20200331Comment.pdf

From: Lynn Anderson <[e-mail]>
Sent: Thursday, March 26, 2020 4:43 PM
To: Diane Hanian <[e-mail]>
Subject: AVU-G-18-08 and AVU-E-18-12 comment

AVU-G-18-08 and AVU-E-18-12

Commissioners,

Obviously, the Commission Staff has found significant problems during its investigation of
Avista's Application for prudency determinations for its 2016 and 2017 demand side
management (DSM) programs. Staff found similar problems with Avista's last three DSM
prudency applications in 2013, 2014 and 2016. It's worth noting that in the last case, AVU-
E-16-06, in its filed comments, Staff said: "However, Staff still has concerns about whether
all issues have been fully resolved or have simply been made more difficult to
discern." While I don't know if the issues were more difficult for Staff to discern in the
present case, it is clear that the issues haven't been resolved. That said, in the current case
it appears that the Staff is willing to acquiesce to recommending a determination of
prudency with only minor disallowances and promises by Avista to do better in the future,
as detailed in the Stipulation. Regarding these promises, I've read the public comments
filed by Jon Powell in this case and believe his insightful analysis and recommendations are
well-founded and recommend that the Commission and the Staff carefully consider his
advice.

Also, I want to bring to your attention one specific issue in Avista's natural gas
"prudency" request. On pages 7 and 10 of the Application is the claim that the Company's
2016 and 2017 DSM programs saved 535 million "gross" therms and that programs were
somehow cost-effective under the utility cost test (UCT), p. 8. As I've said in prior
comments filed with the Commission, it is a violation of nationally recognized and accepted
DSM evaluation standards to calculate cost-effectiveness of programs based on gross
savings instead of on net savings. On page A-5 of Appendix A in Avista's filing (p. 116) are
Nexant's estimates of "net-to-gross" factors for determining cost-effectiveness, but it
appears that Avista prefers to ignore those necessary downward adjustments to savings and
cost-effectiveness. This is nothing new, as Intermountain Gas has the same preference,
and it is not surprising, given that it is extremely difficult, if not impossible, for most natural
gas DSM programs to be shown as cost-effective when benefit/cost ratios are calculated
using nationally accepted methods.

Thank you for your consideration,
Lynn Anderson

3/31/2020 jn
COMMx, AVx, KWx