20121011Kopczynski DI.pdf

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

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION ) CASE NO. AVU-E-12-08
OF AVISTA CORPORATION FOR THE ) CASE NO. AVU-G-12-07
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC AND )
NATURAL GAS SERVICE TO ELECTRIC ) DIRECT TESIMONY
AND NATURAL GAS CUSTOMERS IN THE ) OF
STATE OF IDAHO ) DON F. KOPZCYNSKI
)

FOR AVISTA CORPORATION

(ELECTRIC AND NATURAL GAS)

Kopczynski,Di 1
Avista Corp
I. INTRODUCTION 1
Q. Please state your name, employer and business 2
address. 3
A. My name is Don F. Kopczynski and I am employed 4
as the Vice President of Energy Delivery for Avista 5
Utilities, at 1411 East Mission Avenue, Spokane, 6
Washington. 7
Q. Would you briefly describe your educational 8
background and professional experience? 9
A. Yes. Prior to joining the Company in 1979, I 10
earned a Bachelor of Science Degree in Engineering from 11
the University of Idaho. I have also earned a Master‟s 12
Degree in Engineering from Washington State University, a 13
Master‟s Degree in Organizational Leadership from Gonzaga 14
University, and a Master‟s Degree in Business 15
Administration from Whitworth University. Over the past 31 16
years I have spent approximately 18 years in Energy 17
Delivery, managing Engineering, various aspects of 18
Operations, and Customer Service. In addition, I spent 19
three years managing the Energy Resources Department, 20
including Power Supply, Generation and Production, and 21
Natural Gas Supply. I have worked in the areas of 22
Corporate Business Analysis and Development, and served in 23
a variety of leadership roles in subsidiary operations for 24
Kopczynski,Di 2
Avista Corp
Avista Corp. I was appointed General Manager of Energy 1
Delivery in 2003 and Vice President in 2004. I serve on 2
several boards, including the Washington State Electrical 3
Board, Northwest Gas Association, American Gas 4
Association, Common Ground Alliance, University of Idaho 5
and the Washington State University Engineering Advisory 6
Boards. 7
Q. What is the scope of your testimony? 8
A. I will provide an overview of the Company‟s 9
electric and natural gas energy delivery facilities and 10
operations. I will explain some of our efforts to control 11
costs, increase efficiency, improve customer service, and 12
the replacement of the Company‟s legacy customer 13
information system (CIS), as well as summarize Avista‟s 14
customer support programs in Idaho. I will also address 15
the Company‟s plans to replace early-vintage Aldyl A 16
piping in our natural gas distribution system. A table of 17
the contents for my testimony is as follows: 18
19
Description Page 20
I. Introduction 1 21
II. Overview of Avista‟s Energy 22
Delivery Service 3 23
III. Distribution Operations 5 24
IV. Aldyl A Pipe Replacement 7 25
Kopczynski,Di 3
Avista Corp
V. Customer Service Information 1
System Replacement 10 2
VI. Cost Control and Efficiency Efforts 13 3
VII. Customer Support Programs 21 4
Q. Are you sponsoring any exhibits in this 5
proceeding? 6
A. Yes. I am sponsoring Exhibit No. 8, Schedule 7
No. 1 which shows the detailed usage and number of 8
customers for each customer class. 9
10
II. OVERVIEW OF AVISTA’S ENERGY DELIVERY SERVICE 11
Q. Please describe Avista Utilities’ electric and 12
natural gas utility operations. 13
A. Avista Utilities operates a vertically-14
integrated electric system in Idaho and Washington. In 15
addition to the hydroelectric and thermal generating 16
resources described by Company witness Mr. Lafferty, the 17
Company has approximately 18,300 miles of primary and 18
secondary electric distribution lines. Avista has an 19
electric transmission system of 685 miles of 230 kV line 20
and 1,535 miles of 115 kV line. 21
Avista owns and maintains a total of 7,650 miles of 22
natural gas distribution lines, and is served off of the 23
Williams Northwest and Gas Transmission Northwest (GTN) 24
pipelines. A map showing the Company‟s electric and 25
Kopczynski,Di 4
Avista Corp
natural gas service area in Idaho, Washington, and Oregon 1
is provided by Company witness Mr. Morris in Schedule No. 2
2. 3
As detailed in the Company‟s 2011 electric Integrated 4
Resource Plan1, Avista expects retail electric sales growth 5
to average 1.6% annually for the next ten years and 1.6% 6
over the next twenty years in Avista‟s service territory, 7
primarily due to increased population and business growth. 8
In 2011, Avista had 2,693 new electric residential 9
customer connections2 and 2,433 for 2010. 10
Also, based on Avista‟s 2012 natural gas Integrated 11
Resource Plan3, in Idaho and Washington the number of 12
natural gas customers were projected to increase at an 13
average annual rate of 1.7%, with demand growing at a 14
compounded average annual rate of 1.3%. New natural gas 15
customer connections for all customer classifications 16
(system) were 2,693 in 2010 and 3,400 in 2011. 17
Q. How many customers are served by Avista 18
Utilities in Idaho? 19
A. Of the Company‟s 359,343 electric and 319,875 20
natural gas customers (as of June 30, 2012), 123,440 and 21

1 A copy of the Company‟s 2011 Electric IRP has been provided by Mr.
Lafferty as Schedule No. 1.
2 A new customer connection as defined by Avista is when a customer
receives a bill for the first time at a particular premises/location.
3 A copy of the Company‟s 2012 Natural Gas IRP has been provided by
Company witness Mr. Harper as Schedule No 1.
Kopczynski,Di 5
Avista Corp
75,205, respectively, were Idaho customers. Avista‟s 1
largest electric customer in Idaho is the Clearwater Paper 2
facility located in Lewiston, Idaho. 3
Q. Please describe the Company’s operations centers 4
that support electric and natural gas customers in Idaho. 5
A. The Company has construction offices in 6
Grangeville, Orofino, Lewiston-Clarkston, Moscow-Pullman, 7
Kellogg, St. Maries, Coeur d‟Alene, Sandpoint and Bonner‟s 8
Ferry. Avista‟s four customer contact centers in Spokane, 9
Washington, Coeur d‟Alene and Lewiston, Idaho, and 10
Medford, Oregon, are networked, allowing the full pool of 11
regular and part-time employees to respond to customer 12
calls in all jurisdictions. 13
14
III. DISTRIBUTION OPERATIONS 15
Q. What construction and maintenance programs does 16
the Company have in place to maintain electric and natural 17
gas facilities? 18
A. The Company utilizes seasonal and regular crews 19
for electric and natural gas construction, including new 20
and reconstructed lines, damage repair, and connecting new 21
customers. The Company employs contract crews and 22
temporary and part-time employees to meet customer needs 23
during the peak construction season. The Company also has 24
Kopczynski,Di 6
Avista Corp
several maintenance programs to maintain the reliability 1
of our electric and natural gas infrastructure. On the 2
electric side, this includes the Company‟s Asset 3
Management Program (including wood pole inspection and 4
replacement), vegetation management, electric transmission 5
line inspection and upgrades. 6
Q. Please describe any ongoing maintenance plans 7
for the Company’s natural gas operations? 8
A. Our natural gas operations department performs 9
necessary maintenance, as required by the US Department of 10
Transportation Pipeline Safety Regulations, 49 CFR, Part 11
192. Ongoing maintenance focuses on valve and regulator 12
stations, atmospheric corrosion protection, and leak 13
surveys. The following is further detail regarding the 14
natural gas maintenance programs the Company has, or is in 15
the process of implementing: 16
17
1. Increased Leak Survey of Aldyl-A Pipe. Avista will 18
perform annual leak surveys of certain Aldyl-A 19
mains installed prior to 1987. 20
21
2. Atmospheric Testing Program. Atmospheric Testing 22
is an inspection program to find conditions in the 23
Company‟s system that could lead to corrosion 24
issues on customer meter sets. This “Atmospheric 25
Corrosion” inspection program is a federally 26
mandated program that requires the Company to 27
inspect all above-ground steel pipe at a frequency 28
not to exceed three years. 29
30
Kopczynski,Di 7
Avista Corp
The Company completes this testing in each State 1
over a three year period, rotating through one 2
State per year. Idaho‟s cost in 2011 was $390,000. 3
The Company is requesting to recover Idaho‟s cost 4
over a 3 year period, one-third per year, and 5
therefore Ms. Andrews has pro formed approximately 6
1/3 of the atmospheric O&M expense within her 7
adjustments. 8
9
10
IV. ALDYL A PIPE REPLACEMENT 11
12
Q. What is Avista’s plan related to its Aldyl A 13
polyethylene pipe? 14
15
A. The Company is undertaking a twenty-year program 16
to systematically remove from service and replace select 17
portions of the DuPont Aldyl A medium density polyethylene 18
pipe in its natural gas distribution system in the States 19
of Idaho, Washington, and Oregon. None of the subject 20
pipe is “high pressure main pipe,” but rather, consists of 21
distribution mains at maximum operating pressures of 60 22
psi and pipe diameters ranging from 1¼ to 4 inches. Also, 23
as part of this program, Avista will replace the 24
connections on Aldyl A service piping, ½ and ¾ inch 25
diameters, when it is tapped to steel main piping. 26
Q. Why is the Company initiating this replacement 27
program? 28
A. In recent years, Avista experienced two 29
incidents on its natural gas system that prompted 30
increased concerns over the long-term reliability of 31
Kopczynski,Di 8
Avista Corp
certain Aldyl A pipe. Results of the investigations, 1
which were aided by new tools developed for Avista‟s 2
Distribution Integrity Management Plan (DIMP), 3
corroborated reports for similar Aldyl A piping around the 4
Country, and supported the development of a protocol for 5
the management of this natural gas pipe. 6
7
Q. Why did the Company elect to carry this pipeline 8
replacement program out over 20 years? 9
A. Avista modeled various time horizons for the 10
replacement program, up to a timeline of 30 years, and 11
determined a replacement horizon in the range of twenty 12
years to represent an optimum timeframe for removing and 13
replacing its priority Aldyl A pipe. Shortening the 14
timeline was found to have increasing cost impacts on 15
customers but with little improvement in the numbers of 16
expected Aldyl A failures. Lengthening the timeline past 17
twenty years, however, was found to result in a 18
substantial increase in the number of expected material 19
failures. A replacement timeline of 25 years, for 20
example, resulted in more than a doubling of the number of 21
leaks expected when compared with the 20 year horizon. 22
Q. Could the 20-year replacement time change as the 23
work proceeds? 24
Kopczynski,Di 9
Avista Corp
A. Yes. The current proposal for a 20-year 1
replacement program represents an optimization based on 2
the information we have available today. Any number of 3
factors could change, as the work proceeds over the first 4
few years and could result in a „new‟ optimum time 5
horizon. Avista will be collecting new leak survey and 6
other information each year, and will continue to use its 7
Asset Management models to further refine expected trends 8
and potential consequences, making program adjustments as 9
appropriate. 10
Q What are the expected capital costs associated 11
with this program? 12
A. Avista‟s analysis and planning effort is 13
projecting capital costs of approximately $10 million 14
annually, across all its natural gas jurisdictions, from 15
2013 – 2032. Actual costs will vary somewhat depending on 16
the prioritization of piping to be replaced each year, 17
among other factors. In addition, the calculated amounts 18
will also be subject to annual inflation. For its Idaho 19
jurisdiction, Avista is planning to start investing in 20
2015 with some Tapping Tee remediations, and actual pipe 21
replacement is estimated to start in 2017. This will 22
allow for effective planning with contractors, hiring 23
Avista staff, and developing a solid project management 24
Kopczynski,Di 10
Avista Corp
foundation for the duration of the program. There are no 1
costs associated with this project included in the 2
Company‟s June 30, 2012 ending test period. 3
4
V. CUSTOMER SERVICE INFORMATION SYSTEM REPLACEMENT 5
Q. Please summarize Avista’s plans regarding its 6
Customer Information System? 7
A. Avista‟s legacy customer information system 8
(CIS) has served the Company and our customers well for 9
over 20 years. Integrating commercial, off-the-shelf 10
software and other internally developed systems into the 11
CIS over time has fortified the technology foundation that 12
helped Avista receive national awards and consistently 13
high customer-satisfaction ratings. 14
When Avista‟s CIS platform was developed 20 years 15
ago, however, there were no smart phones or iPads. Home 16
computers were uncommon and customers did not expect to be 17
involved in energy choices. Just as we are upgrading our 18
transmission and distribution system and investing in 19
smart grid technology, we need to now invest in a new CIS 20
system that can interface with these new systems and 21
technologies, and investing in a new CIS system is part of 22
Avista‟s strategy to invest wisely in technology. The new 23
Kopczynski,Di 11
Avista Corp
CIS system will be a standard industry application, and be 1
less costly to manage and upgrade in the future. 2
Replacing Avista‟s CIS system is a significant 3
decision that will impact all aspects of the Company‟s 4
operations. Linking into the CIS system are many current 5
Company systems. These include billing, outage 6
management, work and asset management, automated phone 7
system, construction design, enterprise business 8
intelligence, supply chain and financial systems. Also 9
linking into CIS system are electric and natural gas meter 10
applications, and the avistautilities.com website for 11
managing customer transactions. 12
Another example of operation support is Avista‟s 13
investments in developing a smarter grid. To achieve 14
these objectives, Avista‟s CIS system may include the 15
ability to accommodate not only smart grid technology, but 16
also may incorporate: 17
Advanced meter information; 18
Energy efficiency programs 19
Real-time billing; 20
On-bill financing; 21
Automated notifications based on customer 22
preferences; 23
Customer relationship management capabilities; 24
and 25
Multi-channel, self-service options. 26
27
Kopczynski,Di 12
Avista Corp
Q. Has the Company selected a vendor for this 1
project? 2
A. Avista has selected Oracle Customer Care and 3
Billing to replace our legacy Customer Service System. 4
This system will support the Call Center and Operations 5
day to day customer support, billing and collection 6
processes. Avista has selected IBM‟s Maximo software for 7
Enterprise Asset Management support, replacing our legacy 8
work management system. This system will provide asset 9
tracking, work order management oversight for both 10
transmission/distribution activities as well as generation 11
support. We are currently in the design phase of this 12
large project with a projection of Maximo generation “go 13
live” in September 2013 and Maximo transmission and 14
distribution “go live” in September 2014 along with Oracle 15
Customer Care and Billing. 16
Q. Are there any costs associated with the CIS 17
replacement in this request? 18
A. There are no capital costs associated with the 19
replacement project included in this case, however, there 20
are approximately $725,000 of expenses related to labor 21
costs and professional services contracts included in the 22
June 30, 2012 ending test year. The Company is committed 23
to moving forward with replacing its aging CIS system with 24
Kopczynski,Di 13
Avista Corp
an off-the shelf application that will allow for the most 1
cost-effective implementation. This will provide the 2
Company with industry-standard software and a solution 3
that will keep pace with Avista‟s evolving energy 4
business. The replacement will eliminate the challenges 5
of maintaining an out-of-date customized system. 6
7
VI. COST CONTROL AND EFFICIENCY EFFORTS 8
Q. What actions or specific measures has the 9
Company undertaken to control costs and mitigate the 10
requested rate increase? 11
A. We continue to pay particular attention to 12
limiting the growth in our costs, while meeting important 13
reliability and environmental compliance requirements, and 14
preserving a high level of customer satisfaction. 15
As Mr. Morris explained in his testimony, in 2010, 16
the Company enlisted the help of Booz & Company to work 17
with us on what we refer to as Performance Excellence. 18
They brought with them industry knowledge, expertise and a 19
phased-approach. Phase 1 involved assessing and 20
identifying Avista‟s top opportunities to better align our 21
resources so we can run our business more efficiently, and 22
be better prepared to meet customers‟ future needs for 23
energy and energy information. Through this initial 24
Kopczynski,Di 14
Avista Corp
assessment phase we discovered that many of our processes 1
were already efficient, but the outside, third-party, best 2
practices perspectives brought in by Booz & Company has 3
provided us the opportunity to identify areas where we can 4
fine-tune our practices and further mitigate increased 5
costs to our customers. In Phase 2 we are designing 6
processes to capture these opportunities. One example of 7
these opportunities is within our Fleet Department. Fleet 8
utilization is really focused on ensuring that we have the 9
right mix of vehicles at the right place and the right 10
time. It is the Company‟s goal to reduce fleet by five 11
percent over the next three years (sixty vehicles). To 12
date, we have turned in 25 vehicles that were not 13
replaced. 14
Another example is in our Supply Chain. We spend 15
hundreds of millions of dollars every year on goods and 16
services, everything from poles and pipes, trucks and 17
transformers or software and services (professional, 18
technical and construction). By changing our buying 19
strategies, we could achieve significant savings each 20
year. By focusing on standardization and specifications 21
that provide the best fit and function at a reasonable 22
cost, we make certain that we buy the right materials to 23
do a job. Rigorous processes allow us to use the optimal 24
Kopczynski,Di 15
Avista Corp
buying strategy for each area of spend. When it makes 1
sense to buy in bulk, we can take advantage of lower 2
costs. Think Costco! It‟s more cost effective to buy two 3
jars of peanut butter at Costco, compared to one jar at 7-4
Eleven. You pay a premium for convenience. The same is 5
true for the materials and services we buy to run our 6
business. At home, if you save money on one item, you can 7
allocate those savings toward something else. That‟s also 8
true for our business. The money we save by changing what 9
we buy, how we buy it and who we buy it from will be used 10
to pay for projects that we might not otherwise be able to 11
fund. This will become more important as we invest in 12
smart technology and other equipment to meet our future 13
business needs. 14
The measures listed below are among some of the other 15
actions we have taken to mitigate the impact of increased 16
costs on our customers: 17
18
1. Mobile Dispatch – Electric. In December 2010, the 19
implementation of wireless laptop computers with 20
mobile maps (Mobile Dispatch) was deployed to 21
approximately one-half of Avista electric 22
servicemen. Mobile dispatch was previously 23
implemented in June 2006 to all Avista natural gas 24
servicemen. Mobile Dispatch automatically 25
dispatches work orders to Avista servicemen 26
throughout the day through wireless technology to 27
laptop computers mounted in Avista service trucks. 28
Prior to Mobile Dispatch, orders were created in 29
Avista‟s work management system and printed at the 30
Kopczynski,Di 16
Avista Corp
local construction offices. Employees in each 1
office would sort, assign and dispatch (via phone, 2
pager, fax or in person) orders each morning. The 3
field employees would work with the orders and call 4
in the completed work periodically throughout the 5
day or simply turn-in the stack of completed orders 6
at the end of the day. The completed orders were 7
manually completed by employees who entered the 8
information regarding the order back into the work 9
management system. The paper processes made it 10
difficult to track the status of individual orders 11
and fieldworkers throughout each day. It was also 12
very difficult for the dispatchers to keep up with 13
the volume of paper being sent out each morning, 14
changes to the orders that occurred during the day, 15
and completed orders returned at the end of the 16
shift. 17
18
Mobile Dispatch has automated the order creation, 19
modification and completion process. With the new 20
technology, orders are created in the work 21
management system and are automatically dispatched 22
to the correct field worker based on the order‟s 23
Latitude/Longitude position and the person assigned 24
to work orders in that area. Once a field employee 25
has been identified, the order is sent through 26
wireless technology to the laptop computer mounted 27
in Avista‟s service truck. The order is then 28
reviewed by the employee for specific information 29
needed to complete the work. The order status is 30
transmitted back to the dispatch center, as the 31
employee indicates they are en route, on-site, 32
and/or have completed the work. The completed 33
order is transmitted back to the work management 34
system where it is closed automatically. 35
Dispatchers have complete information for each 36
order and a field employee‟s status. They have the 37
ability to manage and redistribute work by simply 38
dragging and dropping orders from one field 39
employee to another. The orders instantly move 40
from the originally-assigned laptop to the newly-41
assigned laptop. 42
43
44
2. Keyhole Technology. This process helps us cost-45
effectively expose underground pipes to perform 46
some of our natural gas repair and maintenance work 47
Kopczynski,Di 17
Avista Corp
without cutting into and excavating concrete. 1
Keyhole technology allows the Company to work on 2
underground facilities through an 18 inch-diameter 3
hole in a street‟s pavement. When the job is done, 4
the street is restored by putting the pavement core 5
back into place with no waste from asphalt mixing. 6
Cost reductions also come from eliminating the need 7
for a backhoe and asphalt hot-patch crew or 8
replacing concrete. 9
10
3. Remote Installation/Removal of Hot Line Holds. A 11
Hot Line Hold (HLH) is a temporary relay setting 12
that a feeder breaker/recloser is placed into 13
whenever utility personnel are working on or in the 14
proximity of energized power lines. This setting 15
prevents the normal reclosing of breakers so that 16
in the event of contact with the wire, the device 17
will open and remain de-energized. The application 18
of the setting has traditionally been a 19
physical/manual push button operation of a switch 20
at the station breaker along with the physical 21
tagging for notification and identification 22
purposes. Historically, Avista has utilized the 23
Distribution SCADA system and a device within our 24
substations called the 43H switch to remove the Hot 25
Line Hold upon completion of work done by crews out 26
in the field. Field personnel would then be 27
required to travel to the substation to remove the 28
tag from the breaker. The Company‟s new procedure 29
allows Avista to return the breaker to normal 30
operation in a timely manner through updated 31
software and hardware that allows the work to be 32
done by a dispatcher located at the Avista main 33
office. 34
35
4. Wild Life Guards. Avista has installed wildlife 36
guards, targeting 60 feeders most affected by 37
wildlife as part of the Company‟s Wood Pole 38
Management program. This project has reduced the 39
number of squirrel related outages across the 40
system by 350 events annually and has provided 41
approximately $386,000 in avoided outage benefits 42
over the past three years. 43
44
5. The Natural Gas Periodic Meter Change (PMC) 45
Program. Current rules require utilities to change 46
out between 2-4% of its meters each year to measure 47
Kopczynski,Di 18
Avista Corp
for billing accuracy. This process requires a 1
serviceman to remove an existing meter, installed 2
at a premise, and then bring it to be tested by the 3
Company‟s meter shop. In order to be more 4
efficient, with this new program, each time a 5
serviceman responds to a service call, they 6
evaluate the potential for the customers meter to 7
be replaced and thereby eliminating a special trip 8
to remove a customer‟s meter. This program has 9
saved approximately $385,000 over the past two 10
years. 11
12
13
Q. What other cost-management measures has the 14
Company undertaken? 15
A. Avista‟s efforts to control its costs have not 16
been prompted solely by the most recent downturn in the 17
economy. We have continually revisited our costs and 18
operating practices over time in order to mitigate price 19
increases for our customers. Other measures we have taken 20
include the following: 21
22
1. Avista approved a lower capital budget than was 23
requested by the Company‟s Engineering and 24
Operations personnel. The original capital 25
projects request for approval in 2012 consisted of 26
projects totaling over $269 million. The Capital 27
Prioritization Committee reduced the list of 28
recommended projects by $19 million to the $250 29
million capital budget approved by the Board. In 30
addition, the Company prioritized O & M facility 31
maintenance and improvement projects and removed 32
projects that could be delayed without safety or 33
operational concerns. 34
35
2. Retirees are now picking up the full premium 36
increases on the health insurance coverage. A few 37
years ago retirees under age 65 were paying 10% of 38
Kopczynski,Di 19
Avista Corp
the health insurance premiums and now they pay 50% 1
on average. 2
3
3. The Defined Benefit Pension Plan‟s benefit formulas 4
were reduced (approximately 23%) for all non-union 5
new hires effective January 1, 2006 and forward, 6
and all new union hires effective January 1, 2011. 7
8
4. Avista continues to operate under a hiring 9
restriction which requires approval by the 10
Chairman, CEO and President, President of the 11
Utility, CFO, and Sr. VP for Human Resources for 12
all replacement or new hire positions. 13
14
5. The Company has increased shift coverage company-15
wide for natural gas and electric servicemen for 16
after (normal) hours calls. This provides for more 17
prompt call response at lower cost (straight time 18
versus overtime). 19
20
These programs are examples of the extensive efforts 21
by Avista to identify and implement efficiency measures 22
and/or productivity improvements while continuing to 23
provide quality service to customers. 24
Q. What improvements have been made in the area of 25
customer service? 26
A. Avista also has a number of ongoing process 27
improvement measures related to customer service that have 28
provided savings and efficiencies as described below. 29
1. Avista’s Customer Service Analyst Team constantly 30
challenges themselves to find ways to improve the 31
business without compromising customer 32
satisfaction. Initiatives such as automated 33
address corrections4 prior to bill printing and 34
automated address returns with the US Postal 35

4 This process validates address formats for conformance with USPS
regulations and makes corrections to avoid the cost associated with
address corrections.
Kopczynski,Di 20
Avista Corp
Service, reviewing collection notice parameters, 1
implementing e-mail management processes, improving 2
system response time, designing a comprehensive 3
screen view, e-bill promotions and other 4
miscellaneous improvements resulted in over $1 5
million of productivity savings from 2004-2011. 6
Examples included within the $1 million in savings 7
include options that give customers more choices 8
such as: 9
a. E-bill – 86,501 customers enrolled – Savings 10
$.46 per bill per month. 11
b. Web payment process – reduced company cost 12
from $.80 to $.10 per transaction – 60,000 13
transactions per month. 14
15
2. Enterprise Voice Portal (EVP) System. In mid-2009, 16
Avista implemented its new EVP System. The new EVP 17
system replaced the Company‟s old Integrated Voice 18
Response (IVR) system, installed in 1997, which was 19
no longer being supported by the vendor. The new 20
EVP system handled 708,000 customer calls in 2011 21
(approximate offset of 36 Full Time Equivalent 22
employees). This was 46.1% of the total inbound 23
calls into Avista. The new EVP system has several 24
new features that will increase customer self 25
service capabilities and improve customer 26
satisfaction, including the ability to generate 27
customized, automated outbound calling campaigns. 28
In 2011, over 30,000 customers were contacted using 29
this automated system, with messages ranging from 30
planned maintenance that may interrupt their 31
electrical service, to important information about 32
their account - reducing the need for more 33
expensive customer contact options, such as mailed 34
postcards, door to door visits, or manual calling 35
by customer service employees. The avoided labor 36
savings from the IVR/EVP system from 1998 through 37
2011 represents a total cumulative savings of 38
approximately $23 million. 39
40
3. Construction workbench. On-line tool installed 41
September 2010. This tool is aimed primarily at 42
contractors and developers to request new or 43
updated Avista services online. It automatically 44
creates and sends job tickets to an Avista service 45
worker‟s Blackberry or Smartphone. A Contractor 46
can initiate a construction order on-line any time 47
Kopczynski,Di 21
Avista Corp
allowing them additional flexibility in scheduling 1
and avoiding the requirement to contact the 2
Customer Service Design technician during normal 3
business hours. 4
5
4. Energy conservation and efficiency improvements at 6
Avista Facilities. The Company actively practices 7
energy conservation and efficiency in our buildings 8
and facilities. The focus of these efforts is to 9
reduce energy consumption and manage energy costs 10
while providing comfort to building occupants. In 11
2010, Avista began benchmarking facility energy use 12
to continuously improve performance. Over the last 13
few years Avista has made great strides to improve 14
energy efficiency and reduce annual energy usage in 15
own facilities through a number of different 16
projects. Some of these projects include: 17
18
Lighting retrofit projects in a number of 19
areas to reduce kWh usage and take advantage 20
of more efficient lighting fixtures; 21
Replacing aging HVAC systems to improve energy 22
efficiency and take advantage of the controls 23
that new technology offers; 24
Upgrading to high efficiency windows providing 25
better insulation and helping to reduce heat 26
gain in the summer months. 27
Reconstruction of office space to meet 28
Leadership in Energy and Environmental Design 29
(LEED) standards. 30
31
32
VII. CUSTOMER SUPPORT PROGRAMS 33
Q. What customer support programs does Avista 34
provide for its customers in Idaho? 35
A. Avista Utilities offers a number of programs for 36
its Idaho customers, such as energy efficiency programs, 37
Project Share for emergency assistance to customers, a 38
Customer Assistance Referral and Evaluation Service 39
Kopczynski,Di 22
Avista Corp
(CARES) program, senior programs, level pay plans, and 1
payment arrangements. Through these programs the Company 2
works to build lasting ways to ease the burden of energy 3
costs for customers that have the greatest need. 4
To assist our customers‟ in their ability to pay, the 5
Company focuses on actions and programs in four primary 6
areas: 1) advocacy for and support of energy assistance 7
programs providing direct financial assistance; 2) low 8
income and senior outreach programs; 3) energy efficiency 9
and energy conservation education; and 4) support of 10
community programs that increase customers‟ ability to pay 11
basic costs of living. 12
In the 2011/2012 heating season 23,695 Idaho 13
customers received approximately $4 million in various 14
forms of energy assistance (Federal LIHEAP program, 15
Project Share, and local community funds). 16
Q. Please describe the recent results of the 17
Company’s Project Share efforts? 18
A. Project Share is a community-funded program 19
Avista sponsors to provide one-time emergency support to 20
families in the Company‟s region. Avista customers and 21
shareholders help support the fund with voluntary 22
contributions that are distributed through local community 23
action agencies to customers in need. Grants are 24
Kopczynski,Di 23
Avista Corp
available to those in need without regard to their heating 1
source. In 2011, Avista Utilities‟ customers donated 2
$302,505 on a system-wide basis, of which $82,009 was 3
directed to Idaho Community Action Agencies. In addition, 4
the Company contributed $61,800 to Project Share for the 5
benefit of Idaho customers in the last heating season. 6
Q. What other bill-assistance programs does the 7
Company offer? 8
A. In an effort to assist and educate customers 9
about options such as Comfort Level Billing, and Payment 10
Arrangements, we developed a campaign encouraging 11
customers to learn about and enroll in the various bill 12
assistance options available to them. This campaign was 13
launched in March 2009 in both Idaho and Washington. It 14
explained how Comfort Level Billing helps smooth out the 15
seasonal highs and lows of customers‟ energy usage and 16
provides the customer the option to pay the same bill 17
amount each month of the year. This allows customers to 18
more easily budget for energy bills and avoid higher 19
winter bills. This program has been well-received by 20
participating customers. Roughly 20,137 or 14%, of Idaho 21
electric and natural gas customers are on Comfort Level 22
Billing. 23
Kopczynski,Di 24
Avista Corp
In addition, the Company‟s Contact Center 1
Representatives work with customers to set up payment 2
arrangements to pay energy bills, and choose a preferred 3
due date. In 2011, 31,903 Idaho customers were provided 4
with over 73,013 such payment arrangements. 5
Q. Please summarize Avista’s CARES program. 6
A. In Idaho, Avista is currently working with over 7
918 special needs customers in the CARES program. 8
Specially-trained representatives provide referrals to 9
area agencies and churches for customers with special 10
needs for help with housing, utilities, medical 11
assistance, etc. One of the benefits we have in utilizing 12
CARES representatives is the ability to evaluate each 13
customer, based on their specific need and to educate them 14
on what assistance is available within the community that 15
meets those individual needs. A goal of the program is to 16
enable customers to manage not only their Avista bill, but 17
other bills and needs as well. 18
Q. Does the Company have other programs to serve 19
its customers? 20
A. Yes. The following are examples of outreach 21
programs that are available to customers: 22
23
24
Kopczynski,Di 25
Avista Corp
1. Gatekeepers Program: Avista has implemented the 1
Gatekeepers Program, a program that trains field 2
personnel to be aware of signs that a customer may 3
be having difficulty with daily living tasks (e.g. 4
paper or mail not collected). The CARES 5
representatives conduct training of company-wide 6
field personnel who come into contact with 7
residential customers on a regular basis. In the 8
event employees identify a customer having 9
difficulty, the employee is asked to notify the 10
CARES representatives who would contact appropriate 11
community resources for assistance. 12
13
2. Senior Energy Outreach: Avista has developed 14
specific strategic outreach efforts to reach our 15
more vulnerable and fixed income customers (seniors 16
and disabled customers) with bill paying assistance 17
and energy efficiency information that emphasizes 18
comfort and safety. 19
20
3. Senior Publications: Avista has created a one-page 21
advertisement that has been placed in senior 22
resource directories and targeted senior 23
publications to reach seniors with information 24
about energy efficiency, Comfort Level Billing, 25
Avista CARES and energy assistance. A brochure 26
with the same information has also been created for 27
distribution through senior meal delivery programs 28
and other senior home-care programs. 29
30
4. Senior Energy Workshops: With the help of 31
additional workshop presenters, 8 Senior Energy 32
Workshops were held in Idaho during the 2011/2012 33
heating season. Over 595 seniors were reached and 34
were given Senior Energy Efficiency kits along with 35
learning about low-cost/no-cost ways to reduce 36
energy use. Each kit contains energy-saving items 37
such as plastic window covering, draft stoppers for 38
exterior light switches and outlets, v-seal for 39
drafty doors and a polar fleece lap blanket. The 40
Company approaches talking with seniors about 41
reducing their energy use very respectfully and 42
carefully to assure health, safety and comfort. We 43
discuss lifestyle changes that could be made and 44
steps to take before turning the thermostat up, and 45
not keeping the thermostat too low. 46
47
Kopczynski,Di 26
Avista Corp
5. Every Little Bit House: In partnership with KREM 1
television, fifteen and thirty second vignettes 2
were developed that cover low-cost and no-cost ways 3
to save energy at home. The goal of the vignettes 4
is to help limited income seniors and other 5
vulnerable populations with their energy bills by 6
providing home energy conservation education. The 7
vignettes provide helpful energy conservation tips, 8
information on community resources and ways for 9
customers to manage their energy bills. 10
11
6. Energy Fairs: In 2011, Avista initiated and hosted 12
three Energy Fairs – one in Coeur d‟Alene, Idaho, 13
one in Spokane, Washington, and one in Clarkston, 14
Washington. The fairs provided information and 15
demonstrations on energy assistance, energy 16
efficiency and home weatherization to limited 17
income families and senior citizens. Nearly 900 18
people attended the three fairs. The Energy Fairs 19
provide an environment for customers to learn about 20
billing options and energy assistance, while 21
offering them tips and tools to use to help manage 22
their limited financial resources. 23
24
25
26
Q. Can you please describe how the Company measures 27
customer satisfaction, and how important it is to Avista? 28
A. Yes, our customer satisfaction is very important 29
to Avista. We measure satisfaction by doing a quarterly 30
survey we refer to as “Voice of the Customer” (VOC). The 31
purpose of the VOC Survey is to measure and track customer 32
satisfaction for Avista Utilities‟ “contact” customers – 33
customers who have contact with Avista through the Call 34
Center and/or work performed through an Avista 35
construction office. 36
Kopczynski,Di 27
Avista Corp
Customers are asked to rate the importance of several 1
key service attributes. They are then asked to rate 2
Avista‟s performance with respect to the same attributes 3
(time for connection to a representative, representative 4
being courteous and friendly, representative being 5
knowledgeable, being informed of job status, leaving 6
property in condition found, etc.) Customers are also 7
asked to rate their satisfaction with the overall service 8
received from Avista Utilities. Customer verbatim 9
comments are also captured and recorded. 10
Our most recent second quarter 2012 customer survey 11
results show an overall customer satisfaction rating of 12
93% in our Idaho, Washington, and Oregon operating 13
divisions. This rating reflects a positive experience for 14
customers who have contacted Avista related to the 15
customer service they received. 16
Q. Does this conclude your pre-filed direct 17
testimony? 18
A. Yes. 19

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

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION ) CASE NO. AVU-E-12-08
OF AVISTA CORPORATION FOR THE ) CASE NO. AVU-G-12-07
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC AND )
NATURAL GAS SERVICE TO ELECTRIC ) EXHIBIT NO. 8
AND NATURAL GAS CUSTOMERS IN THE )
STATE OF IDAHO ) DON F. KOPCZYNSKI
)

FOR AVISTA CORPORATION

(ELECTRIC AND NATURAL GAS)

Electric kwh
Schedule No. of Customers (000s) % of Total kwh
Residential Sch. 1 100,675 1,134,723 34%
General Sch. 11&12 19,982 330,238 10%
Lge. General Sch. 21&22 1,227 700,573 21%
Ex. Lge. General Sch. 25&25P 10 1,142,791 34%
Pumping Sch. 30,31&32 1,369 56,195 2%
Street & Area Lights 177 13,905 0%
123,440 3,378,425 100%
Natural Gas Therms
Schedule No. of Customers (000s) % of Total Therms
General Service 101 73,857 53,137 45%
Lg. General Service 111&112 1,338 21,553 18%
Interruptible Service 132 1 395 0%
Transportation Service & Other 7 43,527 37%
75,203 118,612 100%
Total Electric & Gas Customers 198,643
Customer Usage
State of Idaho - Electric & Natural Gas
As of June 30, 2012
Exhibit No.8
Case Nos. AVU-E-12-08 and AVU-G-12-07
D. Kopczynski, Avist
Schedule 1, p. 1 of 1