The URL can be used to link to this page

Home My WebLink About20210129Kensok Exhibit 13 Schedule 1.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: (509) 495-4316 FACSIMILE: (509) 495-8851 DAVID.MEYER@AVISTACORP.COM 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 ) NATURAL GAS SERVICE TO ELECTRIC ) EXHIBIT NO. 13 AND NATURAL GAS CUSTOMERS IN THE ) OF STATE OF IDAHO ) JAMES M. KENSOK FOR AVISTA CORPORATION (ELECTRIC & NATURAL GAS) Exhibit No. 13, Schedule 1 Capital Investment Business Case Justification Narratives Index Business Case Name Page Number Enterprise Technology High Voltage Protection (HVP) Refresh 2 Technology Failed Assets 11 Technology Refresh to Sustain Business Process 20 Basic Workplace Technology Delivery 25 Data Center Compute and Storage Systems 34 Digital Grid Network 44 Endpoint Compute and Productivity Systems 54 Enterprise & Control Network Infrastructure 65 Enterprise Communication Systems 74 Enterprise Data Science 84 Environmental Control & Monitoring Systems 92 ET Modernization & Operational Efficiency - Technology 102 Facilities Driven Technology Improvements 113 Fiber Network Lease Service Replacement 121 Land Mobile Radio & Real Time Communication Systems 130 Atlas 140 Energy Delivery Modernization 149 Outage Management System & Advanced Distribution Management System (OMS & ADMS) 154 Energy Delivery Operational Efficiency & Shared Services 162 Energy Delivery Modernization & Operational Efficiency 167 Energy Resources Modernization & Operational Efficiency 178 Financial & Accounting Technology 188 Human Resources Technology 196 Legal & Compliance Technology 208 CIP v5 Transition - Cyber Asset Electronic Access 212 Payment Card Industry Compliance (PCI) 214 NERC CIP Compliance 217 Enterprise Security 223 Facilities and Storage Location Security 229 Generation, Substation & Gas Location Security 234 Telecommunication & Network Distribution location Security 239 Enterprise Business Continuity 244 High Voltage Protection Business Case Justification Narrative Page 1 of 9 EXECUTIVE SUMMARY Technology that enables Avista’s safety, control, customer-facing, and backoffice systems is critical to the operations that serve our gas and electric customers. It is found in many different environments from office locations to mountaintop sites to substations across our entire service territory. Technology investments under the High Voltage Protection business case are needed to provide high voltage protection for communication circuits in high voltage areas in support of employee and public safety, system reliability, and business productivity throughout our service territory. Under CenturyLink (formerly known as Qwest Communications), Tariff FCC Number 1, Section 13.7, Avista is required to provide high voltage protection for leased communication circuits in high voltage areas newer than September 12, 1994. If Avista does not meet the tariff requirements, telecommunication companies can turn off communication circuits to substations until Avista electrically isolates the copper wire coming into a substation, thereby affecting phone, modem, SCADA, and other metering and monitoring systems at substations. This infrastructure is core to utility operations, thus demanding safe and reliable networks. This business case will meet the needs of this tariff and ensure investments are made to minimize risk regarding personal safety for all workers in and around these high voltage areas. The cost of each solution has historically proven symmetrical across substations, and we have been able to leverage that data to estimate costs based on the number of sites outstanding. Avista and its customers will experience the benefits through ongoing attention to safety and system reliability. VERSION HISTORY Version Author Description Date Notes 1.0 Jim Ogle Initial BCJN Draft 6/2017 2.0 Shawna Kiesbuy Revision of BCJN to new template 7/2020 DocuSign Envelope ID: BDB4A44C-C1BE-4A83-AB1B-24AEB387A427 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 2 of 248 High Voltage Protection Business Case Justification Narrative Page 2 of 9 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Under CenturyLink (formerly known as Qwest Communications), Tariff FCC Number 1, Section 13.7, Avista is required to provide high voltage protection for leased communication circuits in high voltage areas newer than September 12, 1994. If Avista does not meet the tariff requirements, telecommunication companies can turn off communication circuits to substations until Avista electrically isolates the copper wire coming into a substation, thereby affecting phone, modem, SCADA, and other metering and monitoring systems at substations. This infrastructure is core to utility operations, thus demanding safe and reliable networks. This business case will meet the needs of this tariff and ensure investments are made to minimize risk regarding personal safety for all workers in and around these high voltage areas. The cost of each solution has historically proven symmetrical across substations, and we have been able to leverage that data to estimate costs based on the number of sites outstanding. Avista and its customers will experience the benefits through ongoing attention to safety and system reliability. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The technology improvements invested under this business case will provide protection for communication circuits in high voltage areas in support of employee and public safety, system reliability, and business productivity throughout our service territory. They are tied to the Mandatory and Compliance investment driver. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Avista facilities providing service to electric power generating, switching, or distribution station may require the use of Special High Voltage Protection (HVP) Requested Spend Amount $1,850,000 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Shawna Kiesbuy | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Execution Category Mandatory Driver Mandatory & Compliance DocuSign Envelope ID: BDB4A44C-C1BE-4A83-AB1B-24AEB387A427 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 3 of 248 High Voltage Protection Business Case Justification Narrative Page 3 of 9 Apparatuses such as isolation or neutralization devices. These devices are to protect against the effects of Ground Potential Rise (GPR) and induction caused by faults in a customer’s electric power system. The special protection precautions are intended to minimize electrical hazards to personnel and prevent electrical damage to telecommunications equipment and facilities. The risks of not approving this business case and its funding request will result in an inability to adequately support the safety of personnel near high voltage equipment where unprotected communication circuits exist. Additionally, termination of services by the telecommunications circuit provider could occur if their HVP requirements are not met. This would impact Avista’s ability to safely and reliably control and monitor our substation and transmission facilities. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. The investment and work involved to implement has been produced and proved successful in previous projects. As the design standards are such that repeatable success can be achieved, there is minimal risk of not meeting the desired protection objectives with appropriate funding allocations and a properly trained and skilled workforce. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem CenturyLink (formerly known as Qwest Communications), Tariff FCC Number 1, Section 13. 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. This is not an asset replacement driven business case. It is instead driven by an FCC requirement to meet safety compliance for leased communication circuits in high voltage areas. Option Capital Cost Start Complete Recommended Solution – Replace copper communication with fiber for protection of equipment and personnel by 2024 $1,850,000 01 2021 12 2024 Alternative #1 – Fund at 80% to replace copper communication with fiber for protection of equipment and personnel by 2025 $1,480,000 01 2021 12 2025 Alternative #2 – Do not fund the program $0 01 2021 12 2025 DocuSign Envelope ID: BDB4A44C-C1BE-4A83-AB1B-24AEB387A427 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 4 of 248 High Voltage Protection Business Case Justification Narrative Page 4 of 9 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The requested amount of $1,850,000 reflects the total estimated cost of implementing HVP solutions at all applicable substations through the year 2024. Yearly allocation and project prioritization are set based on the output of annual budget planning activities. These activities take in to account estimated completion dates of in-flight work, areas of high risk, and length of the construction season. Adjustments are requested and approved by the Steering Committee throughout each calendar year to accommodate any changes to the plan. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. The technology improvements invested under this business case benefit all customers across our service territory by investing in the high voltage protection technology solution thereby mitigating the voltage protection risk. With management oversight from the Program Steering Committee, projects initiated through the High Voltage Protection business case, will be reviewed and sequenced this business case on a per project basis spending the funded capital up to the approved allocation. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. The projects in this program are standalone projects within the High Voltage Protection business case but are dependent on length of construction season and other geographically similar but unrelated work being performed at impacted substations. Through those projects, business functions and processes might be impacted but the technology upgrades being made at the varied locations throughout Avista’s service territory should strive to increase performance and capacity for employees in their daily work life. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Alternative 1: Fund program at an 80% level and through 2025 Funding the High Voltage Protection business case minimally each year based on a reduced capital plan and request incremental increases as projects are completed. This would result in ad-hoc funding requests to the Capital Planning Group for work approved outside of the 5-year capital planning process. Safety DocuSign Envelope ID: BDB4A44C-C1BE-4A83-AB1B-24AEB387A427 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 5 of 248 High Voltage Protection Business Case Justification Narrative Page 5 of 9 risks related to the High Voltage Protection work would be mitigated at a much slower pace than if the program were funded as requested. Alternative 2: Do not fund the program High Voltage Protection projects would not be funded. Personnel and equipment safety risks would remain at unprotected substation locations and telecommunication carriers would be able to deny service at the same unprotected locations. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. The High Voltage Protection business case is managed as a program of projects planned yearly. All individual projects are managed through the PMO, which follows the Project Management Institute (PMI) standards. Throughout the year, the business case’s projects are Initiated, Planned, Executed, and then Completed with a Transfer to Plant for the scope requests which over the course of a calendar year equates to the funded budget allocation. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete projects that align with Avista’s vision, mission and strategic objectives: • The HVP initiative aligns with Avista’s commitment to invest in its infrastructure to achieve optimal lifecycle performance – safety, reliability, and at a fair price. Data communications that monitor and control Avista substations are critical in the support of bulk electric system. The implementation of HVP technology will continue to enable and support these critical communications in a manner that is much safer to all workers in and around the substation locations. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Throughout the course of a year, all project requests are vetted before the Steering Committee to validate the request against the business case purpose and making sure the request can be delivered within the approved funding allocation. DocuSign Envelope ID: BDB4A44C-C1BE-4A83-AB1B-24AEB387A427 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 6 of 248 High Voltage Protection Business Case Justification Narrative Page 6 of 9 2.8 Supplemental Information Identify customers and stakeholders that interface with the business case Within the High Voltage Protection business case, the discrete projects interface with various internal Avista groups such as ET engineering, Substation engineering, the Telecommunications Shop, along with our internal business partners at various office and substation facilities. Steering Committee members include Business Case Sponsors, Directors and Managers within the Enterprise Technology group along with the Business Case Owner. The ET Business Case Owner works in conjunction with the Project Management Office (PMO), the assigned Program Manager, and subsequent Project Managers. The ET Business Case Owner is accountable and responsible for all Business Case related activities and assignments. 2.8.1 Identify any related Business Cases There are no related business cases. HVP is a standalone business case. 3.1 Steering Committee or Advisory Group Information Steering Committee members are invaluable to the project and will provide approval on scope, schedule, and budget related changes. Additionally, they will provide approval on issues and risks pertaining to project deliverables outlined in this document, which also typically have an impact on the scope, schedule, or budget of a project. Steering Committee members will also provide approval on Change Requests, Go-Live, and the Approval to Close document. For the High Voltage Protection business case, the Steering Committee will consist of the Directors and Managers within ET, Energy Delivery, GPSS and the Business Case Owner. 3.2 Provide and discuss the governance processes and people that will provide oversight The High Voltage Protection Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. Program Steering Committee DocuSign Envelope ID: BDB4A44C-C1BE-4A83-AB1B-24AEB387A427 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 7 of 248 High Voltage Protection Business Case Justification Narrative Page 7 of 9 This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically in order to plan and sequence work to the levels of funding allocation received. Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a monthly basis. Each program and project steering committee meet regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. DocuSign Envelope ID: BDB4A44C-C1BE-4A83-AB1B-24AEB387A427 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 8 of 248 High Voltage Protection Business Case Justification Narrative Page 8 of 9 Any changes in funding or scope are documented at the Business Case level, via Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow process. All Enterprise technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. The undersigned acknowledge they have reviewed the High Voltage Protection 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: Date: Print Name: Shawna Kiesbuy Title: Sr. Manager, Network Engineering Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review DocuSign Envelope ID: BDB4A44C-C1BE-4A83-AB1B-24AEB387A427 Jul-31-2020 | 8:59 AM PDT Aug-03-2020 | 10:57 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 9 of 248 High Voltage Protection Business Case Justification Narrative Page 9 of 9 DocuSign Envelope ID: BDB4A44C-C1BE-4A83-AB1B-24AEB387A427 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 10 of 248 Technology Failed Assets Business Case Justification Narrative Page 1 of 9 EXECUTIVE SUMMARY Technology assets enable automated business processes. These technology assets range from computers to hand-held radios carried by our field staff to printers in remote offices to networking equipment. Sometimes these technology assets fail prior to being refreshed as part of a lifecycle management program. These failures can be caused by manufacture defects, human error, natural disasters, malicious actors, or age/runtime of equipment. In those cases, the failed asset can cause downtime for an employee or system resulting in significant disruption to daily operations across our service territory depending on where and to what asset the failure occurred. To support these types of unplanned failures, the Technology Failed Assets business case was established and consists of in-portfolio technology assets for rapid replacement of assets as they fail and when repairs are not feasible. A technology inventory is maintained to quickly restore business automation. They can include, but not be limited to laptops, mobile phone and tablets, printers, field area network (FAN) equipment, monitors, audio-visual equipment, routers, switches, servers, and fiber cable. The cost of each technology solution will vary depending on the type of asset, scope of failure, required lead time, and location. However, funding for this business case has been calculated based on predictable technology asset failure rates over the last three years. For unpredictable failed assets, additional funding requests will be made to replace the failed asset. Since technology asset failures will happen across Avista’s territory, having budget allocation available to quickly replace a failed asset is critical to the daily operations of the Company. If the Technology Failed Assets business case funding is not approved, replacement of failed assets will result in individual requests for funding each time an asset fails potentially extending the downtime of a system until the funding is approved and the asset is replaced. VERSION HISTORY Version Author Description Date Notes 1.0 Mike Beil BCJN 1.0 Created 7/2019 2.0 Mike Beil BCJN 2.0 Revised 7/2020 DocuSign Envelope ID: 87676DA8-FA8F-40B3-9CD2-7F1C80328B81 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 11 of 248 Technology Failed Assets Business Case Justification Narrative Page 2 of 9 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Technology assets enable automated business processes. These technology assets range from computers and mobile devices to radio systems and pole-mounted network devices. Sometimes these technology assets fail prior to being refreshed as part of a lifecycle management program. These failures can be caused by manufacture defects, human error, natural disasters, malicious actors, or age/runtime of equipment. In those cases, the failed asset can cause downtime and loss of performance for an employee or system resulting in significant disruption to daily operations across our service territory depending on where and to what asset the failure occurred. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The main driver for this program is Failed Plant & Operations which is also related to asset management strategies being driven by technology lifecycles and technology obsolescence. As outlined in section 1.1 of this Business Case Justification Narrative, at times technology may unexpectedly fail. This program provides a technology inventory to quickly restore business automation and reduce the downtime caused by the failure. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Since technology asset failures will happen across Avista’s territory, having budget allocation available to quickly replace a failed asset is critical to the daily operations of the company. If the Technology Failed Assets business case funding is not approved, replacement of failed assets will result in individual requests for funding each time an asset fails potentially extending the downtime of a system until the funding is approved and the asset is replaced. Requested Spend Amount $3,028,400 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Mike Beil | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Failed Plant & Operations DocuSign Envelope ID: 87676DA8-FA8F-40B3-9CD2-7F1C80328B81 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 12 of 248 Technology Failed Assets Business Case Justification Narrative Page 3 of 9 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Since the main driver behind this program is Failed Plant & Operations, the success of this program can be measured by the timely replacement of failed technology assets and restoration of automated business processes and overall productivity. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem See below for supporting details 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Asset Type Avg. Failures/Yr. Avg. Cost Forecast Printers 16 $3,724 $59,584 Monitors 40 $295 $11,800 Mobile Phones 50 $904 $45,200 Personal Computer 42 $1,326 $55,692 Field Area Network- Devices 40 $10,407 $416,280 AV Devices 3 $3,586 $10,758 Other Failed Technology 6 $3,245 $19,470 $618,784 Option Capital Cost Start Complete Funding based on previous 3-year failure rates (Recommended) $ 3,028,400 01 2021 12 2025 Request funding when needed $0 01 2021 12 2025 Funding based on 5% failure rates of all technology assets $6,225,000 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. To support these types of unplanned failures, the Technology Failed Assets business case was established and consists of in-portfolio technology assets for rapid replacement of assets as they fail and when repairs are not feasible. A technology inventory is maintained to quickly restore business automation. They can include, but DocuSign Envelope ID: 87676DA8-FA8F-40B3-9CD2-7F1C80328B81 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 13 of 248 Technology Failed Assets Business Case Justification Narrative Page 4 of 9 not be limited to laptops, mobile phone and tablets, printers, field area network (FAN) equipment, monitors, audio-visual equipment, routers, switches, servers, and fiber cable. The cost of each technology solution will vary depending on the type of asset, scope of failure, required lead time, and location. However, funding for this business case has been calculated based on predictable technology asset failure rates over the last three years. For unpredictable failed assets, additional funding requests will be made to replace the failed asset. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. The requested capital cost amount per year has been calculated to replace failed assets based on a three-year failure history. This level of funding is critical to maintain an inventory of in-portfolio assets to be available for rapid replacement during failures or unplanned outages (i.e. laptops, mobile phones, field area network equipment, etc.). The funding amounts within this program undergo regular review to balance the asset failure forecast within the predetermined budget allocations. Since technology asset failures will happen across Avista’s territory, having budget allocation available to quickly replace a failed asset is critical to the daily operations of the Company. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Since technology asset failures will happen across Avista’s territory, having budget allocation available to quickly replace a failed asset is critical to the daily operations of the Company. Each time an asset fails, Avista employees and customers can be affected by the downtime related to the automated process not performing. Rapid replacement of the asset is critical to maintain safety and performance. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Alternative 1: Request Funding when Needed Funding will only be requested once an asset fails beyond repair. The risk with this alternative is additional down time of our automation systems due to the time needed to request/approve funding to replace the failed asset. Alternative 2: Funding based on 5% failure rates of all technology assets Funding would be based on an assumed 5% failure rate of all technology assets. Each assets lifecycle is managed under a different business case. This option assumes a 5% funding level of the sum of all technology business cases which manage technology asset lifecycles. DocuSign Envelope ID: 87676DA8-FA8F-40B3-9CD2-7F1C80328B81 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 14 of 248 Technology Failed Assets Business Case Justification Narrative Page 5 of 9 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. The Technology Failed Assets business case is managed as a program of blanket projects which manage the replacement of failed assets tracking their used and usefulness on a monthly cadence. All individual projects set up for unplanned asset failures are managed through the PMO, which follows the Project Management Institute (PMI) standards. These projects are Initiated, Planned, Executed, and then Completed with a Transfer to Plant for the installed assets. Over the course of a calendar year, the blanket projects, along with the individual projects, equate to the funded budget. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete projects that align with Avista’s vision, mission and strategic objectives: • To provide Better Energy for Life, you need systems that perform at an optimal level to deliver electricity and gas in a safe and reliable manner. The team supporting asset failures are highly skilled and responsive to the needs of these systems so critical business services continue to be delivered without interruption. The Technology Failed Assets Business Case aligns with Avista’s “Perform” Strategic Focus Area. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Based on the individual asset data listed above, the requested funding amount will allow for an inventory of in-portfolio technology assets for rapid replacement of assets as they fail and when repairs are not feasible. Since the projects within the business case are evaluated monthly for used and usefulness, the forecasted failures and subsequent planned costs are also adjusted monthly based on failure rates. If there are trends appearing in the failure rates resulting in a higher velocity of spend in one asset area versus another, forecasted costs will be adjusted to make sure dollars are available across all projects. 2.8 Supplemental Information DocuSign Envelope ID: 87676DA8-FA8F-40B3-9CD2-7F1C80328B81 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 15 of 248 Technology Failed Assets Business Case Justification Narrative Page 6 of 9 2.8.1 Identify customers and stakeholders that interface with the business case Within the Technology Failed Assets business case, the projects interface with various internal Avista groups such as ET Engineering, the Telecommunications Shop, various operations teams, and procurement to name a few. Steering Committee members include Business Case Sponsors, Directors and Managers within the Enterprise Technology group long with the Business Case Owner. The ET Business Case Owner works in conjunction with the Project Management Office (PMO), and assigned Program Manager, and subsequent Project Managers. The ET Business Case Owner is accountable and responsible for all Business Case related activities and assignments. 2.8.2 Identify any related Business Cases There are no related business cases currently. 3.1 Steering Committee or Advisory Group Information Steering Committee members are invaluable to the project and will provide approval on scope, schedule, and budget related changes. For the Technology Failed Assets business case, the Steering Committee will consist of the Directors and Managers within ET and the Business Case Owner. 3.2 Provide and discuss the governance processes and people that will provide oversight The Technology Failed Assets Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. Program Steering Committee This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. DocuSign Envelope ID: 87676DA8-FA8F-40B3-9CD2-7F1C80328B81 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 16 of 248 Technology Failed Assets Business Case Justification Narrative Page 7 of 9 Product roadmaps identify investment demand that is generally not fully funded. Product investments are prioritized in this manner: 1) Safety Systems 2) Control Systems 3) Customer Facing Systems 4) Back Office Systems Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a monthly basis. Each program and project steering committee meet regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. Any changes in funding or scope are documented at the Business Case level, via Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow process. All Enterprise technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an DocuSign Envelope ID: 87676DA8-FA8F-40B3-9CD2-7F1C80328B81 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 17 of 248 Technology Failed Assets Business Case Justification Narrative Page 8 of 9 ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. DocuSign Envelope ID: 87676DA8-FA8F-40B3-9CD2-7F1C80328B81 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 18 of 248 Technology Failed Assets Business Case Justification Narrative Page 9 of 9 The undersigned acknowledge they have reviewed the Technology Failed Assets 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: Date: Print Name: Mike Beil Title: Mgr., IT Operations Engineering Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 87676DA8-FA8F-40B3-9CD2-7F1C80328B81 Jul-30-2020 | 1:40 PM PDT Aug-03-2020 | 3:18 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 19 of 248 Technology Refresh to Sustain Business Process Business Case Justification Narrative Page 1 of 5 1 GENERAL INFORMATION 1.1 Steering Committee or Advisory Group Information The Enterprise Technology Department serves as a shared service business unit that supports technology infrastructure and information systems for the enterprise. The Technology Refresh to Sustain Business Processes Business Case has three levels of governance: The Executive Technology Steering Committee (ETSC); Technology Planning Group (TPG) of Directors; and Program/Project Steering Committees. Applicable stakeholders and disciplines meet regularly to govern the business case and subsequent programs and projects (i.e. software delivery, electrical engineering, accounting, energy delivery, technology, etc.) The TPG sets priority across the technology investment portfolio, balancing: strategic alignment, business value, and customer benefits, as driven by the strategic initiatives established by the ETSC. The Capital Planning Group (CPG), an independent body, establishes funding allocations for each Business Case across the enterprise. The Business Case is largely limited by the funding allocation and resource capacity (staff) to meet its goals. The funding is generally established at the Business Case level by the CPG. The resource capacity constraint is generally managed by the TPG and the Business Case owner. Once the two constrains are established, the Business Case owner will work with steering committee(s) to set project priority and sequence over a five year planning period. Each program and project steering committee meet regularly to review the backlog of demand to that align with Avista’s strategies. They oversee scope, schedule and Requested Spend Amount $17,917,613 Requesting Organization/Department IS/IT Business Case Owner Andy Leija Business Case Sponsor Jim Corder/Hossein Nikdel Sponsor Organization/Department IS/IT Category Program Driver Asset Condition Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 20 of 248 Technology Refresh úo Susúain Business Process budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. During an annual planning cycle (July - September), the Business Case owner surfaces the project demand for the upcoming five years to the TPG and ETSC. After review for resource capacity, strategic alignment, and risk, the investment plan is submitted to the CPG for funding consideration across all other Business Cases. The CPG then provides a revised funding allocation to each Business Case. The revised allocation then requires the TPG to review and revise the investment plan to fit within the new funding allocation. This establishes the annual investment plan under this Business Case. Steering committees prioritize technology asset risk within the two constraints (resource capacity and funding) for each year. Technology asset refresh funding is generally assigned priority in this sequence: Safety, Energy Control, Customer Facing, and Back Office. 2 BUSINESS PROBLEM The Technology Refresh to Sustain Business Processes program is in place to provide for replacement of existing technology in alignment with the manufacturer product roadmaps for application and technology lifecycles. Not only is the asset condition of technology subject to the traditional mortality rate or lifecycle, but it is compounded by planned obsolescence, also known as technology obsolescencel. That is whereby the technology asset although within its functional lifespan is technologically flawed or no longer meets the need of users or customers, as expectations increase due to newer and more powerful technology is available in the market. Reliance on obsolete technology for automated business process presents significant risk that may only be solved with the reinstatement of manual process. Sustaining business process by replacing automation with workforce would increase labor expense. Additionally, with the rapid pace of technological change, technology vendors require continuous upgrades to maintain system maintenance and support, which can include security patching, bug fixes, version upgrades, interoperability, and compatibility with other technologies. These upgrades can in turn drive subsequent system replacements, creating a cascading event of change. Therefore, vendor roadmaps and technology asset lifecycles are data points that inform Avista on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. Below is a graph that illustrates the technology replacement demand across the six technology domains (Networks, Communications, Distributed, Central, 1 Barreca, Stephen L. (1995-2000). Technolog,t Lifecycles ønd Technologt Obsolescence. Retrieved from http : i/bcri.com/products/publications. htm Business Case Justification Narrative Page 2 of 5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 21 of 248 Technology Refresh úo Susfa in Business Process Environmental and Applications) under this Business Case. As you can see, the greatest increase is in Networks and Applications. Technology Refresh Spend by Year I Network I Cornmúnicât¡ons s Distr¡buted rCentral rEnvironmental rApplications s3s,000,000 s3O,o00,ooo s2s,00o,m0 s20,000,000 s1s,000,mo 51O,0m,000 s1000,000 s- 2074 2015 2016 2017 2018 2019 2020 2o21 The Annual lnvestment Plan reviewed by the TPG and ETSC monitors the risks of deferred replacements or upgrades to maintain a stable and reliable application and computing platform that allows for the safe and reliable operation of our electric and natural gas infrastructures, as well as deliver on customer demands. 3 PROPOSAL AND RECOMMENDED SOLUTION The monetized value of "no funding" alternative is $1.9 million per year The basis for measuring the business impact of not funding the Technology Refresh to Sustain Automated Business Process Business Case program is realizing the loss of business process automation. As technology products reach manufacturer planned or real obsolescence, they then cease product maintenance and product support, the automation value is jeopardized and business risk is increased. This condition would drive action. The "no funding" alternative would lead to a mitigation plan of having to remove the automation. Funding at current level analysis According to Avista's technology asset management system of record, which stores over 10,000 assets, 25% of the in-service assets are beyond manufacturer lifecycle. The Business Case owner analyzed project demand, resource capacity, and pace Option Capltal Coet Start Gomplete Do nothing (No funding)$1.9 MM 01 2017 122017 Fund at current level Approx. $18 MM 01 2017 122017 Fund at lower level < $18 MM 01 2017 122017 Business Case Justification Narrative Page 3 of 5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 22 of 248 Technology Refresh fo Susúa in Business Process of change, and determined that the 2016 funding level is adequate to maintain a balance among the constraints (demand, capacity, funding). The results of the analysis were presented to the ETSC and TPG, with the recommendation and requested an annual analysis to validate the investment portfolio, while managing the risk of deferring technology upgrades and replacements. Technology Refresh 2016 eSpend . produrtr ¡ tËru ica . ¿mploy¡c ' rtrtt ¡q6 sam0.000 17.e0,000 9qü0.000 l1æ0.000 $4@0.s00 É3,æ0,000 s¿ùo,ooo s1æ0,ooo II5- Funding at a Iower level As described above, funding the Technology Refresh to Sustain Automated Business Process Business Case at a lower level would increase the number of technology assets that would need to be deferred, thereby increasing risk of technology obsolescence, losing maintenance and support, and reducing automation efficiencies. Annual investment planning efforts will inform ETSC and TPG of the risks associated with continuous deferrals. The Business Case aligns directly with the Asset Condition driver and Avista's strategic initiatives of providing a Safe and Reliable Infrastructure and delivering more value to more customers and strengthen engagement. As a shared service, a majority of the lS/lT Business Case supports automated business functions, which many departments depend on to manage costs and maintain staff efficiencies. Concomitantly, many of the technology solutions (devices, systems, applications, etc.) provide direct support to all Avista customers, while the remaining provide indirect benefit through operational efficiencies, field mobility, and safer conditions. Technology Refresh $18 millron \ÅJorkforr-e 54% $tl 7 rrlll¡on Workforce: 7 2 FT E $67lhour Business Case Justification Narrative Page 4 of 5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 23 of 248 Technology Refresh úo Susúa in Business Process 4 APPROVAL AND AUTHORIZATION The undersigned acknowledge they have reviewed the Technology Refresh to Sustain Automated Business Process 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 Section 1.1. 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 04t2017 Andy Leija lT Delivery Manager Business Case Owner Signature: Print Name Title: Role: Signature: Print Name Title: Role tn kdel Business Case Sponsor Application System Planning Director Date 04t2017 Date 04t2017 Template Version: 03107 12017 Jim Corder lnfrastructure Technology and Security Director Business Case Sponsor 5 VERSION HISTORY Vorsion lmplemented By Revlelon Date Approved By Approval Date Reason 1.0 Andy Leija 04t12t17 ET Directors 04t14t17 lnitialversion Business Case Justification Narrative Page 5 of 5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 24 of 248 Basic Workplace Technology Business Case Justification Narrative Page 1 of 9 EXECUTIVE SUMMARY The nature of basic workplace technology requests can vary, be either planned or unplanned and generally have short turnaround cycles. The short turnaround nature of the requests can cause chaos in the procurement processing of basic workplace technology, as the lag time from when a request is submitted to when it is fulfilled can exceed expected timeframes. Additionally, ad-hoc requests, impact business value by un-batching technology orders, as well as reduce employee productivity and experience by submitting individual orders to meet requests. The Basic Workplace Technology business case responds to five essential functions that equip our staff to optimize our business and be responsive to our customers. The five essential functions include: Employee Onboard; Contractor Onboard; Job Function Change; Off Cycle Exchange; and General Additions. This requires a need to keep a small amount of inventory to meet business value timeframes. The primary driver for this program is performance and capacity, whereby the Company balances the need to meet job function requirements and technology availability. To do so, it requires historical trend analyses, technology inventory management, and cost per unit control measures. The costs associated with each solution can vary by the type of solution and number deployed. Therefore, regular review of inventory levels, historical trends, and planned requests help determine the overall performance and capacity standards under the established budget allocations. These reviews can result in calling for additional investment under this program from time to time for technology procurement trending behind planned requests. Not funding this program can result in delays in hiring, onboarding, job function changes, automation opportunities, etc. VERSION HISTORY Version Author Description Date Notes 1.0 Walter Roys Initial BCJN Draft 7/2019 2.0 Walter Roys Revision of BCJN to new template 7/2020 DocuSign Envelope ID: FEF14E54-3C24-445F-89B7-702B72D57EF0 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 25 of 248 Basic Workplace Technology Business Case Justification Narrative Page 2 of 9 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Basic workplace technology required by Avista’s workforce to perform office, call center, or field day-to-day job functions is a requirement, which either automates or enables business processes to provide gas and electric service to our customers. Regular job changes can occur in our workforce throughout our service territory as new employees or contractors are hired, leave, or retire, while others can change in job role or responsibilities. These changes at times result in technology requests that can vary, and generally have short turnaround cycles of (2) two weeks or less to fulfill them, at times planned and at other times unplanned. This could range from a new hiring of a cohort of customer service center staff needing a computer and monitors with call center applications, headsets, and communication equipment to a change in job function for an existing employee moving from the office out to the field and requiring a rugged computer or tablet with a different application portfolio, and hand radio. The short turnaround nature of the requests can cause challenges in processing procurement requests, which can result in lag time from when a request is submitted to when it is fulfilled and put worker productivity at risk of not having the technology to perform their new job assignment. Additionally, the ad-hoc nature of requests, can impact business value by un-batching technology orders, as well as reduce employee productivity and experience by submitting individual orders to meet requests. Requested Spend Amount $7,200,000 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Walter Roys | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Monitor/Control Category Program Driver Performance & Capacity DocuSign Envelope ID: FEF14E54-3C24-445F-89B7-702B72D57EF0 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 26 of 248 Basic Workplace Technology Business Case Justification Narrative Page 3 of 9 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The Basic Workplace Technology Business case is to respond to technology requests that allow workers to meet performance in their respective job functions within the capacity of in-portfolio technology at Avista. Therefore, the major driver for this business case is Performance & Capacity. The business requests generally fit within these major categories: • Employee Onboard • Contractor Onboard • Job Function Change • Off Cycle Exchange • General Additions 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Assuring that each technology request is met within the expected timeframe for job additions or changes, allows for Avista’s workforce to continue to provide gas and electric service to our customers across all our service territory. Job role additions, and changes are not new and will not stop, as the utility workforce continues to evolve with many retiring from older roles, and new roles created to meet the changing nature of our industry. The risk of not approving this program will result in delay of technology fulfillment to Avista’s workers who are requiring new technology due to a new job or change in job function. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Tracking of each request is done to determine if each technology request is fulfilled within the (2) two-week timfeframe, as the objective of this business case is to meet in-portfolio technology requests for employee and contractor onboarding, job function changes, off-cycle exchanges, and general additions. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem There are no specific studies to point to on the need for basic workplace technology, since it is now an expected norm. Generally, all job functions require some form of basic technology equipment to perform day-to-day job assignments. From a computer with the right set of applications to a mobile radio that keeps field workers safe in remote and hard to reach locations. This program was designed to deliver on each of those requests based on the criteria mentioned above. DocuSign Envelope ID: FEF14E54-3C24-445F-89B7-702B72D57EF0 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 27 of 248 Basic Workplace Technology Business Case Justification Narrative Page 4 of 9 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Not applicable, as the investment under this program business case is to respond to technology requests that allow workers to meet performance in their respective job functions within the capacity of in-portfolio technology at Avista. The basic workplace technology requests may generally include personal computers, tablets, print/copy/scan systems, television displays, monitors, telephones, etc., and the basic software productivity tools. They generally fall within these major categories, and are therefore tracked accordingly: • Employee Onboard: A request from leadership to deliver workspace technology for a new employee. • Contractor Onboard: A request from leadership to deliver workplace technology for a new contractor. • Job Function Change: A request from leadership to add or change workplace technology to enable a job function change for an existing employee or contractor. • Off-Cycle Exchange: A requests from leadership to exchange in service workplace technology, in a timeframe that does not align with a technology refresh cycle. • General Additions: General requests from leadership for additional workplace technology. The technology solutions fall within the capacity of in-portfolio technology at Avista, and therefore the recommended solution is a funding level commensurate with historical technology requests for employee and contractor onboardig, job function changes, off-cycle exchanges, and general additions. This business case does not include planned technology refresh investments based on technology obsolescence. The recommended solution allows the business case program to proactively plan for procurement intervals to maintain small-batches of technology inventory in- house to meet the short-turnaround requests over the course of the year. Option Capital Cost Start Complete Recommended Solution $7,200,000 01/2021 12/2025 [Alternative #1] – 80% Funding Level $5,760,000 01/2021 12/2025 [Alternative #2] – 70% Funding Level $5,040,000 01/2021 12/2025 DocuSign Envelope ID: FEF14E54-3C24-445F-89B7-702B72D57EF0 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 28 of 248 Basic Workplace Technology Business Case Justification Narrative Page 5 of 9 Do Nothing $0 01/2021 12/2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. Due to the nature of unpredictability of job role additions or changes, in 2019, a historical trend analyses provided the estimate required to fulfill these orders based on year to date requests fulfilled and those forecasted. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] The funding requested under the Basic Workplace Technology business case will be invested in technology to fulfill business requests in the areas of employee and contractor onboarding, job function changes, off-cycle exchanges, and general additions. Generally basic workplace technology includes personal computers, tablets, print/copy/scan systems, television displays, monitors, telephones, etc., and the basic software productivity tools. Investment in these technologies can result in added O&M expenses from an increase in licenses from time to time. There are no O&M reductions or offsets resulting from these investments, as this technology enables the Avista workforce to perform their day-to-day job functions in delivering gas and electric service to our customers. DocuSign Envelope ID: FEF14E54-3C24-445F-89B7-702B72D57EF0 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 29 of 248 Basic Workplace Technology Business Case Justification Narrative Page 6 of 9 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. All Avista business functions requesting basic workplace technology due to a job addition or change, off-cycle exchange, or general addition is affected by this business case, as it enables everyday work activities and automated business processes. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Several options were considered and proposed. However, the ‘Do Nothing’ alternative was removed as an option, as it is not realistic. Below are the alternatives discussed in detail: • A ‘Do Nothing’ option would not fund the basic technology items and become a blocking factor of productivity; job functions are extremely difficult to perform without digital productivity tools. For example, a new worker would not be able to adequately meet job function performance requirements in a customer call center without a personal computer and telephone. • Alternative #1 is to fund at 80% of the recommended solution and seek alternative ways to reduce deployment costs to deliver basic workplace technology and return during the year for additional funds to meet business demand, if not successful. • Alternative #2 is to fund at 70% of the recommended solution and seek alternative ways to reduce deployment costs to deliver basic workplace technology and return during the year for additional funds to meet business demand, if not successful. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. This business case is a program of blanket technology projects that transfers to plant monthly. Quarterly forecasts capture changes in transfers to plant based on trends of fulfillment requests. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. DocuSign Envelope ID: FEF14E54-3C24-445F-89B7-702B72D57EF0 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 30 of 248 Basic Workplace Technology Business Case Justification Narrative Page 7 of 9 The technology investments under this business case program align with Avista’s vision to deliver ‘better energy for life’ to our customers and in the area of ‘Perform’, which calls for “our focus on performance today to serving our customers well and unlocking pathways to growth.” Each investment under this business case program allows Avista to deliver electric and gas services to our customers. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project The reason that the technology investment under the Basic Workplace Technology program business case is prudent is because the Avista workforce requires this technology every day to deliver gas and electric service to our customers either in an office, customer service center, or in the field. Basic workplace technology deployments that fall under this business case are often in short notice, and minimum inventory quantities are maintained to meet business value time frames. The business case is structured in such a way to handle both planned or unplanned short-cycle business demand to deliver basic technology items to all job functions and office areas. Alternative funding levels are considered, yet not investing in it is not an option as basic workplace technology is a minimum requirement to perform day-to-day job functions to deliver gas and electric service to our customers, respond to compliance requirements, and conduct business operations and reporting. Additionally, the existing governance structure overseeing this business case program meets regularly to oversee and make decisions on the ongoing needs, benefits, costs, and risks associated with basic workplace technology fulfillment requests. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Nearly all Avista’s workforce interface with basic workplace technology business case, either as a leader requesting technology changes or a worker responding to job role and responsibility changes. DocuSign Envelope ID: FEF14E54-3C24-445F-89B7-702B72D57EF0 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 31 of 248 Basic Workplace Technology Business Case Justification Narrative Page 8 of 9 2.8.2 Identify any related Business Cases The technology deployed under this business case is in the existing technology portfolio, which is driven by engineering teams who are responsible for managing technology obsolescence and asset lifecycles. 3.1 Steering Committee or Advisory Group Information The Basic Workplace Technology Delivery governance team will act as the governance committee that oversees investment under this business case. The governance team consists of the Business Case Owner, Business Case Sponsor, and may include other key leadership stakeholders. 3.2 Provide and discuss the governance processes and people that will provide oversight The governance team is accountable for the financial performance of this business case. The governance team will have regular monthly meetings to review the progress of the program and make decisions on the following topics: • Prioritization of Business Drivers • Funding Constraints • Long-term Planning • Scope of Workplace Technology • Monitoring Workplace Technology Productivity 3.3 How will decision-making, prioritization, and change requests be documented and monitored The governance structure under this business case program is responsible for decision-making, prioritization, and change requests. Through the regular Program Steering Committee Meetings, the team reviews and balances planned work versus unplanned work to determine prioritization, as well as pending project change requests. Any change request requiring either an increase or decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is submitted to the Capital Planning Group for consideration. DocuSign Envelope ID: FEF14E54-3C24-445F-89B7-702B72D57EF0 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 32 of 248 Basic Workplace Technology Business Case Justification Narrative Page 9 of 9 The undersigned acknowledge they have reviewed the Basic Workplace Technology 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: Date: Print Name: Walter Roys Title: System Engineering Manager Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Karen Schuh Title: IT Program Manager Role: Steering/Advisory Committee Review Signature: Date: Print Name: Andy Leija Title: ET PMO Manager Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: FEF14E54-3C24-445F-89B7-702B72D57EF0 Jul-30-2020 | 11:46 AM PDT Aug-03-2020 | 5:44 PM PDT Aug-03-2020 | 6:37 PM PDT Aug-04-2020 | 7:28 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 33 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 1 of 10 EXECUTIVE SUMMARY Business processes require automated technology solutions to meet the overwhelming need for data and information to make decisions. All industries are reliant on the ability to produce, transmit, analyze, and store information to meet various business requirements. This digitalization is resulting in an ever-growing need for data processing and storage for on-demand requests and decision-making. Avista is no different. The Company produces, transmits, analyzes, and stores meter data, telemetry data, asset data, customer billing data, geographic information systems data, etc. Data processing and storage requires high reliability no different than our electric and gas grids supplying customers with power and gas. The Data Center Compute and Storage Systems business case is a program of investments in server technology required to process and store massive amounts of data to automate and enable business processes that support our gas and electric customers across our service territory. The technology solutions to meet performance standards and reliability requirements can vary from hardware and software upgrades in an on-premise data center, offsite storage, or service provider (cloud) facility, or in operating technology to optimize compute and storage capacity. Solution costs can also vary depending on the magnitude of the technology footprint or vendor licensing model(s). As enabling technology, data center processing and storage investment benefits all Avista customers, as it optimizes cost and productivity by not reverting to manual business processing, which would result in increased labor costs, human error, and overall processing delays. Because technology is evolving so quickly, this program undergoes regular review of the levels of investment and utilization to meet performance and capacity standards, and reliability requirements, while balancing against pre-established budget allocations. These reviews can result in calling for additional investment under this program for technology at risk of poor application system performance and system unavailability. VERSION HISTORY Version Author Description Date Notes 1.0 Walter Roys Initial BCJN Draft 6/2017 2.0 Walter Roys Revision of BCJN to new template 7/2020 DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 34 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 2 of 10 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Technology is not only subject to the traditional mortality rate or lifecycle, but it is compounded by planned obsolescence, also known as technology obsolescence.1 That is, whereby, the technology asset although within its functional lifespan is technologically flawed or no longer meets the need of users or customers, as expectations increase due to newer and more powerful technology that is available in the market. Data center compute and storage technology is no different. Additionally, with the rapid pace of technological change, technology vendors require continuous upgrades to maintain system maintenance and support, which can include security patching, bug fixes, version upgrades, interoperability, and compatibility with other technologies. Additionally, the endpoint compute and productivity technology is necessary to enable the capabilities that align with our strategic goals of putting our customers at the center. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The Data Center Compute and Storage Systems Business Case is driven by managing technology replacement according to manufacturer product roadmaps with an objective to maintain infrastructure performance and align infrastructure assets with business demand for capacity. Therefore, it falls under the Performance and Capactiy investment driver. 1 Barreca, Stephen L. (1998-2000). Technology Lifecycles and Technology Obsolescence. Retrieved from http://bcri.com/products/publications.htm Requested Spend Amount $9,856,000 Requested Spend Time Period 5 years. Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Walter Roys | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Monitor/Control Category Program Driver Performance & Capacity DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 35 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 3 of 10 All Avista customers benefit from maintaining data center compute and storage systems, as this technology enables the Avista workforce to perform their day-to-day job functions in delivering gas and electric service to our customers. Additionally, assets that fail due to not being replaced within their technology lifecycle are replaced by the Technology Failed Asset business case, which tracks technology asset failures, and is also used as a data point to inform the technology lifecycles under this business case. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Avista’s office, call center, and field staff require on-demand information to meet customer expectations when providing gas and electric service to customers across our service territory. The information can be critical to prevent, reduce, affect, or optimize an outcome that benefits our customers. Reliance on obsolete technology that stores and computes many of our on- premise business applications to automate business processes presents significant risk that may only be solved with the reinstatement of manual process. Sustaining automated business process by replacing automation with workforce would increase labor expense, and delay response times to meet customer needs. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. Ongoing reviews of vendor roadmap and technology asset lifecycle alignment provide necessary information to track how much of our investment in technology is lagging behind the vendor roadmap, and thereby introducing risk. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem The Enterprise Technology team references various technology vendor and third-party resources to stay informed and recommend decisions on the various technology investments. A few sample sources are included below: Barreca, Stephen L. (1998-2000). Technology Lifecycles and Technology Obsolescence. Retrieved from http://bcri.com/products/publications.htm DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 36 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 4 of 10 Directions on Roadmaps, Independent IT Planning Information and Advisory Service focused exclusively on Microsoft enterprise software and services. Retrieved from https://www.directionsonmicrosoft.com/ Gartner Industry Research and Reference Material. Retrieved from https://www.gartner.com/en/information-technology 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Not applicable, as the investment under this program business case is to maintain performance and capacity standards in each respective data center compute and storage technology. The data center compute and storage technology systems provide the infrastructure foundation for basically all automated business process. The recommended solution is to address 75% of obsolete products and capacity constraints (Recommended). This will introduce risk associated with technology systems reliability, interoperability and capacity. The investment required to address obsolete technology products is deferred to subsequent years. The likelihood of technology impact to business is increased. To minimize the impact of this risk, the Program Steering Committee will manage project sequence according to the investment priority documented in section 3.2. Option Capital Cost Start Complete Alternative #1: Retire assets and remove automation $1,338,700 01/2020 12/2024 Alternative #2: Address 100% obsolete products and capacity constraints $17,649,867 01/2020 12/2024 Alternative #3: Address 75% obsolete products and capacity constraints (recommended) $13,237,400 01/2020 12/2024 Alternative #4: Address 56% obsolete products and capacity constraints (submitted) $9,856,000 01 2021 12 2025 Alternative #5: Address 40% obsolete products and capacity constraints $7,060,000 01/2020 12/2024 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The funds request was based on a calculation of the asset lifecycle associated with each technology asset, the scope of the technology footprint across our service territory, and historical project costs for technologies previously refreshed under this business case. Through regular reviews, the program balances the need to meet system performance and reliability standards for the various technologies under this program within annual budget allocations, and DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 37 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 5 of 10 their respective technology lifecycles. These reviews can result in calling for additional investment under this program from time to time for technology either falling behind technology lifecycles or predetermined performance and reliability standards. A product obsolescence working group, consisting of Technology Domain Architects, maintains technology roadmaps to inform Program Steering Committee members of project demand. Project demand is assessed against funding constraints each year and prioritized based on risk of technology impact to the business. Various data points inform the team’s decisions and recommendations, which include, but are not limited to vendor-driven obsolescence, compute capacity and storage, historical project costs for similar type projects, etc. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] The funding requested under the Data Center Compute and Storage Business Case will be invested in technology, such as: • Data center compute technology, which includes both on premise servers and cloud services • Remote office compute and storage • Application systems to manage compute and storage technology • Server operating systems (OS) • Data storage systems • Data center racks and power distribution units (PDU) • Backup and recovery systems Investment in these technologies can result in added O&M expenses from increase in licenses from time to time. However, not funding this business case may result in removing automated business functions, which will either cause delay in meeting business and customer demands or completely change whether we can even respond to business and customer demands. There are no O&M reductions or offsets resulting from these investments, as this technology enables the Avista workforce to perform their day-to-day job functions in delivering gas and electric service to our customers. Reliance on obsolete technology for automated business process presents significant risk that may only be solved with the reinstatement of manual process. Sustaining automated business process by replacing automation with workforce would increase labor expense. DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 38 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 6 of 10 Additionally, with the rapid pace of technological change, technology vendors require continuous upgrades to maintain system maintenance and support, which can include security patching, bug fixes, version upgrades, interoperability, and compatibility with other technologies. These upgrades can in turn drive subsequent system replacements, creating a cascading event of change. Therefore, vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. All Avista business functions are affected by this business case, as it enables all day-to-day work activities and automated business processes. From service center to call center to field work, every worker requires endpoint technology to perform their business function and deliver gas and electric service to our customers. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Retire assets and remove automation This option assumes the assets would not be replaced upon end of life and be removed from service due to product incompatibility, business risk or safety risk. The basis for measuring the business impact of not funding this business case is realizing the loss of business process automation. As products reach the manufacturer-defined planned obsolescence, business process automation is jeopardized, and business risk is increased as manufacturers cease product maintenance and support. This condition would drive action. The alternative could lead to a mitigation plan of having to re-instate manual business process or eliminate the business process. This option bears the cost of asset retirement for failed assets. The retirement cost is estimated at 10% of the cost to replace the asset. Address 100% of obsolete products and capacity constraints This is the optimal solution. This option fully addresses and minimizes the likelihood of technology impact to automated business process. Address 75% of obsolete products and capacity constraints (Recommended) DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 39 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 7 of 10 This will introduce risk associated with technology systems reliability, interoperability and capacity. The investment required to address obsolete technology products is deferred to subsequent years. The likelihood of technology impact to business is increased. To minimize the impact of this risk, the Program Steering Committee will manage project sequence according to the investment priority documented in section 3.2. Address 40% of obsolete products and capacity constraints This will introduce risk associated with technology systems reliability, interoperability and capacity. The investment required to address obsolete technology products is deferred to subsequent years. The likelihood of technology impact to business is increased. Interoperability constraints may force unplanned funding requests. Multi-year, complex projects are at risk of completion prior to product obsolescence. This option impacts the workforce. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. This business case is a program that transfers to plant the total cost of each sub-project at the completion of every project, which can straddle calendar years. Quarterly forecasts capture changes in transfers to plant based on project status. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. The technology investments under this business case program align with Avista’s vision to deliver ‘better energy for life’ to our customers and in the area of ‘Perform’, which calls for “our focus on performance today to serving our customers well and unlocking pathways to growth.” Each investment under this business case program allows Avista to deliver electric and gas services to our customers. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project The reason that the technology investment under this program business case is prudent is because the Avista workforce requires this technology every day to deliver gas and electric service to our customers either in an office, customer service center or in the field. Alternatives to each technology are considered, yet not investing in it is not an option as automated business process would DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 40 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 8 of 10 either stop or be removed, thereby crippling our workforce’s ability to deliver gas and electric service to our customers, respond to compliance requirements, and conduct business operations and reporting. Additionally, a two-tiered governance structure overseeing this business case program meets regularly to oversee and make decisions on the needs, benefits, costs, and risks of each investment. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Nearly all Avista’s workforce interface with the technology investments under this business case, depending on the application systems being used to perform any given business function. 2.8.2 Identify any related Business Cases The technology investment under this business case allows for upgrade and refresh of the compute and storage from investments in other business cases, such as all business application systems, security systems, operations tools, etc. Basically, almost every software application used by Avista to conduct business functions is either processed or stored in servers refreshed under this business case. 3.1 Steering Committee or Advisory Group Information The Data Center Compute & Storage Systems Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. 3.2 Provide and discuss the governance processes and people that will provide oversight Program Steering Committee This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 41 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 9 of 10 The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically and will consist of projects needed to maintain the reliability and performance of all Data Center Compute & Storage Systems. Technology product roadmaps identify investment demand that is generally not fully funded. Technology product investments are prioritized in this manner: 1) Safety Systems 2) Control Systems 3) Customer Facing Systems 4) Back Office Systems Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored The governance structure under this business case program is responsible for decision-making, prioritization, and change requests. Through the regular Program Steering Committee Meetings, the team reviews and balances planned work versus unplanned work to determine prioritization, as well as pending project change requests. Any change request requiring either an increase or decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is submitted to the Capital Planning Group for consideration. DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 42 of 248 Data Center Compute and Storage Systems Business Case Justification Narrative Page 10 of 10 The undersigned acknowledge they have reviewed the Data Center Compute and Storage Systems 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: Date: Print Name: Walter Roys Title: System Engineering Manager Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Karen Schuh Title: IT Program Manager Role: Steering/Advisory Committee Review Signature: Date: Print Name: Andy Leija Title: ET PMO Manager Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: B7DE109B-DB4B-4C6F-B5E0-BFAAE4F83EC3 Jul-30-2020 | 11:50 AM PDT Aug-03-2020 | 5:53 PM PDT Aug-03-2020 | 6:38 PM PDT Aug-04-2020 | 7:29 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 43 of 248 Digital Grid Networks Business Case Justification Narrative Page 1 of 10 EXECUTIVE SUMMARY Technology that enables Avista’s safety, control, customer-facing, and backoffice systems is critical to the operations that serve our gas and electric customers. It is found in many different environments from office locations to mountaintop sites to generation plants across our service territory. Managing our network technologies to optimize communications and operations in the field for our crews, inspectors, employees, contractors and customers is critical to our ability to provide safe and reliable service. Technology investments under the Digital Grid Network business case are needed to expand and maintain these network assets in support of system reliability and business productivity throughout our service territory, ensuring our ability to appropriately and timely respond to the needs of our customers. The technology solutions under the Digital Grid Network business case will vary by site location and the systems supported in each facility or environment. They will include, but not limited to, emergency and safety systems, control systems, customer systems, and enterprise back office productivity systems. This infrastructure is core to utility operations, thus demanding reliable networks utilizing commercial carrier services and private network solutions. The cost of each technology will vary with the type of solution identified for the appropriate level of network capacity and data classifications to be transported. Avista and its customers will experience the benefits through ongoing system reliability. The technology solutions to meet performance standards and reliability requirements can vary between use cases. Solution costs can also vary depending on the magnitude of the technology footprint or vendor licensing model(s). As enabling technology, our private transport investments benefits all Avista customers, as it optimizes cost and productivity by not reverting to manual business processing, which would result in increased labor costs, human error, and overall processing delays. Because technology is evolving so quickly, this program undergoes regular review of the levels of investment and utilization to meet performance and capacity standards, and reliability requirements, while balancing against pre-established budget allocations. These reviews can result in calling for additional investment under this program for technology at risk of poor network system performance and system unavailability. VERSION HISTORY Version Author Description Date Notes 1.0 Jim Ogle Initial BCJN Draft 6/2017 2.0 Shawna Kiesbuy Revision of BCJN to new template 7/2020 DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 44 of 248 Digital Grid Networks Business Case Justification Narrative Page 2 of 10 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Technology that enables Avista’s safety, control, customer-facing, and backoffice systems is critical to the operations that serve our gas and electric customers. It is found in many different environments from office locations to mountaintop sites to generation plants across our service territory. Managing our network technologies to optimize communications and operations in the field for our crews, inspectors, employees, contractors and customers is critical to our ability to provide safe and reliable service. Technology investments under the Digital Grid Network business case are needed to expand and maintain these network assets in support of system reliability and business productivity throughout our service territory, ensuring our ability to appropriately and timely respond to the needs of our customers. The technology solutions under the Digital Grid Network business case will vary by site location and the systems supported in each facility or environment. They will include, but not limited to, emergency and safety systems, control systems, customer systems, and enterprise back office productivity systems. This infrastructure is core to utility operations, thus demanding reliable networks utilizing commercial carrier services and private network solutions. The cost of each technology will vary with the type of solution identified for the appropriate level of network capacity and data classifications to be transported. Avista and its customers will experience the benefits through ongoing system reliability. Requested Spend Amount $12,819,204 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Shawna Kiesbuy | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Performance & Capacity DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 45 of 248 Digital Grid Networks Business Case Justification Narrative Page 3 of 10 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The main driver behind this program is asset performance and capacity in alignment with asset management strategies driven by technology lifecycles that are based on manufacturer product roadmaps and planned obsolescence. The technology solutions within this program undergo regular review to balance performance and capacity against the asset management strategy within the predetermined budget allocations. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The risks of not approving this business case at the level to which it can maintain the balance of optimal performance against meeting its asset management strategy can result in unplanned failures, which result in unplanned labor and non-labor costs, risk of delay to procure and replace the failed asset, increased safety risks in sending field staff in extreme weather conditions to remote locations, as well as downtime to the critical operations and safety systems supported. New investments will be required when existing assets do not provide adequate capacity, performance, and functionality. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Executing planned projects will provide optimum performance and capacity as we refresh assets prior to the asset’s obsolescence. In this way, the business case should be able to support the asset lifecycles and reduce the risk of failing assets affecting critical business systems, processes and infrastructure reliability. DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 46 of 248 Digital Grid Networks Business Case Justification Narrative Page 4 of 10 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem Reference materials that support the needed changes in Network technology are maintained by Technology Domain Architects within each respective technology area. 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. This business case is aligned with Performance & Capacity. Option Capital Cost Start Complete Asset replacement for optimized performance and capacity $12,819,204 01 2021 12 2025 Do not fund the program $0 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The main driver behind this program is performance and capacity aligned with asset management strategies driven by technology lifecycles that are based on manufacturer product roadmaps, which can compound planned obsolescence. The asset management strategy is critical to optimize the overall lifecycle value of the product and reduce potential for failure or unplanned outages. Tracking of the assets’ installation and lifecycle durations are maintained to plan the program projects over the course of future years driving the annual budget request to maintain the refresh roadmap. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This business case includes network solutions for both expansion requirements and systematic refresh of existing devices that provide access to our digital grid field and wide area networks. Life cycle schedules allow for a known number of assets, by type, to be refreshed based on impact and likelihood of realized risk to the environment. Historical costs and timelines provide indicators in support of the requested allocations above. Through roadmapping activities and known pressures on existing network capacity, expansion work has been identified for each year. Again, using historical data along with current product cost estimates, the team developed a DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 47 of 248 Digital Grid Networks Business Case Justification Narrative Page 5 of 10 cost plan for work by year. Combined with the refresh work cost estimates, the overall business case request amount is determined. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. The projects in this program are standalone projects within the Digital Grid Network business case but are dependent on length of construction season and other geographically similar but unrelated work being performed at impacted substations. Through those projects, business functions and processes might be impacted but the technology upgrades being made at the varied locations throughout Avista’s service territory should strive to increase performance and capacity for employees in their daily work life. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Alternative 1: FUND PROGRAM BASED ON OPTIMIZED PERFORMANCE AND ASSET MANAGEMENT Funding the Digital Grid Network business case minimally each year based on a reduced capital plan and request incremental increases as projects are completed. This would result in ad-hoc funding requests to the Capital Planning Group for work approved outside of the 5-year capital planning process. Alternative 2: DO NOT FUND THE PROGRAM Digital Grid Network projects would not be funded. Enterprise network access from our field locations, optimization and/or unfunded capacity management could result in minimized network capacity reducing the ability to communicate with field assets and members of our workforce at field area locations across our geographic territory. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. The Digital Grid Network business case is managed as a program of projects planned yearly. All individual projects are managed through the PMO, which follows the Project Management Institute (PMI) standards. Throughout the year, DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 48 of 248 Digital Grid Networks Business Case Justification Narrative Page 6 of 10 the business case’s projects are Initiated, Planned, Executed, and then Completed with a Transfer to Plant for the scope requests which over the course of a calendar year equates to the funded budget allocation. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete projects that align with Avista’s vision, mission and strategic objectives: • The Digital Grid Network business case investments align with Avista’s commitment to invest in its infrastructure to achieve optimal lifecycle performance – safety, reliability, and at a fair price. Network technologies that allow for communication with field area assets and workforce in the field are critical in support of the bulk electric system. The implementation of these network technologies will continue to enable and support these critical communications in a manner that is much safer to all workers and at all locations across Avista. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Throughout the course of a year, all project requests are vetted before the Steering Committee to validate the request against the business case purpose and making sure the request can be delivered within the approved funding allocation. 2.8 Supplemental Information Identify customers and stakeholders that interface with the business case Within the Digital Grid Network business case, the discrete projects interface with various internal Avista groups such as ET engineering, Substation DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 49 of 248 Digital Grid Networks Business Case Justification Narrative Page 7 of 10 engineering, GPSS and Generation Plants, the Telecommunications Shop, along with our internal business partners at various office and remote facilities. Steering Committee members include Business Case Sponsors, Directors and Managers within the Enterprise Technology group along with the Business Case Owner. The ET Business Case Owner works in conjunction with the Project Management Office (PMO), the assigned Program Manager, and subsequent Project Managers. The ET Business Case Owner is accountable and responsible for all Business Case related activities and assignments. 2.8.1 Identify any related Business Cases There are no related business cases. 3.1 Steering Committee or Advisory Group Information Steering Committee members are invaluable to the project and will provide approval on scope, schedule, and budget related changes. Additionally, they will provide approval on issues and risks pertaining to project deliverables outlined in this document, which also typically have an impact on the scope, schedule, or budget of a project. Steering Committee members will also provide approval on Change Requests, Go-Live, and the Approval to Close document. For the High Voltage Protection business case, the Steering Committee will consist of the Directors and Managers within ET, Energy Delivery, GPSS and the Business Case Owner. 3.2 Provide and discuss the governance processes and people that will provide oversight The Enterprise and Control Network Infrastructure Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. Program Steering Committee This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 50 of 248 Digital Grid Networks Business Case Justification Narrative Page 8 of 10 program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically in order to plan and sequence work to the levels of funding allocation received. Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a monthly basis. Each program and project steering committee meet regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. Any changes in funding or scope are documented at the Business Case level, via Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 51 of 248 Digital Grid Networks Business Case Justification Narrative Page 9 of 10 Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow process. All Enterprise technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. The undersigned acknowledge they have reviewed the Facilities Driven Technology Improvements 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: Date: Print Name: Shawna Kiesbuy Title: Sr. Manager, Network Engineering Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Aug-04-2020 | 10:44 AM PDT Aug-07-2020 | 1:01 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 52 of 248 Digital Grid Networks Business Case Justification Narrative Page 10 of 10 DocuSign Envelope ID: 32744C2D-06CD-4C4D-9361-505DFC174E85 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 53 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 1 of 11 EXECUTIVE SUMMARY Business processes require automated technology solutions to meet the overwhelming need for data and information to make decisions. All industries, including the utility industry, are reliant on the ability to produce, transmit, analyze, and store information to meet various business requirements. Avista’s office, call center, and field staff require on- demand information to meet customer expectations when providing gas and electric service to customers across our service territory. The information can be critical to prevent, reduce, affect, or optimize an outcome that benefits our customers. Technology investments under the Endpoint Compute and Productivity Systems business case enable our staff with information to optimize our business and be responsive to our customers. Traditionally, much of this technology was primarily driven by asset condition aligned with asset management strategies. Technology lifecycles based on manufacturer product roadmaps were critical to optimize the overall lifecycle value of the product. However, more recently, we have witnessed an increase in vendor-driven planned obsolescence, whereby the technology asset although within its functional lifespan is technologically flawed or no longer meets the need of users or customers, as expectations increase due to newer and more powerful technology that is available in the market. This has resulted in a reclassification of the primary driver to performance and capacity, whereby the Company balances the need to meet performance standards and system reliability for the various technologies under this program with annual budget allocations, and their respective technology lifecycles. This is a true balancing act that requires historical trend analyses, technology road-mapping, and cost-control measures. Technology solutions under this program include, but are not limited to, technology required day-to-day to automate and enable business processes, such as Personal Computer (PC) hardware and their operating systems, various handheld devices, printers, configuration and management systems, productivity tools (e.g. Office 365), etc. The costs associated with each solution can vary by the scale of the solution deployed, as well as vendor licensing models. Therefore, each technology under this program undergoes regular review of the levels of utilization and performance to determine if it is meeting the expected performance standards and capacity requirements to maintain system reliability under the established budget constraints. These reviews can result in calling for additional investment under this program from time to time for technology either falling behind technology lifecycles or predetermined performance standards, which can pose risk to computing system reliability that may only be resolved with the reinstatement of manual processes replacing automation with workforce, thereby increase labor costs, human error, and overall processing delays. VERSION HISTORY Version Author Description Date Notes 1.0 Walter Roys Initial BCJN Draft 6/2017 1.1 Walter Roys Update Investment Driver 7/2019 2.0 Walter Roys Revision of BCJN to new template 7/2020 DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 54 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 2 of 11 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Endpoint compute and productivity technology is not only subject to the traditional mortality rate or lifecycle, but it is compounded by planned obsolescence, also known as technology obsolescence.1 That is, whereby, the technology asset although within its functional lifespan is technologically flawed or no longer meets the need of users or customers, as expectations increase due to newer and more powerful technology (with greater performance and capacity) that is available in the market. Additionally, with the rapid pace of technological change, technology vendors require continuous upgrades to maintain system maintenance and support, which can include security patching, bug fixes, version upgrades, interoperability, and compatibility with other technologies. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The Endpoint Compute and Productivity Systems Business Case is driven by managing technology replacement according to manufacturer product roadmaps with an objective to maintain infrastructure performance and align infrastructure assets with business demand for capacity. Therefore, the major driver for this business case is Performance & Capacity. All Avista customers benefit from maintaining endpoint compute and productivity systems, as this technology enables the Avista workforce to perform their day- to-day job functions in delivering gas and electric service to our customers. 1 Barreca, Stephen L. (1998-2000). Technology Lifecycles and Technology Obsolescence. Retrieved from http://bcri.com/products/publications.htm Requested Spend Amount $22,400,000 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Walter Roys | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Monitor/Control Category Program Driver Performance & Capacity DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 55 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 3 of 11 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Avista’s office, call center, and field staff require on-demand information to meet customer expectations when providing gas and electric service to customers across our service territory. The information can be critical to prevent, reduce, affect, or optimize an outcome that benefits our customers. Additionally, the endpoint compute and productivity technology is necessary to enable the capabilities that align with our strategic goals of putting our customers at the center. Reliance on obsolete technology for automated business process presents significant risk that may only be solved with the reinstatement of manual process. Sustaining automated business process by replacing automation with workforce would increase labor expense, and delay response times to meet customer needs. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. Ongoing reviews of vendor roadmap and technology asset lifecycle alignment provide necessary information to track how much of our investment in technology is lagging behind the vendor roadmap, and thereby introducing risk. Additionally, assets that fail due to not being replaced within their technology lifecycle are replaced by the Technology Failed Asset business case, which tracks technology asset failures, and is also used as a data point to inform the technology lifecycles under this business case. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem The Enterprise Technology team references various technology vendor and third-party resources to stay informed and recommend decisions on the various technology investments. A few sample sources are included below: Barreca, Stephen L. (1998-2000). Technology Lifecycles and Technology Obsolescence. Retrieved from http://bcri.com/products/publications.htm DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 56 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 4 of 11 Directions on Roadmaps, Independent IT Planning Information and Advisory Service focused exclusively on Microsoft enterprise software and services. Retrieved from https://www.directionsonmicrosoft.com/ Gartner Industry Research and Reference Material. Retrieved from https://www.gartner.com/en/information-technology 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Not applicable, as the investment under this program business case is to maintain performance and capacity standards in each respective endpoint compute and productivity technology. This program will manage technology replacement according to manufacturer product roadmaps with an objective to maintain infrastructure performance and align infrastructure assets with business demand for capacity. Although this is not the optimal solution, the recommended funding level will address 75% of obsolete products and capacity constraints, which will introduce risk associated with technology systems’ reliability, interoperability, and capacity. The investment required to address obsolete technology products will be deferred to subsequent years, thereby creating a bow-wave of backed up technology obsolescence that at some point will need to be addressed. This is no different than pushing out buying winter tires for your car into the next winter. However, doing this every winter may eventually catch up with you. The likelihood of technology impact to automated business processes will increase. To minimize the impact of this risk, the Program Steering Committee will manage project sequence according to the investment priority documented in Section 3.2. Option Capital Cost Start Complete Recommended Solution – Address 75% obsolete products and capacity constraints $22.4 M 01 2021 12 2025 Alternative #1 - Address 100% of obsolete products and capacity constraints (recommended) $32.1 M 01 2021 12 2025 Alternative #2 - Address 50% obsolete products and capacity constraints $16.1 M 01 2021 12 2025 DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 57 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 5 of 11 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The funds request was based on a calculation of the asset lifecycle associated with each technology asset, the scope of the technology footprint across our service territory, and historical project costs for technologies previously refreshed under this business case. Through regular reviews, the program balances the need to meet system performance and reliability standards for the various technologies under this program within annual budget allocations, and their respective technology lifecycles. These reviews can result in calling for additional investment under this program from time to time for technology either falling behind technology lifecycles or predetermined performance and reliability standards. A product obsolescence working group, consisting of Technology Domain Architects, maintains technology roadmaps to inform Program Steering Committee members of project demand. Project demand is assessed against funding constraints each year and prioritized based on risk of technology impact to the business. Various data points inform the team’s decisions and recommendations, which include, but are not limited to vendor-driven obsolescence, compute capacity and storage, historical project costs for similar type projects, etc. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] The funding requested under the Endpoint Compute and Productivity Business Case will be invested in technology, such as: o Personal Computer (PC) systems o Vehicle PC mounting systems o Tablets o Print, Scan, & Fax systems o Global Positioning Systems (GPS) o Digital scale systems o Uninterruptable Power Supplies (UPS) o Other endpoint computer systems o PC Operating Systems (OS) o Virtual PC Systems o Virtualized application systems o End user PC productivity tools o Remote PC management systems o Configuration management systems DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 58 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 6 of 11 o Mobile computing systems o Battery management systems Investment in these technologies can result in added O&M expenses from increase in licenses from time to time. However, not funding this business case may result in removing automated business functions, which will either cause delay in meeting business and customer demands or completely change whether we can even respond to business and customer demands. There are no O&M reductions or offsets resulting from these investments, as this technology enables the Avista workforce to perform their day-to-day job functions in delivering gas and electric service to our customers. Reliance on obsolete technology for automated business process presents significant risk that may only be solved with the reinstatement of manual process. Sustaining automated business process by replacing automation with workforce would increase labor expense. Additionally, with the rapid pace of technological change, technology vendors require continuous upgrades to maintain system maintenance and support, which can include security patching, bug fixes, version upgrades, interoperability, and compatibility with other technologies. These upgrades can in turn drive subsequent system replacements, creating a cascading event of change. Therefore, vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. All Avista business functions are affected by this business case, as it enables all day-to-day work activities and automated business processes. From service center to call center to field work, every worker requires endpoint technology to perform their business function and deliver gas and electric service to our customers. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Address 100% of obsolete products and capacity constraints This is the optimal solution. This option fully addresses and minimizes the likelihood of technology impact to automated business process. DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 59 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 7 of 11 Address 75% of obsolete products and capacity constraints This will introduce risk associated with technology systems reliability, interoperability and capacity. The investment required to address obsolete technology products is deferred to subsequent years. The likelihood of technology impact to business is increased. To minimize the impact of this risk, the Program Steering Committee will manage project sequence according to the investment priority documented in Section 3.2. Address 50% of obsolete products and capacity constraints This will introduce risk associated with technology systems reliability, interoperability and capacity. The investment required to address obsolete technology products is deferred to subsequent years. The likelihood of technology impact to business is increased. Interoperability constraints may force unplanned funding requests. Multi-year, complex projects are at risk of completion prior to product obsolescence. This option impacts the workforce. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. This business case is a program that transfers to plant the total cost of each project at the completion of every project, which can straddle calendar years. Quarterly forecasts capture changes in transfers to plant based on project status. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. The technology investments under this business case program align with Avista’s vision to deliver ‘better energy for life’ to our customers and in the area of ‘Perform’, which calls for “our focus on performance today to serving our customers well and unlocking pathways to growth.” Each investment under this business case program allows Avista to deliver electric and gas services to our customers. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project The reason that the technology investment under this program business case is prudent is because the Avista workforce requires this technology every day to deliver gas and electric service to our customers either in an office, customer DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 60 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 8 of 11 service center or in the field. Alternatives to each technology are considered, yet not investing in it is not an option as automated business process would either stop or be removed, thereby crippling our workforce’s ability to deliver gas and electric service to our customers, respond to compliance requirements, and conduct business operations and reporting. Additionally, a two-tiered governance structure overseeing this business case program meets regularly to oversee and make decisions on the needs, benefits, costs, and risks of each investment. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Nearly all Avista’s workforce interface with the technology investments under this business case. Selected leaders in organizational business units, known as technology stakeholders, work closely with the technology teams to help with business roadmaps, use case definition, gather non-functional requirements, test design and deployment approaches to inform technology investments. 2.8.2 Identify any related Business Cases The technology investment under this business case allows for the deployment and use of outputs from other business cases, such as application access and delivery on personal computers and servers, connecting to a virtual private network or cloud service, managing data storage and compute, security updates and patching, etc. 3.1 Steering Committee or Advisory Group Information The Endpoint Compute & Productivity Systems Business Case has two levels of governance: The Program Steering Committee and the Project Steering Committee. 3.2 Provide and discuss the governance processes and people that will provide oversight Program Steering Committee This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 61 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 9 of 11 • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically and will consist of projects needed to maintain the reliability and performance of all endpoint compute & productivity systems. Technology product roadmaps identify investment demand that is generally not fully funded. Technology product investments are prioritized in this manner: 1) Safety Systems 2) Control Systems 3) Customer Facing Systems 4) Back Office Systems Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 62 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 10 of 11 3.3 How will decision-making, prioritization, and change requests be documented and monitored The governance structure under this business case program is responsible for decision-making, prioritization, and change requests. Through the regular Program Steering Committee Meetings, the team reviews and balances planned work versus unplanned work to determine prioritization, as well as pending project change requests. Any change request requiring either an increase or decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is submitted to the Capital Planning Group for consideration. DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 63 of 248 Endpoint Compute and Productivity Systems Business Case Justification Narrative Page 11 of 11 The undersigned acknowledge they have reviewed the Endpoint Compute & Productivity Systems 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: Date: Print Name: Walter Roys Title: System Engineering Manager Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Karen Schuh Title: IT Program Manager Role: Steering/Advisory Committee Review Signature: Date: Print Name: Andy Leija Title: ET PMO Manager Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 0451D1C5-E17F-4B57-BEBC-9824BB4FACC5 Jul-30-2020 | 11:48 AM PDT Aug-03-2020 | 3:16 PM PDT Aug-03-2020 | 3:45 PM PDT Aug-03-2020 | 3:46 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 64 of 248 Enterprise and Control Network Infrastructure Business Case Justification Narrative Page 1 of 9 EXECUTIVE SUMMARY Technology that enables Avista’s safety, control, customer-facing, and backoffice systems is critical to the operations that serve our gas and electric customers. It is found in many different environments from office locations to mountaintop sites to generation plants across our service territory. Managing our network technologies to optimize communications and operations of the enterprise and control systems in these locations is extremely important. Technology investments under the Enterprise and Control Network Infrastructure business case are needed to expand and maintain these network assets in support of system reliability and business productivity throughout our service territory, ensuring our ability to appropriately respond to the needs of our customers. The technology solutions under the Enterprise and Control Network Infrastructure business case will vary by site location and the systems supported in each facility or environment. They will included, but are not limited to, emergency and safety systems, control systems, customer systems, and enterprise back office productivity systems. This infrastructure is core to utility operations, thus demanding reliable networks utilizing commercial carrier services and private network solutions. The cost of each solution will vary with the type of solution identified for the appropriate level of network access at each site. Avista and its customers will experience the benefits through ongoing system reliability. The main driver behind this program is asset performance and capacity in alignment with asset management strategies driven by technology lifecycles that are based on manufacturer product roadmaps and planned obsolesces. The technology solutions within this program undergo regular review to balance the asset management strategy within the predetermined budget allocations. The risks of not approving this business case at the level to which it can maintain the balance of meeting its asset management strategy can result in unplanned failures, which result in unplanned labor and non-labor costs, risk of delay to procure and replace the failed asset, increased safety risks in sending field staff in extreme weather conditions to remote locations, as well as downtime to the critical operations and safety systems supported. New investments will be required when existing assets do not provide adequate capacity, performance, and functionality. VERSION HISTORY Version Author Description Date Notes 1.0 Jim Ogle Initial BCJN Draft 6/2017 2.0 Shawna Kiesbuy Revision of BCJN to new template 7/2020 DocuSign Envelope ID: 1EED9D00-05D8-4B50-82C4-3A2DAB2F597E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 65 of 248 Enterprise and Control Network Infrastructure Business Case Justification Narrative Page 2 of 9 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Technology that enables Avista’s safety, control, customer-facing, and backoffice systems is critical to the operations that serve our gas and electric customers. It is found in many different environments from office locations to mountaintop sites to generation plants across our service territory. Managing our network technologies to optimize communications and operations of the enterprise and control systems in these locations is extremely important. Technology investments under the Enterprise and Control Network Infrastructure business case are needed to expand and maintain these network assets in support of system reliability and business productivity throughout our service territory, ensuring our ability to appropriately respond to the needs of our customers. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The main driver behind this program is asset performance and capacity in alignment with asset management strategies driven by technology lifecycles that are based on manufacturer product roadmaps and planned obsolescence. The technology solutions within this program undergo regular review to balance the asset management strategy within the predetermined budget allocations. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The risks of not approving this business case at the level to which it can maintain the balance of meeting its asset management strategy can result in unplanned failures, which result in unplanned labor and non-labor costs, risk of delay to Requested Spend Amount $35,365,826 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Shawna Kiesbuy | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Performance & Capacity DocuSign Envelope ID: 1EED9D00-05D8-4B50-82C4-3A2DAB2F597E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 66 of 248 Enterprise and Control Network Infrastructure Business Case Justification Narrative Page 3 of 9 procure and replace the failed asset, increased safety risks in sending field staff in extreme weather conditions to remote locations, as well as downtime to the critical operations and safety systems supported. New investments will be required when existing assets do not provide adequate capacity, performance, and functionality. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Executing planned projects will refresh assets prior to the asset’s obsolescence and in this way, the business case should be able to support the asset lifecycles and reduce the risk of failing assets affecting critical business systems, processes and infrastructure reliability. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem Reference materials that support the needed changes in Network technology are maintained by Technology Domain Architects within each respective technology area. 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. This business case is aligned with Performance & Capacity; not Asset Management. Option Capital Cost Start Complete Asset replacement for optimized performance and capacity $35,365,826 01 2021 12 2025 Do not fund the program $0 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The main driver behind this program is performance and capacity aligned with asset management strategies driven by technology lifecycles that are based on manufacturer product roadmaps, which can compound planned obsolescence. The asset management strategy is critical to optimize the overall lifecycle value of the product and reduce potential for failure or unplanned outages. Tracking of the assets’ installation and lifecycle durations are maintained to plan the program projects over the course of future years driving the annual budget request to maintain the refresh roadmap. DocuSign Envelope ID: 1EED9D00-05D8-4B50-82C4-3A2DAB2F597E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 67 of 248 Enterprise and Control Network Infrastructure Business Case Justification Narrative Page 4 of 9 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This business case includes network solutions for both expansion requirements and systematic refresh of existing devices that provide access to our enterprise and control networks. Life cycle schedules allow for a known number of assets, by type, to be refreshed based on impact and likelihood of realized risk to the environment. Historical costs and timelines provide indicators in support of the requested allocations above. Through roadmapping activities and known pressures on existing network capacity, expansion work has been identified for each year. Again, using historical data along with current product cost estimates, the team developed a cost plan for work by year. Combined with the refresh work cost estimates, the overall business case request amount is determined. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. The projects in this program are standalone projects within the Enterprise and Control Network Infrastructure business case but are dependent on length of construction season and other geographically similar but unrelated work being performed at impacted substations. Through those projects, business functions and processes might be impacted but the technology upgrades being made at the varied locations throughout Avista’s service territory should strive to increase performance and capacity for employees in their daily work life. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Alternative 1: FUND PROGRAM BASED ON OPTIMIZED PERFORMANCE AND ASSET MANAGEMENT Funding the Enterprise and Control Network Infrastructure business case minimally each year based on a reduced capital plan and request incremental increases as projects are completed. This would result in ad-hoc funding requests to the Capital Planning Group for work approved outside of the 5-year capital planning process. DocuSign Envelope ID: 1EED9D00-05D8-4B50-82C4-3A2DAB2F597E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 68 of 248 Enterprise and Control Network Infrastructure Business Case Justification Narrative Page 5 of 9 Alternative 2: DO NOT FUND THE PROGRAM Enterprise and Control Network Infrastructure projects would not be funded. Enterprise network access, optimization and/or unfunded capacity management could result in minimized network capacity reducing the ability to perform ordinary and necessary daily business operations. Control network access, optimization and/or unfunded capacity management could result in minimized control network capacity reducing the ability to manage and control our generation and control system assets. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. The Enterprise and Control Network Infrastructure business case is managed as a program of projects planned yearly. All individual projects are managed through the PMO, which follows the Project Management Institute (PMI) standards. Throughout the year, the business case’s projects are Initiated, Planned, Executed, and then Completed with a Transfer to Plant for the scope requests which over the course of a calendar year equates to the funded budget allocation. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete projects that align with Avista’s vision, mission and strategic objectives: • The Enterprise and Control Network Infrastructure business case investments align with Avista’s commitment to invest in its infrastructure to achieve optimal lifecycle performance – safety, reliability, and at a fair price. Network communications that monitor and control Avista enterprise networks and control networks are critical in support of the bulk electric system. The implementation of these network technologies will continue to enable and support these critical communications in a manner that is much safer to all workers and at all locations across Avista. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project DocuSign Envelope ID: 1EED9D00-05D8-4B50-82C4-3A2DAB2F597E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 69 of 248 Enterprise and Control Network Infrastructure Business Case Justification Narrative Page 6 of 9 Throughout the course of a year, all project requests are vetted before the Steering Committee to validate the request against the business case purpose and making sure the request can be delivered within the approved funding allocation. 2.8 Supplemental Information Identify customers and stakeholders that interface with the business case Within the Enterprise and Control Network Infrastructure business case, the discrete projects interface with various internal Avista groups such as ET engineering, Substation engineering, GPSS and Generation Plants, the Telecommunications Shop, along with our internal business partners at various office and remote facilities. Steering Committee members include Business Case Sponsors, Directors and Managers within the Enterprise Technology group along with the Business Case Owner. The ET Business Case Owner works in conjunction with the Project Management Office (PMO), the assigned Program Manager, and subsequent Project Managers. The ET Business Case Owner is accountable and responsible for all Business Case related activities and assignments. 2.8.1 Identify any related Business Cases There are no related business cases. DocuSign Envelope ID: 1EED9D00-05D8-4B50-82C4-3A2DAB2F597E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 70 of 248 Enterprise and Control Network Infrastructure Business Case Justification Narrative Page 7 of 9 3.1 Steering Committee or Advisory Group Information Steering Committee members are invaluable to the project and will provide approval on scope, schedule, and budget related changes. Additionally, they will provide approval on issues and risks pertaining to project deliverables outlined in this document, which also typically have an impact on the scope, schedule, or budget of a project. Steering Committee members will also provide approval on Change Requests, Go-Live, and the Approval to Close document. For the High Voltage Protection business case, the Steering Committee will consist of the Directors and Managers within ET, Energy Delivery, GPSS and the Business Case Owner. 3.2 Provide and discuss the governance processes and people that will provide oversight The Enterprise and Control Network Infrastructure Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. Program Steering Committee This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically in order to plan and sequence work to the levels of funding allocation received. Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope DocuSign Envelope ID: 1EED9D00-05D8-4B50-82C4-3A2DAB2F597E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 71 of 248 Enterprise and Control Network Infrastructure Business Case Justification Narrative Page 8 of 9 • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a monthly basis. Each program and project steering committee meet regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. Any changes in funding or scope are documented at the Business Case level, via Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow process. All Enterprise technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. The undersigned acknowledge they have reviewed the Facilities Driven Technology Improvements 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: Date: Print Name: Shawna Kiesbuy Title: Sr. Manager, Network Engineering DocuSign Envelope ID: 1EED9D00-05D8-4B50-82C4-3A2DAB2F597E Jul-31-2020 | 8:58 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 72 of 248 Enterprise and Control Network Infrastructure Business Case Justification Narrative Page 9 of 9 Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review DocuSign Envelope ID: 1EED9D00-05D8-4B50-82C4-3A2DAB2F597E Aug-03-2020 | 5:52 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 73 of 248 Enterprise Communications Business Case Justification Narrative Page 1 of 10 EXECUTIVE SUMMARY Communication is at the very essence of human interaction, and thus a pillar of business processes. The most basic form of communication among human beings is face-to-face, which allows for both verbal and non-verbal signals to be exchanged, resulting in the most riches of interaction. However, today’s world requires that communication be conducted beyond face-to-face to reach people regardless of time and location. Moreover, it enables business processes beyond people, but across systems that communicate with one another to exchange data in near-real time, such as a phone call, or to make information available on demand like an email waiting in your inbox accessible from any mobile device or location. The primary driver for the Enterprise Communication Systems business case is performance and capacity, whereby the Company balances the need to meet performance standards and system reliability for the various technologies under this program with annual budget allocations, and their respective technology lifecycles. Being no different than most businesses, Avista requires continuous communication among our staff and customers throughout our service territory. However, to do it effectively, we require communication technology for greater agility, flexibility, and scalability to enable many business processes, such as 24 x 7 x 365 communication with our gas and electric customers by telephone, fax, or email. Additionally, email, instant messaging, text and collaboration platforms support a digital workforce that during the COVID-19 pandemic proved very effective in supporting remote work during ‘stay at home’ orders issued by state governments throughout our service territory. The costs associated with each solution can vary by the scale of the solution deployed, as well as vendor licensing models. Therefore, each technology under this program undergoes regular review of the levels of utilization and performance to determine if it is meeting the expected performance standards and capacity requirements to maintain system reliability under the established budget allocations. These reviews can result in calling for additional investment under this program from time to time for technology either falling behind technology lifecycles or predetermined performance standards, which can pose risk to communication system reliability or degradation that may delay communication channels and result overall processing delays. VERSION HISTORY Version Author Description Date Notes 1.0 Walter Roys Initial BCJN Draft 6/2017 1.0 1.1 Walter Roys Update Investment Driver 7/2019 1.1 2.0 Walter Roys Revision of BCJN to new template 7/2020 2.0 DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 74 of 248 Enterprise Communications Business Case Justification Narrative Page 2 of 10 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Communication technology enables business processes beyond people exchanging information, but across systems that communicate with one another to exchange data in near-real time. Communications technology is not only subject to the traditional mortality rate or lifecycle, but it is compounded by planned obsolescence, also known as technology obsolescence1. Technology obsolescence is defined as when the technology asset, although within its functional lifespan, is technologically flawed or no longer meets the need of users or customers, as expectations increase due to newer and more powerful technology (with greater performance or capacity) that is available in the market. Additionally, with the rapid pace of technological change, technology vendors require continuous upgrades to maintain system maintenance and support, which can include security patching, bug fixes, version upgrades, interoperability, and compatibility with other technologies. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The Enterprise Communications Systems Business Case is driven by managing technology replacement according to manufacturer product roadmaps with an objective to maintain infrastructure performance and align infrastructure assets with business demand for capacity. Therefore, the major driver for this business case is Performance & Capacity. 1 Barreca, Stephen L. (1998-2000). Technology Lifecycles and Technology Obsolescence. Retrieved from http://bcri.com/products/publications.htm Requested Spend Amount $13,084,123 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Walter Roys | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Monitor/Control Category Program Driver Performance & Capacity DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 75 of 248 Enterprise Communications Business Case Justification Narrative Page 3 of 10 All Avista customers benefit from maintaining communication systems, as this technology enables the Avista workforce to perform their day-to-day job functions in delivering gas and electric service to our customers. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred All Avista business functions are affected by this business case, as it enables all day-to-day work activities and automated business processes around communications. From service center to call center to field work, every worker requires communications systems technology to perform their business function and deliver gas and electric service to our customers. Every customer service call is enabled by this technology. Communications technology has been critical in keeping our workforce connected, while many of our staff are required to work remotely to minimize risk to those in roles of critical operations. Reliance on obsolete communications technology for automated business process presents significant risk that may only be solved with the reinstatement of manual process, which can result in delay response times to meet business demands and customer needs. Additionally, in some cases there is no manual solution that can replace automated communication systems that provide near- real time communication solutions. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. Ongoing reviews of vendor roadmap and technology asset lifecycle alignment provide necessary information to track how much of our investment in technology is lagging behind the vendor roadmap, and thereby introducing risk. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem The Enterprise Technology team references various technology vendor and third-party resources to stay informed and recommend decisions on the various technology investments. A few sample sources are included below: Barreca, Stephen L. (1998-2000). Technology Lifecycles and Technology Obsolescence. Retrieved from http://bcri.com/products/publications.htm DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 76 of 248 Enterprise Communications Business Case Justification Narrative Page 4 of 10 Directions on Roadmaps, Independent IT Planning Information and Advisory Service focused exclusively on Microsoft enterprise software and services. Retrieved from https://www.directionsonmicrosoft.com/ Gartner Industry Research and Reference Material. Retrieved from https://www.gartner.com/en/information-technology 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Not applicable, as the investment under this program business case is to maintain performance and capacity standards in each respective enterprise communications technology. This program will manage technology replacement according to manufacturer product roadmaps with an objective to maintain infrastructure performance and align infrastructure assets with business demand for capacity. The recommended solution is to address approximately 75% of obsolete products and capacity constraints (Recommended). This will introduce risk associated with technology systems reliability, interoperability and capacity. The investment required to address obsolete technology products is deferred to subsequent years. The likelihood of technology impact to business is increased. To minimize the impact of this risk, the Program Steering Committee will manage project sequence according to the investment priority documented in section 3.2. Option Capital Cost Start Complete Recommended Solution – Address ~75% of obsolete products and capacity constraints $13,084,123 01/2021 12/2025 Alternative #1 - Address 100% obsolete products and capacity constraints $17,195,000 01/2021 12/2025 Alternative #2 - Address 50% of obsolete products and capacity constraints $8,597,000 01/2021 12/2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The funds request was based on a calculation of the asset lifecycle associated with each technology asset, the scope of the technology footprint across our service territory, and historical project costs for technologies previously refreshed under this business case. Through regular reviews, the program balances the need to meet system performance and reliability standards for the various technologies under this program within annual budget allocations, and their respective technology lifecycles. These reviews can result in calling for additional investment under this program from time to time for technology either DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 77 of 248 Enterprise Communications Business Case Justification Narrative Page 5 of 10 falling behind technology lifecycles or predetermined performance and reliability standards. A product obsolescence working group, consisting of Technology Domain Architects, maintains technology roadmaps to inform Program Steering Committee members of project demand. Project demand is assessed against funding constraints each year and prioritized based on risk of technology impact to the business. Various data points inform the team’s decisions and recommendations, which include, but are not limited to vendor- driven obsolescence, compute capacity and storage, historical project costs for similar type projects, etc. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. The funding requested under the Enterprise Communication Systems Business Case will be invested in the following technologies: • Instant messaging systems • Contact Center automatic call distribution system • Contact Center scheduling and QA systems • Customer interactive voice response (IVR) system • Voice recording systems • Electronic mail and calendar system • Voicemail system • Telephone systems • Teleconferencing systems • Video conferencing systems • Conference room technology • Media Walls • Enhanced 911 emergency services • Electronic fax systems • Paging systems • Application systems to manage enterprise communication technology Investment in these technologies can result in added O&M expenses from licensing increases from time to time. However, not funding this business case may result in removing automated business functions, which will either cause delay in meeting business and customer demands or completely change whether we can even respond to business and customer demands. There are no O&M reductions or offsets resulting from these investments, as this technology enables the Avista workforce to perform their day-to-day job functions in delivering gas and electric service to our customers. DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 78 of 248 Enterprise Communications Business Case Justification Narrative Page 6 of 10 Reliance on obsolete technology for automated business process presents significant risk that may only be solved with the reinstatement of manual process. Sustaining automated business process by replacing automation with workforce would increase labor expense. Additionally, with the rapid pace of technological change, technology vendors require continuous upgrades to maintain system maintenance and support, which can include security patching, bug fixes, version upgrades, interoperability, and compatibility with other technologies. These upgrades can in turn drive subsequent system replacements, creating a cascading event of change. Therefore, vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. All Avista business functions are affected by this business case, as it enables all day-to-day work and communications activities and automated business processes. From service center to call center to field work, every worker requires enterprise communication technology to perform their business function and deliver gas and electric service to our customers. This technology is even more important in a work from home environment to keep employees and departments connected while minimizing risk to essential employees. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Retire assets and remove automation This option assumes the assets would not be replaced upon end of life and be removed from service due to product incompatibility, business risk or safety risk. The basis for measuring the business impact of not funding this business case is realizing the loss of business process automation. As products reach the manufacturer-defined planned obsolescence, business process automation is jeopardized, and business risk is increased as manufacturers cease product maintenance and support. This condition would drive action. The alternative could lead to a mitigation plan of having to re-instate manual business process or eliminate the business process. Address 100% of obsolete products and capacity constraints This is the optimal solution. This option fully addresses and minimizes the likelihood of technology impact to automated business process. DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 79 of 248 Enterprise Communications Business Case Justification Narrative Page 7 of 10 Address 50% of obsolete products and capacity constraints This will introduce risk associated with technology systems reliability, interoperability and capacity. The investment required to address obsolete technology products is deferred to subsequent years. The likelihood of technology impact to business is increased. Interoperability constraints may force unplanned funding requests. Multi-year, complex projects are at risk of completion prior to product obsolescence. This option impacts the workforce. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. This business case is a program that transfers to plant the total cost of each project at the completion of every project, which can straddle calendar years. Quarterly forecasts capture changes in transfers to plant based on project status. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. The technology investments under this business case program align with Avista’s vision to deliver ‘better energy for life’ to our customers and in the area of ‘Perform’, which calls for “our focus on performance today to serving our customers well and unlocking pathways to growth.” Each investment under this business case program allows Avista to deliver electric and gas services to our customers. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project The reason that the technology investment under this program business case is prudent is because communication is at the very essence of human interaction, and thus a pillar of business processes. As such, the Avista workforce requires this technology every to deliver gas and electric service to our customers either in an office, customer service center or in the field. Alternatives to each technology are considered, yet not investing in it is not an option as automated business process would either stop or be removed, thereby crippling our workforce’s ability to deliver gas and electric service to our customers, respond to compliance requirements, and conduct business operations and reporting. Additionally, a two-tiered governance structure overseeing this business case program meets regularly to oversee and make decisions on the needs, benefits, costs, and risks of each investment. DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 80 of 248 Enterprise Communications Business Case Justification Narrative Page 8 of 10 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Nearly all Avista’s workforce interface with the technology investments under this business case. Selected leaders in organizational business units, known as technology stakeholders, work closely with the technology teams to help with business roadmaps, use case definition, gather non-functional requirements, test design, and deployment approaches to inform technology investments. 2.8.2 Identify any related Business Cases The technology investment under this business case requires deployment and use of outputs from other business cases, specifically delivery on personal computers and servers, connecting to a virtual private network or cloud service, security updates and patching, etc. 3.1 Steering Committee or Advisory Group Information The Enterprise Communication Systems Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. 3.2 Provide and discuss the governance processes and people that will provide oversight Program Steering Committee This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically and will consist of projects needed to maintain the reliability and performance of all enterprise communication systems. DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 81 of 248 Enterprise Communications Business Case Justification Narrative Page 9 of 10 Technology product roadmaps identify investment demand that is generally not fully funded. Technology product investments are prioritized in this manner: 1) Safety Systems 2) Control Systems 3) Customer Facing Systems 4) Back Office Systems Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored The governance structure under this business case program is responsible for decision-making, prioritization, and change requests. Through the regular Program Steering Committee Meetings, the team reviews and balances planned work versus unplanned work to determine prioritization, as well as pending project change requests. Any change request requiring either an increase or decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is submitted to the Capital Planning Group for consideration. DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 82 of 248 Enterprise Communications Business Case Justification Narrative Page 10 of 10 The undersigned acknowledge they have reviewed the Enterprise Communications Systems 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: Date: Print Name: Walter Roys Title: System Engineering Manager Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Karen Schuh Title: IT Program Manager Role: Steering/Advisory Committee Review Signature: Date: Print Name: Andy Leija Title: ET PMO Manager Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 759343F8-8C64-49F9-A3C3-8959649F3B0A Jul-30-2020 | 11:51 AM PDT Aug-03-2020 | 5:43 PM PDT Aug-03-2020 | 6:36 PM PDT Aug-04-2020 | 7:27 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 83 of 248 Enterprise Data Science Business Case Justification Narrative Page 1 of 8 EXECUTIVE SUMMARY Enterprise Data Science is a program of opportunity. Our vision is that by democratizing data and analytics, across the enterprise, we thereby empower our people to use their expertise, ingenuity, and innovation to better serve our customers, communities and people. The program acts as a Center of Excellence to help migrate the company further towards managing data as an enterprise asset. The Data Science team delivers value thru the development of use-cases as jointly scoped and prioritized with each of the requesting business units. Aside from the business insights derived thru use-cases developed by this team, this program also supports change management of new analytics tools and skills development within the enterprise to promote self-service. The budget for this program primarily consists of capital labor resources. The Data Science program maintains an active dashboard, displayed below, of use-cases delivered since program inception in 2017. Each use-case is tagged with the following: • alignment with organizational goals (i.e., perform, customer, people, invent) • functional area served (i.e., facilities, contracts, veg mgmt, etc.) • value metric - categorized as either compliance, cost reduction, customer, inform, productivity, or revenue growth Investment drivers of program: 1. performance & capacity (PRIMARY) - drive efficiencies enterprise wide 2. customer service quality - provide customers with information that allows them to make choices that matter most to them 3. asset condition - provide data and analysis that analyze asset performance 4. customer requested - support new products and services that serve the customer Enterprise Data Science Business Case – Key Info Capital Cost 5-year Program $9,100,000 (2021-2025) Jurisdiction All jurisdictions (allocation) Timeline This is ongoing program (2021-2025); with expectations to continue 2025+ Alternatives Risks (of alternatives) Disband program all employees repurposed Business Units exclusively perform data analytics, assuming the skills & capacity are available; analytic results could be non-uniform across org Scale-back program some employees repurposed Enterprise could fall behind peers with analytic skills development, thereby impacting investment drivers Contract with 3rd Party for Data Science Services Costs are higher with 3rd party; use-case flexibility would be reduced VERSION HISTORY v Author Description Date Notes 1.0 Pat Dever Initial Business Case Nov 2016 Start of program 1.1 Nolan Steiner Change Request 2020-2024 July 2019 2.0 Nolan Steiner Business Case 2021-2025 July 2020 DocuSign Envelope ID: 6DBBE56A-E305-4B99-991C-727AADAA2169 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 84 of 248 Enterprise Data Science Business Case Justification Narrative Page 2 of 8 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? This program is intended to unlock additional value contained in Avista’s enterprise data assets, using analytic tools that enhance our enterprise capabilities. Through the implementation of this program, users will be able to access enterprise information more easily, better understand what the data means including how it may be related to other disparate data sets, and how to use analytic tools that help support the development of meaningful insights. The program has extracted key insights that benefit the customer and other stakeholders, which may be challenging to implement on an enterprise level in the absence of this program. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The Data Science program develops use-cases jointly with various business units across the enterprise, with each business unit having their own investment driver. Based upon the use-cases delivered by this program to date, it has predominantly supported the ‘Performance & Capacity’ investment driver. It should be noted this program already has, or has plans in future, to develop use-cases that support all investment drivers. As to the benefits this program has delivered to the customer, those can vary by use- case. Some examples of customer benefits from prior use-cases include: • reduced operating costs (i.e., customers mostly likely to switch to paperless billing) • products that matter to customers (i.e., targeting customers most likely to adopt new products such as community solar, roof-top solar, natural gas, etc.) • low-income analysis (i.e., analysis supporting need to increase Oregon low-income funding for energy efficiency programs, LIRAP analysis that shows at risk customers that may qualify for energy program assistance). Requested Spend Amount $9,100,000 Requested Spend Time Period 5 years (2021-2025) Requesting Organization/Department ET / Data Science (X-09) Business Case Owner | Sponsor Nolan Steiner | Pat Dever Sponsor Organization/Department ET / Data Science (X-09) Phase Execution Category Program Driver (Primary) Performance & Capacity DocuSign Envelope ID: 6DBBE56A-E305-4B99-991C-727AADAA2169 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 85 of 248 Enterprise Data Science Business Case Justification Narrative Page 3 of 8 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred This program was developed in 2016 in order to leverage new technologies to help drive more efficient and prudent decision making. For Avista and its customers to benefit from the data driven economy, data and analytics need to take on a more active and dynamic role in supporting customer activities, which this program has taken on within the enterprise. Data is the raw material for any decision and many key initiatives at Avista. Data comes both from within and outside Avista, and modern technology enables us to harness and use it differently than in prior years. Data exists everywhere: at rest, in motion, on- premise and in the cloud. Data volume, variety and velocity is ever-increasing, which can be challenging to capture and retrieve without the right tools in place. With ongoing cost pressures within the enterprise, the Data Science program can sort thru large amounts of data to help identify cost-reduction, productivity or risk-reduction opportunities. Stopping or delaying this program will likely put Avista at a competitive disadvantage to other companies that are similarly adopting data and analytic platforms and tools to serve their customers or other stakeholders. Likewise, with a robust ongoing Data Science program at Avista, this program helps positively differentiate our company with insights into higher customer satisfaction, customer retention, positive community relations, enhanced employee engagement, or other stakeholder benefits. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. The Data Science program tracks several key metrics associated with each completed use-case, with a summary dashboard published and available for reference. The program attempts to serve a balance of internal competing needs, rather than focus exclusively on one functional area or one organizational goal. As such, each use-case is described and tagged with the following: • Organizational goals: how the use-case aligns with ‘perform, customer, people, or invent.’ The program has developed use cases aligned with each of the four organization goals of the enterprise. • Functional area served: identification of which department or functional group has benefitted from the results (i.e., facilities, contracts, vegetation management, asset management, customer service, products and services, etc.) • Value metric: a categorized description of value, bucketed into either ‘compliance, cost reduction, customer, inform, productivity, or revenue growth’ 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem Capgemini Consulting authored a report in 2016 that provided a roadmap for developing a Data Science program at Avista (report: “Future State Executive Summary – Data Science Program”) Location: https://avistacorp- DocuSign Envelope ID: 6DBBE56A-E305-4B99-991C-727AADAA2169 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 86 of 248 Enterprise Data Science Business Case Justification Narrative Page 4 of 8 my.sharepoint.com/:p:/p/pat_dever/EYsdBrTwLi5Fm- O7XOySQ6ABBQs1ReAhN1fIjKDw36JPRQ?e=dfGvea 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. n/a Option Capital Cost Start Complete [Recommended Solution] – Staffing up to proposed budget $9,100,000 01 2021 12 2025 Disband Program (repurpose/eliminate staff) $0 01 2021 n/a Scale-back Program (reduce staff) >$0 and <$9,100,000 01 2021 12 2025 Contract with 3rd party for data science services >$9,100,000 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The historical spending trend of the Enterprise Data Science program has been at or near the annual requested amounts shown in this Business Case for the past several years. We expect the trend to be similar over the 5-year horizon from 2021-2025. The business case owner and sponsor have previously managed to then approved budgets and will continue to manage current and future spending to the approved budget resulting from the Funds Request corresponding with this Business Case. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This Business Case is primarily comprised of capital labor resources, with minimal O&M allocation for the entire Data Science program. The proportion of capital labor resources is forecasted to continue for the duration of the 5-year capital plan horizon. As mentioned previously, this program develops use-cases on behalf of other business units, some of which may lead to cost reductions or productivity enhancements within the business units themselves. Those results and budget impacts are monitored within the respective business units. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. The results of each use-case are delivered to the business units for their further assessment and/or adoption into existing processes. Any process changes are managed DocuSign Envelope ID: 6DBBE56A-E305-4B99-991C-727AADAA2169 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 87 of 248 Enterprise Data Science Business Case Justification Narrative Page 5 of 8 and valued at the business unit level. Data Science often delivers automated updates of use-case results for ongoing benefit to the requesting business unit. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Avista Data Science Team - Data is a valuable asset that can be used to gain new insights and uncover hidden opportunities. It is a renewable resource that can be used to gain insights across the enterprise. It is important to have a team of Data Analysts, Engineers and Scientists that fully understand our business and culture. By exposing our data assets to business analysts, we gain significant value toward business outcomes. Outsource Data Science to 3rd Party – Knowing our business and culture are keys to the success of using data to help inform the business. Outsourcing the analyst work would miss opportunities and reduce the continuity of the program. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. This program delivers two packages per year, each package containing completed use- cases for the applicable period. The packages delivered are considered used-and-useful, and transferred to plant as part of the routine Project Management protocol for such transfers. The use-cases in each package serve each of the four organizational goals of our company, including ‘customer’. Documentation of use-cases and packages is completed according to protocol and retrievable as needed. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program that completes use-cases to serve business unit requests, as they are further defined and prioritized based upon available resources and then-relevant business needs. As stated previously, this program is intended to provide insights using data to enable more informed decision making – whether that decision making is at the strategic level, operational level, or exploratory level. Each use case is tagged with one of the organizational goals of the company (customer, people, perform, invent) to ensure alignment between the program and the corporate strategic vision. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project The requested amount is a prudent investment to develop a regimented data and analytics program that delivers useful business insights for more informed decision making. The investment supports our people in learning new tools to advance competencies necessary to improve Avista’s competitive position for advanced analytics. These analytics and resulting insights will enable us to continually improve how we serve the customer, our people, and innovative solutions to new challenges as they arise. DocuSign Envelope ID: 6DBBE56A-E305-4B99-991C-727AADAA2169 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 88 of 248 Enterprise Data Science Business Case Justification Narrative Page 6 of 8 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case 2.8.2 Identify any related Business Cases The below listed business cases are related, but not dependent upon Enterprise Data Science. Data Science will be able to leverage value from these other business cases, and vice versa, from an analytics standpoint. • Sales Force – CXP • AMI – Washington • Energy Imbalance Market • Data and Analytic Platform - AWS 3.1 Steering Committee or Advisory Group Information The Data Science Steering Committee meets, at minimum, once per month to review budget (spend vs budget), as well as a review of active use cases and upcoming resource needs to fill near-term use-cases under consideration. Notes of Steering Committee meetings are archived for reference, and action items or priorities are also advanced where necessary as a result of such meetings. DocuSign Envelope ID: 6DBBE56A-E305-4B99-991C-727AADAA2169 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 89 of 248 Enterprise Data Science Business Case Justification Narrative Page 7 of 8 3.2 Provide and discuss the governance processes and people that will provide oversight The Project Manager assigned to Data Science coordinates the monthly SteerCo meetings and, in concert with the Data Science management team, develops the slide deck for discussion at SteerCo. Participants of the monthly SteerCo meeting include: • Pat Dever – Chief Data Strategist • Nolan Steiner – Manager Data Science • Hossein Nikdel – Director Application and Innovation • Mike Mudge – Data Deliver Manager • Jason Pegg – Enterprise Data Architect • Tom Heavey – Enterprise Application Architect • Jim Kensok – VP, CIO Outside of the formal SteerCo meetings, the Chief Data Strategist consults regularly with his manager, the VP CIO, to discuss issues and obtain input as needed. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Day-to-day decision making within the program is handled by the Data Science team, with the Director consulted for direction when needed. Ad hoc meetings occur several times per day, to discuss activity and progress of ongoing use-cases. For planning purposes, the Data Science team meets every two weeks for sprint planning to manage priorities within the team and across other teams in which there are dependencies. Every other week has a standing formal team meeting to address any other relevant issues that need to be shared for further discussed with the entire team. Decisions related to budgets are typically escalated first to the Manager Data Science, then to the Chief Data Strategist. Periodically, we may seek direction from VP of ET/IT to provide guidance and alignment. Change requests to budgets, if warranted, are documented by the Data Science team, PMO and FP&A. The undersigned acknowledge they have reviewed the Enterprise Data Science 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. DocuSign Envelope ID: 6DBBE56A-E305-4B99-991C-727AADAA2169 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 90 of 248 Enterprise Data Science Business Case Justification Narrative Page 8 of 8 Signature: Date: Print Name: Nolan Steiner Title: Role: Business Case Owner Signature: Date: Print Name: Pat Dever Title: Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 6DBBE56A-E305-4B99-991C-727AADAA2169 Jul-30-2020 | 10:12 AM PDT Aug-01-2020 | 8:02 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 91 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 1 of 10 EXECUTIVE SUMMARY Technology that enables Avista’s safety, control, customer-facing, and backoffice systems is critical to the operations that serve our gas and electric customers. It is found in many different environments from office locations to mountaintop sites to call centers across our service area. Managing the facility and power environments to optimally run the systems housed in these locations is extremely important, as environmental condition changes can adversely affect them. The parameters monitored and controlled include but are not limited to temperature, humidity, fire protection, and backup power supply systems. If these parameters should fall outside of the device specification levels, it can cause damage to the technology equipment impacting business automation processes. The technology solutions under the Environmental Control & Monitoring Systems business case will vary by site location and systems supported in each facility or environment. They may include uninterrupted power sources to allow systems to continue operating while waiting for an auxiliary power source to come online, such as an emergency generator. In fact, on a mountain top, heated and cooled enclosures are critical to assuring technology housed in that facility is maintained at the proper temperature despite changes in outside weather. The cost of each solution will vary with the type of solution identified for each site. However, location can also affect cost based on the remoteness and extreme conditions affecting that particular location. Avista and its customers can experience the benefits through ongoing system reliability. The main driver behind this program is asset condition aligned with asset management strategies driven by technology lifecycles that are based on manufacturer product roadmaps, which can compound planned obsolescence. The asset management strategy is critical to optimize the overall lifecycle value of the product and reduce potential for failure or unplanned outages. The technology solutions under this program undergo regular review to balance the asset management strategy within the predetermined budget allocations. The risks of not approving this business case at the level to which it can maintain the balance of meeting its asset management strategy can result in unplanned failures, which result in unplanned labor and non-labor costs, risk of delay to procure and replace the failed asset, increase safety risk to send field staff in extreme weather conditions to remote locations, as well as downtime to the critical operations and safety systems that it supports. VERSION HISTORY Version Author Description Date Notes 1.0 Michael Busby Original business case request 7/2017 1.1 Michael Beil Updated investment driver 7/2019 2.0 Michael Busby Narrative added to new template 7/2020 DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 92 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 2 of 10 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Technology that enables Avista’s safety, control, customer-facing, and back office systems is critical to the operations that serve our gas and electric customers. It is found in many different environments from office locations to mountaintop sites to call centers across our service area. Managing the facility and power environments to optimally run the systems housed in these locations is extremely important, as environmental condition changes can adversely affect them. The parameters monitored and controlled include but are not limited to temperature, humidity, fire protection, and backup power supply systems. If these parameters should fall outside of the device specification levels, it can cause damage to the technology equipment impacting business automation processes. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The main driver behind this program is asset condition aligned with asset management strategies driven by technology lifecycles that are based on manufacturer product roadmaps, which can compound planned obsolescence. The asset management strategy is critical to optimize the overall lifecycle value of the product and reduce potential for failure or unplanned outages. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The technology solutions under this program undergo regular review to balance the asset management strategy within the predetermined budget allocations. The risks of not approving this business case at the level to which it can maintain the balance of meeting its asset management strategy can result in unplanned failures, which result in unplanned labor and non-labor costs, risk of delay to procure and replace the failed asset, increase safety risk to send field staff in extreme weather conditions to remote locations, as well as downtime to the critical operations and safety systems that it supports. Requested Spend Amount $5,000,000 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Michael Busby | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Asset Condition DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 93 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 3 of 10 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. The main driver behind this program is asset condition aligned with asset management strategies driven by technology lifecycles. Executing planned projects will refresh assets prior to the asset’s obsolescence and in this way, the business case should be able to support the asset lifecycles and reduce the risk of failing assets affecting critical business systems and processes. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem See below for supporting details. 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. EMERGENCY GENERATORS (EGEN) Emergency Generator assets are located at facilities where critical technologies are located. We currently have 16 generators in portfolio. They have a 20-year life cycle. Age Count 0-5 Yrs. 2 5-10 Yrs. 7 10-15 Yrs. 1 15-20 Yrs. 1 20-25 Yrs. 0 > 25 Yrs. 5 Total 16 We have 5 generators that are past their end of life and need to be refreshed. We have 2 generators that will reach their end of life over the next 5 years. UNINTERRUPTIBLE POWER SYSTEMS (UPS) Uninterruptible power systems used to provide AC or DC power voltages to equipment during the loss of utility power events and/or during emergency generator startup. We currently have 59 UPS systems in portfolio. They have a 5-year life cycle. Age Count 0-1 Yrs. 5 1-2 Yrs. 9 2-3 Yrs. 5 3-4 Yrs. 16 DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 94 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 4 of 10 4-5 Yrs. 4 > 5 Yrs. 20 Total 59 We have 20 UPS systems beyond their end of life. 4 of these will be addressed in 2020. DC RECTIFIERS DC Rectifier systems are used to convert AC power to DC power. Some of Avista’s technology assets have DC power supply requirements. We have 69 DC Rectifiers in portfolio. They have a 10-year life cycle. Age Count 0-3 Yrs. 6 3-6 Yrs. 6 6-9 Yrs. 25 9-12 Yrs. 7 12-15 Yrs. 0 > 15 Yrs. 25 Total 69 We have 25 Rectifiers beyond their end of life. We will have 7 more Rectifiers reach their end of life within the next 5 years. DC BATTERIES DC Batteries store electrical energy used to provide power to technology equipment during loss of AC power event. We have 2 type of DC batteries in portfolio. A standard and a “Long Life” Valve Regulated Lead Acid (VRLA) battery. The Standard VRLA battery has a 5-year life cycle. The “Long Life” VRLA battery has a 15-year life cycle. We currently have 55 Standard VRLA battery banks and 11 “Long Life” Battery banks in portfolio. 5 Year Lifespan 15 Year Lifespan Age Count Age Count 0-1 Yrs. 2 0-3 Yrs. 0 1-2 Yrs. 11 3-6 Yrs. 0 2-3 Yrs. 4 6-9 Yrs. 1 3-4 Yrs. 1 9-12 Yrs. 1 4-5 Yrs. 1 12-15 Yrs. 5 > 5 Yrs. 36 > 15 Yrs. 4 Total 55 Total 11 DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 95 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 5 of 10 36 of the Standard VRLA battery banks are beyond their end of life, 14 of which are planned to be replaced in 2020. 4 “Long Life” VRLA battery banks are beyond their end of life. 6 “Long Life” VRLA Battery banks will reach end of life over the next 5 years. HVAC SYSTEMS HVAC Systems monitor and control the environments temperature and/or humidity. Avista’s technology assets may experience physical damage if operated in temperatures and/or humidifies outside of their specifications. We do not currently have a good inventory of our old HVAC systems. The old HVAC systems are simple in wall Air conditioning units. As they are failing, we are replacing them with a more industrial grade systems with heat pump capabilities. There are 9 new HVAC systems in portfolio. The new HVAC systems have a 20-year life cycle. None of them will reach end of life within the next 5 years. Option Capital Cost Start Complete Optimized Asset Replacement $5,000,000 01 2021 12 2025 Asset Replacement when Obsolete $7,965,000 01 2021 12 2025 Asset Replacement upon Failure $6,207,500 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The main driver behind this program is asset condition aligned with asset management strategies driven by technology lifecycles that are based on manufacturer product roadmaps, which can compound planned obsolescence. The asset management strategy is critical to optimize the overall lifecycle value of the product and reduce potential for failure or unplanned outages. Tracking of the assets’ installation and lifecycle durations are maintained to plan the program projects over the course of future years driving the annual budget request to maintain the refresh roadmap. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. The requested capital cost amount per year has been calculated to deliver projects which align with the asset lifecycles that are based on manufacturer product roadmaps. This asset management strategy is critical to optimize the overall lifecycle value of the product and reduce potential for failure or unplanned outages. The technology solutions under this program undergo regular review to balance the asset management strategy within the predetermined budget allocations. The risks of not approving this business case at the level to which it can maintain the balance of meeting its asset management strategy can result in unplanned failures, which result in unplanned labor and non-labor costs, risk of delay to procure and replace the failed asset, increase safety risk to send field staff in extreme weather conditions to remote locations, as well as downtime to the critical operations and safety systems that it supports. DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 96 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 6 of 10 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Technology that enables Avista’s safety, control, customer-facing, and back office systems is critical to the operations that serve our gas and electric customers. It is found in many different environments from office locations to mountaintop sites to call centers across our service area. Managing the facility and power environments to optimally run the systems housed in these locations is extremely important, as environmental condition changes can adversely affect them. The parameters monitored and controlled include but are not limited to temperature, humidity, fire protection, and backup power supply systems. If these parameters should fall outside of the device specification levels, it can cause damage to the technology equipment impacting business automation processes. Maintaining the environmental assets through this business case allows for the refresh of the asset proactively in order to not affect the critical business functions and processes housed at these locations. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Alternative 1: Asset Replacement When Obsolete This alternative maintains all Environmental Control and Monitoring systems in alignment with product lifecycles. This is not the recommended option because it would result in high variability in funding and staffing levels throughout the 5-year plan. Alternative 2: Asset Replacement upon Failure This alternative replaces equipment only upon failure. This option introduces high risk to the company because failed assets will create significant loss of automated business processes. Mitigating this loss will result in increased asset management costs to maintain spare inventory. These costs are not accounted for in the estimate. This option assumes 50% of all obsolete assets will fail or become incompatible. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. The Environmental Control and Monitoring Systems business case is managed as a program of projects planned yearly which align with asset lifecycles that are based on manufacturer product roadmaps. All individual projects are managed through the PMO, which follows the Project Management Institute (PMI) standards. Throughout the year, the business case’s projects are Initiated, Planned, Executed, and then Completed with a Transfer to Plant for the installed assets which over the course of a calendar year equates to the funded budget. Within this business case, there is one blanket project for battery refreshes which Transfers to Plant on a monthly basis. DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 97 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 7 of 10 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete projects that align with Avista’s vision, mission and strategic objectives: • To provide Better Energy for Life, you need systems that function at an optimal level to deliver electricity and gas in a safe and reliable manner. The team supporting the environmental control and monitoring systems is highly skilled and responsive to the needs of these systems so critical business services continue to be delivered without interruption. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Based on the individual asset data listed above, the requested funding amount will allow for a group of discrete projects each year which will strive to maintain a refresh cycle ahead of the assets’ obsolescence reducing the risk of unplanned failures, which result in unplanned labor and non-labor costs, risk of delay to procure and replace the failed asset, increase safety risk to send field staff in extreme weather conditions to remote locations, as well as downtime to the critical operations and safety systems that it supports. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Within the Environmental Control and Monitoring Systems business case, the projects interface with various internal Avista groups such as ET engineering, the Telecommunications Shop, real estate, contracting, and accounts payable to name a few. While in the field, the teams also interface with landowners, local governments, environmental groups, and others related to mountaintop sites, office locations, and shared substations. Steering Committee members include Business Case Sponsors, Directors and Managers within the Enterprise Technology group long with the Business Case Owner. The ET Business Case Owner works in conjunction with the Project Management Office (PMO), and assigned Program Manager, and subsequent Project Managers. The ET Business Case Owner is accountable and responsible for all Business Case related activities and assignments. 2.8.2 Identify any related Business Cases There are no related business cases currently. DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 98 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 8 of 10 3.1 Steering Committee or Advisory Group Information Steering Committee members are invaluable to the project and will provide approval on scope, schedule, and budget related changes. Additionally, they will provide approval on issues and risks pertaining to project deliverables outlined in this document, which also typically have an impact on the scope, schedule, or budget of a project. Steering Committee members will also provide approval on Change Requests, Go-Live, and the Approval to Close document. For the Environmental Control and Monitoring business case, the Steering Committee will consist of the Directors and Managers within ET and the Business Case Owner. 3.2 Provide and discuss the governance processes and people that will provide oversight The Environmental Control and Monitoring systems Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. Program Steering Committee This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically and will consist of projects needed to maintain the reliability and performance of all Environmental Control and Monitoring systems. Product roadmaps identify investment demand that is generally not fully funded. Product investments are prioritized in this manner: 1) Safety Systems 2) Control Systems 3) Customer Facing Systems 4) Back Office Systems Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 99 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 9 of 10 • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a weekly basis. Each program and project steering committee meet regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. Any changes in funding or scope are documented at the Business Case level, via Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow process. All Enterprise technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 100 of 248 Environmental Control & Monitoring Systems Business Case Justification Narrative Page 10 of 10 The undersigned acknowledge they have reviewed the Environmental Control & Monitoring Systems business case narrative 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: Date: Print Name: Michael Busby Title: Mgr., IT Operations Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 9A219921-7E2A-43AF-8C4D-B4EED256E6E6 Jul-30-2020 | 1:40 PM PDT Aug-03-2020 | 3:17 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 101 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 1 of 11 EXECUTIVE SUMMARY As the utility industry undergoes transformation into digitalization, the growth of business application technology continues to enable automation and manual business processes to provide safe and reliable gas and electric service to our customers. This growth in business application technology creates an intricate tapestry that require ancillary tools and systems to deliver and support Company-wide solutions. Essentially, business application technology requires shared platforms and management tools to increase the quality, stability, and delivery velocity to meet business goals and meet expectations from our customers. The Enterprise Technology (“ET”) Modernization and Operational Efficiency Business Case is primarily driven by performance and capacity to support business application implementation, development, operations, support, delivery automation, and data delivery. Put another way, this program focuses on the tools and systems used by the technology teams to deliver solutions to the rest of the organization. The cost of these solutions varies by scale of footprint and vendor licensing models. Therefore, technology under this program undergoes regular review of the levels of utilization and performance to determine if it is meeting the expected performance standards and capacity requirements to maintain business application system reliability under the established budget allocations, and their respective technology lifecycles. These reviews can result in calling for additional investment under this program from time to time for technology either falling behind technology lifecycles or predetermined performance standards. The technology tools and systems under this program benefit all Avista customers, as they support business application systems throughout the Company. Not approving this business case or its recommended funding can pose risks to the reliability of the tools and systems the technology team uses to support the rest of the organization. VERSION HISTORY Version Author Description Date Notes 1.0 Jason Pegg Initial BC Narrative 1.0 7/2017 1.0 2.0 Andy Leija Revised BC Narrative 2.0 7/2020 2.0 DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 102 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 2 of 11 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? The growth in business application technology, as part of the transformation of the utility industry, requires ancillary tools and systems to deliver and support Company-wide technology solutions. Essentially, business application technology requires shared platforms and management tools to increase the quality, stability, and delivery velocity to meet business goals and meet expectations from our customers. These platforms and tools fit into two categories, those shared across the entire Avista Organization and those specific to the needs of the Enterprise Technology (ET) department as tools to support business applications. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The Enterprise Technology Modernization and Operational Efficiency (ETMOE) Business Case is primarily driven by performance and capacity to support business application implementation, development, operations, support, delivery automation, and data delivery. Put another way, this program focuses on the tools and systems used by the technology teams to deliver solutions to the rest of the organization. The technology tools and systems under this program benefit all Avista customers, as they support business application systems throughout the Company. Requested Spend Amount $10,252,000 Requested Spend Time Period 5 Years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Andy Leija | Hossein Nikdel, Pat Dever, Clay Storey, Jim Corder, Jim Kensok Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Performance & Capacity DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 103 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 3 of 11 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred These technology platforms and tools provide functional enhancements that address ongoing changes in the workplace, provide increased employee efficiency through the reduction of steps required to complete a task, and make better use of Avista resources. They shift efforts from inefficient processes to more value-driven activities by leveraging the technology to meet both planned and unplanned business needs. Not approving the technology investments under this business case results in technology platforms and tools falling behind their technology vendor required upgrades, which in turn hinders any support needed for business applications or information storage and workflow management used daily for investment planning and delivery, managed file transfers, pre-production testing, and technology lifecycle management. For example, this is very similar to not furnishing a mechanic with either the tools or equipment necessary and required to fix a car when it breaks down or does not perform as expected. The technology teams would be hindered in their ability to assist or repair business applications and their respective information storage and workflows when they become unresponsive or inoperable, especially for reoccurring issues where root cause analysis is necessary to prevent future events or incidents. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements for existing technology under the ETMOE program, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. Ongoing reviews of vendor roadmap and technology asset lifecycle alignment provide necessary information to track how much of our investment in technology is lagging behind the vendor roadmap, and thereby introducing risk to supporting business application systems and their corresponding and respective automated business processes. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem ET Modernization and Operational Efficiency Monthly Stakeholder and Steering Committee teams references various technology vendor and third-party resources to stay informed and recommend decisions on the various technology investments. A few sample sources are included below: DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 104 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 4 of 11 • Roadmaps for specific platforms and tools, such as Opentext (for Enterprise Content Management) and Biztalk (for Enterprise Service Bus) are examples of vendor roadmaps regularly referenced. • Gartner Industry Research and Reference Material. Retrieved from https://www.gartner.com/en/information-technology 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Not applicable, as the investment under this program business case is to maintain performance and capacity standards in each respective technology that falls within it. Option Capital Cost Start Complete Recommended Solution – Fund at level to sustain existing technology tools and enterprise-wide systems, including required license renewals $10.252 M 01 2021 12 2025 Alternative #1 – Reduced funding by deferring license renewal funding requests into the in-year CPG review process $8.7 M 01 2021 12 2025 Alternative #2 – Reduced funding by removing IT Service Management investment to upgrade outdated Tracker/Resource Library custom-coded system $8.252 M 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. These estimates were derived from calculated employee and contract labor costs for the primary teams working in this business case area, as well as historical trends, product roadmaps and high-level industry estimates for technology products. High level estimates are collected by the business level subject matter expert(s), technology domain architect(s), and delivery management team(s). Upstream investment in enhancements and upgrades to these platforms can result in savings by not incurring downstream costs when applications break, or simply stated, avoid costs associated with system inoperability that can hinder worker productivity. Non-production systems (such as Azure DevOps) allows the organization to test enhancements, upgrades and new implementations prior to deployment in production. This results in reduced errors in production systems, which could also affect employees and customers negatively, from untested changes or upgrades. DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 105 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 5 of 11 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] The funding requested under the ETMOE Business Case will be invested in technology, such as: • IT Incident and Asset Management – Replacements for existing, custom-coded, and outdated IT incident and asset management tools (Tracker and Resource Library) to support Avista’s technology service workflows, incident, and asset management. • Content and Workflow Platforms – Enhancement and upgrades for platforms that allow for content storage and sharing, such as ECM and SharePoint, as well as organizational workflows. • Non-production Environment & Data Management – Enhancements and new system implementations required to support continuous integration, QA and other automations, data management, and new development environments (which improves developer efficiency and overall systems security). • ET Portfolio Management – Ongoing enhancements to portfolio and project management systems to support the evolving needs of technology investment planning and delivery, while capturing contemporaneous project artifacts that document governance. • Application Lifecycle Management Tools – Ongoing enhancements to the systems and platforms that support application development, delivery, and integration for consistent deployment and delivery of changes and upgrades on a multitude of business application systems that enable business processes across the organization. • Shared Systems and Tooling – Ongoing enhancements to and expansion of automation and tracking tools (such as AppDynamics) that provide Operations and Software Development teams with insight into application usage, issues, network connectivity, and more. Also includes integration of systems across Avista utilizing Microsoft Biztalk to assist in process and information sharing for platforms supported by other business cases such as CC&B and Maximo. • Managed File Transfer – Ongoing enhancements to and expansion of Avista’s managed file transfer system (GlobalScape), which allows for the secure transfer of data from one location to another, both internally and externally. This can include transactions with sensitive and highly sensitive information. DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 106 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 6 of 11 Reliance on obsolete technology for automated business process presents significant risk that may only be solved with the reinstatement of manual process. In some cases, reinstating manual processes is not even an option, as technology has completely introduced system requirements in information storage, access, and transactions among systems greater and faster than any human being is able to store, access, or transact. Sustaining automated business process by replacing automation with workforce would increase labor expense in the few areas where removing business process automation is possible. Additionally, with the rapid pace of technological change, technology vendors require continuous upgrades to maintain system maintenance and support, which can include security patching, bug fixes, version upgrades, interoperability, and compatibility with other technologies. These upgrades can in turn drive subsequent system replacements. Therefore, vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. Impacts to O&M can occur and be both positive and negative as a result of multi- year, pre-pay license agreements that are capitalized under this business case. However, these changes can vary from year to year depending on the system or tool up for license renewal and the licensing model being offered by the technology vendor. This makes forecasting product license renewal costs quite challenging. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. These technology platforms are used by all areas of the organization, or they furnish tools for the technology team to support other business application systems. The business function or processes that may be impacted include, but are not limited to: • Meeting gas Maximum Allowable Operating Pressure (MAOP) compliance document storage requirements and labor relations bargaining unit documentation and decisions; • Workflow management used daily for Accounts Payable invoice processing and approvals; • Investment planning and delivery for technology investments across the organizations, including project management and artifact storage and approval workflows: • Near real time transaction of data from enterprise systems, such as our customer care billing and asset management system; DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 107 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 7 of 11 • Managed file transfers for internal and external movement of information among systems and third parties; • Pre-production environment testing and quality assurance tools to minimize or avoid errors in production systems from upgrades or changes to application business systems; • Root cause analyses tool to identify cause for faster operational remediation; • Information storage for technology lifecycle management, and • Workflow processes for technology incident management and change approval. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Alternative #1 – Reduced funding by deferring license renewal funding requests into the in-year CPG review process One alternative is to defer funding to support license renewals to in-year requests from the Capital Planning Group (CPG). For example, multi-year, pre- pay renewal for a root cause identification and analysis tool, such as App Dynamics could be deferred until the renewal year with a funding request to the CPG. The risk of deferring this funding request is that if the funds are not available during the required period, the license renewal can lapse, thereby leaving the system out of software license compliance and in some cases losing access to functionality from the technology vendor. Alternative #2 – Reduced funding by removing IT Service Management investment to upgrade outdated Tracker/Resource Library custom-coded system This alternative would remove the IT Service Management project from the roadmap and replace it with a smaller amount of funding ($100,000 per year) to attempt enhancements to our existing tools, Tracker and Resource Library. This Alternative runs the risk of keeping Avista on tools that are written in outdated, custom code. There is also no guarantee that these existing systems can be enhanced to the degree necessary to meet the required capabilities of technology asset management and incident management. So, while feasible, these funding alternatives reduce efficiencies, increase complexity in system interoperability, and add risk to system reliability, which can put our workforce at peril of not being able to perform their job functions. DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 108 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 8 of 11 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. This business case is a program that transfers to plant the total cost of each sub-project at the completion of every project, which can straddle calendar years. Quarterly forecasts capture changes in transfers to plant based on project status. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. The technology investments under this business case program align with Avista’s vision to deliver ‘better energy for life’ to our customers and in the area of ‘Perform’, which calls for “our focus on performance today to serving our customers well and unlocking pathways to growth.” Each investment under this business case program allows Avista to maintain system reliability to deliver electric and gas services to our customers. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project The platforms and tools under the ETMOE Business Case provide essential functions to Avista’s workforce and customers throughout all service territories. These vital systems require systematic upgrades and enhancements to maintain reliability, interoperability, and reduce security vulnerabilities. The reason that the technology investment under this program business case is prudent is because the Avista workforce requires this technology every day to deliver gas and electric service to our customers either in an office, customer service center or in the field. Alternatives to each technology are considered, yet not investing in it is not an option as automated business process would either stop or be removed, thereby crippling our workforce’s ability to deliver gas and electric service to our customers, respond to compliance requirements, and conduct business operations and reporting. Additionally, a two-tiered governance structure overseeing this business case program meets regularly to oversee and make decisions on the needs, benefits, costs, and risks of each investment. 2.8 Supplemental Information DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 109 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 9 of 11 2.8.1 Identify customers and stakeholders that interface with the business case Nearly all Avista’s workforce interface with the technology investments under this business case, depending on the application systems being used to perform any given business function. In some cases, the technology investments are primarily interfacing with the technology operations teams whose job is to support business application systems. The stakeholders that interface directly with the business case include, the ETMOE Business Case Sponsors and Owner who work in conjunction with the assigned Program Manager, and subsequent Project Managers. The Business Technology Analyst (BTA) team is also engaged at all levels. 2.8.2 Identify any related Business Cases The ET Modernization and Operational Efficiency Business Case works closes with all other Enterprise Technology business cases to determine which platforms and tools provide functionality to all areas of the business, as opposed to department specific platforms and tools that respond to specific business unit needs. 3.1 Steering Committee or Advisory Group Information The ETMOE Business Case consists of Program Steering Committees and the Project Steering Committee for respective project investments. The ET Modernization and Operational Efficiency Business Case has four levels of governance: The Executive Technology Steering Committee (ETSC); Technology Planning Group (TPG) of Directors; Integrated Oversight Committee (IOC), and Program/Project Steering Committees. Applicable stakeholders and disciplines meet regularly to govern the business case and subsequent programs and projects. The IOC evaluates and compares all the application portfolio project priorities on a weekly basis, utilizing risk, capacity, and other situational factors to ensure each planned project is meeting critical milestones. The TPG sets priority across the technology investment portfolio, balancing: strategic alignment, business value, and customer benefits, as driven by the strategic initiatives established by the ETSC. The Capital Planning Group (CPG), an independent body, establishes funding allocations for each Business Case across the enterprise. The Business Case is largely limited by the funding allocation and resource capacity (staff) to meet its goals. The funding is generally established at the Business Case level by the CPG. The resource capacity constraint is generally managed by the TPG and the Business Case owner. Once the two constrains are established, the Business Case owner will work with steering committee(s) to set project priority DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 110 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 10 of 11 and sequence over a five-year planning period, subject to additional funding changes as directed by the CPG. 3.2 How will decision-making, prioritization, and change requests be documented and monitored The governance structure under this business case program is responsible for decision-making, prioritization, and change requests. Through the regular Program Steering Committee Meetings, the team reviews and balances planned work versus unplanned work to determine prioritization, as well as pending project change requests. Any change request requiring either an increase or decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is submitted to the Capital Planning Group for consideration. The undersigned acknowledge they have reviewed the Enterprise Technology Modernization and Operational Efficiency 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: Date: Print Name: Andy Leija Title: IT Manager Role: Business Case Owner Signature: Date: Print Name: Hossein Nikdel Title: Director, App and Sys Planning Role: Business Case Sponsor Signature: Date: Print Name: Pat Dever Title: Director, Data Science Role: Business Case Sponsor Signature: Date: Print Name: Clay Storey Title: Director, Enterprise Security Role: Business Case Sponsor DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Jul-30-2020 | 7:03 PM PDT Jul-31-2020 | 2:54 PM PDT Jul-31-2020 | 7:44 AM PDT Aug-01-2020 | 8:03 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 111 of 248 ET Modernization and Operational Efficiency Business Case Justification Narrative Page 11 of 11 Signature: Date: Print Name: Jim Corder Title: Director, Infrastructure Technology Role: Business Case Sponsor Signature: Date: Print Name: Jim Kensok Title: Chief Info. & Security Officer Role: Business Case Sponsor DocuSign Envelope ID: DDE44FBC-AF8A-463B-9804-1242EE07F83D Aug-03-2020 | 3:20 PM PDT Aug-03-2020 | 3:26 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 112 of 248 Facilities Driven Technology Improvements Business Case Justification Narrative Page 1 of 8 EXECUTIVE SUMMARY Throughout a typical year, the Facilities group receives manager-requested improvements to facilities across our service territory in response to changing business demands under the Structures and Improvements business case. At times, the improvements consist of updates or changes to technology infrastructure either currently in place or needed as part of the improvement request. These improvements can vary from small to medium size efforts that require changes to an outdated or previously installed infrastructure technology to bring it to current state or to fully meet the goal of the improvement request. Aside from centralizing technology investment costs, a greater issue is technology assets have a shorter life than facility structures or improvement assets. The Facilities Driven Technology Improvements business case dove-tails structure and improvement requests that require an infrastructure technology improvement. The technology solutions can range from network cabling to audio visual expansion to computer and phone improvements, etc. The cost of each solution can also vary depending on the type of improvement request. However, because not all improvements will have a technology requirement, such as asphalt replacement or addressing structural issues, this program has been funded at 10% of the Structures and Improvements business case budget allocation for any given year, based on historical trends. The technology improvements invested under this program, which integrate with the Facilities Structures and Improvements business case, benefit all customers across our service territory by investing in the technology solution while the facility is being improved, thereby bringing current outdated technology infrastructure or adding it to meet changing business demands. However, service and jurisdiction are evaluated at the onset of each respective Structures and Improvements project. The risks of not approving this business case and its funding request will result in not being able to support the technology improvements associated with the manager- requested structures and improvements. VERSION HISTORY Version Author Description Date Notes 1.0 Mike Busby Initial BCJN drafted 7/2017 2.0 Mike Busby BCJN revised as part of BC Refresh 2.0 7/2020 DocuSign Envelope ID: 83B39A48-7737-4BA0-A34B-AA4B0F2C5925 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 113 of 248 Facilities Driven Technology Improvements Business Case Justification Narrative Page 2 of 8 BGENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Throughout a typical year, the Facilities group receives manager-requested improvements to facilities across our service territory in response to changing business demands under the Structures and Improvements business case. At times, the improvements consist of updates or changes to technology infrastructure either currently in place or needed as part of the improvement request. These improvements can vary from small to medium size efforts that require changes to an outdated or previously installed infrastructure technology to bring it to current state or to fully meet the goal of the improvement request. Aside from centralizing technology investment costs, a greater issue is technology assets have a shorter life than facility structures or improvement assets. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The technology improvements invested under this program, which integrate with the Facilities Structures and Improvements business case, are tied to Performance & Capacity and benefit all customers across our service territory by investing in the technology solution while the facility is being improved, thereby bringing current outdated technology infrastructure or adding to it to meet changing business demands. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The Facilities Driven Technology Improvements business case dove-tails structure and improvement requests that require an infrastructure technology improvement. The technology solutions can range from network cabling to audio visual expansion to computer and phone improvements, etc. The cost of each solution can also vary depending on the type of improvement request. However, because not all improvements will have a technology requirement, such as asphalt replacement or addressing structural issues, this program has been funded at 10% of the Structures and Improvements business case budget allocation for any given year, based on historical trends. The risks of not approving this business case and its funding request Requested Spend Amount $1,440,000 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Michael Busby | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Performance & Capacity DocuSign Envelope ID: 83B39A48-7737-4BA0-A34B-AA4B0F2C5925 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 114 of 248 Facilities Driven Technology Improvements Business Case Justification Narrative Page 3 of 8 will result in not being able to support the technology improvements associated with the manager-requested structures and improvements. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. The Facilities Driven Technology Improvements business case dove-tails structure and improvement requests that require an infrastructure technology improvement. Since each of the projects in this business case are discrete and vary by location and request, project success will be evaluated on a project by project basis. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem See Facilities Structures and Improvements Business Case for respective project forecasts that may require technology improvements. 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. This business case is aligned with Performance & Capacity. Option Capital Cost Start Complete Fund program based on 10% of the previously approved facilities business case funding level (recommended) $1,440,000 01 2021 12 2025 Alternative #1 – Minimally fund program based on facilities reduced 5-year capital plan $500,000 01 2021 12 2025 Alternative #2 - Do not fund the program $0 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. Historical trends indicate that approximately 10% of the costs of the Structures and Improvements business case are investments associated with information technologies. Therefore, the recommendation is to fund the Facilities Driven Technology Improvements business case at 10% of the funded amount of the Structures and Improvements business case. This will allow both business cases to align financial resources needed for any work done within the Structures and Improvement business case. DocuSign Envelope ID: 83B39A48-7737-4BA0-A34B-AA4B0F2C5925 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 115 of 248 Facilities Driven Technology Improvements Business Case Justification Narrative Page 4 of 8 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. The technology improvements invested under this program, which integrate with the Facilities Structures and Improvements business case, benefit all customers across our service territory by investing in the technology solution while the facility is being improved, thereby bringing current outdated technology infrastructure or adding it to meet changing business demands. With management oversight from the Program Steering Committee, projects initiated through Facilities’ Structures and Improvements business case, will be reviewed and accepted into this business case on a per project basis spending the funded capital up to the approved allocation. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. The projects in this program are supporting the technology requests associated with projects within the Structures and Improvements business case. Through those projects, business functions and processes might be impacted but the technology upgrades being made at the varied locations throughout Avista’s service territory should strive to increase performance and capacity for employees in their daily work life. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Alternative 1: FUND PROGRAM BASED ON FACILITIES ANNUAL PLAN Funding the Facilities Driven Technology Improvements business case minimally each year based on a reduced 5-year capital plan under the Structures and Improvements business case and request incremental increases as needed should new projects surface throughout the year. This would result in ad-hoc funding requests to the Capital Planning Group for work approved under the Structures and Improvements business case outside of the 5-year capital planning process. Alternative 2: DO NOT FUND THE PROGRAM Structures and Improvements projects requiring information technology will not be performed. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. DocuSign Envelope ID: 83B39A48-7737-4BA0-A34B-AA4B0F2C5925 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 116 of 248 Facilities Driven Technology Improvements Business Case Justification Narrative Page 5 of 8 The Facilities Driven Technology Improvements business case is managed as a program of projects planned yearly which align with Facilities’ Structure and Improvements business case. All individual projects are managed through the PMO, which follows the Project Management Institute (PMI) standards. Throughout the year, the business case’s projects are Initiated, Planned, Executed, and then Completed with a Transfer to Plant for the scope requests which over the course of a calendar year equates to the funded budget allocation. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete projects that align with Avista’s vision, mission and strategic objectives: • To provide Better Energy for Life, you need people. This program embodies Avista’s Focus Areas, particularly placing emphasis in ‘Our People.’ The Enterprise Technology team is dedicated to the people of Avista and its customers. Through the alignment of work between the Facilities and Enterprise Technology teams, the technology implemented gives our employees what they need for their daily work allowing them we deliver value to our customers and the communities they serve. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project This program is requesting funding at 10% of the Structures and Improvements business case budget allocation for any given year based on historical trends. The projects contained in this business case are driven by Facilities’ projects which require a technology component and without funding, the technology requests would not be fulfilled. Throughout the course of a year, all project requests are vetted before the Steering Committee to validate the request against the business case purpose and making sure the request can be delivered within the approved funding allocation. 2.8 Supplemental Information Identify customers and stakeholders that interface with the business case Within the Facilities Driven Technology Improvements business case, the discrete projects interface with various internal Avista groups such as Facilities, ET engineering, DocuSign Envelope ID: 83B39A48-7737-4BA0-A34B-AA4B0F2C5925 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 117 of 248 Facilities Driven Technology Improvements Business Case Justification Narrative Page 6 of 8 the Telecommunications Shop, along with our internal customers at various office and generation facilities. Steering Committee members include Business Case Sponsors, Directors and Managers within the Enterprise Technology group long with the Business Case Owner. The ET Business Case Owner works in conjunction with the Project Management Office (PMO), and assigned Program Manager, and subsequent Project Managers. The ET Business Case Owner is accountable and responsible for all Business Case related activities and assignments. 2.8.1 Identify any related Business Cases This Business Case is a program tied to Facilities’ Structure and Improvements business case which has historically been funded at 10% of the Structures and Improvements business case budget allocation for any given year. 3.1 Steering Committee or Advisory Group Information Steering Committee members are invaluable to the project and will provide approval on scope, schedule, and budget related changes. Additionally, they will provide approval on issues and risks pertaining to project deliverables outlined in this document, which also typically have an impact on the scope, schedule, or budget of a project. Steering Committee members will also provide approval on Change Requests, Go-Live, and the Approval to Close document. For the Environmental Control and Monitoring business case, the Steering Committee will consist of the Directors and Managers within ET and the Business Case Owner. 3.2 Provide and discuss the governance processes and people that will provide oversight The Facilities Driven Technology Improvements Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. Program Steering Committee This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing DocuSign Envelope ID: 83B39A48-7737-4BA0-A34B-AA4B0F2C5925 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 118 of 248 Facilities Driven Technology Improvements Business Case Justification Narrative Page 7 of 8 The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically and will consist of projects supporting Facilities’ Structures and Improvements business case. Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a monthly basis. Each program and project steering committee meet regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. Any changes in funding or scope are documented at the Business Case level, via Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow process. All Enterprise technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. DocuSign Envelope ID: 83B39A48-7737-4BA0-A34B-AA4B0F2C5925 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 119 of 248 Facilities Driven Technology Improvements Business Case Justification Narrative Page 8 of 8 The undersigned acknowledge they have reviewed the Facilities Driven Technology Improvements 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: Date: Print Name: Michael Busby Title: Mgr., IT Operations Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 83B39A48-7737-4BA0-A34B-AA4B0F2C5925 Jul-30-2020 | 10:25 AM PDT Aug-03-2020 | 1:32 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 120 of 248 Fiber Network Leased Service Replacement Business Case Justification Narrative Page 1 of 9 EXECUTIVE SUMMARY Technology that enables Avista’s safety, control, customer-facing, and backoffice systems is critical to the operations that serve our gas and electric customers. Avista utilizes leased fiber optic cables to transport primarily Emergency and Control network data. Avista’s current contracts for leased fiber network services expire in 2027. Transitioning Avista’s Emergency and Control network data from leased network services to private network infrastructure will align with the long-term network strategy to maintain control of these critical data sources and reduce expense costs to the company. The technology solutions under the Fiber Network Leased Service Replacement business case will vary by site location. There are 54 known outstanding segments to be replaced and they are represented in the estimated build costs per segment, which collectively provides the overall funding need. Failure to accomplish this work by the end of the existing lease date would add significant costs to the leased circuits still in service at the end of the contract. Avista and its customers can experience the benefits through ongoing system reliability and appropriate oversight and management of our networks serving our Emergency and Control network data. The main driver behind this project is performance and capacity, driven by the total cost of ownership of the networks required for Emergency and Control data and assets. VERSION HISTORY Version Author Description Date Notes 1.0 Michael Busby Original business case request 7/2017 1.1 Michael Beil Updated investment driver 7/2019 2.0 Shawna Kiesbuy Narrative added to new template 7/2020 DocuSign Envelope ID: EEBCC6EC-13E9-4065-AAA0-3243A686E592 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 121 of 248 Fiber Network Leased Service Replacement Business Case Justification Narrative Page 2 of 9 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Avista utilizes leased fiber optic cable to transport primarily Safety and Control (S&C) data. The leased fiber is an operating expense. The lease rates were established during the sale of Avista Communication’s subsidiary. An Indefensible Right to Use (IRU) was established to benefit Avista Utilities with rates well below market. The IRU expires in 2027 with an option to renew for 5 years. Transitioning Avista’s S&C network data from leased network services to private network infrastructure aligns with the long-term network strategy and will reduce risk along with Operate & Maintain (O&M) costs to the company. The project work started in 2018 and identified at least 54 segments and a total of approximately 200 miles of leased fiber to be replaced with Avista owned private fiber. The anticipated complexity associated with rights of ways, permitting, construction and coordination with other parties such as city/county planning departments, contractors and internal Avista departments, or to partner with complementary projects, will influence the pace of work to complete the transition to private fiber is important to successfully meet the 2027 deadline. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer Investment in private network transport and technology to service S&C communication systems is an established industry standard. The private network investment is designed to best fit the communication requirements of industrial control and safety systems. The reliability and predictability of a private network is a business value. Public carrier leased services are best fit for customer and back office communications. The investment in private network is tied to the Performance & Capacity investment driver. Requested Spend Amount $15,200,000 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Shawna Kiesbuy | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Performance & Capacity DocuSign Envelope ID: EEBCC6EC-13E9-4065-AAA0-3243A686E592 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 122 of 248 Fiber Network Leased Service Replacement Business Case Justification Narrative Page 3 of 9 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The work to move from leased fiber to private fiber is timebound by the expiration of lease agreements all of which are due to end by 2027. As noted above, there are many factors that can consume periods of time per segment to complete the work and therefore any delays in executing on this work would risk the ability to finalize work and therefore terminate contracts for leased segments per current agreements. There is also benefit to the company by having full control over fiber segments for these critical E&C communication paths. While the current agreements may allow for extension of the lease terms, there are increased O&M costs to do so. Avista is proactively working to prevent any additional O&M costs by implementing privately owned fiber prior to having to execute on any lease extensions. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Timely implementation and transfer to plant such that all segments are completed prior to an IRU or segment lease expiration will determine success. The completion and transfer to plant will occur over time as each segment/project is completed. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem The leased fiber terms detail costs associated with the expiration date. 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. This business case is aligned with Performance & Capacity. Option Capital Cost Start Complete Recommended Solution - Replace each identified segment of leased fiber optic cable with Avista owned/private fiber to meet the fiber lease agreement deadline. $15,200,000 01 2021 12 2025 Alternative #1 – Fund at 80%, and risk not meeting the fiber lease agreement deadline in 2027, resulting in higher unplanned O&M annual costs $12,160,000 01 2021 12 2025 Do not fund the program $0 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The requested amount of $15,200,000 reflects the total estimated cost of implementing Avista privately owned fiber optic cable for all applicable IRU segments through the year 2025. Yearly allocation and project prioritization are DocuSign Envelope ID: EEBCC6EC-13E9-4065-AAA0-3243A686E592 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 123 of 248 Fiber Network Leased Service Replacement Business Case Justification Narrative Page 4 of 9 set based on the output of annual budget planning activities. These activities take into account estimated completion dates of in-flight work, areas of high risk, and length of the construction season. Adjustments are requested and approved by the Steering Committee throughout each calendar year to accommodate any changes to the plan. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. The technology improvements invested under this business case benefit all customers across our service territory by investing in the privately-owned fiber optic cable segments thereby mitigating the potential of increased O&M costs for leased fiber in the future and having full control of the fiber. With management oversight from the Program Steering Committee, projects initiated through the Fiber Network Leased Service Replacement (FNLSR) business case, will be reviewed and sequenced in this business case on a per project basis spending the funded capital up to the approved allocation. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. The projects in this FNLSR business case are standalone projects but are dependent on length of construction season, right of way approvals, permitting and other similar but potentially unrelated work being performed at or near each identified segment. Through those projects, business functions and processes might be impacted but the technology upgrades being made at the varied locations throughout Avista’s service territory should strive to increase performance and capacity for employees in their daily work life while providing a safe and reliable infrastructure for Avista to deliver energy to customers. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Alternative 1: Fund at 80%, and risk not meeting the fiber lease agreement deadline in 2027, resulting in higher unplanned O&M annual costs Funding the FNLSR business case minimally each year based on a reduced capital plan and request incremental increases as projects are completed. This would result in ad-hoc funding requests to the Capital Planning Group (CPG) for work approved outside of the 5-year capital planning process. Risks related to the FNLSR work, such as proactively working to reduce O&M costs and DocuSign Envelope ID: EEBCC6EC-13E9-4065-AAA0-3243A686E592 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 124 of 248 Fiber Network Leased Service Replacement Business Case Justification Narrative Page 5 of 9 providing the private fiber to carry S&C communication, would be mitigated at a much slower pace than if the program were funded as requested, and may resulotin higher unplanned O&M annual costs if the 2027 deadline is missed. Alternative 2: Do not fund the program FNLSR projects would not be funded and therefore the planned move from leased fiber to privately owned fiber that provides the benefits noted above would not be achieved. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. The FNLSR business case is managed as a program of projects planned yearly. All individual projects are managed through the PMO, which follows the Project Management Institute (PMI) standards. Throughout the year, the business case’s projects are Initiated, Planned, Executed, and then Completed with a Transfer to Plant for the scope requests which over the course of a calendar year equates to the funded budget allocation. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete projects that align with Avista’s vision, mission and strategic objectives: • The FNLSR business case aligns with Avista’s commitment to invest in its infrastructure to achieve optimal lifecycle performance – safety, reliability, and at a fair price. Data communications that monitor and control Avista systems are critical in the support of energy delivery. The move from leased to privately owned fiber will continue to enable and support critical communications in a manner that increases reliability and manage costs. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Throughout the course of a year, all project requests are vetted before the Steering Committee to validate the request against the business case purpose and making sure the request can be delivered within the approved funding allocation. DocuSign Envelope ID: EEBCC6EC-13E9-4065-AAA0-3243A686E592 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 125 of 248 Fiber Network Leased Service Replacement Business Case Justification Narrative Page 6 of 9 2.8 Supplemental Information Identify customers and stakeholders that interface with the business case Within the FNSLR business case, the discrete projects interface with various internal Avista groups such as Enterprise Technology engineering, Transmission and Distribution, Real Estate, the Telecommunications Shop, along with other internal business partners at various office and substation facilities. Steering Committee members include Business Case Sponsors, Directors and Managers within the Enterprise Technology group along with the Business Case Owner. The ET Business Case Owner works in conjunction with the Project Management Office (PMO), the assigned Program Manager, and subsequent Project Managers. The ET Business Case Owner is accountable and responsible for all Business Case related activities and assignments. 2.8.1 Identify any related Business Cases There are no related business cases. FNLSR is a standalone business case. 3.1 Steering Committee or Advisory Group Information Steering Committee members are invaluable to the project and will provide approval on scope, schedule, and budget related changes. Additionally, they will provide approval on issues and risks pertaining to project deliverables outlined in this document, which also typically have an impact on the scope, schedule, or budget of a project. Steering Committee members will also provide approval on Change Requests, Go-Live, and the Approval to Close document. For the FNLSR business case, the Steering Committee will consist of the Directors and Managers within ET, Energy Delivery, GPSS and the Business Case Owner. 3.2 Provide and discuss the governance processes and people that will provide oversight The FNLSR Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. Program Steering Committee DocuSign Envelope ID: EEBCC6EC-13E9-4065-AAA0-3243A686E592 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 126 of 248 Fiber Network Leased Service Replacement Business Case Justification Narrative Page 7 of 9 This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically in order to plan and sequence work to the levels of funding allocation received. Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a monthly basis. Each program and project steering committee meet regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the Technology Planning Group (TPG) or CPG for decision-making around resource or funding constraints. DocuSign Envelope ID: EEBCC6EC-13E9-4065-AAA0-3243A686E592 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 127 of 248 Fiber Network Leased Service Replacement Business Case Justification Narrative Page 8 of 9 Any changes in funding or scope are documented at the Business Case level, via a Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow process. All Enterprise Technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. The undersigned acknowledge they have reviewed the Fiber Network Leased Service Replacement 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: Date: Print Name: Shawna Kiesbuy Title: Sr. Manager, Network Engineering Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: Director, Information Technology Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review DocuSign Envelope ID: EEBCC6EC-13E9-4065-AAA0-3243A686E592 Jul-31-2020 | 9:00 AM PDT Jul-31-2020 | 5:17 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 128 of 248 Fiber Network Leased Service Replacement Business Case Justification Narrative Page 9 of 9 DocuSign Envelope ID: EEBCC6EC-13E9-4065-AAA0-3243A686E592 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 129 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 1 of 10 EXECUTIVE SUMMARY Avista’s service territory consists of urban and rural environments with topologically difficult to reach areas. The remoteness of some locations, along with the temperature variances through the annual seasons can present additional challenges to field staff required to work under those conditions. Additionally, commercial cellular or telecommunication services are not offered in some of these locations, as they are not cost effective for commercial vendors to deploy. Finally, during unplanned emergency events, commercial telecommunication services are overloaded with the public reaching friends and family members affected by the event, thereby exacerbating the need for a separate land mobile radio and real-time communication system, much like those used by emergency service personnel. As a Company that maintains critical infrastructure for gas and electric systems, we are required to do it safely and reliably to provide essential services to our customers. This requires that our staff communicate with one another in real time across our service territory to establish situational awareness and reduce the risk of a safety incident. The Land Mobile Radio & Real Time Communications System business case consists of mobile radio and communication technology solutions that enable our staff to communicate with each other in the field and office in real time. The investments under this program provide the communication technology that enables real time 24 x 7 x 365 communication with our gas and electric field staff in ever changing conditions. The costs associated with each solution can vary by the solution deployed. However, due to the remoteness and topology of our service territory, some of the technology investments in field radio sites on mountain tops can be costly but provide a valuable service to our customers in unplanned weather events, and most importantly bring safety to our field staff. Not investing in increasing radio coverage across our service territory can result in ‘dead zones’ with no radio coverage that may increase the safety risks of our field staff who rely on radio communication to perform their jobs. VERSION HISTORY Version Author Description Date Notes 1.0 Walter Roys Initial BCJN Draft 6/2017 1.1 Walter Roys Updated Investment Driver 7/2019 2.0 Walter Roys Revision of BCJN to new template 7/2020 2.1 Walter Roys Error in calculation of Alt. #2 8/2020 Revised calculation DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 130 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 2 of 10 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Avista’s service territory is approximately 30,000 square miles across four northwestern states with nearly 7,800 miles of natural gas distribution mains, 19,000 miles of electric distribution lines, and 2,750 miles of electric transmission lines. Although many of these miles of gas and electric infrastructure run through urban and suburban areas to heat and power homes and businesses, some infrastructure travels across remote and hard to reach locations, such as steep canyons and mountain tops. As a pacific northwest region with four seasons, some of these remote locations can be even more difficult to reach in harsh weather conditions yet must be maintained safely and reliably. To add to it, commercial cellular or telecommunication services are not offered in these remote locations, thereby leaving communication service gaps.In other words, if there were commercial offerings, during an unplanned emergency event, the services could be overloaded with customers trying to reach friends or family members affected by the event and resulting in communication latency or unavailability. The lack of radio communication coverage in these remote locations presents risk to our field workers who are required to respond to events throughout the year and must communicate with one another in real time across our service territory to establish situational awareness and reduce the risk of a safety incident. Requested Spend Amount $24,509,809 Requested Spend Time Period 5 years Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Walter Roys | Jim Corder Sponsor Organization/Department Enterprise Technology Phase Monitor/Control Category Program Driver Performance & Capacity DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 131 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 3 of 10 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The Land Mobile Radio & Real Time Communications Systems Business Case is driven by managing technology replacement according to manufacturer product roadmaps with an objective to maintain infrastructure performance and align infrastructure assets with business demand for capacity. All Avista customers benefit from maintaining communication systems, as this technology enables the Avista workforce to perform their day-to-day job functions in delivering gas and electric service to our customers. Additionally, assets that fail due to not being replaced within their technology lifecycle are replaced by the Technology Failed Asset business case, which tracks technology asset failures, and is also used as a data point to inform the technology lifecycles under this business case. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Mobile radio coverage is an essential safety requirement for field staff working throughout our service territory to maintain a safe and reliable gas and electric infrastructure, and even more so in remote and hard to reach locations. Every day that goes by of lacking radio coverage can result in a safety incident, whereby field staff requiring emergency assistance could not communicate with either dispatch, a nearby co-worker, or emergency services. In some of these hard to reach locations, small logging roads can be buried in deep snow a few miles in from a paved road, thereby extensively prolonging any response should an emergency incident occur. Deferring the investments under this program puts field staff’s lives at risk by lacking radio coverage in high risk areas. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. Ongoing reviews of vendor roadmap and technology asset lifecycle alignment provide necessary information to track how much of our investment in technology is lagging behind the vendor roadmap, and thereby introducing risk. DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 132 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 4 of 10 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem The Enterprise Technology team references various technology vendor and third-party resources to stay informed and recommend decisions on the various technology investments. A few sample sources are included below: Barreca, Stephen L. (1998-2000). Technology Lifecycles and Technology Obsolescence. Retrieved from http://bcri.com/products/publications.htm Gartner Industry Research and Reference Material. Retrieved from https://www.gartner.com/en/information-technology 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Not applicable, as the investment under this program business case is to maintain performance and capacity standards in each respective endpoint compute and productivity technology. The Land Mobile Radio & Real Time Communications Systems business case will represent projects that are driven by performance and capacity for the following technology systems: • Private 2-way Land Mobile Radio (LMR) System for field operations; and • Radio Telephone Command and Control System (RTCCS) used by Dispatch and System Operations to perform critical radio and telephone communication to field personnel. The Land Mobile Radio (LMR) system facilitates critical communication between field personnel, dispatch, system operations, and other end users. This radio system is used for normal day to day operation work, coordinating responses to outage events, switching and tagging procedures, communication with external agencies including Public Safety entities, and several other uses. It is a business-critical system used to maintain day to day operations and respond to emergency situations. This program is in place to provide reliable LMR functionality at all times throughout Avista’s service territory. The system contributes to the health and safety of employees, contractors, and the public. Option Capital Cost Start Complete Recommended Solution – Address 100% obsolete products, unit growth, and expand radio coverage area at a reduced pace $24,509,809 01 2021 12 2025 Alternative #1 - Address 100% obsolete products, $40,037,939 01 2021 12 2025 DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 133 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 5 of 10 unit growth, and radio coverage area Alternative #2 – Address 100% of obsolete products and unit growth without expanding coverage $18,000,000 01 2021 12 2025 Alternative #3 – Expand radio coverage area only $12,500,000 01 2021 12 2025 Alternative #4 – Retire assets and remove automation $1,900,000 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The funds request was based on a calculation of the asset lifecycle associated with each technology asset, the scope and scale of the technology, and the project costs for technologies previously refreshed under this business case. Additionally, funds requested include coverage expansion costs for additional radio sites based on coverage analyses, and historical site acquisition costs. Through regular reviews, the program balances the need to provide radio coverage across our service territory and maintain performance and reliability standards for the various technologies under this program within annual budget allocations, and their respective technology lifecycles, which can result in calling for additional investment under this program from time to time for technology either falling behind technology lifecycles or predetermined performance, coverage, and reliability standards. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] The funding requested under the Land Mobile Radio & Real Time Communications Systems business case will be invested in technology, such as: • Private 2-way Land Mobile Radio (LMR) System • Radio Telephone Command and Control System (RTCCS) Investment in these technologies can result in added O&M expenses from increase in licenses from time to time. However, not funding this business case may result in removing automated business functions, which will put field workers at risk by not having radio communications across our service territory. There are no O&M reductions or offsets resulting from these investments, as this technology enables the Avista workforce to perform their day-to-day job functions in delivering gas and electric service to our customers. DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 134 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 6 of 10 Reliance on obsolete technology for automated business process presents significant risk, and in this case cannot be achieved manually. Additionally, with the rapid pace of technological change, technology vendors require continuous upgrades to maintain system maintenance and support, which can include security patching, bug fixes, version upgrades, interoperability, and compatibility with other technologies. These upgrades can in turn drive subsequent system replacements, creating a cascading event of change. Therefore, vendor roadmaps and technology asset lifecycles are data points that inform on how best to plan replacements, while meeting business value and strategic alignment, within the constraints of resource capacity and funding, which in turn can result in deferred replacement introducing the risk of technology failure. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. All Avista field operations, dispatch, and system operations are affected by the technology invested under this business case program, as it is a critical tool that is heavily relied on for communication across our service territory. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Retire assets and remove automation This option assumes the assets would not be replaced upon failure and be removed from service due to product incompatibility or business or safety risk. The basis for measuring the business impact of not funding this business case is realizing the loss of business process automation. As products reach the manufacturer-defined planned obsolescence, business process automation is jeopardized, and business risk is increased as manufacturers cease product maintenance and support. This condition would drive action. The alternative would lead to a mitigation plan of having to re-instate manual business process or eliminate the business process. This option bears the cost of asset retirement for failed assets. Failed assets are estimated to be 50% of obsolete products. The retirement cost is estimated at 10% of the cost to replace the asset. Address 100% obsolete products, unit growth, and radio coverage area (recommended) DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 135 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 7 of 10 This is the optimal solution. This option fully addresses and minimizes the likelihood of technology failure and impact to automated business process. It also expands the radio coverage area, adding value for employees, contractors, and the public by enabling safe and reliable radio communications in certain areas of poor coverage. Address 100% of obsolete products and unit growth Addressing 100% of obsolete products and unit growth will minimize likelihood of technology failure and impact to automated business process. However, this option does not address expanding the radio coverage area. This introduces risk to employees, contractors, and the public in areas where radio communications are unavailable. Expand radio coverage area This option addresses expansion of the radio coverage area, adding value for employees, contractors, and the public by enabling safe and reliable radio communications in certain areas of poor coverage. However, this option does not address obsolete products within the program and introduces risk associated with technology systems reliability and interoperability. The investment required to address obsolete technology products is deferred to subsequent years. The likelihood of technology failure and impact to business is increased. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. This business case is a program that transfers to plant the total cost of each project at the completion of every project, which can straddle calendar years. Quarterly forecasts capture changes in transfers to plant based on project status. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. The technology investments under this business case program align with Avista’s vision to deliver ‘better energy for life’ to our customers and in the area of ‘Perform’, which calls for “our focus on performance today to serving our customers well and unlocking pathways to growth.” Each investment under this business case program allows Avista to deliver electric and gas services to our customers. DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 136 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 8 of 10 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project The reason that the technology investment under this program business case is prudent is because the Avista workforce requires this technology every day to deliver gas and electric service to our customers either in dispatch and system operations, and in the field. Alternatives to each technology are considered, yet not investing in it is not an option as automated business process, such as radio communication could not be replicated manually, thereby crippling our workforce’s ability to deliver gas and electric service to our customers in a safe and reliable way. Additionally, a two-tiered governance structure overseeing this business case program meets regularly to oversee and make decisions on the needs, benefits, costs, and risks of each investment. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Nearly all operations and field staff interface with the Land Mobile Radio (LMR) system, which facilitates critical communication between field personnel, dispatch, system operations, and other end users. 2.8.2 Identify any related Business Cases There are not related business cases associated with this business case program. 3.1 Steering Committee or Advisory Group Information The Land Mobile Radio (LMR) & Real Time Communication Systems Business Case has two levels of governance; The Program Steering Committee and the Project Steering Committee. 3.2 Provide and discuss the governance processes and people that will provide oversight Program Steering Committee This business case is a program of related projects. The Program Steering Committee consists of members in management positions that are identified and responsible for prioritizing the projects within this program. The Steering Committee is also held accountable for the financial performance of this program. The Program Steering Committee will have regular meetings to review the progress of the program and to make decisions on the following topics: DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 137 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 9 of 10 • Project prioritization and risk • Approving business case funding requests • New project initiation and sequencing The Program will be facilitated and administrated by an assigned Program Manager within the Enterprise Technology (ET) Project Management Office (PMO) Department. The project queue will be reviewed periodically and will consist of projects needed to maintain the reliability and performance of all LMR and real time communication systems. Project Steering Committee Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: • Scope • Schedule • Budget • Project Issues • Project Risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the ET PMO Department. 3.3 How will decision-making, prioritization, and change requests be documented and monitored The governance structure under this business case program is responsible for decision-making, prioritization, and change requests. Through the regular Program Steering Committee Meetings, the team reviews and balances planned work versus unplanned work to determine prioritization, as well as pending project change requests. Any change request requiring either an increase or decrease of funds is reviewed at the upcoming Technology Planning Group meeting before it is submitted to the Capital Planning Group for consideration. DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 138 of 248 Land Mobile Radio & Real Time Communication Systems Business Case Justification Narrative Page 10 of 10 The undersigned acknowledge they have reviewed the Land Mobile Radio & Real Time Communication Systems 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: Date: Print Name: Walter Roys Title: System Engineering Manager Role: Business Case Owner Signature: Date: Print Name: Jim Corder Title: IT Director Role: Business Case Sponsor Template Version: 05/28/20 DocuSign Envelope ID: 731B8D52-9ECA-45DB-8AD8-7325EDB8B8EF Aug-25-2020 | 7:58 AM PDT Aug-25-2020 | 12:22 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 139 of 248 Atlas Business Case Justification Narrative Page 1 of 9 EXECUTIVE SUMMARY Atlas is a multi-year year program to strategically replace the suite of custom Geographic Information System (GIS) applications known as Avista Facility Management (AFM). AFM is the system of record for spatial electric facilities in Washington and Idaho and gas facility data in Washington, Idaho and Oregon and provides the connectivity model to support GIS engineering and analysis applications. The AFM applications and data model have been used for nearly two decades and have reached technology obsolescence. The existing data model used by AFM is scheduled for end of life in 2023. The AFM is a cornerstone to Avista’s ability to provide responsive service across its territory. If AFM is not replaced with a modern GIS platform, the ability of Avista to meet customer, regulatory, compliance requirements will be at risk. Replacing AFM will enable Avista to take advantage of commercial GIS applications that provide improved mobile and desktop functionality, increased collaboration capabilities and increased reliability. Improvement of customer experience is at the core of Atlas Program. The proposed next generation applications will enable Avista workers, office and field, to respond to customer requests faster; provide information to customers that is more accurate, timely and complete; and improve customer experience when they interact with Avista. Avista benefits of replacing the AFM applications include improved worker productivity, improved asset data integrity, and the opportunity to reengineer work processes and methods, supporting a continual improvement program. New commercial solutions also provide Avista with the ability to meet changing demands of customers, enable effective operation of an increasingly complex and dynamic distribution grid, and provide the opportunity to create new service offerings to customers. The total program budget is estimated to $27.0M dollars. The funds in this business case will be utilized to fund the phases of the Atlas Program as detailed in the supplemental information referenced in section 1.5 below. The years 2020-2024 will be primarily focused on the project timeline and deliverables detailed in the Utility Network Advantage Program Report, while also supporting Mobility in the Field initiative which configures and deploys mobile GIS mapping and data applications. VERSION HISTORY Version Author Description Date Notes 1.0 Mike Littrel Initial draft of business case 04/2017 2.0 Mike Littrel Updated buisnes case format 07/2020 DocuSign Envelope ID: 75EC8367-E425-44FC-82D8-C367C6EF1E37 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 140 of 248 Atlas Business Case Justification Narrative Page 2 of 9 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Avista’s AFM system has been used for nearly two decades and has reached technology obsolescence. The technology no longer meets the business needs, and has exceeded its useful life. The software has already undergone two major conversions to extend the life to this point. The first was a programing language conversion from Microsoft Visual Basic to Microsoft .NET because Visual Basic was no longer a supported language. The second was a geometric precision change to support the requirements of the integration with Maximo. Both of these changes achieved their goals, however the code is now more fragile which increased the complexity of supporting AFM. Additionally, the existing system is custom built and requires continual maintenance and support by internal staff whose skillset is becoming scarce, as the fundamental code and architecture is complex and outdated. In parallel, most of the staff who were part of the original custom build of the AFM system, have long since moved on. Certain AFM applications, such as electric and gas edit and Outage Management Tool, do not have the full complement of desired functionality and are unreliable at times due to the outdated architecture. When a new configuration request is surfaced, the change cannot always be implemented, as the custom code and architecture will not allow it. The existing data model used by the AFM applications is scheduled for end of life in 2023. It is important to begin the transition to the next generation GIS technology while there is still staffing to support the AFM system, and the data model is still supported, because delaying will increase the risk of customer impact caused by increasing system issues. Requested Spend Amount $27,000,000 Requested Spend Time Period 06/2015 – 12/2024 Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Mike Littrel | Josh DuLuciano Sponsor Organization/Department Energy Delivery Technology Projects Phase Execution Category Program Driver Asset Condition DocuSign Envelope ID: 75EC8367-E425-44FC-82D8-C367C6EF1E37 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 141 of 248 Atlas Business Case Justification Narrative Page 3 of 9 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer Improvement of electric and gas customer experience is at the core of the Atlas Program. These new tools will enable Avista workers, office and field, to respond to customer requests faster; provide information to customers that is more accurate, timely and complete; and improve customer satisfaction when they interact with Avista. In addition to replacing traditional desktop GIS applications, additional mobile tools will extend the value of Avista’s investment in the GIS system by providing field staff with applications for near real-time editing and data collection. For example, the Mobile Design Tool will enable functionality for a designer to perform designs at a job site, providing an improved customer experience, and will be fully compatible with the desktop design tool. In addition, the Mobile tools will provide field personnel with powerful functionality to meet customer responsiveness expectations; Global Positioning System (GPS) guided turn by turn directions to work locations; electronic receipt sent to the customer’s communication preference (email, text, etc.) at completion of work orders; access to GIS data in the field; capture of as-built configuration, compliance data and materials electronically by taking advantage of a variety of data sources, including digital image data, keyed data, bar code scanned data, and GPS location data. New commercial solutions also provide Avista with the ability to more fully integrate with gas and electric planning and analysis tools. This will lead to a better understanding of where weakness in the infrastructure may exist and proactively reinforce those areas improving reliability for the customers. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The AFM applications and data model have been used for nearly two decades and have reached technology obsolescence. Continuing to utilize AFM would continue to create Operating and Maintenance cost pressure while also creating risks and lost opportunities. Additionally, any investment in the current system is a sunk cost, as the system is limited in the functionality it can provide to our staff as they serve both gas and electric customers. The current system is highly customized and cannot leverage industry GIS platforms to share data sets that provide field and office workers with more information about our assets and those of other agencies, such as local, county and state governments. The existing data model used by the AFM applications is scheduled for end of life in 2023. The GIS platform is a cornerstone to Avista’s ability to provide responsive service across its territory, if it is not replaced with a modern GIS platform the ability of Avista to meet current and future customer, regulatory, and compliance requirements will be at risk. DocuSign Envelope ID: 75EC8367-E425-44FC-82D8-C367C6EF1E37 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 142 of 248 Atlas Business Case Justification Narrative Page 4 of 9 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Each project within the Atlas program will have a project charter which includes project costs, schedule, deliverables and benefits. Each project will have a steering committee assigned. Throughout the duration of each project the steering committee will be provided status reports on a monthly basis. These status reports will include updates on project scope, schedule and budget, as well as any risks and/or issues that the project team is currently working on. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem Justification for system replacement is based on comprehensive assessments of AFM technologies, processes and functions that were performed in 2015 and 2019 by third-party consultants as part of the project planning process. The details of the assessments are available in the following supporting documents: • Current State Report • Future State Report • Gap Analysis Report • Industry Analysis Report • Requirements Report • Alternative Analysis Report • Utility Network Advantage Program Report • Atlas Roadmap The Esri ArcGIS product will continue to be the foundational spatial data engine for next generation application delivered through Atlas. Esri is the industry standard for GIS, so continuing to use that platform provides the highest level of access to commercial applications and standard integration to other enterprise applications. The replacement will take place through a series of targeted and incremental projects to maximize value and minimize risk. DocuSign Envelope ID: 75EC8367-E425-44FC-82D8-C367C6EF1E37 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 143 of 248 Atlas Business Case Justification Narrative Page 5 of 9 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. ESRI GIS serves as the foundational data structure on which AFM applications are built or rely on. AFM is the system of record for spatial electric and gas facility data and provides the connectivity model to support the AFM applications. The following is a brief description of AFM tools. • Electric and Gas Edit are tools inherent in the system used for data edits prior to committing final data changes and additions. • Outage Management Tool is an in-house developed application that supports outage analysis and management. • Engineering Analysis is a commercial tool used for engineering analysis modeling. • Distribution Management System is a commercial application used to monitor and control the distribution grid. It relies on the GIS data from AFM to determine the current operating state. The AFM applications and data model have been used for nearly two decades and have reached technology obsolescence. Continuing to utilize AFM would continue to create Operating and Maintenance cost pressure while also creating risks and lost opportunities. Additionally, any investment in the current system is a sunk cost, as the system is limited in the functionality it can provide to our staff as they serve both gas and electric customers. Option Capital Cost Start Complete Recommended Solution - Replace the custom AFM applications with Commercial Off The Shelf Applications $27.0M 06/2015 12/2024 Alternative - Continue to utilize the custom AFM applications $7.0M 06/2015 12/2024 DocuSign Envelope ID: 75EC8367-E425-44FC-82D8-C367C6EF1E37 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 144 of 248 Atlas Business Case Justification Narrative Page 6 of 9 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. Detailed documentation from industry experts as listed in section 1.5 above, along with project costs from recent comparable projects at Avista were used to determine the amount of the capital funds request and duration of the business case. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. The funds in this business case will be utilized to fund the phases of the Atlas Program as detailed in the supplemental information referenced in section 1.5 above. The years 2020-2024 will be primarily focused on the project timeline and deliverables detailed in the Utility Network Advantage Program Report, while also supporting Mobility in the Field initiative which configures and deploys mobile GIS mapping and data applications. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Each project within the Atlas Program will include a business process and stakeholder analysis to determine the organization change management and training needs. This analysis will then be used to deliver communication to the stakeholders throughout the project and develop end user training. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. The current suite of AFM solutions has a recent history of performance challenges which may only be mitigated with considerable investment or replacement. Continuing to invest in a custom system with no vendor support is not a sustainable long-term solution. There are network management functionality limitations and performance related issues with the current data model that are addressed in Esri’s new data model and platform. The support by Esri for the current solution will be ending in the near future – January 2024. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. The work was started in 2015 and is scheduled to complete in December 2024. The Atlas Program has been and will continue to be divided into discrete projects than when possible have a duration of one calendar year or less. This will allow the capital expenditure for a given year to be transferred to plant in that year. DocuSign Envelope ID: 75EC8367-E425-44FC-82D8-C367C6EF1E37 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 145 of 248 Atlas Business Case Justification Narrative Page 7 of 9 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. Having a modern GIS will enable Avista to meet the changing needs in energy delivery such as Distributed Generation and Smart Grids with Grid Edge Intelligence. It will also enable the ability to model complex network and equipment such as electric substations, gas regulator stations to provide a more accurate view of the assets in the field. The increased accuracy and currency of the data along with modern mobile applications will provide field personnel with powerful functionality to meet customer responsiveness expectations. Finally the advanced modelling will enable improved analysis and reporting capabilities. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project. The AFM applications and data model have been used for nearly two decades and have reached technology obsolescence. Continuing to utilize AFM would continue to create Operating and Maintenance cost pressure while also creating risks and lost opportunities. Additionally, any investment in the current system is a sunk cost, as the system is limited in the functionality it can provide to our staff as they serve both gas and electric customers. Replacing AFM will enable Avista to take advantage of commercial GIS applications that provide improved mobile and desktop functionality, increased collaboration capabilities and increased reliability far beyond the what can be achieved with AFM. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Customers will interface with the technology in this business case both through their interactions with Avista personnel who will be using the technology and through map-based information that they will have access to through online methods such as the Avista website. 2.8.2 Identify any related Business Cases The work in the business case (specifically the new data model) is related to the work in the Outage Management System and Advanced Distribution Management System business case. DocuSign Envelope ID: 75EC8367-E425-44FC-82D8-C367C6EF1E37 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 146 of 248 Atlas Business Case Justification Narrative Page 8 of 9 3.1 Steering Committee or Advisory Group Information The Atlas Business Case has two levels of governance: The Executive Technology Steering Committee (ETSC), and Project Steering Committees. The committees review monthly project status reports, which identify project scope, schedule and budget, as well as any risks and/or issues that the project team is currently working on. The Atlas Program Team reports progress monthly to the steering committees and other stakeholder groups. 3.2 Provide and discuss the governance processes and people that will provide oversight The Steering Committee for each project in the Atlas Program will be made up of stakeholders from across the functional business units and Enterprise Technology. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Monthly status reports to the steering committees will be used as the official review and approval process for prioritization and change requests. Risks, issues and change requests will be documented in project logs and kept as artifacts of each project within Enterprise Technology’s project management software system. DocuSign Envelope ID: 75EC8367-E425-44FC-82D8-C367C6EF1E37 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 147 of 248 Atlas Business Case Justification Narrative Page 9 of 9 The undersigned acknowledge they have reviewed the Atlas 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: Date: Print Name: Mike Littrel Title: Manager of Energy Delivery Technology Projects Role: Business Case Owner Signature: Date: Print Name: Josh DiLuciano Title: Director of Electric Engineering Role: Business Case Sponsor Signature: Date: Print Name: Hossein Nikdel Title: Director of Applications and Systems Planning Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 75EC8367-E425-44FC-82D8-C367C6EF1E37 Jul-30-2020 | 10:02 AM PDT Jul-30-2020 | 10:15 AM PDT Jul-30-2020 | 10:28 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 148 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 149 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 150 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 151 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 152 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 153 of 248 Outage Management System and Advanced Distribution Management System (OMS & ADMS) Business Case Justification Narrative Page 1 of 8 EXECUTIVE SUMMARY Avista’s Outage Management Tool (OMT) is an in-house developed custom application that supports outage analysis, management and restoration. OMT provides the functionality to help manage the overall cycle of electric outage and restoration processes for the Washington and Idaho service territories. It works in synchronization with Avista’s Distribution Management System (DMS), feeding it current operating state data of its electric assets to monitor and control Avista’s electric distribution network efficiently and reliably. The DMS is a commercial application used to monitor and control the distribution grid. It relies on the GIS data to determine the current operating state. Because of its reliance on the outdated, custom-built OMT, Avista is not getting full benefit from the DMS capabilities, which in turn results in two systems running at a different pace. The OMT application and data model have been used for nearly two decades and have reached technology obsolescence. The existing data model used by OMT is scheduled for end of life in 2023 and is recommended for replacement in the Atlas business case. Replacing Avista’s OMT and DMS with a commercial Outage Management System (OMS) and Advanced Distribution Management System (ADMS) will improve field and office worker productivity, provide more accurate data, and provide the ability to reengineer work processes and methods to support the continuous improvement of Avista’s outage management and restoration program. An OMS/ADMS solution also provides Avista with the ability to respond to more stringent and detailed regulatory compliance reporting requirements, enables effective operation of an increasingly complex and dynamic distribution grid, and delivers more accurate Estimated Restoration Time (ERT) information to electric customers during outages. The improved ERT accuracy and restoration status for customers will improve customer confidence in the information which will reduce the number of calls received by our customer service representatives, as well as call durations. The estimated project cost is $19.5M over a three planned project duration. The work is scheduled to start in 2022 so that it can be completed while the current data model used by OMT is still supported by the vendor. If the work is not completed on schedule, there will be significant risks and costs to maintain OMT with the existing data model and application version. VERSION HISTORY Version Author Description Date Notes 1.0 Mike Littrel Initial draft of business case 04/2017 2.0 Mike Littrel Updated business case format 07/2020 DocuSign Envelope ID: 82A87F5C-43B9-4B3E-A04A-FA6257F8DEDF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 154 of 248 Outage Management System and Advanced Distribution Management System (OMS & ADMS) Business Case Justification Narrative Page 2 of 8 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Avista’s Outage Management Tool (OMT) has been used for nearly two decades and has reached technology obsolescence. The technology no longer meets the business needs and has exceeded its useful life. The software has already undergone two major conversions to extend the life to this point. Both changes achieved their goals; however, the code is now more fragile which increased the complexity of supporting OMT. Additionally, the existing system is custom built and requires continual maintenance and support by internal staff whose skillset is becoming scarce, as the fundamental code and architecture is complex and outdated. OMT does not have the full complement of desired functionality and outage incident processing performance can be slow during high-volume outage conditions (storm), particularly in field division offices, impacting the ability to restore outages quickly. When a new configuration request is surfaced, the change cannot always be implemented, as the custom code and architecture will not allow it. The existing data model used by OMT is scheduled for end of life in 2023. It is important to begin the transition to the next generation GIS technology while there is still staffing to support OMT, and the data model is still supported, because delaying will increase the risk of customer impact caused by increasing system issues and decreasing supportability. Requested Spend Amount $19,500,000 Requested Spend Time Period 3 Years (2022-2024) Requesting Organization/Department Enterprise Technology Business Case Owner | Sponsor Mike Littrel | Josh DuLuciano Sponsor Organization/Department Energy Delivery Technology Projects Phase Initiation Category Project Driver Asset Condition DocuSign Envelope ID: 82A87F5C-43B9-4B3E-A04A-FA6257F8DEDF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 155 of 248 Outage Management System and Advanced Distribution Management System (OMS & ADMS) Business Case Justification Narrative Page 3 of 8 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer Avista can gain significant operations and business advantages by replacing OMT with an OMS/ADMS. A new OMS/ADMS can address many of the issues currently faced by dispatch and field personnel. Fully integrated with other enterprise systems along with optimized business processes, the benefits to be realized include improved outage analysis and restoration capabilities, improved status information to customer facing systems, and improved system reliability and dependability. A fully integrated OMS/ADMS provides capabilities that include: (1) a platform that integrates numerous utility systems to achieve improved operational awareness and grid management capabilities, (2) enables real-time automated outage restoration, and (3) enables real-time optimization of distribution grid performance. While improved customer experience is difficult to quantify, it is perhaps the most important business reason for justifying a new OMS/ADMS. During major outage event situations, the ability to communicate timely, accurate and consistent status of outages and estimated restoration is of paramount importance. Whether the customer hears directly from the utility, the media or a public agency, the information about the outage needs to be the same. An OMS/ADMS is that vehicle to provide this timely, accurate and consistent information to customers. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The OMT application and data model have been used for nearly two decades and has reached technology obsolescence. Continuing to utilize OMT would continue to create Operating and Maintenance cost pressure while also creating risks and lost opportunities. Additionally, any investment in the current system is a sunk cost, as the system is limited in the functionality it can provide to our staff as they respond electric customer outages. The current system is highly customized making it very difficult to integrate with newer enterprise applications. The existing data model used by the OMT is scheduled for end of life in 2023. OMT is a cornerstone to Avista’s ability to manage the overall cycle of the electric outage and restoration processes for the Washington and Idaho service territories. If it is not replaced with a modern OMS/ADMS, the ability of Avista to meet current and future customer, regulatory, and compliance requirements will be at risk. DocuSign Envelope ID: 82A87F5C-43B9-4B3E-A04A-FA6257F8DEDF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 156 of 248 Outage Management System and Advanced Distribution Management System (OMS & ADMS) Business Case Justification Narrative Page 4 of 8 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Avista tracks a large number of electric system reliability statistics that can and will be used to benchmark and measure success of the project. The project team will work with key stakeholders to determine which reliability statistics would be directly or indirectly influenced by the increased capabilities and functionality of an OMS/ADMS and use those to measure the success of the project. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem Justification for system replacement is based on comprehensive assessments of technologies, processes and functions that were performed in 2015 by third-party consultants as part of the project planning process. The details of the assessments are available in the following supporting documents: • Business Case • Current State Report • Future State Report • Gap Analysis Report • Industry Analysis Report • Requirements Report • Alternative Analysis Report 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Esri Geographic Information System (GIS) serves as the foundational data structure on which Avista Facility Management (AFM) applications including OMT are built or rely on. AFM is the system of record for spatial electric and gas facility data and provides the connectivity model to support OMT. The following is a brief description of AFM tools. DocuSign Envelope ID: 82A87F5C-43B9-4B3E-A04A-FA6257F8DEDF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 157 of 248 Outage Management System and Advanced Distribution Management System (OMS & ADMS) Business Case Justification Narrative Page 5 of 8 • Electric and Gas Edit are tools inherent in the system used for data edits prior to committing final data changes and additions. • Outage Management Tool is an in-house developed application that supports outage analysis and management. • Engineering Analysis is a commercial tool used for engineering analysis modeling. • Distribution Management System is a commercial application used to monitor and control the distribution grid. It relies on the GIS data from AFM to determine the current operating state. The OMT application and data model have been used for nearly two decades and has reached technology obsolescence. Continuing to utilize OMT would continue to create Operating and Maintenance cost pressure while also creating risks and lost opportunities. Additionally, any investment in the current system is a sunk cost, as the system is limited in the functionality it can provide to our staff as they respond electric customer outages. Option Capital Cost Start Complete Recommended Solution - Replace the custom OMT application with an OMS/ADMS $19.5M 01/2022 12/2024 Alternative - Continue to utilize the custom OMT application $1.0M 01/2022 12/2024 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. Detailed documentation from industry experts as listed in section 1.5 above, along with project costs from recent comparable projects at other utilities were used to determine the amount of the capital funds request and duration of the business case. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. The funds in this business case will be utilized to fund the replacement of OMT with an OMS/ADMS. The project is estimated to have a three-year duration. Upon completion, the OMS/ADMS will fully replace both the existing Outage Management Tool and the Distribution Management System. The project is scheduled to start in 2022 and is currently planned for a levelized spend of $6.5M per year over the three-year duration of the project. DocuSign Envelope ID: 82A87F5C-43B9-4B3E-A04A-FA6257F8DEDF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 158 of 248 Outage Management System and Advanced Distribution Management System (OMS & ADMS) Business Case Justification Narrative Page 6 of 8 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. In addition to the business functions and processes already documented in the reports referenced in section 1.5, the project will include a stakeholder analysis to determine the organization change management and training needs. This analysis will then be used to deliver communication to the stakeholders throughout the project and develop end user training. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. The current OMT has a recent history of performance challenges which may only be mitigated with considerable investment or replacement. Continuing to invest in a custom system with no vendor support is not a sustainable long-term solution. There are network management functionality limitations and performance related issues with the current data model that are addressed in Esri’s new data model and platform which would be utilized by a modern OMS/ADMS. The support by Esri for the current data model and software solution will be ending in January 2024. Continuing to use OMT beyond that date would becoming increasingly costly and risky. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. The project is scheduled to start in 2022 and estimated to have a three-year duration. Upon completion, the OMS/ADMS will fully replace both the existing Outage Management Tool and the Distribution Management System. The investment is planned to be used and useful in late 2024 which is when the project costs would transfer to plant. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. Having a modern OMS/ADMS will improve field and office worker productivity, provide more accurate data, and provide the ability to reengineer work processes and methods to support the continuous improvement of Avista’s outage management and restoration program. It will also provide Avista with the ability to respond to more stringent and detailed regulatory compliance reporting requirements, enable effective operation of an increasingly complex and dynamic distribution grid, and deliver more accurate Estimated Restoration Time (ERT) information to electric customers during outages. The improved ERT accuracy and restoration status for customers will improve customer confidence in the information which will reduce the number of calls received by our customer service representatives, as well as call durations. DocuSign Envelope ID: 82A87F5C-43B9-4B3E-A04A-FA6257F8DEDF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 159 of 248 Outage Management System and Advanced Distribution Management System (OMS & ADMS) Business Case Justification Narrative Page 7 of 8 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project The OMT application and data model have been used for nearly two decades and has reached technology obsolescence. Continuing to utilize OMT would continue to create Operating and Maintenance cost pressure while also creating risks and lost opportunities. Additionally, any investment in the current system is a sunk cost, as the system is limited in the functionality it can provide to our staff as they respond electric customer outages. The current system is highly customized making it very difficult to integrate with newer enterprise applications. The existing data model used by the OMT is scheduled for end of life in 2023. OMT is a cornerstone to Avista’s ability to manage the overall cycle of the electric outage and restoration processes for the Washington and Idaho service territories. If it is not replaced with a modern OMS/ADMS, the ability of Avista to meet current and future customer, regulatory, and compliance requirements will be at risk. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Customers will interface with the technology in this business case both through their interactions with Avista personnel who will be using the technology, and through map-based outage information that they will have access to through online methods such as the Avista website and the Avista mobile application. 2.8.2 Identify any related Business Cases The work in this business case is related to and dependent on the work in the Atlas business case. 3.1 Steering Committee or Advisory Group Information This business case will have two levels of governance: The Executive Technology Steering Committee (ETSC), and Project Steering Committee that will be formed as part of the project initiation. The committees will review monthly project status reports, which identify project scope, schedule and budget, as well as any risks and/or issues that the project team has identified. DocuSign Envelope ID: 82A87F5C-43B9-4B3E-A04A-FA6257F8DEDF Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 160 of 248 Outage Management System and Advanced Distribution Management System (OMS & ADMS) Business Case Justification Narrative Page 8 of 8 3.2 Provide and discuss the governance processes and people that will provide oversight The Steering Committee for the project will be made up of stakeholders from across the functional business units and Enterprise Technology. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Monthly status reports to the steering committees will be used as the official review and approval process for prioritization and change requests. Risks, issues and change requests will be documented in project logs and kept as artifacts of each project within Enterprise Technology’s project management software system. The undersigned acknowledge they have reviewed the Outage Management System and Advanced Distribution Management System 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: Date: Print Name: Mike Littrel Title: Manager of Energy Delivery Technology Projects Role: Business Case Owner Signature: Date: Print Name: Josh DiLuciano Title: Director of Electric Engineering Role: Business Case Sponsor Signature: Date: Print Name: Hossein Nikdel Title: Director of Applications and Systems Planning Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 82A87F5C-43B9-4B3E-A04A-FA6257F8DEDF Jul-30-2020 | 10:16 AM PDT Jul-31-2020 | 7:47 AM PDT Jul-31-2020 | 8:15 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 161 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 162 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 163 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 164 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 165 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 166 of 248 Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 1 of 11 EXECUTIVE SUMMARY Energy Delivery Modernization and Operational Efficiency (EDMOE) as a business case supports both existing and new technologies leveraged by the Energy Delivery business areas including Gas Engineering & Operations, Electric Engineering & Operations, Asset Management & Supply Chain, Facilities, Fleet Operations & Metering. These technologies are used to automate and augment business solutions bringing efficiencies and capabilities to support the delivery of energy to our customers. This support includes the following: 1) improving the performance and capacity of business resources by implementing new functionality in existing technologies. 2) improving the performance and capacity of business resources by implementing overall new technologies. 3) modernizing existing technologies in accordance with product lifecycles and technical roadmaps, typically through product or system upgrades. Due to an increase in vendor-driven planned obsolescence, if these systems are not refreshed on a regular cadence, the ability of Avista to meet customer, regulatory and compliance requirements will be at risk. Although these are the primary purposes of this business case, other benefits include cost savings, safety, regulatory compliance and innovative customer-focused products and services. The total program budget over the next five years is estimated to be $24.52M dollars. The funds in this business case will be utilized to fund the EDMOE Program as detailed in the supplemental information referenced in section 2.0 below. Though not exhaustive, the list of supported technologies includes the following major systems: GIS our geospatial information system, Maximo our enterprise work and asset management system, ECM our enterprise content management solution where this solution is used in support of energy delivery activities, PI our plant information system where this system is used to support our energy delivery activities, and Service Suite our mobile workforce management system. Beyond these major systems, there are other miscellaneous applications that are leveraged that also require periodic updates and enhancements. The years 2021-2025 will be focused on the systems and capabilities detailed below. VERSION HISTORY Version Implemented By Revision Date Approved By Approval Date Reason 1.0 Michael Mudge 07/21/2018 Initial version 2.0 Michael Mudge 06/29/2020 Updated Template DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 2 of 11 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? The Energy Delivery business area utilizes a suite of technologies and applications in order to better and more efficiently execute ongoing business processes. As these business processes change, or new opportunities for better or more efficient business processes emerge, these technologies need to change as well. These changes often can be met through leveraging the capabilities of existing systems with minor modifications or configuration changes. We call these types of changes enhancements and set up minor programs to support these activities. Examples of this type of activity includes the GIS and Maximo enhancement packages. Sometimes these changes are larger and require a project of their own, but still leverage existing in portfolio products. Examples include the Centralized Planning and Scheduling project which leverages our GIS system, or Facilities asset management which will leverage our Maximo system. Other times these changes may require new systems altogether with new or different capabilities. Regardless, these changes require technology resources versed both in the changing business processes and the systems being leveraged in order to make the changes. Additionally, this suite of technologies, whether the applications themselves or the technologies supporting them often require upgrades to keep them current with vendor lifecycle roadmaps. The performance of these upgrades often leverages the same resources as identified above, technology experts who understand both the capabilities of the systems themselves as well as strong familiarity with the business processes they support. Under this business case, we are referring to the technologies and applications leveraged by the Energy Delivery business areas including Gas Engineering & Operations, Electric Engineering & Operations, Asset Management & Supply Chain, Facilities, Fleet Operations & Metering. These technologies are used to Requested Spend Amount $24,520,000 Requested Spend Time Period 01/2021-12/2025 Requesting Organization/Department Energy Delivery Business Case Owner | Sponsor Michael Mudge | Hossein Nikdel Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Performance & Capacity DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 3 of 11 automate and augment business solutions bringing efficiencies and capabilities to support the delivery of energy to our customers. This support includes the following: 1) improving the performance and capacity of business resources by implementing new functionality in existing technologies. 2) improving the performance and capacity of business resources by implementing overall new technologies. 3) modernizing existing technologies in accordance with product lifecycles and technical roadmaps, typically through product or system upgrades. Although these are the primary purposes of this business case, other benefits include cost savings, safety, regulatory compliance and innovative customer-focused products and services. The current major applications included in the Energy Delivery Program portfolio include: • Geospatial platform environment - ArcGIS solution(s) - Esri • Enterprise Asset Management system – Maximo solution(s) - IBM • Time Series Operational Data - Plant Intelligence (PI) solution(s) – OSIsoft • Mobile Workforce Management – Mobile Dispatch solution(s) – ABB/Service Suite • Fleet Asset & Work Order Management – FASuite solution(s) – Asset Works • Crew Planning & Scheduling - Crew Manager solution(s) - Arcos • System Operations Outage Management– CROW – Equinox • Metering solution(s) – Itron o OpenWay Riva o MV90 o Field Collection System (FCS) o Fixed Network o TWACS DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 4 of 11 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer At the core of the EDMOE business case is the ongoing support and development of the technologies that enable the Energy Delivery business areas including Gas Engineering & Operations, Electric Engineering & Operations, Asset Management & Supply Chain, Facilities, Fleet Operations & Metering. These technologies enable the workers in these various teams to respond to customer requests faster; provide information to customers that is more accurate, timely and complete; and improves customer satisfaction when they interact with Avista. Other benefits for the company and our customers include cost savings, safety, regulatory compliance and innovative customer- focused products and services. This business case supports the ongoing changes necessary to improve the performance and capacity of these business areas. Although performance and capacity are the key driver, this business case where necessary also supports the other major drivers listed. 1.3 Identify why this work is needed now and what risks there are if not approved or if the work is deferred The suite of technologies managed under this business case and the business processes they enable in many cases are core to Avista’s ability to deliver energy safely and reliably to our customers. These technologies and the business processes they support change on a continual basis based on both internal and external drivers. These drivers include continuous improvements in business process, continuous improvements in safety, changing compliance requirements, changing regulatory requirements, vendor driven change, product obsolescence, changes in customer expectations, as well as changes in system reliability. Additionally, as these changes are ongoing in nature, they require a minimum level of staff capability to support these necessary changes. If the work is deferred or delayed, the technologies will not be in alignment with changing business processes, the technologies will not support improvements in safety, regulatory, or compliance, and the technologies will not be aligned with vendor driven change. Further, if deferred or delayed (meaning the labor required to do the work is made unavailable) when the work is funded the staff required to implement these changes will not be readily available or will likely be more expensive to hire. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Each project within the EDMOE business case has a project charter which includes project costs, schedule, deliverables and benefits. Each project will have a steering committee assigned. Throughout the duration of each project the steering committee will be provided status reports on a monthly basis. These status reports will include updates on project scope, schedule and DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 5 of 11 budget, as well as any risks and/or issues that the project team is currently working on. Each program within the EDMOE business case has a steering committee that prioritizes a backlog of required enhancements and changes in support of changing business process, cost savings, new safety, regulatory or compliance work, and customer driven requirements. These often result from technology demand related to transformations in the utility industry and continual changes required to meet expanding customer needs, as well as the drive to achieve operational efficiencies. Recent trends in the area of mobility, scalability, and the move towards Commercial off the Shelf (COTS) solutions that enhance and/or improve conventional business practices and processes also influence these efforts. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem The technologies and applications improved upon and delivered under this business case automate and enable key business processes used today to deliver safe and reliable energy to our customers. These technologies and applications require ongoing enhancements and sometimes replacement to keep them in line with changing business processes and with changing vendor roadmaps. Technical resources with specialized skills who are familiar with these supported business areas are required to make the ongoing changes. This business case supports the required changes, along with the technical resources, for technologies and applications that support the Energy Delivery business areas including Gas Engineering & Operations, Electric Engineering & Operations, Asset Management & Supply Chain, Facilities, Fleet Operations & Metering. Option Capital Cost Start Complete Recommended Solution $24.52 Million 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. A thorough review of the list of technologies and applications currently providing automation to Energy Delivery business processes was performed. Based on this cataloging, two types of activities were identified, projects and programs. Projects are typically used to support one-time major efforts such as software or platform upgrades, technology replacement or technology implementation. Programs are typically used to enhance existing technologies, DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 6 of 11 keeping the technology in line with existing and evolving business process or to facilitate implementation of additional digitization of business process using existing technologies. For projects, estimates were developed based on identified staffing requirements, software and hardware requirements (license and product costs), and professional service requirements. These were based on current scope and schedule estimates. For Programs providing ongoing enhancements or new functionality to support changing or developing business process the costs were estimated based on staffing, license, professional service, and product costs identified through historical trends. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. The costs incurred under this business case across the next five years will be spent on product licenses, hardware, professional services and labor in support of the technical systems in place across the Energy Delivery business area. Significant costs include the cost of ESRI term licenses, Labor and professional services costs to implement Maximo for Facilities Asset Management, Labor and Professional Services to implement a replacement for EngDraw, Labor costs to develop a new Gas Control Desk Logging solution, Labor to continue enhancements to our GIS system in support of business process, Labor to continue enhancements to our Maximo solution in support of business process, Labor to upgrade our Maximo solution in line with vendor product lifecycles, Labor to support enhancements to our Plant Information (PI) system in support of business process, Labor and hardware updates necessary to support enhancements and upgrades of our AMI head end platform in support of business process and vendor product lifecycles, Labor in support of upgrading MV90 and TWACS in line with vendor product lifecycles, Labor and professional services to support upgrading Mobil Dispatch in line with vendor lifecycles. Labor and professional services for smaller applications in line with vendor product lifecycles. The timelines for this work have been developed with the best information available today and represent ideal scenarios. It is subject to change based on priorities, availability of shared labor, and our ability to find appropriate professional services. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Each project and program within the EDMOE business case includes a business process and stakeholder analysis to determine the organization change management and training needs where necessary. This analysis is then used to deliver communication to the stakeholders throughout the project or program and where required is used to develop end user training. DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 7 of 11 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Each Project under this business case is evaluated before inception to review alternatives, tangible risks, and mitigation strategies for each alternative prior to beginning. This evaluation is reviewed with stakeholders as part of the chartering process. For programs, each has its own steering committee to evaluate risks and prioritize the work prior to inception. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. The timelines shown in the table below for this work has been developed with the best information available today and represent ideal scenarios. It is subject to change based on priorities, availability of shared labor, our ability to find appropriate professional services and current estimates of scope. Projects/Progr ams/Licenses 2021 2022 2023 2024 2025 ESRI ELA (Licenses) 12/2021 Q1/2024- Q4/2024 Facilities Asset Management - Maximo Q1/2021- Q4/2021 ECM Eng Draw Replacement Q1/2021- Q4/2021 Gas Control Q1/2021- Q4/2021 GIS Enhancements Q1/2021- Q4/2021 Q1/2022- Q4/2022 Q1/2023- Q4/2023 Q1/2024- Q4/2024 Q1/2025- Q4/2025 Maximo Enhancements /Upgrade Q1/2021- Q4/2021 Q1/2022- Q4/2022 Q1/2023- Q4/2023 Q1/2024- Q4/2024 Q1/2025- Q4/2025 PI Enhancements Q1/2021- Q4/2021 Q1/2022- Q4/2022 Q1/2023- Q4/2023 Q1/2024- Q4/2024 Q1/2025- Q4/2025 AMI Enhancements /Upgrade Q1/2021- Q4/2021 Q1/2022- Q4/2022 Q1/2023- Q4/2023 Q1/2024- Q4/2024 Q1/2025- Q4/2025 MV90 Upgrade Q1/2021- Q4/2021 Q1/2024- Q4/2024 TWACS Upgrade Q1/2021- Q4/2021 Q1/2024- Q4/2024 DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 8 of 11 Service Suite Upgrade Q1/2022- Q4/2022 Misc. Upgrades Q1/2021- Q4/2021 Q1/2022- Q4/2022 Q1/2023- Q4/2023 Q1/2024- Q4/2024 Q1/2025- Q4/2025 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. Avista has a as its mission to improve our customers lives through innovative energy solutions. Safely, Reliably, Affordably. Avista has as its Focus Areas: Our Customers, Our People, Perform, and Invent. This business case supports the Technologies in the Energy Delivery Business area. Half of all our customer contacts happen in the field as we work to service and deliver energy to meet our customer needs. Every interaction is an opportunity to better our customers lives through informed field workers who have the necessary information to do their job. The systems that support these activities and are supported under this business case include Maximo our Work and Asset Management system, GIS our Geospatial Information System, and Mobile Dispatch/Service Suite our Mobile Work Management system. These systems are highly leveraged to enable the work our Field Workers perform for our customers and supports them doing so safely, reliably and affordably. This business case also supports our Metering systems – MV90, TWACS, Fixed Network, and Itron RIVA. These systems are critical to obtaining our customers meter reads for proper billing. PI is our Engineering Analytics platform that collects sensor data from various distribution sensors including our Itron Riva Meters, this data is used to analyze the performance of our distribution system and to support making changes to improve efficiencies and identify anomalies requiring correction. The Gas Control Desk is required to Log certain events pertaining to Avista’s gas infrastructure. This is currently done in a homegrown shared access database application. The requirements for capturing gas control information has outgrown the capabilities of the application and Avista risks possible non- compliance status and subsequent monetary failures if a system failure were to occur. Moving to a centralized and supported application will benefit Avista and its customers by providing a more reliable method of recording gas events in order to keep our employees and customers safe and meet compliance with DOT regulations. Similarly, EngDraw is a twenty-year-old custom-built document management system that needs replacing. It is end of life, is DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 9 of 11 inefficient in searching for all necessary documents, and is not compatible with 3D files which are being used by Generation and soon by Substation. This leads to inefficiencies, safety risk, and data incompatibilities. Today, Facilities Work and Asset Management is currently done manually using tools such as Microsoft Excel (spreadsheets) and Microsoft Exchange (email). This leads to inefficiencies, delays, and duplication in areas like communication, preventative maintenance, asset lifecycle information, and procurement planning. Without automation of some of these processes, the Facilities team will either need to increase staffing levels to keep up or risk continuing to fall behind on preventive maintenance and asset lifecycle planning. Benefits include (but not limited to) an anticipated productivity increase for all Facilities staff in planning, scheduling, and recording work. This includes all work types of project delivery, operate & maintain, and emergency break/fix. Asset information would be stored and updated from a central location. Another key benefit is mobile access to information in the field, which reduces paper and aids in productivity. All these anticipated benefits also support the proof of prudency required for Avista's capital investment in digital tools to support business process. Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project. Avista’s Energy Delivery and Shared Services technology systems are a necessity, as they provide essential functions to our employees and customers throughout all service territories. These vital systems require systematic upgrades and enhancements in order to maintain reliability, compatibility, and reduce security vulnerabilities. This funding level will provide the appropriate technology and development to meet the periodic upgrades and enhancements prioritized by the Energy Delivery and Shared Services (ED) governance committee. This funding is necessary to mitigate the risk of unsupported applications, security liability, and significantly higher costs as a result of the deferment of upgrades and enhancements, etc. Investment prudency is reviewed by the Steering Committee to ensure alignment of initiatives through judiciously selected and implemented projects. The funding requested as part of this program generally fits these initiatives and are assigned to specific projects (with Steering Committee oversight) as they are identified. Also, the Business Case owner will work with Steering Committee(s) to set project priority and sequence over a five-year planning period, subject to any additional funding changes as directed by the Capital Planning Group (CPG). Each program and project steering committee meet regularly to review the demand to ensure that it aligns with Avista’s strategies. The Steering Committee oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the Technology Planning Group (TPG) or CPG for decision- making around resource or funding constraints. DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 10 of 11 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Customers will interface with the technology in this business case both through their interactions with Avista personnel who will be using the technologies and through map-based information that they will have access to through online methods such as the Avista website. 2.8.2 Identify any related Business Cases None 3.1 Steering Committee or Advisory Group Information The EDMOE Business Case has two levels of governance: The Executive Technology Steering Committee (ETSC), and Project Steering Committees. The committees review monthly project status reports, which identify project scope, schedule and budget, as well as any risks and/or issues that the project team is currently working on. The EDMOE Program Team reports progress monthly to the steering committees and other stakeholder groups. 3.2 Provide and discuss the governance processes and people that will provide oversight The Steering Committee for each project in the EDMOE business case will be made up of stakeholders from across the functional business units and Enterprise Technology. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Monthly status reports to the steering committees will be used as the official review and approval process for prioritization and changes request. Risks, issues and changes requests will be documented in project logs and kept as artifacts of each project within Enterprise Technology’s project management software system. The undersigned acknowledge they have reviewed the EDMOE 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: Date: DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Jul-31-2020 | 1:46 PM PDT Energy Delivery Modernization and Operational Efficiency Business Case Justification Narrative Page 11 of 11 Print Name: Michael Mudge Title: Application Delivery Manager Role: Business Case Owner Signature: Date: Print Name: Hossein Nikdel Title: Director of Applications and Systems Planning Role: Business Case Sponsor Signature: Date: Print Name: Josh DiLuciano Title: Director of Electric Engineering Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 9B6823E9-9297-4F14-B089-AC9E1662DBAD Jul-31-2020 | 1:52 PM PDT Jul-31-2020 | 1:53 PM PDT Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 1 of 10 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? This program is required to support the application-related technology initiatives for all areas within Energy Resources. These areas include Power Supply, Gas Supply, Generation Production Substation Support (GPSS), and Environmental & Real Estate Application refresh projects are necessary due to the continuous requirement to provide updates, upgrades and/or replacements on existing Energy Resources applications, as they are required to respond to changing business needs and/or technical obsolescence. Application refreshes/upgrades are essential in order to remain current, maintain compatibility, reliability, and address security vulnerabilities. Application expansion projects result from demand related to transformations in the utility and continuous technology progression required to achieve operational efficiencies and strategic objectives. Recent trends in the areas of mobility, scalability, and employee experience, require technological expansion of conventional business practices and processes. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The primary investment driver for the Energy Resources Business Program is Performance and Capacity. A secondary investment driver, nearly as important as the first, is Asset Condition. Many of the applications and respective projects in this Business Case provide direct support to Avista customers, while the remaining provide many indirect benefits. Some benefits to upgrades and enhancements to these systems include: • Promoting Risk Management • Utilizing technology to make more informed decisions • Monitoring of generation facilities • Sharing generation resources to provide a more efficient use of renewable energy at the lowest available cost Requested Spend Amount $15,815,000 Requested Spend Time Period 5 years Requesting Organization/Department Energy Resources Business Case Owner | Sponsor Brian Hoerner | Jason Thackston Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Performance & Capacity DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 167 of 248 Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 2 of 10 • Advancing the ‘Innovation and Performance’ focus • Increasing productivity and efficiency • Maintaining compliance with all FERC, NERC, and FCC rules 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The projects and initiatives listed above provide functional enhancements that address ongoing changes in the workplace, provide increased employee efficiency through the reduction of steps required to complete a task, and make better use of Avista resources. They shift costs from inefficient processes to more value-driven activities. The primary alternative to these projects is to use existing systems as-is and to not put new systems in place. This perpetuates inefficiencies as employees are less efficient and effective. Working through these projects as suggested, reduces Avista’s overall risk exposure by ensuring Avista is using funds in the most cost-efficient manner and by maintaining a culture of performance and innovation, which has a positive impact on our employees and customers. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. The Energy Resources business team utilizes technology as a critical component to meeting their strategic objectives. Some success measurements would include; risk avoidance, system reporting, and better forecasting results. Constraints are possible and risks hinder the delivery of the outlined objectives. In these circumstances, the Business Case owner will work with Steering Committee(s) to set project priority and sequence over a five-year planning period, subject to any additional funding changes as directed by the Capital Planning Group (CPG). Each program and project Steering Committee meets regularly to review the demand to ensure that it aligns with Avista’s strategies. The Steering Committee oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the Technology Planning Group (TPG) or CPG for decision-making around resource or funding constraints. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem • Information regarding the EIM Program and Scope can be found via this link: EIM Program Scope 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. NA The recommended solution to ensure that Energy Resources can meet these initiatives and their timelines over the next five years is to follow the recommended application refresh and DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 168 of 248 Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 3 of 10 expansion requirements for Energy Resources applications. The requested allocation is based primarily on compatibility, reliability, security, and safety. Additional criteria considers maintaining operational efficiencies and aligning with strategic objectives. Conventional business practices and processes must be scalable, provide mobility, and focus on the employee and customer experience. The project roadmap for the next five years includes refreshing and/or expansion initiatives made possible by these core Energy Resources systems • Energy Risk Management and Energy Trading – Managing Avista’s collection of energy assets, asset position, and relationships within the various energy markets. Supported applications include: o Nucleus – An energy risk management and energy trading tool enhanced and maintained by Avista, captures all wholesale energy transactions, including significant metering data and forward pricing curves, provides data for tracking energy positions, credit monitoring, compliance reporting, financial reporting, accounting, and market drivers. o Avista Decision Support System (ADSS) – Forecasting and decision support for Energy Traders and Planners, developed and maintained by Avista. (NOTE: The ADSS development is funded via its own business case through 2021. Only enhancements and updates in 2021 and beyond are included here.) o Settlement Solutions – Commercial software solution to support Avista’s sales activity and submission of bids into the California Independent System Operator (CAISO) market. The application provides functionality in the areas of CAISO invoice payments, analysis, and reconciliation, as well as the ability to submit bids into the CAISO markets with a high degree of speed and flexibility. • Gas Forecasting – Understanding the supply, demand, and market influences on natural gas volume and prices. Supported applications include: o Nostradamus – An off-the-shelf industry solution used in gas forecasting. • Work Management / Project Management – Asset management, preventative/ unplanned work management, and construction project/portfolio management for Generation Production and Substation Support (GPSS). Supported applications include: o Maximo for GPSS – Work and Asset Management utilizing modules of Maximo, an off-the-shelf industry solution provided by IBM and used in various Avista business units. o Oracle Primavera (P6) – Enterprise Project and Portfolio Management tool used for project portfolio management, scheduling, risk analysis, and collaboration., provided by Oracle. Implementation is forecasted for late 2020- early 2021. • Generation Plant and Substation Operations – Control and monitoring of operations at all plants and substations from a single location. Supported applications include: DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 169 of 248 Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 4 of 10 o Ignition (replacing Wonderware) – An off-the-shelf industry solution under the Human Machine Interface (HMI) called Ignition that handles control and monitoring of most Avista generation and substation locations. o Stackvision - Software that is used for monitoring the stack emissions at the Rathdrum Combustion Turbine. • Fuel Inventory Management – Management of Avista’s biomass fuel (in the form of logging and mill wood waste) at its Kettle Falls thermal plant. Supported applications include: o WeighWiz – Part of an off-the-shelf Log Inventory and Management System (LIMS) dedicated to timber and wood products procurement and management • Energy Imbalance Market (EIM) - a real-time energy wholesale market that permits the western region to share generation resources over a large geographic area, resulting in a more efficient use of renewable energy at the lowest available cost for our customers. The EIM program is currently funded under its own business case until the implementation and entry into the market in 2022. The Energy Resources Business Case will then consume the ongoing optimization and enhancements for these associated applications currently forecasted in 2023: • Asset Operations o Generation Outage Management System (GOMS) – Performs functions to submit planned and unplanned outages to CAISO for the generation units. o Transmission Outage Management System (TOMS) – Performs functions to submit planned and unplanned outages to CAISO for the transmission lines. • GenManager Front Office (EIM only) o PRSC Bidding & Scheduling System – Performs Merchant functions to submit bids and base schedules to CAISO for participating resources. o EESC Scheduling System – Performs Entity (Balancing Authority) functions to submit base schedules for both participating resources and non-participating resources. • Energy Accounting o Energy Accounting System – Performs meter verification, estimation and editing (VEE) for generation and interchange metering to produce and share Settlement Quality Meter Data (SQMD) with CAISO. • SettleCore o PRSC Settlement System – Performs Merchant settlement functions for the participating resources and activities. o EESC Settlement System – Performs Entity settlement functions for non-participating resources and transmission resources. • Visual Analytics DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 170 of 248 Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 5 of 10 o Performance & Analytics System – Performs a near real-time market analytic functions in a visual display. • Licensing / Cross-Functional / Other – Not every project fits nicely into one of the initiatives above. Some are cross-functional, and some are simply good ideas that continue to improve upon Avista’s workplace (OATI). Upcoming technology-related initiatives for the Energy Resources business area include the move towards utilizing Oracle Primavera Enterprise Project and Portfolio Management, replacing the ABB Sendout system used for Avista’s Gas Integrated Resource Plan (IRP), continuous improvements to work management processes via the Maximo Anywhere application, as well as HMI enhancements to optimize the generation and substation monitoring. This business case will support these initiatives along with required refresh projects. These projects are within industry norms for like-sized Energy Resources departments within like-sized utilities and are accepted and widely adopted approaches used within the energy industry. Capturing every detail of every project over the course of the next five years is not possible. This is part of why the Steering Committee exists – to help propel Avista forward in its initiatives through intelligently selected and implemented projects. The funding requested as part of this program generally fits these initiatives and will be assigned to specific projects (with Steering Committee oversight) as they are identified. Option Capital Cost Start Complete Recommended Solution $15,815,000 01 2021 12 2025 ➢ Alternative #1 – Waterline (see section 2.4) $12,015,000 01 2021 12 2025 ➢ Alternative #2 - Not Funding (see section 2.4) $0 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. As part of the 5-year planning process, Enterprise Technology and the Energy Resources department leaders meet to review the technology demand that is derived from maintaining the current ‘core’ systems currently in place, as well as enhancements or new technology that enables the business to meet their strategic initiatives. These estimates were developed based on the historical trends for enhancement work (Nucleus, Maximo & ADSS), and the product roadmaps for upgrades and licensing renewals, as well as high-level estimates for new product technologies. High level estimates are collected by the business level subject matter expert(s), technology domain architect(s), and delivery management team(s). The schedule was developed with the most recently available information and is subject to change pending risks, competing priorities, dependencies, etc. DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 171 of 248 Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 6 of 10 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. Due to budget constraints within ET Applications and the Energy Resources Business Case over the past couple of years, the majority of 2021 will be focused on ensuring we are as current as we need to be to maintain support, compatibility, reliability and security. After 2021, the goal is to maintain that standard, while moving toward more strategic objectives, such as the Primavera implementation, and potentially replacing some outdated systems to create efficiencies and cost savings. Many of the enhancements planned for Maximo GPSS will create significant value quantitatively and qualitatively. The ABB Sendout System is on the roadmap for replacement which will dramatically impact operational O&M needed to continuously handle break/fixes due to updating aging technology. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. The function of Energy Resources and associated technology is critical to Avista’s ability to function. Although there is not a direct touchpoint within every area of the company, the ability for this business area and job functions to succeed, is dependent on the understanding and support of Avista’s employees and contractors. This Business Case intends to grow significantly with many of the major initiatives and new technologies that will be supported under Energy Resources. (ADSS, HMI, EIM). 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. ➢ Alternative #1 - Funding at a Lower Level (or the Waterline). The Waterline is bottom-up estimate for technology that is required to enable and sustain automated business processes of existing Enterprise Applications to essentially ‘run the company’. These investments allow the company to continue to extract value from the initial technology investment that supports essential functions and delivers efficiency at the appropriate level of quality and performance. Without this investment, systems can fall out of support based on technology vendor-driven lifecycles, as well as degrade appropriate levels of performance and capacity needed to sustain existing automated or technology-supported business processes or to keep automated solutions in line with changing business processes. Estimates include labor and non- labor forecasts based on historical trends and anticipated expenses, which support the skillset, product, and licensing entitlements required to keep the systems current. Waterlines can be fluid for various reasons and therefore are calibrated annually. This alternative has a number of factors working against it. If this Business Case was funded at the waterline, it would result in the need to run the projects at a slower pace or defer existing system enhancements. This alternative would cause a decline in the number of enhancements implemented and efficiencies gained each year. While the work would likely get pushed to future years, the ability to meet planned strategic objectives would be delayed even further. DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 172 of 248 Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 7 of 10 In short, while feasible, funding at a lower level reduces the timing of efficiency gains, adds risk that Avista would have to take extra measures to retain functions and could impact Avista’s ability to run the business, such as keeping up with periodic EIM market enhancements incorporated by the CAISO. It would increase the number of software application assets that would need to be deferred, thereby increasing risk of obsolescence, losing maintenance and support, and reducing automation efficiencies. ➢ Alternative #2 - Not Funding (Retire assets and remove automation) This option assumes the assets would not be replaced upon failure and be removed from service due to product incompatibility or business or safety risk. The basis for measuring the business impact of not funding this business case is realizing the loss of business process automation. As products reach the manufacturer- defined planned obsolescence, business process automation is jeopardized, and business risk is increased as manufacturers cease product maintenance and support. This condition would drive action. The alternative would lead to a mitigation plan of having to re-instate manual business process or eliminate the business process. This option bears the cost of asset retirement for failed assets. Failed assets are estimated to be 50% of obsolete products. The retirement cost is estimated at 10% of the cost to replace the asset. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. This is a program with discrete projects and packages that typically run annually and Transfer to Plant within that same year. There are times that a project may start in Q3/Q4 of one year and Transfer to Plant the following year. Typically, application projects will Transfer to Plant about 60 days prior to the project completion date (due to the post implementation warranty period and to capture the trailing charges). The goal is to break out large/complex projects into smaller projects (phases) to avoid scope creep, budget overages, and ensure the work can be properly prioritized. The first phase of every project would be scoped at the Minimum Viable Product (MVP), and subsequent phases would be scoped accordingly, based on the next highest priority after MVP. This also allows for more accurate Transfer to Plant forecasts. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete projects and packages that align with Avista’s vision, mission and strategic objectives: • To provide Better Energy for Life, you need Power and Gas Supply and Generation. The Energy Resources team is dedicated to the safe and reliable systems that are necessary to meet Avista’s vision. • To improve our customers’ lives through innovative energy solutions, we also need to have technology systems and processes that ensure we are making good decisions, and consistently improving our ability to provide power utilizing innovative technology that enables safety, reliability, and is cost effective. DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 173 of 248 Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 8 of 10 • This program definitely enables people and performance but is also steadily making its impact with innovation. The Energy Resources area uses some technology that may be considered a differentiator in the marketplace (ADSS/Nucleus). The roadmap consists of other technology solutions that will allow for more innovation opportunity, once implemented (EIM, HMI). 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated Energy Resources throughout the project Avista’s Energy Resources technology systems are a necessity, as they provide essential functions to Avista. These vital systems require systematic upgrades and enhancements in order to maintain reliability, compatibility, and reduce security vulnerabilities. This funding level will provide the appropriate technology and development to meet the periodic upgrades and enhancements prioritized by the Energy Resources and Enterprise Technology (ET) governance committee. This funding is necessary to mitigate the risk of unsupported applications, security liability, and significantly higher costs as a result of the deferment of upgrades and enhancements. Investment prudency is reviewed by the Steering Committee to ensure alignment of initiatives through judiciously selected and implemented projects. The funding requested as part of this program generally fits these initiatives and are assigned to specific projects (with Steering Committee oversight) as they are identified. Also, the Business Case owner will work with Steering Committee(s) to set project priority and sequence over a five-year planning period, subject to any additional funding changes as directed by the Capital Planning Group (CPG). Each program and project steering committee meets regularly to review the demand to ensure that it aligns with Avista’s strategies. The Steering Committee oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the Technology Planning Group (TPG) or CPG for decision- making around resource or funding constraints. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case The Energy Resources Steering Committee members include Business Case Sponsors, Directors and Managers within Energy Resources, Finance, and the Enterprise Technology (ET) Business Case Owner. The ET Business Case Owner works in conjunction with the Project Management Office (PMO), and assigned Program Manager, and subsequent Project Managers. The Business Technology Analyst (BTA) is also engaged at all levels and serves as a liaison between ET and Energy Resources. The ET Business Case Owner is accountable and responsible for all Business Case related activities and assignments, but the Energy Resources team is regularly consulted, informed as this directly impacts Energy Resources stakeholders. This model is conducive to a strong partnership, which is key to DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 174 of 248 Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 9 of 10 managing all of the dynamic intricacies throughout the course of the budget year. 2.8.2 Identify any related Business Cases This Business Case is a program that has been functioning for the last 4 years (prior to 2017, the majority of these projects were in the Technology Refresh and Technology Expansion Business Cases). 3.1 Steering Committee or Advisory Group Information The Energy Resources Steering Committee members include Business Case Sponsors, Directors and Managers within Energy Resources, and the Business Case Owner. 3.2 Provide and discuss the governance processes and people that will provide oversight The Energy Resources Business Case has four levels of governance: The Executive Technology Steering Committee (ETSC); Technology Planning Group (TPG) of Directors; Integrated Oversight Committee (IOC), and Program/Project Steering Committees. Applicable stakeholders and disciplines meet regularly to govern the business case and subsequent programs and projects. The IOC evaluates and compares all of the application portfolio project priorities on a weekly basis, utilizing risk, capacity, and other situational factors to ensure each planned project is meeting critical milestones. The TPG sets priority across the technology investment portfolio, balancing: strategic alignment, business value, and customer benefits, as driven by the strategic initiatives established by the ETSC. The Capital Planning Group (CPG), an independent body, establishes funding allocations for each Business Case across the enterprise. The Business Case is largely limited by the funding allocation and resource capacity (staff) to meet its goals. The funding is generally established at the Business Case level by the CPG. The resource capacity constraint is generally managed by the TPG and the Business Case owner. Once the two constrains are established, the Business Case owner will work with steering committee(s) to set project priority and sequence over a five-year planning period, subject to additional funding changes as directed by the CPG. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a weekly basis through the IOC. Each program and project steering committee meets regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. Any changes in funding or scope are documented at the Business Case level, via Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 175 of 248 Energy Resources Modernization and Operational Efficiency Technology Business Case Justification Narrative Page 10 of 10 process. All Enterprise technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. The undersigned acknowledge they have reviewed the Energy Resources Technology Business Case Narrative 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: Date: Print Name: Brian Hoerner Title: Application Delivery Manager Role: Business Case Owner Signature: Date: Print Name: Jason Thackston Title: Sr. VP Energy Resources & Env. Comp. Officer Role: Business Case Sponsor Signature: Date: Print Name: Jason Lang, Andy Vickers, Scott Kinney, Jody Morehouse, Bruce Howard Title: Dir. of Finance, Risk & Asst Treasurer; Dir Gen Prod Sub Support; Dir. of Power Supply; Dir of Gas Supply, Sr. Dir. Environmental Affairs Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: DCCE05C6-40FD-42CC-A3EA-049CFB4B8017 Jul-31-2020 | 8:37 AM PDT Aug-03-2020 | 5:09 AM PDT Aug-04-2020 | 8:28 AM PDT Aug-04-2020 | 11:38 AM PDT Aug-06-2020 | 8:06 AM PDT Aug-04-2020 | 8:32 AM PDT Aug-06-2020 | 3:31 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 176 of 248 Finance and Accounting Technology Business Case Business Case Justification Narrative Page 1 of 8 EXECUTIVE SUMMARY The Finance and Account Technology business case supports the financial application that are critical to Avista Corporation financial health and regulatory requirements. This enables Avista to provide Better Energy for Life for our customers. The financial applications vary from simple to complex and require ongoing management of the enhancements to meet the internal and external business requirements. The financial systems primarily serve the all Avista’s customers and operations throughout our service territories. To maintain the business processes, application and systems supported by this business case it is recommend being funded at $15,540,000 for the next five years or $2,500,000 to $3,500,000 per year. This funding level will provide the appropriate technology and development labor to complete periodic upgrades in order to maintain patched and supported systems. The funding level will also maintain the development staff required to enhance the technology solutions to keep pace with business process drift or change. This is a program business case and is intended to run year over year to maintain the business applications and keep pace with changes in the business processes. If this business case if not funded at the recommended level the it will result in a reduction in technical staff which result in the loss of institutional business process and technology knowledge and will increase the risk to the financial health of the company. Additionally, a lower funding amount will increase the risk to the company through the delay of upgrades resulting in either unsupported applications being used (audit risk) or significantly higher costs for upgrades. VERSION HISTORY Version Author Description Date Notes 2.0 Graham Smith First draft of the Executive Summary 7/1/2020 2.1 Leianne Raymond BC Justification Narrative 7/22/2020 Edits to Narrative 2.2 Leianne Raymond BC Justification Narrative 7/29/2020 DocuSign Envelope ID: 24FC7D18-1A95-4342-BC18-F84016FD1CC4 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 177 of 248 Finance and Accounting Technology Business Case Business Case Justification Narrative Page 2 of 8 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? The Finance and Accounting business area utilizes a collection of business applications to complete the reoccurring business processes. These business processes change on a frequent basis which is driven by a number of factors. The frequency of the change is dictated by the lifecycles of the applications governed in this business case and these changes require resources and technology solutions. This business case provides the resources to keep the systems and automation processes in line with the changes in business process, as well as ensuring the systems are current in their lifecycle to maintain supportability, compatibility, security, and reliability. 1.2 Discuss the major drivers of the business case (Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, or Failed Plant & Operations) and the benefits to the customer The primary driver of this business case is performance and capacity, with asset condition being secondary. As mentioned above, maintaining systems to align with current state business process, is what allows this business area to operate in an efficient manner. The lifecycle management of the applications under this business case are also critical to maintain supportability and performance of the applications. These lifecycles are largely dictated by the technology solutions that we use. All of this work is being done to enable efficiencies and reduce risks to allow Avista to serve internal and external customers. Without properly managed business processes or lifecycles of these applications, our customers would potentially see difficulty in our ability to report company financials, which could jeopardize the ability for our customers to trust our integrity, and the services that we provide. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The projects and initiatives this Business Case supports orderly management of the business processes and technology utilized by this business area. Not funding at a consistent level year over year will result in inconsistent fluctuations in forecasts, as well as risking the functionality and support of the application. Requested Spend Amount $15,540,000 Requested Spend Time Period 5 years Requesting Organization/Department Finance, Accounting, Financial Planning and Analysis. Business Case Owner | Sponsor Graham Smith | Ryan Krasselt Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Performance & Capacity DocuSign Envelope ID: 24FC7D18-1A95-4342-BC18-F84016FD1CC4 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 178 of 248 Finance and Accounting Technology Business Case Business Case Justification Narrative Page 3 of 8 By not performing incremental upgrades and improvements to the business applications, the risk of either failure of those business processes or failure of the applications that support those business processes, increases. Additionally, by not funding the requested amount, it will impact the technology staff that is used to support these applications. That technology staff gains valuable insights and knowledge into the internal workings of Avista and the applications and the loss of those team members could result in significant setbacks. It takes between six to nine months to gain the business process knowledge and understanding to be able to efficiently support these systems. Technology progresses on a constant basis and work is required to be able to keep pace with those advancements. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. A measurement that can be used to track this business case over a longer period of time is evaluation of the ‘vendor provided’ support timeline in comparison to the version that is being utilized in Avista’s portfolio of applications. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Option Capital Cost Start Complete Recommended Solution $15,540,000 01 2021 12 2025  Alternative #1 – Waterline (see section 2.4) $7,600,000 01 2021 12 2025  Alternative #2 - Not Funding (see section 2.4) $0 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. As part of the 5-year planning process, Enterprise Technology and the Finance and Accounting department leaders meet to review the technology demand that is derived from maintaining the current ‘core’ systems currently in place, as well as enhancements or new technology that enables the business to meet their strategic initiatives. These estimates were developed based on the historical trends for enhancement work (EBS/PP), the product roadmaps for upgrades and licensing renewals, as well as high- level estimates for new product technologies. High level estimates are collected by the business level subject matter expert(s), technology domain architect(s), and delivery management team(s). The schedule was developed with the most recently available information and is subject to change pending risks, competing priorities, dependencies, etc. DocuSign Envelope ID: 24FC7D18-1A95-4342-BC18-F84016FD1CC4 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 179 of 248 Finance and Accounting Technology Business Case Business Case Justification Narrative Page 4 of 8 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This business case is in place to reduce the risk to the back-office business operations, specifically related to finance and accounting area. There are no direct reductions to O&M investments by this capital investment, however not investing in this program on a year over year basis will result in increased expense for the application defects as a result of a non-supported platform. Additionally, not keeping the systems in line with current business processes will also result in inefficiency in work process, which creates increasing O&M pressure. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. The business process supported by the business case impact all of the financial transactions for the company. Failure to support these systems may impact the creation of a new accounting project for a new customer request construction project to the payment of an invoice. These are critical functions of the company and require technology to be executed efficiently and successfully. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative.  Alternative #1 - Funding at a Lower Level (or the Waterline). The Waterline is bottom-up estimate for technology that is required to enable and sustain automated business processes of existing Enterprise Applications to essentially ‘run the company’. These investments allow the company to continue to extract value from the initial technology investment that supports essential functions and delivers efficiency at the appropriate level of quality and performance. Without this investment, systems can fall out of support based on technology vendor-driven lifecycles, as well as degrade appropriate levels of performance and capacity needed to sustain existing automated or technology-supported business processes or to keep automated solutions in line with changing business processes. Estimates include labor and non- labor forecasts based on historical trends and anticipated expenses, which support the skillset, product, and licensing entitlements required to keep the systems current. Waterlines can be fluid for various reasons and therefore are calibrated annually. This alternative has a number of factors working against it. If this Business Case was funded at the waterline, it would result in the need to run the projects at a slower pace or defer existing system enhancements. This alternative would cause a decline in the number of enhancements implemented and efficiencies gained each year. While the work would likely get pushed to future years, the ability to meet planned strategic objectives would be delayed even further. Both of these actions would increase the risks for the company concerning its financial viability. In short, while feasible, funding at a lower level reduces the timing of efficiency gains, adds risk that Avista would have to increase the number of software application assets that would need to be deferred, thereby increasing risk of obsolescence, losing maintenance and support, and reducing automation efficiencies.  Alternative #2 - Not Funding (Retire assets and remove automation) DocuSign Envelope ID: 24FC7D18-1A95-4342-BC18-F84016FD1CC4 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 180 of 248 Finance and Accounting Technology Business Case Business Case Justification Narrative Page 5 of 8 This option assumes the assets would not be replaced upon failure and be removed from service due to product incompatibility or business or safety risk. The basis for measuring the business impact of not funding this business case is realizing the loss of business process automation. As products reach the manufacturer- defined planned obsolescence, business process automation is jeopardized, and business risk is increased as manufacturers cease product maintenance and support. This condition would drive action. The alternative would lead to a mitigation plan of having to re-instate manual business process or eliminate the business process. This option bears the cost of asset retirement for failed assets. Failed assets are estimated to be 50% of obsolete products. The retirement cost is estimated at 10% of the cost to replace the asset. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. Below is roadmap of the applications and business initiatives that this business case supports. Due to lower than requested funding of this business case a number of these applications are already past due for an upgrade to maintain supportability. Typical projects in the business case are generally 12 months less and transfer to plant within 60 days following implementation to accommodate trailing charges. *Finance and Account Roadmap as of July 2020 and is subject to change. 2021 2022 2023 2024 2025 EBS & database upgrade (continued) Extract DB replacement Extract DB replacement EBS upgrade EBS upgrade (continued) Reconciliation and close automation (replace RED & JET; systematic account PowerPlan upgrade (Tax and FA) continued Consolidation / financial reporting improvements Systematic calculation of tax APx evaluation / replacement PowerPlan upgrade (Tax and FA) Reconciliation and close automation Reconciliation and close automation Systematic cash forecasting Expense report solution review Capital prioritization Unitization pre-2012 Depreciation Debt Database UI Planner evaluation Unitization support Oracle Business Clarity integration for PowerPlan Tax Fixed Automated testing EIM settlements CPI (tax AFUDC) in Robotic process Automated testing FERC XBRL solution Remittance Automate FERC UI Planner upgrade Oracle Business PowerPlan upload as-Automated testing Quickbooks upgrade Depreciation Automated testing Quickbooks upgrade PowerPlan FERC audit DocuSign Envelope ID: 24FC7D18-1A95-4342-BC18-F84016FD1CC4 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 181 of 248 Finance and Accounting Technology Business Case Business Case Justification Narrative Page 6 of 8 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete project and packages that align with Avista’s vision, mission, and strategic objectives: • To provide Better Energy for Life, you need people. The Finance and Accounting teams are dedicated to the people of Avista and its customers. The technology in this business area is utilized as an investment, so that it can be updated as the market demands, and sustainable to meet ongoing business operations. • To improve our customers’ lives through innovative energy solutions, we also need skill resources and specialized technology solutions to meeting the many complicated financial requirements. The specialized technology solutions require continuous maintenance in order to meeting the ever-changing requirements and to perform at acceptable levels. • The program embodies Avista’s Focus Areas, particularly placing emphasis on the ‘perform’ aspect. The specialized technology solutions supported under this business case are force multiplier for the financial and accounting employees who without the technology would not be able to meet the needs of Avista. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project This is program level business case and its investments are evaluated through program level governance. On a routine basis the technology team members meet with the business stakeholders and evaluate prior performance as well as input what should be done next. Investment prudency is also reviewed by the Steering Committee to ensure alignment of initiatives through judiciously selected and implemented projects. The funding requested as part of this program generally fits these initiatives and are assigned to specific projects (with Steering Committee oversight) as they are identified. Also, the Business Case owner will work with Steering Committee(s) to set project priority and sequence over a five-year planning period, subject to any additional funding changes as directed by the Capital Planning Group (CPG). Each program and project steering committee meets regularly to review the demand to ensure that it aligns with Avista’s strategies. The Steering Committee oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the Technology Planning Group (TPG) or CPG for decision- making around resource or funding constraints. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Our customer and shareholders interface with this business case by having a financially viable company. 2.8.2 Identify any related Business Cases Because of the company’s highly integrated business processes all of the Technology Business cases have relation to each other. The business DocuSign Envelope ID: 24FC7D18-1A95-4342-BC18-F84016FD1CC4 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 182 of 248 Finance and Accounting Technology Business Case Business Case Justification Narrative Page 7 of 8 cases are divided to provide a clear understanding of the resources required to maintain and enhance a highly integration company. 3.1 Steering Committee or Advisory Group Information This business case is governed by a steering committee made up of the principle managers of the finance and accounting areas and facilitated by the application delivery manager and business product manager. The roles include but are not limited to: Director of Accounting, Director of Financial Planning and Analysis, Manager Projects and Fixed Assets Accounting, Manager or Financial Systems, Manager Resource Accounting, Manager of Asset Management, and Manager Treasury. 3.2 Provide and discuss the governance processes and people that will provide oversight The Finance and Accounting Business Case has four levels of governance: The Executive Technology Steering Committee (ETSC); Technology Planning Group (TPG) of Directors; Integrated Oversight Committee (IOC), and Program/Project Steering Committees. Applicable stakeholders and disciplines meet regularly to govern the business case and subsequent programs and projects. The IOC evaluates and compares all of the application portfolio project priorities on a weekly basis, utilizing risk, capacity, and other situational factors to ensure each planned project is meeting critical milestones. The TPG sets priority across the technology investment portfolio, balancing: strategic alignment, business value, and customer benefits, as driven by the strategic initiatives established by the ETSC. The Capital Planning Group (CPG), an independent body, establishes funding allocations for each Business Case across the enterprise. The Business Case is largely limited by the funding allocation and resource capacity (staff) to meet its goals. The funding is generally established at the Business Case level by the CPG. The resource capacity constraint is generally managed by the TPG and the Business Case owner. Once the two constrains are established, the Business Case owner will work with steering committee(s) to set project priority and sequence over a five-year planning period, subject to additional funding changes as directed by the CPG. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a weekly basis by the IOC. Each program and project steering committee meets regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. Any changes in funding or scope are documented at the Business Case level, via Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. DocuSign Envelope ID: 24FC7D18-1A95-4342-BC18-F84016FD1CC4 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 183 of 248 Finance and Accounting Technology Business Case Business Case Justification Narrative Page 8 of 8 Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow process. All Enterprise technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. The undersigned acknowledge they have reviewed the Finance and Accounting Technology 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: Date: Print Name: Graham Smith Title: Application Delivery Manager Role: Business Case Owner Signature: Date: Print Name: Ryan Krasselt Title: VP and Controller Role: Business Case Sponsor Signature: Date: Print Name: Jason Lang, Lauren Pendergraft, Adam Munson, Daniel Loutzenhiser, Hossein Nikdel Title: Dir. Fin. Risk, & Asst. Treasurer, Dir. Fin. Planning & Analysis, Dir. of Accounting, Dir. Tax – Asst. Treasurer, Director of Application Development Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 24FC7D18-1A95-4342-BC18-F84016FD1CC4 Aug-03-2020 | 7:56 AM PDT Aug-03-2020 | 1:17 PM PDT Aug-03-2020 | 3:38 PM PDT Aug-05-2020 | 7:39 AM PDT Aug-04-2020 | 10:46 AM PDT Aug-04-2020 | 8:37 AM PDT Aug-04-2020 | 8:29 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 184 of 248 Human Resources Technology Business Case Justification Narrative Page 1 of 12 EXECUTIVE SUMMARY The Human Resources Technology (HRT) Business Case sponsors the technology related applications that support the Human Resources (HR) business areas strategic initiatives. The HR business area includes Labor and Employee Relations, Leadership and Organizational Development, HR Shared Services, Craft Training, and Safety. Avista’s Human Resources technology systems are a necessity, as they provide essential functions to all our employees and customers throughout all service territories, such as payroll, benefits, safety, personnel development, and labor compliance. These vital systems require systematic upgrades and enhancements in order to maintain reliability, compatibility, and reduce security vulnerabilities. This business case is intended to run as an annual program that maintains these applications necessary to meet internal and external business processes and objectives. In order to maintain these business processes and systems supported by this business case, the recommended funding level is roughly estimated to be $850,000 to $1,350,000 per year. This funding level will provide the appropriate technology and development to meet the periodic upgrades and enhancements prioritized by the HR and Enterprise Technology (ET) governance committee. This funding level considers the development staff required to maintain the technology solutions. If this business case if not funded at the recommended level, it will result in a reduction of skilled resources, which greatly impacts the institutional business process and technical knowledge, as well as our employees, customers, and compliance efforts. Additionally, a lower funding amount will increase the risk to the company through the deferment of upgrades and enhancements, resulting in unsupported applications, security liability, and significantly higher costs. VERSION HISTORY Version Author Description Date Notes 1.0 Leianne Raymond 2021-2025 Business Case Revision 7/3/2020 Executive Summary only DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 185 of 248 Human Resources Technology Business Case Justification Narrative Page 2 of 12 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? This program is required to support the application-related technology initiatives for all areas within Human Resources (HR). Those areas include, Payroll & Timekeeping, Benefits & Compensation, Leadership & Organizational Development, Labor & Employee Relations, Occupational Health, and Safety & Craft Training. Application refresh projects are necessary due to the continuous requirement to provide updates, upgrades and/or replacements on existing HR applications, as they are required to respond to changing business needs and/or technical obsolescence. Application refreshes/upgrades are essential in order to remain current, maintain compatibility, reliability, and address security vulnerabilities. Application expansion projects result from demand related to transformations in the utility and continuous technology progression required to achieve operational efficiencies and strategic objectives. Recent trends in the areas of mobility, scalability, and employee experience, require technological expansion of conventional business practices and processes. 1.2 Discuss the major drivers of the business case and the benefits to the customer The primary investment driver for the Human Resources Business Program is Performance and Capacity. A secondary investment driver, nearly as important as the first, is Mandatory and Compliance. Many of the applications and respective projects in this Business Case provide direct support to Avista customers, while the remaining provide many indirect benefits. Some benefits to upgrades and enhancements to these systems include: • Advancing the ‘Customer Experience’ focus • Improving the ‘Employee Experience’ and engagement • Attracting and retaining diverse resources • Fostering ‘Diversity, Equity and Inclusion’ (DEI) and a culture of belonging • Promoting safety and health Requested Spend Amount $5,500,000 Requested Spend Time Period 5 years Requesting Organization/Department Human Resources Business Case Owner | Sponsor Brian Hoerner | Bryan Cox Sponsor Organization/Department Enterprise Technology Phase Execution Category Program Driver Performance & Capacity DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 186 of 248 Human Resources Technology Business Case Justification Narrative Page 3 of 12 • Increasing employee productivity • Encouraging and facilitating learning and skill development • Refining talent management • Fostering collaboration and communication • Maintaining compliance with relevant local, state and federal regulations 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The projects and initiatives listed above provide functional enhancements that address ongoing changes in the workplace, provide increased employee efficiency through the reduction of steps required to complete a task, and make better use of Avista resources. They shift costs from inefficient processes to more value-driven activities. The primary alternative to these projects is to use existing systems as-is and to not put new systems in place. This puts Avista at risk through attrition and perpetuates inefficiencies as employees search to find the information they need. Another alternative to taking on these projects as suggested would be to take them on at a slower pace. While feasible, it reduces the timing of efficiency gains, continues to risk attrition through employee dissatisfaction, and is harder to attract new talent as current talent retires. Working through these projects as suggested, reduces Avista’s overall risk exposure by ensuring our employees are fully compliant with all FERC, NERC, and FCC rules (via training and talent management), by ensuring Avista is using funds in the most cost-efficient manner (via improved employee tools that increase overall efficiency and keep employees focused), limiting costly employee turnover, and by keeping employees educated in the latest safety and health trends and requirements. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. The HR business team utilizes technology as a critical component to meeting their strategic objectives. Some tools used to measure success would include; surveys, reporting (compliance, training, payroll), collaboration tools (Yammer, Avenue, Teams) and other various forms of employee input. Constraints are possible and risks hindering the delivery of the outlined objectives. In these circumstances, the Business Case owner will work with Steering Committee(s) to set project priority and sequence over a five-year planning period, subject to any additional funding changes as directed by the Capital Planning Group (CPG). Each program and project Steering Committee meets regularly to review the demand to ensure that it aligns with Avista’s strategies. The Steering Committee oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the Technology Planning Group (TPG) or CPG for decision-making around resource or funding constraints. DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 187 of 248 Human Resources Technology Business Case Justification Narrative Page 4 of 12 1.5 Supplemental Information Please reference and summarize any studies that support the problem These articles outline overall priorities of HR functions, and also reinforce the need for starting the Digital Employee Experience strategy/program. The articles also provide some information that is relative to the issues/gaps/obstacles Avista faces with HR centric technology. Gartner: Hackett Group DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 188 of 248 Human Resources Technology Business Case Justification Narrative Page 5 of 12 2020-Q2-state-of-digital workplace-report.pdf For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. NA The recommended solution to ensure that HR can meet these initiatives and their timelines over the next five years, is to follow the recommended application refresh and expansion requirements for HR applications. The requested allocation is based primarily on compatibility, reliability, security, and safety. Additional criteria considers maintaining operational efficiencies and aligning with strategic objectives. Conventional business practices and processes must be scalable, provide mobility, and focus on the employee and customer experience. The project roadmap for the next 5 years includes refreshing and/or expansion of the core HR systems that support these initiatives: • Analytics / Compliance – Compliance is an important part of Avista’s regulated business. This includes compliance with finance laws, safety laws, and more. Ensuring compliance requires a great deal of data discovery and analysis. Additionally, growing Operator Qualification Compliance for gas workers and contractors creates increased requirements for learning systems. This is one of the drivers behind reviewing Avista’s current LMS (Learning Management System), a potential shift to other systems, and emerging needs for additional applications. • Employee Engagement and Belonging– Study after study shows that an engaged workforce is a healthier workforce. Engaged employees have higher job satisfaction, lower attrition rates, and higher productivity. Some of that engagement comes in the form of Avista’s LMS work mentioned above; some comes in the form of surveys and other forms of employee input. HR personnel are considering products and product suites that target employee sentiment and suggest new areas of employee engagement. Employee engagement also comes from having the people systems and tools that support ease of productivity, collaboration, communication, belonging, equity and fairness. • HR Information Systems (HRIS) – HR Information Systems (HRIS) are those that process and manage employee records and transactions. Examples include systems responsible for timekeeping (UltiPro), change of status (Resource Hub), performance management, employee perceptions, benefits enrollment, and more. • HR Management (HRM) – HR Management (HRM) systems support the day-to-day management of employees from across the employee life-cycle from recruiting to onboarding to exit interviews. DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 189 of 248 Human Resources Technology Business Case Justification Narrative Page 6 of 12 • Learning and Ongoing Training – Providing up-to-date training keeps the Avista workforce safe (through ongoing safety training), productive and customer-focused (by learning the latest approaches and techniques), and compliant (through ongoing FERC/NERC/Other training by Avista contractors and employees). Avista does this by accelerating the development of new leaders through guided talent management, building a skilled workforce, and providing central talent to Avista leaders through learning platforms (Avista Learning Network and other learning systems such as Articulate 360 learning design tools and Mandarin Learning Center software). • Safety and Health – Safety and Health are key elements of Avista’s culture. Promoting a culture of safety and health falls to Avista’s HR team. (Enterprise Health and Safety System, PrognoCIS EMR) • Cross-Functional / Other – Not every project fits nicely into one of the initiatives above. Some are cross-functional, and some are simply good ideas that continue to improve upon Avista’s workplace These projects are within industry norms for like-sized HR departments within like-sized utilities. None of the proposed projects are on the leading edge of technological innovation; they are accepted and widely adopted approaches used within the energy industry. Capturing every detail of every project over the course of the next five years is not possible. This is part of why the Steering Committee exists – to help propel Avista forward in its initiatives through intelligently selected and implemented projects. The funding requested as part of this program generally fits these initiatives and will be assigned to specific projects (with Steering Committee oversight) as they are identified. Option Capital Cost Start Complete Recommended Solution $5,500,000 01 2021 12 2025 ➢ Alternative #1 – Waterline (see section 2.4) $3,500,000 01 2021 12 2025 ➢ Alternative #2 - Not Funding (see section 2.4) $0 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. As part of the ongoing planning and roadmap process, Enterprise Technology and the HR department leaders meet to review the technology demand that is derived from maintaining the current ‘core’ systems currently in place, as well as enhancements or new technology that enables the business to meet their strategic initiatives. These estimates were developed based on the historical trends for enhancement work (Resource Hub, UltiPro, Learning Management System, etc.), the product roadmaps for upgrades and licensing renewals, as well as high-level estimates for new product technologies. High level estimates are collected by the business level subject matter expert(s), technology domain architect(s), and delivery management team(s). The DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 190 of 248 Human Resources Technology Business Case Justification Narrative Page 7 of 12 schedule was developed with the most recently available information and is subject to change pending risks, competing priorities, dependencies, etc. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. Due to budget constraints within ET Applications and the HR Business Case over the past couple of years, the majority of 2021 will be focused on ensuring we are as current as we need to be to maintain support, compatibility, reliability and security. After 2021, the goal is to maintain that standard, while moving toward more strategic objectives, such as the Digital Employee Experience, and potentially replacing some outdated systems to create efficiencies and cost savings. Many of the modules available in UltiPro (UltiPro Expansion) can replace manual processes, or significantly shorten the amount of time spent in those processes. The Avista Learning Network (ALN) is on the roadmap for potential replacement, due to the need to expand these capabilities as the industry and technology changes quickly and exponentially. 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Human Resources impacts every area of the business. From pre-employment (recruiting), to post employment (retirement), and the many years in between, HR plays a critical role in every employee’s tenure at Avista, which must include the technology to manage effectively. Any deficiency in the technology is a direct and visible impact to Avista employees and contractors. Any shortfalls that employees experience, can have multiple downstream impacts, such as increased costs (inefficiencies / attrition, etc.), and an objectionable customer experience. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. ➢ Alternative #1 - Funding at a Lower Level (or the Waterline) The Waterline is bottom-up estimate for technology that is required to enable and sustain automated business processes of existing Enterprise Applications to essentially ‘run the company’. These investments allow the company to continue to extract value from the initial technology investment that supports essential functions and delivers efficiency at the appropriate level of quality and performance. Without this investment, systems can fall out of support based on technology vendor-driven lifecycles, as well as degrade appropriate levels of performance and capacity needed to sustain existing automated or technology-supported business processes or to keep automated solutions in line with changing business processes. Estimates include labor and non- labor forecasts based on historical trends and anticipated expenses, which support the skillset, product, and licensing entitlements required to keep the systems current. Waterlines can be fluid for various reasons and therefore are calibrated annually. This alternative has a number of factors working against it. DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 191 of 248 Human Resources Technology Business Case Justification Narrative Page 8 of 12 If this Business Case was funded at the waterline, it would result in the need to run the projects at a slower pace or defer existing system enhancements. This alternative would cause a decline in the number of enhancements implemented and efficiencies gained each year. While the work would likely get pushed to future years, the ability to meet planned strategic objectives would be delayed even further. In short, while feasible, funding at a lower level reduces the timing of efficiency gains, adds risk that Avista would have to take extra measures to retain key employees (and thus knowledge), and could impact the community’s perception of Avista as an employer of choice. It would increase the number of software application assets that would need to be deferred, thereby increasing risk of obsolescence, losing maintenance and support, and reducing automation efficiencies. ➢ Alternative #2 - Not Funding (Retire assets and remove automation) This option assumes the assets would not be replaced upon failure and be removed from service due to product incompatibility or business or safety risk. The basis for measuring the business impact of not funding this business case is realizing the loss of business process automation. As products reach the manufacturer- defined planned obsolescence, business process automation is jeopardized, and business risk is increased as manufacturers cease product maintenance and support. This condition would drive action. The alternative would lead to a mitigation plan of having to re-instate manual business process or eliminate the business process. This option bears the cost of asset retirement for failed assets. Failed assets are estimated to be 50% of obsolete products. The retirement cost is estimated at 10% of the cost to replace the asset. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. This is a program with discrete projects and packages that typically run annually and Transfer to Plant within that same year. There are times that a project may start in Q3/Q4 of one year and Transfer to Plant the following year. Typically, application projects will Transfer to Plant about 60 days prior to the project completion date (due to the post implementation warranty period and to capture the trailing charges). 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This is a program with discrete projects and packages that align with Avista’s vision, mission and strategic objectives: • To provide Better Energy for Life, employees are essential. The Human Resources team is dedicated to the people of Avista and its customers. The technology in this business area is utilized as an investment, so that it can be updated as the market demands, and sustainable to meet ongoing business operations. DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 192 of 248 Human Resources Technology Business Case Justification Narrative Page 9 of 12 • To improve our customers’ lives through innovative energy solutions, we also need very skilled people with diverse experiences, that are trustworthy, innovative and collaborative. HR utilizes technology systems to locate, onboard, train, develop, compensate, and keep these valuable employees safe and healthy. • This program embodies Avista’s Focus Areas, particularly placing emphasis in ‘Our People’. The tools that HR provides to invest in people is key to providing a stellar employee experience. Some of the systems used to achieve this are UltiPro, which provides an employee dashboard, that serves as the timekeeping system, but also is a one-stop location for performance management, career development, payroll and benefits. This is an application that is helpful and efficient for employees to utilize, which creates a downstream impact to our shareholders and customers. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Avista’s Human Resources technology systems are a necessity, as they provide essential functions to all of our employees and customers throughout all service territories. These vital systems require systematic upgrades and enhancements in order to maintain reliability, compatibility, and reduce security vulnerabilities. This funding level will provide the appropriate technology and development to meet the periodic upgrades and enhancements prioritized by the HR and Enterprise Technology (ET) governance committee. This funding is necessary to mitigate the risk of unsupported applications, security liability, and significantly higher costs as a result of the deferment of upgrades and enhancements, etc. Investment prudency is reviewed by the Steering Committee to ensure alignment of initiatives through judiciously selected and implemented projects. The funding requested as part of this program generally fits these initiatives and are assigned to specific projects (with Steering Committee oversight) as they are identified. Also, the Business Case owner will work with Steering Committee(s) to set project priority and sequence over a five-year planning period, subject to any additional funding changes as directed by the Capital Planning Group (CPG). Each program and project steering committee meets regularly to review the demand to ensure that it aligns with Avista’s strategies. The Steering Committee oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the Technology Planning Group (TPG) or CPG for decision- making around resource or funding constraints. 2.8 Supplemental Information DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 193 of 248 Human Resources Technology Business Case Justification Narrative Page 10 of 12 Identify customers and stakeholders that interface with the business case The Human Resources Steering Committee members include Business Case Sponsors, Directors and Managers within Human Resources, and the Enterprise Technology (ET) Business Case Owner. The ET Business Case Owner works in conjunction with the Project Management Office (PMO), and assigned Program Manager, and subsequent Project Managers. The Business Technology Analyst (BTA) is also engaged at all levels, and serves as a liaison between ET and HR. The ET Business Case Owner is accountable and responsible for all Business Case related activities and assignments, but the HR team is regularly consulted, informed as this directly impacts HR stakeholders. This model is conducive to a strong partnership, which is key to managing all of the dynamic intricacies throughout the course of the budget year. Identify any related Business Cases This Business Case is a program that has been functioning for the last 4 years (prior to 2017, these projects were in the Technology Refresh and Technology Expansion Business Cases). There are some applications that HR is responsible for that are used ‘Enterprise wide’ and receive technology requests outside of the HR department. Those requests typically fall under the Enterprise Technology Modernization and Operational Efficiency (ETMOE) Business Case. 3.1 Steering Committee or Advisory Group Information The Human Resources Steering Committee members include Business Case Sponsors, Directors and Managers within Human Resources, and the Business Case Owner. 3.2 Provide and discuss the governance processes and people that will provide oversight The Human Resources Business Case has four levels of governance: The Executive Technology Steering Committee (ETSC); Technology Planning Group (TPG) of Directors; Integrated Oversight Committee (IOC), and Program/Project Steering Committees. Applicable stakeholders and disciplines meet regularly to govern the business case and subsequent programs and projects. The IOC evaluates and compares all of the application portfolio project priorities on a weekly basis, utilizing risk, capacity, and other situational factors to ensure each planned project is meeting critical milestones. The TPG sets priority across the technology investment portfolio, balancing: strategic alignment, business value, and customer benefits, as driven by the strategic initiatives established by the ETSC. The Capital Planning Group (CPG), an independent body, establishes funding allocations for each Business Case across the enterprise. The Business Case is largely limited by the funding allocation and resource capacity (staff) to meet its goals. The funding is generally established at the Business Case level by the CPG. The resource capacity constraint is generally managed by the TPG and the Business Case owner. Once the two constrains are established, the Business Case DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 194 of 248 Human Resources Technology Business Case Justification Narrative Page 11 of 12 owner will work with steering committee(s) to set project priority and sequence over a five-year planning period, subject to additional funding changes as directed by the CPG. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project prioritization is evaluated by the management team on a weekly basis by the IOC. Each program and project steering committee meets regularly and oversees scope, schedule and budget within their respective programs and projects and inform the Business Case owner of any changes needing escalation to the TPG or CPG for decision-making around resource or funding constraints. Any changes in funding or scope are documented at the Business Case level, via Change Request document that is presented to the CPG on a monthly basis and evaluated by the CPG for approval. Changes in scope, schedule, or budget are also documented through a ‘Change Request’ at the project level and reviewed and approved through a formal workflow process. All Enterprise technology projects in this business case are managed through the PMO, which follows the Project Management Institute (PMI) standards. Projects initiate with a ‘Charter’ to begin the planning process. When planning is complete, a ‘Project Management Plan (PMP)’ is created and approved as the projects baseline for scope, schedule and budget. At the end of execution, an ‘Approval to Go Live’ is submitted and approved prior to implementation (Transfer to Plant). After the technology is in service and out of the warranty period, the Project Manager will hold a Lessons Learned, and subsequently submit an ‘Approval to Close’ prior to finishing the project. All Monitor and Control documentation and Change Requests are documented and stored to ensure a comprehensive audit trail. The undersigned acknowledge they have reviewed the Human Resources Technology Business Case Narrative 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: Date: Print Name: Brian Hoerner Title: Mgr. Application Delivery Role: Business Case Owner Signature: Date: Print Name: Bryan Cox Title: VP Safety & Human Resources Role: Business Case Sponsor DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Jul-31-2020 | 8:38 AM PDT Jul-31-2020 | 10:33 AM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 195 of 248 Human Resources Technology Business Case Justification Narrative Page 12 of 12 Signature: Date: Print Name: Diane Quincy, Mary Prince, Laura Vickers, Jeremy Gall, Hossein Nikdel Title: Dir. Leadership & Org. Dev, Dir. Benefits HRIS & Payroll, Dir. Culture, Diversity & People, Sr. Mgr. Safety & Craft Training, Director Application Delivery Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: BD9AA372-47AD-4C19-B059-6703C327674E Aug-06-2020 | 6:58 PM PDT Jul-31-2020 | 1:21 PM PDT Aug-03-2020 | 6:25 AM PDT Jul-31-2020 | 2:13 PM PDT Aug-04-2020 | 3:09 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 196 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 197 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 198 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 199 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 200 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 212 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 213 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 214 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 215 of 248 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 216 of 248 NERC CIP Compliance Business Case Justification Narrative Page 1 of 6 EXECUTIVE SUMMARY Avista, as a regulated utility, is required to meet North American Electric Reliability Corporation (“NERC”) Critical Infrastructure Protection (“CIP”) Standards. NERC CIP standards continue to evolve to address emerging threats. To achieve and maintain compliance with NERC CIP standards, an estimated $250,000 annual investment is necessary. This business case will fund cyber and physical security improvements to achieve and maintain NERC CIP compliance. Being compliant with NERC CIP standards benefits customers by reducing the risk of electric service interruptions associated with cyber or physical attacks. The requested funding amount is intended to achieve and maintain compliance with the effective dates defined by NERC CIP. Not being compliant and accepting fines is not considered a viable alternative, as it puts Avista’s cyber and physical security posture at risk and increases costs due to penalties. The recommended solution is to implement the controls necessary to achieve compliance. VERSION HISTORY Version Author Description Date Notes Draft Andru Miller Initial draft of original business case 6/29/2020 Updated Andru Miller Reduction of funds request in 2021 8/28/2020 GENERAL INFORMATION 1. BUSINESS PROBLEM Meeting NERC CIP compliance standards for both cyber and physical security measures is a requirement for Avista. In addition to protecting gas and electric services, meeting the NERC CIP compliance standards by the specificed timeframe Requested Spend Amount $1,100,000 Requested Spend Time Period 5 years Requesting Organization/Department Security Business Case Owner | Sponsor Clay Storey | Clay Storey Sponsor Organization/Department Phase Choose an item. Category Choose an item. Driver Choose an item. DocuSign Envelope ID: 08242A4B-AF2B-440C-AE7F-48125CAC1229 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 217 of 248 NERC CIP Compliance Business Case Justification Narrative Page 2 of 6 will save Avista money from fines associated with the violation of a standard. 1.1 What is the current or potential problem that is being addressed? The NERC CIP Compliance business case addresses the following problems: - Physical security: theft, vandalism, safety, service interruptions, fines - Cyber security: customer accounts, payment transactions, identity theft, intellectual property, safety, service interruptions, fines 1.2 Discuss the major drivers of the business case and the benefits to the customer Customer Requested, Customer Service Quality & Reliability, Mandatory & Compliance, Performance & Capacity, Asset Condition, and Failed Plant & Operations are all the major drivers in the NERC CIP Compliance business case. Each driver has its own security elements necessary to mitigate the risk to customers and the services they expect. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred NERC CIP Compliance standards for physical and cyber security measures are an absolute necessity and will be for the foreseeable future. Avista must remain compliant to ensure service reliability and avoid fines. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Avista conducts internal audits to evaluate its ability to meeting the NERC CIP compliance standards. These audits, along with utility industry forums, counsels, and organizations provide Avista with a strong baseline from which to measure its compliance and thus channel the appropriate level of investment to meet a new standard. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem - N/A 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. - N/A The NERC CIP Compliance business case provides funding for cyber and physical security related projects and supports Avista’s safe and reliable infrastructure strategy. The projects funded by this business case are driven by NERC CIP compliance standards. DocuSign Envelope ID: 08242A4B-AF2B-440C-AE7F-48125CAC1229 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 218 of 248 NERC CIP Compliance Business Case Justification Narrative Page 3 of 6 Option Capital Cost Start Complete Address NERC CIP standards as they are applicable (Recommended) $1,250,000 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The capital dollar request was derived from the historical annual spend implementing physical and cyber security measures across the Avista service territory to reasonably mitigate risks based on input from the programs governing body. It also takes into account estimates of in-flight projects and a 1% per year increase for inflation for future projects. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This business case supports simultaneous projects over multiple years. This business case expects to continue to deliver physical and cyber tools contributing to NERC CIP compliance standards. Each project within the business case evaluates the potential impact to O&M costs and staffing. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Both physical and cyber security systems, processes, and procedures can have an impact on business functions. As a business case with multiple projects, Avista’s project management office (PMO) tools and processes will be leveraged to coordinate and collaborate through standardized change management any changes to business functions. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. No alternative funding strategy is proposed. Compliance requirements will be identified and corresponding projects will be sequenced to mitigate those risks based on the approved funding level. DocuSign Envelope ID: 08242A4B-AF2B-440C-AE7F-48125CAC1229 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 219 of 248 NERC CIP Compliance Business Case Justification Narrative Page 4 of 6 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. Since this business case is comprised of projects running concurrently over multiple years, each one designates its own completion date and transfer-to- plant. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. This business case is a compilation of discrete projects. The projects funded by this business case protect Avista’s people, assets and information and will ensure compliance with the NERC CIP standards. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Security measures to protect critical infrastructure is not only prudent, but required. Reasonable and appropriate security measures are an expectation from Avista’s customers. The prudency of the program’s investments will be evaluated by its governing body every month and adjusted as necessary. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case The NERC CIP Compliance business case significantly impacts all of Avista’s staff and its customers. Each project within the business case must carefully consider stakeholders and effected customers during the chartering process. 2.8.2 Identify any related Business Cases - None 3.1 Steering Committee or Advisory Group Information The Reliability Compliance Advisory Committee will provide quarterly recommendations and guidance based on the NERC CIP compliance standards. DocuSign Envelope ID: 08242A4B-AF2B-440C-AE7F-48125CAC1229 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 220 of 248 NERC CIP Compliance Business Case Justification Narrative Page 5 of 6 3.2 Provide and discuss the governance processes and people that will provide oversight The Reliability Compliance Advisory Committee acts as the guiding body for compliance related work. This group meets quarterly and is composed of senior leaders and directors from most of the lines of business. In addition, each project funded by the NERC CIP Compliance business case has project level steering committees. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project Steering Committees act as the governing body over each individual project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: scope, schedule, budget, project issues, and project risks. The Project Steering Committee will meet at the defined intervals documented in the Charter of the project, and will be facilitated by an assigned Project Manager from within the PMO Department. The undersigned acknowledge they have reviewed the NERC CIP Compliance 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: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Owner Signature: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Sponsor DocuSign Envelope ID: 08242A4B-AF2B-440C-AE7F-48125CAC1229 Aug-31-2020 | 2:28 PM PDT Aug-31-2020 | 2:28 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 221 of 248 NERC CIP Compliance Business Case Justification Narrative Page 6 of 6 Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review 2. DocuSign Envelope ID: 08242A4B-AF2B-440C-AE7F-48125CAC1229 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 222 of 248 Enterprise Security Business Case Justification Narrative Page 1 of 6 EXECUTIVE SUMMARY Cyber security measures along with physical security is an expectation of all companies today by its customers. Especially companies considered critical infrastructure that are required to meet specific compliance standards. Protecting vital electric and gas services from cyber-attacks greatly benefits Avista’s customers. In addition to protecting gas and electric services, cyber and physical security tools mitigate risks like theft and vandalism on Avista properties and identity theft and payment transactions from online attacks. The capital budget request of $12,900,000 for Enterprise Security funds the technology, tools, and systems that benefit all Avista customers as the funded projects maintain and enhance Avista’s security posture to minimize the risks associated with cyber intrusions. Not approving this business case or its recommended funding can pose risks to the systems that Avista depends on to conduct business and delivery safe and reliable energy. VERSION HISTORY Version Author Description Date Notes Draft Andru Miller Initial draft of original business case 6/30/2020 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Requested Spend Amount $12,900,000 Requested Spend Time Period 5 years Requesting Organization/Department Security Business Case Owner | Sponsor Clay Storey | Clay Storey Sponsor Organization/Department Phase Choose an item. Category Program Driver Performance & Capacity DocuSign Envelope ID: A703D637-DF9F-460D-B81E-493ACEBBFF59 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 223 of 248 Enterprise Security Business Case Justification Narrative Page 2 of 6 The security of our electric and natural gas infrastructure is a significant priority at a national and state level and is of critical importance to Avista. Threats from cyberspace, including viruses, phishing, and spyware, continue to test our industry’s capabilities. And while these malicious intentions are often unknown, it is clear the methods are becoming more advanced and the attacks more persistent. In addition to these threats, the vulnerabilities of hardware and software systems continue to increase, especially with industrial control systems such as those supporting the delivery of energy. For these reasons, Avista must continue to advance its cybersecurity program and invest in security controls to prevent, detect, and respond to these increasingly frequent and sophisticated attacks. 1.2 Discuss the major drivers of the business case and the benefits to the customer Performance & Capacity is the primary driver for the business case as the projects it funds address security risks with the use of technology that keeps our systems secure and reliable. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Addressing security risks has been and will continue to be an ongoing issue. If the funding is not approved or is deferred, this increases the likelihood of a security event that could impact Avista’s operations. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Avista utilizes third party assessments to evaluate the effectiveness of its security posture. These assessments, along with utility industry forums, counsels, and organizations provide Avista with a strong baseline from which to measure its security capabilities and channel the appropriate level of investment to mitigate identified risks. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem N/A 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Security assets such as firewalls, intrusion prevention, anti-virus, and endpoint protection systems must be regularly updated or replaced as they reach their end of life so they don’t become unreliable and become a security risk due to not being able to be patched. The Enterprise Security business case provides funding for cyber and physical security-related projects and supports Avista’s safe and reliable infrastructure strategy. The projects funded by this business case protect Avista’s people, DocuSign Envelope ID: A703D637-DF9F-460D-B81E-493ACEBBFF59 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 224 of 248 Enterprise Security Business Case Justification Narrative Page 3 of 6 assets, and information. Without proper security protection the risk to Avista’s people, assets, and information increases. Option Capital Cost Start Complete Address 80% of obsolete technology and emerging risks (Recommended) $12,900,000 01 2021 12 2025 Address 40% of obsolete technology and emerging risks $5,400,000 01 2021 12 2025 Address 100% of obsolete technology and emerging risks $22,500,000 01 2021 12 2025 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The capital dollar request was derived from the historical annual spend implementing security measures to reasonably mitigate risks based on input from the programs governing body. It also takes into account estimates of in- flight projects and a 1% per year increase for inflation for future projects. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This business case supports simultaneous projects over multiple years. This business case expects to continue to deliver security systems that contribute to threat reduction. Each project within the business case evaluates the potential impact on O&M costs and staffing. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Security systems, processes, and procedures can have an impact on business functions. As a business case with multiple projects, Avista’s project management office (PMO) tools and processes will be leveraged to coordinate and collaborate through standardized change management any changes to business functions. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. The first alternative strategy would be to fund the business case at roughly half the recommended budget amount (40%). This alternative significantly DocuSign Envelope ID: A703D637-DF9F-460D-B81E-493ACEBBFF59 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 225 of 248 Enterprise Security Business Case Justification Narrative Page 4 of 6 increases the risk of using outdated security systems to provide safe and reliable service to Avista’s customers. The second alternative would fully fund the business case and allow Avista the ability to implement new security systems as they become available and replace existing systems well before the end of their serviceability. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. Since this business case is comprised of projects running concurrently over multiple years, each one designates its own completion date and transfer-to- plant. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. The projects funded by this business case protect Avista’s people, assets and information. Without proper security protection the risk to Avista’s people, assets and information increases. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Security measures to protect critical infrastructure is not only prudent, but required. Reasonable and appropriate security measures are an expectation from Avista’s customers. The prudency of the program’s investments will be evaluated by its governing body every month and adjusted as necessary. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case The Enterprise Security business case significantly impacts all of Avista’s staff and its customers. Each project within the business case must carefully consider stakeholders and effected customers during the chartering process. 2.8.2 Identify any related Business Cases This Enterprise Security business case replaced the following business cases: - Enterprise Security Systems Refresh - Enterprise Security Systems Expansion DocuSign Envelope ID: A703D637-DF9F-460D-B81E-493ACEBBFF59 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 226 of 248 Enterprise Security Business Case Justification Narrative Page 5 of 6 3.1 Steering Committee or Advisory Group Information The Enterprise Security Committee will provide monthly recommendations and guidance based on security operations center updates, business case financial updates, and industry recommendations. 3.2 Provide and discuss the governance processes and people that will provide oversight The Enterprise Security Committee acts as the custodian and governance body of security resources and investments which includes the Enterprise Security Business Case. This group meets monthly and is composed of directors and managers from most of the lines of business. In addition, each project funded by the Enterprise Security Business Case has project-level steering committees. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project Steering Committees act as the governing body over each project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: scope, schedule, budget, project issues, and project risks. The Project Steering Committee will meet at the defined intervals documented in the Charter of the project, and will be facilitated by an assigned Project Manager from within the PMO Department. The undersigned acknowledge they have reviewed the Enterprise Security 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: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Owner DocuSign Envelope ID: A703D637-DF9F-460D-B81E-493ACEBBFF59 Aug-07-2020 | 9:31 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 227 of 248 Enterprise Security Business Case Justification Narrative Page 6 of 6 Signature: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: A703D637-DF9F-460D-B81E-493ACEBBFF59 Aug-07-2020 | 9:31 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 228 of 248 Facilities and Storage Location Security Business Case Justification Narrative Page 1 of 5 EXECUTIVE SUMMARY Security is an expectation of companies today by its customers. Especially companies considered critical infrastructure. Protecting facility & storage locations benefits Avista’s customers by protecting our people, equipment, and material that are critical to support our day to day operations. The capital budget request of $3,100,000 funds the security protections that benefit Avista customers as the enhancements maintain and enhance Avista’s security posture to minimize the risks associated with attacks at facility & storage locations within the Avista service territory. Not approving this business case or its recommended funding can pose risks to the people and assets Avista depends on to conduct business and delivery safe and reliable energy. VERSION HISTORY Version Author Description Date Notes Draft Andru Miller Initial draft of original business case 7/01/2020 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Security remains a concern at our facility & storage locations. These locations contain people, equipment, and material that are critical to support our day to day operations and, in turn, the delivery of safe and reliable gas and electricity. A security incident at any of these locations may harm people, damage equipment, or even restrict our ability to respond to our customers. Also, attacks Requested Spend Amount $3,100,000 Requested Spend Time Period 5 years Requesting Organization/Department Security Business Case Owner | Sponsor Clay Storey | Clay Storey Sponsor Organization/Department Phase Choose an item. Category Choose an item. Driver Choose an item. DocuSign Envelope ID: B775DCB2-CB41-41BB-8840-47C3961621C7 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 229 of 248 Facilities and Storage Location Security Business Case Justification Narrative Page 2 of 5 can give intruders access to critical cyber equipment, which can lead to a cybersecurity event. 1.2 Discuss the major drivers of the business case and the benefits to the customer Performance & Capacity is the primary driver for the business case as the projects it funds address security risks by protecting our people, equipment, and material that are critical to support our day to day operations. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Addressing security risks has been and will continue to be an ongoing issue. If the funding is not approved or is deferred, this increases the likelihood of a security event that could impact people, equipment, and materials that are critical to support our day to day operations. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Avista utilizes utility industry forums, counsels, organizations and knowledge from past security incidents to provided Avista with a strong baseline from which to measure its security capabilities and channel the appropriate level of investment to mitigate the identified risks. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem N/A 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Option Capital Cost Start Complete Address security at facilities and storage locations as funding allows (Recommended) $3,100,000 01 2021 12 2025 Address security at facilities and storage locations in 7.5 years $4,000,000 01 2021 06 2028 Address security at facilities and storage locations in 10 years $6,000,000 01 2021 12 2031 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The capital dollar request was derived from the historical annual spend implementing security measures across the Avista service territory to reasonably mitigate risks based on input from the programs governing body. It DocuSign Envelope ID: B775DCB2-CB41-41BB-8840-47C3961621C7 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 230 of 248 Facilities and Storage Location Security Business Case Justification Narrative Page 3 of 5 also takes into account estimates of in-flight projects and a 1% per year increase for inflation of future projects. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This business case supports simultaneous projects over multiple years. Each project within the business case evaluates the potential impact to O&M costs and staffing. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Security systems, processes, and procedures can have an impact on business functions. As a business case with multiple projects, Avista’s project management office (PMO) tools and processes will be leveraged to coordinate and collaborate through standardized change management any changes to business functions. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. The alternative strategy would be to fund the business case based on a set schedule of 7.5 or 10 years rather than as funding allows. These options would require more funding and resources but would be more likely to address security needs in a timely manner rather than as needed. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. Spend, and transfers to plant by year. Since this business case is comprised of projects running concurrently over multiple years, each one designates its completion date and transfer-to-plant. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. The projects funded by this business case protect Avista’s people, equipment, and material. Without proper security protection, the risk to Avista’s people, equipment, and material increase and could impact operations of the company and mission to provide safe and reliable infrastructure. DocuSign Envelope ID: B775DCB2-CB41-41BB-8840-47C3961621C7 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 231 of 248 Facilities and Storage Location Security Business Case Justification Narrative Page 4 of 5 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Security measures to protect critical infrastructure is not only prudent but required in some cases because of compliance. Reasonable and appropriate security measures are also an expectation of Avista’s customers. The investments reduce the likelihood of a security event that could impact the people, equipment, and materials that are critical to support our day to day operations. The prudency of the program’s investments will be evaluated by its governing body every month and adjusted as necessary. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Each project within the business case must carefully consider stakeholders and effected customers during the chartering process. 2.8.2 Identify any related Business Cases - None 3.1 Steering Committee or Advisory Group Information The Enterprise Security Committee will provide monthly recommendations and guidance based on security operations center updates, business case financial updates, and industry recommendations. 3.2 Provide and discuss the governance processes and people that will provide oversight The Enterprise Security Committee acts as the custodian and governance body of security resources and investments which includes the Facilities and Storage Location Security business case. This group meets monthly and is composed of directors and managers from most of the lines of business. In addition, each project funded by the Facilities and Storage Location Security business case has project-level steering committees. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project Steering Committees act as the governing body over each project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work DocuSign Envelope ID: B775DCB2-CB41-41BB-8840-47C3961621C7 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 232 of 248 Facilities and Storage Location Security Business Case Justification Narrative Page 5 of 5 identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: scope, schedule, budget, project issues, and project risks. The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the PMO Department. The undersigned acknowledge they have reviewed the Facilities and Storage Location Security 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: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Owner Signature: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review DocuSign Envelope ID: B775DCB2-CB41-41BB-8840-47C3961621C7 Aug-07-2020 | 9:34 PM PDT Aug-07-2020 | 9:34 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 233 of 248 Generation, Substation & Gas Location Security Business Case Justification Narrative Page 1 of 5 EXECUTIVE SUMMARY Security is an expectation of companies today by its customers. Especially companies considered critical infrastructure. Protecting vital electric and gas services from attacks benefits Avista’s customers by having safety and reliable energy. The capital budget request of $3,100,000 funds the security protections that benefit Avista customers as the enhancements maintain and enhance Avista’s security posture to minimize the risks associated with physical attacks at Avista generation, substation & gas locations. Not approving this business case or its recommended funding can pose risks to the assets Avista depends on to conduct business and delivery safe and reliable energy. VERSION HISTORY Version Author Description Date Notes Draft Andru Miller Initial draft of original business case 7/02/2020 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Security remains a concern at our generation, substation & gas locations. These locations contain equipment that is critical to the delivery of safe and reliable gas and electricity. Many of these locations are remote, unmanned, and vulnerable, which makes them difficult to protect. A security incident at any of these locations could deny, degrade, or disrupt the delivery of energy. Also, attacks can give intruders access to critical cyber equipment, which can lead to a cybersecurity event. Requested Spend Amount $3,100,000 Requested Spend Time Period 5 years Requesting Organization/Department Security Business Case Owner | Sponsor Clay Storey | Clay Storey Sponsor Organization/Department Phase Choose an item. Category Choose an item. Driver Choose an item. DocuSign Envelope ID: 399B8319-431B-4C75-A5C6-F33C79F8BA3D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 234 of 248 Generation, Substation & Gas Location Security Business Case Justification Narrative Page 2 of 5 1.2 Discuss the major drivers of the business case and the benefits to the customer Performance & Capacity is the primary driver for the business case as the projects it funds address security risks by protecting Avista’s generation, substation & gas locations that are critical to support our customers. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Addressing security risks has been and will continue to be an ongoing issue. If the funding is not approved or is deferred, this increases the likelihood of a security event that could impact Avista’s generation, substation & gas locations that are critical to support our customers. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Avista utilizes utility industry forums, counsels, organizations, and knowledge from past security incidents to provide Avista with a baseline from which to measure its security capabilities and channel the appropriate level of investment to mitigate the identified risks. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem N/A 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Option Capital Cost Start Complete Address security at facilities and storage locations as funding allows (Recommended) $3,100,000 01 2021 12 2025 Address security at facilities and storage locations in 7.5 years $5,000,000 01 2021 06 2028 Address security at facilities and storage locations in 10 years $7,000,000 01 2021 12 2031 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The capital dollar request was derived from the historical annual spend implementing security measures across the Avista service territory to reasonably mitigate risks based on input from the programs governing body. It also takes into account estimates of in-flight projects and a 1% per year increase for inflation of future projects. DocuSign Envelope ID: 399B8319-431B-4C75-A5C6-F33C79F8BA3D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 235 of 248 Generation, Substation & Gas Location Security Business Case Justification Narrative Page 3 of 5 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This business case supports simultaneous projects over multiple years. This business case expects to continue to deliver security that contributes to threat reduction and deterrence of Avista’s assets. Each project within the business case evaluates the potential impact to O&M costs and staffing. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Security systems, processes, and procedures can have an impact on business functions. As a business case with multiple projects, Avista’s project management office (PMO) tools and processes will be leveraged to coordinate and collaborate through standardized change management any changes to business functions. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. The alternative strategy would be to fund the business case based on a set schedule of 7.5 or 10 years rather than as funding allows. These options would require more funding and resources but would be more likely to address security needs in a timely manner rather than as needed. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. Since this business case is comprised of projects running concurrently over multiple years, each one designates its completion date and transfer-to-plant. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives, and mission statement of the organization. The Generation, Substation, and Gas Location Security business case provides funding for security-related projects and supports Avista’s safe and reliable infrastructure. DocuSign Envelope ID: 399B8319-431B-4C75-A5C6-F33C79F8BA3D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 236 of 248 Generation, Substation & Gas Location Security Business Case Justification Narrative Page 4 of 5 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Security measures to protect critical infrastructure is not only prudent but required in some cases because of compliance. Reasonable and appropriate security measures are also an expectation of Avista’s customers. The prudency of the program’s investments will be evaluated by its governing body every month and adjusted as necessary. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Each project within the business case must carefully consider stakeholders and effected customers during the chartering process. 2.8.2 Identify any related Business Cases - None 3.1 Steering Committee or Advisory Group Information The Enterprise Security Committee will provide monthly recommendations and guidance based on security operations center updates, business case financial updates, and industry recommendations. 3.2 Provide and discuss the governance processes and people that will provide oversight The Enterprise Security Committee acts as the custodian and governance body of security resources and investments which includes the Generation, Substation, and Gas Location Security business case. This group meets monthly and is composed of directors and managers from most of the lines of business. In addition, each project funded by the Generation, Substation, and Gas Location Security business case has project-level steering committees. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project Steering Committees act as the governing body over each project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key DocuSign Envelope ID: 399B8319-431B-4C75-A5C6-F33C79F8BA3D Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 237 of 248 Generation, Substation & Gas Location Security Business Case Justification Narrative Page 5 of 5 issues that affect the following topics: scope, schedule, budget, project issues, project risks The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the PMO Department. The undersigned acknowledge they have reviewed the Generation, Substation, and Gas Location Security 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: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Owner Signature: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review DocuSign Envelope ID: 399B8319-431B-4C75-A5C6-F33C79F8BA3D Aug-07-2020 | 9:33 PM PDT Aug-07-2020 | 9:33 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 238 of 248 Telecommunication & Network Distribution Security Business Case Justification Narrative Page 1 of 5 EXECUTIVE SUMMARY Security is an expectation of companies today by customers. Especially companies considered critical infrastructure. Protecting communication infrastructure is vital as many of Avista’s business processes depend on network communications and without them, they could not function which could have an impact on our day to day operations that are needed to support our customers. The capital budget request of $975,000 funds the security protections that benefit Avista customers as the enhancements maintain and enhance Avista’s security posture to minimize the risks associated with attacks at Avista telecommunication & network distribution locations. Not approving this business case or its recommended funding can pose risks to the assets Avista depends on to conduct business and delivery safe and reliable energy. VERSION HISTORY Version Author Description Date Notes Draft Andru Miller Initial draft of original business case 7/06/2020 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Physical security remains a concern at our telecommunication & network distribution locations. These locations contain equipment that is critical to the operation of safety, control, customer, and back-office networks. These networks support the delivery of safe and reliable gas and electricity. Many of these locations are remote, unmanned, and vulnerable, which makes them difficult to protect. A physical security incident at any of these locations could Requested Spend Amount $975,000 Requested Spend Time Period 5 years Requesting Organization/Department Security Business Case Owner | Sponsor Clay Storey | Clay Storey Sponsor Organization/Department Phase Choose an item. Category Choose an item. Driver Choose an item. DocuSign Envelope ID: 61A4B6D0-6117-4D2A-A6D5-880BBD89C57B Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 239 of 248 Telecommunication & Network Distribution Security Business Case Justification Narrative Page 2 of 5 deny, degrade, or disrupt any of the networks and impact critical business processes. Also, physical attacks can give intruders access to critical cyber equipment, which can lead to a cybersecurity event. 1.2 Discuss the major drivers of the business case and the benefits to the customer Performance & Capacity is the primary driver for the business case as the projects it funds address security risks by protecting our telecommunication & network distribution locations that are critical to support our day to day operations. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred Addressing security risks has been and will continue to be an ongoing issue. If the funding is not approved or is deferred, this increases the likelihood of a security event that could impact Avista’s telecommunication & network communications. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Avista utilizes utility industry forums, counsels, organizations, and knowledge from past security incidents to provide Avista with a baseline from which to measure its security capabilities and channel the appropriate level of investment to mitigate the identified risks. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem N/A 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. Option Capital Cost Start Complete Address security at facilities and storage locations as funding allows (Recommended) $975,000 01 2021 12 2025 Address security at facilities and storage locations in 7.5 years $1,462,500 01 2021 06 2028 Address security at facilities and storage locations in 10 years $1,950,000 01 2021 12 2031 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The capital dollar request was derived from the historical annual spend implementing physical security measures across the Avista service territory to DocuSign Envelope ID: 61A4B6D0-6117-4D2A-A6D5-880BBD89C57B Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 240 of 248 Telecommunication & Network Distribution Security Business Case Justification Narrative Page 3 of 5 reasonably mitigate risks based on input from the programs governing body. It also takes into account estimates of in-flight projects and a 1% per year increase for inflation of future projects. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This business case supports simultaneous projects over multiple years. This business case expects to continue to deliver physical security systems contributing to threat reduction and deterrence of Avista’s assets. Each project within the business case evaluates the potential impact to O&M costs and staffing. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Security systems, processes, and procedures can have an impact on business functions. As a business case with multiple projects, Avista’s project management office (PMO) tools and processes will be leveraged to coordinate and collaborate through standardized change management any changes to business functions. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. The alternative strategy would be to fund the business case based on a set schedule of 7.5 or 10 years rather than as funding allows. These options would require more funding and resources but would be more likely to address security needs in a timely manner rather than as needed. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. Spend, and transfers to plant by year. Since this business case is comprised of projects running concurrently over multiple years, each one designates its completion date and transfer-to-plant. 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives and mission statement of the organization. The telecommunication & network distribution locations business case provides funding for security-related projects and supports Avista’s safe and reliable infrastructure. DocuSign Envelope ID: 61A4B6D0-6117-4D2A-A6D5-880BBD89C57B Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 241 of 248 Telecommunication & Network Distribution Security Business Case Justification Narrative Page 4 of 5 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project Security measures to protect critical infrastructure is not only prudent but required in some cases because of compliance. Reasonable and appropriate security measures are also an expectation of Avista’s customers. The prudency of the program’s investments will be evaluated by its governing body every month and adjusted as necessary. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Each project within the business case must carefully consider stakeholders and effected customers during the chartering process. 2.8.2 Identify any related Business Cases - None 3.1 Steering Committee or Advisory Group Information The Enterprise Security Committee will provide monthly recommendations and guidance based on security operations center updates, business case financial updates, and industry recommendations. 3.2 Provide and discuss the governance processes and people that will provide oversight The Enterprise Security Committee acts as the custodian and governance body of security resources and investments which includes the Telecommunication & Network Distribution Security business case. This group meets monthly and is composed of directors and managers from most of the lines of business. In addition each project funded by the Telecommunication & Network Distribution Security business case has project-level steering committees. 3.3 How will decision-making, prioritization, and change requests be documented and monitored Project Steering Committees act as the governing body over each project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work DocuSign Envelope ID: 61A4B6D0-6117-4D2A-A6D5-880BBD89C57B Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 242 of 248 Telecommunication & Network Distribution Security Business Case Justification Narrative Page 5 of 5 identified in the Charter document for the Project. The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: scope, schedule, budget, project issues, and project risks. The Project Steering Committee will meet at the defined intervals documented in the Charter of the project and will be facilitated by an assigned Project Manager from within the PMO Department. The undersigned acknowledge they have reviewed the Telecommunication & Network Distribution Security 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: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Owner Signature: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review DocuSign Envelope ID: 61A4B6D0-6117-4D2A-A6D5-880BBD89C57B Aug-07-2020 | 9:32 PM PDT Aug-07-2020 | 9:32 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 243 of 248 Enterprise Business Continuity Business Case Justification Narrative Page 1 of 5 EXECUTIVE SUMMARY Avista has developed and maintains an Enterprise Business Continuity Program to continually enhance and improve the Company’s emergency response, business continuity, and disaster recovery capabilities to ensure the continuity of its critical business process and systems under crisis conditions. The program includes the key areas of technology recovery, alternate facilities, and overall business processes. The effort of developing and continuously improving the program ensures the readiness of systems, procedures, processes, and people required to support our customers and our communities in the event of a disaster. The capital budget request of $2,160,000 funds projects that benefit Avista customers by mitigating service interruptions due to a disaster by continually enhancing and improving emergency response, business continuity, and disaster recovery capabilities. Not approving this business case or its recommended funding can pose risks to the business processes and systems that support the delivery of safe and reliable energy. VERSION HISTORY Version Author Description Date Notes Draft Andru Miller Initial draft of the original business case 6/30/2020 GENERAL INFORMATION 1. BUSINESS PROBLEM 1.1 What is the current or potential problem that is being addressed? Severe storms, natural disasters, and significant security events are unpredictable and, while they may have a low probability, they can have a high consequence. These types of low frequency, high consequence events can Requested Spend Amount $2,160,000 Requested Spend Time Period 5 years Requesting Organization/Department Security Business Case Owner | Sponsor Clay Storey | Clay Storey Sponsor Organization/Department Enterprise Security Phase Choose an item. Category Program Driver Performance & Capacity DocuSign Envelope ID: 8635D3A5-0C08-40A1-9B48-8FD9999E4623 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 244 of 248 Enterprise Business Continuity Business Case Justification Narrative Page 2 of 5 have an impact on the resources Avista depends on for its operations. Many of Avista’s critical business processes are now more than ever dependent on data, communication networks, and computer systems. Prolonged failure of any of these resources could have a significant impact on Avista’s ability to sustain gas and electric operations for its customers. 1.2 Discuss the major drivers of the business case and the benefits to the customer Performance & Capacity is the primary driver for the Enterprise Business Continuity business case as the projects it funds generally enhance or address performance or technology capacity constraints. 1.3 Identify why this work is needed now and what risks there are if not approved or is deferred The ability to maintain uninterrupted services and/or recover quickly in the event of a disaster is critical to serving our customers. Technology investments are needed annually to continue to enhance the resiliency of systems that support critical business processes. Not approving or deferring investments in this business case could limit Avista’s disaster recovery abilities. 1.4 Identify any measures that can be used to determine whether the investment would successfully deliver on the objectives and address the need listed above. Avista conducts an annual disaster recovery exercise to evaluate the effectiveness of its program. This exercise, along with utility industry forums, counsels, and organizations provide Avista with a strong baseline from which to measure its recovery capabilities and channel the appropriate level of investment to address any identified issues or risks. 1.5 Supplemental Information 1.5.1 Please reference and summarize any studies that support the problem N/A 1.5.2 For asset replacement, include graphical or narrative representation of metrics associated with the current condition of the asset that is proposed for replacement. The requested funding level will address the highest risks that can’t wait until the next technology refresh cycle. It is recommended that this level of funding continue rather than potentially deferring the work 3-5 years since this program is meant to address high-risk deficiencies in a shorter cycle than a typical refresh cycle. Option Capital Cost Start Complete Address business continuity gaps outside of technology refresh or expansion projects $2,160,000 01 2021 12 2025 DocuSign Envelope ID: 8635D3A5-0C08-40A1-9B48-8FD9999E4623 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 245 of 248 Enterprise Business Continuity Business Case Justification Narrative Page 3 of 5 2.1 Describe what metrics, data, analysis or information was considered when preparing this capital request. The historical spending trend has been $405,000 annually. The requested funding level is derived from actual estimates for projects to maintain and enhance Avista’s ability to respond and continue operations in the event of major disasters. Based on the consistent spend of $405,000 annually over the past five years to provide business continuity in the event of a disaster, and project estimates to continue to deliver disaster recovery solutions, there is a high level of confidence the requested annual budget will fully be utilized. 2.2 Discuss how the requested capital cost amount will be spent in the current year (or future years if a multi-year or ongoing initiative). (i.e. what are the expected functions, processes or deliverables that will result from the capital spend?). Include any known or estimated reductions to O&M as a result of this investment. This business case supports simultaneous projects over multiple years to enhance our disaster recovery and business continuity capabilities. Each project within the business case evaluates the potential impact to O&M. [Offsets to projects will be more strongly scrutinized in general rate cases going forward (ref. WUTC Docket No. U-190531 Policy Statement), therefore it is critical that these impacts are thought through in order to support rate recovery.] 2.3 Outline any business functions and processes that may be impacted (and how) by the business case for it to be successfully implemented. Business continuity and disaster recovery solutions for business functions can have an impact on how the function will be performed during a disaster. As a business case with multiple projects, Avista’s project management office (PMO) tools and processes will be leveraged to coordinate and collaborate through standardized change management any changes to the business functions. 2.4 Discuss the alternatives that were considered and any tangible risks and mitigation strategies for each alternative. Not funding the program was considered. If the program was not funded, the risk of not having adequate recovery capabilities would have to be tied to the technology refresh cycles which is typically 3-5 years. 2.5 Include a timeline of when this work will be started and completed. Describe when the investments become used and useful to the customer. spend, and transfers to plant by year. Since this business case is comprised of projects running concurrently over multiple years, each project designates its completion and transfer-to-plant timeline. DocuSign Envelope ID: 8635D3A5-0C08-40A1-9B48-8FD9999E4623 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 246 of 248 Enterprise Business Continuity Business Case Justification Narrative Page 4 of 5 2.6 Discuss how the proposed investment aligns with strategic vision, goals, objectives, and mission statement of the organization. This business case best aligns with Avista’s focus area of Perform as having reliable systems is essential to serving our customers. 2.7 Include why the requested amount above is considered a prudent investment, providing or attaching any supporting documentation. In addition, please explain how the investment prudency will be reviewed and re-evaluated throughout the project. The prudency of the program’s projects will be evaluated by its governing body and adjusted as necessary. 2.8 Supplemental Information 2.8.1 Identify customers and stakeholders that interface with the business case Each project within the business case will consider stakeholders during the chartering process. 2.8.2 Identify any related Business Cases - None 3.1 Steering Committee or Advisory Group Information Each project will have steering committees to monitor scope, schedule, and budget. 3.2 Provide and discuss the governance processes and people that will provide oversight Project Steering Committees act as the governing body over each project within the program and will consist of key members in management positions that are identified as responsible for the successful completion of the scope of work identified in the Charter document for the Project. 3.3 How will decision-making, prioritization, and change requests be documented and monitored The Project Steering Committee is responsible to provide guidance and make decisions on key issues that affect the following topics: scope, schedule, budget, project issues, and project risks. DocuSign Envelope ID: 8635D3A5-0C08-40A1-9B48-8FD9999E4623 Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 247 of 248 Enterprise Business Continuity Business Case Justification Narrative Page 5 of 5 The undersigned acknowledge they have reviewed the Enterprise Business Continuity 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: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Owner Signature: Date: Print Name: Clay Storey Title: Director of Security, IT & Security Management Role: Business Case Sponsor Signature: Date: Print Name: Title: Role: Steering/Advisory Committee Review Template Version: 05/28/2020 DocuSign Envelope ID: 8635D3A5-0C08-40A1-9B48-8FD9999E4623 Aug-07-2020 | 9:35 PM PDT Aug-07-2020 | 9:35 PM PDT Exhibit No. 13 Case Nos. AVU-E-21-01 & AVU-G-21-01 J. Kensok, Avista Schedule 1, Page 248 of 248