20190610Rosentrater Exhibit 8 Sechedule 3.pdf

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Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I of I 86
Exhibit No. 8, Schedule 3
Capital Investment Business Case Justification Nanatives Index
Business Case Name Page Number
Distribution
Distribdion Grid Modemization
Distribtrion M inor Rebuild
Distrbuion Wood Pole Management
Electric Relocation and Replacement Program
LED Change Out Program
Meter Minor Blanket
Primary Underground Residential Development Cable Replacement
SCADA - System Operatiors Office & Backrp Control Center
Segment Reconductor and Feeder Tie Program
Storms
Substation - Station Rebuilds
Transformer Change Ou Program Related Distribution Rebuilds
Transmission
N oxon Switchyard Rebuild
Protection System Upgrade
Raulesnake Flat Wind Farm Project
South Regon Vohage Control
Spokane Valley Transmission Reffi rcenrent
Storrns
Substation - New Distnbution Station Capacity Program
Substation - Station Rebuilds
Transmission Major Rebuild - Asset Condition
Transmission Minor Rebuild
Transmission NERC Low-Risk Priority Lines Mitigation
Tnbal Permits and Settlements
Transmission Corstruction - Compliance
Westside 23011 15kV Station Rebuild
J
11
t7
25
29
36
42
46
51
63
66
69
77
80
83
86
89
63
92
66
95
98
l0l
104
107
lll
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Exhibit No. 8, Schedule 3
Capital Investment Business Case Justilication Narratives Index
Business Case Name Page Number
General Plant
Facilities Structures & [mproverrrent, Office Furnitrne
Stores, Tools l-ab & Shop Equpment
Central Office Facilities Long TermRestructuring Plan Phase 2
New Airport Hanger
Noxon and Clark Fork Living Faculty Remodel
Apprentice Craft Training
Other Calital Proiects
Fleet Capital Replacenrent Progam
Strategic
tt4
t2t
t28
148
154
t62
165
179
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Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 2 of I 86
a
Di stri b uti o n G ri d M ode rn izati o n
Requested Spend Amount $17,500,000
Req uesting Organization/Department Asset Maintenance
Business Case Owner Laine Lambarth
Business Case Sponsor Bryan Cox
Sponsor OrganizationlDepartment Asset Maintenance
Category Program
Asset Condition
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1 GENERAL INFORMATION
1.1 Steering Committee or Advisory Group lnformation
. The program scope is defined by an analytical study done by the Program
Engineer for each feeder and by the Distribution Feeder Management Plan
which was created and is updated by consulting The Distribution
Engineering Standards Engineer and Asset Management Manager.
. Reliability, avoided costs, and capital offset of future O&M expense data is
collected and analyzed by Asset Management. This information is
normalized and entered into a selection toolwhich then ranks the feeders.
o The regional distribution engineers for the East, South, North, West and
Spokane regions are consulted regarding the feeder ranking and feeder
p rioritization with i n thei r respective reg ions,
o The program manager then balances the prioritized feeders between the
states, rural/urban split, and regions.
. The program manager then collaborates with Electric Operations and
Contractors to coordinate the work and track the budget, scope, and
schedule.
2 BUSINESS PROBLEM
The Distribution Grid Modernization Program provides value to customers and
shareholders through the following objectives of improving:
o Grid Reliability - Replacing aging and failed infrastructure that has a high
likelihood of creating customer outages and a need of an unplanned crew
call-out which costs more than planned work and would filter into higher
rates for customers.
o Without programs like Grid Modernization and Wood Pole
Management there would be an average 40 pole failure events per
year effecting an average of 80 customers for 4.8 hours per event.
Totaling a customer impact value of approximately $24,000 per
event totaling to $960,000 per year.
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 3 of 186
o
Page 1 of8
Driver
o Energy Efficiency - Replace equipment such as old conductor and
transformers that have high energy losses with new equipment that is more
energy efficient and improve the overall feeder energy performance. This
creates the need for less power generation or acquisition and equates to
lower rates for customers.
Operational Abilitv - Replace conductor and equipment that hinders outage
detection and installautomation devices that enable isolation of outages.
o This means shorter outrages for customers because the areas that
failed can be identified faster and possibly reroute power
automatically. Currently the Grid Modernization Program in the only
company initiative installing these devices.
o The installation of automated line devices on a feeder of 1600
customers reduces an average outage duration from 3 hours to 5
minutes per event for 1200 of those customers.
Safety - Focus on public and employee safety through smart design and
work practices.
o Replacing aging and failed infrastructure that puts employees and
customers at risk of property damage and injury.
o Bringing infrastructure up to current National Electric Safety Code.
o Eliminate PCB risk to the public by eliminating transformers
containing known PCB's.
o The Grid Modernization program lowers the risk of high severity
safety (S4) events, defined below, as follows:
. 54 events are categorized as having potential for multiple
serious injuries or loss of an individual life; major damage to
propefty or business, and a public health infrastructure impact
up to 72 hours.
. Base Case (do nothing) has the risk of 10 54 events every 50
years with a total cost of $52.3M.
. The Grid Modernization Program brings this risk down to 2
events in 50 years with a total cost of $10.4M.
Another Safety objective of The Distribution Grid Modernization Program is
to address Washington State's Department of Transportation (WSDOT)
Target Zero requirements, which states that utilities move all non-
breakaway structures, such as power poles and pad mount transformers,
out of highway clear zone as defined in the 1U2A05 AASHTO "A Guide for
Accommodating Utilities Within Highway Right-of-Way," which is attached
for reference. Washington State law requires that we complete this task by
year 2030. Currently this is the only program within Avista actively
addressing this mandate. Additional Control Zone justifications include the
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Distribution Grid Modernization
Page 2 of 8 Exhibit No. 8
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 4 of 186
D i stri b uti o n G ri d M od ern izati o n
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following Washington Administrative Codes (WAC) and Revised Codes of
Washington (RCW):
o WAC 468-34-350 - Control Zone Guidelines
o WAC 468-34-300 - Overhead Lines Location
o RCW 47.32.130 Dangerous Objects and Structures as Nuisances
o RCW 47.44.010 Wire and Pipeline and Tram and Railway
Franchises - Application - Rules on Hearing and Notice
o RCW 47.44.020 Grant of Franchise - Condition - Hearing
Selected Metrics include.
o Energy savings provided by completed work
o Number of circuit miles of work completed
o Number of sustained outages (anything longer than 5 minutes)
recorded in Avista's Outage Management Tool (OMT).
Based on Avista's 2015 lntegrated Resource Plan dated August 31st, 2015,
the realized and anticipated energy savings by identified feeders is shown
in Table 1.
Table I, Energlt Sovings hosed on Integrated Resource Plon
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Spokane, WA (gth &
Central)
Spokane, WA (Beacon)
Spokane, WA (Francis &
Cedar)
Spokane, WA (Beacon)
Coeur d'Alene, lD
othello, wA
Rathdrum, lD
Moscow, lD
Wilbur, WA
Spokane, WA (Waikiki)
Rathdrum,lD
Northport, WA (Spirit)
2009
zotz
2072
2013
2013
2014
2074
2015
2015
2016
20L9
2019
601
972
570
885
438
2L
o
473
1,403
t75
471-
127
6,076
Year
Complete
Annual Energy
Savings (MWh)Feeder Service Area
Page 3 of 8 Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 5 of I 86
Distri b uti on G rid Modernization
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ln order to address Avista's entire system and every customer in a 60 year
cycle, the program would need to address an average of 190 miles per year
of Avista's 11,300 total overhead and underground circuit miles. The miles
of work planned is ultimately driven by the approved budget and generally
can only be projected for 5 years. At the current funding level and average
cost per circuit mile, represented in Table 2 below, it will take us
approximately 90 years to address the entire system and every customer.
Table2, Grid Modernizatlon Clrcuit Mlles Addressed ond Associaled Cosl
Grid Modernization
160@0 140
120
100
140000
120000
1fo00t
8m00
60000
40000
20000
80o9a
Eo
a
=60E
oa
2
oL
o
40
20
0 2013
l35n0
54
2074
7!4232
89
2015
t2017!
100
2016
trt772
98
2077
1116E2
123
0
EcsS Per Mile
-
tircut MilesComptste
For tracking the impacts of the programs effect on sustained outages we monitor
the OMT sub-reasons identified as potentially avoidable and most directly
impacted by The Grid Modernization Program work. Through the end of 2015
there has been a reduction of 0.1 outages per mile of overhead work
completed. Table 3, below, illustrates these reduction of outages and therefore
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 6 of 186
Page 4 of 8
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Distribution G rid Modern izati on
o the reliability advantages and reasons for the program. The red line represents
the reduction of outages of these sub-reasons on the feeders that the Grid
Modernization program has completed to date. You will see the Grid
Modernization addressed feeder outages are trending down whereas the system
wide outages are trending up. lf 2015, which is when Avista experienced a large
wind storm, was excluded the system wide outages would be trending slightly
downward but the Grid Modernization addressed feeders are trending downward
at a faster rate.
Table 3, OMT Sustained Oulages related to Grid Modernlzatlon
Sustained Outages
2500
2000
1500
1000
500
oh!F)o
oE0qr
120
100
C,r
0u809fo
U1'UGoE.E'
oE'tf,.;
an(9
ot:t
20
201620tz 2013 2014 2015
I Svstem WdeOutees -rFGrid Mod Feeder Outages ......... Linear (System Wicle Outages)
3 PROPOSAL AND RECOMMENDED SOLUTION
201,7
Lmear (Grid Mod Feeder O$ageq
o
Option Capital Gost Start Complete
Do nothing - Address issues as the infrastructure
fails. This is the most risky as injury or property
damage may occur and is estimated to increase
the risk cost by 56.1M. lt is also the most costly as
usually it is done during off hours and ends up in
overtime and is estimated to increase O&M by
S2.5M. lt is also unplanned and therefore takes
longer to do. This option would also lead to higher
and longer number of customer outages.
$9,000,000 per
year
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 7 of I 86
Page 5 of 8
,.,,1.::1,,,""',,.';.':
Distribution Grid Modernization
[Recommended Solutionl The Distribution Grid
Modernization Program provides benefits to
customers, employees, and shareholders by
replacing problematic poles, cross-arms, cut-outs,
transformers, conductor, etc. Additionally
automated line devices are installed which
increase energy efficiency and system reliability.
2017 request is for S17.5M as we continue to
ramp up to the full recommendation.
$21,000,000 per
year
01 2012 12 2072
[Alternative #1] Address issues through the
different specific company initiatives, such as
Wood Pole Management, Transformer Change
Out, URD, Segment Reconductor, etc. This means
that a crew would potentially go out to the same
area multiple times. This costs more for set up and
traveltime, flagging, etc. which means higher rates
for customers. This also means the customer could
have multiple different planned outages and have
multiple different street closers while the crews
did specific work at multiple different times. The
risk reduction is also cut in half compared to the
comprehensive work completed by the Grid
Modernization program.
Per year MM YYYY MM YYYY
The Grid Modernization Program combines the recommendations from two Avista
system performance studies into its work activities to provide refreshed system
feeders with new automation capabilities across Avista's distribution system. The
first of these studies was performed in 2009 and had a system efficiencies team
evaluate the potential energy savings for distribution system upgrades and
analyzed the value of selective rebuild with "right sized" conductor replacements
for reducing energy losses, improve reliability, and meeting future load grov'rth
demand. A second study was conducted in 2013 to assess the benefits of
distribution feeder automation for increased reliability, operability, and load Ioss
savings.
The reliability, energy losses, reductions in operations and maintenance
(O&M) costs and capital investment from the individual efficiency programs under
consideration were combined on a per feeder basis. This approach provided a
means to rank and compare optimalfeeder modernizing and net resource costs to
achieve the desired benefits.
The system efficiencies team evaluated several efficiency programs to improve
both urban and rural distribution feeders. The programs consisted of the following
system enhancements:o Conductor losses;
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 8 of I 86
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Page 6 of 8
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Distrib ution G rid Modern ization
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o Distribution transformer losses and PCB mitigation;. Secondary district losses;o Conservation Voltage Reduction (CVR);. lntegrated VolWar Control (lWC), and;o Fault Detection lsolation and Restoration (FDIR) opportunities;
The Grid Modernization Program's charter criterion has grown to include a more
holistic approach to the way Avista addresses each project. This vital program
integrates work performed under various operational initiatives at Avista including
the Wood Pole Management Program, the Transformer Change-out Program, the
Vegetation Management Program, various budgeted maintenance programs and
the Feeder Upgrade Program.
The ancillary work of the Grid Modernization Program includes the replacement of
undersized and deteriorating conductors, replacement of failed and end-of-life
infrastructure materials including wood poles, cross arms, fuses and insulators.
lnaccessible pole re-alignment, right-away, undergrounding, joint use coordination
and clear zone compliance issues are addressed for each feeder section. This
systematic overview enables Avista to cost-effectively deliver a modernized and
robust electric distribution system that is more efficient, easier to maintain and
more reliable for our customers.
The long-term plan aims to upgrade 190 circuit miles per year to cover the whole
distribution system in a 60 year cycle. According to Avista's Asset Management
subject matter experts a 60 year cycle is optimal due to the average mean time
to failure and age profiles of our systems assets. lt also coordinates well with the
Wood Pole Management's (WPM) program 20 year cycle. The average cost for
the Grid Modernization program to rebuild a circuit mile is $110,000. !n orderto
meet the 60 year cycle $21M would be needed each year. Alternatively we could
complete the entire system in 80 years for $15.5M each year, but that means we
would not address the entire system until approximately the year 2093. This
would not be prudent at Asset Management shows a bow wave of infrastructure
reaching end of life by the year 2060. Currently the program is still ramping up to
its fully desired resource needs and therefore has only requested $17.5M for
2017. The plan is to have enough resources, design, and funding in place to be
able to construct the 190 circuit mile per year goal by 2019.
The Grid Modernization Program consists of the following fully allocated
resources: Project Manager, Associate Project Manager, Distribution Engineer,
six internal designers (customer project coordinators/CPC), and five contract
designers and has the following part time shared resources: analyst, and two in-
house and two contract field inspector/auditors, Construction labor usually
consists of a mix of in-house and contract line crews totaling around eight to
twelve five man crews. The program also interfaces with and relies on assistance
from the following departments which might require additional resources; Real
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 9 of 186
o
Page 7 of 8
Distrib ution G ri d Modern ization
Estate, Environmental, Contracts, Substation Engineering, Relay Shop, Electric
Shop, SCADA, Network Systems, and Protection Engineering.
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Distribution Grid
Modernization business case and agree with the approach it presents and that it
has been approved by the steering committee or other governance body identified
in Seclion1.1. The undersigned also acknowledge that significant changes to this
will be coordinated with and approved by the undersigned or their designated
representatives.
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Signature:
Print Name:
Title:
Role:
Signature
Print
Title:
Role:
Laine Lambarth
*r*^ fr^Jil-q/F /tT
Business Case Owner
Grid Modernization Project Mgr
Date:
Date:Q1v ttt
Template Version: 0A13nU7
Bryan
Sr Dir of HR Operations
Business Case Sponsor
5 VERSION HISTORY
Veralon lmplemented
By
Revislon
Date
Approved
By
Approval
Date
Reason
'1.0 Laine Lambarth 4t14t2017 Bryan Cox 4t1412017 lnitialversion
Page I of I
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Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page l0 of 186
Distribution Minor Rebuildo
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1 GENERAL INFORMATION
Requested Spend Amount $12,300,000
Req uesting Organ ization/Department Electric Operations
Business Gase Owner Cody Krogh
Business Case Sponsor Bryan Cox
Sponsor O rgan ization/Department Operations
Category Program
Driver Asset Condition
1.1 Steering Committee or Advisory Group lnformation
The Distribution Minor Rebuild work is overseen by the local area operations
engineers, general foremen, and area construction managers. Often, the work
addresses failed asset replacements or customer requests that are unplanned.
Occasionally, larger proiects with an identified need and short timeframe for
implementation are constructed under the Distribution Minor Rebuild business.
Minor Rebuild work occurs regularly and historical averages are used to estimate
the appropriate funding allocations.
The loca! area operation engineers, general foremen, and area construction
managers manage the work as it is identified throughout the given construction
season. A more formal governance is currently being developed for this business
case, which will provide a check or gate on which projects in the business become
approved for scheduling.
2 BUSINESS PROBLEM
The work done under the distribution minor rebuild is driven by keeping the
distribution system in reliable condition for customers and safe condition for the
workers, responsiveness to unplanned damaged to distribution assets not related
to weather events, as well as small customer driven rebuilds. Throughout the entire
distribution system, minor rebuilds or replacements of asset units need to be
completed to maintain system reliability and safety.
Below is a categorical breakdown which fall within the Distribution Minor Rebuild
business.
Customer Reouested Rebuilds - Work is initiated by an existing customer or
property owner, and the costs associated with the work are typically reimbursed by
the requesting party.
Trouble Related Work - Work required to repair damaged facilities related to non-
storm related outages. A common example of trouble related work is a car hit pole.
Joint Use Requested Rebuilds - "Make-ready" work required to existing facilities
in order to accommodate joint use installations. The costs associated with the joint
use work are typically reimbursed by the requesting joint use party(s).
Hxhlblt No. 6
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 1 of 186
o
Business Case Justification Narrative Page 1 of6
Distribution Minor Rebuild
Deteriorated Pole Replacements - Changing out isolated wood poles that fail
Avista's inspection standards that are not on schedule for a planned replacement
under Avista's Asset Maintenance programs.
General Rebuilds - Work can be initiated through a variation of sources. General
rebuild work is typically small in scope (i.e. one ortwo poles) and typically addresses
unplanned work that is identified as priority because of:
o NESC code violations (e.9., inadequate clearance)
o Failed or failing equipment (e.9., rotten cross-arms)
o lnadequately sized or classed equipment for serving an existing
customer or group of customers (such as an undersized transformer
or fuses)
o Other minor projects include minor loop feeds, installing air switches,
line regulators, line reclosers, and short reconductoring projects for
reliability improvements.
Figure I shows a pie chart of the mentioned categorical breakdown to demonstrate
the magnitude of each category. The figure gives a three year average, which has
remained historically constant.
Minor Rebuild Categorical Breakdown (2O14 - 2OL6l
s71,444,r%$8t3,671,7,/o
Sz,3oz,32o,tgyo
s249,193,2%
58,3t2,4e7,71%
o
o
o
r Customer Requested
' General Rebuilds
a Trouble Related
r Deteriorated Pole Replacements
r Joint Use Requested
Figure l: Dislribulion Minor Rebuiltl Categoricol Breokdown
H. Rosentrater, Avista
Schedule 3, Page l2 of 186
o Distribution Minor Rebuild
ln 2016, 1,115 work orders were created with the average cost equaling only $4,400,
which demonstrates the business is made of thousands of small dollar amount jobs.
Occasionally larger rebuild projects, such as small reconductor project, are
undertaken as Distribution Minor Blanket projects. A common reason is the work is
considered critical and non-discretionary. Only 28 work orders were created over
$25,000, averaging $54,000 per work order in 2016.
Figure 2 displays a breakdown of the different types of charges that occur in the
Minor Rebuild. The majority of charges are from specific work orders. Distribution
Minor Rebuild work often consists of isolated, replacement of failed asset(s) that do
not lend themselves to a specific project (i.e. trouble related work), which are
charges falling under craft and non-craft expenditures.
?:OLG Types of Charges to Minor Rebuild
r Craft Related Project Expenditures r Non-€raft Related Project Expenditures
a Specific Work Order Charges
Figure 2: Typu of Chorges lo Minor Rehuild (2016)
The following is a brief description of each type of charge.
. Craft Related Project Expenditures: Craft labor (servicemen, general
foremen, local rep), associated vehicle usage, trouble related work charges
. Non-Craft Related Proiect Expenditures: Non-craft labor, associated vehicle
usage, contribution reimbursables (credits), and material issues/returns
. Specific Work Order Gharges: The work order is referenced on timesheets,
material requests, invoices, and vehicle charges/loadings.
Distribution Minor Rebuild work is one of the many components that contribute to
the overall reliability of the distribution system as well as responsiveness to
customer requested service demands and system safety. Safety is of utmost
concern for linemen and the general public and the minor rebuild business funds
the replacement of a car-hit pole in the alley, a broken cross-arm, a burned up
transformer, or fixes a joint use code violation, and a myriad of other safety
o
25%
17%
58%
o
Business Case Justificalion Narrative rese3ofOCase No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 13 of 186
Distribution Minor Rebuild
related projects. By not funding the business will also affect the ability to respond
to customers' needs for modifications to their electrical service. Lastly, it is
acknowledged some minor rebuilds left unrepaired will not result in immediate
catastrophic failures to the distribution system (i.e. a broken pole pin insulator),
but over time an adverse accumulation of unrepaired assets would greatly put
line workers and the general public at risk as minor asset failures begin to
deteriorate pockets of the distribution system.
o
3 PROPOSAL AND RECOMMENDED SOLUTION
Figure 3 is the historical spend required to fully fund the Minor Rebuild business.
Historical Minor Rebuild Costs (2014 - 20161
s14,000,fi)o
$12,3EE,u5
s12,000,000 $tl,769,lzs o
$10,0@,@0 s9,009,015
SS,ooo,ooo
SG,ooo,om
S4,ooo,ooo
S2,ooo,ooo
s-
S(2,ooo,ooo)2014
Sr,478.3s6
$rgo,oeg
SG,389,964
$892,8s4
S25r,sso
2015
s2,4oo,ue
S26r,o6s
59,474,27G
$G78,198
s(39,7951
2015
S2,665,215
s254,814
$8,703,54o
57a2,3s7
Sltt,792,
I Trouble Related Rebuilds
IJolnt Use
a 6eneral Mlnor Rebullds
I Oeterlorated Pole Replacement
I Customer Requested
Figure 3: Minor Rebuild Historical Spend
Figure 3 shows a steady increase in costs for unplanned minor rebuild work from
2O14 to 2016. The categories of Joint Use, General Minor Rebuilds, and Trouble
ExhibitNo. 8 paoe 4 of 6
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 14 of I 86
Option GapltalCost Start Gomplete
Untunded $0 N/A
Fund Unplanned Work (based on historical
quantities)
$12,300,000 Continuous
Program
Business Case Justification Narrative
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Distri b uti on M i no r Reb u i ld
Related Rebuilds increased annually over the three years, while Deteriorated
Pole Replacements remained steady in costs. Customer Requested Rebuilds are
typically a credit to the business because most are reimbursed in part or in full by
the customer. As shown in 2014, Customer Requested Rebuilds are not always
reimbursed back to the business.
The Distribution Minor Rebuild business reaches across multiple departments in
Engineering and Operations. The business involves operation area engineers,
local customer project coordinators, and construction technicians who work
directly with customers and perform all the designs for the business. Once the
minor projects are designed and ready for construction, field personnel such as a
Foremen, Journeyman Linemen, Line Servicemen, Meter men, Equipment
Operators execute the work.
The Distribution Minor Rebuild business provides a solution for the utility to
address small unplanned asset failures and customer driven modifications to the
distribution system, but excludes fixes to the system considered to be
maintenance. While the work is unplanned, minor rebuilds to the distribution
system occur on a regular basis every year and make up a significant portion of
the business within Engineering and Operations. While unplanned and isolated
minor rebuilds will always exists in the distribution system, unplanned work is
minimized to the greatest extent through other systematic infrastructure
programs.
The Distribution Minor Rebuild business reaches across multiple departments in
Engineering and Operations. The business involves operation area engineers,
local customer proiect coordinators, and construction technicians who work
directly with customers and perform all the designs for the business. Once the
minor projects are designed and ready for construction, field personnel such as a
Foremen, Journeyman Linemen, Line Servicemen, Meter men, Equipment
Operators execute the work.
The Distribution Minor Rebuild business provides a solution for the utility to
address small unplanned asset failures and customer driven modifications to the
distribution system, but excludes fixes to the system considered to be
maintenance. While the work is unplanned, minor rebuilds to the distribution
system occur on a regular basis every year and make up a significant portion of
the business within Engineering and Operations. While unplanned and isolated
minor rebuilds willalways exists in the distribution system, unplanned work is
minimized to the greatest extent through other systematic infrastructure
programs.
The Distribution Minor Rebuild business aligns with the company's focus of Safe
& Reliable lnfrastructure, to invest in our infrastructure to achieve optimum life-
cycle performance - safely, reliably and at a fair price.
H. Rosentrater, Avista
Schedule 3, Page l5 of 186
o
Distribution Mi nor Rebuild
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Distribution Minor Rebuild
and agree with the approach it presents and that it has been approved by the
steering committee or other governance body identified in Section1.1. The
undersigned also acknowledge that significant changes to this will be coordinated
with and approved by the undersigned or their designated representatives.
o
Signature:
Print Name:
Title:
Role:
fu,&*z Date: 4-rq -ZotT
c"dy xrof r
Mgr Asset Maintenance
Business Case Owner
Signature:
Print Name:
Title:
Role:
Bryan Cox
Sr Dir of HR Operations
Business Case Sponsor
5 VERSION HISTORY o
Template Version: 0212412017
Exhibit No. 8
case No. AVU-E-I9-04 Page 6 0f 6
H. Rosentrater, Avista
Schedule 3, Page 1 6 of 1 86
Version
#
lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Landen Grant 4t13t2017 Cody Krogh 4t14t2017 lnitialversion
Business Case Justification Narrative
o
Date: 4 -ll -\1
Wood Pole Managemento
o
1 GENERAL INFORMATION
Requested Spend Amount $9,000,001
Requesting O rganizationlDepartment Asset MaintenanceMood Pole Management
Business Case Owner
Business Case Sponsor Bryan Cox
Sponsor Organization/Department M51AruPM
Category Program
Driver Asset Condition
1.1 Steering Committee or Advisory Group lnformation
Asset Management and Distribution Engineering provide ongoing analysis of
distribution asset condition. This analysis is used to direct the Wood Pole
Managementwork that includes inspecting and maintaining Avista's poles, hardware
and equipment on a twenty year cycle. The operating guidelines are documented in
the Distribution Feeder Management Plan (DFMP). The analysis is documented in
the Electric Distribution System 2016 Asset Management Plan. Asset Maintenance
then collaborates with Electric Operations and contractors to coordinate the work.
Asset Maintenance tracks the work budget, scope, and schedule.
2 BUSINESS PROBLEM
The major drivers for the program are system reliability, improved cost performance, and
reduced customer outages. These drivers are obtained by replacing defective poles,
associated hardware, and equipment at its end of life. The National Electric Safety Code
(NESC) is adopted as Washington State Law under WAC 296-45-045. More specifically
Part 013 describes the application, Part 121 describes the inspection interval, and Part
212A describes documentation and correction of the pole inspection results.
The currentWood Pole Management (WPM) program inspects and maintains the existing
distribution wood poles on a twenty year cycle and the transmission poles on a fifteen
year cycfe. Avista has 7,7O2 overhead distribution circuit miles. The average age of a
wood pole is twenty-eight years with a standard deviation of twenty-one years. Nearly
20o/o of all poles are over fifty years old and we have an estimated 240,000 Distribution
poles in the system. This means approximately 48,000 poles are currently overfifty years
old. Our current inspection cycle allows us to reach approximately 12,000 poles each
year. Along with inspecting the poles, we inspect distribution transformers, cutouts,
insulators, wildlife guards, lightning arresters, crossarms, pole guying, and pole grounds.
The average asset life of this equipment is fifty-five years and requires replacement along
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 17 of 186
o
Business Case Justification Narrative Page 1 of 8
Mark Gabert
Wood Pole Management
with the pole work. The inspections document asset condition and indicate what work is
required to replace assets that are damaged or near failure point. The asset condition is
observed and documented during the pole inspection process as indicated in both the S-
622 Specification for the lnspection of Poles, and the Distribution Feeder Management
Plan (DFMP). Designs and work plans are then created to replace the aging
infrastructure. The construction work to replace the assets is part of this program.
The work is required now to keep pace with the aging assets and expected failure rate.
Figure 1 below shows the increased rate at which the poles are reaching the seventy-five
year end of life. lf this work is not maintained the aging infrastructure will cause an
increasing rate of failures leading to increased outages and higher construction costs.
ln addition to the risks of outages and failures with the aging equipment, the additional
risks associated with this program pertain to the following:
Environmental: Risks include; large volume transformer oil spill, dfficult
hazardous waste cleanup, moderate to low volume or level of PCBs, minimal
impact to waterways, repeated or moderate air emission exceedance. lf the
program is unfunded the potential occurrence is greater than 4 spills per year. lf
funded, the potential occurrence is less than 1 per 50 years.
Public Safety and Health: Risks include: a potentialfor serious injury for crews or
the public, significant damage to equipment, property or business, public health
infrastructure impact up to 48 hours. lf the program is unfunded, the potential
occurrence is less than 1 per 10 years. !f funded the potential occurrence is less
than 1 per 50 years.
o
O
Business Case Justification Narrative Page 2 of 8
o
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 8 of I 86
Wood Pole Man
Figure I- Pole Age ProJile
Wood Pole Age Profile
3.SYo
3.OY"
Over 75 years
2.5%
1910 ,92(, 1930 19/rO 19sO 1960 1970 1980 1990 2000 2010 2020
Year lnstalled
The Outage Management Tool (OMT) is used by Asset Management to track asset
conditions and show trends of failures of specific equipment that should be targeted for
replacement. This information is also used to track key Program performance as shown
in Table 1 below. The number of outage type events has been reduced by over 40o/o
from 2009 through 2015. This reduction in outage events results in significant customer
benefit. This reduction also demonstrates increased reliability and safety along with a
reduction in outages. The original goal for this KPI was to stay below the number of
events averaged over 2005-2009 for WPM Related OMT Events. The goal will be re-
evaluated in the future.
to
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Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 9 of I 86
Business Case Justification Narrative Page 3 of I
Wood Pole Management
O
Toble I: Event Reduclion Resulls
1460
1460
1460
1450
1460
1460
1460
1320
1004
1004
1013
816
905
760
500
450
459
416
M5
4t2
390
t72
435
333
435
329
385
t64
o
The type of OMT events are broken down into more detail in Table 2. Note there are
significant improvements to some events such as; annual squirrel events being reduced
from nearly 750 to around 240 events. This improvement has been realized by adding
wildlife guards to the top of transformers in order to prevent squirrels from touching
exposed power connections which can result in outages. Both the transformer and
cutout\fuse events have been reduced by over 50% through the replacement of aged
equipment. Table 2 also reveals a concerning upward trend of Pole-rotten events that
indicate the impact of the aging poles. Note that the calculated cost to customers for a
pole failure is $24,400 based on an average duration of 4.8 hours for 80 customers, per
Asset Management, Other key OMT events that have been significantly reduced from
2009 to 2016 include Transformer, CutouUFuse, and Squirrel. The combined cost impact
to customers in 2015 alone for those events was $2,265,600. See Figure 2.
O
Exhibit No. 8
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 20 of 186
WPM Goal
Related
number of
OMT
Events
Actual
WPM
Related
number
of OMT
Events
Projected
Miles
Follow-up
Work**
Actual
Miles
Follow-up
Work
Completed
KPI
Description
2009
2010
2ALt
2AL2
20L3
20L4
2015
Business Case Justification Narrative Page 4 of 8
o Wood Pole Management
Figure 2: OMT Events
WPM OMT Events by Sub Reason
l2m8 I2m9 l?01O a2011 I2012 t2Or3 82014 E2o1s 82016
o.*b
800
76troBsm!,G4 soo-IA
Bnm
5rm
U
=,*o 100
()
.."+dF'....t-t" .*tn-u r""-'t ".--t- .o$" ..-''"" tJ
^"..""OMT Evenl Sub Reason
o
Ultimately the impact of this Program can be associated with our Electric Systems
Reliability metrics. The System Average lnterruption Frequency lndex (SAlFl)
represents the average number of sustained interruptions per customer for the year.
Avista reported a SAIFI score of 1.05 for the year 2015. The Asset Management group
created Table 2 below to show the impact of this Program to our overall SAIF! score.
The predicted contribution is about .211 which has a significant impact on the customer,
whereas without WPM the contribution to SAIFI would be 0.57. This means the
customer would experience 0.36 more outages per year without WPM. Without WPM
and the contribution to SAIDI would be 1.27(Hours).
Table 2: SAIFI Metrics
03r{0aeec
0,208'180350
0xfi022023
0.2fi022023
orfi022029
0.2fi022023
0.10et0838
0r02t62t3e
0,186t3098
0.ffi0a00t2
0.211511914'
02ilw38l,r
+?Ul
4.0t2
5.0t0
0,770
0.5uI
10,500
t2,e00
12,000ta$0
r2,800
12,000
r2,000
32
32
32
x2
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32
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It7
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tt7
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ait
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r2,07,
o
Proiecled
Met ic
Descriplion
Projected wPM
Contribution To The
Annual SAIFI
Number
Proiected
Number o{
Disl Poles
lnspected
ilodel Predicted
materaal Use for
WPM Follow-up
Work
Proiected
I'lumber of
Pole Rotten
OMT Events
Proiected
Number of
Crossarm Otlf
Events
200s
?9.!_0_
2011
291?20t3
391{
201 s
Actual
Metric
Description
2000
29r0
2011
2012
20r3.
201 l
20ls
Actual WPM
Conlribution To The
Annual SAIFI
Number
Actual
Number of
Diel Foles
lnspected
Actual ,llaterial
Use for WPM
Follow-up Work
Actual
,'lumber of
Pole Rotlen
OMT Events
Actual Number
of Crossatm
OMT Events
Business Case Justification Narrative Page 5 of 8
Exhibit No. 8
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 2l of 186
."tt"
a'"
r-r{l
3 PROPOSAL AND RECOMMENDED SOLUTION
Optlon Gapltal Cost Start Complete Rlsk Mitigatlon
Do nothing $0 lncreases OMT events by 1700 events
Distribution Wood Pole Management
Program rnspecfs all feeders on a 20
year cycle and repairs and replaces
wood poles, crossarms, missing
lightning anesters, missing/stolen
grounds, bad cutouts, bad insulators,
leaking transformers, replace guy
wrres not meeting current code
requirements when the pole is
replaced.
$9,000,000M 012017 122017 Annually/indefinite
Alternative 1: Distribution Wood Pole
Management Program rnspects a//
feeders on a 20 year cycle and repairs
and replaces wood poles, crossarmgmrsslng lightning anesterg
missing/stolen grounds, bad cutouts,
bad insulators, leaking transformers,
replace guy wires not meeting cunent
code requirements when the pole is
replaced and replaces pre-1981
transformers
$10,712,022 012021 122021 Annually/indefinite
Alternative 2: Everything in Alternative
1 except completed on a 10 year
cycle.
$17,296,4s7 012021 012021 Annually/lndefinite
Based on analysis the current twenty year Wood Pole Management cycle delivers the
best life cycle value for the funding level. Alternative 2 would decrease the inspection
cycle down to ten years but at nearly double the capital cost. There is also additional
O&M cost to support alternative 2. Asset Management and Distribution Engineering will
contanue to monitor system reliability to determine if adjustments are required in the
future.
Distribution Wood Pole Management is an ongoing cyclical program that proactively
replaces aging assets. By replacing assets before they fail, outage risks are reduced and
replacement costs are reduced through planned work. lnvesting in the infrastructure
increases life-cycle performance, safely, reliably, and is cost effective through the use of
unit based pricing. Figure 2 below shows the significant improvement in "events per mile
of feeder" resulting from this Program. The peak of events per mile was approximately 6
years ago when there were nearly 1.5 events per mile. The results after the Program
show performance as low as .3 events per mile of feeder.
o
o
o
Wood Pole Management
Business Case Justification Narrative Page 6 of 8
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3,Page22 of 186
Woad Pole Managemento
lf funding were to be reduced, expected outages would increase. The team would need
to prioritize which components would be replaced and which would be left. This would
increase the likelihood that crews would need to revisit the same pole later if a rernaining
component were to fail.
Figure 3: Reduclion of Events per mile before and aflerfeeders are compleled.
Wood Pole Management & Grid Modification
Before and After
m[y61696 before WPM @.Average after WPM
. ' '- ,Averate after Grid Mod
-Average
before Grid Mod
o
1.6Lgu5
E1.4o(,
L
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8p.e
co,,io.s
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-7 -6 -5 -4 -3 -2-1012
Before and After work (Years)
?456f
The primary stakeholders are Asset Management, Distribution Engineering,
Environmental, Real Estate, Asset Maintenance, Electric Operations, and our electric
customers.
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 23 of 1 86
o
Business Case Justification Narrative Page 7 of 8
4r .afrhr 5
Wood Pole Management o
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Distribution Wood Pole
Management and agree with the approach it presents and that it has been approved
by the steering committee or other governance body identified in Section1,1. The
undersigned also acknowledge that significant changes to this will be coordinated
with and approved by the undersigned or their designated representatives.
Signature:/t,/t lJe Date:
4rct2417
Print Name:
Title:
Role:
Mark Gabert
WPM Program Manager
Business Case Owner
Signature:
Print Name:
Title:
Role:
Date:?/rz I n
Bryan Cox
Sr Dir of HR Operations
Business Case Sponsor o
5 VERSION HISTORY
Tem plate Version : 021241 2017
o
Exhibit No. 8
Case No. AVIJ-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 24 of 186
[Verclon#
lmplemented
By
Revlelon
Date
Approved
By
Approval
Date
Reason
1.0 Mark Gabert 04t13t17 Bryan Cox 04t14t17 lnitial version
Business Case Justification Narrative Page 8 of 8
Electric Relocation and Replacement Programo
o
1 GENERAL INFORMATION
Requested Spend Amount $2,750,000
Requesting Organ ization/Department Operations
Business Case Owner
Business Case Sponsor Bryan Cox
Sponsor Orga nization/Department Operations
Category Program
Driver Mandatory & Compliance
{.1 Steering Committee or Advisory Group lnformation
The Electric Distribution and Transmission Relocation and Replaccment Program
work is overseen by the local area operations engineers and area construction
managers. The work is mostly unplanned and non-specific in nature, but occurs
regularly and historical averages are used to estimate a quantity. The loca! area
operation engineers and area construction managers manage the work as it is
identified throughout the given construction season.
2 BUSINESS PROBLEM
The Electric Distribution and Transmission Road Moves/Relocation program is
driven by compliance mandated by "Franchise Agreement" contracts with local city
and state entities and "permits" issued by Railroad owners. ln general, a
"Franchise Agreement" generally refers to a non-exclusive right and authority to
construct, maintain, and operate a utility's facility using the public streets,
dedications, public utility easements, or other public ways in the Franchise Area
pursuant to a contractual agreement executed by the City and the Franchisee.
Although each Franchise Agreement or permit is a little different, they all serve a
similar purpose in providing for utility access along city, county, state and railroad
right-of-way (ROW). The agreement(s) make provisions forAvista to installelectric
equipment along these ROW's in order to provide service to Avista customers.
Within each agreement are provisions for relocation of utilities at the request of the
ROW owner. These request are usually driven by road and or sidewalk re-design
projects. For reference, franchise 95-0990 recorded with Spokane County
paragraph Vl states "lf at any time, the County shall cause or require the
improvement of any County road, highway or right-of-way wherein Grant*
maintains facilities subject to this franchise by grading or regarding,
planking or paving the same, changing the grade, altering, changing,
repairing or relocating the sarrre or by constructing drainage or sanitary
sewer facilities, the grantee upon written notice from the county engineer
shall, with all convenientspeed, change the location or readjustthe elevation
of its system or other facilities so that the same shall not interfere with such
County work and so that such lines and facilities shall conform to such new
Business Case Justification Narrative Bxhibit No. 8
case No. AVU-E- l9-04 Page 1 0f 4
H. Rosentrater, Avista
Schedule 3, Page 25 of 186
a
Cody Krogh
Electric Relocation and Replacement Program
grades or routes as may be esfablshed," For example, a State Department of
Transportation (DOT) is widening an intersection or highway, which requires Avista
to relocate their overhead or underground electric facility to accommodate the new
DOT design. A smaller example for instance is a local municipality is installing new
ADA ramps on the corners of localstreet intersections, which sometimes requires
Avista to relocate a utility pole to accommodate the new ramp design.
The Electric Relocations are agreed to and executed per the jurisdictional
Franchise Agreement or Permit.
Work under Franchise Agreements or Permits are contractual, agreed upon, and
if the terms of the agreement or permit are not executed a breach of contract will
likely ensue. Also, state and local government departments which oversee
highways, roads, and city streets incorporate the guidelines set forth in the
American Association of State Highway Transportation Officials (AASHTO)
Roadside Design Guide into the design of the highways and roads. The guidelines
are based on the type of roadway and posted speed, but generally do not allow for
any fixed objects inside the traveled way or sides of the roadway ("clear zones")
for public safety. As a result, nearly all new road projects require utilities to relocate
or remove all poles inside and outside the traveled way. The new roadside design
guidelines allow for placement of new facility in a location that improves the safety
of the driving public, thus reduces risk to Avista. Avista designers coordinate with
each state or local road project to ensure the new relocations meet the clear zone
standards, yet minimize cost. Most Franchise Agreements have provisions to
prohibit the ROW owner from requiring the utility to move the same facility more
than once over a span of years, usually five.
The asset conditions replaced through Electric Relocations can vary since the
relocations are unplanned and therefore not coordinated with Avista's Asset
Maintenance programs. Most assets in an Electric Relocation project are replaced
because they are unsalvageable and close to their useful life. ln the case of
relocating newer assets, efforts are made to re-use as much material as possible.
Under a Franchise Agreement or Permit, Avista is allowed to occupy space within
a ROW owned by the respective jurisdiction in order to serve its customers. Electric
relocations occur every year during the construction season, but are unplanned,
so historical trends are used to estimate the annual cost to fully fund all the
relocation projects. The annual costs of electric relocations has very little variance
year to year, therefore fully funding the business will likely ensure all electric
relocations under Franchise Agreements or Permits will be completed.
H. Rosentrater, Avista
Schedule 3, Page 26 of 186
o
o
a
Electric Relocation and Replacement Programo
o
3 PROPOSAL AND RECOMMENDED SOLUTION
Electric Relocation projects are managed, coordinated, and executed within the
Operations department. When a transportation agency has a road project requiring
Avista to relocate its facility, a Customer Project Coordinator (CPC) is designated
full time to coordinate the project with the agency as the direct contact from Avista.
The CPC manages, coordinates, and designs the relocation of Avista's distribution
or transmission facility. He or she will meet with line foreman in the field to scope
out the project and identify any construction obstructions (i.e. equipment access).
The Real Estate group, under Environmenta! Affairs, often is involved in Electric
Relocation projects to obtain further easements or get permits approved.
Because the Electric Relocations business is unplanned work, contractually
obligated, and adds high risk to the company if not completed, no alternative
analysis is considered. This program is demand driven and unplanned work.
Funding allocation is based on historicalspending trends. The graph below shows
the historicalspend for Electric Relocation eAfi -2016). The average spend over
the six years is $2.3 million. However, at 2014 spend is thrown out as an outlier, it
is clear the trend in electric relocations is trending upward. Because electric
relocations are directly correlated with the number of highway and street projects,
the reason for the upward trend in spend is likely an increase in transportation
project spending.
Electric Relocation Historical Spend (2011- 2016)
s3,500,000
$3,ooo,ooo
$2,soo,ooo
s2,0o0,ooo
Sl,soo,ooo
Sl,ooo,ooo
S5oo,ooo
s-
s3,206,007
s2,669,472
s2,3gg,o1o
S2,060,539 S2,115,597
sL,371,057
2AL1 2012 2013 2014 2015 2016
The primary external stakeholders in the business include all state and local
transportation governments as well as customers since they live in the territory
governed by these agencies and use the transportation system.
H. Rosentrater, Avista
Schedule 3,Page27 of 186
Optlon Capltal Cost Start Gomplete
Unfunded $o
Fully Funded $2,750,000 Ongoing
-Program
o
Electric Relocation and Replacement Program o
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Electric Relocation and
Replacement Program and agree with the approach it presents and that it has been
approved by the steering committee or other governance body identified in
Section1.1. The undersigned also acknowledge that significant changes to this wil!
be coordinated with and approved by the undersigned or their designated
representatives.
Signature:
Print Name:
Title:
Role:
b-fu Date: 4-(q- z.o t+
c"dy Kr;d[
,tr
Mgr Asset Maintenance
Business Case Owner
Signature:
Print Name:
Title:
Role:
Date:\- [z-\7
Bryan Cox
Sr Dir of HR Operations
Business Case Sponsor o
5 VERSION HISTORY
Tem plate Version: O3lO7 12017
Exhibit No. 8
caseNo. AVU-E-19-04 Page 4 01 4
H. Rosentrater, Avista
Schedule 3, Page 28 of 1 86
lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Cody Krogh 4t14t2017 Bryan Cox 4n4t2417 lnitialversion
Business Case Justification Narrative
o
Version
LED Change-Out Program
o
o
1 GENERAL INFORMATION
Requested Spend Amount $2,900,000
Requestin g Organ ization/Department Operations
Business Case Owner Landen Grant
Business Case Sponsor Bryan Cox
Sponsor Organization/Department Operations
Category Project
Driver Customer Service Quality & Reliability
1.1 Steering Committee or Advisory Group lnformation
lnternal stakeholders meet together every six months to discuss program progress
and how their respective departments are impacted by the work. They guide the
program on any processes requiring modification or developing new processes to
help improve the program. lnternal stakeholders include Construction Services,
Distribution Engineering, Warehouse and Investment Recovery, Supply Chain,
External Communications, Mobile Dispatch, Enterprise Asset lt/anagement,
Customer Enterprise Technology, and Regional Business [Vlanagers. External
stakeholders are state and local governments who have jurisdiction over roads and
streets where Avista provides illumination. Neighborhood councils are a particular
external stakeholder which is often involved before their neighborhood is converted
to LED because the residential areas are sensitive to street lighting.
2 BUSINESS PROBLEM
Any local or state government which has jurisdiction over streets and highways has
an obligation to the general public they serve to provide acceptable illumination
levels on their streets, sidewalks, and/or highways intended for vehicle driver and
pedestrian safety. Avista manages streetlights for many local and state government
entities to provide such street, sidewalk, and/or highway illumination for their streets
by installing overhead streetlights.
The primary driver for converting overhead streetlights from High-Pressure Sodium
(HPS) lights to LED lights is the significant improvement in energy savings, lighting
quality to customers, and resource cost savings.
Secondly, converting streetlights to LED technology helps bring Avista in
compliance with the Washington State lnitiative 937 (or the Clean Energy lnitiative),
which ensured that at least fifteen percent of the electricity Washington state gets
from major utilities comes from clean, renewable sources, and that Washington
utilities undertake all cost-effective energy conservation measures. LED streetlight
technology is part of the mentioned energy conservation measure.
The desire to begin the LED Change-Out Program in2015 stems from an immediate
savings in energy, positive financial impacts, benefits associated with personal
injury and property theft, and resource cost savings.o
Business Case Justification Narrative Page 1 of7Exhibit No. 8
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 29 of 1 86
. Each 100 watt and 200 watt HPS light replaced will save approximately 65
watts and 128 watts, respectively, per fixture. Once all of the 100 watt and
200 watt HPS street lights are replaced, the annual energy savings will be
9,903 MWH each year.
. With respect to the financial impacts of converting to LED streetlight
technology, the customer internal rate of return is 8.46%, assuming the
current cost of materials and life expectancy of the photocells and LED
streetlight fixtures.
. From a public safety perspective, the consequence of converting to LED
streetlights in lieu of replacing burned-out HPS bulbs shows a risk reduction
for customers of nearly eight times less for potential injury, a serious fatal
accident, and property theft.
. Lastly, company resource demands are reduced after the initial conversion
to LED technology. The Average Annual Labor Man-Hours for current
practices of changing burned-out HPS bulbs is estimated at 5,200 man-hours
and 2,600 equipment hours, while the average man-hours required during
the fifteen year life of the LED fixtures are 3,200 man-hours and 1,800
equipment hours.
ln 2011, the average cost to maintain a HPS streetlight was nearly $92 per fixture
with only about $10 of the cost being the actual material. The remaining costs were
the main constituents of the overall cost as seen in Figure 1.
Material,
Sro
Equipment,
Figure l: 2Al I Cost Breakdown of a HPS Lighl Fixture
Also, a lifetime material usage analysis on the HPS light fixtures estimated a Mean
Time to Failure (MTTF) for the various light fixture components. Table 1 shows the
results for each streetlight component.
o
o
o
LED Change-Out Program
Business Case Justification Narrative ExhibitNo. rPage20f7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 30 of 186
Labor, $33
s21
Overheads,
s28
LED Change-Out Protgfdlfl
o
o
641
7,930
5,1 51
1,126
683
1o/o
15%
1Oo/o
2o/o
2o/o
84
7
10
48
55
o
Table I: 201 1 Mean Time To Failure (MTTF) for HPS Streetligh*
Upon completion of all streetlights changed-out to LED fixtures, a guarantee of real
energy savings can be measured on an individual light fixture basis and then
extrapolated to the entire system. Most LED fixtures have the capabilityto have real-
time energy consumption measurements taken and reported back to Avista. Also,
once all the streetlights are converted to LED, the number of service requests for
streetlight burn-out should drop significantly from the number of service requests
prior to 2015.
3 PROPOSAL AND RECOMMENDED SOLUTION
Option Capital
Cost
Start Gomplete
Do nothing $0 N/A
Base Case (current practice of replacing
burned-out HPS bulbs or replacing a
fixture if broken)
$1.70M Ongoing
Optimized HPS Case (planned
replacement of HPS bulbs and photocells)
$1.67M 14t2015 12t2019
LED Case (change-out all fixtures to LED)$2.32M 10t2015 12t2019
Three alternative cases were considered in an analysis performed by the Asset
Management Department of converting streetlights to LED technology. The current
case or Base Case replaces failed HPS streetlight components only when they fail.
The second case, called the LED Case, replaces the current HPS streetlights with
new LED fixtures and implements a planned replacement at fifteen years for the
light fixture and photocell. The analysis noted that inside the new LED Case model,
a fifteen year replacement strategy proved more cost effective overthe lifecycle than
running LED lights to failure. Thirdly, the Optimized HPS Gase represents keeping
the current HPS light fixtures and performing planned replacements of the HPS
bulbs and photocells at five year cycles for the bulbs and ten year cycle for the
photocells.
Component
Groups
Material
Usage
Quantities
Replacement
Ratio
MTTF
(Years)
fuee
lamp
photocell
starter board
street light fixture
Business Case Justification Narrative Page 3 of 7Exhibit No. 8
Case No. AVU-E-I9-04
H. Rosentrater, Avista
Schedule 3, Page 3 I of I 86
Key assumptions made in the alternatives analysis are outlined below.
The Base Case and the Optimized HPS Case, because they propose using HPS
fixtures, have the same failure characteristics shown in Table 2.
Table I, HPS Light Componenl Foilure Characteristics
3.4
5.7
7.4
4.4
7.3
10.5
6.7
10.6
16.3
o
o
Table 3 shows the failure characteristics assumed for LED fixtures and components
based on manufacturer's information and an assumed failure shape characteristic.
Table 2, Assumed LED Light Contponenl Foilure Curves
7.9
L2.L
10.2
15.5
L4.9
22.6
For all three cases, a model was created to help compare the risks including,
resource needs, potential energy savings, and financial impacts of each case. ln the
end, the LED Case wil! save customers money over the Base Case. While the
Optimized HPS Case provides a better financial return to our customers compared
to both the Base Case and LED Case when considering strictly labor and material
costs, the energy savings associated with the LED Case becomes an overcoming
driver. The customers will still see savings over the life of the LED fixtures compared
to today's practices in the Base Case and eliminate the need for 2.3 Megawatts of
generation at night. ln addition, customers will realize an annual system energy
savings of 9,903 Megawatt hours.
Table 4 is a Projected Planned Capital and O&M budget for next twenty-four years,
showing the initial change-out and a subsequent planned LED change-out fifteen
years later.
o
Population
Failure Rate
(r0%) by
Year
Population
Failure Rate
(20%) by
Year
Itiean Time to Failure
(50% of the initial
population will have
failed by _ Years)
Component
HPS 100 W Bulb
Photocells
Starter Board
Population Failure
Rate (10%) by
Year
Population
Failure Rate {20%}
by Year_
Mean Time to Failure
(50% of the initial
population will have
failed by Year _
Component
New Style Photocell
LED Light Fixture
LED Change-Out Program
Business Case Justification Narrative Page 4 ot7Exhibit No. 8
CaseNo. AVU-E-I9-04
H. Rosentrater, Avista
Schedule 3, Page 32 of 186
LED Change-Out Program
o Toble 4, Projected Plonned 24 Yeor Capitol ond O&M Budgetsfor Slreet Lights (I00lY sfiealights only)
o
52,3t9,248
s2,323,37O
S2,33s,G05
52,354,4L8
s2,393,676
Sgz,ts9
S140,218
s225,059
5297,367
S33o,oo3
541.1.,862
S496,398
s544,068
s646,035
5704,577
s2,059,519
S2,118,200
52,744,239
s2,178,558
52,263,8L4
s277,O74
s334,083
5444,O3L
5522,725
s603,s2s
5Lg3,gz4
5198,241,
5203,97O
SzLo,732
$22O,542
s228,035
s238,563
Szss,z4o
5269,3t4
Szlg,qoz
$295,973
$3t2,9es
5324,taz
53qq,+tq
s357,923
S264,983
5274,L95
s282,089
529t,zoo
s304,580
S:tg,otz
s330,312
s345,078
s355,799
s37L,337
5732,012
5746,6s2
S761,585
s776,877
s792,353
s808,200
5824,364
S8+o,gsz
$857,669
$874,822
s892,318
Sgro,rss
s928,368
s946,935
Sg6s,8z+
S98s,t92
s1,004,895
S1,024,993
S1,045,493
S1,066,403
51,097,731"
s1.,109,496
S1,131,676
S1.,154,309
s1,177,395
Ssla,tgg
S548,41i.
$557,615
s566,085
s571,811
s580,165
Ssas,got
Ss8s,6tz
Ssgg,gsa
S595,360
S596,346
s597,200
$603,666
s602,521
s607,952
572A,209
s730,700
5742,905
Slsq,zgz
5761.,724
$769,t74
5779,114
S786,598
S798,s10
s806,058
o
Capital
Budget
with LED
Conversion
o&M
Budget
with LED
Conversion
o&M
Budget
without LED
Conversion
o&M
Offset with
LED
Conversion
Year
2015
2016
2017
2018
2019
2020
202t
2022
2023
2024
2025
2026
2027
2028
2029
2030
2031
2032
2033
2034
2035
20t6
20?7
2038
2039
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 33 of 1 86
Business Case Justilication Narrative Page 5 of 7
Table 4 shows the resource savings with the LED Case. The last column to the right
gives the estimated O&M savings, which is the result of installing new LED
streetlight fixtures verses installing a new HPS bulb or photocell, which is the
scenario in the Base Case and Optimized HPS Case. The column labeled O&M
Budget without LED Conve,rsibn shows the annual O&M costs in the Base Gase.
The O&tvl cost in the Optimized HPS Gase would be higher than the Base Case
since it includes a programmatic change-out of all HPS bulbs.
The LED Change-Out Program achieves the objective of saving energy, reducing
resource costs, and improving nighttime light quality, which are all objectives
customers will immediately benefit from.
The LED Change-Out Program has a five year timetable, beginning in 2015, to
change-out all existing Avista owned non decorative streetlights to LED (Light
Emitting Diode), which equates to over 35,000 change-outs. The program schedule
is orientated by circuit feeder, similar to other programs. The priorities of what circuit
feeders or cities in the service territory are to be completed first is based on
efficiencies. At times, coordination with cities may impact the schedule of when an
area is changed out.
As shown in Table 4, the requested annual amount of nearly $2.32 million for five
years (2015 -2019) is the minimum funding amount to complete the LED Change-
Out Program in the five years. lf funded below the $2.32 million for five years, the
realized O&t\4 savings to customers would be delayed to subsequent years, and to
a lesser amount. However, if the Program is funded above the requested annual
amount of $2.32 million for five years, customers will realize the O&M savings
sooner and to a greater degree.
The impacts of the LED Change-Out Program span across multiple departments at
Avista. Operations is responsible for managing the work and executing the light
change-outs in the field, primarily by Avista's servicemen and local reps. Avista's
Operations Support Group (Mobile Dispatch) and Enterprise Asset Management
(EAM) Technolog)/ are responsible for creating work orders for all 28,000 change-
outs and dispatching them to the field. The Customer and Shared Services
department, particularity Enterprise Systems - Customer Care & Billing (CC&B), is
impacted by the project because the customer billing changes upon converting to
LED light fixtures. For the LED Case, the implementation of converting to LED
streetlights will require only one additional Full Time Employee (FTE) over a five
year period. To remain with HPS streetlights, as in the Base Gase and Optimized
HPS Case, will require no additional or new staffing.
The entire alternative analysis report is attached for further detail.
To summarize the overarching benefits of the LED Change-Out Program and the
justification to begin the five year program sooner than later are the immediate
energy savings and resource savings. Customers will benefit with every light
changed out in the form of better lighting quality, reduced energy consumption and
reduced labor cost. To delay the program is to delay the immediate savings to
customers. The LED Change-Out Program is in alignment with the company's
strategic vision of delivering reliable energy service and the choices that matter most
to our customers. As part of the program, infrastructure is replaced with longer
o
o
o
LED Change-Out Program
Business Case Justiflcation Narrative Exhibit No. , Page 6 0f 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 34 of I 86
LED Change-Out Program
o lasting equipment. By providing more efficient equipment and quality lighting, this
results in an energy savings and safety increases for our customers.
The LED Change-Out Program extends across multiple departments at Avista
impacting them directly or indirectly. Each department identified as a stakeholder
will nominate an engaged representative to act as the liaison between the program
and their department. The department stakeholder representative will also take part
to promote their department's interests in the business.
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the LED Change-Out Program
and agree with the approach it presents and that it has been approved by the
steering committee or other governance body identified in Section1.1. The
undersigned also acknowledge that significant changes to this will be coordinated
with and approved by the undersigned or their designated representatives.
Signature:Date: 411312017
Print Name
Title:
Role:
Landen Grant
Project Manager
o Business Case Owner
Signature:
Print Name
Title:
Role:
Date: S,/rt / tlM
Sr Dir of HR Operations
Business Case Sponsor
5 VERSION HISTORY
Template Version: 0212412017
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 35 of 186
[Version#
lmplemented
By
Revision
Date
Approved
By
Approval
Date
Reason
1.0 Landen Grant 4t1312017 Bryan Cox 4t14t2017 lnitial version
o
Business Case Justification Nanative Page 7 of 7
1 GENERAL INFORMATION
Reguested Spend Amount $505,000'
Req uesti ng O rg an iz ation/D epaftm ent Z08/Electric Meter Shop
Busrness Case Owner Dan Austin
Business Case Sponsor Bryan Cox
Sponsor O rg anizati onlDepaft ment Operations
Category
Driver
*Note: 2017 Reguest includes addilional one time request of $205,000 for lhe A-base meler replacement project. This
work is in suryort of the AMI project,
1.1 Steering Committee or Advisory Group lnformation
The deterrnination for how the funds in this business case will be spent is a joint
decision made by the Manager and General Foreman. A meter usage forecast will
be used to guide the decision making process. The forecast will be based on the
past five years of meter installs, current install rates, and manufacturer lead times.
2 BUS,,VESS PROBLEM
The primary driver for this business case is failed plant and operations. We regularly
experience failed plant when meters and/or metering equipment fails. Meters are a
critical component to supplying our customers with electricity and to accurately
measure their energy consumption. Please refer to Attachment 1 for the most
recent meter failure analysis completed by Asset Management in early 2017. This
analysis shows the failure curves for both digital and mechanical meters. The
analysas suggests thatthe more digital meters that are installed the higherthe meter
failure rate becomes. However, mechanical meters are no longer manufactured by
our meter vendors because they have moved to the digital market.
When meters fail at existing customer service point's immediate action must be
taken to repair or replace the meter. This is because a failed meter will not provide
accurate consumption data. Funding is necessary to replace or make needed
repairs othenruise the customer billing data will have to be estimated. Billing
estimation lowers the quality of service we provide our customers because
estimated data can be viewed by the customer as inaccurate. Additionally,
estimated billing data can put rate pressure on our customer base if usage is under
estimated. lf usage is over estimated it unfairly penalizes the customer whose bill
is being estimated.
o
o
o
Meter Minor Blanket
Business Case Justification Narrative Exhibit No. g Page 1 of 6
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 36 of I 86
Meter Minor Blanket
o
o
3 PROPOSAL AND RECOMMENDED SOLUTION
Optlon Capltal
Cost
O&M Cost Sfarf Complete
Fully fund new electric
meter purchases
$505,000 $0 01 2017 12 2017
RMA meters 313,994 $278,448.72 01 2017 12 2017
Repair or Refurbish meters 313,994 $281,013.48 01 2017 12 2017
This business case will reduce the O&M required to replace failed meters. As you
can see tabulated in the above table the lowest cost option is to fully fund this
business case. The reduction in O&M is associated with the meter replacement
portion of this business case.
Historically there has been three solutions to replace failed meters:
1.) Refurbish and repair in house
2.) Return Merchandise Authorization (RMA)
3.) Replace failed meter with new meters
3.1 REFURBISH AND REPAIR IN HOUSE
As Avista's population of digital meters grows and the mechanical meter population
shrinks the less viable this option becomes. This is because digital meters require
special equipment and training to repair, which is not available to our technicians.
Also of note is that mechanical meters are no longer manufactured by our meter
vendors because they have moved to the digital market. lt is very rare for our
technicians to remove a mechanical meter from the field as a result of failure. The
majority, if not all, of the rneter failures we experience in a given year are from the
digital meter families. Table 1 shows how many digital and mechanical meters we
have installed in WA and lD. This table also shows the average failure rate we
experience annually. This option was not chosen due to the equipment and
technical training required as well as the higher cost associated with the labor to
refurbish meters.
MeterType
Qtv-
Single-Phase Mechanical 172,2',15
Single-Phase Digital 187,1 00
Poly-Phase Mechanical 5,781
Poly-Phase Digital 17,346
Total 382,442
Average failures per year 3882
Table 1: Meter Quantities by Typeo
Business Case Justification Narrative Exhibit No. t Page 2 of 6
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 37 of 186
Charge Type Cosf
Refurbish Labor $37.26
lnstallLabor $35.76
Total $73.02
Table 2: Tabulated Cost to Refurbish Meters
3.2 RETURN MERCHANDTSE AUTHORTZATTON (RMA)
Option 2 is more costly than purchasing new meters due to the manufacturer's
costs, shipping costs, and labor associated with the RMA process. Recent repair
costs were quoted from our meter vendor to be between $20 and $40 dollars per
meter. Table 3 shows the total cost to RMA a single meter. This cost was developed
using very conservative values for each charge type and may be higher if more
expensive (Poly-phase) meter types were included. This option was not chosen
due to the high cost.
Charge Type Cost
RMA Labor $9.31
Shipping $7.17
Repair Charges $20.00
lnstall Labor $35.76
Total $72.74
Table 3: Tabulated Cost to lnstall RMA Meters
3.3 REPLACE FA'LED METERS WTH NEW METERS
The final option is to purchase meters new for meter failure replacements. This is
the lowest cost solution as shown in Table 4. There is a cost savings with new
meters because there is no labor associated with refurbishing and testing and there
is no RMA charges as compared to Options 1 and 2. This business case supports
Options 3 to purchase new meters to replace failed meters.
Charge Type Cost
Purchase Cost $20.43
Labor $35.76
Total $56.19
Table 4: Tabulated Cost to lnstall New Meters
o
o
o
Meter Minor Blanket
Business Case Justification Narrative Page 3 of 6Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 38 of 186
Meter Minor Blanket
o Do nothing is not an option because at minimum we need functioning meters to
replace failed meters. Doing nothing would keep Avista from accurately billing our
existing customer base.
o
Exhibit No. 3 Page 4 of 6
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 39 of I 86
o
Business Case Justification Narrative
Meter Minor Blanket
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Meter Minor Blanket and
agree with the approach it presents and that it has been approved by the steering
committee or other governance body identified in Section1.1. The undersigned also
acknowledge that significant changes to this wil! be coordinated with and approved
by the undersigned or their designated representatives.
o
Signature:
Print Name:
Title:
Role:
Date: 4 - ry-ZoiZ
Dan n
Electric Meter Shop Manager
Business Case Owner
Signature:Date:(-t:-\r
Print Name:
Title:
Role:
Bryan Cox
Sr Dir of HR Operations
Business Case Sponsor
Signature:
Print Name:
Title:
Role:
Date:o
Steering/Advisory Com mittee Review
5 YERS'ON HISTORY
T em p late V ersio n : O3lO7 12017
a
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 40 of 186
Version lmplemented
By
Revlslon
Date
Approved
By
Approval
Dace
Reason
1.0 Dan Austin 4113t2017 Bryan Cox 4t14t2017 lnitialversion
Business Case Justification Narrative Page 5 of 6
)
Meter Minor Blanket
o Attachment 1: Electric Meter Model Review
E;
Electric Meter
Model Review.pptx
o
Exhibit No. , Page 6 0f 6
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 41 of 186
o
Business Case Justiflcation Nanative
Requested Spend Amount $1,000,000
Req uesting OrganizationlDepartment Asset Maintenance
Business Case Owner
Business Case Sponsor Bryan Cox
Sponsor Org an ization/Department Asset Maintenance
Category Program
Driver Asset Condition
1 GENERAL INFORMATION
1.1 Steering Committee or Advisory Group lnformation
Cable condition and outage information is collected and analyzed by Asset
Management. This information is reviewed with Asset Maintenance to establish an
effective construction plan that prioritizes work based on faults and number of
customer impacted. Asset Maintenance then collaborates with Electric Operations
to coordinate the work. Asset Maintenance tracks the work budget, scope, and
schedule.
2 BUSINESS PROBLEM
The primary driver for the Underground Residential Development (URD) Cable
Replacement Program is to improve system reliability by removing URD cable with a high
failure rate. The other driver is to reduce O&M costs related to responding to customer
outages caused by the failed cable.
This work is needed to complete the replacement of the un-jacketed first generation
underground primary distribution cable referred to as URD cable. This first generation
URD cable was installed from 1 971 to 1982. There was over 6,000,000 feet of URD cable
installed during this time period. Subsequent to installation the URD cable began to
experience an increasing failure rate. From 1992 to 2005 the cable failure rates
quadrupled from 2 faults to I faults per 10 miles of cable. The faults reached a peak of
238 annual failures in 2AO7. lncreased capital funding to replace this URD cable from
2005 through 2009 helped stabilize the failure rates. Continued funding and replacement
of the cable has enabled a downward trend in failures as shown below in table 1. Cable
installed after 1982 has not shown the high failure rate.
This work is required to continue to reduce primary URD cable failures and increase
reliability. Historically there have been over 200 cable faults per year. The average cost
to respond to a fault in 2015 was about $3000 per event due to the challenging nature of
the work to locate and repair the cable underground. The estimated remaining pre-l982
cable is around 1,000,000 circuit feet.
H. Rosentrater, Avista
Schedule 3,Page 42 of 186
o
o
o
Primary URD Cable Replacement 2017
Cody Krogh
o Primary URD Cable Replacement 2017
The tables below demonstrate the effectiveness of this program to reduce faults and
outage expenses through the replacement of the defective cable. The trend of cable
faults and expenses decrease over time as the older cable is removed from the system.
Tablel: URD Cable Replacement Results
136
93
95
72
93
88
64
L4?
119
94
70
45
45
45
178,(xro
178,000
178,(xm
178,000
0
0
0
213,ooo
217,883
225,82?
117,247
35,874
35,515
24,155
o
Table 2: URD Cable Replacement Cost lmpact
$r,om,er3
$t,229,275
$1,368,s61
S1,516,1s9
$1,744,539
S1,899,311
$1,997,0s2
$1,0s6,113
$1,29s,225
91,352,649
s1,491,504
5l,4g4,lgg
S1,580,378
$t,720,O2O
Reference:
Electric Distribution System, 2016 Asset Management Plan
Case No. OrU-r-i,
H. Rosentrater, Avista
Schedule 3, Page 43 of I 86
Projected
URD
Cable -
Primary
OMT
Events
Actual
URD
Cable -
Primary
OMT
Events
Projected
Number
of Feet
Replaced
Actual
Number
of Feet
Replaced
KPI
Description
2009
20LO
20tL
20L2
20t3
20L4
201s
Projected Avoided
Outage Benefit due
to URD Cable - Pri
Caused Outages
ActualAvoided
Outage Benefit due
to URD Cable - Pri
Outages
Metric
Description
2009
2010
zAtt
20t2
20L3
20L4
20L5
o
Primary URD Cable Replacement 2017 o3 PROPOSAL AND RECOMMENDED SOLUTION
Optlon Gapltal Cost Start Complete
Do nothing $0
[Recommended Solution] Continue to Replace $1M 04 2017 122037
The Primary URD Cable Replacement Program requires design resources and
construction labor to complete the field work. There is also some analytics/engineering
to identify remaining cable segment locations. Given the projected low capital spend
level, the majority of the construction labor will be performed by Avista Crews. Contract
crews are typically used to plow in the cable, bore conduit or trench and install conduit in
the trench. Avista crews then pullthe cable into the conduit and complete the installation.
The Do Nothing approach presents significant reliability risk and added O&M cost. The
historic positive results from the URD cable replacement program shown above in section
two provide strong justification for continuing the current funding plan.
Over 6,000,000 feet of URD was installed before 1982. Programmed replacement of the
problem cable has been on-going at varying funding levels. The estimated remaining
pre-1982 cable is around 1,000,000 circuit feet. At the current proposed funding rate of
$1M per year this program is planned for the next 20 years. Reduced funding would
extend this time and result in additional outages and O&M expenses.
The URD Cable Replacement Program aligns with Avista's strategic vision by increasing
reliability to the electric distribution system. Safe and Reliable infrastructure is the focus
area for this program.
The projected annual capital spend of $1M per year is reasonable based on the realized
reduction in faults from previous work and this spend level enables continued
replacement of the high failure rate cable. Repair of the cable has not shown to be cost
effective because the cable typically faults in another location.
Avista customers will be positively impacted by this program by realizing fewer outages
from the URD cable failure. This results in improved system reliability. Avista electric
operations is positively impacted through converting this work to planned work that
enables more efficient use of labor. lt also reduces O&M expenses. Asset Management
is responsible for tracking URD cable outages from Outage Management Tool (OMT) and
tracking replacement locations and cost. The Asset Maintenance group is responsible
for identifying cable segments and managing the coordination of work.
H. Rosentrater, Avista
Schedule 3, Page 44 of 1 86
o
o
o
o
Primary URD Cable Replacement 2017
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Primary URD Cable
Replacement and agree with the approach it presents and that it has been approved
by the steering committee or other governance body identified in Section1.1. The
undersigned also acknowledge that significant changes to this will be coordinated
with and approved by the undersigned or their designated representatives.
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
Cody
Mgr Asset Maintenance
Business Case Owner
Bryan Cox
Sr Dir of HR Operations
Business Case Sponsor
Date: 4- l4- Zot+
Date:1 -\1 -\1
5 VERSION HISTORY
Tem plate Version : O3IOT Da17
case No. AVU-E-19-04 Page 4 0f 4
H. Rosentrater, Avista
Schedule 3, Page 45 of 1 86
Verelon lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Cody Krogh 4t1412017 Bryan Cox 4114t2017 lnitial version
o
SCADA - SOO and BUCC
Requested Spend Amount $920,000
Requesting OrganizationlDepartment T&D - SCADA/EMS/DMS - System Operations
Business Case Owner Brad Calbick
Business Case Sponsor Mike Magruder/Heather Rosentrater
Sponsor Organ ization/Depailment Energy Delivery
Category Program
Driver Asset Condition
1.1 Steering Committee or Advisory Group Information
The program's yearly Requested Spend Amount are reviewed and authorized by the Capital
Budget Group. Within the program's yearly authorized spend amount, specific budgetary
items to be implemented are determined based upon requests by affected stakeholders
including System Operations, Distribution Dispatch, and Power Supply, and are documented
in the Director of Transmission & Distribution System Operations' annual goals and
priorities list. The business case owner re-prioritizes items throughout the year as necessary
to address evolving business and compliance requirements. Any mid-year increases in the
program's requested spend amount require authorization by the Capital Budget Group.
2 BUSINESS PROBLEM
ln order to effectively operate the T'ransmission & Distribution (T&D) Systems, sufficient
business and computing hardware and software is necessary. This business case provides
for replacement of existing technology in alignment with manufacturer product roadmaps
for application and technology Iifecycles, as well as for deployment of new applications
and technology as required to address expanding regulatory and business requirements.
Technology continucs to change and T&D Systems continue to incorporate improved
technology.
The primary driver for this business case is to maintain and improve our real-time T&D
System Operations, upgrading and replacing systems as they become outdated and
obsolete. Many projects within this business case replace or upgrade equipment to meet
mandatory obligations required by the Federal Energy Regulalory Cornmission (FERC),
North American Electric Reliability Corporation (NERC), and the US Pipeline and
Hazardous Materials Salbty Administration (PHMSA). Other projects replace existing
fhiled or failing equipment to maintain operability. See belorv for information on
operalional needs supported by this business case.
o Transmission Operations - Certified System Operalors monitor electrical system
condilions around-the-clock. 'l'hey perform switching operations, rnaintain systen'r
voltage, and respond to abnornral conditions. Constant comnrunication occurs with
neighboring systems and regional authorities lo assure system reliability. Operators
respond to emergency situations such as black slarl restoration. load shedding,
disturbance response. and activation ol the Backup Control Center.
H. Rosentrater, Avista
Schedule 3, Page 46 of 1 86
o
o
o
1 GENERAL INFORMATION
o SCADA - SOO and BUCC
o Balancing Authority - To maintain the balance between load, interchange, and
generation, automated calculations occur every four seconds which determine
Avista's electrical power obligation based on customer load, contracted power
purchases & sales, and the system frequency at that instant. Conlrols are
automatically issued to generating stations to adjust generation to meet our
obligations. Control algorithms are optimized to minimize unnecessary mechanical
stress while maximizing compliance with control requirements.
o Gas Operations - Gas Controllers nronitor gas system conditions around-the-clock.'they direct field crews. maintain system integrity, and respond to abnormal
conditions. Controllers respond to emergency situations.
o Critical lnfrastructure Protection - Numerous protection measures arc deployed to
protect critical systems from unauthorized physical and electronic access. NERC
standards have dozens of requirements regarding protection of critical infrastructurc.
In-depth and lengthy audits are perfonned every three years by the regional reliability
organization, the Western Electricity Coordinating Council. Potentially significant
financial penalties result from any instances of non-compliance.
o NERC reliability standards are being continually changed. New and changed
standards are adopted which will address emergency operations, transmission
operations, critical infrastructure protection, communications, and balancing authority
operations.
3 PROPOSAL AND RECOMMENDED SOLUTION
Optlon Gapltal Coet Start Complete
Do nothing $o
Fully funded 'SCADA - SOO and BuCC" business
case
$920,000 0112018 12t2018
This program (Supervisory Control and Data Acquisition - System Operations Office arrd
Backup Control Ccnter) replaces and upgrades existing electric and gas control center
telecommunications and computing systems as they reach the end ol'their useful lives,
require increased capacity, or cannol accommodate necessary equipment upgrades due to
existing constraints.
Included are hardware, soliware, and operating system replacement and upgrades, as well
as deployment of additional capabilities to satisfy new operational stalrdards and
requirements.
Some systern upgrades may bc necessitated by other requiremenls. including NEITC
reliability standards. federal gas standards. systern growth. and external projects (e.g. Srnart
Grid).
There are multiple risks il-this program is not adequately funeled. The clearest risk would
be to public and personnel safety. 'fhe control systems supporled by this business casc
provide real-tinre visibility. situational awareness. and control ol'Avista's electric and gas
systems. Degradation of these capabilities due to lack ol'capacity. capability. or aging
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 47 of I 86
o
Business Case Justifi cation Narrative Page 2 of 5
SCADA - SOO and BUCC
systems would present increased safety risk. Additionally there is significant compliance
risk.
l'hese control systems provide the capabilities required to achieve compliance with
numerous reliability standards and requirements. For the electrical system these include
the NERC standards BAL, COM, CIP, EOP, INT, PER, PRC, TOP, and VAR. Forthe gas
system these include the PHMSA "Pipeline Safety: Control Room Management/Human
Factors" rule (49 CFR Parts 192 and 195.)
The expenditure of these funds is necessary to operate Avista's electric and gas systems in
a safe, reliable, and conrpliant manner.
The "Do Nothing" option was considered. This business case addresses the need to provide
the technical capabilities and tools to remotely monitor and control our electric and gas
infrastructure. The systems which accomplish this are integral to meeting our
responsibilities to ensure public and personnel safety, monitor and respond to system
conditions, protect equipment, and protect from cyber threats. These systems need to be
periodically upgraded and expanded to continue to meet existing and new requirements.
There is really no responsible "alternative" to this business case.
ln addition to the risks related to public and personnel safety, compliance risk would be
increased without this investment. Non-compliant operational capabilities and practices
would result in negative audit findings, significant financial penalties, and litigation
expenses. Obsolete equipment would remain in service until failure. Additional capacity
for growth may or may not be suitable for required expansions to meet other needs (e.g.
Regulatory, Smart Grid.)
Further justification of the need of this business case is listed below.
o There are numerous mandates in effect which compel these expenditures,
numerous NERC Standards, and PHMSA's Control Room Managernent rule,
in particular (49 CFR Parts 192 and 195).
o There is no practical risk mitigation should we fail to meet these requirements.
o This is a conlinuous program. Work is started and completed throughout each
year. and in some cases, such as major upgrades, spans multiple years.
o This business case is crucial in a key aspect of Our Vision; "l)elivering reliable
energy service..." Il is essential in providing suflicient control center
technology tools, situational awarcness, and monitor/control capabilities to
achieve reliable energy service.
o l'his business case is key in accomplishing the Our Focus item of "Safe &
Iteliable Infrastructure." Providing remote monitor and control capabilities to
operators is essential in achicving "optimum life-cycle pertbrmance - safely.
reliably, and at a fair price."
o The amount requested is based partially upon historical spending needs. and
panially on known upcoming major projects.
o Our Customers include:
. Retail and wholesale electric custonlers
H. Rosentrater, Avista
Schedule 3, Page 48 of 186
o
o
o
SCADA - SOO and BUCCo
o
. Wholesale electric transmission customers
. Retail gas customers
o Our Stakeholders include:
o Operations
. System Operators
. Power Schedulers
. Distribution Dispatchers
. Gas Controllers
r EnerBY Accounting & Risk Management
. Neighboring utility control centers
. Peak Reliability Coordinator
o l'echnicians
. Protection/Control/Metering'Iechnicians
. TelecommunicationTechnicians
o Engineering
' Protection/lntegration Engineering
. SubstationEngineering
. GenerationEngineering
. Distribution System Operations
o EnterpriseTechnology
. Oracle Database Administrators
. Security Engineering
r Network Engineering
r Network Operations
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 49 of 186
Business Case Justification Narrative Page 4 of 5
SCADA - SOO and BUCC o4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the 'SCADA - SOO and BUCC"
business case and agree with the approach it presents. Significant changes to this
will be coordinated with and approved by the undersigned or their designated
representatives.
Signature:
Print Name:
Title:
Role:
zo_-Date: 1 t7 2t rff
T. Calbick, P.E.
Manager of SCADA/EM S/DMS
Business Case Owner
Signature:
Print Name:
Title:
'hArLr^^A Date: 1 I l2-It8
Energy Delivery
Transmission &
System Operations
Director,
Distribution
Role:Business Case Sponsor o
Signature:
Print Name:
Title:
Role:
Date:
Steering/Advisory Committee Review
5 VERSION HISTORY
Template Version : OYOT 12017
Case No. AVU-E-19-04 Page 5 of 5
H. Rosentrater, Avista
Schedule 3, Page 50 of 1 86
Version lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Calbick 2017-04-10 Magruder 2017-04-14 lnitialversion
2.0 Calbick 2018-07-12 Magruder 2017-07-'t2 Review & update
Business Case Justification Nanative
o
7
o Reconductor and FDR Tie
GENERAL INFORMATION
STEERING COMITIITTEE OR ADVISORY GROUP INFORMATION
Distribution Area Engineers and Distribution Sysfem Planning.
Tim Figart- Spokane
Scott Weber & Marshall Law - East Region
Dan Knutson - Othello, Davenport
Marc Lippincott - Colville
Elizabeth Frederiksen - South Region
Will Stone - Distribution System Planning
David James * Distribution Eng. Mng.
BUSINESS PROBLEM
Avista's electric distribution system consists of three hundred and forty seven
(347) discrete primary electric circuits enoompassing over 19,000 miles of
overhead conductors and underground cables. The distribution grid is managed
by division or'area engineers' and centralized distribution planning.
Load Demandg on the qrid at€ dvnamic with load patterns changing as a result
of many factors including weather, temperature, economic conditions,
conservation efforts, and seasonalvariations. Avista operates a radialdistribution
system using a trunk and lateral configuration (industry standard). Though many
circuits are monitored at the source substation (SCADA), downstream trunk and
lateral branch circuits loading are analyzed via computer simulation. At Avista.
distribution analvsis is performed with the Svnerqee load flow proqram.
o
o
Requested Spend Amount $5,000,000 / year (on-going)
Requesting Organlzation/Department Disbibution Engineering - C51
Business Case Owner David James
Businese Gase Sponsors David Howell, Josh DiLuciano, Heather Rosentrater
Sponsor O rganizatlonlDepartment Energy Delivery / Distribution Englneering
Category Program
Driver Performance & Capacity
Business Case Justification Narrative Exhibit No. 8page 1 of 12
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 5 1 of I 86
Segment Reconductor and FDR Tie
Avista's distribution system analysis and mitigation strategies are informed by
several intema! documents and data repositories. These are listed below for
reference:
1. Distribution Planning Standard '500 Amp FDR'- internal document that defines the
performance criteria and limits for both urban FDR tie systems and rural pure radlal
circuits. This document is maintained by Distribution System Planning (W. Stone).
2. tpR StAtuF Beport - distribution engineering publishes an annual report indicating peak
circuit demand by season, reliability outage statistics, circuit health check, and other
logistic information.
3. Distribution Standards - distribution engineering maintains construction standards for
both overhead and underground primary circuits. lt also maintain standards for all
electrical material and apparatus.
4. Pl Database - operating data retrieved by either the SCADA or DMS system is stored
in the Pl historian. This allows direct access by engineers and planners to help inform
both operating and design strategies. (Distribution Operations)
5. Distribution FDR Management Plan - a design guide to assist the CPC/Engineer when
making decisions related to reinforcements or reconstruction of distribution assets
(Asset Mngt).
6. Feeder Automation Strateqv - a design guide to assist the CPC/Engineer when making
decisions involving automated devices (Distribution Engineering).
7. Synergee Computer Program -the load flow program derives topology information from
Avista's GIS system. Updates to the Synergee database are performed by Distribution
Planning.
8. Scada Variable Limit (SVL) - Avista uses temperature compensated program to monitor
conductors, cables, and series connected major equipment (e.9. transformers, breakers,
switches, regulators, and etc.). This system is deployed on Avista's EMS/SCADA
system. The program is SME supported by Substation Engineering.
o
o
Business Case Justifi cation Nanative
o
Exhibit No. Fage 2 of 12
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 52 of 186
Segment Reconductor and FDR Tieo
A typical distribution circuit is illustrated below. Similar to municipal water
systems, grid capacity decreases with distance away from the source substation.
This leads to system 'constraints'as loads are added to the system through direct
customer action or load shifting between circuits (Avista).
A A
A
500A 200 A 100 A
Sub
o Illustration of Distribution Grid Capacity Constraint
Ayista's Distribution System conlains over 75 different wires and cables
Exhibit No. Page 4 of 13
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 53 of I 86
2017 Avista Standard OH Primary Conductors
556 All-Aluminum (AAC) -- 557 Amps (main trunk, urban)
336 All-Aluminum (AAC) - 405 Amps (main trunk, rural)
2/0 Aluminum Conductor, Steel Reinforced (ACSR) -- 221Amps (gen purposes, rural)
#4 Aluminum Conductor, Steel Reinforced (ACSR) - ll2 Amps (lateral circuit)
Legacy Conductors
2/0-3lO Copper -291-336 Amps (maintrunk)
#2 Copper- 185 Amps (maintrunk)
#6 Copper - 65 Amps (ateral circuit)
Avista's distribution grid contain over 1,000 miles of conductor equivalent or smaller than
#6 Copper.
o
Business Case Justification Narrative
Load Demand
Exceeds Grid
Capacity
Segment Reconductor and FDR Tie
DECISION MAKING PROCESS o
The decision model is represented by individual 'proposals'coupled with joint
review and acceptance by distribution engineering and distribution system
planning, The program's business case is modified annually to reflect the S-year
work plan. The Capital Planning Group then reviews all of the submitted business
cases and prioritizes and allocates resour@s across the organization. Distibution
infrastructure is not part of the "Engineeing Roundtable" with the exception af
d i stri b ution subsfations.
The Segment Reconductor & FDR Tie decision model is illustrated below.
Authorized Resources by CPG
o
Requested Resources by
Distribution EnglPlanning
o
ExhibitNo. Fage
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 54 of 186
Proposal Acceptance Approval
( Arca' Division llnsirrecr)
Protrlctn Area lelentilied b1.
Area f:nginccr (South. [:.ast. and
West Region Proposals to
plincipally:
I ) Reconducl.or line
"\cglncnl" to ntitiuirtc
thcrrnal ovcrload
l) ('t,nstlrrcr lic-l-irre
corrrrectior) to shilt
donand to an ad.jacerrt
c irc trit
( DistribLrtion -l'earn )
All pro-iect proposals review,ed
b-r Distribution [:rrsincerinrr ancl
Planning to providc pcer
rcvicw. lnitialll screcrrirrg to
detcrrlinc pliorit-r ranking and
inrrncdiacl'. [Jusirress Casc
Rcvised atrrrual ll' lo reprcscnt .S-
y'ear planning horizon.
Sutlnitted to Ct'C
(Capital Planrring)
llusiness Casc rcvicr.r lLcneral l,v
resLrlts irr partial firndirrg ol'thc
wtrrk plarr. l'lre I)istribution
fcarrt (Al:. Mng. l)lalrrring)
reassernbles to prioritize. ranl<.
ancl scltedule pro.iects trl aligrr
rvith authorized builgets.
Business Case Justification Narrative 4o112
Segment Reconductor and FDR Tieo
o
PROPOSAL AND RECOMMENDED SOLUTION
Optlon Description Gonsequence
Do-Nothing No Action to mitigate
thermal overloads
Conductor will 'sag'
down beyond design
limits and contiact joint-
use telecom circuits or
violate NESC prescribed
limits. ln extreme
situations, conductor
failure willoccur.
Select DSM treatment Target homes and
businesses with
demand side
management solutions
to effect peak load
demand reduction.
This option would be a
viable, however, State
Commissions do not
allor DSM treatment in
localized areas.
Load Shifting This action is
represented in the
Segment Reconductor
program. Ey extending
lines b adjacent circuits,
load can be shifted to
underutilized circuits and
mitigate overloads. This
action requires capital
investment.
Recondudor overloaded
'segments'to lncrease
line capaci$
All electric components
allthermally limited.
Reconductoring is the
most direct aoproach to
mitigating overloaded
circuits.
RECOMMENDATION:
1. Do Nothino is unacceptable. Violates NESCMAC regulations and represents
an una@eptable levelof risk to public safety and infrastructure.
2. Tarqeted DSM is not allowed.
3. FDR Tie - represented in the program (indirect solution)
4. Segment Reconductor- represented in the program (direct solution)
o
Business Case Justification Narrative ExhibitNo. tsage 5 of 12
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 55 of I 86
FDR Ti€
Capacity Increase
Reconductor and FDR Tie o
Projects listed in the current S-year "Segment Reconductor and FDR-Tie" program
are summarized on the Distribution Engineering SharePoint site. The following is
a summary of those projects listings as of Friday Apri! 7, 2017.
http ://s ha repoinUdepa rtments/enso/d ist/defa u lt. asox
Region 2077 2018 20!9 2020 2A2L
West
East
South
Total
One of the planning objectives is to levelize the rcsource demands and avoid
significant upswings ordowntums in crew resource forccasting. Distribution
Engineeing worl<s closely with the Operuting Drvrsions andAssef Maintenance to
develop a resource balanced work plan and maximize the effectiveness ofAvrbfa
craft rcsources.
o
Distribution assets are fixed resources and therefore, project alternatives are
generally dominated by supply side solutions. Operating limitations are codified in
Avista internal standards (as listed) but derived through industry and regulatory
policies including: Washington Administrative Code WAC), National Electric
Safety Code (NESC), National Electric Code (NEC), and IEEE/ANSI standards &
manufacturer recommendations specific to equipment ratings and operating limits.
Exhibit No. hage 6 of 12
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 56 of 186
2,485,000
13 projects
1,315,000
9 projects
1,375,000
8 projects
5,!75r,,,J,O
3O proJects
1,250,000
1,$0,m0
2,500,000 2,500,000 2,5oo,ooo 2,5q),000
1,250,000 1,250,000 1,250,000
1,250,000 1,250,000 1,250,000
4,900,(x)0 5r000,qn 5,(xn (xto s,(xro,ooo
Business Case Justification Nanative
o
Segment Reconductor and FDR TieoAPPROVAL AI\D AUTHORIZATION
The undersigned acknowledge they have reviewed the Segment Reconductor and
FDR Tie busrness case and agree with the approach it presents and that it has been
approved by the steering committee or other governance body identified in
Section1.1. The undersigned also acknowledge that significant changes to this wil!
be coordinated with and
representatives.
by the or their designated
Signature:
Print Name:
Title:
Role:
Date ,/,/,
urf)aryfS
\irl. tn,t. nr-
Business Case Owner
Signature:
Print Name
Title:
Role:
Date:
fe t3Business Case Sponsor
o Signature:
Print Name:
Title:
Role:
Date:
Business Case Sponsor
Tem plate Version : 03 lO7 12017
Exhibit No. hage 7 of 12
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 57 of 186
Veralon lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.1 David James Above
signatures
04107117 lnitialversion
o
Business Case Justifi cation Nanative
a\,', lrr.
Segment Reconductor and FDR Tie
EXAMPLES SHOWN FOR ILLUSTRATION:
FDR Status Report (provides baseline circuit performance and logistics
information) Warning Level (yellow highlight),
Thard & Hatch 3HTr211
tarrb&aa
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Business Case Justification Nanative ExhibitNo. Page 8 of 12
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 58 of I 86
ll{tItr
Segment Reconductor and FDR Tie
o Distribution "500 Amp" Plan (System Planning)
Company standard for the operation and load service planning associated with
Avista's electric distribution grid.
Key elements- Urban "FRD Tie" system. Requires that reserve capacity margins
be maintained so that adjacent circuits can restore service to customers in the event
of a planned orforced outage. ln summary, no urban circuit should be loaded above
its 67% capacity limit.
Svstem Limits - Operatino & Deson
The following sel of proposed service limits are based on tradiUonal company service
reliability and practices, as wellas appropriate state and federal rules and regulatons
These are guidelines only. specilic situalions will arise where lhese limils nlust be
exceeded because of p]rysical or economic problerns.
1. Maxamum Oulrage - 3 hrs.
This is an appnoximate numberheavily weaghled by the polilical inlluence ot
'Keeping the Cuslomer Happy". Avista urban customer service recod has been
quite good in the past and shoulrt be maintained at a high level.
o
2. Maximum Portion ol Customers Servetl to See Full Length of Outage - 50%
For example: Feeder outage - 50t5 of customers on thal Eeder)
Substatirn outage - 50% of customers servett l)y that substataon)
This again is an arbitrary number. However, it is the worst case possibility using lhe
subslalion connectrons and feeder sectionalizing pracuce that is being recom-
mencled as General Oesign Criteda for the future. t\iost cases would resull in a
smaller numberof custorners seeing fulloutage duration.
Excerpt from "500 Amp" Plan. Source: Distribution SharePoinl (3115117')
Exhibit No. Spage g of 12
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 59 of I 86
o
Business Case Justification Narrative
oAvista's SCADA monitoring system incorporates a temperature compensated
thermal, ampacity rating system known internally as SVL (Scada Variable Limit).
SVL has been in use since 1993. The following indicates a summary screen
indicating the top ten most heavily loaded (by o/o capacity) transmission lines,
substation power transformers, and distribution circuits. This screen is
continuously monitored by System Operators but also used by Area Engineers to
capture data during peak load conditions. lt provides additionaldata to aid with
project planning for the segment reconductor program.
ildrl:ml tr nrcnrrry to mrnurlly rcfret tttb dbehv lo updrto thr roil odrr.
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Sqgment Reconductor and FDR Tie
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Business Case Justification Nanative Exhibit No.p6ge 10 of 12
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 60 of 186
SCADA \lariable Lirnits
Top l0 Urtr
o
o
Reconductor and FDR Tie
FDR by Area. Shown only to illustrate the scale of the effort to monitor our
distribution system.
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Business Case Justifi cation Nanative ExhibitNo.ftgell of 12
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 6 I of 1 86
U .l tH
Segment Reconductor and FDR Tie
Synergee Computer Modeling (Millwood 12F4 screen shot)o
Computer simulation is the primary tool used to identiff and develop strategies to
mitigate a thermal overload condition. Note, thatAvista's electric distribution
system has been developed over the full course of the Company's operating
history and infrastructure installed near the turn of the century (1900) is still in-
service. Though current Avista construction standards limit the number of
overhead primary wires to four $l: # ASCR, 2/0 ACSR, 336 AAC, 556 AAC;
Avista maintains a fleet of seventy five (75) different primary wires and cables.
Many are no longer available commercially and we maintain'hand coils' salvaged
from project work in order to effect maintenance repairs on those conductor
segments. We eased to installoverhead copper conductors in the 1950's though
today, thousands of miles of #6A, #6CW, and other copper conductors remain in
service.
Synergee Computer System: Millwood 12F4 Gircuit
o
Exhibit No. Page 12 of 12
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3,Page 62 of 186
Businees Case Justifrcation Nanative
o
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Electric Stormo
o
1 GENERAL INFORMATION
Requested Spend Amount $3,090,000
Req uesting Organization/Department Operations
Business Case Owner Cody Krogh
Business Case Sponsor
Sponsor Organization/Department Operations
Category Program
Driver Failed Plant & Operations
1.1 Steering Committee or Advisory Group lnformation
The Electric Storm work is overseen by the local area operations engineers and
area construction managers. The work is unplanned and non-specific in nature, but
occurs regularly and historicalaverages are used to estimate an annualquantity. ln
the event of larger scale storms, like the historical storm event in November 2015,
a formal lncident Command System (lCS) is created to manage the resources
needed to respond.
2 BUSINESS PROBLEM
The electric storm business case is driven by restoring Avista's transmission,
substation, and distribution systems (damaged plant) into serviceable condition
during a weather storm event where assets are damaged. Storm events are random
and often with short notice. The business case of Storms is funding a rapid response
to unplanned damages and outages so customer outages are minimized. The
business provides funds for replacing poles, cross arms, conductor, transformers,
and all other defined retirement units damaged during storm events. The damage
can be due to high winds, heavy ice and snow loads, lightning strikes, flooding, or
wildfires. The importance of quickly replacing damaged facility is vital to providing
reliable service to our customers.
The annual budget amount is determined based on historical average experience
rate of Capital restoration work.
3 PROPOSAL AND RECOMMENDED SOLUTION
Option CapitalCost Start Complete
Unfunded $0
Fully Funded $3,090,000M Continuous Program
Figure 1 shows the historical costs (2005 - 2016) for the distribution storm
business. From 2005 to 2013, the average annual cost for distribution storms was
$2.1 million dollars, with a range of $893k (2005) to $2.7M (2013). The years of
2014 and 2015 experienced an anomaly with 2014 having two uncharacteristic
Business Case Justification Narrative Case No. AVU_E-19_04 Page 1 of 3
H. Rosentrater, Avista
Schedule 3, Page 63 of 186
o
Bryan Cox
Electric Storm
major wind events during the summer and November 2015 was a historic 1O0-year
wind storm event. Consequenlly,2014 and 2015 realized record spending on storm
related distribution work. The year 2016 had a distribution storm spend of nearly $4
million, but much of the work was related to clean up of the historic November 2015
storm event. The proposed funding level does not account for the storm anomalies
that occurred in 2A14 and 2015.
o
Distribution Storm Historical Costs (2005 - 2016)
$30,ooo,ooo
s25,000,000
S20,ooo,ooo
S15,ooo ooo o
$1o,ooo,ooo s2,272,651 92,973,775 s2,665,145 s1,554,721 57,oil,zLo
s5,ooo,ooo S3,440,031 s2,733,229
$893,662
I
S1,633,443 $1,393,997Is-
2005 2006 2007 2008 2009 2010 20tt 2012 2013 2014 2015 2016
Figure I: Dx Slorm Hislorlcal Costs
The Electric Storm business case aligns with the company's strategic goal of Safe
and Reliable lnfrastructure. The work is a key component to minimizing customer
outage times and thus contributes to Avista's Reliability indices like SAFI and
cAlDl.
o
H. Rosentrater, Avista
Schedule 3, Page 64 of I 86
I listorir I llll
vcirr lr irttl cve nl
I'rr in rttl.ior sulllnre r'
u ilrtl evcrrls
o
o
Electric Storm
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Electric Storm and agree
with the approach it presents and that it has been approved by the steering
committee orothergovernance body identified in Section1.1. The undersigned also
acknowledge that significant changes to this will be coordinated with and approved
by the undersigned or their designated representatives.
Signature:
Print Name:
Title:
Role:
Signature:
Print Na
Title:
Role:
Cody
Mgr Asset Maintenance
Date: 4- lq - Zot
Date:9-t: -t7
Business Case Owner
Bryan
Sr Dir of HR Operations
Business Case Sponsor
5 VERSION HISTORY
Template Version: 03107 12017
H. Rosentrater, Avista
Schedule 3, Page 65 of 186
Venslon lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Cody Krogh 4t1412017 Bryan Cox 4t14t2017 lnitialversion
a
o1 GENERAL INFORMATION
Requested Spend Amount $'12,850,000 per year on-going
Requesting Orga n ization/Department T&D - Substation Engineering
Business Case Owner Ken Sweigart
Business Gase Sponsorc Josh DiLuciano and Scott Waples
S ponsor Organization/Department T&D
Category Program
Driver Asset Condition
1.1 Steering Committee or Advisory Group lnformation
The Engineering Roundtable manages the prioritization of projects within this
business case as supported by Asset Management studies and input from
company subject matter experts. The Engineering Roundtable is comprised of
representatives from the following departments: Asset Maintenance, Asset
Management, Compliance, System Planning, System Operations,
Telecommunications, Transmission Contracts, Protection Engineering, Substation
Engineering, Transmission Engineering, and Substation Support.
2 BUSINESS PROBLEM
Replacing and upgrading major substation apparatus and equipment as it
approaches end of life or becomes obsolete is necessary to maintain safe and
reliable operation of Avista's transmission and distribution systems. Rebuilding
significant portions of stations may be necessaryto accommodate the replacement
of failing or obsolete equipment since new standard-use apparatus and equipment
is often of higher capacity and newer technology and may need to meet updated
equipment spacing and operating standards. While asset condition is the primary
driver triggering the need to replace major apparatus and equipment, additional
factors that may contribute to the need to broaden the scope of a station rebuild
project include operational and maintenance requirements, updated design and
construction standards, SCADA communications, future customer load-service
needs, and other programs (e.9. Grid Modernization). Future complete station
rebuilds and/or replacements will be outside the scope of this business case and
will be addressed individually.
Major apparatus include high-voltage circuit breakers, lower voltage circuit
breakers and reclosers, circuit switchers, capacitor banks, powertransformers and
step voltage regulators. Associated equipment includes relays, meters, surge
arrestors, station rock and fencing, panel houses, instrument transformers, high-
voltage fuses, air switches, autotransformer diagnostic equipment, batteries and
chargers, and panel houses.
Failure to replace old and obsolete equipment will increase the risk of more
frequent and/or extended duration of outages due to major equipment failure and
o
o
Subsfafio n - Station Rebuilds Program
Business Case Justification Narrative Exhibit No. 8 Page 1 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 66 of 186
o
Subsfafibn - Sfafion Rebuilds
inability to maintain major apparatus. Substation outages may have significant
consequences as they tend to impact a large number of customers.
3 PROPOSAL AND RECOMMENDED SOLUTION
The recommended approach is to replace station apparatus and equipment as
needed due to asset condition and consider broader station rebuilds when the
majority of assets in the impacted area of a station have been determined to have
reached their end of life.
This business case aligns with the Company's mission to deliver safe and reliable
electric service to customers by preventing the degradation of reliability and
mitigating the frequency and duration of outages due to equlpment failure.
Option 1: Do nothing - Not recommended
Option 2: Maintain current funding level - Current spending on the Asset Condition
risk category is $12.85 million annually. Project prioritization will be
supported by Asset Management and substation subject matter experts
for prioritization of work within this risk category. Project and funding
levels will be reviewed on an annual basis.
Option 3: Reduce current Asset Condition capital improvements. Not
recommended. May lead to a reduction in the level of reliability and or
operating flexibility that can be achieved by the transmission and
distribution systems.
o
Option Capital
Cost
Requested
Start
Requested
Complete
Risk
Mitigation
Alternate 1: Do nothing $0 N/A
Alternate 2:
Maintain present level of
Sfafion Rebuilds
$12.85M 2017 N/A
(Program)
a Lower
Operating
Risk
Alternate 3:
Maintain minimum level
of Station Rebuilds
0-$12M N/A
(Program)
a Higher
Operating
Risk
o
Business Case Justification Narrative Exhibit No. 3Page 2 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 67 of 186
Subsfation - Sfafion Rebuilds Program
o
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Subsfation - Station
Rebuilds Program Busrness Case and agree with the approach it presents and that
it has been approved by the steering commiftee or other governanoe body identified
in Section1.1. The undersigned also acknowledge that significant changes to this
will be coordinated with and approved by the undersigned or their designated
representatives.
Signature:
Print Name:
Title:
Role:
Date:
Manager Engineering
Business Case Owner
Signature:
Print Name:
Title:
Role:
laH Date:
/,losn DiLuciano
Director, Electrical Engineering oBusiness Case Sponsor
Sign Date:
Print Name:
Title:
Role:
Scott Waples
Director, Planning and Asset Mgmt
Business Case Sponsor
5 VERSION HISTORY
Template Version: O3lO7 12017
Exhibit No. 8 Page 3 of 3
Case No. AVt -E-19-04
H. Rosentrater, Avista
Schedule 3, Page 68 of I 86
neth
Verslon lmplemented
By
Revlslon
Date
Approved
By
Approval
Dats
Reason
1.0 Ken Sweigaft Above
signatures
4/14/17 lnitialversion
2.0 Jeff Schlect ill7/17 Above
signatures
s/r+/t-t Consolidation of capital
maintenance and major
rebuild cases
Business Case Justification Narrative
o
s/t/^r
il,/,^
{/h/ 2o/z_-t_-_-
Distribution Transformer Change Out Program 2017o
o
1 GENERAL INFORMATION
1.1 Steering Committee or Advisory Group lnformation
Transformer condition, outage information, and energy savings is collected and
analyzed by Asset Management. The environmental team tests and tracks PCB
level of each transformer by location. This information is reviewed with Asset
Maintenance to establish an effective replacement program that prioritizes work
based on environmental risk and reliability. Asset Maintenance manages the
program and collaborates with Electric Operations and contractors to coordinate
the work. Asset Maintenance tracks the work budget, scope, and schedule.
2 BUSINESS PROBLEM
The Transformer Change-Out Program (TCOP) work has three primary drivers. First, the
pre-1981 distribution transformers that are targeted for replacement average 44 years of
age. Their replacement will increase the reliability and availability of the system.
Secondly, the transformers to be replaced are inefficient compared to current standards
and their replacement will result in energy savings. Thirdly, pre-1981 transformers have
the potentialto have Polychlorinated Biphenyls (PCB) containing oil.
The TCOP Program was implemented in 2011. The Program has focused on eliminating
alltransformers containing or potentially containing PCBs. The initialtarget was on areas
near the Spokane and Pend Oreille River watersheds and has now moved to all
transformers containing PCBs. These transformers have specific work plans for removing
them from the system. These PCB targeted transformers are on schedule to be replaced
by 2019. The second phase of the Program is to replace all remaining pre-1981
transformers through the use of the Wood Pole Management Program. This work is
planned to be complete by 2040 based on the current funding request.
PCBs and PCB wastes are regulated by both the Washington Department of Ecology
(Ecology), through the Dangerous Waste Regulations, Chapter 173-303 WAC, and by the
U.S. Environmental Protection Agency (EPA) under 40 CFR Part 761, the Toxic
Substances Control Act (TSCA). The transformers to be removed early in the program
are those that are most likely to have PCB containing oil and their replacement will reduce
Efilblt No. u
case No. AVU-E-19-04 Page 1 0f I
H. Rosentrater, Avista
Schedule 3, Page 69 of 1 86
Requested Spend Amount $3,000,000
Requesting Organ ization/Department Asset Maintenance
Business Case Owner Cody Krogh
Business Gase Sponsor Bryan Cox
Sponsor Organization/Department Asset Maintenance
Category Program
Driver Asset Condition
o
Business Case Justification Narrative
Distribution Transformer Change Out Program 2017
the risk of PCB containing oil spills which are a safety, environmental, and a public
relations concern.
There has also been an increased focus on PCBs and similar contaminants by local,
regional, and national initiatives. On April 10,2010, the EPA had issued an Advanced
Notice of Proposed Rulemaking (ANPR) on new PCB regulations. Washington State
Ecology created an "urban waters initiative" to investigate persistentand bio-accumulative
toxics; this initiative included the Spokane River watershed. The Spokane River is listed
on the Clean Water Act "impaired" list for PCB contamination. The City of Spokane began
a storm water study to find and reduce sources of PCBs in its storm water system. ln
addition, PCB cleanup is very difficult in any environment and nearly impossible in
aqueous environments. These and other efforts reflect how important it is to keep PCBs
from entering the environment. As a result, Avista is determined to aggressively remove
PCBs from its electricaldistribution system in a disciplined manner.
Currently, there are 906 transformers remaining in our system that are known or predicted
to contain a PCB level greater than 1 part per million. ln addition, there are 1,098
underground transformers that have been predicted to not contain PCBs (predicted non-
detect) however, no actual tests have been conducted on these transformers. These
transformers were analyzed using Serial Number Sequencing (SNS) where transformers
with similar serial numbers were assumed to have similar PCB levels. Serial Number
Sequencing is more cost effective versus PCB testing the pre-1981 transformers in the
field. The predicted non-detect transformers do run a risk of containing some level of
PCBs. The table below reveals the replacement plans for the targeted transformers in
the immediate future.
This is the sixth year of replacing the targeted (PCB containing) distribution transformers.
When the program began in 2011, there were over 12,000 targeted transformers.
Currently, 7o/o of the 12,000 are remaining. This program has been successful in
converting targeted transformers to a retired asset. The chart below shows remaining
transformers year to date.
o
o
o
2017 2018 20t9
Total L2342
Retired 1L436
Remaining 906
815
TCOP Only
Planned 73 18
Predicted Non-Detect 1098 535Planned forl
rcoP onfi |
s58 0
Distribution Transformers Containing PCB's
Distribution Underground Transformers Predicted Non Detect
(Predicted No PCB's)
Business Case Justification Narrative Exhibit No. 8 page 2 of g
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 70 of 1 86
lro112016l
Distribution Transformer Change Out Program 2017o
o
Non Retired TCOP Transformers By PCB Status
As of January L,2OL7
30,m0
25,000
20,m0
15,000
10 000
5,000
Total All TCOP Contein FCBb
Trensformerg
Prediacd Non-
Dttoct
Actuel Non-
Octcct
e Model Results OH
. .. ' '.... Linear (Transformer UG)
Another compelling reason to replace the pre-1981 transformers is due to the decreasing
reliability caused from a population of transformers that average 44 years old. The optimal
replacement age of a transformer is M years old. The failure of an aging transformer
results in an outage for the downstream customers. The chart below shows the positive
reduction in outages as a result of this Program. Note that overhead transformer outages
have been reduced nearly 60% between 2007 (approximately 250 outage events) and
2016 (approximately 100 outage events). There is a customer impact value of $5,600
per event according to the U.S. Department of Energy's lnterruption Cost Estimate (lCE)
Calculator. This reduction in outage events equates to about $840,000 in customer value
for 2016. !
OMT Event Trends and Projections
-J16n5f6rmer
- OH
rModel Results UG -fl36sf6rmerUG..'..'... Expon. (Transformer - OH)
v!
Co
lrl
=o
o
olt
E
=z
400
3s0
300
250
200
150
100
50
0
20602000201020402050 2070
o
Business Case Justification Narrative
2020 2030
Year
m
caseNo. AVU-E-19-04 Page 3 0f 8
H. Rosentrater, Avista
Schedule 3, Page 71 of 186
-
Another significant driver for the TCOP program is energy efficiency and cost savings. A
component of Washington State lnitiative l-937 is to undertake cost-effective energy
conservation. To fulfillthis requirement, sources of efficiencywere identified. Distribution
transformers are one of the identified groups of assets where efficiency can be gained by
replacing dated models with newer models that do not lose as much energy while in an
unloaded state. Upon replacement of all pre-1981 transformers, there is an expected
energy savings of 5.6 MW per hour. According to Asset Management this represents a
savings of $215 per hour and contributes to an estimated lnternal Rate of Return (!RR)
of 8.24o/o.
The key metrics of the program are to replace the targeted transformers and achieve
energy savings, which results in increased reliability. The table below reflects the results
tracked for the program.
Table 2: TCOP Metrics
2,687
2,555
2,930
2,335
1,419
7.,283
347
2,529
2,599
2,625
2,899
2gto
2,?O4
2,3O4
2344
t,746
1,265
2,43O
2,67L
3,002
3,150
2,428
o
o
o
*
|t
References.
"Distribution Transformer PCBs" report, February 2010
Electric Distribution System, 2016 Asset Management Plan
Planned Number
of Transformers
Changed Out
Actual Number
of
Transformers
Changed Out
Planned Energy
Savings from
Transformers
(MWh)
Actual Energy
Savings from
Transformers
{MWh}
Year
20t2
2013
2014
2015
20r6
20t7
2018
+Not calculated
Distribution Transformer Change Out Program 2017
Business Case Justillcation Narrative Exhibit No. 8 Page 4 of 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 72 of 186
Distribution Transformer Change Out Program 2017o
o
3 PROPOSAL AND RECOMMENDED SOLUTION
Optlon Capltal
Coat
Start Complete
Do nothing: No planned
replacement program fordistribution transformers.
Substantially higher risk of a PCB
containing oil spill occurrlng.
$o N/A
Continue to replace high risk PCB
transformers, then remaining pre-
1981's.
$3,000,000 01 2017 12 2417
[Alternative #11 Planned
replacement of PCB transformers
only through programmatic work.
Cost and timing dependent on
when programs address feeders
with PCB transformers
ln order for the Distribution Transformer Change-Out Program to be successful, design
resources are needed to complete field assessments and designs. Contract construction
crews are also necessary to supplement Avista's Electric Operation resources. Pole
inspection support from the Wood Pole Management group is also required to ensure the
safety of the pole prior to any construction work.
This Program has been funded since 2011. The current approach is considered the best
solution for mitigating environmental risk and for dollar efficiency. There are alternatives
that consider different implementation schedules. One alternative is to remove overhead
PCB containing and other pre-1981 transformers through the Wood Pole Management
program. This alternatives does have some efficiencies because it involves a crew
visiting a pole one time to address multiple issues. Additionalfunding would be required
for Wood Pole Management to conduct this increase in scope. Another program to
address the underground transformers would also be needed. The time to replace all,
would be approximately 20 years. Underground transformers run a greater risk of leaking
and not detecting those leaks. This is motivation to replace those transformers in a
shorter time period.
Another alternative discussed was to replace the targeted transformers "as we get there".
ln other words, if work is occurring at a site where a targeted transformer is located, the
transformer would be replaced at that time. This method could be considered efficient by
the same reasons as using the Wood Pole Management approach with a crew visiting a
location one time however, this approach would take a minirnum of 12A years to replace
alltargeted transformers. This increases the risks of spills and/or failures.
o
Business Case Justification Narrative m
case No. AVU-E-19-04 Page 5 0f I
H. Rosentrater, Avista
Schedule 3, Page 73 of 186
Distribution Transformer Change Out Program 2017
ln addition to the risks of outages and failures with the aging equipment, the additional
risks associated with this program pertain to the following:
Environmental: Risks include; large volume transformer oil spill, difficult
hazardous waste cleanup, moderate to low volume or level of PCBs, minimal
impact to watenrvays, repeated or moderate air emission exceedance. lf the
program is unfunded the potential occurrence is greater than 4 spills per year. lf
funded, the potential occurrence is less than 1 per 50 years.
Public Safety and Health: Risks include: a potentialfor serious injury for crews or
the public, significant damage to equipment, property or business, public health
infrastructure impact up to 48 hours. If the program is unfunded, the potential
occurrence is less than 1 per 10 years. lf funded the potential occurrence is less
than 1 per 50 years.
The entire population of pre-1981 transformers total nearly 47,000 units. The first phase
of targeted PCB transformers (approximately 12,000) is expected to be complete by 2019.
The second phase of the program is to replace the remaining pre-1981 transformers
(Predicted Non-Detect and Actual Non-Detect). This work is expected to extend 1o2040.
The chart below shows the comparison of targeted transformers by retired status (blue =
retired, orange = remaining to work)
AIITCOP Transformers by PCB Status
As of January 1,2077
o
o
o
30000
2so00
20000
1so00
10000
5m0
0 LJ
Actual Non-Detect
r Retired
The Distribution Transformer Change-Out Program aligns with Avista's strategic vision by
ensuring transformers deliver safe and reliable energy to our customers. As older
transformers are replaced for more modern equipment, the result is an increase in
reliability, efficiency and energy savings. The other impact for replacing the pre-1981
transformers containing PCB oil, demonstrate that we are diligent in protecting our
waterways and the environment as a whole, mindful of our environmental footprint and
Total AIITCOP
Transformers
Contain PCB's Predicted Non-
Detect
r Non-Retired
Business Case Justification Narrative m
case No. AVU-E-19-04 Page 6 0f 8
H. Rosentrater, Avista
Schedule 3, Page 74 of I 86
o Distribution Transformer Change Out Program 2017
meet compliance requirements. As a result, Avista customers will be positively impacted
by this program with the increased efficiencies, reliability, and environmentally safe
equipment. The risk of not doing the work exposes Avista not only to environmental risks
but reliability risk as well.
The requested amount of spend is in alignment with the program plan. The chart below
shows the historic spend levels and efficiency of dollars spent versus transformers
installed.
Sa,o6a $3,872 f,008
$9,747
S3,28s
92,846
2011 20t2 2013 2014 2015 2016
Avista stakeholders for this program include:
r Asset Maintenance department; responsible for the work.
o Environmental department; responsible for our environmental footprint in our
service territory.
o Electric Operations; performs the construction work,
r Asset Management for tracking system reliability and risk.
o Avista customers who benefit from increased system reliability and efficiencies.
o The general community within our service territory who are impacted by
environmental issues.
r Coct (roundcd to (tro'sl
rTramiormcrt Rqhccd
93,s523891
o
o
Business Case Justification Narrative Exhibit No. 8
case No. AVU-E-19-04 Page 7 0f 8
H. Rosentrater, Avista
Schedule 3, Page 75 of I 86
2,722
Distribution Transformer Change Out Program 2017
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Distribution Transformer
Change-Out Program and agree with the approach it presents and that it has been
approved by the steering committee or other governance body identified in
Section1.1. The undersigned also acknowledge that significant changes to this will
be coordinated with and approved by the undersigned or their designated
representatives.
o
o
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
b{4,n/
Cody Kilgh I
Mgr Asset Maintenance
Business Case Owner
Bryan Cox
Sr Dir of HR Operations
Business Case Sponsor
Date: +-t*- 20I 7
Date:
5 VERSION HISTORY
Tem plate Version : 0212412017
Case No. AUU-E-ts-oa Page I of 8
H. Rosentrater, Avista
Schedule 3, Page 76 of I 86
Verslon lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Cody Krogh 4t14t20',t7 Bryan Cox 411412017 lnitial version
o
Noxon 230kV Switchyard HV Breaker Replacement
o
o
1 GENERAL INFORMATION
Requested Spend Amount $4,000,000
Req uestin g Organization/Department Transmission Planning
Business Case Owner Ken Sweigart
Business Case Sponsor David Howell/Scott Waples
S ponsor Organ ization/Depa rtment T&D
Gategory Project
Driver Mandatory & Compliance
1.1 Steering Committee or Advisory Group lnformation
o Ken Sweigart - Manager, Substation Engineering
. Project Engineer/Project Manager (PE/PM) - Brian Chain
The assigned PE/PM holds stakeholder meetings to develop/confirm scope, schedule and
costs. Also meets at time of pre-construction. Other meetings held as necessary.
This project has also been reviewed by the Engineering Roundtable.
2 BUSINESS PROBLEM
Transmission Planning identified a need of 6 breakers to be replaced per Short Circuit
Analysis studies performed in the 2016 assessment. The 230 kV breakers are the
Westinghouse oil circuit breakers with a name plate interrupting duty of 12.5 kA. The
maximum 3-phase short circuit calculated at Noxon Rapids is 14.31 kA.
Since the limiting ratings are both an urgent safety and reliability issue new breakers wcre
ordcred in early 2016. Avista has taken delivery of the new Mitsubishi 230 kV type "F"
SF6 breakers. l'he new breakers are capable of intemrpting fault currents of 40 kA and
operating at steady state voltages of 253 kV. The Mitsubishi type "F" circuit breaker
represents the new standard 230 kV design breaker for Avista. Completion of this project
is required to mitigate a deficiency identified by TPL-001-4 and to ensure compliance with
the NERC standard.
3 PROPOSAL AND RECOMMENDED SOLUTION
o
Optlon CapitalCost Start Gomplete
Alt 1: Status Quo $0
Alt 2: Fault Reduction Scheme
Alt 3: Tie Breaker to be operated normally open
Alt 4: Reduce generation at Noxon Rapids HED
Alt 5: Construct DBDB Sfation at Noxon Rapids
Alt 6: Replace (6) limiting breakers (plus OCB Tie
Breaker) within existing switchyard
$4M 2017 2018
Business Case Justification Narrative Exhibit No. 8 Page 1 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 77 of I 86
Alternative I -Stalus Ouo/Do Nothine:
This alternative is not recommended because it does not mitigate the safety and
operational issues associated with over-dutied equipment within a station.
Alternative 2 - Fault Reduction Scheme:
This alternative is not recommended because the fault current at the Noxon 230kV
Station, after opening a remote breaker, remains greater than the nameplate interrupting
duty of the Noxon 230kV circuit breakers. This alternative also does not follow standard
industry practices for distance relaying settings.
Alternalive 3 - Tie Breaker Onerated Normallv Ooen:
This alternative is not recommended because this operating condition will affect
neighboring parties. This will isolate Avista's generating units on the bus tied to BPA's
transmission system with no normally closed transmission path to integrate Avista's
generation onto the Avista transmission system. It will also isolate Avista's new 230kV
reactors on the BPA system, thereby leaving no reactive control tied to Avista's 230kV
transmission system. Extensive studies for the Montana-to-Northwest transmission path
will need to be addressed with affected transmission entities through a WECC process.
Alternative 4 - Reduce Generation at Noxon Raoids HED:
This alternative is not recommended because the ground fault current at the Noxon
230kV Station would remain too high. The only way to get the fault curent low enough
is to disconnect the Noxon generator step-up transformers at the station which would
leave the entire station out of service. Also, Noxon Unit No. 5 is typically used for
operating reserves and reserve sharing, which would be eliminated with the station out of
service. Eliminating this generation capability would be costly and infeasible.
Alternative 5 - Conslruct DBDB Station:
This alternative mitigates all issues but is presently not recommended due to its longer
lead time to construct. The over-dutied circuit breakers are a current safety issue and need
to be addressed immediately. The Noxon Switchyard Rebuild project alternative remains
necessary due to asset condition and poor operational flexibility with the current station
configuration, impacting both the Avista and BPA transmission systems.
Alternalive 6 - Reolace Over-Dutied Breokers in Exislirts Stuitchvard:
This alternative is the least-cost effective option to immediately address the safcty and
operational issues by providing sufficient fault-interrupting capability at Noxon 23OkV
Station. This altemative also mitigates identified NERC TPL-001-4 R 2.3 dehciencies in
the 2016 Planning Annual Assessment.
Solution:
Alternative 6: Transmission Planning recommends replacing the six limiting breakers
within the existing switchyard. In addition, the oil filled HV Bus Tie Breaker will also be
replaced, bringing the total number to seven (7):
Replace 3 breakers, R334, R332, and R336 at Noxon Rapids Station in Fall of 2017
Replace remaining 4 breakers at Noxon Rapids Station in 2018
o
o
o
Noxon 230kV Switchyard HV Breaker Replacement
Business Case Justification Narrative Exhibit No. 3 Page 2 of 3
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 78 of 1 86
Noxon 230kV Switchyard HV Breaker Replacement
o
o
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Noxon 230kV Switchyard
HV Breaker Replacement Business Case and agree with the approach it presents
and that it has been approved by the steering committee or other governance body
identified in Section1.1. The undersigned also acknowledge that significant changes
to this wil! be coordinated with and approved by the undersigned or their designated
representatives
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
Signature:
Print Name
Title:
Role:
Date +lrs/urr
Manager,Engineering
Business Case OwnerTJ I t
David Howell
Director, Electrical Engineering
Date: I l?17.
Date:L/ /1/ zolz
Template Version: 03107 nU7
Business Case Sponsor
Scott Waples
Director, Planning and Asset Mgmt
Business Case Sponsor
5 VERSION HISTORY
Version lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Ken Sweigaft
Jeff Schlect
4t14t17 Above
signatures
4/19/17 lnitialversion
o
Business Case Justification Narrative Exhibit No. 8 Page 3 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 79 of I 86
o1 GENERAL INFORMATION
Requested Spend Amount $5,075,000
Requesting Organization/Department Relay & Protection Design
Business Case Owner Randy Spacek
Business Case Sponsor Josh DiLuciano
Sponsor Organization/Department Electrical Engineering
Category Project
Driver Mandatory & Compliance
1.1 Steering Committee or Advisory Group lnformation
The Engineering Roundtable process is used to identify projects requiring
Transmission, Substation, or Protection (TS&P) engineering support. The committee
is responsible to track TS&P project requests, facilitate prioritization of TS&P capital
projects across Engineering, Operations, and Planning), and to ensure projects are
completed consistent with the company's mission and corporate strategies.
2 BUSINESS PROBLEM
NERC reliability standard PRC-002-2 defines the disturbance monitoring and
reporting requirements to have adequate data available to facilitate analysis of Bulk
Electric System (BES) Disturbances. The methodology of Attachment A of the
NERC standard was performed to identify the affected buses within the Avista BES.
The Protection Systems must be capable of recording electrical quantities for each
BES Elements it owns connected to the BES buses identified.
The present Protection Systems are either electromechanical or first generation
relays not capable of meeting the NERC PRC-002-2 standard requirements of fault
recording. The scope of the project is to upgrade the existing Protection Systems
on various 230 kV and 1 1skv terminals to Fault Recording (FR) capability per PRC-
002 requirements at Beacon, Boulder, Rathdrum, Cabinet Gorge, North Lewiston,
Lolo, Pine Creek, Shawnee, and Westside. lmplementation is a phased approach
with 50% complaint within 4 years and fully compliant within 6 years of the effective
date711116. The total number of affected terminals is 49.
Non-compliance can carry a fine of up to a million dollars per day based on severity.
3 PROPOSAL AND RECOMMENDED SOLUTION
Option CapitalCost Start Complete
Do nothing $0
Upgrading Protection Systems $4.86 02 2017 10Y2022
o
o
Pratection Sysfem Upgrades for PRC-002
Business Case Justification Narrative Page 1 of 3Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 80 of 186
Protection Sysfem Upgrades for PRC-002
o
o
o
The Protection System upgrade of 49 terminals impacts the resources of
Engineering and GPSS over a 5 year period. The NERC standard requires
compliance by specific dates. By missing the compliance date set forth by NERC,
Avista not only risks monetary penalties based on severity but reputational damage
as well.
To complete the work the high level targets are as follows:
April 17 Engineering designs for Beacon and Boulder start
September 17 Engineering designs for Lolo and Pine Creek start
January 18 Construction of Beacon and Boulder start
March 18 Engineering designs for Shawnee and North Lewiston start
July 18 Construction of Lolo and Pine Creek start.
December 18 Lolo/Pine Creek/Boulder complete
February 19 Beacon complete
March 19 RathdrumAffestside/North Lewiston design start
January 20 Construction of RathdrumA//estside
March 20 Shawnee complete
October 20 Construction North Lewiston start
December 20 Rathdrum complete
March 21 Cabinet Gorge Design start
October 2'1 North Lewiston Complete
December 21 Construction Cabinet Gorge start
January 22 Westside Complete
July 22 Cabinet Gorge Complete
Cost estimates per terminal from previous Protection System upgrades at a total
installed cost of $150k.
Business Case Justification Narrative Exhibit No. 8 Page 2 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 81 of 186
Protection Sysfe m Upgrades for PRC-002
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Protection System Upgrade
for PRC-002 and agree with the approach it presents. Significant changes to this
will be coordinated with and approved by the undersigned or their designated
o
representatives.
Signature:
Print Name:
Title:
Role:
4.Date: 0512912019
Glenn den
Manager Substation Engineering
Business Case Owner
Signature:
Print Name
Title:
Role:
Date: 0512912019
h Diluciano
Director of Electrical Engineering
Business Case Sponsor
Signature:
Print Name
Title:
Role:
o
5 VERSION HISTORY
Tem plate Version: 03107 12017
ExhibitNo.8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 82 of 1 86
Version lmplemented
By
Revision
Date
Approved
By
Approva!
Date
Reason
1.0 Randy Spacek 7111t17 Josh
DiLuciano
7 t11t17 lnitialversion
2.0 Glenn Madden 5t28119 Josh
DiLuciano
5t29t19 Revised to remove
'DRAFT' watermark
Business Case Justification Narrative Page 3 of 3
o
Date:
Raftles nake Flat Wind I 15kV lntegration Project
Requested Spend Amount $'19,789,874
Req uesting Organization/Department Transmission Services
Business Case Owner Josh DiLuciano
Business Case Sponsor Heather Rosentrater
Sponsor Organization/Department T&D
Category Project
Driver Customer Requested
o
o
o
1 GENERAL INFORMATION
1.1 Steering Committee or Advisory Group lnformation
o Ken Sweigart - Manager, Transmission Line Design Engineering
. Glenn lvladden - Manager, Substation Engineering
. Project Engineer/Project Manager - Aaron Tremayne and Adam Newhouse
. Randy Gnaedinger - Transmission Contracts Analyst
The assigned PE/PM holds stakeholder meetings to develop/confirm scope, schedule and
costs. Also meets at tirne of pre-construction. Other meetings held as necessary.
2 BUSINESS PROBLEM
The Interconnection Customer representing the Rattlesnake Flat Wind Farm
)evelopment (Avista Interconnection Project #49)has proposed construction of a new
l44MW nameplate capacity wind generation facility, and has chosen an interconnection
to Avista's Lind-Washtucna l l5kV Transmission Line at a point approximately 4.5 miles
southeast of Avista's Lind Substation. The Point of Interconnection (POf will be the
new 3-position ring bus Neilson Substation with a line position dedicated to the
Interconnection Customer. The Interconnection Customer chose the POI from a number
of options developed by Avista's Transmission Planning Group during the FERC-
mandated interconnection study process. Per the FERC process, the Interconnection
Customer and Avista have signed an Interconnection Agreement that include required
milestones for completion of this project.
These rnilestones include, the Interconnection Customer providing deposits totaling
$1,041.500 (equivalent to the project's associated Direct Assigned Costs) in the 2018-
2019 time frame, and Avista's completion of the project with an in service date prior to
Septernber 30,2020.
3 PROPOSAL AND RECOMMENDED SOLUTION
Option CapitalGost Start Complete
Alt 1: Status Quo: Do nothing.
Alt 2: Build Network Upgrade Facilities required to
support the Rattlesnake Flat Wind Farm nameplate
outputof 144MW.
$19,789,874 201 I 2020
Business Case Justification Narrative Page 1 of3Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 83 of I 86
Rattlesnake Flat Wind 115kV lntegration Project
oDue to the nature of the rules governing the Interconnection Process the POI location is
selected by the Interconnection Customer, therefore only one alternative is shown.
Alternative I:
This alternative is not recornmended because it does not comply with rules set forth by
FERC governing interconnection requests. Options are available for funding, design, and
construction, but not as to whether the project can be avoided.
Alternative 2:
This alternative meets the requirements of the Interconnection Custorner's request, and
best satisfies the integration requirements of the wind project. This alternative also
addresses a Transmission Line Asset Condition project (Lind-Warden) previously
identified and prioritizedto construct in the 2018-2019 tirne frame. This alternative is the
best solution for the long term.
Solution:
Altemative 2: The scope recommended consists of the following:
o
o
Transmission Provider Network Upgrades
Rebuild 22 miles of I 15 kV transmission with OPGW from Lind-Warden -
permitting, engineering, design, procurement and construction (includes
Distribution Underbuild)
$ I l,l 50,000
Rebuild 4.5 rniles of I 15 kV transmission with Optical Ground Wire
(OPGW) frorn Neilson to Lind - permitting, engineering, design,
procuren"lent and construction (includes Distribution Underbuild)
$ 2,900,000
Point of Interconnection 115 kV Substation Q{eilson) - engineering, design,
procurement and construction of (2) line positions, protection and control of
a 3-position ring bus station
s 2,500,000
Construct Communications Path(s) for Operation of the (POI) 115 kV
Neilson switching station, Lind Substation, and Warden Substation -
engineering, design, licensing, land acquisition, building construction, and
installation
$ 689,874
Lind Substation capacity upgrades I l5 kV substation -+ngineering, design,
procurement and installation of protection and control (two relay upgrades
and rnobile installation)
$ 550"000
Replacement of the Roxboro circuit switcher - engineering, design,
procurement and installation of protection and control (includes mobile
installation)
$ 250,000
Warden Substation capacity upgrades - engineering, design, procurement and
installation of protection and control (two breaker replacements, two relay
upgrades, and one relay modification)
$ 1,250,000
Othello Switching Station capacity upgrades - engineering, design,
procurement and installation of protection and control construction (two
relay upgrades)
$ 5oo,ooo
Business Case Justification Narrative Exhibit No. 8 Page 2 of 3
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 84 of 186
Rattlesnake Flat Wind 11flkV lntegration Project
o
S ubtotol Netn'ork Upgrades $ 19,789,874
IN SERVICE:8/31/2020
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Rattlesnake Flat Wind
115kV lntegration Project and agree with the approach it presents. Significant
changes to this will be coordinated with and approved by the undersigned or their
desig nated representatives
o
Signature:
Print Name
Title:
Role:
Signature:
Print Name:
Title:
Role:
Signature:
Print Name
Title:
Role:
T"L O {,1Aao
Business Case Owner
\\er ho en{ r {cr
VP , 6nerg j 0e \, utry
Business Case Sponsor
Steering/Advisory Com mittee Review
Date:
Date. Ll _ LZ-\q
Date
Tem plate Version : 03 lO7 12017
5 VERSION HISTORY
Version lmplemented
By
Revision
Date
Approved
By
Approval
Date
Reason
1.0 <Author name>mm/dd/yy <name>mm/dd/yy lnitial version
o
Business Case Justification Narrative Exhibit No. 3 Page 3 0f 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 85 of 186
D,rnl,-
1/rr/n-_---T----
W
South Region Voltage Control (N. Lewiston Reactor) Project
Requested Spend Amount $8,000,000
Requesting Organ lzation/Department Transmission Planning
Business Caae Owner Ken Sweigart
Business Case Sponsor David Howell/Scott Waples
T&D
Gategory Project
Driver Mandatory & Compliance
o1. GENERAL INFORMATION
1.1 Steering Committee or Advisory Group lnformation
o Ken Sweigart - Manager, Substation Engineering
o Project Engineer/Project Manager (PE/PM) - Adam Newhouse
The assigned PE/PM holds stakeholder meetings to develop/confirm scope, schedule and
costs. Also meets at time of pre-construction. Other meetings held as necessary.
2. BUSINESS PROBLEM
There is an ongoing issue with high voltage on the 230 kV transmission system inthe
Lewiston/Clarkston area. The high voltage problem is persistent most months of the year
(the exception is heavy sunmer loading months) and the high voltage peaks during the
overnight hours. This high voltage condition is a result of the expansion of Avista's 230
kV transmission network. Although there are many benefits to a large networked
transmission system, one negative outcome is that long, lightly loaded transmission lines
produce large amounts of line charging current (leading reactive MVAR), which
increases system voltage. Currently, there is no practical way to correct this high voltage
issue with the existing 230 kV transmission system beyond taking lines out of service.
3. PROPOSAL AND RECOMMENDED SOLUTION
Optlon Capital Gost Start Complete
Alt 1: Do nothing
Alt 2: North Lewiston Reacfors $8M 2016 2019
Alternative l:
This alternative is not recommended because it does not mitigate the expected capacity
constraints, and does not adhere to NERC Compliance regulations.
Alternative 2:
Install two 50 MVAR shunt reactors at the North Lewiston Station on the 230 kV bus.
The reactors allow for adequate voltage control to maintain voltage below applicable
facility ratings during normal and contingency scenarios.
Business Case Justification Narrative Exhibit No' 8 Page 1 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 86 of I 86
o
o
Sponsor OrganizationlDepartment
South Region Voltage Control (N. Lewiston Reactor) ProjectoSolution:
Alternative 2: North Lewiston Reactors. Project scope includes the following:
Install two 50 MVAR shunt reactors to the existing 230 kV bus at North Lewiston
Station. The project has already been initiated including procurement of the reactors.
o
Exhibit No. 8
case No. AVU-E-t9-04 Page 2 0f 3
H. Rosentrater, Avista
Schedule 3, Page 87 of I 86
o
Business Case Justification Nanative
Soufh Region Voltage Control (N. Lewiston Reactor) Project o
4. APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Soufh Region Voltage
Control Business Case and agree with the approach it presents and that it has been
approved by the steering committee or other governance body identified in
Sectionl.1. The undersigned also acknowledge that significant changes to this will
be coordinated with and approved by the undersigned or their designated
representatives.
Signature:
Print Name
Title:
Role:
Date:
Case Owner
sig Date:l,Z t-l ,
Print Name:
Title:
Role:Business Case Sponsor o
Signature:
Print Name:
Title:
Role:
Date:| //7/ zl rz
J t
Business Case Sponsor
VERSTON HISTORY
Tem plate Version: O3lO7 12017
case No.
^".#t,-Tli;:;l
Page 3 or 3
H. Rosentrater, Avista
Schedule 3, Page 88 of 1 86
Verclon lmplemented
By
Revlslon
Date
Approved
By
Apprcval
Date
Reason
1.0 Ken Sweigart Above
sbnafuras
4/14/17 lnitialversion
Business Case Justification Nanative
o
/;1 -
Spokane Valley Transmission Rei nforcement Project
Requested Spend Amount $6,s00,000
Req uesting Organization/Department Transmission Planning
Business Case Owner Ken Sweigart
Business Case Sponsor David Howell/Scott Waples
Sponsor Organ izationlDepartment T&D
Gategory Project
Drlver Mandatory & Compliance
o
o
o
1 GENERAL INFORMATION
1.1 Steering Commitbe or Advisory Group lnformation
o Ken Sweigart - Manager, Substation Engineering
r Project Engineer/?roject Manager (PE/PM) - Various
The assigned PE/PM holds stakeholder meetings to develop/confirm scope, schedule and
costs. Also meets at time of pre-construction. Other meetings held as necessary.
2 BUSINESS PROBLEM
Completion is this project is required to mitigate a NERC TPL-001-4 system deficiency.
The transmission system in the Spokane Valley currently fails TPL-001-4(P2.4), which is
an intemal Breaker Fault (Bus-tie Breaker) on A7l7 at the Boulder Station. In addition the
system fails the NERC TPL-001-4 P2 Contingency for the 2017 Heavy Summer Scenario.
Completion of this project is required to ensure Avista maintains compliance with NERC
regulations and Avista's planning documents.
3 PROPOSAL AND RECOMMENDED SOLUTION
Option Gapital Cost Start Complete
A/t 1: Status Quo $0
Alt 2: Complete the already stafted Spokane Valley
Iransmissio n Reinforcement Project
$6.5M 01 2012 12 2019
Alt 3: Reconfigurc the CDA Reconfiguration Project
Alternative I:
This altemative is not recommended because it does not mitigate the expected capacity
constraints, and does not adhere to NERC Compliance regulations.
Alternative 2:
The remaining portions of the Spokane Valley Transmission Reinforcement project are
constructing the Irvin Station and rebuilding a portion of the Beacon - Boulder #2 Lls
kV Transmission Line. All system deficiencies are mitigated and the desired operational
flexibility to serve large industrial customers is realized.
Business Case Justifi cation Nanative ffi
case No. AVU-E- I 9-04 Page 1 0f 3
H. Rosentrater, Avista
Schedule 3, Page 89 of 1 86
S po ka n e Val I ey T ra n s missfon Re i nfo rcem e nt P roj ect
Alternative 3:
Revert the system to the condition prior to the Coeur d'Alene Reconfiguration Project
creating the Boulder - Rathdrum and Post Falls * Ramsey 115 kV transmission lines.
Operational concerns will present themselves specifically with a P2.1 planned outage
followed by a forced Pl event in the Coeur d'Alene area. (The P2.l and Pl event
combination is not a TPL-001-4 event.) Operational flexibility constrained by large
industrial customers will continue to persist.
Solution:
Alternative 2, complete the Spokane Valley Transmission Reinforcement project.
Remaining project scope includes the following:
Construct the Irvin Station terminating the Beacon - Boulder #1 and #2,kvin- IEP, and
Irvin - Opportunity I 15 kV transmission lines as a breaker and a half configuration: $4
million, energize 2019
Rebuild the existing Beacon - Boulder #2 ll5 kV Transmission Line from Beacon to
Millwood to 795 ACSS conductor: $2.5 million , energizs 2019
o
o
Exhibit No. 8
case No. AVU-E-19-04
Page 2 0f 3
H. Rosentrater, Avista
Schedule 3, Page 90 of 186
Business Case Justification Narrative
o
Spokane Valley Tra n s mission Rei nfo rceme nt P roi ect
o
o
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Spokane Valley
Iransmlssion Reinforcement ProjectBusiness Case and agree with the approach it
presents and that it has been approved by the steering committee or other
governance body identified in Section1.1. The undersigned also acknowledge that
significant changes to this will be coordinated with and approved by the undersigned
or their designated
Signature:
Print Name:
Title:
Role:
Signature:
Print
Title:
Role:
sig
Print Name:
Title:
Role:
Business Sponsor
Date:7
Date:<lnl,, ,
f -t
Date: 4 /tf7 Z.tZ
Template Version : 0UO7 l2O17
,t/elp,
^/aCase Owner
,
Dt ,rfoc, ?/to ? t 4,rc'/ ,t V.+
Business Case Sponsor
5 VERSION HISTORY
I \toe
Jr^
Vemlon lmplemented
By
Revblon
Date
Apptoved
By
Apprcva!
Date
Reason
1.0 Ken Sweigart ADpve
srbnatures
4/14/17 lnitialvedon
O
Business Case Justification Nanative Exhibit No. 8 page 3 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 9l of I 86
Subsfafio n - New Distribution Station
1 GENERAL INFORMATION
Requested Spend Amount $6,000,000 per year on-going
Requesting Organization/Department T&D - Substation Engineering
Business Gase Owner Ken Sweigart
Business Case Sponsor David Howell
Sponsor OrganizationlDepartment T&D
Gategory Program
Driver Performance & Capacity
,l.1 Steering Committee or Advisory Group lnformation
o Ken Sweigart - Manager, Substation Engineering
o Project Engineer/Project Manager (PE/PM) - Various
The assigned PE/PM holds stakeholder meetings to develop/confirm scope, schedule and
costs. Also meets at time of pre-construction. Other meetings held as necessary.
2 BUSINESS PROBLEM
New distribution substations added to the system for load growth and reliability are critical
to the long term operation of the system. As load demands increase and customer
expectations rise regarding reliability, incremental distribution substation capacity is
required. This allows for improved operational flexibility, better system reliability, and
easier routine maintenance scheduling as equipment is more easily taken out of service
because load can be transferred.
3 PROPOSAL AND RECOMMENDED SOLUTION
Optlon Capltal Gost Start Complete
Do nothing $0
Recommended Solution $6M
This program adds new distribution substations to the system in order to serve new and
growing load as well as for increased system reliability and operational flexibility. New
substations under this program will require planning and operational studies, justifications,
and approved Project Diagrams prior to funding.
Alternatives considered include :
o Do Nothing: Maintain (to the best of our ability) all obsolete or end-of-life
apparatus. Repair or replace equipment on emergency basis only. Some repairs
would not be possible due to obsolescence. Considerably more, and longer,
customer outages would result. Although there is zero Capital cost connected with
keeping the status quo there are some associated O&M and other system
sustainment costs.
Business Case Justification Narrative Exhibit No. 8 Page 1 of 3
Case No. AW-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 92 of I 86
o
o
o
SuDsfation - New Distribution Station Capaciff ProgramoExtension of distibution feeders from neighboring substations and increased
capacity at those substations would be required at a minimtun. The negative
impact is most certainly reduced reliability and difficulty in long term maintenance
and system operation. Increased liability would result.
Solution:
Anticipated load growth requires the addition of two new substations per year over the
2017-2026 horizon.
o
Exhibit No. 8 page 2 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 93 of I 86
o
Business Case Justification Narrative
Substation - New Distribution Station Capaci9 Program o
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the SuDsfafibn - New
Distibution Station Capacity Progmm Business Case and agree with the approach
it presents and that it has been approved by the steering commiftee or other
governance body identified in Section1.1. The undersigned also acknowledge that
significant changes to this will be coordinated with and approved by the undersigned
or their designated
Signature:
Print Name:
Title:
Role:
Date:
edtT
Case Owner
Signature:
Print Name:
Title:
Role:
Date: 4 l?t
Ui
E\<.*....'co t
tr *1
Business Case Sponsor o
5 VERSION HISTORY
Template Version: O3lO7 12017
Business Gase Justification Nanative Exhibit No' 8 Page 3 of 3
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 94 of I 86
Verslon lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Ken Sweigaft Above
sl-?natures
4/14/17 lnitial version
o
af r{z"r'/
I
Transmission Major Rebuild - Asset Conditiono
o
1 GENERAL INFORMATION
Requested Spend Amount $9,450,000
Requesting Organ ization/Department T&D - TLD Engineering
Business Case Owner Lamont Miles
Business Case Sponsor David Howell/Scott Waples
Sponsor OrganizationlDepartment Electrical Engi neering
Category Program
Driver Asset Condition
1.1 Steering Committee or Advisory Group lnformation
The Engineering Roundtable manages the prioritization of projects within this
business case as supported by Asset Management studies and input from company
subject matter experts. lt is comprised of representatives from the following
departments: Asset Maintenance, Asset Management, Compliance, System
Planning, System Operations, Telecommunications, Transmission Contracts,
Protection Engineering, Substation Engineering, Transmission Engineering, and
Substation Support.
2 BUSINESS PROBLEM
The Transmission Major Rebuild - Asset Condition Business Case covers major
rebuilds of transmission lines due to overall asset condition. Factors such as
operational issues, ease of access during outages, and potential for
communications build-out are also considered in prioritizing this work.
A relevant metric to this business case is the Probability, Consequence, and Risk
Summary developed by the Asset Management group, which indicates which
transmission lines are most in need of replacement due to end-of-life indicators.
This list changes on an annual basis based on the work performed under this
business case in the previous year. Another relevant metric is the System
Operator's Log with a focus on tracking the number of outages related to asset
failures.
3 PROPOSAL AND RECOMMENDED SOLUTION
Option Caplta!
Cost
Requested
Start
Requested
Complete
Rlsk Mitlgation
Do nothing $0 N/A
lmplement Transmission MajorRebuild Asset Conditionprogram at recommended
spending levels
$21.1 M 2017 N/A
(Program)
Lower Operating
Risk
Transmission
Outages caused
by Asset
Failures, and
a
o
Business Case Justification Narrative Exhibit No. 8 Page 1 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 95 of I 86
a
Transmission Major Rebuild - Asset Condition
Optlon Capltal
Cost
Requested
Start
Requested
Complete
Rlsk Mltlgatlon
associated risk of
fires
lmplement Transmission MajorRebuild Asset Condition
program at current spending
levels
$9.45M 2017 N/A
(Program)
a Higher Operating
Risk
Transmission
Outages caused
by Asset
Failures, and
associated risk of
fires
a
The recommended solution is to replace poles, cross-arms, and other assets where
the majority of assets have been determined to have reached their end of life.
There are no expected business impacts (such as staffing, etc.) to continue the
program in place as it was split off of an existing business case.
Without replacing old and worn-out poles and cross-arms, our system will be
increasing in risk for more failures and more risk of a major fire caused by a failure.
As time moves fonrard, the number of failures and risk of a major fire will increase
the difference in costs between doing nothing and continuing the Transmission
Major Rebuild - Asset Condition program. Transmission outages can have
significant consequences as they tend to impact a large number of customers and
have the potentialto start fires in dry areas.
Transfers to plant will typically occur lightly over a May-June timeframe for work that
can be completed in the spring, and heavily in the October-December timeframe for
work that has to be completed in the fall. Most of the work is typically completed in
fall months due to access conditions and availability of outage windows.
This business case aligns with the organization's mission to deliver reliable energy
service to customers by preventing the degradation of reliability of transmission
service to the substations that serve them.
lnternal stakeholders in this business case include all of the departments listed in
the Steering Committee section.
Option 1: Do nothing - Not recommended
Option 2: According to Avista's Transmission System Asset Management Plan,
"The 30-year replacement period is recommended at $21.1 million per
year, split between $11.3 million for 11SkV and $9.8 million for 230kV.
This policy, when coupled with an ongoing, annual risk assessment and
targeting of funds, over the long term will effectively reduce risks and
minimize total lifecycle costs".
Option 3: Current funding level - Current spending on the Asset Condition risk
category is $9.45 million annually. Funding levels will be reviewed on an
annual basis.
Exhibit No. 8 Page 2 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 96 of 1 86
o
o
Business Case Justilication Narrative
o
Transmission Rebuild - Assef Condition
o 4 APPROVAL AND AUTHORTZATION
The undersigned acknowledge they have reviewed the Transmission Major Rebuild
- Asset Condition Program and agree with the approach it presents. Significant
changes to this will be coordinated with and approved by the undersigned or their
desig nated representatives.
Signature:
Print Name
Title:
Role:
*^^,,+tl Date: 1ll8 It1
Business Case Owner
tr
Signature:Date: 4
Print Name:
Title:
Role:
rt,1c@f r
Business Case Sponsor
o Signature:Date l/4 t,r^
Print N
Title:
Role:Business Case
5 VERSION HISTORY
Tem plate Vers ion: 0424f2O17
Exhibit No. 8 Page 3 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 97 of I 86
[Verslon#
lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Lamont Miles Above
Signatures
4t17 t17 lnitial version
o
Business Case Justification Narrative
L".,*stS A la;kr
T@*nsmlss;an &sirn .ry\},rqap.
-
t
l) :r e"/o n P/*;u , 4st.r .*btf
o1 GENERAL INFORMATION
Requested Spend Amount $1,555,249
Requeeting OrganizationlDepartment T&D -TLD Engineering
Bueiness Gase Owner Lamont Miles
Buslnees Gase Sponsor David HowelUScott Waples
Sponsor OrganizationlDepartment Electrical Engineering
Gategory Program
Driver Asset Condition
{,{ Steering Committee or Advisory Group lnformation
The Transmission Design Engineering Manager manages the prioritization of
proiects within this business case based on inputs from the Asset Maintenance
group and the maintenance engineer in the Transmission Design group.
2 BUSINESS PROBLEM
The Transmission Minor Rebuild Business Case covers the follor-up work to Wood
Pole lnspections and Aerial Patrol inspections in ER 2057, and Air Switch
Replacements in ER 2254.
During routinely scheduled inspections, issues are discovered regarding the
condition of assets, including items such as rotten poles, broken/spliUroften
crossarms, broken conductor or ground/shield wire, and air switches that no longer
operate safely or reliably.
A relevant metric to this business case is the System Operator's Log, with a focus
on tracking the number of outages related to asset failures. This number would be
expected to increase over time if this program is not funded. Transmission outages
can have significant consequences as they tend to impact a large number of
customers and have the potential to start fires in dry areas.
3 PROPOSAL AND RECOMMENDED SOLUTION
O$lon Gapltal
Gost
Requested
Start
Requested
Complete
Rlek illtlgatlon
Do nothing $0 N/A
Continue lransmr'ssrbn Minor
Rebulld Program
$1.55M 2017 N/A
(Program)
a Transmission
Outages
caused by
Asset
Failures, and
assocrbted
risk of fires
Business Case Justification Narrative Exhibit No. 8 psgs 1 e1 3
Case No. AVU-E- I 9-04
H. Rosentrater, Avista
Schedule 3, Page 98 of 186
o
o
Transmission - Minor Rebuild
o Transmrssfon - Minor Rebuild
The recommended solution is to replace poles, cross-arms, and other assets
identified by inspection, and replace Transmission Air Switches located outside of
the substations that have reached their end of life.
This program has been in place for many years and there are no expected business
impacts (such as staffing, etc.) to continue the program in place.
Without replacing old and worn-out poles and cross-arms, our system will be
increasing in risk for more failures and more risk of a major fire caused by a failure.
As time moves forward, the number of failures and risk of a major fire will increase
the difference in costs between doing nothing and continuing the Transmission
Minor Rebuild program.
Transfers to plant will typically occur over a July-December monthly spread, as the
work is typically completed in summer and fall months due to access conditions and
availability of outage windows.
This business case aligns with the organization's mission to deliver reliable energy
service to customers by preventing the degradation of reliability of transmission
service to the substations that serve them.
The amount requested aligns with the amount of work typically identified on an
annual basis from pole inspections and aerial inspections. The goal of this funding
level is to ensure that the Transmission Design Engineering department doesn't fall
behind on addressing the issues as they are identified. This amount will need to
increase annually to adjust for increased material and labor costs.
lnternal stakeholders in this business case include Asset Maintenance and System
Operations.
Business Case Justification Nanative Exhibit No' 8 Paoe 2 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 99 of I 86
o
o
Transmr.ssron - Minor Rebuild
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Tnnsmission - Minor
Rebuild and agree with the approach it presents and that it has been approved by
the steering committee or other governance body identified in Section1.1. The
undersigned also acknowledge that significant changes to this will be coordinated
with and approved by the undersigned or their designated representatives.
o
Signature:
Print Name:
Title:
Role:
Date:t8 11
Business Case Owner
Signature:Date:l?
Print
Title:
Role:
r\YBusiness Case Sponsor
Signature:Date:o
Print
Title:
Role:Case
5 VERSION HISTORY
Tem plate Version: OA24I2O17
Exhibit No. 8 page 3 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 00 of I 86
[Verclon#
lmplemented
By
Revlslon
Date
Approved
By
Apprcva!
Dato
Reagon
1.0 Lamont Miles Above
sr-?natures
4/14/17 lnitial version
Business Case Justification Narrative
o
I ^.^*+ A./t1il.r
Trwrsdsqon O .;g," lAarqgr,
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Transmission ,VERC Low-Risk Priority Lines Mitigationo
o
1 GENERAL INFORMATION
Requested Spend Amount $2,000,000
Requesting OrganizationlDepartment T&D -TLD Engineering
Business Case Owner Lamont Miles
Business Case Sponsor David HowelUScott Waples
Sponsor Organ izationlDe partment Electrical Engineering
Category Program
Driver Mandatory & Compliance
1.1 Shering Commitbe or Advisory Group lnformation
The Transmission Design Engineering Manager manages the prioritization of
projects within this business case based on inputs from the LiDAR studies that have
been performed.
2 BUSINESS PROBLEM
The Transmission NERC Medium Priority Lines Mitigation Business Case covers
the work to reconfigure insulator attachments, and/or rebuild existing transmission
line structures, or remove earth beneath transmission lines in order to mitigate
ratings/sag discrepancies found between "design" and "field" conditions as
determined by LiDAR survey data. This program was undertaken in response to
the October 7, 2012 North American Electric Reliability Corporations (NERC)
"NERC Alert" - Recommendation to lndustry, "Consideration of Actual Field
Conditions in Determination of Facility Ratings". This Capita! Program covers
mitigation work on Avista's "Low Priority" 230kV and 115kV transmission lines.
Mitigation brings lines in compliance with the National Electric Safety Code (NESC)
minimum clearances values. These code minimums have also been adopted into
the State of Washington's Administrative Code WAC). This program is expected
to be completed in2020.
The lines that were found to have clearance discrepancies were categorized High,
Medium, and Low Priority based on the following criteria:
. High: Bulk Grid 230 kV linking Avista generation to primary load
. Medium: Remaining 230 kV lines, and 11skv lines linking Avista generation
to primary load
. Low: Remaining 115 kV lines
A relevant metric to this business case can be found in the NERC Alert Mitigation
spreadsheet maintained by Avista's Reliability & Compliance Manager, which
shows the status of mitigation work completed and work outstanding.o
Business Case Justification Narrative Exhibit No. 8 paoe 1 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 101 of 186
Optlon Gapital
Cost
Requeeted
Start
Requested
Complete
RIsk tltlgatlon
Do nothing $o N/A
Continue NERC Low Priority Lines
Mitigation prognm
$2M 2017 2020 a Publb
safety
concem;
and Avista
could be
found at
fault ff an
electrical
contact
incident
occurs;,
because of
fhese inas
being out
of
compliance
with the
ruESC
code and
WAC.
o3 PROPOSAL AND RECOMMENDED SOLUTION
The recommended solution is to correct the issues found in the L|DAR studies to
stay in oompliance with the NESC code and WAC.
There are no expected business impacts to continuing this program in place.
lf Avista does not fully implement this business case, it runs the risk of being fined
for not staying in compliance with the NESC code and WAC rules.
Transfers to plant will typically occur lightly over a MayJune timeframe forwork that
can be completed in the spring, and heavily in the October-December timeframe for
work that has to be completed in the fall. Most of the work is typically completed in
fall months due to ac@ss conditaons and availability of outage windows.
This business case aligns with the organization's commitment to stay in compliance
with all applicable regulations.
The amount requested is a good faith estimate of the work left to be completed on
the Low Priority transmission lines.
The internal stakeholders in this business case include System Operations and
Re I iab i I ity/Com pl ian ce.
o
o
Transmission ,VERC Low-Risk Priority Lines Mitigation
Business Case Justifi cation Nanative Exhibit No. 8 page 2 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 102 of 186
o
o
Transmission ,VERC Low-Risk Priority Lines Mitigation
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Transmission NERC Low-
Risk Pioity Lines Mitigation Program and agree with the approach it presents and
that it has been approved by the steering committee or other govemance body
identified in Sectionl .1. The undersigned also acknowledge that significant changes
to this will be coordinated with and approved by the undersigned or their designated
representatives.
Signature:
Print Name
Title:
Role:
Date \<l1
Business Case Owner
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
'rt-.
Business Gase Sponsor
Date: 4
Date:
r-t\
tv\a?rro
'A'-2a/7
D)r crfir, ?haa;ty t .{stet ztbet
Business Case Sponsor
o
5 VERSION HISTORY
Tem plab Vercion: O2f24nO17
Business Case Justification Nanative Exhibit No. 8 Page 3 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 103 of 186
[Velllon#lmplemented
By
Revblon
Date
Approved
By
Apprcva!
Date
Reaeon
1.0 Lamont Miles Above
slgnatures
4/14n7 lnitialvercion
Tribal Permits & Seffle ments
1 GENERAL INFORMATION
Requested Spend Amount $ 300,000
Requesting Organization/Department A01 - Native American Relations
Business Case Owner ToniPessemier
Business Case Sponsor Jason Thackston
Sponsor Organization/Department Energy Resources
Gategory Program
Oriver Mandatory & Compliance
1.1 Steering Committee or Advisory Group lnformation
There is no specific Steering Committee for this Business Case. The Advisory
Group is our Native American Relations department, who negotiates easements and
settlements with the individual Native American Tribes. Projects are driven by any
installation or rebuild of facility on Tribal lands. The Native American Relations
department meets with Tribal representatives to negotiate easements, or
modification of easements in conjunction with construction projects.
2 BUSINESS PROBLEM
o
o
This business case is driven by compliance, the legal requirement to obtain
and maintain easements for our transmission and distribution lines. This is
required under Part 25 of the Code of Federal Regulations, Section 169.
Several of these cross Native American Tribal land, requiring us to maintain
easements or fees to occupy those areas. The Native American Relations
department of Avista is the interface with the Tribes, and conducts
negotiations on behalf of Avista.
Failure to maintain easements would put us in immediate violation of Federal
Law. We would be required, lacking an easement, to remove our facility from
Tribal land. Many of our easements are for transmission lines, therefore this
is not a viable option.
The primary measure would be to have active easements on all Tribal
encroachments. Currently, Avista maintains 81.7 miles of transmission lines
on Tribal land.
3 PROPOSAL AND RECOMMENDED SOLUTION
a
a
Optlon CapltalCost Start Complete
Do nothing $0
Continue to negotiate easements as required $300,000 01 2017 122099
Business Case Justification Narrative
o
Exhibit No. 8 page 1 of 3
Case No. AVU-E- l9-04
H. Rosentrater, Avista
Schedule 3, Page 104 of 186
Tribal Permits & SeffIements
o Relocate all Transmission lines off of Tribal land $61,190,000 01 2018 122023
r The only alternative to settling easements, would be to vacate those
easements and reroute all of our facility off of Tribal land. This would be an
extremely expensive alternative, as indicated above. ln fact, for Tribal
distribution assets, there is no viable option, due to obligation to serve.
o The primary risk of relocation would be the longer distances involved, and
the risk of obtaining satisfactory easements on non-Tribal land.
o This is ongoing work, as these easements are not long-lived, and are subject
to change as we change the nature of the facility covered by them.
o Through spending the approximately $300,000 annually, Avista maintains all
easements through Tribal land, and maintains good working relationships
with the Tribes.
o
Exhibit No. 8 page 2 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 05 of I 86
o
Business Case Justification Narrative
Tribal Permits & Seffle ments
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Tribal Permits & Settlements
and agree with the approach it presents. Significant changes to this will be
coordinated with and approved by the undersigned or their designated
representatives.
o
Signature:
Print Name:
Title:
Role:
-/-*/r^"Date:4/n/,t
Toni Pessemier
lndian Relations Advisor
Business Case Owner
Signature:
Print Name:
Title:
Role:
))tr-Date:'(lt('t
Goniln..krton
Sr. V.P. Energy Resources
Business Case Sponsor
Signature:
Print Name:
Title:
Role:
Date:o
Steering/Advisory Committee Review
5 VERSION HISTORY
Tem plate Vension : 03107 12017
Exhibit No. 8 page 3 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 106 of 186
Verslon lmplemented
By
Revblon
Date
Approved
By
Approval
Dat6
Reaaon
1.0 ToniPessemier ul12t17 Jason
Thackston
04t12117 lnitial version
Business Case Justification Narrative
o
Transmrssion Construction - Compl i ance
o
o
1 GENERAL INFORMATION
Requested Spend Amount $11,850,000
Requesting Organ ization/Depa rtment T&D - TLD Engineering
Business Case Owner Lamont Miles
Business Gase Sponsor David Howell/Scott Waples
Sponsor Organization/Department Electrical Engineering
Category Program
Driver
1.1 Steering Committee or Advisory Group lnformation
The Engineering Roundtable manages the prioritization of projects within this
business case based on the annual Corrective Action Plans developed by the
System Planning group. The Engineering Roundtable is comprised of
representatives from the following departments: Asset Maintenance, Asset
Management, Compliance, System Planning, System Operations,
Telecommunications, Transmission Contracts, Protection Engineering, Substation
Engineering, Transmission Engineering, and Substation Support.
2 BUSINESS PROBLEM
The Transmission Construction Compliance Business Case covers the
Transmission rebuild and reconductor work necessary to maintain compliance with
the NERC Reliability Standard TPL-0014 - Transmission System Planning
Performance Requirements ("Standard"). This standard mandates that an annual
planning assessment be conducted and corrective actions be identified and
implemented to remedy any system performance deficiencies. Corrective Action
Plans must be completed within the required timeframe to meet the system
performance requirements dictated by the Standard.
The implementation of this business case will be considered successful if these
projects are all completed prior to the required compliance dates identified in the
Engineering Roundtable Project List, which are copied from the Corrective Action
Plans (within the annually published Avista System Planning Assessment).
O
Business Case Justiflcation Narrative Exhibit No. 8 paoe 1 of 4
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 07 of I 86
Mandatory & Compliance
Optlon Capltal
Cost
Requeated
Start
Requeeted
Complete
Rlsk Mltlgatlon
Do nothing $0 N/A
I m pl eme nt lransmrssion
Con struction - Compliance
program
$11.85M 2017 N/A
(Program)
Potentialfines (up
to $1M/day) for
possrb/e
noncompliance with
NERC Reliability
Sfandards
3 PROPOSAL AND RECOMMENDED SOLUTION
The recommended solution is to build, rebuild, or reconductor transmission lines as
identified in the Corrective Action Plans to stay in compliance with NERC mandatory
and enforceable Reliability Standards, most notably TPL-0014.
!f Avista does not implement this business case, the company is at risk of violating
NERC Reliability Standard Requirements and could be subject to penalties of up to
$1M per day for the duration of any such violation. Following a "do nothing" option
for this business case would likely be treated as an aggravating factor by the
regulatory authority when assessing enforcement actions. Relevant sections of the
NERC Sanction Guidelines are cited below.
NERC Sanction Guideline Summaryl
2.9 Concealment or lntentional Violation
AIERC orthe Regional Entity shall always consider as an aggravating
factor any attempt by a violator to conceal the violation from NERC
or the Regional Entity, or any intentional violation incuned for
purposes other than a demonstrably good faith effort to avoid a
significant and greater threat to the immediate reliability of the Bulk
Power Sysfem.
2.10 Economic Choice to Violate
Penalties shall be sufficient fo assure that entities responsible for
complying with Reliability Standards do not have incentives to make
economic choices that cause or unduly risk violations of Reliability
Standards, or incidents resulting from violations of the Reliability
Sfandards. Economic choice includes economic gain for, or the
avoidance of cosfs to, the violator. NERC orthe Regional Entity shall
I NERC Rules of Procedure, Appendix 4F., Sanction Guidelines of the North American Electric Reliability
Corporation, luly I ,2014, pp 4-5.
Business Case Justification Narrative Exhibit No. 8 page 2 of 4
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 108 of 186
o
o
o
Transmrssfon Construction - Compliance
Transmrcslon Construction - Complianceotreat economic choice to violate as an aggravating factor when
determining a Penalty.
2.15 Maximum Limitations on Penalties
ln the United Sfafes, the maximum Penalty amount that NERC or a
Regional Entity wrl/ assess for a violation of a Reliability Standard
Requirement is $1,000,000 per day per violation. NERC and the
Regional Entities will assess Penalties amounts up to and including
this maximum amount for violations where warranted pursuant to
these Sanction Guidelines.
o
o
This business case aligns with the organization's commitment to comply with all
applicable laws and regulations. The amount requested represents the portion of the
Transmission Reconductors & Rebuilds business case that is being spent on
compliance-related projects in 2017. Annual funding will fluctuate based on the
scope identified in the Corrective Action Plans.
lnternal stakeholders in this business case include System Planning, System
Operations, and Compliance.
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 109 of I 86
Transmissfon Construction - Compliance
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Tansmission Construction
and agree with the approach it presents and that it has been approved by the
steering committee or other governance body identified in Section1.1. The
undersigned also acknowledge that significant changes to this will be coordinated
with and approved by the undersigned or their designated representatives.
o
Signature:
Print Name:
Title:
Role:
rykb Date:\)ruln
L,.^nf A- laLt
5S
Business Case Owner
Signature:
Print Name:
Title:
Role:
Date:
Ca
Business Case Sponsor
Signature:Date: ./ / l?t t,tZ o
Print Name:
Title:
Role:
/es
D , y't,f
Business Case Sponsor
5 VERSION HISTORY
Template Version: 0212412017
[Version#
lmplemented
By
Revision
Data
Approved
By
Approval
Oate
Reason
1.0 Lamont Miles Above
srignatures
4/14/17 lnitialversion
O
a\ roI rz
Case No. AVU-E- I 9-04
H. Rosentrater, Avista
Schedule 3, Page 1 10 of 186
Westside 230/1 I flkV Station Rebuild
Requested Spend Amount $32,000,000
Req uesting Organ ization/Department Transmission Planning
Business Case Owner Ken Sweigart
Business Gase Sponsor David Howell/Scott Waples
S ponsor Organ ization/Department T&D
Gategory Project
Driver
o
o
1 GENERAL INFORMATION
1.1 Steering Committee or Advisory Group lnformation
o Ken Sweigart - Manager, Substation Engineering
o Project Engineer/?roject Manager (PE/PM) - Sara Koeff
The assigned PE/PM holds stakeholder meetings to develop/confirm scope, schedule and
costs. Also meets at time of pre-eonstruction. Other meetings held as necessary.
This project has also been reviewed by the Engineering Roundtable.
2 BUSINESS PROBLEM
The existing Westside #l230/115 kV transformer exceeds its applicable facility rating
for the Pl event of the Westside #22301115 kV transformer. System performance
analysis indicates an inability of the system to meet the performance requirements in
Table 1 ofNERC TPL-001-4 in scenarios representing20lT Heavy Summer for P1
events. While Avista intends to avoid proactively shedding customer load, an operating
procedure to shed non-consequential load can be used lur:rtil202l to mitigate system
deficiencies (non-consequential load shedding is considered acceptable through the 84
month implementation of TPL-00 1 -4).
3 PROPOSAL AND REGOMMENDED SOLUTION
Alternative 7 - Status Ouo/Do Nothins:
This alternative is not recommended because it does not mitigate the expected capacity
constraints and does not adhere to NERC transmission planning standards.
o
Alt 1: Status Quo
Alt 2: Westside Transformer Replacement $32M 201 5 2022
Alt 3: Garden Spnngs 230kV Station lntegration
Alt 4: Replace Westside Transformers without
Station Rebuild
Business Case Justification Narrative Page 1 of3Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I I I of 186
Mandatory & Compliance
Westside 230/1 1 5kV Station Rebuild
Alternative 2 - Westside Transformer Replacement:
Replace the existing Westside transformers with 250 MVA rated transformers and
reconstruct both the 230 kV and 1 15 kV buses at the station to double bus, double breaker.
All associated system deficiencies will be mitigated.
Alternative 3 - Garden Sprines 230kV Station Integration:
The Garden Springs 230 kV Station Integration project includes the installation of new
230lll5 kV transformation in the Spokane area. The additional transformation will offload
the Westside #1 and #2 230/115 transformers. In the future, the Garden Springs 230 kV
Station Integration project will be necessary in addition to the Westside Transformer
Replacement project.
Alternative 4 - Reolace Westside Transformers without Station Rebuild:
Replacing the existing Westside transformers ts 250 MVA rated transforners will mitigate
the transformer overload system deficiencies but will create a short circuit breaker rating
exceedance. Additional P2 bus outage system deficiencies will exist.
Solution:
Altemative 2: Westside Transformer Replacement is the recommended solution. Project
scope includes the following:
Phase 1 : Replace the existing Westside #l230lll5 kV transformer and construct necessary
bus work and breaker positions. $11 million, energize 2018
Phase 2: Continue bus work and breaker replacement: $8 million, energlze2019
Phase 3: Replace the existing Westside #22301115 kV transforrner and complete bus work
to single bus configuration: $6 million, errergize2020
Phase 4: Complete bus work to double bus, double breaker on both the 230 kV and I 15 kV
buses: $7 million, energize2022
o
o
Business Case Justification Narrative Page 2 of 3
a
Exhibit No. 8
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I l2 of 186
Westside 230/1 I 1kV Station Rebuild
o 4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Westside 230/115kV Station
Rebuild Busrness Case and agree with the approach it presents and that it has been
approved by the steering committee or other governance body identified in
Section1.1. The undersigned also acknowledge that significant changes to this will
be coordinated with and approved by the undersigned or their designated
representatives
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
Signature:
Business Case Owner
Date:
rt
Manager,on Engineering
J#64,14/"t Date:
Date: I t{I
Date
Template Version: O3lO7 12017
,t(N lz"n
Lamont Miles
Manager, Transmission Design
Business Case Owner
o \
David Howell
Director, Electrical Engineering
Business Case Sponsor
Scott Waples
Director, Planning and Asset Mgmt
Business Case Sponsor
5 VERSION HISTORY
Version lmplemented
By
Revision
Date
Approved
By
Approval
Date
Reason
1.0 Ken Sweigart Above
signatures
4/14/17 lnitialversion
o
Business Case Justification Narrative Page 3 of 3Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 13 of 186
Print Name:
Title:
Role:
o/*/ ;
uri'
Faci lities Structu res and I mprovement
o1 GENERAL INFORMATION
Requested Spend Amount $3,000,000
Requesting Organ ization/Department Facilities
Business Case Owner Eric Bowles, Facilities Manager
Business Gase Sponsor Anna Scarlett, Shared Services Manager
Sponso r Org a n ization/De partment Shared Services
Gategory Program
Driver Asset Condition
1.{ Steering Gommittee or Advisory Group lnformation
ER7001 Facilities Structures and lmprovements is a S-year program created to
address the capital lifecycle asset replacements and business/site improvements at
all of Avista's regional sites and offices. Asset lifecycle replacements are compiled
by Facilities and are based on an asset condition report and industry recognized
lifecycles. Site improvement projects are approved based on productivity and/or
business need.
ln 2011, Facilities prepared a survey of several of our existing sites that created an
Asset Condition score. This survey is the basis for prioritizing asset lifecycle
replacements and site improvement projects (See attached for survey results).
A new site assessment survey is currently underway with an independent
contractor and should be completed in 2017 - This will be the basis for the asset
replaement program over the next 10 years.
Total combined requests have been considerably higher each year than funding,
and valid projects are often times backlogged.
ER 700U7OO} Request vs Funding
s126c
€ sro
=s8
So
S+
s2
so I
2015 2AL6
r requested I Funded
20t7
Funding backlog
Once the project list is assembled, it is vetted for approval by a stakeholder group
at the next level of management familiar with the individua! requests, (usually at
Exhibit No. 8 Page 1 of 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 14 of 186
o
Business Case Justificalion Narrative
o
Facilities Structu res and lmprovemento
o
the Director level). !n the past this has most often been:
. Director of Facilities,
r Directors of East and West Operations,
o Directors of Generation, Transmission, and Gas (when applicable)
2 BUSINESS PROBLEM
Many of the service centers in Avista's territory were built in the 1950s and 60s and
are starting to show signs of severe aging. Most of our building systems are also
past their recommended life based on recognized industry standards defined by
Building Owners and Managers Association (BOMA), and lnternational Facility
Management Association (IFMA) and are requiring renovation or replacement.
Many of the origina! campus layouts and buildings at our Service centers are no
longer optimaltoday due to changes in our vehicle sizes, materials storage, and
operations flow. These changes have required the need for project funding to
address changing business and site requirements as well.
Average funding splits based on proiect priorities
This program is be responsible for the capital maintenance, site improvement, and
furniture budgets at over 40 Avista offices, storage buildings, and service centers
(over 900,000 total square feet) Companywide. This program is intended to
systematically address the following needs:
. Lifecycle asset replacements (examples: roofing, asphalt, electrical,
plumbing)
o Lifecycle furniture replacements and new furnilure additions (to support
growth)
. Business additions or site improvements (examples: adding a welding bay,
vehicle storage canopy, expanding an asphalt yard. Can sometimes include
property purchases to support site expansions.)
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I l5 of 186
ER7 OOtl ER7003 2017 fu nding brea kdown
r ER7001 Asset Lifecycle Replacements
r ER7001 Site lmprovement/Business Need Projeas
. ER7003 Furnlture Replacements
o
Business Case Justifi cation Narrative
Facilities Structures and lmprovement
This program would encompass capital projects in all construction disciplines
(roofing, asphalt, electrical, plumbing, HVAC, landscaping, expansions, remodels,
energy efficiency projects).
3 PROPOSAL AND RECOMMENDED SOLUTION
Ootion I - Fund Prooram at Current Level (Recommended)
This will allow us to address capital asset replacements and business needs. Safety,
compliance, and productivity requests are rated highest and given priority first. Many of
these replacements can create safety risk if not addressed (sidewalks, structural
repairs). Not systematically addressing maintenance needs could ultimately result in
complete replacement of the buildings at some point.
This Structures and lmprovements program will be made up of 3 main parts:
1. Capital Asset Replacements ER 7001
This portion of the Structures and lmprovements Program is based on the results of the
Facilities Condition Assessment Survey. This survey willtake into account the condition
and lifecycle of each Facilities asset. Assets will be graded and those requiring
replacement within the next 10 years will be estimated and scheduled for replacement
at an appropriate year during the 10 year time frame of the survey. Buildings as a whole
will be assigned a Facilities Condition lndex (FCl) as part of the survey to help compare
future capital needs and drive the decision of continued capital expenditures vs.
possible replacement.
o
o
Optlon Caplta!
Cost
Start Complete Rlsk Mitlgatlon
Option I (Recommended) - Fund at
existing levels.
$3M u I 2417 01t2022 Many of the issues on the
list can quickly become
safety issues if not
addressed, exposing the
company to risk.
Option 2 - Partially Fund Program $1M
Capital
and $1M
o&M
01 I 2018 01t2022 Capital investments can be
limited with a corresponding
increase in O&M dollars. As
building systems continue
to decline O&M burden will
increase.
Option3-Donothing $o Sites will continue to decline due to normalwear and
tear. Certain systems (ex: roofing) failing can cause
major damage to other areas of the building. Safety
issues due to walkways and structural issues not being
addressed.
Business Case Justification Narrative
o
Exhibit No. 8 Page 3 of 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 16 of 186
Facilities Structures and lmprovemento
o
Examples (asphalt and structural issues):
2. Furniture Replacement or Additions ER 7003
This portion of the program is for furniture replacements based on industry standard
lifecycles, condition, and availability of parts. The program is also meant to support new
furniture additions required on approved building projects.
Examples:
-
\i,.:i., i1Q#."
O
Business Case Justillcation Narrative w raoe 4 of 7Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I l7 of 186
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3. Business Additions or Site lmprovements ER 7001
This portion of the program is intended to support site improvement requests and
productivity or business-related needs. Project requests are made by Operations site
managers in June the year before. The list is then vetted for validity and business need
by director-level management. Approved projects are then prioritized vs. capital asset
replacement priorities, and assigned per available capitalfunding. Projects that are tied
to compliance, safety, or productivity will be given funding preference.
Example (security fencing and gate, weld shop crane):
A robust operations and maintenance program will be required to help further extend
the lifecycle of our Facilities assets and help to lessen capital replacement needs.
Conversely, limited O&M maintenance programs will result in shorter than standard
asset lifecycles, and ultimately increased Capital spending.
As the condition of our Facilities improve, capita! asset replacements should lessen in
future years of the program. This is again dependent on sufficient O&M maintenance
budgets and workforce.
The majority of projects in the Facilities Structures and lmprovements program begin
work in the 2nd or 3'd quarter of each year, and will usually transfer to plant before the
end of the year. Some of the larger projects, or projects with extensive design, can carry
over to the following year.
Option 2 - Partiallv Fund Proaram based on orioritv
This option would decrease the capital program and increase existing O&M budgets to
prolong structures' lifecycles beyond rated life, and reduce capital needs. This option is
not the prefened approach over the long-term. Capital investments can be limited with a
corresponding increase in O&M dollars. As building systems continue to decline O&M
burden will increase.
Business site improvement requests are intended to address changing business needs.
These projects are usually linked to an enhanced productivity outcome. Having the
ability to incorporate structures and equipment that fall within the improvement and
business needs category can help support improved processes and lead to enhanced
o
o
Business Case Justification Narrative
o
Exhibit No. 8 Page 5 of 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I l8 of 186
t e IC
s rt
Faci lities Structu res and I m provement
o safety and longer lifecycles. When the budget needs to be reduced, reductions are first
made to requests in this category.
Replacement is intended to replace aging units to achieve more predictable capital
requirements and avoid replacement peaks caused by large-scale failures. Cutting into
these requests over an extended period could lead to reduced efficiency and have
safety impacts.
Ootion3-Donothino
This option is not recommended. Sites will continue to decline due to normal wear and
tear. The failure of certain systems, such as roofing or HVAC, can cause major damage
to other areas of the building. Walkways and structural issues not being addressed
could have safety impacts to employees, visitors and customers.
o
o
Business Case Justification Narrative Exhibit No. 8 page 6 of 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 19 of 186
Facilities Structu res and lmprovement
4 APPROVAL AND AUTHORIZATION
o
&)t-b: 9**,-' i lrro'e-'*
sf t/n
Theundersignedacknow|edgetheyhavereviewedtheffirplanand
agree with the approach it presents and that it has been approved by the steering
committee or other governance body identified in Section1.1. The undersigned
also acknowledge nt to this will be coordinated with and
approved by the designated representatives
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
Eric Bowles
Date:
Date V, ltt
Date: q-"f -(1
Facilities Manager
Business Case Owner
Anna
Manager, Shared Services
Business Case Sponsor o
Heather Rosentrater
Vice President, Energy Delivery
Steering/Advisory member
5 VERSION HISTORY
Template Vercion: 02n412017
o
Verclon lmplemented
By
Revlsion
Date
Approved
By
Apprcval
Date
Reagon
1 Eric Bowles 04t25t17 Heather
Rosentrater
04t25117 New template
Business Case Justification Narrative Exhibit No. 8 Page 7 of 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 120 of 186
or
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o
Iools & Sfores
1 GENERAL INFORMATION
1.1 Steering Committee or Advisory Group lnformation
Budgeting for Avista's Capital Tool Program is projected for five years based on
historical spends and prioritized against other company budget needs by Avista's
Capital Planning Group (CPG). Midway through every year, business units
analyze their need for tools and equipment to be purchased during the next fiscal
year. Each year the Capital Tool Program has more requests for tools and
equipment than can be funded (see Figure 1). The requests are prioritized by
Safety and Compliance, Replacement, or Enhanced Productivity categories. Cuts
to the requests are made by the business units to bring the projected cost of the
list of equipment and tools into line with the budgeted amount, Review of the
request is performed by Avista's CPG who may modify the funding level for the
program in concert with other business budget needs. Additiona! cuts by the
business units to the Tools and Equipment budget may be needed to meet the
revised budget.
Total Request vs Approved Budget (in millions)
2.512.27
L.73!.42
o
20t5
I Total Request
2015
I Approved Budget
Figure {
o
Requested Spend Amount $2,400,000
Req uesting Organ ization/Department Supply Chain
Business Case Owner Glenn Madden, Manager, Supply Chain
Business Case Sponsor Anna Scarlett, Manager, Shared Services
Sponsor Organization/Department Shared Services
Category Program
Driver Asset Condition
Business Case Justifi cation Nanative Exhibit No. g Page 1 of 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 121 of 186
oPurchasing and oversight of this program is by the Supply Chain Department. The
approval process follows the management chain of Supply Chain Manager,
Manager of Shared Services, Vice-President of Energy Delivery, and President of
Avista Utilities. The CapitalTools Program does not have a steering committee but
does have stakeholders who are the managers and directors of all departments.
2 BUSINESS PROBLEM
Avista's Capital Tool Program provides all departments the proper tooling and
equipment to perform work safely and efficiently. This equipment is necessary to
safely construct, monitor, ensure system integrity, and properly repair and
maintain the Avista systems (electric, gas, communications, fleet, facilities, and
generation). Tool and equipment purchases are prioritized based on three
categories:
1. Safety and Compliance
2. Replacements
3. Enhanced Productivity (see Figure 2)
2OL4-2OL6 Tools and Equipment Purchased
Safety and
Compliance,
132,27%
Enhanced
Productivity,
28?,570.4
Replacement,
80, t6%
Figure 2
The highest priority tool and equipment purchases help ensure that Avista meets
all safety and compliance requirements. Changes to safety standards and new
compliance mandates may require purchasing new tools. Examples of tools and
equipment purchased for safety and compliance reasons are:
o
a
Capital lools & Sfores
Business Case Justifi cataon Nanative Exhibit No. 8 page 2 of 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3,Page 122 of 186
Capital lools & Stores
o
o
o
a
a
a
Ergonomic tooling such as battery cutters/presses/pole grounding staplers,
vibration reduction pole tamps
Manhole extrication devices, rescue mannequins and Automatic External
Defibrillators (AEDs)
Grounding equipment - such as mechanicalgrounding jumpers, equipotential
grounding mats, and voltage indicators needed to support Avista's new
Electro Potential Zone (EPZ) grounding program
Groundhound site safety device - measures variances in ground voltage,
alarming workers of hazardous ground potentia! rises preventing shock
hazards
The next highest priority tool and equipment purchases are to replace existing
tools that have reached their end of life. Avista employees must be able to rely on
this equipment while performing hazardous duties, and must be confident that the
equipment will perform safely and efficiently. Failed equipment can lead to
hazardous conditions for the operators, potentially causing injury or death.
Much of the capitalequipment used in the utility industry is very specialized and
may not be readily available due to long lead times. This equipment needs to be
fully functional and available, for planned work as well as emergency outage
repairs on our facilities and equipment. Equipment failures cause slowdowns in
work performance. Examples of tools and equipment purchased for replacement
reasons are:
. Replacement of telecommunications equipment when the current platform is
no longer supported. Aged gas boring moles that can no longer be rebuilto Underground locating equipment when replacement parts are no longer
available for repairs
The third and last category for prioritizing tool and equipment purchases is
enhanced productivity. Capitaltooling and equipment is used to perform new
construction work or repair work for unplanned failures. Ofien this work can take
less time or be completed with better results by using tools.
This category also includes material handling and storage equipment for company
storerooms (forklift, storage cabinets, racking, etc.) Equipment for storerooms
increases warehouse response and efficiency to crews in providing the needed
material or tool in a timely manner.
Examples of tools and equipment purchased for enhanced productivity are:
o Purchase of new underground locators, which serve as a cable locator and
fault finder- previously these were separate pieces of equipmento Plasma metal cufting table so Generation can machine their own parts onsiteo IKE field data collection device used to efficiently design, capture mapping
information, and field audit overhead assetso Fiber optic fusion splicing trailer to allow technicians to splice in all
climates/conditions
a
Business Case Justification Narrative Exhibit No. 8 Page 3 of 7
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 123 of 186
3 PROPOSAL AND REGOMMENDED SOLUTION
Optlon Capltal
Cost
Requested
Start
Raquested
Gomplete
Rlrk
lltlltlgatlon
Option 1 (Recommended):
Fund program at current levels.
$2.4M 1/2018 Low Risk
Option 2: Partially fund (based on
priority)
Varies 1r2U8 Medium Risk
Option 3: Rent 4o/o ol total equipment
and purchase the rest
$2.3M 1r2U8 12n020 High Risk
Option 4: Do nothing $0 NlA 12/2020 Extremely
High Risk
Ootion I - Fund Proqram at Current Level (Recommendedl
It is recommended that this program be funded annually at its current levelto
ensure Avista has the proper capital equipment necessary to safely and efficiently
perform all required work. Due to the specialized nature of utility equipment, it is
most efficient for Avista to equip employees with the necessary tools and
equipment to safely perform timely emergency repairs, while using the same tools
and equipment to perform ongoing scheduled work and maintenance.
Furthermore, this specialized equipment is often only available directly from the
manufacturer, and is not typically available as a rental.
By funding this program, Avista ensures that employees have the proper
equipment to safely and efficiently perform their work, while providing safe, reliable
service to customers.
o
o
O
Capital Tools & Sfores
Business Case Justification Narrative Exhibit No. 8 paoe 4 of 7
Case No. AVU-E- l 9-04
H. Rosentrater, Avista
Schedule 3, Page 124 of 186
Option 2- Partiallv Fund Prooram based on prioritv
This option is not the preferred approach over the long-term, however it is
exercised when necessary. Each year when the requests for tools and equipment
are submitted, cuts to Capital Tool program are made by the business units to
bring the projected cost of the list of equipment and tools into line with the
budgeted amount. Further modification of the funding level for the program is
performed in concert with other business budget needs.
When the budget needs to be reduced, reductions are first made to requests in the
category of enhanced productivity, then replacement. Replacement is intended to
replace aging units to achieve more predictable capital requirements and avoid
replacement peaks caused by large-scale failures. Cufting into these requests
over an extended period could lead to reduced efficiency and have safety impacts.
Having the ability to test and incorporate equipment that falls within the enhanced
productivity category can help support improved processes and lead to enhanced
safety and longer equipment lifecycles.
Capital lools & Sfores
o
o
o
Ootion 3 - Rent Eouiomant
Renting a percentage of the capital equipment was considered as a possible
altemative. Of the 430 items purchased firom20121o2014,233 can be rented,
although 216 out of the 233 items are needed on hand at alltimes for emergency
locates and repairs. This leaves 17 possible items, or 4o/o of the totalequipment,
which qualifies as potential rentalequipment (see Figure 3).
lf equipment is rented, there is no guarantee of availability. Rental companies rent
equipment on a first-come, first-serve basis, making equipment scheduling for
specific time sensitive jobs very difficult. Safety and compliance regulations are
also affected when correct equipment is not available for rent.
Equipment failure is often a con@rn with rental equipment, as it is uncertain what
condition rentalequipment is in, or how it has previously been maintained. This
can lead to safety issues for equipment operators when failures occur, as well as
lost production time.
Depending on the timeline of the rental equipment, it would not be cost effective to
rent long-term as the rental costs would exceed the base price of new equipment.
An average rentral price for a basic cable locator is $450/month, which equates to
$5,400/year. The 2017 purehase price of this item is $3,700.
2012-2014 Renta I Possi bi llty
Not Needed for
Emergencies,
t7,4yo
Figure 3
Training on rental equipment would also be required, if different than standardized
Avista equipment. For example, Avista gas employees are only trained/qualified
on specific equipment that has been standardized by Avista, which may or may
not be what can be rented for specific jobs. This can contribute to added time
Business Case Justification Nanative Exhibit No. 8 Page 5 of 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 125 of I 86
Can not be
Rented, 197,
46%
Needed for
Emergencies,
2L6,s0yo
Capital Tools & Sfores
necessary to qualiff employees on the operation of the equipment, and safe
operating procedures.
Due to the Department of Transportation (DOT) compliance, Avista is also
required to maintain maintenance and calibration records for all gas equipment,
along with operations guides for all on site equipment. Avista would be out of
compliance using various rental equipment as rental companies are not required
to provide this documentation for their equipment to their customers.
o
Oolion 4- Do Nothina
All construction, maintenance, and repair work performed at Avista is dependent
on the use of capital tools and equipment. lf proper tools and equipment are not
available, work would cease. Without the necessary equipment, workers cannot
perform their duties safely or efficiently, and Avista facilities and equipment could
no longer be maintained.
o
H. Rosentrater, Avista
Schedule 3, Page I 26 of 1 86
o
o
o
Iools & Sfores
1 APPROVAL AND AUTHORIZATION (a*,ttJ-I?iors I f{aro:
The undersigned acknowledge they have reviewed ther-*rFerttlaqur plan and
agree with the approach it presents and that it has been approved by the steering
committee or other governance body identified in Sectionl .1. The undersigned
also acknowledge that significant changes to this will be coordinated with and
approved by the undersigned or their designated representatives.
Signature:
Print Name
Title:
Role:
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
Manager, Supply Chain
Date:
Date 7,
Date t{ zl'.r:
Glenn
Business Case Owner
Anna Scarlett
Manager, Shared Services
Business Case Sponsor
Heather Rosentrater
Vice President, Energy Delivery
Steering/Advisory member
2 VERSION HISTORY
Tem plate Veruion : 02f24 12017
Verelon lmplemented
By
Revlslon
Data
Approved
By
Approval
Date
Reason
1 4-7-2017 Heathar
Rosentrater
0425/17 Newtemplate
o
Business Case Justification Nanative Exhibit No. 8 Page 7 of 7
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 127 of 186
e/z/tr
W
Gary Shrope
Campus Repurposing Phase 2
o
1 GENERAL INFORMATION
Requested Spend Amount $29,000,000
Requesting O rgan ization/Department Facilities
Business Case Owner Vance Ruppert / Eric Bowles, Facilities
Business Case Sponsor Anna Scarlett, Manager, Shared Services
Sponsor Organlzation/Department Shared Services
Gategory Project
Driver Performance & Capacity
1.1 Steering Committee or Advisory Group lnformation
The Campus Repurposing Phase 2 Steering Committee is made up of a cross
section of directors that represent groups impacted by the projects, as well as a
couple members not directly affected to add an outside view. The current group is as
follows:
o Director of Environmental Affairso Director of Shared Serviceso Director of lT and Security. Director of Natural Gaso Director of Financial Planning and Analysisr Director of Operations
Advisors may contribute input; approvals, or information as needed, and include:
r Vice President of Energy Deliveryo Executive Officerso End Users
Each project within this business case is reviewed and approved by the Steering
Committee group, and regular updates are provided during proiect execution.
2 BUSINESS PROBLEM
The Campus Re-Purposing Plan is a multiyear plan (Phase 1 and Phase 2) that
address the following issues:
. Employee space needs. lmproving safety and efficiency of campus traffic flowo Outdated fleet maintenance space and processeso Lack of materials storage yards, no short-term flexibility
o
Business Case Juslification Narrative
o
Exhibit No. Fage 1 of 20
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 128 of 186
Campus Repurposing Phase 2o
o
o
a Alignment of campus parking and number of employees based at main
Gampus
The Avista corporate campus comprises 28 acres located next to the Spokane River
in heart of the Logan Neighborhood. The campus in just north of the downtown
Spokane corridor. Avista also owns eight additional acres of property directly
adjacent to the campus at the north end. This parcel is separated from the main
campus by North Center Street (a main city arterial).
Avista's corporate campus footprint is currently bound to the east by the Spokane
River, and to the west and south by the Mission Park and Burlington Northern
Railroad, leaving minimalflexibility to manage company parking, employee and
materials space needs.
The Avista corporate campus was built in 1958 to consolidate and house all utility
operations that were at that time spread throughout the community. As business
needs changed over time, one-off expansion projects were to reactively address
changes in business need. Employee grov'rth and materials storage increases
through the years have created the need to locate employees and materials at
offsite locations, requiring space leases and other non-optimal solutions to meet
growing company space needs.
Business Case Justification Narrative Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 129 of 1 86
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Campus ng Phase 2
Strategic propefi purchases to the North of the campus have been ongoing since
1988 as they become available to help address the issue and grow the campus to
give us future flexibility. The final properties between Avista and the neighboring
Riverview Retirement Community were purchased in2O14, now allowing us to
develop them for company use.
The decision was made in 2011 to take a holistic approach to these issues and
create a single proposed solution for the Corporate Campus that would address
current issues, and future needs. The campus repurposing planning group began
working in 2011 to find a way to address the growing employee space needs,
parking issues, campus materials storage issues, safety and traffic flow issues
(Operations traffic and employee traffic mixing), as well as look into addressing the
changing business needs of our vehicle fleet and operational processes.
The result of this approach is a total campus plan that repurposes the existing
campus for the next 50 years, minimizing our reactive approach and ensuring the
best long term results for the Company and Ratepayers.
3. PROPOSAL AND RECOMTUIENDED SOLUTION
Campus Repurposing Phase 2 includes three major projects:
1. North Center Re-Route
2. Construct New Fleet Building
3. Gonstruct Parking Garage
These three projects are connected and largely dependent on each other because of
location, timing and the overall campus design. The projects will ultimately allow us
to:. Expand and consolidate the campus footprint while establishing a formal
boundary between the Avista campus and the Riverview campus.o Modernize the aged Fleet Building and address Fleet queuing needs.. Expand and locate campus parking to align the available number of parking
spaces with the number of employees working onsite, improving employee
and public safety by reducing parking sprawl.. Separate operations traffic from pedestrian traffic to improve safety and
i ncrease workfl ow efficiencies.
o
o
Business Case Justification Nanative
o
Exhibit No. Fage 3 of 20
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 130 of 186
o
Phase 2oProiect 1: North Center Street Re-Route
Avlsta-owned properties separated from campus by North Genter Street
North Center Street currently divides us from the eight acres of property owned to
the north on Ross Court. Re-routing North Center Street will allow us to
consolidate our campus to include these properties. As North Center Street is a
major city arterial that connects lndiana Street to Upriver Drive, a considerable
amount of traffic uses the street daily. This traffic creates an ongoing safety risk to
employees moving back and forth between the properties. lt also creates
challenges with securing the lots during business hours (gates, entrances, etc.).
Beginning in 2013, Avista began discussion with Riverview to plan the future
development of each of our campuses. Riverview management expressed
concern with future development on our adjacent properties due to the proximity of
these properties to their resident housing. With no formal separation between our
campuses, they were concerned with the height of proposed buildings as well as
idling dieseltrucks next to their resident properties.
Severaloptions were considered (see options listed below). After many
discussions, there was interest on both sides to explore rerouting North Center
Street to the north in order to: 1) consolidate our properties into our secured
€mpus; and 2) give Riverview a formal separation between our campuses.
H. Rosentrater, Avista
Schedule 3, Page 131 of 186
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Ross Couil Prcperty Optlons
(rc+oute of North Center Strcet)
Capttal
Cost
Start Complete Rlsk Mltlgatlon
Option I (Recommended):
North Center rerouted around our
Ross Court properties, adding eight
acres to the Campus
$6M 2016 20'17 Riverview prefers this
option due to formal
separation.
Option 2: no rcroute (minimum
development required to make
Rose Court property usable).
North Center Street remains in place
creating a separated campus to the
North, accessed by crossing North
Center. Fencing, gates, and lot
development still required.
$3,000,000 2016 20'17 Risk involved in
tra nsportin g materials
across a major City
Arterial. Strong
opposition from
Riverview on any
development other than
basic storage.
Option 3: no reroute, with tunnelor
bridge connection to Ross Gourt
North Center Street would remain and
a tunnel or bridge would be created to
safely access Ross Court and create
a single secured Campus.
$9,000,000 2016 2017 Higher maintenance
costs for bridge or
tunnel. Strong
opposition from
Riverview on any
development other than
basic storage
Option 4: Do nothing $0 Basic storage use only with no development.
Property does require basic Civil and site
work to be usable though.o
Ootion I (recommendedl: Reroute Nofth Genter Street to consolidate Ross Court
prooefties with the main campus.
The re-route of North Center Street would allow us to create a new operations entrance
to our campus, separating operations traffic from pedestrian traffic and resulting in
operations workflow efficiencies and improved safety of the company and employees.
Exhibit No. 8page S of 20
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 132 of 186
Business Case Justification Narrative
o
Campus Phase 2o
o
ExnlDu No. 6Paoe 6 of20Case No. AVU-E- I 9-04
H. Rosentrater, Avista
Schedule 3, Page 1 33 of 1 86
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Recommended Option
Positlve Benefits Neqatives
Allows the creation of a new Qp!le!!g!q eltralqq
Riverviera/s preferred option due to formal separation. No
opposition to future developments options
lssues with City pe
Closure of North Crescent Street to
access apartments behind Riverview
Sinsle con nected/secured Cam pus
Better Operations traffic flow from entry, drop off, and
parking
Create a formal separation between Avista and Riverview
Better separation of employee and Operations traffic would
dramatically lessen safety risk to the company
o
Business Case Justification Narrative
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Options 2 and 3: No reroute, leave North Center Street in olace and secure as
seoarate camous.
A minimum of Option 2 or 3 would be required to make the Ross Court properties
usable; however, these options would not allow separate operations entrance to be
added.
o
o
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Exhibit No. Fage 7 of 20
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 34 of I 86
Poeitive Benefits Negatives
Lower cost options
(Option 't lower cost, Option 2 similar cost)
Development options we are considering would be
strongly opposed by Riverview due to direct
adjacency of our operations to their resident
properties
Slightly larger usable area vs Option 1 Two separate campuses requiring constant traffic
across North Center Street creates safety risk
(Alternative 2 only).
Altemative 2 would create a single Campus
access
Alternative 2 would require higher O&M cost for
tunnel or bridge
Quicker project execution These 2 alternatives will not allow for a new
Operations entrance
Business Case Justitication Nanative
o Campus Repurposing Phase 2
Existing Fleet Building Location
o
o
Business Case Justification Nanatlve E hibftNol8i;oe 8 of 20Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 135 of 186
Proiect 2: Construct New Fleet Operations Facilitv
Avista's existing fleet operations building is located in the heart of the main campus and
was originally built in 1958 to centralize allAvista fleet maintenano€ operations.
Vehicle and Building Size
The originalfleet building was built to house smaller half-ton pick-ups and has been
expanded twice through the years to accommodate the increased size of the new
service trucks, once in 1978 and again in 1999. The size of vehicles in today's fleet
have continue to increase since 1999 and some of the current fleet is difficult to service
in the existing building. The curent building is much smaller than City of Spokane and
Waste Management facilities, which utilize similar-sized vehicles. Many of our larger
trucks cannot be worked on in the existing space without leaving the doors open.
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Avista has added vehicles fueled by compressed natural gas (CNG) to our fleet over the
past four years. The existing fleet building is not CNG rated and all CNG-fueled vehicles
must be taken offsite for repairs. To make the building CNG compliant would require the
addition of a new emergency exhaust system. The estimated cost to make the building
CNG compliant is around $1.3 Million
Environmental
The hydraulic lift system installed in the existing building did not include secondary
containment when originally installed, and testing has indicated possible leakage of
hydraulic oil in the soi! under the building. Relocation of the building will allow us to
completely encase all new hydraulic systems and mitigate any current or potential
leakage.
Safety
The existing fleet staging and queuing area is also in the heart of the campus and is
directly adjacent to multiple parking canopies and surface parking areas. This staging
area is small and requires multiple trips in and out of the area for day-to-day operations.
A main employee walkway also goes through this major traffic area and brings
considerable safety risk to the company as some of the pedestrian traffic can be hidden
by the parking canopies. Moving the fleet building to the north will allow for increased
queuing area and lessen the employee and operations traffic risk considerably.
Building Conditions
ln addition to compliance, environmental and safety issues, the existing building has a
number of conditions that affect operations and employee safety and health, including
the issues below (see attachment Corp Fleet Building Issues for complete list).
o Current facilities have bays less than 14'wide. Current trucks are 103" wide at the
mirrors, leaving limited space for maneuvering and working on vehicles.o We cannot lift rear tandem axle trucks with in ground lifts. We utilize wheel lifts which
add 38" to the width of the vehicle. This leaves less than 2' for the technician to
move himself and his tools into position. Tandem axle trucks make up 35% of the
Avista Fleet. This effects productivity.r Roof leaks at multiple points.
Options and Alternatives
o
o
Fleet Operatlono Optlonc Gapltal
Cost
Start Complete Rlsk Mitlgatlon
Option I (Recommended): Build a
new GNG-compliant Fleet
Operations building at the north
end of the property and address the
existing issues.
. This options would allow us to use
the existing fleet footprint for the
Parking Garage and move all
$10,000,000 2017 20'18 Major safe$ risk
mitigated with
employee and Ops
traffic mixing.
Campus Repurposrng Phase 2
Business Case Justification Narrative Exhibit No. hage 9 of 20
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 36 of I 86
Campus Repurposing Phase 2o
o
o
Option 7 (recommendedl: Construct a new fleet operutions facilitv at the north
end of the campus.
Constructing a new fleet operations center operations building strategically located at
the north end of the campus would achieve a number of objectives:
r Enable us to increase the size of bays to accommodate larger fleet vehicleso Address CNG compliance requirements and environmental issues related to the
aging current facilityr lncrease efficiency and safety of pedestrians and operations traffic on campus. lncrease efficiency of fleet operations
A pre-design BPI process was undertaken in early 2016 to look at efficiencies that
would be created by a new building and new processes. lt was discovered that the poor
layout of the existing building resulted in numerous extra steps taken each day resulting
in wasted time and resources. The new building was designed using industry best
practices, and observed employee workflow.
Operations traffic to the North end
of the Campus.
Option 2: Addrcss the maior ieeues
in the existing building separately.
o Replace Hydraulic systems,
replace the constantly leaking roof,
and installa CNG comPliant
exhausting system.
r lncrease the building in the future
if needed.
$4,000,000 2017 2018 . Location not optimal
in regards to safety
and risk
. Environmental and
compliance issues
r Continued rising of
maintenance costs
due to age of the
building and
systems
Optlon 3: Do nothing $0 Still need to address the future impact of
larger fleet vehicle sizes, aging hydraulic
systems, non-compliant CNG space, and most
importantly the safety risk due to the constant
traffic and employee mixing.
Business Case Justification Narrative Exhibit No' Faoe 1o of 2o
Case No. AVU-E-19-04 -
H. Rosentrater, Avista
Schedule 3, Page 137 of 186
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See aftached bullet points for a comprehensive fisf of r.ssues that a new building would
address.
Recommended Option: New Fleet Building on Ross Gourt
o
ExhibitNo.p6gell ot2o
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 138 of 186
Business Case Justification Narrative
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Campus Repurposing Phase 2
.{
Campus Phase 2
o
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Option 2: Address individual issues with existinq buildinq
Remodeling the existing building to accommodate fleet vehicles that no longer fit the
current facility is not possible within the current footprint's size. ln addition, this option
does not address environmental, compliance or safety concerns described above. To
make the building CNG compliant would require the addition of a new emergency
exhaust system. The estimated cost to make the building CNG compliant is around $1.3
Million
Option 3: Do Nothino:
Doing nothing is not a viable option. New hydraulic lifts would be required soon, and basic
space, environmentaland compliance issues would still need to be addressed. We would
need to reevaluate how to continue servicing CNG vehicles.
o
Business Case Justilication Nanative ExhibitNo. Page12ot20
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 139 of 186
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Proiect 3: Parkinq Garaoe
As of June 2016, Avista has a headcount of approximately 1,280, including company
and contracted employees, reporting to the main campus facility. The number of parking
spaces available for employees is approximately 728 (not including visitor and disabled
paking). Assuming not all employees are on the property at any one time, a minimum
of 400 additional parking spaces are required each day to address the current existing
need as well as additional spaces for future flexibility. Avista leases parking space along
Perry Street from Burlington Northern Railroad (BNR), in an open-ended lease that can
be cancelled by BNR with 30 days written notice. Employees walk across railroad tracks
to get to and from the buildings and these parking areas. Additionally, loss of this lease
would result in the loss of almost 200 parking spaces.
Aligning campus parking with employee count has been addressed through the years
by relocating materials storage yards from the campus footprint and adding surface
parking lots (see below).
o
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Mission Campus Parking Space Count 2008 538
Added Spaces South Mission Lot 2009 +57
Added Spaces Transformer Storage Lot 2009 +55
Expanded North Pole Yard 2012 +124
Added North Ross Court 2012 +49
Total Current Parking Spaces
(includinq Disabilitv and Vlsitor ParkinE)
823
Total Parking Spaces Available
(excludlnE Disability and Visitor Parkinq)
728
Estimated Employees/Contractors Assigned to Mission
Campus as of June 2016.
1282
Estimated Employee/Contractors e not at Mission Campus
on any one day (15o/o\
-129
Shortage of Parking Spaces to Meet Current Need for
Employees/ Contractors Assigned to Mission Campus**
425""
Year Parking
Spaces
Business Case Justification Narrative
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Exhibit No. tsage 13 of 20
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 140 of 186
Action Taken
o
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Phase 2
Using valuable campus real estate for parking lots has required us to take our
operations vehicles and materials storage offsite to our Beacon substation property
more than a mile away, increasing crew time and resources to access materials and
vehicles each day.
This daily deficit in parking is currently absorbed in gravel lots on Ross Court and along
the railroad tracks on Burlington Northern Railroad land. This parking is not in
compliance with City of Spokane parking code, and we could be required to cease at
any time. Additional parking overflow beyond these locations usually takes place in the
immediate neighborhoods around Avista, and has resulted in frustrated calls, threats,
and visits from our residential neighbors.
The proposed parking garage is intended as a long-term solution to the employee and
visitor parking deficiency and related safety concerns.
Safety
With our current parking conditions, employees and visitors face a number of ongoing
safety risks:
Business Case Justiflcation Narrative
H. Rosentrater, Avista
Schedule 3, Page l4l of I 86
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a The main building and service center, where the majority of regular and contract
employees are located, is separated from parking areas by railroad tracks, busy
arterials (Mission and Perry Streets), and operations areas, forcing pedestrians
to cross these areas throughout the day.
Operations traffic peaks in the mornings and afternoons, when employees are
often walking to or from their vehicles.
Parking areas are open and must be maintained throughout year to keep lots
safe and clear of seasonal conditions. Even with ongoing maintenance, lost work
days due to slipping and falls on the main campus (both inside and outside) is
estimated at 1 1,000 days since 1997. ln the first quarter of 2017 , Avista
experienced a record number of slips, trips and falls related to icy conditions.
While we have full-time security on campus with cameras and patrol staff, there
is no security off campus to protect employees, visitors and their vehicles.
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Parking lmpact 2016
Options and Alternatives
We analyzed three primary options for adding up to 500 parking spaces to fully solve
the parking issue and give protection against the loss of the BNR leased space:
. Option 1 (recommended) - Construct a parking garage in the location of the
originalfleet building. The garage would be a four-story structure with five levels
of parking.
Campus Repurposing Phase 2
Business Case Justification Nanative ExhibitNo.tsage 1b of 20
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 142 of 186
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Campus Phase 2oOption 2 - Convert property at the north end of campus (Ross Court) into
parking lots.
Option 3 - Purchase properties to the east of campus, across Perry Street, and
develop parking lots.
Rose Court Propcrty Optlons
(rc-route of North Center Strcet)
Capltal
Cost
Start Complete Riak Mitlgatlon
Option I (Recommended): Build
Parking Garage
Build a 4-story 500-space parking
garage in the location of the
existing Fleet Building.
$12,000,000 2018 20't8 o Coverage in the event
of the loss of BNR
leased space.
o Employees would not
need to park in the
neighborhood.
Option 2: Convert Ross Court
property lnto parking to
address current deficit
Pave the remaining four acres of
undeveloped Ross Court property
and make a parking lot. Would
need to include drainage swales,
parking island vegetation, and
sidewalks to be comply with city
code.
$3,000,000 2017 2018 r Not highest and best
use of existing property.
Willonly net -175.
spaces.
r Would impact Fleet
construction project as
this space is earmarked
for the new building.
. Risk of impact from
losing BNR lease still
possible.
Option 3: Purchase properties
to the east of Avlsta to huild 500
parking spacos (10 acres
required)
Purchase 10 acres of property
along Perry to the east and
develop to create 500 parking
spaces.
$16.2M 2016 2017 r Risk of not getting all
properties.
o Highest maintenance
costs (snow removal,
crack seal, seal coat,
1S-year average
asphalt replacement)
Option 4: Do nothing $o a
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Risk of City of Spokane compliance issues
with using Ross Park in its current form.
This can be called out at any time.
Negative perception from local neighbors
due to parking overflow in front of their
houses.
Loss of BNR lease would be catastrophic to
employee parking with no immediate
resolution.
Option I ftecommendedl: Build a 4 storu Parkino Garaoe
This option will minimize the physical footprint required (only 0.71 acres). Constructing it
in the location of the original FIeet Building will locate parking density next to employee
workspace density, maximizing safety and operations efficiency.
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Business Case Justification Narrative Eihi5ifNof$aoe 16 of 20Case No. AVU-E- l9-04 -
H. Rosentrater, Avista
Schedule 3. Page I 43 of I 86
Campus ing Phase 2
Parklng Garage Footprint
Option 2: Conveft Ross Court properttt into parkins to address current deficit
Converting property on the north side of Campus (Ross Court), would only address part
of the current parking deficit, with a net of approx. 175 spaces. This solution doesn't
address a potential BNR lease loss and would impact plans for the new fleet facility.
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Option I (Recommended): Buildins a fourstory parking garago with flve levels of parklng
Positive Benefits Negatives
Locates parking density near employee density Customer perception of structure
Wlldrastically reduce slips, trips and falls experienced by
employees walking through 20 acres of existing parking lots
each day, reducing risk and L&l claims to the Company.
Possible environmental issues under
existins fleet footprint
Maiority of parkinq would now be secured within the Campus
Willdramatically reduce the risk to the company from
employee and Operations traffic mixing in the north lot areas.
Lowest O&M maintenance costs, and longest life vs. asphalt
lot.
Lowest snow removal cost vs.10 acres of traditional blacktop.
Could allow us to repurpose campus real estate back to
materials storage.
Positlve Benefits Negatives
Lower cost vs. recommended Not highest and best use of purchased properties on Ross
Court. High cost vs strategic value (when including property
purchases). No option for a new Fleet Building.
Quickest Solution Solution would only address the current parking deficit, (only
net approx. 175 spaces) Doesn't address BNR lease loss.
Business Case Justification Narrative
o
ExhibitNo.ftge 1T ol20
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 44 of t 86
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Option 3: Purchase orcoerties to the east of Avista to build 500 parkino spaces
Traditional parking lot construction for 500 spaces would require 10 acres of land to
accommodate 208 drainage swales, vegetation for heat island mitigation, and other
items required by the City of Spokane. The only available option for adding additional
land to the campus would be the properties to the east, on the other side of Perry
Street. These would be difficult and costly to acquire, and add additional challenges of
expanding the campus into a residential area separated by a major arterial.
500 spots using surface parking construction
Option 4: Do Nothina
This option would not solve the parking deficiency or the problems it has created:
o Operations vehicles and materials storage offsite at Beacon substation propertyo Non-compliantparkingo Neighborhood impacts
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Option 3: Purchase l0 acres to the east and build 500 spacos
Positive Benefits Negatlves
Would net the full 500 spaces Highest cost option
High risk of not getting all properties required to build. Risk of
street vacations not beino approved.
lncreased risk of injury with 500 employees crossing Perry
Street daily.
Highest cost maintenance option, (snow removal, crack seal,
sealcoat, complete asphalt replacement every 15-20 years).
Business Case Justification Nanative
H. Rosentrater, Avista
Schedule 3, Page 145 of 186
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Positlve Benefits Nesatives
Lowest Cost Does not address the current parkinq deficit
Still out of compliance with current City of Spokane parking
code
Frustration from neighbors due to employees parking in front of
their houses.
At risk if BNR lease is ever lost.
Campus Repurposing Phase 2
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Ongoing O&M costs include snow removal, crack seal, seal coat, and asphalt renewal at 15 years.
Parking Garage usefu! life based on 45 yearc.
See attached PowerPoint Presentations for high level explanations.
sxhibit No. Bage 19 of 20
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 146 of 186
Business Case Justification Narrative
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Campus Rep Phase 2
APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Campus Repurposing
Phase 2 plan and agree with the approach it presents and that it has been approved
by the steering committee or other governance body identified in Section1.1. The
undersigned also that significant changes to this will be coordinated
with and approved nd or their designated representatives.
Signature:
Print Name:
Title:
Role:
Signature:
Print Name
Title:
Role:
Signature:
Print Name:
Title:
Role:
Eric Bowles
Business Case Owner
Manager, Facilities
Date sf, ln
Date: 1-Zt-11
*0* Srr*l*r*1,ln
Anna Scarlett
Manager, Shared Services
Business Case Sponsor
Heather Rosentrater
Vice President, Energy Delivery
Steering/Advisory Committee Review
VERSION HISTORY
Tem plate Vergion : 021241201 7
Verslon lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1 Eric Bowles 04t24117 Heather Rosentrater 04t25t17 New template
o
Business Case Justification Narrative Case No. ^fr'lJli)lrtase20
or2o
H. Rosentrater, Avista
Schedule 3, Page 147 of 186
Date:
W
Airport Han'gar
Requested Spend Amount $1,500,000
Req uesting Organ izationlDepartment Facilities
Business Case Owner Eric Bowles, Facilities Manager
Business Case Sponsor Anna Scarlett, Manager of Shared Services
Sponsor Organ ization/Department Shared Services
Category Project
Driver Performance & Capacity
1 GENERAL INFORMATION
1.1 Steering Committee or Advisory Group lnformation
Steering Committee:
o Facilities Managero Manager of Shared Serviceso Chief Piloto Captaino Project Manager, Facilities. Real Estate Manager
Advisors may contribute input, approvals, or information as needed, and include:
. Vice President of Energy Deliverye Executive Officers
2 BUSINESS PROBLEM
Avista currently subleases a hangar owned by Spokane lnternationalAirport and
leased by the airport to Merlin Enterprises, for secure storage and maintenance of
our company aircraft and for daily operations by the flight crew. Avista will Iose the
sublease on the hangar after July 31, 2018, at which time Merlin's Iease will end.
At that time, airport management plans to demolish the existing hangar as part of
a plan to reclaim the existing property and relocate private hangars to a different
part of the airport. At that time, Avista will need to secure a new hangar for the
aircraft.
o
o
Business Case Justification Narrative
o
Exhibit No. g Page 1 of 6
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 148 of 186
Airport Hangar
o
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3 PROPOSAL AND RECOMMENDED SOLUTION.
Four options were considered for securing a hangar for the aircraft, including
building a new hangar, extending use of the current hangar, relocating to another
airport, and co-use of an existing hangar.
Option 1 (Recommended): Build a new Avista-owned hangar on land leased
directly from Spokane lnternational Airport.
This solution is recommended for the following reasons:
o Spokane lnternationalAirport is convenient to headquarters.
o The airport is currentty offering a good selection of plots, with good
approaches and footprints that would allow easier separation of the public
entrance from the secured part of the airport.
. We could secure a long-term lease with the airport and lock in lease
payments. Current discussions include a lease term of up to 50 years.
. Construction in 2018 would allow us to take advantage of lower interest
rates and construction costs than what we would likely get in 2019 or 2020.
r Leasing directly from the airport will allow us to de-ice and fuel the aircraft
ourselves or through a contractor we select, rather than having to use the
airport's services exclusively, saving costs and increasing efficiency.
o Constructing the hangar would allow us to design a structure with the future
in mind. The current aircraft has an expected life of up to 20 years, and a
new aircraft would change the required size of height and width of the
hangar. A new hangar would include the following elements (see
schematics):
o Ample plane storage and room for maintenance and maneuveringo Minimal parts storageo Restroomso Offices for flight staffo Secure parking with Avista accesso Separate unsecured and secured areas for travelers
Optlon Capltal Cost Start Gomplete Rlsk
Mitlgation
1. Recommended: Build a new Hangar
at Spokane lnternational Airport.
$1,500,000 01 2018 122018
2. Extension of the existing sublease.$o 8 2018 10 2019
3. Co-Lease an existing structure with
another plane.
$o N/A
4. Find a location at another Airport.N/A N/A
o
Business Case Justification Narrative Exhibit No. 3 Page 2 of 6
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 149 of 186
Airport Hangar
oSchematic Option:
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Exhibit No. s Page 3 of 6
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 50 of I 86
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Option 2 - Direct lease from Spokane airport
We looked into pursuing an extension of the existing sublease, and confirmed that
we can convert our sublease into a direct lease with the airport and stay in the
existing hangar temporarily. However, because of airport management's plans for
vacating the land the current hangar is on, we would be able to do this for a
maximum ol6-12 months, and we would need to be in negotiations with the airport
on a long term solution.
Option 3 - Share existing hangar
There is cunently one hangar at the Spokane lnternationalAirport large enough
and with owners who would consider co-leasing with Avista. Avista would not have
ownership of this building, which presents several challenges:
o Sharing space with co-lessor(s) would require additional security measures
to protect our aircraft and ensure the security of our network (located in the
office of the flight crew). These measures could require additional
construction of secured entrances and areas and/or hiring security
personnel, and would need to be coordinated with and approved of by any
co-lessors, at Avista's cost.
r There is also a concern about damage to the airplane. The plane would be
stored in tight quarters alongside another aircraft, and damage is more
likely to occur as planes are maneuvered in and out of the hangar.
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Business Case Justification Narrative txnlDlt l\o. 6 D,
Case No. AVU-E- l9-04 vage 4 of 6
H. Rosentrater, Avista
Schedule 3, Page 151 of 186
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Airport Hangar
Maintaining the aircraft and keeping it secure from co-lessor's employees
and/or mechanics would present a security logistical challenges as well.
o Currently we do not have to coordinate departures or arrivals with another
entity. Co-leasing would require us to share flight information and
coordinate our departures and arrivals with our co-lessor.
o Additional future co-occupants could be brought in and affect Avista's use
of the hangar.
Option 4 - Store at another airpoft
A. Felts Field was looked into as an option to move the plane but the runway is
not long enough. A 7,000-ft runway minimum is required to safely land and
takeoff with our current aircraft.
B. The Coeur d'Alene airport was researched as a solution. There are no
options to lease an existing hangar available; however there is the
possibility of building a hangar at that location. The cost of building a
hangar at the Coeur d'Alene Airport would be the same or comparable as
building a hangar at the Spokane lnternationalAirport, but would increase
overalltravel time and cost for employees having to drive to Coeur d'Alene
for flights.
o
o
Business Case Justification Narrative
o
Exhibit No. 3 Page 5 of 6
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 52 of I 86
o
or
Bowles
Date:s lrh
Airport Hangar
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Airport Hangar plan and
agree with the approach it presents and that it has been approved by the steering
committee or other governance body identified in Section1.1. The undersigned
also acknowledge that changes to this will be coordinated with and
approved by the representatives.
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
Signature:
Print Name
Title:
Role:
Facilities Manager
Business Case Owner
\.ua-oarc:sf 1 1,.
Anna Scarlett
Manager, Shared Services
Business Case Sponsor
o Jh-eL Date: t{-Lr_n
Heather Rosentrater
Vice President, Energy Delivery
Steering/Advisory member
5 VERSION HISTORY
Template Version: 0212412017
Verslon lmplemented
By
Revision
Date
Approved
By
Approval
Date
Raason
1 Eric Bowles 04125t17 Heather Rosentrater 04t25t17 New template
o
Business Case Justification Narrative Page 6 of 6rc
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 53 of I 86
1 GENERAL INFORMATION
Requested Spend Amount $2,950,200
Requesting Organization/Department Facilities
Business Case Owner Rod Staton/ Eric Bowles
Business Gase Sponsor Anna Scarlett
Sponsor Organization/Department Shared Services
Gategory Project
Driver Asset Condition
2 STEERING COMMITTEE OR ADVISORY GROUP INFORMATION
2.1 The steering committee is made up of a cross section of directors that represent
groups impacted by the projects, as well as a couple members not directly affected
to add an outside view. The current group is as foltows:
o Director of Generation Production Substation Supporto Manager of Shared Serviceso Manager of Project Deliveryo Manager of lT Deliveryo Manager of Facilities
Each project within this business case is reviewed and approved by the Steering
Committee group, and regular updates are provided during project execution.
Other advisors may contribute input, approvals, or information as needed, and
include:
o Vice President of Energy Deliveryo End Users
3 BUSINESS PROBLEM
The Clark Fork and Noxon Living Facilities were constructed in 1983 and 1984
and have been in use for more than 30 years. The facilities are 16-room
bunkhouses designed in a similar fashion to a motel with two wings, with each
wing containing 8 rooms and a centralcommon space containing a kitchen, dining
hall and laundry facility.
Because of the limited availability of lodging in this ruralarea, Avista crews and
personnel lodge at these facilities when performing work at Noxon Rapids Dam,
Cabinet Gorge Dam, or on other Avista equipment in the area. Employees who
perform work on the dams during the work week reside in the bunkhouse during
the evenings. The living facilities are strategically located adjacent to the dam to
maximize the time spent doing critical maintenance work.
With our aging infrastructure, work is currently ongoing at both dams and is
planned to continue for the foreseeable future in the form of maintenance and
o
o
o
Noxon and Clark Fork Living Facilities Renovation
Business Case Justiflcation Narrative Page 1 of8Exhibit No. 8
Case No. AVU-E-I9-04
H. Rosentrater, Avista
Schedule 3, Page 154 of 186
Noxon and Clark ForR Living Facilities Renovation
o
o
o
upgrade projects. This work is essential to maintaining the reliability of our power
generation and associated infrastructure in the region.
ln 2015, Facilities Management was asked to evaluate the condition of the Clark
Fork and Noxon Living Facilities by the GPSS department. Eric Bowles (Corporate
Facilities Manager.) and Rod Staton (Facilities Project Manager) traveled to the two
sites and stayed in the rooms to evaluate the overallcondition of the facilities and
to experience the conditions first hand. lnterviews were conducted with employees
that were staying in the rooms to receive feedback. Photographs were taken of the
facilities and a list of possibilities was put together to discuss with sponsors and
stakeholders. (See Appendix).
During these inspections, extensive issues were found, including structural and
water damage to the siding and framing due to faulty construction and subsequent
water penetration, inadequate and antiquated electric heating systems, HVAC
deficiencies, non-cornpliant electric breaker panels and inadequate insulation.
Subsequent inspections exposed black mold and mildew caused by water
penetration in parts of both facilities.
Upon sharing the facilities assessment with the sponsors and stakeholders it was
decided that the next logical step would be to create a project to address the
problems discovered at the living facilities. Bernardo Wills Architects of Spokane
was hired to recommend the level of modernization needed to address the
concerns found during the site assessment, and create the scope of work needed
to renovate the facility. (See Appendix for concerns raised during the site
assessment.)
4 PROPOSAL AND REGOMMENDED SOLUTION
Ootion 1 (Recommendedl - Remodel & correct issues at both facilities.
The selected altemative includes the significant renovation of the living facilities at
Clark Fork and Noxon to address the identified problems and components to
extend the life of the facilities and update the facility to a more modern and energy
efficient state. This alternative combines the required repair work with the facility
renovation to avoid duplicating efforts and saving costs on contractor mobilization
and re-work. The completed facilities would provide years of additional service,
increase the efficiency of energy usage, reduce annual O&M costs to maintain the
structures, and provide a suitable environment for housing our workforce at these
remote sites.
With a centralized workforce based out of Spokane, it is criticalto provide lodging
Business Case Justification Narrative Exhibit No. 8Page 2 of 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 155 of 186
April2016Option 1 (Recommended) - Remodel& conect all
issues at both existing facilities at one time.
$2.95M Dec2017
Option 2 - Address deferred maintenance issues
individually over time as individual projects over a
five year period.
$2.95M April2016 Dec2021
Option3-DoNothing $0
option 'Gapital Gost Start 'Gdinplete
Noxon and Clark Fork Facilities Renovation
near our worksites to best utilize available working hours. These living facilities are
utilized by Avista maintenance crews and engineering personnel when performing
work at Noxon Rapids Dam, Cabinet Gorge Dam, or other Avista equipment in the
region. Both Noxon Rapids Dam and Cabinet Gorge Dam are in very rural and
isolated areas. Options for lodging are extremely limited, with Sandpoint or
Thompson Falls being the nearest towns. Travel time from these towns would limit
the efficient use of crews for work at these facilities. Without the continued
availability of the living facilities, it's estimated that it would cost $316,200 annually
to procure lodging at alternate sites for work at the plants. Over a Z}-year period,
the annual cost to procure alternative lodging would exceed the total cost of the
project by more than double.
The scope of the remodel project includes each of the 16 individualguest rooms,
bathrooms, kitchen, dining room, activity room, lobby, laundry room, office,
basement and building exterior. This work would extend the life of these facilities
and update them to a more modern and efficient state. lnterior scope work
includes: full bathroom remodels, HVAC replacements/installs, window trim
replacements, lighting upg rades, new fl oori ng/trim/paint, new cab inets,
countertops, & furniture, replacement of hot water heaters, new door handles &
locks, and more. The exterior scope of work includes repair of termite/rot damage,
re-siding, new paint, installation of snow guards & gutters, replacement of exhaust
fans/vents, and more.
During each construction period, the facility being worked on will be unavailable for
use until the first wing of eight rooms and the common areas are completed. Once
constructions moves to the second wing of eight rooms, the facility will become
available at half capacity. Crews working in the region will be required to utilize the
other living facility until capacity is reached and make other arrangements after
that point.
Option 2 - Addrcss issu* with multiple oroiects over 5 vears.
This option spreads the cost of correction over a S-year period. The mold and
mildew issues would be addressed first and the additional items would be
addressed systemically over time. The major argument against this approach is
the down time in room availability while the work is occurring. Each discovered
issue needs time to be addressed in both facilities, requiring prolonged periods of
time where the rooms would unavailable to the crews. This option would drive up
hotel room oosts to accommodate work at the living facilities. The other major
issue with this option is the staging of the work. Many of the discovered issues
require substantialdemolition to complete the work. There is a cascading effect
and a logical order to trade stacking, creating logical work flow, this option does
not afford the stacking of trades to create efficiency.
OptionS-DoNothins.
Disregarding the water penetration is not an option as this would render portions
ol and eventually the entire facility, uninhabitable over time. The lack of available
living facilities would inhibit plant maintenance and upgrade work resulting in
increased project costs and customer rates.
This option is unacceptable due to health issues associated with mold and mildew.
Business Case Justification Nanative Page 3 of 8Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 56 of I 86
o
o
o
o Noxon and Clark Fork Living Facilities Renovation
The discovery of significant design flaws and inadequate construction materials
increases the need to respond immediately. Facility assessment provided by
Facilities Management and Bernardo Wills Architecture note significant issues that
must be addressed to halt further decline of the facilities and to meet the current
(UBC) Uniformed Building Code requirements. The levelof deferred maintenance
must be addressed to prevent additional cost to repair in future years. The damage
increases over time and cost to address the concerns will increase with inflation.
o
o
Business Case Justification Narrative Exhibit No. 8 page 4 of g
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3. Page I 57 ol I 86
Noxon and Clark Fork Living Facilities Renovation
5 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Jack Stewart Training
Center Expansion & Enhancement plan and agree with the approach it presents
and that it has been approved by the steering committee or other governance
body identified in 1.1. The u also acknowledge that significant
changes to this will nated approved by the undersigned or their
designated rep
o
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
Signature:
Print Name:
Title:
Role:
sl*fn
Eric Bowles
Manager, Facilities
Date:
Date:r1
Dare: 5 (zt ltl O
Business Case Owner
I- \t-<ru 1,>
Anna Scarlett
Manager, Shared Services
Business Case Sponsor
Heather Rosentrater
Vice President, Energy Delivery
Steering/Advisory Com mittee Review
6 VERSION HISTORY
Template Version: 03107 12017
o
Version lmplemented
By
Revision
Date
Approved
By
Approval
Date
Reason
1.0 Rod Staton 5t19t2017 mNddlyy lnitialversion
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 58 of I 86
Business Case Justification Narrative Page 5 of 8
W
<name>
Noxon and Clark Fork Living Facilities Renovationo
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APPENDIX
. Major structural damage to the siding and framing members due to faulty
roof flashings installed at time of construction. Demolish lower room exterior
walls, check for black mold, remediate black mold, repair damage, and
replace materials.. lnadeguate and antiquated electric resistance wall mounted heating
systems in each bathroom (manualcontrols only) and no GFI Receptacles.o Air conditioning was not installed in the rooms at the time of construction,
which is particularly difficult for crews during hot summer months.o Electric breaker panels serving the facility are grossly undersized and must
be replaced with code compliant panels.. Highly undesirable shared hot water tanks installed in the upstiairs rooms in
hidden closets causing major water damage in the ground floor units due to
tank leaks.. lnadequate insulation (sound bats) between each unit producing high levels
of sound transmission between the units.o Life cycle failure (age) found in faucets, mixing valves and toilet hardware
due to water alkalinity and mineral build up.o R-19 insulation found in the ceilings of the entire facility, should be R-38 by
energy code.. Poor to no cell phone reception in individual rooms, limiting contact with
family members during the week.o 19" televisions in each room with terrible picture quality and audio.o Metal Roofing panels that have reached the end of their expected life cycle,
resulting in leak points due to product failure.o /4 inch X 4'X8'vertical grain fir plywood siding that has failed at each
gable end, with numerous intermittent panels failing on the front and rear of
the building. Substantial damage occurring in 30% of the siding structure.
Siding has exceeded expected life cycle, must be replaced. Original siding
design was not compatible to local climate and moisture content.. Numerous dings and chips in drywall, doortrim and base moldings.o Extreme water damage to front and rearfascia boards, must be replaced.o Soffit material water damaged due to exhaust fans from individual units
being inadequately vented to the exterior gable end wall.. Tile and grout in each room showing considerable age and replacement is
warranted due to wear.o Bed frames of originalvintage; highly uncomfortable and noisy.o 112" copper plumbing runs have significant constriction due to mineral build
up, replace all plumbing lines with new runs.. Light fixtures are original era and should be replaced with energy efficient
LED fixtures for energy savings.. Replace exhaust fans with properly vented pipes exiting at gable ends;
currently piped into the soffits and vented onto public walkway.. Carpet has exceeded useful life. Replace carpet in each room.o
Business Case Justification Narrative Exhibit No. 8 Page 6 of 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 159 of 186
Noxon and Clark Fork Living Facilities Renovation
a Kitchen countertops are chipped, broken and many have separated fom
the cabinet substrate. Replace all counter tops with commercial grade
material.
Cabinet hinges are broken and in disrepair, particle board cannot be
repaired, replace cabinetry.
Kitchen flooring material is vinyl sheet goods. Torn and tattered beyond
useful life, replace with commercial grade tile for longevity.
Snow sheds from roof falling 18'to the ground level entrances to lower
rooms. Construct a retaining wallto protect employees from falling snow.
14' x 18' rear deck adjacent to dining hall is rotten and must be demolished
Replace with roof covering and install concrete pavers at ground level.
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PHOTOG RAPHIC ASSESSM ENT
Exhibit No. t Page 7 of 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 60 of I 86
Business Case Justification Narrative
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No.8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 16l of 186
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Business Case Justification Nanative Page 8 of8
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Appren tice/Craft Training
1 GENERAL INFORMATION
Requested Spend Amount $300,000 over 5 years ($60,000 annual)
Req uesting Organ ization/Department Human Resources/Craft Training
Business Case Owner Eric Rosentrater
Business Case Sponsor George Brown
Sponsor Organization/Department Human Resources
Category Mandatory
Driver Mandatory & Compliance
1.1 Steering Committee or Advisory Group lnformation
The Joint Apprenticeship Training Committee (JATC) is the group identified by
Avista to oversee the administration of the company's apprenticeship programs.
The JATC will, as outlined in the Avista Standards of Apprenticeship, secure the
instructional aides and equipment it deems necessary to provide quality instruction.
To the extent possible, related instruction will be closely correlated with the practical
experience and training received on the job.
2 BUSINESS PROBLEM
The capital allowance allotted to the Training Department through the Apprentice
Training Business Case provides for tools, materials and equipment for training
apprentices and journey workers across eleven skilled crafts or trades. This training
consists of hands-on skills development that builds competency in a safe learning
environment that may not always be available or controllable in the field. A well
trained and competent workforce ensures reliable delivery of energy to Avista's
customers and maintains a safe environment for employees, customers and the
general public in all of Avista Utilities service territories.
ln addition to creating a safe and skilled workforce, this training helps Avista to
deliver timely training on new and emerging technologies as well as meet several
federal and state mandated regulations including:. Department of Labor, Standards of Apprenticeship - Title 29 CFR 29.5 (bX4)
and (bXg) - Apprentice on the job training and related instruction. Department of Labor, Occupational Safety and Health Standards - Title 29
CFR 1910,269 (aX2) Electric Power Generation, Transmission, and
Distribution training. Department of Transportation, Transportation of Natural Gas and Gas by
Pipeline: Minimum Federal Safety Standards - Title 49 CFR 192.805 (h) -
Qualification of Pipeline Personnel, Qualification Program training. State of Washington - WAC 480-93-013 (4) - Covered Tasks: Equipment and
facilities used by pipeline company for training and qualification of employees
o
a
Business Case Justilicalion Narrative
o
Exhibit No. 8 page 1 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 62 of I 86
Ap p renti ce/C raft T rai n i ng
o
o
3 PROPOSAL AND RECOMMENDED SOLUTION
Capital expenditures under this program could include items such as building new
facilities or expanding existing facilities, purchase of equipment needed, or build out
of realistic utility field infrastructure used to train employees. Examples include: new
or expanded shops, truck canopy, classrooms, backhoes and other equipment, build
out of "Safe City'- commercial and residential building replicas, and distribution,
transmission, smart grid, metering, gas and substation infrastructure.
Without the ability to provide specific hands-on operational training in-house, the
company takes on several risks which include the inability to successfully fill critical
craft positions with the necessary knowledge, skills and abilities specific to Avista's
operations. This would have a direct and significant negative impact on system
reliability, customer response times, as well as employee and public safety.
Regulating bodies may also de-certify our apprentice program due to not meeting
mandatory requirements for adequate training. As a result, the inability to train in-
house would require extensive travel to fulfil! our training obligations.
The cost to outsource hands-on-training and field simulations would be
approximately $473,000 a year for facility rental alone. This is based on current
training programs that have averaged over 530 hours per year at the training center.
The overall annual costs including travel, lodging, meals and registration are
estimated to more than triple this rental cost and be classified as operations and
maintenance costs. Again this would result in a negative impact to Avista's
customers.
OpUon Capftal Gost Start Complete
Do nothing $o
Ongoing Capital lmprovements $300,000 0't 2015 122019
Conduct Training Externally (No Training Facility)$1,400,000 0&M Annual Annual
o
Business Case Justification Narrative
Case No. AVU-E-
H. Rosentrater, Avista
Schedule 3, Page 163 of 186
No. 8 p3gs 2 e1 3
19-04
Ap p renti celC raft Trai n i ng
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Apprentice/Graft Training
and agree with the approach it presents and that it has been approved by the
steering committee or other governance body identified in Section1.1. The
undersigned also acknowledge that significant changes to this will be coordinated
with and approved by the undersigned or their designated representatives.
o
Signature:
Print Name:
Title:
Date:
Eric Rosentrater
Safety, Training, and Labor Relations
Manager
Role Business Case Owner
Signature:
Print Name:
Title:
Date:Y/,r -
George Brown
Director of HR, Shared Services, Benefits,
Craft Training, Occupational Health and
Safety & Union Labor Relations
Role Business Case Sponsor o
5 VERSION HISTORY
Tem plate Version: O3lO7 12017
Exhibit No. 8 page 3 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 64 of I 86
Veralon lmplemented
By
Revlslon
Date
Approved
By
Approval
Date
Reason
1.0 Jeremy Gall 04t04t2017 George Brown 04t14t2017 lnitialversion
Business Case Justification Nanative
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Fleet Services Capital Plan
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1 GENERAL INFORMATION
Requested Spend Amount $7,700,000
Req uesti n g Organ ization/Department Fleet
Business Case Owner Greg Loew, Manager, Fleet Services
Business Case Sponsor Anna Scarlett, Manager, Shared Services
Sponsor Organ ization/Department Shared Services
Category Program
Driver Asset Condition
1.1 SGering Committee or Advisory Group lnformation
The Fleet capital replacement program is based on the Vehicle Replacement
Model that is a product of our Utilimarc benchmarking subscription. The model
uses benchmark data, purchase and auction data, combined with nationwide
vehicle information that Utilimarc uses to build an accurate and robust model. The
Fleet Specialist for Capita! then takes the results of the model to validate, verify
usage and work with operations managers to ensure that the identified unit meet
their business needs. Capital projects requests are created for each discrete
project (vehicle/equipment) that is approved by the Fleet Manager with notifications
to the Manager of Shared Services and the Vice President of Operations.
2 BUSINESS PROBLEM
FIeet equipment as it ages experiences a growth in cost related to its operation.
Those costs are driven by the requirement of more parts and more labor required
to keep that unit up and running. As your fleet's average age increases you will see
a steady but accelerating trajectory of costs servicing hours required. lt can be
described as more complex repairs requiring more hours and parts to fix. Those
increasing costs are not just the burden of Fleet; the users will see the impact in
lost productivity/downtime. ln a2011 analysis of Avista's class 46 vehicles and a
subsequent analysis done in 2016 saw a 52o/o reduction in the labor hours required
per truck by bringing the classes average age from 9.5 years to the industry
average of 5.5 years.
2010 201 1 2012 2013 2014 201 5
AVA Avg
Age
8.03 7.81 7.59 6.81 6.55 6.23
lndustry
Avg Age
6.11 6.27 6.27 6.56 6.53 6.38
Avg Op
Cost / Unit
$10,924 $11 ,558 $11,534 $10,845 $9,739 $9,285
a
Business Case Justification Narrative Exhibit No. 8 Page 1 ot 14
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 165 of 186
3 PROPOSAL AND RECOMMENDED SOLUTION
Optlon Capltal Gost Start Complete
Option 1 (Recommended): Fully fund
replacement prognm
$7,700,000
Option 2: Partially fund program $3,700,000
Option 3: No funding 0
Option 1 (Recommended) - Fullv Fund Replacement Proqram
The Fleet asset model is optimized for the lowest total cost of ownership. Our life cycle
model seeks the goal of balancing risk and limited investment dollars. The model allows
Fleet to provide users with a reliable and safe tool that is ready for work at any given
moment. The fully funded option allows our capital purchasing model of equipment to
continue replacing aging equipment in a predictive manner that keeps technician
staffing levels constant to the predictive number of repair work orders generated. The
program does not include additions to the existing fleet. The analysis of the data by
Utilimarc shows that this fully funded model over time will yield the lowest cost per
vehicle.
The recent large outages from the summer ot2014 and November 2015 show the
strength of our fleet. During those thousands of hours of combined operation we only
had two minor breakdowns that we were able to quickly repair and return to service
before the start of the operator's next shift.
The customer benefits from this in two distinct ways. One, that crews are quicker to
respond to issues because they operate reliable equipment that can be ready for duty.
Two, that costs for customers remain steady from a fleet cost perspective because we
have a constant investment in the equipment along with a progressive maintenance that
has a monthly average over 95% of vehicles ready for duty. By pursing the
recommended investment path we avoid rising maintenance costs, outside of economic
inflationary trends, and increasing down time due to mounting demand repair work
orders. Additionally, this investments allows us to purchase equipment that has modern
emissions controls or alternative energy sources allowing us reduce carbon emissions
from our fleet vehicles.
Option 2- Partiallv Fund Reolacement Proaram
The partially funded, option 2 continues to replace vehicles but at reduced amount when
compared to the recommended option. The combined ownership and maintenance
costs to appear to be nominally less in costs over the time of the model. However what
you see is a rapidly aging fleet in the last two thirds of the modelwhich have increasing
work order counts for repairs and significant impacts to reliability/uptime not shown in
the totalfleet costs.
o
o
o
Fleet Seryices Capital Plan
Business Case Justification Narrative Exhibit No. haoe 2 ot j4
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 66 of 1 86
o
o
o
Fleet Seryrces Plan
Ootion 3 - Do Not Fund Replacement Prooram
Option 3 is a plan designed to replace a unit only at failure. This model has rapidly
increasing costs due to significant repairs required. This model will require increasing
numbers of repair work orders to be assigned to outside vendors since company
technicians will be able to handle only incrementally more work than today. This outside
work has a higher price per hour and higher parts costs due to vendor markups. This
model will lead to increasing down time of equipment as it ages. The repairs will
become more costly and consume more technician time. lncreasingly, even with the
best preventative maintenance plan, there will be unplanned failures in the field downing
a crew while the issue is addressed. This model was practiced at Avista for over 20
years and led to clusters of vehicles failing at approximately the same time and creating
capital constraint issues.
Vehi c I e Rep lac ement An alvs is
The following information demonstrates the effect of three different replacement
strategies on Avista's Fleet performance. Three projections were built using Utilimarc
Vehicle Replacement Model (VRM) to show the effect of different levels of capital
commitment on fleet maintenance cost, ownership cost, average age, and demand
repairs. ln the Full Budget (Option 1) scenario, vehicles are replaced in line with each
vehicle's calculated, optimal, lifecycles with an annual capital cost starting at
approximately $8,000,000, The Half Budget (Option 2) scenario cuts the annual
replacement budget in half to start at approximately $3,700,000. The No Budget (Option
3) scenario restricts the annual capital cost to $0.
Summary
The table below shows the effects of each budget on annual vehicle ownership and
maintenance cost for Avista's fleet. The full projections are provided on the pages to
follow.
Annual Vehicle Ownership and Maintenance Cost 2016
Full Budget $9,588,817
Half Budget $9,439,904
No Budget $9,350,935
2020
$9,735,956
$9,274,112
$9,145,384
2025
$10,604,849
$1 0,1 97,1 51
$10,854,088
2030
$1 1,700,794
$1 1,658,431
$13,913,603
Avista's fleet is currently ahead of its ideal lifecycle. This is shown by the increase in
average age we see under even the Full Budget scenario. Because of this, the No
Budget scenario is marginally cheaper in the first few years of the projection (<2'/o).
However, by the 1Sth year, the No Budget scenario is 19% higher than the two
alternative scenarios. Avista would also see average age increase from 9.0 years to
over 20 years under this worst-case scenario.
The Full Budget scenario is marginally more expensive then the Half Budget scenario in
these projections, but will begin to outperform the Half Budget scenario beyond the 1Sth
year. While their total costs are comparable, the Full and Half Budget scenarios differ in
how money is being spent. Under the Full Budget scenario, capita! investment is larger
each year, but maintenance costs are significantly lower. The Full Budget scenario also
offers younger units for the crews to operate (average age of 9.22in the 15th year) vs
Business Case Justification Narrative Exhibit No. 8 Page 3 of 14
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 67 of I 86
14.74 in 1Sth year) and fewer demand repairs (7 ,082 work order in the 15th year).
Conversely, The Half Budget scenario sees a smaller capital investment each year, but
the unit for the crews to operate will be older (average age of 14.74 in year 15) and will
see more demand repair (9,671 work orders in the 1Sth year).
Vehicle condition, availability and downtime should also be considered in these
scenarios. ln order to maximize safety, reliability and responsiveness for customer
needs, including emergency outage restoration, vehicles should be equitable in terms of
standards and in optimalworking condition.
Assumptions
o
o
a
o
lnflation: All capital, ownership and maintenance costs are increase annually be
2o/olo account for inflation.
Consistent Replacement: The replacement model is programed to replace a
consistent number of unit each year to achieve more predictable capital
requirements and avoid replacement bubbles. When many vehicles are
concentrated in relatively few vintages, these "bubbles" can cause sudden
increases in parts and labor cost, vehicle downtime, and technician requirements.
Replacing a constant number of unit each year avoids this problem, but
consequently the model will occasionally replace a unit before it reaches in
lifecycle or let a unit run beyond its lifecycle.
Maintenance: Maintenance cost includes the cost of al! parts and labor needed to
maintain the asset over the course of its lifetime. Note that maintenance cost does
not include the cost of fuel or any administrative or corporate overheads. While
there will be some fuel efficiencies associated with running younger vehicles, the
unpredictable nature of the price fuel make it difficult to quantify the savings
associated with these efficiencies.
Maintenance Savings: The replacement model maintains a constant cost per
wrench-turning hour of technician labor. This means that when maintenance cost
increase or decrease, the model adjusts staffing levels to meet the increased or
decreased demand for labor. This should be considered alongside historic
overtime and contract labor practices when interpreting these results.
a
o
Fleet Services Capital Plan
Business Case Justification Narrative ExhibitNo. Page 4 of 14
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 68 ol I 86
a
Fleet Services Capital Plan
o
o
O
Cost Tables
FullBudget
Annual Maintenance (Parts, Labor,
Vendor) Cost
Annual Ownership Cost
Annual Gapital Budget
Units Replaced Annually
Average Age
Unib Out of Lifecycle
Annual Demand Repair Work Orders
3.7M Budget
Annual i[aintenance (Parts, Labor,
Vendor) Cost
Annual Ownership Cost
AnnualGapital Budget
Units Replaced Annually
Avenge Age
Units Out of Llfecycle
Annual Demand RepairYllork Orders
No Replacement
Annual Maintenance (Parts, Labor,
Vendor) Cost
Annual Ownership Cost
Annual Capital Budget
Units Replaced Annually
Average Age
Unlts Out of Llfecycle
Annual Demand Repair Work Orders
2016 2017 2018 2019 2020
$4,945,378 $5,262,213 $5,553,296 $5,876,138 $6,194,199
$6,130,531 $5,589,192 $5,260,460 $4,914,123 $4,665,065
2016
$4,742,786
$6,5s9,724
$8,010,456
112
8.47
134
6,609
2017
$4,856,108
$6,390,102
$7,625,997
106
8.38
110
6,637
2018
$4,976,085
$6,363,332
$8,550,766
106
8,36
74
6,660
2019
$5,129,998
$6,262,211
$7,983,602
103
8.42
57
6,711
2020
$5,303,926
$6,210,697
$8,457,832
104
8.51
41
6,768
$3,719,912
50
9.11
186
6,899
$2,905,936
44
9.59
203
7,191
$4,096,366
50
10.01
202
7,434
$3,574,700
46
10.47
238
7,694
$3,664,350
47
10.92
247
7,942
2016
$5,236,220
$5,735,049
$-
2017
$5,756,008
$4,936,895
$-
2018
$6,296,020
$4,259,317
$-
2019
$6,859,429
$3,682,958
$-
12.71
457
8,932
2020
$7,436,489
$3,191,696
$-
13.69
572
9,485
9.77
281
7,276
10.76
322
7,828
11.74
403
8,380
Business Case Justification Narrative Exhibit No. 8 page 5 of 14
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 169 of 186
Full Budget
Annual Maintenance (Parts, Labor,
Vendor) Cost
AnnualOwnership Cost
AnnualGapital Budget
Unlts Replaced Annually
Average Age
Units Out of Lifecycle
Annual Demand Repair Work Orders
3.7M Budget
Annual Maintenance (Parts, Labor,
Vendor) Gost
Annual Ownership Cost
AnnualCapital Budget
Unlts Replaced Annually
Average Age
Untts Out of Lifecycle
Annual Demand RepairWork Orders
No Replacement
Annual Maintenance (Parts, Labor,
Vendor) Gost
AnnualOwnerchlp Cost
AnnualCapital Budget
Units Replaced Annually
Average Age
Units Out of Lifecycle
Annual Demand RepairWork Orders
2021 2022 2023 2024 2025
$5,469,634 $5,626,095 $5,806,710 $5,936,489 $6,088,050
$6,231,649 $6,252,23s $6,244,883 $6,383,525 $6,422,122
$8,744,956 $8,763,990 $8,633,034 $9,629,551 $8,990,833
103 111 101 106 103
8.62 8.6s 8.77 8.83 8,93
34 4A 41 38 32
6,834 6,880 6,945 6,956 6,990
2021 2422 2023 2024 2025
$6,505,655 $6,847,961 $7,168,380 $7,465,391 $7,801,053
$4,509,902 $4,243,790 $4,133,092 $4,111,033 $4,009,498
$4,301 ,788 $3,281,927 $3,841,499 $4,613,173 $4,025,692
49 45 46 50 46
11.35 11.80 12.23 12.60 13.01
307 330 366 400 418
8,169 8,404 8,618 8,790 8,985
o
o
2021
$8,036,849
$2,772,141
$-
2022
$8,660,759
$2,413,132
$-
2023
$9,299,77'l
$2,105,273
$-
2024
$9,958,388
$1,840,887
$-
2025
$10,638,865
$1,613,357
$-
14.66
620
10,037
15.63
68'1
10,588
16.s9
734
11,140
17.55
769
11,691
18.50
793
12,242
a
Fleet Seryrces Capital Plan
Business Case Justification Narrative @ti+
Case No. AW-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 170 of, 186
Fleet Selices Capital Plan
o
o
o
Ful! Budget
Annual Maintenance (Parts, Labor,
Vendor) Cost
AnnualOwnership Cost
Annual Capital Budget
Units Replaced Annually
Average Age
Units Out of Lifecycle
Annual Demand RepairWork Orders
3.7lll Budget
Annual Maintenance (Parts, Labor,
Vendor) Cost
AnnualOwnership Cost
AnnualCapital Budget
Units Replaced Annually
Average Age
Units Out of Lifecycle
Annual Demand Repair Work Orders
No Replacement
Annual Maintenance (Parts, Labor,
Vendor) Cost
Annual Ownership Cost
AnnualCapital Budget
Units Replaced Annually
Average Age
Units Out of Lifecycle
Annual Demand RepairWork Orderc
2026
$6,226,667
$6,549,886
$9,764,701
112
8.93
23
6,995
2026
$8,099,925
$3,998,122
$4,534,552
50
13.34
422
9,1 36
2027
$6,411,144
$6,593,568
$9,296,048
106
8.95
20
7,048
2028
$6,535,809
$6,783,330
$10,423,336
106
9.02
16
7,045
2029
$6,698,371
$6,85'1,754
$9,731,966
103
9.13
17
7,074
2030
$6,853,080
$6,967,321
$10,310,050
104
9.22
19
7,082
2027
$8,432,876
$3,899,631
$3,542,320
44
13.75
M3
9,314
2428
$8,704,428
$3,982,001
$4,993,447
50
14.06
459
9,419
2029
$9,019,315
$3,957,415
$4,357,539
46
14.41
477
9,555
2030
$9,318,223
$3,994,430
$4,466,822
47
14.74
497
9,671
2026
$11,342,717
$1 ,41 7, 1 38
$-
2027
$'12,068,385
$1,247,603
$-
2028
$12,823,413
$1,100,859
$-
2029
$13,603,405
$973,611
$-
2030
$14,412,019
$863,098
$-
19.46
828
12,793
20.41
860
13,343
21.36
889
13,894
22.31
921
14,444
23.25
940
14,994
Business Case Justification Narrative Exhibit No. 8 page I oI 14
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule3, Page l7l ofl86
Methodology
Annualized Total Cost
For each class, Utilimarc's Vehicle Replacement Module (VRM) determines what
lifecycle achieves the lowest cost to own and maintain an average asset over its
lifetime. This done by calculating the annualized total cost for each potential lifecycle.
Annualized cost total is the sum of all ownership and maintenance cost a unit obtains
over the course of its !ife, divided by the number of years the unit is in service.
Minimizing annualized total cost guarantees the lowest total cost over the life of the
asset. As an example, the table below shows the annualized cost for the possible
lifecycles of a light duty pickup truck.
Replacement Age Annualized Total Cost Deviation
$5,964
$5,759
$5,598
$5,476
$5,390
337
1
2
3
4
5
6
3.10/o
1.50/o
1.60/o
3.00/o
o
o
8
I
10
11
12
13
14
$5,316
$5,345
$5,397
$5,472
$5,567
$5,682
$5,816
Consider the following three replacement scenarios over a 14-year financial period:
Scenario 1: A fleet manager plans to replace this vehicle every year. The annualized
cost of this replacement strategy is $7,811. Over the 14-year period, this replacement
strategy will cost fleet 14 x $5,946 = $83,244.
Scenario 2: A fleet manager plans to replace this vehicle every seven years. The
annualized cost of this replacement strategy is $5,810. Over the 14-year period, this
replacement strategy will cost fleet 14 x $5,31t = $74,382.
Scenario 3: A fleet manager plans to replace this vehicle every fourteen years. The
annualized cost of this replacement strategy is $6,913. Over the 14-year period, this
strategy will cost fleet 14 x $5,816 = $81,424 o
Fleet Seryices Capital Plan
Business Case Justification Narrative Exhibit No. haoe
Case No. AVU-E- I 9-04
H. Rosentrater, Avista
Schedule 3,Page 172 of 186
8of14
12.30/a
8.44/a
0.570
0.0%
0.10/o
0.6%
137
4.8o/o
7.04/o
9.50/o
Fleet Services Capital Plan
o The table below summarizes the calculations in the previous example.
Scenario 1
Chosen
Replacement
Age
1
FlnancialPeriod
(Years)
14
Annualized
Cost
$5,946
Total Cost for Financial
Period
$83,244
Scenario 2 7 14 $5,382 $74,382
Scenario 3 14 14 $5,816 $81,424
This example illustrates that by minimizing annualized total cost achieves the lowest
total cost of ownership over the life of the vehicle. Utilimarc recommends replacing units
within 1.0o/o of the true lowest cost of ownership. This generally provides a three-year
range for replacement, which allows for flexibility when planning replacement without
dramatically affecting overall cost.
o
o
Business Case Justification Narrative Exhibit No. 8 Page 9 of 14
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 73 of I 86
Fleet Serurces Capital Plan
Modelinq Ownershio Cost
The Vehicle Replacement Model uses an exponential decay modelto project the
ownership cost of an asset over its lifetime. Each asset is assumed to lose 18% of its
current book value every year as a cost of depreciation. This decay rate of 18% is
established based on historical auction information from companies across the industry.
Annualized Ownerchip Cost is calculated by taking the cumulative sum of each year of
depreciation for the asset and dividing by the number of years the asset is in service.
Continuing the example from the previous section, the graph below shows the
annualized ownership cost for a light pickup truck for each potential lifecycle.
Light Pickup Annualized Cost by Lifecycle
-Qe76g6hip
o
o
s7,ooo
s5,000
Ss,ooo
S4,ooo
s3,ooo
(E(U
(u
CL
o(J
o,uo(!
(u
S2,ooo
s1,ooo
$o 123456 789
Lifecycle (Years)
10 t7 12 L3 t4 15
Business Case Justification Narrative
o
Exhibit No.Eage 10 of 14
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 74 of I 86
Fleet Services Plan
o Modelinq Maintenance Cost
The Vehicle Replacement Model uses a linear regression modelto project the
maintenance cost of an asset over its lifetime. These class specific models are built
using historical, maintenance cost per mile data taken from the Utilimarc data. ln the
graph below, the red dots represent the average historical maintenance cost per mile for
a light pickup truck of each age. The red, dashed line represents the Iinear regression
model used to estimate the maintenance cost of an average pickup. The linear
regression model helps predict the increase cost of maintenance associated with
running older vehicles.
Light Pick Maintenance Cost Per Mile
a -O
50.50
oI so.so
oCL! so.aouoaI so.ao
o
.c
S so.zo
obog
9 So.ro
So.oo
a -tJ'a
o o a
-'--'--
5 o '
t ()-'-
- - -']'J .
o
10
Age
ao t
o
R2 = 0.8557
723456789 11 t2 13 L4 15 16 t7 18 19
o
Business Case Justification Narrative ExhibitNo. Fage 11 of 14
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 175 of 186
Fleet Services Capital Plan
Annualized Maintenance Cost is calculated by taking the cumulative sum of each year
of maintenance cost for the asset and dividing by the number of years the asset is in
service. The graph below shows the annualized maintenance cost for light pickup
trucks, based on the linear regression model and a calculated average annual mileage.
o
Light Pickup Annualized Cost by Lifecycle
-
[yl3in{sn36sq
L.Eo
oA
raofJoo0(!
o
S7,ooo
S6,ooo
S5,ooo
S4,ooo
53,ooo
S2,ooo
s1,oo0
So 123456 789
Lifecycle (Years)
10 7L L2 13 74 15 o
o
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 176 of 186
Business Case Justification Narrative 12 ot 14
Fleet Seryrces Capital Plan
o Modelino Annualized Total Cost
Annualized total cost is calculated by taking the sum of annualized maintenance and
ownership cost. The graph below shows the annualized total cost for a light duty pickup
truck. The target lifecycle is indicated by a green shaded zone. This is a visual
representation of the table from pg. 7 and demonstrates how the model identifies each
lifecycle.
Light Pickup Annualized Cost by Lifecycle
-elvngr5hip -Maintenance -Total
rar[il[itecvcte
s7,000
S6,ooo
Ss,ooo
s4,000
s3,000
S2,ooo
s1,000
o
t!o
oo-
o(J
o)uo(o
o
So 723456 11 12 13 t4 1578910
(Years)
O
Business Case Justification Narrative Exhibit No. {Page 13 of 14
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 177 of 186
Fleet Seryrces Capital Plan
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Fleet Services plan and
agree with the approach it presents and that it has been approved by the steering
committee or other governance body identified in Sectionl .1. The undersigned
also acknowledge that significant changes to this will be coordinated with and
approved by the undersigned or their designated representatives.
o
Signature:
Print Name
Title:
Role:
^l*Date slr /rz
orli loew
Manager, Fleet Services
Business Case Owner
Signature:
Print Name:
Title:
Role:
-A*Sr--P-ffi--Date V,/rr
Anna Scarleft
Manager, Shared Services
Business Case Sponsor
Signature:
Print Name:
Title:
Role:
Date: Q=Lg- !1 o
Heather Rosentrater
Vice President, Energy Delivery
Steering/Advisory Com mittee Review
5 VERSION HISTORY
Template Vercion: OglOT 12017
Exhibit No. p" ge 14 ol ,14
Case No. AVU-E-I9-04
H. Rosentrater, Avista
Schedule 3, Page 178 of 186
Version lmplemented
By
Revlsion
Date
Approved
By
Approval
Date
Reason
1 Greg Loew 04/25/17 Heather
Rosentrater
04n5/17 New template
Business Case Justification Narrative
o
Clean Energy Fund 2 - Shared Energy Economyo
o
1 GENERAL INFORMATION
1.1 Steering Committee or Advisory Group lnformation
r Heather Rosentrater (Executive Sponsor)
. John Gibson (Project Sponsor)
. Curt Kirkeby (Concept Engineer/Project Sponsor)
. Kenneth Dillon (Project Manager, CEFI and CEF2)
. Mike Diedesch (Project Engineer)
. Washington State, Department of Commerce advisory group
2 BUSINESS PROBLEM
Business Case Justification Narrative Page 1 ofS
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 179 of 186
o
Requested Spend Amount $ 4,500,000 (Avista Contribution)
Req uesting Organ ization/Department Research and DevelopmenU
Distribution Operations
Business Case Owner Kenneth Dillon (Project Manager)
Business Case Sponsor Heather Rosentrater
Sponsor Organization/Department Distribution Operations
Category Strategic
Driver Customer Service Quality & Reliability
Distributed Energy Resources (DERs) interconnected to the grid and operated by the utility
can be optimized to meet the needs of the customer as well as the grid - economies of scope
or "vertical values". Sharing the investment in DERs across multiple building owners and
coordinated across the grid reduces the investment cost to each building owner as well as
provides opportunity to optimize utilization - economies of scale or "horizontal values".
Leveraging both economies of scope and scale to derive value out of DERs requires the
development of a platform to supervise, control, synchronize and optimize these assets -Avista Distribution System Platform (ADSP).
Micro-Transactive Grid (MTG) is an extension of the ADSP platform to support the optimal
utilization of DERs. Rather than optimizing a single building's utilization of DERs, the IVITG
will leverage building fleets, load diversity, and building management systems to optimize the
DERs across the distribution loop network. ln addition, the MTG will be designed to
sectionalize the load into distinct districts which share common DER assets to improve
system resiliency and reduce DER investment requirements.
The opportunity to address these issues is a Strategic opportunity which has a great deal of
support from the Washington State Department of Commerce, the Governor of the State of
Washington, and Avista's Clean Energy Fund 2 Partners (l\4cKinstry, ltron, SEL, SPIRAE).
By enabling the seamless integration of renewable and distributed energy resources, and by
leveraging and extending the electric distribution grid infrastructure to support intrastate
micro-transactive energy markets, Avista can enhance the role and relevancy of utilities in
ways that directly align with the state's objectives for reducing emissions and increasing the
strength and competiveness of its economy. New types of energy and energy service models
can create opportunities for utilities to act as trusted brokers between providers and
Clean Energy Fund 2 - Shared Energy Economy
consumers - to manage and optimized use, performance, safety, and reliability towards a
more responsible, resilient, and sustainable energy future.
A delay in implementing this project could result in a lost opportunity to address these issues
and the loss of matching funding from the Department of Commerce.
Avista's analytical partner, the Pacific Northwest National Lab (PNNL), will extend the
analysis leading to a valuation of the Shared Energy Economy by simulating a transactive
market. ln these simulations, a "trading hub" enabling energy transactions between
participants will be designed across multiple MTG platforms. Due to the limitation of
regulatory requirements, the energy transactions will be simulated rather than executed
across the MTG platforms. However, once established, the MTG platforms will operationally
be utilized to facilitate the exchange in energy and balance the grid logistics from system
capacity, available resources, trading routes, and system stability. The valuation and
operation of the MTG Platforms will determine technical, operational, and economic
opportunities to deploy DERs across an investment community participating in a Shared
Energy Economy.
3 PROPOSAL AND RECOMMENDED SOLUTION
Option Capital Cost Start Complete
Do nothing $0
lmplementation of CEF2 Proposal $8,000,0001 0s12018 612020
Proiect Prooosal/Solution Overview
Avista and its Partners will control and optimize the utilization of shared DERs across a MTG.
The IiITG will consist of building management systems, solar panels, and energy storage
assets integrated on a loop feed to support a shared model of renewable energy resources
for commercial, university campus, and industrial parks.
The ttITG project will be deployed in Spokane's University District in order to maximize the
impact and visibility of the project. The University District, designated by the Department of
Commerce as an lnnovation Partnership Zone, is adjacent to Spokane's downtown core. It
consists of 770 acres, including the campuses of Gonzaga University, Washington State
University Health Sciences Spokane, and programs from Eastern Washington University,
Whitworth, University of Washington and Spokane Community Colleges. ln addition to higher
education, the University District is home to Urbanova, a collaborative effort to create a living
laboratory for smart cities of the future.
Avista and its Partners will extend the valuation of DERs into a Shared Energy Economy
model. ln this model, Avista will be evaluating how a conventional micro-grid and the inherent
combination of distributed assets could provide value while connected to the grid or during
an islanded condition away from the distribution system. ln a Shared Energy Economy,
building owners and tenants can share in the investment and benefits obtained by a MTG.
The valuation analysis for a Shared Energy Economy is fundamentally trying to show that a
non-utility portion of the community can participate in the deployment of local DERs and
derive both financial and operational benefits which cannot be realized within the
conventional regulatory and utility model. ln addition, the Shared Energy Economy can help
support the valuation of DERs when compared to traditional centralized generational assets.
I Of the $8 million tolal capital cost, $3.5 nrillion has been appropriated and approved by the Washington State
Departlnent of Comrnerce and will be provided to Avista upon nreeting defined Milestones
Page 2 of 5
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page I 80 of I 86
o
o
Business Case Justification Narrative
o
o Clean Energy Fund 2 - Shared Energy Economy
To provide analysis to demonstrate the above statements, Avista and its partners will develop
a set of operational modes for the MTG including both grid connected and grid islanded
states.
Two ttITG "platforms", or "nodes", will be deployed. The MTG platforms consist of DER
assets, control devices, and distribution equipment necessary to integrate, control, and
operate the MTG Platform. The projected list of major equipment for the project is listed
below:
. 100 kW350 kWh Energy Storage Asset
. 500 kW/1.5 kWh Energy Storage Asset
. Solar Arrays with total peak capacity between 50 and 125 kW
o Avista intends to utilize 4-quadrant smart inverters compliant with UL1741A
and similar to those compliant to CPUC Rule 21, allowing for extended voltage
ride through as well as voltage and frequency grid support
. 2750 kVA Power Transformers
. Automated Transfer Switches
. MGCS - Micro Grid ControlSystem
. Building Management Systems
. Load Shedding Devices (isolation of critical loads during Critical Resiliency Mode)
Proposed Proiect Schedule
. compretion of phase 0 - september 2017 - tu,|r1$r^luL uy. Engineering Design/lnterconnect - December 2017
. Procurement of large items - June 2018
Construction and lnstallation (solar, battery, distribution system transfer to plant) -October 2018
o ,14fuDbU
a
. Systems Commissioning (control system transfer to plant) - April 2019
o Analytics and Testing - September 2019
. Final Report - Decembes 2019
Strateqic lnnovation
The innovation of the project's business case lies in the development of a shared economy
to reduce the initial cost of the DER assets and to increase the value from the DER assets
and their operation. The MTG distributes the cost of distributed generation assets iike solar
and storage across multiple building or tenant members to reduce the cost of renewable
assets per member. This economic model is similar to the Combined Heat and Power (CHP)
model which shares the waste heat across multiple buildings by the use of steam pipes. The
MTG will supervise and control the renewable assets to coordinate and optimize their
utilization across Avista's distribution loop feed between building and assets.
The functionality above is not being met by other vendors or utilities in the industry, thus
allowing a significant opportunity for innovation in an open part of the market.
Page 3 of 5
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page l8l of 186
o
Business Case Justificalion Narrative
Clean Energy Fund 2 - Shared Energy Economy
lmpacts to Future O&M/Stakeholder !nvolvement
. Protection
lnitial project design, implementation and construction; no ongoing O&M in addition
to the programs in place (relay testing, replacement, etc)
. SpokaneArea Engineering/Distribution Engineering
lnitial project design, implementation and construction; no ongoing O&ttI in addition
to the programs in place (project and electrical design)
o DistributionDispatch
Project implementation, commissioning and ongoing operation; no ongoing O&M in
addition to the staff in place (operation will be assigned to existing staff)
. Asset Maintenance
Ongoing battery and solar panel maintenance will be addressed through an O&M
Agreement with each supplier, and is expected to be less than $100,000 per year
Budqet Develooment
The proposed budget for the project was created and vetted thought the State of Washington
Clean Energy Fund oversight committee, with significant inputfrom the CEFl (Turner Energy
Storage Project) budget and actual costs. This allowed the Grant Application to include a
budget and request developed with a fair amount of confidence, and provided a stepping
stone for the Phase 0 process.
Phase 0, facilitated by Avista and supported by the Partners, was an opportunity to refine the
proposed scope and budget of the Project. During a multi month period, Avista and the
Partners met numerous times to better understand the scope of each Partner's role and to
produce a 30o/o design document with a more accurate cost estimates. Given the unknown
issues that can arise during the deployment of new technology and the experience of Avista
and others during the CEFI implementation, the Department of Commerce was highly
supportive of this effort and provided funding during the development process to fund this
effort.
Page 4 of 5
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 182 of 186
o
o
Business Case Justification Narrative
o
o Clean Energy Fund 2 - Shared Energy Economy
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Clean Energy Fund 2 -
Shared Energy Economy and agree with the approach it presents. Significant
changes to this will be coot
desig n ated representatives
rdinated and approved by the undersigned or their
Signature:
Print Name
Title:
Role:
Date: q v4 Z, tt
Kenneth Dillon
Project Manager
Business Case Owner
Signature:
Print Name:
Title:
Role:
Signature:
Print Name
Title:
Role:
Date 'l llolt'7
Heather Rosentrater
Vice President, Energy Delivery d,t
o
Business Case Sponsor
{l/U/r,/L fuus
C?G
Date: lrlra
Wo
Steering/Advisory Committee Review
5 VERSION HISTORY
Template Version: O3lO7 12017
Version lmplemented
By
Revision
Date
Approved
By
Approval
Date
Reason
1.0 Kenneth Dillon 4t24t2018 John Gibson 4t25t2018 lnilial version
o
Business Case Justification Narrative Page 5 of 5
Exhibit No. 8
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 1 83 of I 86
lb,<-A---
Requested Spend Amount $281,630
Requestin g O rgan ization/Department
Business Case Owner John Gibson
Business Case Sponsor
Sponsor Organ ization/Department Engineering
Category Strategic
Driver Mandatory & Compliance
South Landing
GENERAL INFORMATION o
1.1 Steering Committee or Advisory Group Information
BUSINESS PROBLEM
As a part of the South Landing and Catalyst project, we are requesting the
installation of a secondary 13.2kV sour@ and Automated Transfer Switch (ATS) to
supply the development. The secondary source will be fed from 3rd and Hatch feeder
to the development at an approximate cost of $281,630 dollars. Currently, the
development is under construction and a short window of a week exists to trench
the underground supply to the development.
The south landing development consists of the Catalyst and HUB buildings located
in the Spokane UDistrict on the South side of the tracks. As a part of the
development, the HUB wil! host a central HVAC system, electrical switchgear and
distributed energy resources which will be operated by a private central plant
operator. Due to the unique characteristics of the development's central plant, Avista
Utilltles recognizes it will provide a platform to experiment with both cost and value
rate design. So, in conjunction with the development, Avista has proposed to
Department of Commerce Clean Energy Fund lll to leverage the central plant (Eco-
District) assets to support operationa! scenarios which balance the energy and
capacity needs of the plant against the appropriate utilization of the grid.
The CEFlll proposal includes the cost of the secondary source and Automated
Transfer Switch (ATS) but it may take a couple months before we are notified by the
Department of Commerce whether we have been awarded the grant. Due to the
construction schedule, the secondary source and ATS switch need to be installed in
the next week while the site trenching is available. ln light of this constraint, we are
proposing to fund the secondary source through this request. lf awarded the grant
from the department of Commerce, the cost would be shifted from this account to
the new Capital Project Request developed as an outcome from CEFlll project.
o
ExhibitNo. t Page 1 of 3
Case No. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3. Page I 84 of I 86
Business Case Justification Nanative
o
Josh DiLuciano
Soufh Landingo
o
o
lr ?1/r/4
PROPOSAL AND RECOMMENDED SOLUTION
The south landing development will be designed and operated to support to project
phases: 1) Build Phase, 2) Pilot Phase. Under the build phase the central plant will
serve building tenants with hot and chilled water which will be offset by aggregating
distributed energy resources residing in the development. The developer's goal is to
obtain a net-zero, carbon free development. During the pilot phase, the central plant
will also be designed and operated to supply the eco-district developments plug and
fan load through its 480 V system.
Due to the unique characteristics of the development's central plant, Avista
recognizes it will provide a platform to experiment with both cost- and value-based
rated design. Also, the central plant's point of interconnection with Avista's
distribution system provides operationalflexibility from transmission and distribution
deferral to load shifting for seasonal demands. Much of the operational flexibility is
enhanced by the supply from two 3'd and Hatch feeders since one of the feeders is
summer peaking and the other is winter peaking.
APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the South Landing (Catalyst,
Eco-District) - 2nd 13kV Source & ATS and agree with the approach it presents.
Significant changes to this will be coordinated with and approved by the undersigned
or their designated represe
Signature:
Print Name:
Title:
Role:Business Case Owner
Date
5"-L D iJa
Business Case Sponsor
H. Rosentrater, Avista
Schedule 3, Page I 85 of I 86
Signature:
Print Name:
Title:
Role:
D ,t-t.-
Option Capital Cost Start Complete
Do nothing $0
2nd 13kV Source & AIS $300,000 0a24nu9 03/142.019
Y.L, lz,fDate:
Soufh Landing
Signature:
Print Name:
Title:
Role:
o
Committee Review
VERSION HISTORY
Tem plate Version : 03107 12017
o
o
ExhibitNo.8
CaseNo. AVU-E-19-04
H. Rosentrater, Avista
Schedule 3, Page 186 of 186
Version lmplemented
By
Revision
Date
Approved
By
Apprcval
Date
Reason
1,0 John Gibson 0a14nu9 lnitialversion
Business Case Justification Narrative Page 3 of 3