20150818AVU to Staff 88.docx

AVISTA CORPORATION
RESPONSE TO REQUEST FOR INFORMATIONJURISDICTION:IDAHODATE PREPARED:08/12/2015CASE NO.:AVU-E-15-05/AVU-G-15-01WITNESS:Jim KensokREQUESTER:IPUCRESPONDER:David PlutTYPE:Production RequestDEPARTMENT:IS/ITREQUEST NO.:Staff- 088TELEPHONE:[phone]REQUEST:
Page 9 of Mr. Kensok’s testimony states: “There will be a net increase of $663,188 over current operating expenses associated with the deployment of the Company’s new Customer Service and Work and Asset Management Systems implemented as part of Project Compass. The total for new operating expenses required to support these new Systems is $3,020,858; however, there is a corresponding offset in the amount of $2,357,670, which reflects the annual expense reduction in contract services and mainframe computer costs associated with the retirement of the Company’s Legacy Customer Service and Work Management Systems.” Please provide information on additional and future offsets, if any, including when they will occur and the amount of the offset.RESPONSE:Please see Avista’s response to Staff_PR_087 for identified offsets included in the Company’s direct filing.Avista’s replacement of its legacy customer information and work and asset management system were driven by the need to reduce the business riskinherent with the many obsolete technologies supporting the system. As such, the replacement project was not approved on the basis of any savings or efficienciesexpected to occur in the near term. Avista determined there would be offsets (reductions associated with retiring the legacy system) against the expected operating cost of the new systems, but it also understood there would be an incremental increase in overall operating expenses.With respect to the amount of the current offsets, the Company has not identified any additional or future costs that can be eliminated as a result of implementing the new systems.