20170612Kensok Exhibit 10.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-17-01
OF AVISTA CORPORATION FOR THE ) CASE NO. AVU-G-17-01
AUTHORITY TO INCREASE ITS RATES )
AND CHARGES FOR ELECTRIC AND )
NATURAL GAS SERVICE TO ELECTRIC ) EXHIBIT NO. 10
AND NATURAL GAS CUSTOMERS IN THE )
STATE OF IDAHO ) JAMES M. KENSOK
)

FOR AVISTA CORPORATION

(ELECTRIC AND NATURAL GAS)

Business Case Name Page Number
Asset Condition
Microwave Refresh 2
Project Atlas 6
Technology Refresh to Sustain Business Process 10
Customer Service Quality and Reliability
AvistaUtilities.com Redesign 15
Customer Facing Technology 21
Mandatory and Compliance
High Voltage Protection for Substations 24
Next Generation Radio Refresh 28
Performance and Capacity
Enterprise Business Continuity Plan 31
Enterprise Security 34
Technology Expansion to Enable Business Process 38
Enterprise Technology Capital Projects - Index of
Business Case Justification Narratives
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 1 of 42
Microwave Refresh Business Case
I GENERAL INFORMATION
Requested Spend Amount $25,156,206
Requesting Organ ization/Department Enterprise Technology
Business Gase Owner Mike Busby
Business Gase Sponsor Jim Corder
Sponsor Organ ization/Department Enterprise Technology
Gategory Project
Driver Asset Condition
1.1 Steering Committee or Advisory Group lnformation
The Microwave Refresh Business Case will be managed by a Steering Committee
comprised of Managers and Directors from project stakeholder business units
across the company for the purpose of guiding scope, schedule, and budget for all
projects contained in the Business Case. Management of individual projects in this
Business Case will be performed in Clarity, Enterprise Technology's Project &
Portfolio Management (PPM) tool.
2 BUSINESS PROBLEM
Avista's microwave infrastructure is a critical component of the overall network
backbone for voice and data transmission across all service territories. The current
equipment is past its useful life and no longer supplied or supported by the
manufacturer.
The Microwave Refresh Business Case has a purpose of:
. Replacing Avista's aging microwave technology with current technology to
provide for high speed voice and data communications that support all areas
of Avista's business across all jurisdictions. Current technology is past its
useful life and unsupported by the manufacturer.
o Maintaining up-time and reliability of communication paths through system
redundancy. Current microwave system carries data for Gas and Electric
Operations, Avista corporate back office, Land Mobile Radio (LMR), Hydro
Electric Dam (HED) Generation sites, Gas Telemetry, and Supervisory
Control and Data Acquisition (SCADA)
MAJOR DRIVERS
o Avista's current microwave technology systems are past their useful life.
Average age of all equipment is over 20 years old. Manufacturer
Business Case Justification Narrative Page 1 of4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 2 of 42
Microwave Refresh Busrness Case
replacement parts are no longer available and systems are no longer
supported.
Bandwidth on the current analog microwave system limits transfer speeds.
lmplementation of the Alcatel/Nokia system will allow for increased data
transfer speeds thereby decreasing latency for critical communications.
Many of the communication sites to be replaced under this Business Case
not only serve as primary communication paths for critical data, but also as
a redundant paths during network outages. Maintaining redundant paths
allows for business continuity in the event of an outage.
3 PROPOSAL AND RECOMMENDED SOLUT¡ON
Optlon Capltal
Goet
Start Complete
Do nothing $0 N/A N/A
Replacement of legacy system with new
Microwave technology
$25,156,206 01t2012 12t2022
Fiber Optic Cable $49,620,000 01t2012 12t2022
All existing microwave systems in the company were evaluated and determined to be
obsolete. The recommended solution is to use a risk-based approach to prioritize and
replace Avista's existing legacy microwave equipment across all current communication
sites over a period of 10 years from 2012-2022.
Other options were considered, but ultimately deemed inadequate or cost prohibitive.
Alcatel-LucenVNokia is the manufacturer chosen to provide equipment and services to
support this initiative. This platform provides a single network management solution
console containing monitoring tools that allow for easier troubleshooting and remote
configuration during network outages. The Alcatel platform not only provides a high
quality product, but has been adopted in the industry by companies such as AT&T,
Verizon, State and Federal agencies, and the Department of Defense (DOD) to handle
critical data transport.
ALTERNATIVES CONSI DERED
Fiber Optic Gable Data Transport - High speed fiber optic cable was considered as a
viable option for Microwave replacement, but ultimately deemed cost prohibitive. The
average cost of designing, purchasing, and installing fiber optic cable is estimated at
$60,000 per linear mile. Avista currently operates 827 total miles of point-to-point
microwave shots in its WA, lD, and OR service territories. Using these figures, the total
cost to run fiber optic cable in place of microwave would be $49,620,000. Realistically,
the cost would be much higher because fiber paths (aerial or buried) would likely not be
installed in straight-line paths between communication sites.
a
Business Case Justification Narrative Page 2 of 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 3 of 42
Microwave Refres h Business Case
BUDGET JUST¡FICATION
Business Case budget amount reflects the total estimated cost of legacy microwave
system replacement through the year 2022. Yearly allocation and project prioritization
are set based on the output of annual budget planning activities. These activities take
into account estimated completion dates of in-flight work, age of equipment remaining to
be replaced, 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 plan.
STRATEGIC ALIGNMENT & VISION
The Microwave Refresh efforts align with Avista's commitment to invest in its
infrastructure to achieve optimal lifecycle performance - safely, reliably, and at a fair
price. To accomplish this, Avista has negotiated a multi-year cost optimized purchasing
model with Alcatel-LucenUNokia that offers large volume discounts on both equipment
and professional services. This partnership will help ensure Avista can strengthen and
expand its data network to accommodate the current needs, as well as favorably position
the company to accommodate anticipated increased data volume.
CUSTOMERS & STAKEHOLDERS
The Microwave system benefits all areas of the business by facilitating data
communications between sites and critical systems. Primary stakeholder groups include
Gas and Electric Operations, LMR system users, HED staff, and SCADA.
Business Case Justification Narrative Page 3 of 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 4 of 42
Microwave Refreslr Busrness Case
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Microwave Refresh
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
Michael Busby
lT Operations Manager
Business Case Owner
Signature:
Print Name:
Title:
Role
Jim Corder
lnfrastructure Technology and Security
Director
Business Case Sponsor
Date 04t2017
Tem plate Version : 021241201 7
5 VERSION HISTORY
[Verslon#
lmplemented
By
Revielon
Date
Approved
By
Approval
Date
Reagon
1.0 Matt Reding 03t17t2017 Jim Corder 04t14t2017 lnitialversion
Business Case Justification Narrative Page 4 o1 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 5 of 42
Atlas
I GENERAL INFORMATION
Requested Spend Amount $22,850,000
Requesting Organ ization/Department Enterprise Technology
Business Case Owner Mike Littrel
Business Gase Sponsor Josh DiLuciano
Sponsor Organization/Department Energy Delivery Technology Projects
Category Project
Driver Asset Condition
1.1 Steering Committee or Advisory Group lnformation
The Atlas Business Case has two levels of governance: The Executive Technology
Steering Committee (ETSC), and Project Steering Committees. The committees
rev¡ew 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 monthly at the ETSC, and to stakeholder
groups overall progress.
2 BUSINESS PROBLEM
Avista Facility Management (AFM) is the legacy custom-coded system that the utility
uses to manage the location and curren{ operating state of its electric and gas
assets (e.9. pipes, poles and wires).
Avista's AFM system has been used for nearly two decades, reached technology
obsolescence, and in some components exceeded its useful life. 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. ln parallel, 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 design and edit, do not have the full
complement of desired functionality and are unreliable at times due to the outdated
architecture. For example, when a new simple configuration request is surfaced, the
change cannot always be implemented, as the custom code and architecture will
not allow it. ln addition, Avista uses a significant amount of paper maps and manual
processes in the field that result in inefficient work practices, delays in customer
response times, and duplicative efforts that can result in potential errors.
Business Case Justification Narrative Page 1 of4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 6 of 42
Atlas
Avista Facilities Mnnagement {AFM}
Electric and Gas Design
Electric and Gas Edit
Outage Management Tcol
Engineering Analysis
6as
Model
Distribution Management
System
Electric
Model
[..r¡ i ('l\i spati,rl d.rt.t
t rtlliltt
*6lS- €êa$rðdïc lnûormðttori Slrtem
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.
o Electric and Gas Design tools are applications for the design of electric and
gas facilities.o Electric and Gas Edit are tools inherent in the system used for data edits prior
to committing final data changes and additions.o Outage Management Tool is an in-house developed application that supports
outage analysis and management.o Engineering Analysis is a commercial tool used for engineering analysis
modeling.o Distribution Management System is a commercialapplication used to monitor
and control the distribution grid. lt relies on the GIS data to determine the
current operating state.
3 PROPOSAL AND RECOMMENDED SOLUTION
Do Nothing Alternative
The do nothing alternative is not an option as this legacy custom system has reached
technology obsolescence and cannot be supported. lt 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 to the functionality it can provide to our staff as they serve both
gas and electric customers. The current system 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
r'optlon Capltal Gost Ststt CornÊlêtð
Do nothing $0
Replace the custom AFM applications with
Commercial Off The Shelf Applications
$22.85 M 06t2015 12t2019
Business Case Justification Narrative Page 2 of 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 7 of 42
Atlas
state governments. The GIS platform is a corner stone to a utility's ability to provide
responsive service across its territory.
Fund the Replacement of Gustom AFM Applications
Justification for system replacement is based on a comprehensive assessment of
AFM technologies, processes and functions that was performed in 2015 by a third
party consultant as part of the project. The details of the assessment are available in
the following supporting documents:o Current State Reporto Future State Report. Gap Analysis Reporto Industry Analysis Report. Requirements Reporto Alternative Analysis
Gustomer Benefits
lmprovement of electric and gas customer experience is at the core of AFM system
replacement and enhancements. These new tools 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.
ln addition to the above mentioned AFM system changes, additional mobile tools
extend the value of Avista's investment in the GIS system by providing field staff with
iite versions for real-time editing and data collection. For example, the Mobile Design
Tool enables functionality for a designer to perform designs at a job site, and is
compatible with the office design tool.
The Mobile tool provides field personnelwith powerfulfunctionality to meet customer
responsiveness expectations, such provide electronic receipt and completion of
construction work orders; access to GIS data in the field; capture of as-built
configuration and materials; and document asset and compliance data electronically
by taking advantage of a variety of data sources, including digital image data, keyed
data, bar code scanned data, and Global Positioning System (GPS) location data.
Utility Benefits
Replacing the AFM tools improve worker productivity, asset data integrity, and the
opportunity to reengineer work processes and methods to support a continual
improvement program. COTS solutions also provide Avista with the ability to meet
changing customer demands, respond to more stringent and detailed regulatory
compliance requirements, enable effective operation of an increasingly complex and
dynamic distribution grid, and provide new service offerings to gas and electric
customers.
Business Case Justification Narrative Page 3 of4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 8 of 42
Atlas
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Atlas Business Case and
agree with the approach it presents and that it has been approved by the steering
cõmmittee 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 undersig ned or their nated rep resentatives.
0412017Signature:
Print Name
Title:
Role:
Signature:
Print Name
Title:
Role:
Signature:
Print Name:
Title:
Role
Business Case Owner
Mike
Energy Delivery Project Manager
Date
Date 0412017
Date:04t2017
Tempfate Version: 03107 12017
J DiLuciano
Electrical Engineering Director
Business Case Sponsor
Jim Corder
lnfrastructure Technology and Security
Director
Business Case Sponsor
5 VERSION HISTORY
Yeltlon llnplementod
By
Revlsion
Date
Approved
By
Approval
Date
Rs¡oon
1.0 Mike Littrel 04t1912017 Josh DiLuciano 4t19t2017 lnitialversion
Business Case Justification Narrative Page 4 of 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 9 of 42
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. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 10 of 42
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. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 11 of 42
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. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 12 of 42
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. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 13 of 42
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. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 14 of 42
AvistaUtilities.com (AU.com) Redesign
1 GENERAL INFORMATION
Requested Spend Amount
$ 12,604,683
Requesting Organ ization/Department Enterprise Technology
Business Case Owner Dana Anderson
Business Case Sponsor Kevin Christie and Jim Kensok
Sponsor Organization/Department Customer Solutions
Category Project
Driver Customer Service Quality & Reliability
1.1 Steering Committee or Advisory Group lnformation
This project is governed by a project level steering committee as set forth in the project
charter. The steering committee is composed of representation from the key business and
technical areas. ln this case it was composed of representation from Customer Services,
Treasury, Finance, Digital Communications and lS/lT. The steering committee is scheduled
to meet on a monthly basis and is charged with approving changes and adjustments to
scope, schedule and budget.
2 BUSINESS PROBLEM
lnterest in interacting with Avista via the web continues to increase. ln fact, since 2002, our
web usage has increased 282o/o. To capture this growing market, and to drive costs out of
the business by providing more self-service functionality, AvistaUtilities.com was launched
in January 2008 on the new SharePoint website platform. This launch provided customers
with increased self-service transaction functionality, as well as enhanced content
management functionality. Since its launch, mobile services have been added and the site
usage continues to grow.
Since 2008 alone, we've seen
an increase in web usage by
more than 55%. To date, we
conservatively process more
than $250,000 per day in
transactions through the
web and an average of 68% ofall customer contacts are
made through electronicchannels-with 42%
belonging to the web and 26%
belonging to the Enterprise
Voice Portal (EVP). We've
Web Visits (Jan. - July)
646,576 704,65t
534,308 533,145
453,313
2008 2009 20LO 20lL 20L2
experienced a 12o/o increase in web transactions over 201I alone. All this tells us what
we already know-the web is a critical and increasingly important channel for our customers
who are interested in self-service.
Business Case Justification Narrative Page 1 of6
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 15 of 42
AvistaUtilities.com (AU.com) Redesign
UPDATE 2017: The web is now the single largest channel of customer engagement for the
company, and the technology platform it sits on has outlived its useful life, now nearing 10
years in production. Not only has web traffic and demand for self-service continued to
increase, but web satisfaction and ability to complete transactions has declined. See data
below:
Cu¡tsmer Csntastr hy Channel
r $,EB
r EsR
I I1JR
uÍn6 zfllfi
Mabil¡ Usè 9È
rs45 I
lúfi
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ta!É
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lf
¡!ltttrl¡o¡¡¡0t!
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f6ltr
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Business Case Justification Narrative Page 2 of 6
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 16 of 42
AvistaUtil ities.com (AU.com) Redesign
19
'¡lieh 5:.ti:f¡etic n 5:arr
!l
n
While we've continued to make improvements to our website since our launch in 2008, we
now find ourselves with outdated functionality and usability that's far from perfect. Currently,
while our website still ranks well among industry standards and with our own metrics such
as Forsee and Net lnsights. With the emergence of the iPhone and other mobile application
technologies, customers are looking for easier and faster ways to self-serve. Currently,
according to Forsee data, 14o/o of our customers are not successful in completing online
transactions via the web, and must alternately pick up the phone to make contact with a
customer service rep, thus driving up our cost of service. Estimated data shows that if we
could help just one out of four of these customers self-serve, we could potentially cut 24,000
calls per year and save nearly $100,000 per year.
UPDATE 2017: According to Foresee results, now 19o/o of customers are unable to
complete transactions on average, creating an even higher opportunity to drive costs out of
the business while more effectively serving our customers.
ALTERNATIVES CONSIDERED
When the project team originally evaluated the web redesign project, they did so knowing
that the technology platform would need to be enhanced, updated, or replaced given how
long it had been in production and the updates to systems connecting to the site, as well as
the platform itself.
An alternative would have been to not invest in a more robust platform, site, and self-service
functionality. This option would have likely resulted in maintenance costs for staff, as well
as a less than ideal customer experience (see declining satisfaction above).
Could not find online pavment option 5,000 $19,000
Could not find what they needed 3,000 $13,000
Process was too confusing/Unable to
complete 16,000 $65,000
Annual lmpact
Total $97,00024000
Est. Savings in
Avoided Call Center
Labor
Est. Calls
Avoided
Business Case Justification Narrative Page 3 of 6
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 17 of 42
AvistaUtilities.com (AU.com) Redesign
Given industry trends for customer expectations and self-service, the company concluded
that it was in the best interest of our customers to invest in a platform, and subsequent
services, that could provide a more secure, user-friendly, and mobile capable website.
3 PROPOSAL AND RECOMMENDED SOLUTION
ln 2011, the multi-stakeholder AU.com management team determined there were four
primary areas of focus for updating the site: improving navigation, updating the look and feel
of the overall site, creating a new homepage layout, and improving self-service and search
functionality.
These categories were
developed based on multiple
sources of data from Net
lnsights, E-Source, JD Power,
Sixth Man Marketing, Acquity
and Forsee. Because our site
was originally developed in
2006-2007 and launched in
2008, standards and bestpractices have greatly
involved. Understanding that
five years in the web world is
an eternity, standards such astext heavy pages are no
longer considered acceptableby customers. W¡th the
emergence of app driven devices like the iPhone, customers are looking for quicker ways
to get the information they need. lndeed, 80% of web traffic is focused on transactions,
yet billing and payment options remains one of our top searched items. ln addition, while
our navigation/information architecture remains product focused, more and more sites are
moving toward customer focused layouts. According to JD Power, 30% of a customer's
satisfaction is driven by the ease of navigating the site, with another 20o/o driven by the
range of services that can be performed.
The goals for the refreshed AvistaUtilities.com website are:
Update tor 2017: The proposed timeframe for delivering on the objectives below was
originally three years, however due to changing business priorities and significant changes
in the public facing website technology providers, the final objective will not be delivered
until2017.
Loâdrng Thro!!hour
Êâ$ olNavigal¡ng lho
Wôbsib
x0%
Clârity otlnfornd¡on
Prcv¡d€d ôn lhe
Wobsits
t6%
Appc.rånæ oftho
Wobs¡la
l9%
2ûn
Option Capital Gost Start Complete
Do nothing $0
Complete refresh of the website $12.6M 01 2013 06 2017
Same as "do nothing"
Business Case Justification Narrative Page 4 of 6
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 18 of 42
AvistaUtilities.com (AU.com) Redesign
Navigation . Revise ¡nformat¡on architecture
.lmprove usab¡lity
. Update w¡th new visual ident¡ty, voice/tone ¡n copy
. Redesign home page
. Update w¡th new visual ident¡ty
. Redesign secondary and tert¡ary pages, including
My Account
. Proactively manage search functionality
. Evaluate 3'd party products to increase self-service funct¡onality.
Update lor 2017:
Objective:
To improve the overall customer experience, more effectively connect to customers via their
preferred communication channels, increase customer self-service, and reduce calls to
customer service representatives. To provide a platform of innovation for Avista's customer
focused initiatives.
Phoenix is a multi-phased program that includes
. Complete web replacement. Migration of our website address from avistautilities.com to myavista.com. lmproved search capabilities and analytic packages. Enhanced outage map
' Creation of text and native mobile app channels. lmproved payment processing integrated with new channels. An ecommerce engine
' Ongoing digital enhancements
Home Page
Look and Feel
Search &
Self-Service
Business Case Justification Narrative Page 5 of 6
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 19 of 42
AvistaUtilities.com (AU.com) Redesign
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the AvistaUtilities.com (Au.com)
Revised 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 r design ntatives.
/-/r-nSignature:
Print Name:
Title:
Role:
Signature:
Print Name
Title:
Role:
Signature:
Print Name
Title.
Role:
Dana Anderson
Di Communications
Busi Owner
stie
VPC er Solutions
Business Case Co-Sponsor
t
tm Kensok
VP Chief lnformation & Security Officer
Business Case Co-Sponsor
\,"\Date: A r--?
4-lz¡z
5 VERSION HISTORY
Date:
Template Version: 03107 12017
Version lmplemented
BY
Revision
Date
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By
Approval
Date
Reagon
1.0 Kelly Conley 4t18t17 Dana Anderson 4t18t20147 lnitialversion
Business Case Justification Narrative Page 6 of 6
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 20 of 42
Customer Facing Technology Program
1 GENERAL INFORMATION
Requested Spend Amount $5,000,000
Requesting Organ ization/Department Customer Solutions
Business Case Owner Dana Anderson
Business Case Sponsor Kevin Christie
Sponsor Organization/Department Customer Solutions
Category Program
Driver Customer Service Quality & Reliability
1.1 Steering Committee or Advisory Group lnformation
This program is administered by the Customer Solutions management team that is
facilitated by a Senior Product Manager. The team prioritizes the projects under this
programs scope and surfaces those to the lS/lT PMO for execution.
2 BUSINESS PROBLEM
Customer expectations continue to rise. Gone are the days when a drive up drop box for
payments is acceptable. Additionally, customers continue to expect more value for their
energy and have interest in a variety of offerings that can simplify their interactions with
Avista and give them more information about and control over their energy use. This,
combined with the expansive growth of technology, creates an expectation that information
is easy to find, payments are easy to make, communications are proactive, timely, and
personal, and tools that provide these opportunities are part of the overall energy package.
ln an effort to keep pace with customer demands and quickly changing technologies, Avista
intends to expand on the foundational technologies established during previous business
cases, and offer more channels of choice including self-service options that meet customer
needs and help reduce overall business cost. A primary example of a project funded under
the Customer Facing Technology Program business case is the expansion of our outage
mobile app to include payments, SMS messaging around payments and billing, and "pay
by text" functionality. Expanding our mobile options can reduce call center volumes,
resulting in reduced hold times and enhanced customer satisfaction. lt can also increase
adoption of electronic billing and payment transactions, which can lead to lower processing
costs. Efforts like this, focused around putting tools at a customer's fingertips, supports the
worldwide trend of consumer preference for mobile devices.
ln addition, customers are interested in new products and services such as online
service/job request tracking, appointment scheduling, appointment notifications, mobile
energy management in the home, such as smart home offerings, and expansion of mobile
applications and customer notification options.
Customers are beginning to face a time with an increasing amount of energy related choices
such as solar, storage, electric vehicles and the associated charging options, and energy
efficient equipment. ln this array of increasing choice, customers are looking to Avista to
Business Case Justification Narrative Page 1 of3
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 21 of 42
Customer Facing Technology Program
offer guidance and advice as they make these energy decisions. Avista has responded to
this need with tools such as our HVAC dealer network, Furnace Filter program, Solar
Estimator, and our soon to be launched Home Energy Marketplace. These programs are a
start, but many other future opportunities will arise that will help us advise our customers
and these should be part of this business case. ln the short term, this could include Smart
Home and/or Load Disaggregation.
As customer expectations have changed, companies are expected to deliver fast, easy,
personalized, and intuitive self-service. According to Forrester Research ,77 percent of US
consumers say "valuing my time" is the most important part of good online customer service.
They're looking for more than correct answers or quick response times. They want a
consistent experience from their first interaction to the resolution of their issue. Today's
customer compares Avista to all brands with which they interact. Accenture refers to this
phenomenon as "liquid expectations." For example, even if Apple's products don't compete
with yours, customers are comparing your website to Apple.com. New customers reach
adulthood every year and the expectations for self-service and digital engagement will
continue to increase. Funding the Customer Facing Technology Project ensures that Avista
can continue focusing on delivering value to our customers and making it easier for them to
interact with us.
The major metrics for this program are customer satisfaction scores, web satisfaction
scores, channel growth, and transaction success rates.
3 PROPOSAL AND RECOMMENDED SOLUTION
Alternative #1 - Slower pace of change
lmplement customer solution capabilities and improvements at a slower pace than outlined
in the attached information.
This alternative will delay the benefits to our customers which may generate dissatisfaction
as well as prevent us from maximizing the benefits of previously funded core systems, such
as the mobile application or the myavista.com website. Avista's web channel is experiencing
increasing usage year over year but has a declining rate of customer satisfaction as a result
of not investing in modernizing the channel.
Rising customer service expectations including digital requirements are not going away. ln
fact, customers will only demand more and more from any company they do business
with. Avista's plans are to meet our customer's expectations and deliver the tools that will
enable them to effectively manage and understand their energy use. By not moving
foruvard with these investments, customer satisfaction will decline.
Option Capital Cost Start Complete
Do nothing $0
Recommended solution $19,000,000 01 2016 122021
Slower pace of change $2,500,000 01 2016 12 2021
Business Case Justification Narrative Page 2 of 3
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 22 of 42
Customer Faci ng Tech nology P rogram
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Customer Facing Technology
Program 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.
Signatu Date y'-rZ-tt
Print
Title:
Dana Anderson
Role:Bus Case Owner
Director, Corporate Communications
Signature:
Print Name:
Title:
Role:
\*\Date: 4 \--(
ristie
VPC mer Solutions
Business Case Sponsor
5 VERSION HISTORY
Verslon lmplemented
By
Revislon
Date
Approved
BY
Approval
Date
Rgaeon
1.0 Kelly Conley 4t11t17 Dana Anderson 4t17t2017 lnitialversion
Template Version: 03107 12017
Business Case Justification Narrative Page 3 of 3
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 23 of 42
High Voltage Protection (HVP) Refresh
1 GENERAL INFORMATION
Requested Spend Amount $4,400,000
Requesting Organ ization/Department Enterprise Technology
Business Gase Owner Michael Busby
Business Case Sponsor Jim Corder
Sponsor Organ ization/Department Enterprise Technology
Category Mandatory
Driver Mandatory & Compliance
1.1 Steering Committee or Advisory Group lnformation
This Business case will have a defined steering committee who will be responsible
for allocating funding approved by the Capital Planning Group (CPG) to specific
projects with scope that aligns with this business case. The steering committee will
be comprised of managers and directors.
2 BUSINESS PROBLEM
Under CenturyLink (formerly known as Qwest Communications), Tariff FCC
Number 1, Section 13.7, Avista is required to provide high voltage protection for
communication circuits in high voltage areas newer than September 12, 1994. ln
order to balance the need for communications from devices at substation locations
with safety of personnel and equipment, high voltage protection and isolation
standards have changed. lf Avista does not meet the tariff requirements,
telecommunication companies have the ability to turn off communication circuits to
substations until Avista electrically isolates the copper wire coming into a substation,
thereby affecting phone, modem, SCADA, and other metering and monitoring
systems at substations. This business case was created to meet the needs of this
tariff and to minimize risk regarding personal safety for all workers in and around
these high voltage areas.
3 PROPOSAL AND RECOMMENDED SOLUTION
Optlon Capltal
Coet
Sta¡t Complete Riek
Mitlga$on
Do nothing $o N/A
Replace copper communication with
Fiber
$4,400,000 01t2012 12t2018
Avista facilities providing service to electric power generating, switching, or
distribution station may require the use of Special High Voltage Protective (HVP)
Apparatuses such as isolation or neutralization devices, or mutual drainage
Business Case Justification Narrative Page 1 of4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 24 of 42
High Voltage Protection (HVP) Refresh
transformers. These devices are located on the Avista side of the Point of
Termination to protect against the effects of Ground Potential Rise (GPR) and
induction caused by faults in a customer's electric power system.
These special protection precautions are intended to:. Minimize electrical hazards to personnel. Prevent electrical damage to telecommunications equipment and facilities. Provide the required continuity of telecommunications transmission at times of
power system faults
The risk of not replacing the High Voltage Protection with a system that meets the
CenturyLink's requirements would result in termination of communication services
by the carrier. This would impact Avista's ability to safely and reliably control and
monitor our substation and transmission facilities. Based on the criticality of this risk,
doing nothing was not an option.
ALTERNATIVES CONSIDERED
The project team has weighed out alternatives that included expanding our private
fiber infrastructure or moving the demarcation Iocation outside the zone if influence
(ZOI) and use a fiber optic High Voltage Protection system. The decision to extend
private fiber or move the telecommunication demarcation outside the ZOI was
determined on a case by case basis.
The graphic below shows the locations that will be integrated into our existing private
fiber communication network.
Below are the locations where Avista will be upgrading the High Voltage Protection
system to a fiber optic system and move the telecommunication demarcation
outside the zone of influence
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Business Case Justification Narrative Page 2 ol 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 25 of 42
High Voltage Protection (HVP) Refresh
BUDGET JUSTIFICATION
Business Case budget amount of $4,400,000 reflects the total estimated cost of
implementing HVP solutions at all applicable substations through the year 2018. Yearly
allocation and project prioritization are 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 plan.
STRATEGIC ALIGNMENT
The HVP initiative aligns with Avista's commitment to invest in its infrastructure to
achieve optimal lifecycle performance - safely, reliably, and at a fair price. Data
communications that monitor and control Avista substations are critical in the support of
the bulk electric system. The implementation of HVP technology will continue to enable
and support these critical communications, but in a manner that is much safer to all
workers in and around the substation location.
Business Gase Justification Narrative Page 3 of 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 26 of 42
High Voltage Protection (HVP) Refresh
4 APPROVAL AND AUTHOR¡ZATION
The undersigned acknowledge they have reviewed the High Voltage Protection
(HVP) 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
Michael Busby
lT Operations Manager
Business Case Owner
Signature:
Print Name:
Title:
Role
Jim Corder
lnfrastructure Technology and Security
Director
Business Case Sponsor
Date:04t2017
Tem pf ate Version : 021241201 7
5 VERSION HISTORY
lVerslon#lmplemonted
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Revislon
Date
Approved
By
Approval
Date
Reason
1.0 MichaelBusby 04t04t2017 Jim Corder 04t14t2017 lnitialversion
Business Case Justification Narrative Page 4 of 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 27 of 42
Next Generation Radio
1 GENERAL INFORMATION
Requested Spend Amount $31,000,000
Requesting Organ ization/Department Enterprise Technology
Business Gase Owner Walter Roys
Business Case Sponsor Jim Corder
Sponsor Organization/Department Enterprise Technology
Category Mandatory
Driver Mandatory & Compliance
1.1 Steering Commiffee or Advisory Group lnformation
This Business Case will be managed by a Steering Committee comprised of
Managers and Directors from stakeholder business units across the company for
the purpose of guiding scope, schedule, and budget for all projects contained in the
Business Case.
2 BUSINESS PROBLEM
Avista's Land Mobile Radio (LMR) system is considered the most critical
communication tool for field operations, from both a productivity view point and for
personal and public safety. Currently, Avista's LMR system operates on a collection
of licensed wideband Very High Frequency (VHF) 25 KHz channels. The Federal
Communications Commission (FCC) has announced a mandate that all licensees
operating on private VHF radio frequencies must narrowband channel bandwidth
from 25 KHz to 12.5 KHz by January 1,2013. Avista's existing LMR system is not
compatible with narrowbanding, and therefore will need replacement.
Additionally, Avista Central Dispatch does not currently have the ability to use the
LMR tool for field operations in the Oregon territory, reducing productivity and
increasing risk to personal and public safety. The LMR system replacement will
include an expansion to Oregon field operations in order to deploy a single radio
system to be used by alljurisdictions.
MAJOR DRIVERSo FCC Narrowbanding mandate for all privately licensed VHF and Ultra High
Frequency (UHF) bands. Noncompliance with the FCC narrowbanding
mandate will terminate Avista's current radio frequency (RF) spectrum
license, resulting in complete shutdown of the LMR System.r Avista's legacy VHF LMR system is past its useful life, equipment is no longer
supported by the manufacturer, nor is it capable of being narrow banded.¡ Avista's LMR system is considered the most critical communication tool for
field operations, and provides reliable and private communication for Gas
crews, Electric crews, and Central Dispatch.
Business Case Justification Narrative Page 1 of3
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 28 of 42
Next Generation Radio
3 PROPOSAL AND RECOMMENDED SOLUTION
Optlon Capltal
Cost
Start Completo Risk
Mitlsatlon
Do nothing $o N/A
Replacement of legacy system $31,000,000 04t2008 05t2017
RECOMMENDED SOLUTION
The recommended solution to the business problems identified above is to systematically
replace Avista's legacy wideband LMR VHF system with a trunked, narrow banded VHF
system. The new system will operate on a privately licensed 220MHz VHF spectrum
using LMR product from Tait Communications. Avista will also utilize the engineering and
design expertise of Gillespie, Prudhon & Associates (GP&A) in the implementation of the
LMR system.
ESTIMATED COST IMPACT
The Next Generation Radio projects will begin in 2008 and will conclude in 2017 with a
total projected cost of $31 Million. lncluded in this deployment will be 29
telecommunication sites, 26 Service Centers and offices, 615 mobile radios, 62 contractor
issue mobile radios, and 38 desktop radio consoles. All of this spread across Avista's
30,000 square mile service territory in 4 states (WA, lD, MT, OR) to support a total of
roughly 640,000 gas and electric customers. To maximize the value of both product and
services procured, Avista will conduct formal Request for Proposals (RFP) in the selection
of both the equipment manufacturer and implementation services.
ALTERNATIVES CONSI DERED
Commercial cellular communication systems: These systems alone do not have the
coverage, capacity, or reliability to meet Avista's communication needs.
Listed below are benefits of the LMR System that are not available with commercial
cellular or satellite communication solutions:. Broadcast functionality for Gas and Electric Operations during:o Normal day-to-day operations. This includes dispatch to field worker
communication, and crew to crew communications (talk groups).o Emergency situations such as Code 9 - Blowing Gas or a major electrical
outage.. Ground to air communication with Life Flight helicopter evacuation services during
emergency situationso Private point-to-point communication for electric conductor line stringing
STRATEGIC ALIGNMENT & VISION
The NGR project aligns with Avista's commitment to invest in its infrastructure to achieve
optimum lifecycle performance - safely, reliably, and at afair price.
Business Case Justification Narrative Page 2 of 3
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 29 of 42
Next Generation Radio
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Next Generation Radio
(NGR) 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 0412017
Walter Roys
System Engineering Manager
Business Case OwnerN/lSignature:
Print Name
Title:
Role
Jim Corder
lnfrastructure Technology and Security
Director
Business Case Sponsor
Date 04t2017
Tem plate Version : 0212412017
5 VERSION HISTORY
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1.0 Matt Reding 04t05t2017 Jim Corder 04t14t2017 lnitialversion
Business Case Justification Narrative Page 3 of 3
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 30 of 42
Enterprise B u si ness Conti n u ity
1 GENERAL INFORMATION
Requested Spend Amount $ 450,000
Requesting Organization/Department Enterprise Security
Business Case Owner Clay Storey
Business Case Sponsor Jim Corder
Sponsor Organization/Department Enterprise Technology
Category Program
Driver Customer Service Quality & Reliability
LI Steering Committee or Advisory Group lnformation
This program is governed by the Enterprise Business Continuity Advisory Committee.
This committee provides oversight of the Enterprise Business Continuity Program
and its resources. ln addition, individual projects funded by this business case have
project level steering committees that oversee scope schedule and budget.
2 BUSINESS PROBLEM
Severe storms, national 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 have an impact on the
resources Avista depends on for its operations. Many of Avista's critical business
processes are now more than ever depended on data, communication networks and
computer systems. A prolonged failure of any of these resources could have a
significant impact on Avista's ability to sustain operations and operate our business.
ln response to these significant hazards 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 any
time we are required to operate under critical emergency conditions.
This program supports Avista's safe and reliable infrastructure strategy by
implementing highly available and recoverable systems that support Avista's critical
business processes. A Business lmpact Assessment (BlA) typically drives the need
for improvement projects, however some projects are funded based on quality issues
with existing infrastructure following an annual exercise or actual event. Projects
within this business case may also support regulatory requirements. The Enterprise
Business Continuity Advisory Committee helps prioritize investments and manage
the risk of addressing potential issues now or deferring it to future years.
Business Case Justification Narrative Page 1 of3
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 31 of 42
Enterprise Business Contin uity
3 PROPOSAL AND RECOMMENDED SOLUTION
DO NOT FUND THE PROGRAM
Not funding the Enterprise Business Continuity Program would limit Avista's ability to
address identified business continuity issues outside of technology refresh cycles
which typically run 3-5 years. Not addressing high risk items until a refresh project
puts the company at risk. There is also no guarantee that deferring the work until a
future refresh project would address the gap because the future project may not be
able to absorb the cost or scope of the issue.
REDUCE PROGRAM FUNDING
A reduction in funding for the Enterprise Business Continuity Program would also
limit Avista's ability to address issues identified by BIA's, quality issues, exercises or
other changes in the environment. A reduction in funding would push some projects
into future years due to a lack of program funding. ln some cases the deferred
projects would be brought into future year refresh projects or maintained on a back
log of Enterprise Business Continuity Program until funding is available.
FULLY FUND THE PROGRAM (RECOMMENDED)
At the current funding level Avista is able to address the highest risk business
continuity issues outside of existing technology refresh cycles. lt 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.
Optlon Capltal Gost Start Gomplete
Do not fund the program $o
Reduce program funding $200,000
Fullfunding $450,000
Business Case Justification Narrative Page 2 of 3
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 32 of 42
Enterprise Business Continuity
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Enterprise Business
Continuity 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
Clay Storey
Security Engineering Senior Manager
Business Case Owner
Signature:
Print Name:
Title:
Role
Jim Corder
lnfrastructure Technology and Security
Director
Business Case Sponsor
Date 04t2017
Template Version: 03107 12017
5 VERSION HISTORY
Vereion lmplemented
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Dato
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By
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Dato
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1.0 Clay Storey 3t14t2017 Jim Gorder 04t14t2017 lnitialversion
Business Case Justification Narrative Page 3 of 3
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 33 of 42
Enterprise Security
1 GENERAL INFORMATION
Requested Spend Amount $ 3,200,000
Requesting Organ ization/Department Enterprise Security
Business Case Owner Clay Storey
Business Case Sponsor Jim Corder
Sponsor Organization/Department Enterprise Technology
Gategory Program
Driver Customer Service Quality & Reliability
1.1 Steering Committee or Advisory Group lnformation
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. ln addition each project funded by
the Enterprise Security Business Case has project level steering committees.
The project steering committees are responsible for controlling scope, schedule
and budget for each project.
2 BUSINESS PROBLEM
There are three primary drivers of capital spending for Enterprise Security: cyber
security, physical security and regulatory standards. Each plays a critical role in
supporting our delivery of safe and reliable energy to our customers.
Cyber Securitv
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
cyber space, 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. ln 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 cyber security program and invest in security controls to prevent,
detect, and respond to these increasingly frequent and sophisticated attacks.
Phvsical Securitv
While considerable attention is focused on cyber security, physical security also
remains a concern for our industry. Physical security encompasses the aspects
of employee safety and the protective security of our facilities and critical
infrastructure. Acts of theft, vandalism, and sabotage of critical infrastructure not
only results in property losses, but can also directly impact our ability to serve
customers. Securing remote unmanned or unmonitored critical infrastructure is
difficult, especially when traditional tools such as perimeter fencing by itself is not
Business Case Justification Narrative Page 1 of4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 34 of 42
Enterprise Secu rity
adequate. This creates the need for additional physical security items, expertise
and technology.
Regulatory Obligations
Advancing cyber threats continue to drive change in the regulatory landscape
faced by the Avista. Early in 2013, President Obama issued the Executive Order
"lmproving Critical lnfrastructure Cyber security." The Order directed the National
lnstitute of Standards and Technology to work with stakeholders in developing a
voluntary framework for reducing cyber risks to critical infrastructure. The
Framework consists of standards, guidelines, and best practices to promote the
protection of critical infrastructure. The Federal Energy Regulatory Commission
also issued Order 791 on November 22, 2013, approving the North American
Electric Reliability Corporation Critical Infrastructure Protection Standards, Version5. Both of these activities increased our security-related costs because they
require Avista's security controls and processes to conform to new standards,
guidelines, and best practices. ln addition Avista also has requirements under the
Payment Card lndustry (PCl) standards. These standards continue to change as
updates are made to the standards on 1-2 cycle.
3 PROPOSAL AND RECOMMENDED SOLUTION
The Enterprise Security business case provides funding for cyber, physical and
compliance related projects and supports Avista's safe and reliable infrastructure
strategy. 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.
DO NOT FUND THE PROGRAM
Not funding the program increases the likelihood that a security incident may occur
and cause harm to Avista's people, assets and information. The results of a security
incident can lead to the inability to deliver energy, loss of customer information, and
the failure of systems that support Avista's critical business processes. There are
also potential downstream consequences to the public if Avista is not able to deliver
safe and reliable energy. Avista's energy supports many other essential services
such as health care, telecommunications and water. Avista also has several
compliance related obligations that are constantly evolving and that mandate certain
Option Capital Cost Start Complete
Do not fund the program $0
Reduce program funding $ 1,600,000
Fully fund the program $ 3,200,000
Business Case Justification Narrative Page 2 of 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 35 of 42
Enterprise Security
security protections. Failure to achieve and maintain compliance can lead to fines
and penalties.
REDUCE PROGRAM FUNDING
A reduction in program funding will impact expansion projects that address new risks
and/or delay refresh projects that upgrade or replace aging infrastructure. Both
expansion and refresh play an important role in addressing security risks at Avista.
lnadequate funding would force Avista to primarily focus on maintaining what we have
today and not address new emerging risks with expansion projects. Modern threats
are constantly evolving in response to the baseline security technologies that
companies maintain in portfolio. These systems are still important but it is equally
important to continue to advance security capabilities with expansion projects as the
th reat environment changes.
FULLY FUND THE PROGRAM (RECOMMENDED)
Fully funding the program allows for proper investment in new as well as existing
technologies. This level of funding helps minimize the likelihood and severity of a
security incident. Currently about half of the funding amount goes towards cyber
security investments and the other half addresses physicalsecurity investments. This
creates a balance between cyber, physical, refresh, and expansion projects. Some
of the cyber and physical projects are also addressing mandated compliance
obligations. ln addition, this level of investment allows Avista to continue to measure
and see improvement in Avista's adoption of the NIST Cyber Security Framework. A
lower funding amount would result in lower overall maturity level in the NIST Cyber
Security Framework.
Business Case Justification Narrative Page 3 of 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 36 of 42
Enterprise Secu rity
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Enterprise Security
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
Clay Storey
Security Engineering Senior Manager
Business Case Owner
Signature:
Print Name
Title:
Role:
Jim Corder
lnfrastructure Technology and Security
Director
Business Case Sponsor
Date 04t2017
Template Version: 03107 12017
5 VERSION HISTORY
Ver¡lon lmplemented
BY
Revlsion
Date
Approved
BY
Approval
Date
Reason
1.0 Clay Storey 3t14t2017 Jim Gorder o4t14t2017 lnitialversion
Business Case Justification Narrative Page 4 oÍ 4
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 37 of 42
Technology Expansion to Enable 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 Expansion to Enable Business Process 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.

Requested Spend Amount $14,000,000
Requesting Organization/Department Enterprise Technology
Business Case Owner Andy Leija
Business Case Sponsor Jim Corder/Hossein Nikdel
Sponsor Organization/Department IS/IT
Category Program
Driver Performance & Capacity
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 38 of 42
Technology Expansion to Enable Business Process
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
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 requests within
the two constraints (resource capacity and funding) for each year.
2 BUSINESS PROBLEM
The utility industry is undergoing a transformation that is driving technology demand
to meet ever-changing customer needs and increase operational efficiencies.Specifically, customers'
adoption of mobile and web
technology is growing at a
faster pace than ever before,
challenging industries who in
the past were never affected.
.9tt¡
According to a 2016 studyr,
Americans are spending over
50% of their time on digital
media. That is a 9o/o increase
from 2014.
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Smarlphone App Share of Olgltal Medla Tlme Spent30!rc.r.oñS.or.kdl.kÙ¡¡Íútü.P¡hñatdl.u.m¡,u s,lo[rÁudr.ñ<.
Jul.20 t5 Jan-2016 Jul.20l6Jân-2015Jùf2014
sh¡r. ol Total Dlgltal flmo gp.nt: July 2010sour. ro63.d.kd,.btl¡Mpr¡lhf, S.b¡¡.rh
The increase in time spent on digital media
is largely driven by the rapid growth in
mobile penetration and consumer demand
for immediacy, whereby consumers have
24171365 access to information,
communication, and payment capabilities.
In the same study, comScore found that
much of consumer digital use was on their
smartphone device through the use of
apps. This phenomenon results in
o..*tooff
f'ìLJ
sfrlÂRTP!ONC
consumer demand for swift and easy access to their utility service provider to pay
t The 2016 U.S. Mobile App Report. http://www.comscore.com/Insights/Blog/Smartphone-Apps-Are-Now-
50-of-All-US-Digital-Media-Time-Spent
IABLÉI
Business Case Justification Narrative Page 2 of 5
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 39 of 42
Technology Expansion to Enable Business Process
theír bills, order new services, monitor outage maps, learn of new offerings that
relate to their particular needs or lifestyles, and more. For example, environmentally
conscious consumers may be interested in managing their carbon footprint beyond
the choices they make at home and elect to pursue alternative energy resources,
set up auto-payments, or be alerted when coming close to hitting certain therm or
kilowatt hour preset thresholds.
Congruently, and as illustrated in the graph below, Avista has clearly seen an
increase demand for performance and capacity in network, application and data
projects, whereby new Commercial Off The Shelf (COTS) application systems that
enhance or improve conventional business practices and processes to increase
operational efficiencies, mobility and scalability, also require digital infrastructure
capable of capturing, processing, transmitting and storing large sets of data for daily
use.
Technology Expansion by Year
¡ Networks ¡ Communications * Distribuled a Cenlral ¡ Fac¡lities . Appl¡cations I Dðta
s3O,00o,0o0
s2s,000,000
s2O,Om,000
515,O00,0oo
s10,000,000
stm0,0m
5-
2015 2016 2017 2018 2019 2020 20272014
Additionally, security threats are on the rise requiring additional and continuous
enhancements and changes to protect utility infrastructure and customer information
and their transactions. The increase in cyberattacks that result in data breaches can
not only reduce customer confidence, but result in catastrophic events to operation
systems that manage energy services (i.e. generation, transmission and
distribution).
Consumers also expect utilities to do more with either less or the same2, including
staffing a digital workforce that understand the energy field while also able to
respond using technology solutions that are common to consumers in their daily
lives. This resource constraint is compounded by the fact that more than half of the
utility workforce is eligible to retire in the next 4-6 years,3 which presents a need for
2 2016-17 WA UTC staff rate case rejection;2016-17 Oregon Public Utility
3 http://www.elp.com/articlesl2015l04/solving-the-aging-workforce-dilemma-in-today-s-utility-industry.html
Business Case Justification Narrative Page 3 of 5
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 40 of 42
Technology Expansion to Enable Business Process
a flexible workforce that can be both knowledgeable and responsive.
3 PROPOSAL AND RECOMMENDED SOLUTION
Do Nothing
This customer expected magic is only achieved through capital investment in digital'smart' infrastructure, data responsive integrated systems, varied customer
communication channels, and continuous operational efficiencies. Thus, doing
nothing is not an option. The risks associated with not funding this Business Case
will result in stifling customer demands, any operational efficiencies, and result in
maintaining manual processes and practices that can result in longer wait times at
a minimum and at worse, the inability to respond to certain requests at all.
Alternative #l
The alternative, which is to fund this business case at less than the requested
amount, would result in degrading Avista's infrastructure to a point that the level of
risk is no longer acceptable and that strategic objectives will be negatively impacted.
Recommended Solution
The Technology Expansion to Enable Business Processes program is in place to
automate business processes, add functionality and enhancements to existing tools
or systems, and fund additional software licenses of existing COTS systems. The
recommended solution addresses many type of technology investment projects
across offices, substations, plants, meters, and datacenters. lnfrastructure
investment examples include hardware, software, fiber optic products, services for
inside and outside construction, while application enhancements further operational
efficiencies by leveraging COTS solutions, increase security controls, and improve
Avista's responsiveness.
As stated above in the Steering Committee section, this business case is an annual
program that has various levels of cross-functional governance and manages
transfers to plant forecasts at the project level. lt aligns with Avista's Vision of
delivering reliable energy service and the choices that matter mostto our customers,
and the Safe and Reliable lnfrastructure strategy. Depending on the projects
approved for funding during a given year, stakeholders and customers vary.
Optlon Capltal Cost Start Gomplete
Do nothing $o
Alternative #1: Reduce Funding $7 MM 01 2017 12 2017
Recommended Solution $14 MM 01 2017 122017
Business Case Justification Narrative Page 4 of 5
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 41 of 42
Technology Expansion to Enable Business Process
4 APPROVAL AND AUTHORIZATION
The undersigned acknowledge they have reviewed the Technology Expansion to
Enable 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
desig nated representatives.
Signature:
Print Name
Title:
Role:
Signature:
Print Name:
Title:
Role:
Signature:
Print Name
Title:
Role
Andy Leija
Business Case Owner
lT Delivery Manager
Date (- t è' ucz
Date 4-/s- j./v
Date:ñffìúL&rrÞ
Tem plate Version : 03 107 12017
ossern
Application System Planning Director
Business Case Sponsor
Jim Corder
lnfrastructure
Director
Technology and Security
Business Case Sponsor
5 VERSION HISTORY
Verclon lmplemented
By
Revlelon
Date
Approved
By
Approval
Date
Reaoon
1.0 Andy Leija 04112t17 ET Directors 04114t17 lnitialversion
Business Case Justification Narrative Page 5 of 5
Exhibit No. 10
Case Nos. AVU-E-17-01 and AVU-G-17-01
J. Kensok, Avista
Schedule 1, Page 42 of 42