizes the need to train our first responders to act
safely in fire situations and to coordinate their work with fire-fighting personnel. Investments in
people and systems account for $2.7 million dollars over the 10-year life of the program (< 1%) but
are important to ensure proper and safe response from our front-line workers. In fact, safety
training for Avista first responders is the single largest line item in the cost forecast at $1.3 million
dollars and reflects the program costs to conduct annual fire-safety and electrical hazard training
for Avista and fire fighters, respectively. Safety is the most important component of the Plan.
Estimates to conduct training and coordinated response are based on historical labor rates and
incident frequencies.

Total costs in the Operations and Emergency Response category include a capital investment of
$17.965 million and associated operating and maintenance expenses of $1.019 million (1% of Plan
total).

The 7/23/20 Wildfire Resiliency Cost Forecast of $268,965,000 (capital) and $59,586,000
(operating and maintenance) will change as the program matures and the estimates to perform field
activities are better understood. This variability is one of the reasons that Avista is petitioning for
deferred rate treatment. Fully understanding the scope and extent of fire risk mitigation requires
time and experience.