20170915Avista to Staff 99-111.pdf

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 08/31/2017 CASE NO: AVU-E-17-01/AVU-G-17-01 WITNESS: Clint Kalich
REQUESTER: IPUC Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources REQUEST NO.: Staff - 099 TELEPHONE: [phone]
REQUEST: Please provide the actual average yearly and monthly electricity market sale prices and the actual average yearly and monthly dispatch prices in 2016 for each Company generation resource. Please provide information in Excel format with all formula intact.
RESPONSE:
Please see Avista's response 099C, which contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and exempt from public view and is separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code. The requested data is included in Staff_PR_099C Confidential Attachment A.

This spreadsheet is being provided in electronic format only due to the voluminous nature of the information provided.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 08/31/2017 CASE NO: AVU-E-17-01/AVU-G-17-01 WITNESS: Clint Kalich
REQUESTER: IPUC Staff RESPONDER: James Gall TYPE: Production Request DEPARTMENT: Energy Resources REQUEST NO.: Staff - 100 TELEPHONE: [phone]
REQUEST: Please provide the average yearly and monthly electricity market sale prices and the average yearly and monthly dispatch prices in pro forma 2018 for each Company generation resource. Please provide information in Excel format with all formula intact.
RESPONSE:
Please see Avista's response 100C, which contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and exempt from public view and is separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code. The requested data is included in Staff_PR_100C Confidential Attachment A.

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 09/11/2017 CASE NO: AVU-E-17-01/AVU-G-17-01 WITNESS: Heather Rosentrater
REQUESTER: IPUC RESPONDER: Brian Vandenburg TYPE: Production Request DEPARTMENT: GPSS REQUEST NO.: Staff-102 TELEPHONE: [phone]
REQUEST: For the Little Falls Plant Upgrade, please provide the most recent project schedule, scope, and budget. Please also document changes from original documents.
RESPONSE: The only significant change from the original documents was the delay of the headgate work at
Little Falls. This work was slated for construction in 2018 and 2019. The GPSS department did a
prioritization effort and this project was moved to 2020. This resulted in a re-allocation of funds. The other change to note was the final unit overhaul (unit 4) will be completed in 2019 and funds were requested for 2019.

No additional scope was added to the program. The total budget increased slightly, going from $55.7M to $56.2M. This increase is due to actual unit upgrade costs being slightly higher than estimated.
Staff_PR_102 Attachment A and B are the most recent funds request document along with an update project schedule.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 09/11/2017 CASE NO: AVU-E-17-01/AVU-G-17-01 WITNESS: Heather Rosentrater
REQUESTER: IPUC RESPONDER: Nathan Fletcher TYPE: Production Request DEPARTMENT: GPSS REQUEST NO.: Staff-103 TELEPHONE: [phone]
REQUEST: For the Nine Mile Rehabilitation, please provide the complete evaluation of the project alternative’s review, the analysis process, and risks associated with the project analysis that was mentioned in Kinney Exhibit 4, Schedule 3 on page 47.
RESPONSE: Please see Staff_PR_103 Attachment A - SRA Summary Report (11-9-12).
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AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 09/11/2017 CASE NO: AVU-E-17-01/AVU-G-17-01 WITNESS: Heather Rosentrater
REQUESTER: IPUC RESPONDER: Brian Vandenburg TYPE: Production Request DEPARTMENT: GPSS REQUEST NO.: Staff-101 TELEPHONE: [phone]
REQUEST: Please provide the most recent asset management plans and studies for the following business cases: (1) Little Falls Plant Upgrade; and (2) Nine Mile Rehabilitation.
RESPONSE: (1) Little Falls Upgrade
The existing Little Falls equipment ranges in age from 60 to more than 100 years old. Little Falls experienced an increase in forced outages over the past six years, increasing from about 20 hours in 2004 to several hundred hours in the past several years, due to equipment failures on a number of different pieces of equipment.
The major drivers for the Little Falls Plant Upgrade are availability and reliability. See the
graph below that illustrates the trend line for availability at Little Falls.

Once the business case is complete, a study of forced outages at the plant over a 5 year period could be taken and measured against the pre-construction outage numbers to determine if plant availability has increased and the business case objective met.
Below is a breakdown of the capital construction cost associated with each alternative and
any ongoing maintenance costs associated with each alternative.
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Summary of alternatives:
Status Quo: Forced outages and emergency repairs would continue to increase, reducing the
reliability of the plant. Each time a generator goes down for an emergency repair, Avista is forced to replace this energy from the open market which leads to higher energy costs. It is expected that the O&M costs would continue to climb as more failures occurred. This may also require personnel to be placed back in the plant to man the plant 24/7 in order to
respond to failures. Again, increasing expenses for the project with no benefit in performance. Alternative 1: Replace Switchgear and Exciter: This would replace the two items that are
currently responsible for the majority of the forced outages, and then continue to use the
remaining equipment. This alternative is a temporary fix. One of the generators has a splice and is expected to fail in the next few years. If this generator fails before a new generator is ordered, this generator will be out of service for 2 years. The control system is a vintage system and is on the verge
of a total failure and spare parts are not available (a few minor system failures occurred in the
past 2 years). If a total system failure is encountered, it is expected the plant to be down for a year as the control system is designed, procured and installed. Alternative 2: Replace all generating units with larger, vertical units capable of additional
output. Avista’s Power Supply group evaluated the present value of larger, vertical units at Little Falls. The increase in present value from larger units was $20M over a 30 year analysis. The capital construction cost increase from in-kind replacement to vertical units was $27M. This present value calculation of benefit did not include risk. Installing new vertical units
would require modification of the powerhouse foundation and presents serious construction risk. Due to the high construction costs, high risk, and low payoff NPV, this alternative was abandoned. Alternative 3 Selected: Replace nearly all of the older and less reliable equipment with new
equipment. This includes replacing two of the turbines, all four generators, all generator breakers, three of the four governors, all of the AVR's, removing all four generator exciters, replacing the unit controls, replacing the unit protection system, and replacing and modernizing the station service. All major equipment would be procured through a
competitive bid process to help keep construction costs low. Equipment would also be
purchased for all four units at once to help keep costs down.
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Additional Justification for Proposed Alternative: Because of the age and condition of all of the equipment at the plant, all of the equipment has been qualified as obsolete in accordance with the obsolescence criteria tool. The Asset Management tool has been applied to Little Falls and also supports this project. The Asset
Management studies that have been done to date are still subject to further refinements, but the general conclusions support this project. There are many items in this 100 year old facility which do not meet modern design standards, codes, and expectations. This project will bring Little Falls to a place where it can be relied on for another 50 to 100 years. Finally, this project will need to be worked in coordination with our Indian Relations group as the
Little Falls project is part of a settlement agreement with the Spokane Tribe. See also Avista’s response to Staff_PR_102 for the most recent project schedule, scope and expected cost.
(2) Nine Mile Rehabilitation Following the failure of Unit 1, Unit 2, and the subsequent turbine failure in Unit 4, an assessment of the Spokane River Plants was performed to establish the prudency of work
within the Spokane River, prior to commencing work at Nine Mile. Many alternatives were
generated, including:
• Rehabilitation or new construction of powerhouse at Post Falls • Construction of new powerhouse at Upper Fall • Construction of new powerhouse or spillway modification at Monroe Street • Rehabilitation or new construction of powerhouse at Nine Mile • Rehabilitation or new construction of powerhouse at Long Lake

A Likert Scale was developed by the team to evaluate each alterative against the following criteria.
• Alternative Development
• Financial
• Energy
• Regulatory Influences • Operation and Maintenance • Transmission System Impact • Stakeholders • Risk Identification
• Customer and Community Impact
Following the group evaluation of all proposed alternatives, the Project Team determined the only plant that warranted further evaluation at that time was Nine Mile due to the failed equipment, and ongoing operational and maintenance issues at the 100 year old facility.
Focusing on the Nine Mile plant allowed for further evaluation of and reduced the number of
fully evaluated alternatives to two:

Option Cost Start Complete
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Based on the criteria used by the Project Team to evaluate the Nine Mile Alternatives, Replacement of Units 1 and 2, rehabilitation of Units 3 and 4, and modify the Sediment
Bypass System received the best score primarily due to project economics and likelihood of regulatory agency approval. Do nothing was eliminated due to the risk to our licenses.
The recommended alternative consists of a series of steps or phases, beginning in November 2012 and continuing through 2019. The key elements are:
Unit 1 and 2 Upgrade to Seagull Turbines:
• Units, including Turbines, Bulkheads, Generators, Switchgear
• Control and Protection Package including Excitation and Governors • Powerhouse including Station Service, Ventilation, Intakes • Substation and Communications work • Site Work including cottages and warehouse • Rehabilitate Intake Gates and Trash Rack

Unit 3 and 4 Overhaul:
• Overhaul including Runners, Thrust Bearings, Switchgear • Control and Protection Package including Excitation and Governors • Rehabilitate Intake Gates and Trash Rack
Plant Rehab
• Sediment Bypass and Debris Handling System
• Rehabilitation of the existing 100 year old Powerhouse Building
At completion, the powerhouse production capacity will be increased, units will experience less outages and reduced damaged from the sediment, and the failing control components will be replaced. Spending is expected to occur between 2012 and 2019.
See also Avista’s response to Staff_PR_103 for the Spokane River 2012 Summary Report,
and Staff_PR_104 for the recent project schedule, scope and expected cost.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 09/11/2017 CASE NO: AVU-E-17-01/AVU-G-17-01 WITNESS: Heather Rosentrater
REQUESTER: IPUC RESPONDER: Nathan Fletcher TYPE: Production Request DEPARTMENT: GPSS REQUEST NO.: Staff-104 TELEPHONE: [phone]
REQUEST: For the Nine Mile Rehabilitation, please provide the most recent project schedule, scope, and budget. Please also document changes from original documents.
RESPONSE:
During 2017, the overall Program budget and schedule was modified to reflect reprioritization of
projects within the department. The overhaul for Unit 3 and 4 powerhouse restoration work has
been delayed until 2019 and 2020, with some preliminary work expected in 2018. The key scope elements remain unchanged:
Unit 1 and 2 Upgrade to Seagull Turbines (Completed): • Units, including Turbines, Bulkheads, Generators, Switchgear • Control and Protection Package including Excitation and Governors
• Powerhouse including Station Service, Ventilation, Intakes
• Substation and Communications work
• Site Work including cottages and warehouse • Rehabilitate Intake Gates and Trash Rack
Unit 3 and 4 Overhaul (2019, 2020): • Overhaul including Runners, Thrust Bearings, Switchgear • Control and Protection Package including Excitation and Governors
• Rehabilitate Intake Gates and Trash Rack
Plant Rehab • Sediment Bypass and Debris Handling System (In Progress): • Rehabilitation of the existing 100 year old Powerhouse Building (2019, 2020):

Budget Cost
Year Current Approval Requested Change Proposed Total

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 08/28/2017 CASE NO: AVU-E-17-01/AVU-G-17-01 WITNESS: Scott Kinney
REQUESTER: IPUC RESPONDER: Thomas C Dempsey TYPE: Production Request DEPARTMENT: GPSS REQUEST NO.: Staff-105 TELEPHONE: [phone]
REQUEST: Please provide the three most recent annual business plans for the Colstrip 3 and 4 Capital Projects business case mentioned in Kinney Exhibit 4, Schedule 3 on page 91.
RESPONSE: Please see the Company’s response to Sierra Club_PR_1-3.

AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 09/15/2017 CASE NO: AVU-E-17-01 / AVU-G-17-01 WITNESS: Heather Rosentrater
REQUESTER: IPUC RESPONDER: Ken Sweigart TYPE: Production Request DEPARTMENT: Transmission Design REQUEST NO.: Staff-106 TELEPHONE: [phone]
REQUEST: For the South Region Voltage Control Project, please provide the most recent project schedule, scope, and budget. Please also document changes from original documents.
RESPONSE: Please see the Business Case included in Rosentrater Exhibit 8, Schedule 5, page 121 for details on
schedule, scope and budget. The South Region Voltage Control Project includes work on the N.
Lewiston-230Kv Reactor. The following has changed since the original business case was completed:

• The majority of the project spend relates to the North Lewiston Reactors.
• The Physical Transmittal to integrate the Reactors was primarily completed in June, 2017.
• The Electrical Construction portion of the project was scheduled to start November of
2017, and complete in early 2018. However, a higher priority project has been accelerated, therefore resource constraints will be putting the N.Lewiston – 230Kv Reactor project on hold, and the expected completion date is now spring of 2019. This project will be placed on hold to stop AFUDC charges.

Please see Staff_PR_106 Attachment A for the current time-line.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 09/13/2017 CASE NO: AVU-E-17-01/AVU-G-17-01 WITNESS: Heather Rosentrater
REQUESTER: IPUC RESPONDER: Lamont Miles/Karen Schuh TYPE: Production Request DEPARTMENT: Rates and Tariffs REQUEST NO.: Staff-107 TELEPHONE: [phone]
REQUEST: Please explain the difference in the requested spend amount of $11,850,000 for the Transmission Construction – Compliance business case (Exhibit 8, Schedule 5, pg. 136) compared to $15,390,000 in the 2017 Capital Additions Detail Table (Exhibit 11, Schedule 1, pg. 1). In addition, please provide
the most recent schedule, scope, and budget for all the projects included in this business case. Please also document changes from original documents.
RESPONSE:
The $11,850,000 for the Transmission Construction – Compliance business case represents the originally requested capital spend. The $15,390,000 is the anticipated transfers to plant for 2017. Transfers to plant represent projects in this business case that is used and useful at the end of 2017 vs.
the capital spend is the amount of cash that is anticipated to be spent in this calendar year.
Additionally, the $11,850,000 amount was based on a split from a previous business case titled Transmission Reconductors and Rebuilds. It was discovered that the Devil’s Gap-Lind 115kV Rebuild ($2.9M) and Addy-Devil’s Gap (Ford-DG) 115kV Rebuild ($25,000) projects should also
have been included in this split. Therefore, the originally requested capital spend for the Transmission Construction – Compliance business case is actually $14,775,000. The most recent schedule, scope, and budget for projects included in this business case are provided in Staff_PR_107Attachment A.

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AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 09/11/2017 CASE NO: AVU-E-17-01/AVU-G-17-01 WITNESS: Heather Rosnetrater
REQUESTER: IPUC RESPONDER: Jacob Reidt TYPE: Production Request DEPARTMENT: GPSS REQUEST NO.: Staff-108 TELEPHONE: [phone]
REQUEST: Please provide the most recent monthly project status update including the status of the scope, schedule, and budget for the Kettle Falls Water Treatment System business case. Please also provide all future monthly project status updates as they become available through the end of this
case. RESPONSE:
A comprehensive bid review meeting was held on site at Kettle Falls on 8/18/17. The team narrowed down bidders to one bidder. However the team has concluded, more information may be needed for a final analysis. Bid reviewers are compiling their notes for Morrison & Merle to draft a proposal review draft comment document. The review team has committed to reviewing the one
bidder proposal in greater depth, compiling comments and questions for internal review by
September 8th, at which time a request for a best and final offer (BAFO) from the bidder will occur. The team will reconvene and review the BAFO by Sep. 21st. The most recent monthly status update is through May 31, 2017 as follows:

Kettle Falls Water System RO & EDI – 21205152 Project Manager: Tara Moses
Approved 2017 Budget: $2,000,000 Approved Lifetime Budget: $4,750,000
Actual 2017 to Date (through May): $40,677 $300,999
2017 Estimate at Complete: $1,500,000 $4,510,322
Dec 2018 $4,510,322
Table 1. At-a-glance overall status report
determined at this time. Currently conducting
Released $500k from 2017 in May, project not progressing as quickly as anticipated, will determined at this time. Currently conducting

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Table 2. Milestone status and planned, projected and actual completion dates
Milestone Status/Performance
Preliminary Survey & Investigation complete on test RO system 9/30/2016 10/25/2016 Pulled Membrane, conducted analysis, preliminary analysis found unexpected results, further testing was required
10/21/2016 11/3/2016 Work Authorization issued 11.3.2016
Complete Preliminary Design - Phase 1 (needed for MCC project) 11/30/2016 1/16/2017 Work Authorization deliverables met
RFP process for Design/Build – Phase 2 (contract executed) 7/31/2017 9/01/2017 RFP issued 4.14.2017
Design/Build – Phase 2 TBD TBD
Construction complete – Go Live TBD TBD
Accomplishments:
• Addressed round 1 of RFP Bidder questions – submitted to bidders 5.19
• Opened bidding process up for 2nd site visit and 2nd round of bidder questions
o Extended proposal due date and bid review timeline
 This decision was based on bidder requests Upcoming Activities
• Second site visit at KF – Scheduled 6.26
• Bidder round 2 of questions due – 7.5 o Avista responses due – 7.10
• Bidder proposals due – 7.28
• Bidder selection announced – 8.25
• Contract Executed – 9.1
Risks and Mitigation Strategies:
• RO system may not produce the level of O&M savings expected o Will conduct further analysis on projected O&M costs to evaluate expected savings
• RO system may not eliminate all environmental concerns o Further DMS model analysis needed to validate environmental compliance requirements
Results will be a component of determining a “go/no go” decision on moving forward with the RO/EDI system. Exploring the option of an alternative “Water Treatment System” during the RFP process.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 08/31/2017 CASE NO: AVU-E-17-01 / AVU-G-17-01 WITNESS: Karen Schuh
REQUESTER: IPUC RESPONDER: Karen Schuh TYPE: Production Request DEPARTMENT: Rates and Tariffs REQUEST NO.: Staff-109 TELEPHONE: [phone]
REQUEST: In reference to Attachment A included in response to the Production Request No. 43, please provide the budgeted January through May total system transfers to plant for 2017 on a monthly basis, by expenditure request. Please also provide future monthly transfers to plant as they become
available through the end of this case. RESPONSE:
Staff_ PR_109 Attachment A includes the budgeted January through May total system transfers to plant on a monthly basis. The Company updates forecasted monthly transfers to plant on a quarterly basis. The next update will be available in early October. The most recent update of actual to forecasted results is included in the Company’s response to Staff_PR_043 Attachment A.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 09/07/2017 CASE NO.: AVU-E-17-01 & AVU-G-17-01 WITNESS: Elizabeth Andrews
REQUESTER: IPUC RESPONDER: Annette Brandon TYPE: Production Request DEPARTMENT: State & Federal Regulation REQUEST NO.: Staff – 110 TELEPHONE: [phone]
REQUEST: Please provide copies of all executive Outlook calendars and Daily Planners for 2016 showing day-to-day details supporting the allocation of executive time for regulated operations. Please also provide any other documentation supporting these allocations.
RESPONSE: Please see Avista's response 110C, which contains TRADE SECRET, PROPRIETARY or CONFIDENTIAL information and exempt from public view and is separately filed under IDAPA 31.01.01, Rule 067 and 233, and Section 9-340D, Idaho Code.

Every two weeks employees, including executives, enter their actual time related to the previous
two weeks activities. The timekeeping system contains data related to various projects (which include service and jurisdiction) and associated tasks (by FERC account) and description. Special attention is paid to the utility/non-utility allocation to ensure appropriate shareholder/customer and jurisdiction split. In the event the executive chooses to use a set time allocation by project, this allocation is verified no less than quarterly to assure the appropriate split between projects. The
timekeeping system includes the hourly rate for each employee (annual salary divided by 2080 hours) multiplied by the designated number of hours to develop total labor expense. Please see Staff_DR_110C Confidential Attachment A for each executive officers’ daily timekeeping records for January 1, 2016 – December 31, 2016. Due to the size of this report, it is being provided in electronic format only.
Timekeeping information is summarized on a monthly basis and recorded to the Company’s general ledger by FERC account. Please see Staff_DR_110C Confidential Attachment B for the general ledger information for each executive officer for January 1, 2016 – December 31, 2016.

The combination of timekeeping records and general ledger information provides the support for the amount included in utility operations and captured in our general rate case versus the amount charged to non-utility operations with expenses borne by shareholders. Outlook calendars and daily planners may or may not reflect the actual time spent on utility vs. non-utility operations for
a variety of reasons. Some of these reasons include impromptu meetings or telephone calls or work outside of “normal” business hours displayed on Outlook.
AVISTA CORPORATION RESPONSE TO REQUEST FOR INFORMATION JURISDICTION: IDAHO DATE PREPARED: 09/07/2017 CASE NO.: AVU-E-17-01/AVU-G-17-01 WITNESS: Elizabeth Andrews
REQUESTER: IPUC RESPONDER: Heidi Evans TYPE: Production Request DEPARTMENT: Environmental REQUEST NO.: Staff - 111 TELEPHONE: [phone]
REQUEST: For all of the environmental costs listed in the Company’s response to Staff Audit Request No. 6, please provide a brief narrative of the incident causing the cleanup expense and the jurisdictional allocation of the expenses.
RESPONSE: See Staff_PR_111 – Attachment A.