20210129Kensok Direct.pdf

DAVID J. MEYER
VICE PRESIDENT AND CHIEF COUNSEL FOR
REGULATORY & GOVERNMENTAL AFFAIRS
AVISTA CORPORATION
P.O. BOX 3727
1411 EAST MISSION AVENUE
SPOKANE, WASHINGTON 99220-3727
TELEPHONE: [phone]
FACSIMILE: [phone]
[e-mail]

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION ) CASE NO. AVU-E-21-01
OF AVISTA CORPORATION FOR THE ) CASE NO. AVU-G-21-01
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC AND ) DIRECT TESTIMONY
NATURAL GAS SERVICE TO ELECTRIC ) OF
AND NATURAL GAS CUSTOMERS IN THE ) JAMES M. KENSOK
STATE OF IDAHO )
)

FOR AVISTA CORPORATION

(ELECTRIC & NATURAL GAS)

Kensok, Di 1
Avista Corporation
I. INTRODUCTION 1
Q. Please state your name, employer and business address. 2
A. My name is James M. Kensok. I am employed by Avista Corporation as the 3
Vice-President, Chief Information Officer (CIO) and Chief Information Security Officer 4
(CISO). My business address is 1411 E. Mission Avenue, Spokane, Washington. 5
Q. Mr. Kensok, please provide information pertaining to your educational 6
background and professional experience? 7
A. I am a graduate of Eastern Washington University with a Bachelor of Arts 8
Degree in Business Administration, majoring in Management Information Systems and from 9
Washington State University with an Executive MBA. I have experience through direct 10
application and management of Information Services over the course of my 34-year 11
information technology career. I joined Avista in June of 1996. I have been in the Information 12
Services Department for approximately 23 years in a variety of management roles directing 13
and leading information systems, infrastructure technology and security strategy, system 14
delivery and operations, complex communication networks, cyber security, applications 15
development, outsourcing agreements, contract negotiations, technical support, cost 16
management, and data management. I was appointed Vice-President and Chief Information 17
Officer in January of 2007 and Chief Security Officer in January of 2013. 18
Q. What is the scope of your testimony in this proceeding? 19
A. I will provide an overview of, and discuss capital additions and expenses 20
associated with, the Company’s Information Service/Information Technology (IS/IT) 21
programs, projects and security included in the Company’s filed case over its proposed Two-22
Year Rate Plan. These costs are comprised of the capital investments for a range of IS/IT 23

Kensok, Di 2
Avista Corporation
projects that support systems used by the Company, as well as cyber and physical security 1
projects and costs. I will explain why our information technology and security investments 2
are necessary in the time frames indicated and why investments in technology are necessary. 3
While I discuss this plan in detail within my testimony and exhibits, Company witness Ms. 4
Andrews incorporates the capital additions, and incremental expenses associated with the 5
Company’s IS/IT costs included in the Company’s request for rate relief over the Two-Year 6
Rate Plan effective September 1, 2021 and ending August 31, 2023. 7
A table of contents for my testimony is as follows: 8
Table of Contents 9
I. INTRODUCTION ........................................................................................................1 10
II. IS/IT OVERVIEW ......................................................................................................2 11
III. IS/IT PRIORITIZATION, DELIVERY AND GOVERNANCE PROCESS ............7 12
III. IS/IT CAPITAL PROJECTS ...................................................................................11 13
IV. IS/IT OPERATING AND MAINTENANCE EXPENSES .....................................29 14
15
Q. Are you sponsoring any exhibits in this proceeding? 16
A. Yes. I am sponsoring Exhibit No. 13, Schedule 1, which includes the 17
Information Technology Capital Project Business Cases. 18
19
II. IS/IT OVERVIEW 20
Q. Why is technology important to Avista and its customers? 21
A. Avista provides critical support for virtually every aspect of modern society 22
across our service territory, and technology is the catalyst that enables the business capabilities 23
to reach our customers at scale, in near-real time, and across varying terrain and circumstance. 24
It allows us to quickly pivot to support work-from-home and work-from-anywhere business 25
needs for many of our customers. It allows for new work arrangements for our staff to meet 26

Kensok, Di 3
Avista Corporation
physical distance requirements for those in critical operations roles. It allows us to provide 1
power and natural gas for critical services like healthcare and government operations in the 2
face of catastrophic events like pandemics and natural disasters (wind and fire). 3
The COVID-19 pandemic has challenged utilities in their readiness for the future. It 4
has greatly emphasized digitalization as a necessity to enabling today’s utility business, as 5
well as highlighted opportunities for how we might accelerate structural changes to our energy 6
delivery systems, the need for digital solutions, and the redesigning of underlying business 7
processes. For example: 8
• Work-from-home and work-from-anywhere requirements triggered by public 9
health and employee safety requirements have accelerated back- and front-office 10
digitalization and adoption of new employee collaboration technologies and digital 11
customer engagement platforms. 12
• Functions that are critical to the integrity and functional readiness of power 13
systems — like network control and power plant operation — face serious 14
challenges from the enhanced service continuity and workforce physical 15
distancing requirements. 16
• Redesign work processes and reimagine business capabilities to sustain utility 17
operations in the new work environment, by including technology capabilities for 18
employee productivity, customer engagement, and operations processes. 19
Q. How do technology investments align with Avista’s investment drivers to 20
sustain business processes and to deliver on strategic goals, which include customer, our 21
people, perform, and invent? 22

Kensok, Di 4
Avista Corporation
A. Avista’s technology investments generally fall under the Performance and 1
Capacity investment drivers to meet defined performance criteria, such as transaction response 2
time for energy bill inquiry, and to manage the performance level of technology assets based 3
on a demonstrated need or financial analysis. Some of these needs include system availability 4
of 99.8% and system utilization capacity of 50% average, which in turn informs the level of 5
investment in business continuity and disaster recovery. These performance criteria vary from 6
one technology solution to another and can be driven by technology vendor roadmaps 7
surfacing new requirements and customer expectations. In some cases, one vendor-driven 8
requirement can result in cascading changes to establish new performance criteria for systems 9
to perform effectively. An example of this is when business application such as a Customer 10
Relationship Management system requires an upgrade to a web browser, like the new version 11
of Microsoft in order to perform effectively resulting in acceptable transaction response time 12
and high system availability to meet customer needs. 13
As the pace of technology continues to change rapidly, systems quickly are becoming 14
more complex requiring automation to manage them. This drives investments in system 15
automation tools such as Cloud Access Security Broker (CASB) security software. A cloud 16
access security broker is software that sits between cloud service users and cloud applications 17
(e.g., Amazon). CASB monitors all activity and enforces security policies helping to manage 18
performance and capacity of applications like Amazon Web Services. More importantly, 19
customers must navigate these complex technologies with the confidence that they can 20
transact business with Avista and other service providers in a secure manner. By focusing on 21
maintaining the performance and capacity of technology solutions, it aligns directly with our 22
strategic goals, which focus on putting customers at the center, empowering our people, 23

Kensok, Di 5
Avista Corporation
optimizing our people and system performance, and providing a secure platform for our 1
customers to conduct business with Avista. 2
Q. How is Avista’s technology investments structured to support business 3
processes? 4
A. Avista’s technology investments fall into two major areas: enabling technology 5
and business and operating application systems. Additionally, we take an enterprise-wide 6
approach to security and disaster recovery (resiliency) that envelopes our technology 7
investment efforts to protect our people, our assets, and our facilities. Our business 8
continuity/resiliency plan was tested this year during our COVID-19 pandemic response, 9
exacerbated by windstorms and wildfires that resulted in wide-spread outages throughout our 10
service territory. Our enabling technology (e.g., data/voice networks, customer and 11
electric/gas asset management databases) along with the business and operating applications 12
such as our Website, SCADA applications, and Outage Management System performed very 13
well. 14
Specifically, enabling technology, consists of the technology infrastructure (such as 15
data, endpoint compute and storage that includes hardware such as Personal Computers (PC) 16
Laptops, Smartphones and Digital Storage. Enabling technology also includes operating 17
systems, network transport connectivity which include devices like routers and switches. 18
Additionally, enabling technology includes databases and data schemas, integrations, business 19
intelligence tools, communication and collaboration platforms, etc. necessary to enable 20
business capabilities through business application systems. It is the foundation on which we 21
deliver energy safely and reliably, meet business objectives, and create value for our 22
customers. 23

Kensok, Di 6
Avista Corporation
Illustration No. 1 below shows the relationship between Enabling Technologies, 1
Business & Operating Application Systems and Enterprise Security and how those fit into the 2
different capital business cases discussed later in my testimony. 3
Illustration No. 1- Business Technology Structure: 4
5
6
7
8
9
10
11
12
Business and operating application systems are represented above as customer at the 13
center (as discussed by Company witnesses Mr. Vermillion and Mr. Magalsky), shared 14
business systems and energy resources enable business capabilities. Some of the capabilities 15
within these areas include: providing customers with near real-time information on outages 16
and estimated restoration times or automated bill-pay options, electric and natural gas service 17
design in the field for prompt installation of new electric or natural gas service, storm damage 18
assessment for quicker restoration efforts, fleet vehicle use and driving data to plan vehicle 19
maintenance and increase driver safety, real-time vibration monitoring for large generators to 20
optimize performance and avoid maintenance outages, track training courses for employees 21
to meet compliance requirements, and many more. Business application systems enable 22
business capabilities by automating business processes to optimize efficiencies and add 23

Kensok, Di 7
Avista Corporation
functionality that cannot be duplicated manually at scale. Some examples of this include a 1
three-dimensional imaging of system planning, geographic spatial positioning of assets in the 2
field, near real-time information on system performance, or storage of volumes of compliance 3
data to meet annual requirements from various agencies. Together, both platforms (enabling 4
technology and business and operating application systems) work symbiotically to enable 5
business capabilities. Enabling technology does not exist just to exist, just as business 6
application and operating systems cannot exist without enabling technology. And just as 7
importantly, neither of the two can co-exist without proper security to protect the information 8
that is used to make business decisions and deliver energy to our customers. 9
10
III. IS/IT PRIORITIZATION, DELIVERY AND GOVERNANCE PROCESS 11
Q. How are the enabling technologies and business and operating application 12
systems business cases and projects mentioned above prioritized within IS/IT? 13
A. The IS/IT department uses a decision tree designed by Gartner1 for both 14
enabling technologies and business and operating application systems to help organize capital 15
projects into three categories: Run, Grow and Transform. The definition of those categories 16
are as follows: 17
• Run – This includes technology projects aimed at running the day-to-day 18
business. (e.g., Outage Management, Web, IVR, SCADA, Financial) 19
20
• Grow – These projects are focused on developing and enhancing systems to 21
enable business growth including new customers. 22
23
• Transform- These projects aid the Company in, addressing new customer and 24
employee needs that more recently have included remote work and mobile 25
transactions. It also includes new operating models such as outage restoration 26

1 Gartner - https://www.gartner.com/smarterwithgartner/align-it-functions-with-business-strategy-using-the-
run-grow-transform-model/

Kensok, Di 8
Avista Corporation
and wildfire resiliency. 1
2
Q. Please describe any material changes that impacted Avista’s 3
technology programs since your last rate filing. 4
A. Historically, a majority of Avista’s technology investment business cases have 5
been classified under the asset condition investment drivers, this was due to the stride of 6
technological change outpacing the life of the asset. However, over the last few years, the lives 7
of technology assets are not adequate to support the enabling technologies and business and 8
operating applications and therefore, have been reclassified under the performance and 9
capacity investment driver. This investment driver more closely aligns with the need to 10
upgrade technology systems due to the capacity and performance expectations of the 11
Company and our customers. 12
Another material change that has impacted the IS/IT area is the Company’s response 13
to COVID-19 pandemic as discussed earlier in my testimony. The Company needed to quickly 14
deploy additional devices such as laptops and monitors, increase network capacity in both 15
hardware and bandwidth in order to create an efficient working environment for employees 16
and maintain acceptable customer support levels. The Company responded by quickly 17
deploying over 1,000 employees to work remotely in a matter of a few weeks. This would not 18
have been possible if the Company wasn’t already in the process of creating and implementing 19
strong enabling technologies and business and operating technology applications (e.g., Skype, 20
field automation). 21
Q. Did Avista consider alternatives to technology investments? 22
A. Alternatives are considered to determine if opportunities are available using 23
existing technology and/or changes to business processes as well as new technology options. 24

Kensok, Di 9
Avista Corporation
For example, a growing alternative to the traditional “buy or build” approach has been 1
Software as a Service (SaaS), whereby the software asset that once was in Avista’s data center 2
on premise, is now in the technology vendor’s data center (cloud environment). SaaS 3
assessments are performed by the Company on a case-by-case to determine how the benefits 4
might outweigh the costs and/or other risks. 5
Q. Describe the alternatives evaluated and how the solutions were chosen. 6
A. Technology evolves in short cycles, as new and sometime more improved 7
technologies can perform more efficiently than older ones. Therefore, Avista’s technology 8
leadership teams continuously re-evaluate alternatives in technology investments, 9
recommending to the Technology Planning Group (TPG – comprised of Directors from each 10
business area) the best sets of technology investments to set priority across the technology 11
investment portfolio, balancing business value and customer benefits. 12
Through our technology programs, Avista evaluates and plans the direction of its 13
information technology portfolio. A team of IS/IT professionals, managers, and directors 14
guide technology programs by analyzing the benefits and costs of investing in new technology 15
and maintaining existing technology. The team considers whether the current technology 16
environment is stable and secure (e.g., run-the-business), so that it is in Avista’s and its 17
customers’ best interests to maintain it, and if so, for how long. If not, other options that may 18
better suit the technology needs of Avista and its customers are discussed. The technology 19
programs also evaluate the risks of not making an immediate technology change or delaying 20
a change to a later date. 21
Technology business cases are governed under the Technology Planning Group (TPG) 22
and Executive Technology Steering Committee (ETSC). The TPG sets priority across the 23

Kensok, Di 10
Avista Corporation
technology investment portfolio, balancing business value and customer benefits, and based 1
on the ETSC’s guidance. An additional filter is applied following this vetting by the TPG and 2
respective business case owners considering resource capacity, risk assessment criteria, and 3
alternatives. Alternative criteria can include cost to implement, operate, and maintain; 4
complexity of system or technology; economies of scale and scope to leverage previous 5
technology investments; available skillsets, and long-term technology roadmaps that enable 6
safe and reliable energy to our customers. 7
Q. Describe Avista’s project management process that was used to 8
manage technology projects. 9
A. Avista manages its technology projects by following Avista’s Project Delivery 10
Process (APDP) Framework. The APDP framework is in alignment with industry best practice 11
that is outlined by the Project Management Institute® (PMI).2 The APDP framework was 12
developed to establish a standardized practice in project management at Avista across all areas 13
of capital investment. Avista’s technology department has a Project Management Office 14
(PMO), congruent with the APDP Framework, which acts as a center of excellence to maintain 15
project management standards for project delivery. Each technology investment is overseen 16
by a project manager to monitor scope, schedule, and budget. Each project is also governed 17
by a steering committee for proper oversight. Additionally, Avista’s technology department 18
uses a Project and Portfolio Management tool (CA Technologies) to manage portfolios, 19
programs, and hundreds of parallel inflight projects. Our technology teams also perform their 20
work assignments using ‘waterfall’ and ‘agile’ methodologies. In addition to governance and 21
tracking of each project, the IS/IT department also has a layer of governance at the business 22

2 https://www.pmi.org/

Kensok, Di 11
Avista Corporation
case level consisting of management and other IS/IT stakeholders of the overarching business 1
case. 2
3
III. ENTERPRISE TECHNOLOGY CAPITAL PROJECTS 4
The Enterprise Technology capital projects planned to be transferred to plant in service 5
during 2020 - 2023 are shown in Table No. 1 below. An explanation of each of the projects 6
follows the table. 7

Kensok, Di 12
Avista Corporation
TABLE NO. 4
Business Case Name Project Type 2020 2021 2022 2023(1)
Mandatory and Compliance - Enabling Technology
High Voltage Protection (HVP) Refresh Enabling Technology $ 256 $ 358 $ 192 $ 191
Failed Plant and Operations
Technology Failed Assets Enabling Technology 983 617 555 -
Asset Condition - Enabling Technology
Technology Refresh to Sustain Business Process Enabling Technology (2)563 - -
Performance and Capacity - Enabling Technology
Basic Workplace Technology Delivery Enabling Technology 1,139 440 440 296
Data Center Compute and Storage Systems Enabling Technology 2,192 496 1,924 1,981
Digital Grid Network Enabling Technology 1,985 1,404 3,573 936
Endpoint Compute and Productivity Systems Enabling Technology 5,492 2,878 3,979 621
Enterprise & Control Network Infrastructure Enabling Technology 6,432 6,966 5,595 852
Enterprise Communication Systems Enabling Technology 2,851 1,757 1,358 535
Enterprise Data Science Enabling Technology 1,314 - - -
Environmental Control & Monitoring Systems Enabling Technology 869 1,089 900 664
ET Modernization & Operational Efficiency - Technology Enabling Technology 2,216 1,869 1,681 1,092
Facilities Driven Technology Improvements Enabling Technology 149 147 73
Fiber Network Lease Service Replacement Enabling Technology 1,002 2,054 1,881 319
Land Mobile Radio & Real Time Communication Systems Enabling Technology 1,927 3,295 2,070 3,109
Asset Condition - Business & Operational Application Technology
Atlas Business & Op Technology 2,352 2,131 3,125 2,234
Energy Delivery Modernization Business & Op Technology 486 - - -
Outage Management System & Advanced Distribution Management System Business & Op Technology - - 4,984 -
Performance and Capacity - Business & Operational Application Technology
Energy Delivery Operational Efficiency & Shared Services Business & Op Technology 3,348 389 - -
Energy Delivery Modernization & Operational Efficiency Business & Op Technology - 5,463 3,290 1,498
Energy Resources Modernization & Operational Efficiency Business & Op Technology 1,843 939 2,888 103
Financial & Accounting Technology Business & Op Technology 361 3,514 1,753 1,217
Human Resources Technology Business & Op Technology 874 700 830 203
Legal & Compliance Technology Business & Op Technology 509 323 267 -
Mandatory and Compliance - Security
CIP v5 Transition - Cyber Asset Electronic Access Enterprise Security 446 - - -
Payment Card Industry Compliance (PCI)Enterprise Security 1,211 - - -
NERC CIP Compliance Enterprise Security - 99 250 -
Customer Service Quality and Reliability - Security
Enterprise Security Enterprise Security 5,331 1,249 749 -
Facilities and Storage Location Security Enterprise Security 415 246 171 461
Generation, Substation & Gas Location Security Enterprise Security 253 483 260 123
Telecommunication & Network Distribution location Security Enterprise Security - 63 - 125
Enterprise Business Continuity Enterprise Security - 302 100 12
Total Planned Enterprise Technology Capital Projects $ 46,236 $ 39,687 $ 42,959 $ 16,645
(1) Includes system pro forma capital for the period of January 1, 2023 through August 31, 2023.
Enterprise Technology Capital Projects (System) In $(000's)
Table No. 1 – Enterprise Technology Capital Additions: 1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Q. Please provide an overview of the significant technology programs made 22
by Avista in 2020 and estimated 2021 through August 31, 2023. 23

Kensok, Di 13
Avista Corporation
A. Table No. 1 above provides the listing of significant IS/IT business cases for 1
the period 2020 through August 31, 2023. These business cases are summarized into the 2
investment drivers of Failed Plant and Operations, Performance and Capacity, Asset 3
Condition, Mandatory and Compliance and Customer Service Quality and Reliability as 4
further explained by Ms. Schultz. These are also organized by project type as discussed earlier 5
in my testimony of Enabling Technology, Business and Operating Application Technology, 6
and Enterprise Security. Business cases for each project shown in Table No. 1 are provided 7
in Exhibit No. 13, Schedule 1. 8
Q. Before discussing each project, generally were there any offsetting O&M 9
Costs for Enabling Technologies, Business & Operating Application Technology, and 10
Enterprise Security programs? 11
A. Yes. The Company calculated retirements on a total Company basis and 12
included these as an offsetting cost to future depreciation expense in each Pro Forma Capital 13
Adjustment. These offsets are included by Ms. Schultz, as she sponsors the electric and natural 14
gas Pro Forma Capital Additions Adjustments (3.08), (3.09), (3.10), (22.01), and (22.02) as 15
discussed in her testimony. 16
Q. Again, generally, what alternatives were considered for the above 17
Enabling Technologies, Business & Operating Application Technology, and Enterprise 18
Security programs? 19
A. Alternatives considered for each program can vary and may include the type 20
of technology solutions available in the market, the total cost of ownership for the technology, 21
the option to do the work differently, such as leasing or hiring a service, running the 22
technology asset longer by purchasing extended warranties, or running the technology to 23

Kensok, Di 14
Avista Corporation
failure for technology assets with an available sparing model. Additional alternatives 1
considered under each program include balancing the performance and capacity requirements 2
for each respective technology investment impacted by vendor-driven technology 3
obsolescence lifecycles. For example, how long can an upgrade be deferred before business 4
risks become greater than the necessary upgrade. This can lead to security risks by the vendors 5
no longer offering system patches or system reliability risks as systems can become 6
incompatible with one another. 7
Q. Do Enabling Technologies, Business & Operating Application 8
Technology, and Enterprise Security programs have completion timelines? 9
A. Technology investments can fall into programs with both ongoing and defined 10
timelines, as well as projects with defined timelines. All projects transfer to plant the total cost 11
of each project at the completion of every project timeline, which at times can straddle 12
calendar years. This includes projects that fall within a program, as well as those that are 13
standalone projects. Quarterly forecasts capture changes in transfers to plant schedules and 14
costs determined by project status. 15
Q. What is the governance or cost controls for all business cases with 16
Enterprise Technology investments? 17
A. There are three levels of governance that occur within Enterprise Technology 18
business cases. Executive Officer, Director, and Business Case Governance detailed below in 19
Illustration No. 2. 20

Kensok, Di 15
Avista Corporation
Illustration No. 2 – Technology Governance Structure 1
2
3
4
5
6
7
8
9
Under each business case there are two more levels of governance depending if it is a 10
program or project through Program Steering Committees and Project Steering Committees. 11
Both have cost control responsibilities to manage, and therefore must and do meet regularly 12
to stay on track. Governance committee responsibilities are described further below. 13
Program Steering Committee - The Program Steering Committee consists of 14
members in management positions that are identified and responsible for prioritizing 15
the projects within each respective program. The Program Steering Committee is 16
accountable for the financial performance of the program and hold regular meetings 17
to review the progress of the program and make decisions on the following topics: 18
19
• Project prioritization and risk 20
• Approving program funding requests 21
• New project initiation and sequencing 22
23
The program is facilitated and administrated by an assigned Program Manager within 24
the IS/IT PMO. The project queue is reviewed periodically and consists of projects 25
needed to meet program goals for technology solutions under each respective program. 26
27
Project Steering Committee - Project Steering Committees act as the governing body 28
over each individual project within a program and consist of key members in 29
management positions that are identified as responsible for the successful completion 30
of the scope of work identified in the Charter document for each respective project. 31
The Project Steering Committee is responsible to provide guidance and make 32
decisions on key issues that affect the following topics: 33

Kensok, Di 16
Avista Corporation
1
• Scope 2
• Schedule 3
• Budget 4
• Project Issues 5
• Project Risks 6
7
Project Steering Committees meet at defined intervals documented in the Charter of 8
the project and are facilitated by an assigned Project Manager from within the IS/IT 9
PMO. 10
11
Information Related to “Enabling Technology” Projects Listed in Table No. 1 12
Q. Please describe the investments in Enabling Technology from 2020 to 13
August 31, 2023 included in Table No. 1. 14
A. As previously mentioned, enabling technology consists of the infrastructure 15
technology required to enable business and operating application systems that in turn enable 16
business capabilities. For comparison purposes, it is the concrete footings, the framing, the 17
roof, the conduit and drywall that transform materials into a house that people make into a 18
home. Below are the Enabling Technologies that are Failed Plant & Operations, Performance 19
and Capacity, and Mandatory and Compliance as defined by Ms. Schultz. 20
High Voltage Protection Upgrade for Substations – 2020: $256,000; 2021: $358,000; 21
2022: $192,000; 2023: $191,000 22
23
Telecommunication facilities, including Phone, Communication Switches, SCADA, and 24
Metering & Monitoring systems, are commonly co-located inside Avista’s high voltage 25
substations. This requires communications technicians to work in close association with our 26
high-voltage electrical equipment. Avista has implemented new high-voltage protection & 27
isolation standards that are designed to lower potential risks to our personnel and equipment. 28
The decision to make this technology investment at this time will ensure implementation of 29
the clearance changes required to meet the new standards and will result in a safer working 30
environment for our crews who work near high voltage electrical equipment. If we delay or 31
cancel this high voltage protection upgrade investment, Avista crews will be at a higher risk 32
of injury or death. A few examples of substation locations that were or are in the process of 33
being upgraded include Sandpoint, Addy, Roxboro, and Kettle Falls. 34

Kensok, Di 17
Avista Corporation
Technology Failed Assets – 2020: $983,000; 2021: $617,000; 2022: $555,000 1
The Infrastructure Technology Failed Assets business case represents work that is driven by 2
asset failures. Infrastructure technology assets experience failures due to manufacture defects, 3
human error, natural disasters, malicious actors, or age/runtime of the equipment. These 4
failures can or may occur within or after an asset’s end of life. Depending on the asset, it may 5
be more cost effective to replace versus repairing. As there are higher failure rates related to 6
assets used for mobility, the most common hardware covered under this business case are 7
laptops, tablets, and mobile phones. This business case is planning for laptop, mobile phone, 8
printer, field area network, audio visual devices, and monitor replacements when the assets 9
fail. 10
11
Technology Refresh to Sustain Business Process – 2020: ($2,000); 2021: $563,000 12
The Technology Refresh to Sustain Business Processes program is in place to provide for 13
technology refresh of existing technology in alignment with the roadmaps for application and 14
technology lifecycles. Aging technology is the driving factor behind this project. This program 15
is sunsetting in 2021 and only includes one project for the Mission Campus Cell Booster-16
Phase 1. This cell booster installation is estimated to be complete in 2021. 17
18
Basic Workplace Technology – 2020: $1,139,000; 2021: $440,000; 2022: $440,000; 2023: 19
$296,000 20
This business case represents hardware and software that end users need to perform day-to-21
day job functions. This may generally include personal computers, tablets, print/copy/scan 22
systems, television displays, monitors, telephones, etc., and the basic software productivity 23
tools. Without Basic Workplace Technology Delivery hardware and software, productivity is 24
significantly impacted and can become a blocking factor, as some job functions are extremely 25
difficult to perform without digital productivity tools. For example, a new worker would not 26
be able to adequately meet job function performance requirements in a customer call center 27
without a personal computer and telephone. 28
29
Additionally, Basic Workplace Technology Delivery deployments that fall under this business 30
case are often in short notice, and minimum inventory quantities are maintained to meet 31
business value time frames. The business case is structured in such a way to handle both 32
planned and unplanned short-cycle business demand to deliver basic technology items to all 33
job functions and office areas. 34
35
Data Center Compute and Storage Systems – 2020: $2,192,000; 2021: $496,000; 2022: 36
$1,924,000; 2023: $1,981,000 37
This business case represents projects that are driven by performance and capacity of the 38
following technologies: data center compute technology, which includes both on premise 39
servers and cloud services; remote office compute and storage; application systems to manage 40
compute and storage technology, server operating systems (OS); data storage systems; data 41
center racks and power distribution units (PDU); and backup and recovery systems. 42
43
Key projects addressing the work to replace and update data center compute and storage 44
systems are as follows: Primary Storage Refresh (annually), Linux RH6 Operating System 45
Replacement, Headquarter Data Center Improvements, Data Storage System Replacement, 46

Kensok, Di 18
Avista Corporation
and Headquarter Compute Replacement, which is a server technology replacement project in 1
the main data center. 2
3
Digital Grid Network Expansion – 2020: $1,985,000; 2021: $1,404,000; 2022: $3,573,000; 4
2023: $936,000 5
This business case represents work to expand network systems to support digital endpoints 6
throughout the service territory in support of work that will be conducted within the Grid 7
Modernization and Washington AMI business cases. Projects within this business case are 8
Rural Digital Grid Satellite Implementation, Fixed Network 3G Cellular Replacement, and 9
Field Area Network Expansion. Continuous investment in this business is necessary to keep 10
up with demands on an aging infrastructure that supports multiple use cases. Not investing in 11
this business case may result in reduced quality and performance of our network system to 12
transmit information, data and communication for back office transactions, operation systems, 13
and customer service centers, across our service territory. 14
15
Endpoint Compute and Productivity Systems – 2020: $5,492,000; 2021: $2,878,000; 16
2022: $3,979,000; 2023: $621,000 17
Endpoint Compute and Productivity Systems include refreshing end-user hardware and 18
software assets that ensure access to and interface with all corporate applications required for 19
employees and contractors to perform their jobs in a safe, reliable and efficient manner. 20
Hardware that falls under this business case are: personal computers, virtualized application 21
deployments, tablets, printing, scanning, monitors, touch, global positioning systems, cellular 22
modems, scales, uninterruptable power supplies and peripherals used in all areas of the 23
Company from corporate office users, Customer Service, overseas application development, 24
remote office and mobile field workers. Larger projects in this business case include updates 25
or replacement of end of life or obsolete assets across the company: Microsoft Office System 26
Replacement, Drafting Printers refresh, Citrix Infrastructure upgrade, Windows 10 27
Deployment, Microsoft Product Updates and Rugged Laptop refresh. In 2020, the Company 28
removed some of the projects for the Endpoint Compute (e.g. Employee onboarding hardware 29
and software) and is now recording them in a new business case called Basic Workplace 30
Technology. This business case is described in further detail below. 31
32
Enterprise & Control Network Infrastructure – 2020: $6,432,000; 2021: $6,966,000; 33
2022: $5,595,000; 2023: $852,000 34
The Enterprise and Control Network technology systems provide the data and voice 35
communication foundation for corporate and control systems and automated business 36
processes. The Enterprise and Control Network systems business case projects are driven by 37
performance and capacity related issues on the following technologies: Network Switching; 38
Network Routing; Network Load balancing; Network Optimization; Network communication 39
links; Time Delay Multiplexed (TDM) systems; Virtual Private Network (VPN) systems; 40
Microwave and other telecommunication systems; Global Positioning Systems (GPS); Time 41
Synchronization; Network media converters; and Applications used to monitor and manage 42
systems. Key projects within this business case are: Wireless Access Point Enhancements, 43
Wireless Local Area Network (WLAN) Controller upgrade, Cisco AnyConnect Client 44
Refresh, CMS refresh, Wide Area Network Improvement Project (WIP), and several 45
Company-wide projects to upgrade end of life devices (switches, routers, etc.). 46

Kensok, Di 19
Avista Corporation
Enterprise Communication Systems – 2020: $2,851,000; 2021: $1,757,000; 2022: 1
$1,358,000; 2023: $535,000 2
This business case enables the Company to manage technology replacement, as well as to 3
address asset growth driven by business need for enterprise communication systems such as: 4
instant messaging systems, contact center automatic call distribution system, contact center 5
scheduling and Quality Assurance systems, customer interactive voice response (IVR), voice 6
recording, electronic mail and calendar, voicemail, telephone, teleconferencing, video 7
conferencing, conference room technology, media walls, enhanced 911 emergency services, 8
paging and application systems to manage enterprise communication technology. Larger 9
projects within this business case that address enterprise communication systems include: 10
Electronic Mail System upgrade; Mission cell booster upgrade phase 2; Customer Service 11
application upgrade projects, such as Verint Call Center Application Refresh and Virtual Hold 12
System. 13
14
Enterprise Data Science – 2020: $1,314,000 15
This program addresses the need to democratize data and analytics, across the enterprise to 16
empower our employees to use expertise, ingenuity, and innovation with tools to better serve 17
our customers and the communities across our service territory. The program acts as a Center 18
of Excellence to help migrate further towards managing data and is intended to unlock 19
additional value contained in Avista’s enterprise data assets, using analytic tools that enhance 20
enterprise capabilities. Value is delivered through the development of use-cases as jointly 21
scoped and prioritized with each of the requesting business units. Aside from the business 22
insights derived through use-cases developed, this program also supports change management 23
of new analytics tools and skills development within the enterprise to promote self-service. 24
Through the implementation of this program, users can access enterprise information more 25
easily, better understand what the data means including how it may be related to other 26
disparate data sets and use analytic tools that help support the development of meaningful 27
insights. The program has extracted key insights that benefit the customer and other 28
stakeholders, which may be challenging to implement on an enterprise level in the absence of 29
this program. Some examples of customer benefits delivered under the program from prior 30
use-cases include: 31
• Reduced operating costs (i.e., customers mostly likely to switch to paperless billing). 32
• Products that matter to customers (i.e., customers most likely to adopt new products 33
such as community solar, roof-top solar, natural gas, etc.). 34
• Low-income analysis (i.e., analysis supporting need to increase low-income funding 35
for energy efficiency programs, LIRAP analysis that shows at risk customers that may 36
qualify for energy program assistance). 37
• Excavation Risk Tool – develop a model that identifies the highest risk excavation 38
calls made to 811 “Call Before You Dig” to mitigate risk of damage before excavation 39
commences. 40
• Bill Prediction Statistical Analysis & Visualization – enables better understanding of 41
how well customer bill predictions are performing, enabling more insights into the 42
program accuracy that lead to continuous improvement of said predictions. 43

Kensok, Di 20
Avista Corporation
Environmental Control & Monitoring Systems – 2020: $869,000; 2021: $1,089,000; 1
2022: $900,000; 2023: $664,000 2
The Environmental Control and Monitoring systems ensure reliable operation of Telecom 3
facilities by managing the performance and capacity of assets that support safety, control, 4
customer facing and back office automated business processes. Assets require specific 5
operating environments to prevent physical damage, such as temperature, humidity, and 6
power supply voltages. Environmental Control and Monitoring systems monitor and control 7
these environmental parameters and alert operational personnel when they fall outside of 8
optimal conditions. The alarms allow operational personnel to respond to issues that may 9
cause damage to other assets well in advance of any failure resulting in loss of business 10
automation processes. This business case represents projects that are driven by performance 11
and capacity-related issues to the following assets in Telecom facilities: emergency generation 12
systems; DC power supply plants; fire protection systems; HVAC systems; Remote Terminal 13
Unit (RTU) technologies; microwave towers; UPS systems support; and applications systems 14
used to monitor and manage the environment. 15
16
ET Modernization & Operational Efficiency - Technology – 2020: $2,216,000; 2021: 17
$1,869,000; 2022: $1,681,000; 2023: $1,092,000 18
The Enterprise Technology (ET) Modernization and Operational Efficiency business case 19
supports the technologies and processes necessary to support application implementation, 20
application development, delivery automation, application operations, application support, 21
and data delivery. The focus is on the tools and systems used by ET personnel to deliver 22
solutions to the rest of the organization. These efforts can be divided into the following 23
activities: ET Portfolio Management – Clarity PPM; Application Lifecycle Management 24
(ALM) Tools, which includes Microsoft Azure DevOps, TaskTop, and Microsoft Visual 25
Studio / MSDN; and Shared Systems and Tooling, which include AppDynamics, BizTalk / 26
Application Programming Interface (API), Shared Project Licensing, Tableau, Databases and 27
Small Application Packaging upgrades/updates. Key projects represented in this business case 28
are: Azure DevOps upgrade/enhancements, API Management Tool, Cognos 29
upgrade/enhancements/ licensing, Globalscape upgrade, Java AMC upgrade, and upgrades to 30
Adobe Applications (Flash, Reader, Creative Suite). 31
32
Facilities Driven Technology Improvements – 2020: $149,000; 2021: $0; 2022: $147,000; 33
2023: $73,000 34
The Facilities Driven Technology Improvements business case dove-tails structure and 35
improvement requests that require an infrastructure technology improvement. The technology 36
solutions can range from network cabling to audio visual expansion to computer and phone 37
improvements, etc. The cost of each solution can also vary depending on the type of 38
improvement request. However, because not all improvements will have a technology 39
requirement, such as asphalt replacement or addressing structural issues, this program has 40
been funded at 10% of the Structures and Improvements business case budget allocation for 41
any given year, based on historical trends. 42
43
The technology improvements invested under this program, which integrate with the Facilities 44
Structures and Improvements business case, benefit all customers across our service territory 45
by investing in the technology solution while the facility is being improved, thereby bringing 46

Kensok, Di 21
Avista Corporation
current outdated technology infrastructure or adding it to meet changing business demands. 1
However, service and jurisdiction are evaluated at the onset of each respective Structures and 2
Improvements project. The risks of not approving this business case and its funding request 3
will result in not being able to support the technology improvements associated with the 4
manager-requested structures and improvements. 5
6
Fiber Network Lease Service Replacement – 2020: $1,002,000; 2021: $2,054,000; 2022: 7
$1,881,000; 2023: $319,000 8
The Company utilizes leased fiber optic cables to transport primarily Emergency and Control 9
data. The current contracts for leased fiber network services is due to expire starting in 2025. 10
Transitioning the Company’s Emergency and Control network data from leased network 11
services to a private network infrastructure aligns with the long-term network strategy and 12
will reduce both risk and O&M costs to the Company. The project representing this work 13
commenced in 2018 due to the anticipated complexity associated with rights of ways, 14
permitting, construction, and coordination with other parties (city/county planning 15
departments) to take advantage of complementary projects. Data and voice communications 16
supporting all Avista service areas can and does traverse these currently leased lines as will 17
future Company owned lines that replace them. Projects include scheduled completion of at 18
least 3 segments: Rathdrum CT to Rathdrum Substation, Dollar Road Natural Gas Service 19
Center to Millwood, and Hub (Morris Center) to 3rd and Hatch. 20
21
Land Mobile Radio & Real Time Comm Systems – 2020: $1,927,000; 2021: $3,295,000; 22
2022: $2,070,000; 2023: $3,109,000 23
This business case represents projects that are driven by performance and capacity for the 24
following technology systems: Private 2-way Land Mobile Radio (LMR) System for field 25
operations, and Radio Telephone Command and Control System (RTCCS) used by Dispatch 26
and System Operations to perform critical radio and telephone communication to field 27
personnel. This business case also covers expansion of additional sites for LMR. Key projects 28
for this business case are: LMR Coverage Enhancements, Real Time Control Radio System 29
Refresh, and Mobile RF Repeater Expansion. 30
31
32
Q. How do the Enabling Technology projects benefit Avista Customers? 33
A. Enabling technology benefits our customers by providing the underlying 34
technology infrastructure required to connect with our customers over the phone, web, text, 35
or the ability to process billing, meter reads, or communicate outages and restoration times 36
during an unplanned outage. It also enables our field workers to safely connect over the radio 37
across rugged remote locations or during storm restoration efforts that require significant field 38
coordination to maintain employee safety. As the foundation to delivering natural gas and 39

Kensok, Di 22
Avista Corporation
electric service safely to our customers, investing in enabling technology is a benefit to 1
Avista’s customers that is no different than investing in roads, bridges, and other necessary 2
infrastructure that benefits drivers by allowing them to get to and from work or play. 3
4
Information Related to “Business and Operating Application Technology” Projects 5
Listed in Table No. 1 6
7
Q. Please describe major investments in Business and Operating Application 8
Technology in 2020 through August 31, 2023. 9
A. Business and Operating Application Systems are the engines that allow 10
companies like Avista to deliver value at scale to our customers across our entire service 11
territory. They produce, store, and compute information that allow decision-making and 12
automate what once were manual processes. This is more than digitizing a document that was 13
once printed on a piece of paper. Today, business application systems integrate information 14
to produce opportunities for fine tuning to remove waste and unnecessary steps or handoffs, 15
which all result in optimization of time and cost. These efficiencies are continuously pursued 16
in the benefit of our customers, as it results in the delivery of energy more efficiently and are 17
described in detail below. 18
Project Atlas (Avista Facilities Management Replacement) – 2020: $2,532,000; 2021: 19
$2,131,000; 2022: $3,125,000; 2023: $2,234,000 20
Avista Facility Management (AFM) is the legacy custom-coded system that the utility uses to 21
manage the location and current operating state of its critical electric and gas assets (e.g. pipes, 22
poles and wires). Environmental Systems Research Institute (ESRI) GIS serves as the 23
foundational data structure on which AFM applications are built or rely on. AFM is the system 24
of record for spatial electric and natural gas facility data and provides the connectivity model 25
to support the AFM applications. This program replaces legacy custom-coded systems with 26
COTS technology common in the utility industry. Project examples include the replacement 27
of the Electric and Gas Design tools, which are applications for the design of electric and 28
natural gas facilities, as well as Electric and Gas Edit tools inherent in the system used for 29
data edits prior to committing final data changes and additions. These tools also include a 30

Kensok, Di 23
Avista Corporation
mobile version for in-the-field updates by field staff, enabling real time changes in the system, 1
as well as meeting customer responsiveness expectations. For the reliability of system records 2
and the efficiency reasons stated above, this technology investment is made at this time. If we 3
delay or cancel this AFM technology investment, Avista risks not having up to date 4
information on our natural gas and electric assets that could result in harm to our customers, 5
crews and business operations. 6
7
Energy Delivery Modernization – 2020: $486,000 8
This business case supports the ability to refresh technologies that have been enabled to meet 9
business requirements throughout the Energy Delivery business area including: Gas 10
Engineering and Operations, Electric Engineering and Operations, Asset Management and 11
Supply Chain, Facilities, Fleet Operations, and Metering. The major applications in the 12
Energy Delivery Program portfolio include: Geospatial platform environment – ArcGIS 13
solutions (ESRI), Enterprise Asset Management System – Maximo Solutions; Time Series 14
Operational Data – Plant Intelligence (PI) Solutions; Mobile Workforce Management – 15
Mobile Dispatch solutions; Fleet Asset and Work Order Management; Crew Planning and 16
Scheduling – Crew Manager Solutions; System Operations Outage Management – CROW; 17
Transmission Planning – PowerWorld solutions; Metering solutions which include OpenWay, 18
OpenWay Riva, MV90, Field Collection System (FCS), Fixed Network, and TWACS (two-19
way automatic communication system); Flight Tracker, and Global Mapper. 20
21
Key projects for 2020 in the Energy Delivery Modernization business case that address 22
upgrades of the major applications are the Flight Tracker upgrade, PI upgrade, as well as 23
Serveron, Synergi and Global Mapper Upgrades. This work enables Avista to maintain system 24
maintenance and support, which includes security patching, bug fixes, version upgrades, 25
interoperability, and compatibility with other technologies thereby ensuring application 26
functionality and reliability. 27
28
Outage Management & Advanced Distribution Management System –2022: $4,984,000 29
Avista’s Outage Management Tool (OMT) is an in-house developed custom application that 30
supports outage analysis, management and restoration. OMT provides the functionality to help 31
manage the overall cycle of electric outage and restoration processes for the Idaho and 32
Washington service territories. It works in synchronization with Avista’s Distribution 33
Management System (DMS), feeding it current operating state data of its electric assets to 34
monitor and control Avista’s electric distribution network efficiently and reliably. The DMS 35
is a commercial application used to monitor and control the distribution grid. It relies on the 36
GIS data to determine the current operating state. Because of its reliance on the outdated, 37
custom-built OMT, Avista is not getting full benefit from the DMS capabilities, which in turn 38
results in two systems running at a different pace. The OMT application and data model have 39
been used for nearly two decades and have reached technology obsolescence. 40
41
Replacing Avista’s OMT and DMS with a commercial Outage Management System (OMS) 42
and Advanced Distribution Management System (ADMS) will improve field and office 43
worker productivity, provide more accurate data, and provide the ability to reengineer work 44
processes and methods to support the continuous improvement of Avista’s outage 45
management and restoration program. An OMS/ADMS solution also provides Avista with the 46

Kensok, Di 24
Avista Corporation
ability to respond to more stringent and detailed regulatory compliance reporting 1
requirements, enables effective operation of an increasingly complex and dynamic 2
distribution grid, and delivers more accurate Estimated Restoration Time (ERT) information 3
to electric customers during outages. The improved ERT accuracy and restoration status for 4
customers will improve customer confidence in the information which will reduce the number 5
of calls received by our customer service representatives, as well as call durations. 6
7
The work is scheduled to start in 2022 so that it can be completed while the current data model 8
used by OMT is still supported by the vendor. If the work is not completed on schedule, there 9
will be significant risks and costs to maintain OMT with the existing data model and 10
application version. 11
12
Energy Delivery Operational Efficiency & Shared Services – 2020: $3,348,000; 2021: 13
$389,000 14
This business case supports the ability to expand business functionality using technology 15
throughout the Energy Delivery business area including: Gas Engineering and Operations, 16
Electric Engineering and Operations, Asset Management and Supply Chain, Facilities, Fleet 17
Operations and Metering. The projects represented herein support the need to meet business 18
requirements by enhancing existing functionality or adding brand new functionality for users 19
across the Energy Deliver business area. 20
21
Application expansion projects result from technology demand related to transformations in 22
the utility industry and continual changes required to meet expanding customer needs, as well 23
as the drive to achieve operational efficiencies. Recent trends in the area of mobility, 24
scalability, and the move towards Commercial off the Shelf (COTS) solutions that enhance 25
and/or improve conventional business practices and processes also influence application 26
expansion efforts. Key projects within this business case are GIS Enhancements Packages 2 27
and 3; Maximo Enhancements Packages; CROW Enhancements Package, AssetWorks 28
Enhancements, PI Enhancements Package; and Arcos Enhancements. This business case will 29
be sunsetting in 2021 and will be replaced by Energy Delivery Modernization & Operational 30
Efficiency. 31
32
Energy Delivery Modernization & Operational Efficiency – 2021: $5,463,000; 2022: 33
$3,290,000; 2023: $1,498,000 34
Energy Delivery Modernization and Operational Efficiency (EDMOE) as a business case 35
supports both existing and new technologies leveraged by the Energy Delivery business areas 36
including Gas Engineering & Operations, Electric Engineering & Operations, Asset 37
Management & Supply Chain, Facilities, Fleet Operations & Metering. These technologies 38
are used to automate and augment business solutions bringing efficiencies and capabilities to 39
support the delivery of energy to our customers. This support includes the following: 1) 40
improving the performance and capacity of business resources by implementing new 41
functionality in existing technologies. 2) improving the performance and capacity of business 42
resources by implementing overall new technologies. 3) modernizing existing technologies in 43
accordance with product lifecycles and technical roadmaps, typically through product or 44
system upgrades. Due to an increase in vendor-driven planned obsolescence, if these systems 45
are not refreshed on a regular cadence, the ability of Avista to meet customer, regulatory and 46

Kensok, Di 25
Avista Corporation
compliance requirements will be at risk. Although these are the primary purposes of this 1
business case, other benefits include cost savings, safety, regulatory compliance and 2
innovative customer-focused products and services. A large portion of the work that occurred 3
in Energy Delivery Operational Efficiency & Shared Services business case described above, 4
will be occurring in this business case when that business case sunsets in 2021. 5
6
Energy Resources Modernization & Operational Efficiency – 2020: $1,843,000; 2021: 7
$939,000; 2022: $2,888,000; 2023: $103,000 8
This program supports the technology-related application projects required for both expansion 9
and refresh activities required within the Energy Resources business area. This program is 10
required to support the application-related technology initiatives for all areas of energy 11
Resources – including Gas Supply. The business program functions that require major 12
application support include the following: Energy Risk Management and Energy Trading 13
which includes Nucleus, Avista Decision Support System (ADSS), and Settlement Solutions; 14
Gas Forecasting – Nostradamus, and CROW Outage Management; and Fuel Inventory 15
Management – WeighWiz. 16
17
Financial & Accounting Technology – 2020: $361,000; 2021: $3,514,000; 2022: 18
$1,753,000; 2023: $1,217,000 19
This business case supports technologies for Finance and Accounting groups which include: 20
Accounting, Tax, Finance Planning and Analysis, Treasury and Trust, Risk Management, and 21
Internal Audit. The financial and accounting business processes are critical to the routine 22
operations of Avista. Work within this business case addresses changing accounting standards 23
and regulations that require frequent updates to the financial systems in order to support 24
accurate and timely financial and accounting business processes, as well as the need to manage 25
enhancements to meet internal and external business requirements. Major applications in the 26
Financial & Accounting Technology business case are: Oracle Enterprise Business Suite 27
(EBS), Power Plan (PP), EPBCS Budget system, Utilities International Planner, BancTec 28
Systems, and a small number of commercial off-the-shelf and in-house developed applications 29
to support various accounting requirements. 30
31
Human Resources Technology – 2020: $874,000; 2021: $700,000; 2022: $830,000; 2023: 32
$203,000 33
The Human Resources Technology business case supports the technology-related application 34
projects required for both expansion and refresh activities required within the Human 35
Resources business area. This program is required to support the application related 36
technology initiatives for all areas of Human Resources including Human Resources Labor 37
and Employee Relations, Leadership and Organizational Development, Human Resources 38
Shared Services, Craft Training, Safety, and Internal Communications. The largest 39
applications within the Human Resources business case portfolio are the Ultimate Product 40
Suite and Skillsoft / SumTotal Learning Management System. Key projects for 2020, in 41
particular, include Enterprise Health & Safety System, Enterprise Content Management 42
(Labor Relations), Employee Engagement system enhancements (Intranet and Mobility), and 43
Ultipro Enhancements. 44

Kensok, Di 26
Avista Corporation
Legal & Compliance Technology – 2020: $509,000; 2021: $323,000; 2022: $267,000 1
This business case represents projects that will ensure constant management of enhancements 2
to meet internal and external business requirements for the following business areas: Legal, 3
Environmental Affairs, Real Estate, Claims Management, Corporate Compliance, FERC 4
Compliance, Reliability Compliance, and Ethics Compliance. The main applications are 5
CATSWeb, Claims Management System, Valuemation, Serengeti Law, DocuSign, and a 6
small number of commercial off-the-shelf and in-house developed applications to support 7
various legal and compliance applications. 8
9
Information Related to “Security” Projects Listed in Table No. 1 10
Q. Please describe major investments in Enterprise Security – Physical and 11
Cyber Security, Business Continuity, and Disaster Recovery in 2020 through August 31, 12
2023. 13
A. Avista understands that a safe, reliable, and secure energy infrastructure is 14
essential to the economies in the areas that we serve and our customer's way of life and that 15
intruders can use a variety of cyber and physical attacks to try and disrupt the delivery of safe, 16
reliable, and secure energy. Cyber and physical attacks can not only have a reliability impact 17
but also can lead to data breaches, ransomware, or other costly system repairs and threaten 18
employee safety. Based on information from our government partners in the Information 19
Sharing and Analysis Centers (ISACs), FBI, DHS, and State Fusion Centers, we know the 20
attacks continue to grow in size and complexity, and therefore it is prudent that Avista 21
continues to invest in its cyber, physical and business continuity programs. Major investments 22
in Enterprise Security fall into two areas: physical security and cybersecurity. The Enterprise 23
Security projects included in the Company’s case fall under the Mandatory and Compliance 24
and Customer Service Quality and Reliability investment drivers as shown in Table No. 1 and 25
are described in detail below. 26

Kensok, Di 27
Avista Corporation
Critical Infrastructure Protection v5 Transition – Cyber Asset Electronic Access – 2020: 1
$446,000 2
Avista, as a regulated utility, is required to meet North American Electric Reliability 3
Corporation (“NERC”) Critical Infrastructure Protection (“CIP”) Reliability Standards 4
(“Standards”). Specifically, Avista has been complying with CIP Version.3 Standards 5
(“CIPv3”) and needs to transition to CIP Version.5 Standards (CIPv5). 6
7
This Business Case will support achieving compliance for Low Impact Bulk Electric System 8
Cyber Systems by implementing electronic access controls. While this requirement is for 9
electric service critical infrastructure protections, a component of the security is to detect and 10
respond to cyber-attacks. A cyber-attack can affect all, gas and electric, infrastructure in the 11
event that a security vulnerability has been exploited. A few key projects for 2020 in this 12
business case are Electronic Access per site and Cyber Transient Assets per site. Not investing 13
in this business case will result in not meeting required NERC CIP Reliability Standards. 14
15
Payment Card Industry Compliance (PCI) – 2020: $1,211,000 16
Avista accepts credit cards over the phone, in person and through the Company’s website for 17
both electric and/or natural gas services. Credit cards are becoming the most common form 18
of payment and have become an expectation with Avista’s customers. As a company that 19
accepts credit card payments, Avista is subject to the Payment Card Industry (PCI) standards. 20
These standards specify controls that must be in place in order to meet the standards and be 21
compliant. Failure to achieve and maintain PCI compliance will result in fines and the ability 22
to continue accepting credit cards can be revoked. There are two projects finishing in 2020 in 23
this category, PCI Web Site Payment Compliance and PCI Phone Payment Compliance to 24
further meet the requirements of the Payment Card Industry standards. 25
26
NERC CIP Compliance –2021: $99,000; 2022: $250,000 27
Avista, as a regulated utility, is required to meet North American Electric Reliability 28
Corporation (“NERC”) Critical Infrastructure Protection (“CIP”) Standards. NERC CIP 29
standards continue to evolve to address emerging threats. To achieve and maintain compliance 30
with NERC CIP standards, an estimated $250,000 annual investment is necessary. This 31
business case will fund cyber and physical security improvements to achieve and maintain 32
NERC CIP compliance. 33
34
Being compliant with NERC CIP standards benefits customers by reducing the risk of electric 35
service interruptions associated with cyber or physical attacks. The requested funding amount 36
is intended to achieve and maintain compliance with the effective dates defined by NERC 37
CIP. Not being compliant and accepting fines is not considered a viable alternative, as it puts 38
Avista’s cyber and physical security posture at risk and increases costs due to penalties. The 39
recommended solution is to implement the controls necessary to achieve compliance. 40
41
Enterprise Security – 2020: $5,331,000; 2021: $1,249,000; 2022: $749,000 42
Physical security investments are vital to protecting our people, assets, and information and 43
are the first line of defense to deter an intruder from harming our employees or gaining access 44
to critical resources. Fencing, lighting, access control, and cameras all play a role in deterring, 45
detecting, delaying, and responding to intrusions. Physical security technology is also 46

Kensok, Di 28
Avista Corporation
transforming. Legacy systems are analog while newer systems are digital. These modern 1
systems run on traditional IT networks rather than being stand-alone systems and have 2
advanced capabilities. For example, legacy cameras only show a fixed view and are not 3
capable of using Artificial Intelligence (AI) to identify objects or activity within their field of 4
view. Instead, they must rely upon humans for detection which can be costly and prone to 5
mistakes. The newer systems use AI and can alert based on someone entering a restricted 6
area, identify if they left anything behind, and record traits of the individual like the color of 7
clothing and even perform facial recognition. Adopting this newer technology allows for 8
quicker detection and response to events that may impact our people, assets, and information. 9
10
Not only are physical security systems advancing, but so are cybersecurity systems. Threat 11
actors continue to evolve their tactics in response to our defenses and therefore investments 12
that were effective in the past, need to be enhanced with an upgrade or paired with another 13
solution to help mitigate new risk. Firewalls, anti-virus, and intrusion detection systems all 14
continue to evolve and release enhancements to ensure they are effective in preventing and 15
detecting modern attacks. An example of this is the shift from using signatures to detect 16
security events to using attack patterns. Signature-based detection relies upon the piece of 17
malware being known so a vendor can write a detection signature. Pattern-based detection 18
does not rely upon signatures. Instead, algorithms are used, and they monitor behavior and 19
system activity to spot patterns that match malicious behavior. The advantage of this approach 20
is new malware can be detected in real-time rather than having to wait for a signature to be 21
released by the vendor. This increases the speed at which Avista can detect and respond to 22
cybersecurity events which decrease the likelihood of a cyber intruder being successful. 23
24
For 2020 in particular, the Company increased or refreshed security across the enterprise, 25
including Firewall updates, Antivirus updates, malware monitoring and web filtering. 26
27
Facilities and Storage Locations Security – 2020: $415,000; 2021: $246,000; 2022: 28
$171,000; 2023: $461,000 29
This business case represents projects that cover the physical security at the Company’s 30
facility and storage locations across all its electric and natural gas service territory. These 31
locations contain people, equipment and material that are critical to support our day-to-day 32
operations and in turn the delivery of safe and reliable energy. A physical security incident at 33
any of these locations may harm people, damage equipment, or even restrict our ability to 34
respond to our customers. In addition, physical attacks can also give intruders access to critical 35
cyber equipment, which can lead to a cyber security event. Therefore, this creates the need for 36
additional physical security protections, at all facility and storage locations. Not investing in 37
this business case can leave gaps in how Avista secures and protects its facilities that house 38
people, equipment, and material, potentially affecting our ability to maintain system 39
performance and reliability. 40
41
Generation, Substation & Gas Location Security – 2020: $253,000; 2021: $483,000; 42
2022: $260,000; 2023: $123,000 43
This business case covers physical security at the Company’s generation, substation and gas 44
locations. These locations contain equipment that is critical to the delivery of safe and reliable 45
energy. Many of these locations are remote, unmanned and vulnerable, which makes them 46

Kensok, Di 29
Avista Corporation
difficult to protect. A physical security incident at any of these locations could deny, degrade 1
or disrupt the delivery of energy. In addition, physical attacks can also give intruders access 2
to critical cyber equipment, which can lead to a cyber security event. Therefore, this creates 3
the need for additional physical security protections, at all generation, substation and gas 4
locations. Projects that will represent the work in this business case for 2020 support Model 5
Office Substation Security and Substation Access Control. Not investing in this business case 6
can leave gaps in how Avista secures and protects its generation, substation and natural gas 7
facilities, potentially impacting our ability to maintain system performance and reliability. 8
9
Telecommunication & Network Distribution location Security – 2021: $63,000; 2022: $0, 10
2023: $125,000 11
Security is an expectation of companies today by customers. Especially companies considered 12
critical infrastructure. Protecting communication infrastructure is vital as many of Avista’s 13
business processes depend on network communications and without them, they could not 14
function which could have an impact on our day to day operations that are needed to support 15
our customers. Not funding these investments can pose risks to the assets Avista depends on 16
to conduct business and delivery safe and reliable energy. 17
18
Enterprise Business Continuity – 2021: $302,000; 2022: $100,000; 2023: $12,000 19
Avista has developed and maintains an Enterprise Business Continuity Program to continually 20
enhance and improve the Company’s emergency response, business continuity, and disaster 21
recovery capabilities to ensure the continuity of its critical business process and systems under 22
crisis conditions. The program includes the key areas of technology recovery, alternate 23
facilities, and overall business processes. The effort of developing and continuously 24
improving the program ensures the readiness of systems, procedures, processes, and people 25
required to support our customers and our communities in the event of a disaster. 26
27
This request funds projects that benefit Avista customers by mitigating service interruptions 28
due to a disaster by continually enhancing and improving emergency response, business 29
continuity, and disaster recovery capabilities. Not investing in this business case can pose 30
risks to the business processes and systems that support the delivery of safe and reliable 31
energy. 32
33
34
IV. IS/IT OPERATING AND MAINTENANCE EXPENSES 35
Q. Please summarize the incremental IS/IT O&M expenses beyond the 36
Company’s 2019 historical test period, included in this case. 37
A. In Company witness Ms. Andrews’ Electric and Natural Gas Pro Forma Study, 38
she has pro formed security, information services, and technology expenses, including non-39
labor costs associated with products and services, licensing and maintenance fees, and other 40

Kensok, Di 30
Avista Corporation
costs for a range of information services programs that will be in place during the Two-Year 1
Rate Plan beginning September 1, 2021 and ending August 31, 2023. Specifically, Ms. 2
Andrews adjusts the actual level of IS/IT expense included in the 2019 test year to include 3
2020 and 2021 known increases in expense for Rate Year 1 (effective September 1, 2021 4
thorough August 31, 2022. Next, Ms. Andrews adjusts the IS/IT expense level included in 5
Rate Year 1, to reflect incremental 2022 expenses in Rate Year 2 (effective September 1, 2022 6
thorough August 31, 2023), above Rate Year 1 levels. 7
These incremental expenditures (2020 through 2022) are necessary to support 8
Company cyber and general security, emergency operations readiness, electric and natural gas 9
facilities and operations support, and customer services. In this case, IS/IT has narrowed the 10
scope of incremental expenses to known and measurable non-labor items for 2020 and 2021. 11
These incremental expenses are based on having a contractual agreement in place, are pre-12
paid costs, or are the continuation of costs for products and services that have increased 13
beyond the 2019 historical test period. Incremental 2023 expenses are planned expense 14
increases similar to 2020 ad 2021 expenses. Further detail supporting these IS/IT incremental 15
expenses have been included with Ms. Andrews’ workpapers and provided with the 16
Company’s filed case. 17
Q. What is driving the increase in these non-labor O&M expense categories? 18
A. The main driver of the increase in these non-labor expenses is IS/IT capital 19
investments in Enabling Technology, Business & Operating Application Systems, and 20
Enterprise Security as described above in the IS/IT overview. Capital investments in 21
technology result in increases to product support and maintenance expenses for each of the 22
systems. Another significant driver of increased non-labor expense is the continuing trend of 23

Kensok, Di 31
Avista Corporation
software vendors changing how they license and deliver software solutions; examples include 1
a shift from a perpetual license to a subscription license, or from an on-premises solution to a 2
cloud-based solution. In addition, software vendors regularly increase the cost of ongoing 3
maintenance and support to keep up with the cost of enhancing, fixing and supporting their 4
products, and to align with market driven forces such as annual consumer price index 5
increases. 6
Table No. 2 below categorizes the non-labor incremental system expense increases 7
included in this case into the types of capital investment and underlying general functional 8
areas that can drive incremental increases. 9
Table No. 2 - Non-Labor Incremental System Expense (System): 10
11
Q. What are the primary incremental IS/IT non-labor O&M expenses? 12
13
14
A. As discussed above, Idaho’s share of the system incremental 2020 and 2021 15
increased IS/IT expenses shown in Table No. 2 above, were pro formed by Ms. Andrews into 16
Rate Year 1. Whereas, Idaho’s share of the incremental 2022 IS/IT system expense shown in 17
Table No. 2, was pro formed by Ms. Andrews into Rate Year 2. 18
The primary incremental non-labor O&M expenses include Hardware and Software 19
License support and maintenance, and Software Services and Subscriptions. Hardware and 20
Software License support and maintenance are costs associated with a traditional licensing 21
model where a capital asset license is purchased along with the required license support and 22
maintenance costs. Support and maintenance costs are the ongoing expense portion associated 23

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Avista Corporation
with vendor provided security patches, bug fixes, incremental upgrades, and expert technical 1
support with pre-determined service level agreements. Software Services and Subscriptions 2
are costs associated with a less traditional but increasingly more common licensing model 3
where all or most of the license cost is considered ongoing expense, rather than a capital asset 4
license. Examples can include items like Software as a Service (SaaS), data feeds, or site 5
license subscriptions. Costs in this category range from solutions that enable or supplement 6
on premise systems, to complete end-to-end solutions (infrastructure, networks, computing, 7
storage, hosting, etc.) with little to no on premise footprint. 8
The incremental expenses included in this case, on a system basis, are categorized by 9
general cost types as shown below in Table No. 3: 10
Table No. 3 Non-Labor O&M (System) 11
12
13
14
15
16
17
As discussed in the direct testimony of Ms. Andrews, and shown in Table Nos. 2 and 18
3 above, the total incremental IS/IT non-labor O&M expenses included in this general rate 19
case above 2019 levels is approximately $4.35 million (system) for Rate Year 1 ($1.858 20
million [2020] + $2.496 million [ 2021]), or $0.85 million allocated to Idaho electric 21
operations and $0.22 million allocated to Idaho natural gas operations. For Rate Year 2, the 22
total incremental IS/IT non-labor O&M expenses included above Rate Year 1, is 23

Kensok, Di 33
Avista Corporation
approximately $0.9 million (system), or $200,000 allocated to Idaho electric operations and 1
$50,000 allocated to Idaho natural gas operations . 2
Table No. 4 below provides examples of incremental expenses that have contractual 3
agreements in place, are pre-paid costs, or are the continuation of costs for products and 4
services that have increased beyond the 2019 historical test period: 5
Table No. 4: Examples of IS/IT Incremental Expenses (System) 6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

Kensok, Di 34
Avista Corporation
Q. Who speaks to the Customer Experience Platform O&M Expenses listed 1
in the table above? 2
A. This expense will be discussed further in Mr. Magalsky’s testimony as it is 3
related to the Customer at the Center program.3 4
Q. Describe how technology system support and maintenance service 5
contracts provide value and benefit customers. 6
A. Technology systems are becoming more integrated and complex as business 7
transactions become more integrated and automated. These technology systems require 8
regular maintenance activities to stay current on security vulnerability patching, software 9
defect patching, and various software functionality changes. Due to the increase in complexity 10
of these systems, vendor support is needed to assist with root cause analysis when 11
troubleshooting failures in the system. Without support and maintenance services for these 12
technology systems, the Company and our customers would experience longer system 13
downtimes due to complexities of root cause analysis. The Company would be at increased 14
risk of malicious activities in our technology systems if we did not have access to software 15
vulnerability patches, and our ability to optimize and maintain the business value of the 16
technology system would be degraded if we did not have access to software defect fixes or 17
software functionality changes. Support and maintenance services provided by the technology 18
system vendors indirectly benefit customers, for if we were not able to optimize and maintain 19
the business value of our technology systems, we would see a loss of business automation 20
functionality and an in turn an increase in operational labor that would be necessary to 21

3 The Customer at the Center Platform consists of three program investment areas: Customer Experience
Platform (CXP), Customer Facing Technology, and Customer Transactional Systems. These programs are
described in further detail by Mr. Magalsky.

Kensok, Di 35
Avista Corporation
maintain service levels across our information technology systems. 1
Q. How has Avista focused on managing its overall IS/IT expenses for the 2
benefit of its customers? 3
A. Avista employs several approaches to regularly assess, review and take action 4
to manage and control IS/IT costs. One example is through our approach to software 5
application license acquisition, renewal and tracking. A software analyst works in conjunction 6
with our technical and business subject matter experts to negotiate right-sized licensing, and 7
to review and validate the value and use of software applications to identify opportunities to 8
reduce and remove unused license and maintenance cost prior to renewal of software 9
agreements. An example of this practice from the current year occurred when IS/IT engaged 10
with our Internal Audit Department to discuss the upcoming renewal of the Company’s audit, 11
risk and compliance software. It was determined that the Company could switch vendors while 12
maintaining the needed functionality and, in the process, create a net reduction in pre-paid 13
technology expense of $81,219 in 2020. The impact of the 2020 reduction and the year-over-14
year avoided cost is included in the current adjustment. 15
Avista also regularly looks for other solutions to its growing application needs. For 16
example, in 2019, the Company began evaluating options for implementing a Cloud Access 17
Security Broker (CASB) solution, in response to the growing use of cloud service 18
applications. The Company reviewed (3) three different options and decided to go with the 19
option that delivered a cost advantage by licensing multiple technologies under one enterprise 20
suite. Another approach Avista takes to manage and control IS/IT costs is to identify 21
opportunities to enter into multi-year agreements with software vendors whereby pricing is 22
set over the duration of the agreement. These agreements allow Avista to lock in pricing at or 23

Kensok, Di 36
Avista Corporation
below current or expected market pricing, providing protection from adverse market 1
conditions and normalizing costs over time, which benefits both Avista and our customers. 2
An additional way IS/IT looks to reduce expense over time is to seek further discounts from 3
vendors in exchange for pre-payment of multi-year agreements. Pre-payment of software 4
agreements reduces the administrative overhead of the invoice validation, approval and 5
payment process in addition to the reduction in operating expense over the duration of the 6
agreement. 7
Q. What are other methods Avista uses to manage its overall IS/IT expenses 8
for the benefit of its customers? 9
A. Another method is use of digitalization, an industry-wide strategy that requires 10
additional investment in IT’s support capabilities. As existing services and new services are 11
digitalized, IT departments are experiencing significant increase in workloads. Although 12
these increasing workloads are expected, we actively work to decelerate the associated cost 13
increases using automation technology and changes to our IT operating models. For example, 14
in 2017 the Company implemented a performance monitoring tool that automates a portion of 15
the labor performed by our Information Systems teams. The automation helped to reduce the 16
labor requirement of performance monitoring tasks and our time to resolution when service 17
outages occur. The value these automation tools provide not only brings value to the year 18
they were implemented but sustained value year over year. IS/IT was then able to redeploy 19
that skilled operations labor onto more complex and pro-active task like incident prevention, 20
system optimization and load testing. These tasks directly contribute to a more favorable 21
customer experience via increased platform reliability and service availability. An example 22
of an operational model change is our effort to redirect a portion of our existing operations 23

Kensok, Di 37
Avista Corporation
labor force to seek out and resolve system level issues in pre-production 1
environments. Identifying defects early in the software development life cycle avoids the 2
more costly impact of finding defects after release. 3
The COVID-19 pandemic continues to cause tremendous and unprecedented change 4
across all industries, businesses, employers and workers; Avista is no exception. Through the 5
process of enabling nearly our entire workforce to work remotely, Avista sought to manage 6
and control cost where possible. For example, the Company’s “lemonade stand” set up in the 7
lobby of our Mission headquarters where our workforce could come “check out” technology 8
such as monitors and keyboards. This successful approach to a difficult situation quickly and 9
significantly enhanced our workforce’s productivity and allowed us to avoid costly shipping 10
or delivery charges as an alternative approach. IS/IT also reviewed queued work and work in 11
progress to delay or stop projects that would no longer provide the expected value in the wake 12
of the pandemic and work from home situation that has no known expected end date. An 13
example is the decision to halt all desk additions, moves, and changes, since most of Avista’s 14
workforce was beginning to work remotely, which helped avoid costs that had little value 15
considering the undetermined time to return to the office for most of Avista’s workforce. Only 16
a few business continuity requests for critical operations were processed, which included 17
standing up alternate facilities for system operations and hydro-electric dam operations. 18
In 2019, IS/IT launched a multi-year effort to change the way our voice 19
communications are deployed to our Electric and Gas Service Centers throughout our service 20
territory. The Session Initiation Protocol (SIP) project is replacing local phone service with 21
Voice over Internet Protocol (VoIP) service. One result of the project is cancelling the 22
business phone service of multiple copper-based land lines (TDM circuits) in favor of 23

Kensok, Di 38
Avista Corporation
delivering that phone call traffic to our service centers via our data circuits. This has resulted 1
in cost savings from canceling the TDM circuits once the VoIP services are in place. In 2019 2
the project generated $57,997 in reduced expense, and $74,711 YTD in 2020. The project has 3
converted 24 Service Center sites to SIP and facilitated canceling TDM circuits at 18 sites 4
throughout our service territory. Now that these calls are delivered through a centralized 5
service and then via data circuits to these Service Centers, we have realized improved caller 6
ID presentation, call quality improvements, and more reliable voice mail delivery. 7
Other examples of practices to manage and control IS/IT expense include training 8
employees to use mobile devices to scan documents and temper investment in 9
printing/scanning technology, and working with our Supply Chain department to negotiate 10
volume rebates ($232,852 in discounts from 2019 across capital and expense projects), and 11
early pay discounts ($222,998 in discounts from 2019 across capital and expense projects) for 12
technology products and services procured each year. 13
Q. Does this conclude your pre-filed direct testimony? 14
A. Yes. 15