20210512Avista to Staff Supplemental 3.pdf

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATION
RECEIWI)
2021May 12, PM 3:31
IDAEO PABLIC
UTILITIES COMMISSION
ruRISDICTION: IDAHO DATE PREPARED: 05/1212021
CASE NO: AW-E-21-01 / AW-G-21-01 WITNESS: Liz Andrews
REQUESTER: IPUC RESPONDER: Jeanne PluthTYPE: Production Request DEPARTMENT: Regulatory Affairs
REQUEST NO.: Staft-0Ol-Supplement 3 TELEPHONE: [phone]
REQUEST:
Please provide copies of the monthly frial balances from January 2019 through the most current
month available. Please supplement your response when additional months become available
throughout 2021.
RESPONSE:
Please see StaflPR_OOl-Attachment A for the trial balance for each month between January 2019
and January 2021.
SUPPLEMENTAL RESPONSE 1:
Please see Staff PR_00l-Supplement l-Attachment B for the trial balance for each month
between January 2019 and February 2021.
SUPPLEMENTAL RESPONSE 2:
Please see Staff PR_00l-Supplement 2-Attachment C for the hial balance for each month
between January 2019 and March 2021.
SUPPLEMENTAL RESPONSE 3:
Please see Staff PR_00l-Supplement 3-Attachment D for the trial balance for each month
between January 2019 and Apil2021.
JURISDICTION:
CASE NO:
REQUESTER:
TYPE:
REQUEST NO.:
AVISTA CORPORATION
RESPONSE TO REQUEST FOR TNFORMATION
IDAHO DATE PREPARED: 0511212021
AVU-E-21-01 / AVU-G-21-01 WITNESS: Elizabeth AndrewsIPUC RESPONDER: T. Benjamin / L. Andrews
Production Request DEPARTMENT: Regulatory Affairs
Staft-027 Supplanental TELEPHONE: [phone]
REQUEST:
Please summarize all benefit and retirement plans provided to any classification of Company
employees. Please also include any changes that have occurred to the benefits/accruals during the
past five years.
SUPPLEMENTAL RESPONSE 05/1212021
Included as Staf[-PR-027 Supplemental Affachment A is an updated Benefit Adjustment 3.03
including actual employee medical and post-retirement benefits as of December 2020. This
adjustment also reflects the updated O&M percentage of 59.08% as for 2020. Revising this
adjustrnent to reflect actual 2020 expenses above 2019 test period results in an increase in benefit
expenses of $543,000 Idaho electric and $140,000 Idaho natural gas above 2019 test year levels.
The net effect of updating this adjustment to reflect actual 2020 versus as filed increases electric
and natural gas benefit expenses by $667,000 and $172,000, respectively. The impact on revenue
requirement is an increase of $668,000 for electric and $174,000 for natural gas. 2021 actuarial
reports have not been received by the Company, however, expectations are 2021 levels will be
similar to 2020 actual levels.
RESPONSE:
All regular employees, including Executive Officers, are eligible for the Company's Qualified
Defined Benefit plan (hires after 01.01.14 - see below), the Company's 401(k) plan, health and
dental coverage, Company-paid term life insurance, disability insurance, paid time off and paid
holidays. This benefit package offers several choices as to the type of medical plan, dental plan,
life insurance, etc. to determine the best fit for the employee's circumstances. These plans are
designed to be competitive with the overall market practices and are in place to attract and retain
the talent needed in the business. As with all portions of the plan, the Company works with a
third-party administrator to determine the annual rates for the Company and for each individual
onployee based on their elections.r
Medical - Avista sponsors a self-funded medical benefit plan that provides various levels of
coverage for medical, dental and vision. Avista encourages employees to take responsibility for
their health care decisions and make lifestyle changes to avoid health care issues. The Company
also encourages participants to adopt and maintain healthy lifestyles, and use health care wisely.
Proactive progfttms are set up to help individuals change their behaviors and live a healthier life.
The Company addresses this by using a health continuum; low risk (Wellness), moderate risk
(Wellness, Lifestyle Health Coaching) and high risk (Disease Management, Case Management).
I The Company also offers Optional and Dependent Life insurance, Voluntary Accidental Death and Dismemberment
Insurance, Group Legal Services, and miscellaneous other benefits. Expenses related to these benefits are borne by
the employee and are not included in the Company's case. For this reason, and the immaterial nature of the cost, we
have not described these benefits in this response.
As noted above, Avista provides various wellness progr.rms in an effort to proactively manage
medical expense claims. In addition, the Company has implernented several measures to keep
medical costs down. To keep office visit costs down, we offer access to phone or web-based24l7
telemedicine services and an on-site clinic. We have limited our exposure to large claims through
an insurance policy with annual stop-loss limits of $275,000 per person. When employees do
require medical care for catastrophic conditions, we have a case management program managed
by a third-party administrator to help manage these costs. To keep prescription drug costs down,
the Company has contracted with specialty pharmacies who help participants determine the most
economic treatment options.
In addition, effective January 1,2014 the Company made the following changes to the medical
plan offered to onployees:
a For non-bargaining ernployees hired or rehired on or after January 1,2014, and Local
Union 659 employees hired or rehired on or after April 1,2014, upon retirement the
Company no longer provides a contribution towards his or her medical premiums. The
Company will provide access to the retiree medical plan, but the retiree will pay the full
cost of premiums upon retirernent.
Manage Utilization of Specialty Drugs - The Company reviews measures to lower the
cost of prescription drugs including requiring prior authoization, and implementing
step therapy.
Beginning January 1,2020, the method for calculating health insurance premiums for
the following employee groups changed: non-bargaining retirees, Local Union 659,
hired or rehired after April 1,2014 under age 65, and active non-bargaining employees
hired or rehired after April 1,2014 under age 65. Revisions will result in separate health
insurance premium calculations for retirees and active employees beginning January 1,
2020.
Finally, as of 2017, Avista offers a self-insured High Deductible Health Plan ("HDHP") in
addition to the current self-insured plan. The HDHP requires plan participants to pay all costs of
medical care up to defined deductible limits. This plan enforces the message to participants to
manage their own health with an array of tools to assist them in becoming better consumers. Over
time we expect this plan to result in lower overall medical costs to the Company. The level of cost
savings is dependent upon, among other things, the number of employees that choose this plan,
and the level of utilizationofmedical care for those ernployees (i.e., the overall medical expense to
the Company under the High Deductible plan versus the old plan for those particular employees
and their families). The level of cost savings from the HDHP is expected to be minimal initially,
and will be unknown for the longer-term until we have actual experience under the plan.
Retirement Plans - Retirement programs are crucial to attracting and retaining a skilled workforce
within the utility industry. The Company provides a defined benefit pension plan and a defined
contribution plan (401k) to ernployees. For all employees hired or rehired on or after January l,
20142, the Company's defined benefit is closed to all non-bargaining employees. All actively
ernployed non-bargaining employees that were hired prior to January 1,2014, and were covered
under the defined benefit pension plan at that time, will continue accruing benefits as originally
specified in the plan. A defined contribution aOlft) plan replaced the defined benefit pension plan
a
2 Changes were applicable to Local Union 659 (Southeast Oregon) effective April l, 2014.
for all non-bargaining employees hired or rehired on or after January 1,2014. Under the defined
contribution plan, the Company will provide a non-elective contribution as a percentage of each
anployee's pay based on his or her age. This defined contribution is in addition to the existing
401(k) contribution, where Avista matches a portion of the pay deferred by each participant. In
addition to the above changes, the Company also revised our lump sum calculation for
non-bargaining retirees under the defined benefit pension plan to provide non-bargaining
participants who retire on or after January 1,2014 with a lump sum amount equivalent to the
present value of the annuity based upon applicable discount rates.
Miscellaneous Other Benefits
The Company also offers these miscellaneous other Miscellaneous Benefits. Overall, costs
represented by these benefits represent less than 2o/o of overall benefit costs:
o Short and Long Term Disabilityo Employee Assistance Plano Company Provided Term Life Insurancer Tuition Assistance program
In addition, executives are offered the following benefits:
l. Supplemental Executive Officer Retirement Plan (SERP)
In addition to the Company's retirement plan for all employees, the Company provides
additional pension benefits through the SERP to executive officers of the Company who
have attained the age of 55 and a minimum of 15 years of credited service with the
Company. The costs associated with SERP are excluded from retail rates.
2. Deferred Compensation
The Executive Offi cer Deferred Compensation plan provides the opportunity to defer up to
75oh ofbase salary and up to 100% of cash bonuses for payment at a future date. This plan
is competitive in the market, and provides eligible employees and executive officers with a
tax-efficient savings method. The costs associated with Deferred Compensation are
excluded from retail rates.
Avista regularly participates in a comprehensive benefit study, BENEVAL, conducted by Towers
Watson which compares the total value of our benefit package to the total benefit value of our
peers. This study is comparable to the peer group benchmarking conducted annually for direct
compensation. See Avista's response to Staff PR_032 for additional information.
The Company actively manages costs associated with the overall compensation package which
includes base salary and pay-at-risk incentive compensation in addition to the benefit package.
Please see the Company's response to Sta[PR_024 and Sta[PR_025 for additional information
on incentive and base pay.