20230614Stipulation and Settlement.pdf

STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 1

David J. Meyer, Esq.
Vice President and Chief Counsel of
Regulatory and Governmental Affairs
Avista Corporation
1411 E. Mission Avenue
P.O. Box 3727
Spokane, Washington 99220
Phone: [phone]

Chris Burdin
Deputy Attorney General
Idaho Public Utilities Commission Staff
P.O. Box 83720
Boise, ID 83720-0074
Phone: [phone], Fax: [phone]

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION
OF AVISTA CORPORATION FOR
AUTHORITY TO INCREASE ITS RATES
AND CHARGES FOR ELECTRIC AND
NATURAL GAS SERVICE TO ELECTRIC
AND NATURAL GAS CUSTOMERS IN
THE STATE OF IDAHO
)
)
)
)
)
)
)
)

CASE NO. AVU-E-23-01
AVU-G-23-01

STIPULATION AND SETTLEMENT

This Stipulation and Settlement (“Stipulation”) is entered into by and among Avista
Corporation, doing business as Avista Utilities ("Avista" or "Company"), the Staff of the Idaho
Public Utilities Commission ("Staff”), Clearwater Paper Corporation ("Clearwater"), Idaho Forest
Group, LLC ("Idaho Forest"), and Walmart Inc. These entities are collectively referred to as the
"Settling Parties” and singularly as a “Settling Party.” The remaining parties, the Idaho
Conservation League / NW Energy Coalition (“ICL/NWEC”), do not join in the Settlement. The
Settling Parties understand this Stipulation is subject to approval by the Idaho Public Utilities
Commission ("IPUC" or the "Commission").

RECEIVED
2023 JUNE 14, 2023 2:04PM
IDAHO PUBLIC
UTILITIES COMMISSION
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 2

I. INTRODUCTION
1. The terms and conditions of this Stipulation are set forth herein. The Settling Parties
agree that this Stipulation represents a fair, just, and reasonable compromise of all the issues raised
in the proceeding, is in the public interest, and its acceptance by the Commission represents a
reasonable resolution of the multiple issues identified in this case. The Settling Parties, therefore,
recommend that the Commission, in accordance with RP 274, approve the Stipulation and all of
its terms and conditions without material change or condition.
II. BACKGROUND
2. On February 1, 2023, Avista filed an Application with the Commission for
authority to increase revenue effective September 1, 2023, and September 1, 2024, for electric and
natural gas service in Idaho. The Company proposed a “Two-Year Rate Plan” with an increase in
electric base revenue of $37.5 million or 13.6% for “Rate Year 1”, and $13.2 million or 4.2% for
“Rate Year 2”.1 With regard to natural gas, the Company proposed an increase in base revenue of
$2.8 or 6.0% for “Rate Year 1”, and $120,000 or 0.3% for “Rate Year 2”. By Order No. 35684,
dated February 21, 2023, the Commission provided Notice of the Application and set an
intervention deadline for interested persons and parties to intervene in the case.
3. Petitions to intervene in this proceeding were filed by Clearwater, Idaho Forest,
Walmart Inc., and ICL/NWEC. The Commission granted these interventions in IPUC Order Nos.
35704, 35713 and 35719.
4. A settlement conference was noticed and held on June 1, 2023. All Parties attended,
whether in person or virtually. As a compromise of positions in this case, and for other
consideration as set forth below, the Settling Parties agree to the following terms:

1 “Rate Year 1” is defined as September 1, 2023 through August 31, 2024. “Rate Year 2” is defined as September 1,
2024 through August 31, 2025.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 3

III. TERMS OF THE STIPULATION AND SETTLEMENT

5. Overview of Settlement and Revenue Requirement. The Settling Parties agree that
Avista should be allowed to implement revised tariff schedules designed to increase annual base
electric revenues by $22,134,000, or 8.03%, effective September 1, 2023, and increase base
revenues by $4,305,000, or 1.37%, effective September 1, 2024. For natural gas, the Settling
Parties agree that Avista should be allowed to increase natural gas base revenue by $1,252,000, or
2.71%, effective September 1, 2023, and increase base revenues $3,000, or 0.01%, effective
September 1, 2024.
6. Cost of Capital. The Settling Parties agree to a 9.4 percent return on equity, with a
50.0 percent common equity ratio. The capital structure and resulting rate of return is as set forth
below:

A. ELECTRIC REVENUE REQUIREMENT

7. Overview of Electric Revenue Requirement (September 1, 2023) [Rate Year 1].
Below is a summary table and descriptions of the electric revenue requirement components agreed
to by the Settling Parties, effective September 1, 2023:

Capital Weighted
Component Structure Cost Cost
Total Debt 50.00%4.97%2.49%
Common Equity 50.00%9.40%4.70%
Total 100.00%7.19%
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 4

Table No. 1

a. Cost of Capital. As previously described (see ¶6 above). This adjustment reduces the
overall revenue requirement by $5.343 million.
b. Remove 2024 AMA Capital Additions. This adjustment removes the Company’s
capital additions beyond August 31, 2023, included by the Company for Rate Year 1,
reflecting only plant investment prior to the September 1, 2023, effective date. This
adjustment decreases the overall revenue requirement by $3.051 million and reduces
net rate base by $17.554 million.
c. Revise Wildfire Deferral Amortizations. This adjustment revises the Company’s
proposed amortization of its two Wildfire Regulatory Deferred Asset balances: 1)
Wildfire Resiliency Plan Expense Deferral and 2) Wildfire Expense Balancing Account
deferral, for the period July 1, 2020 through September 30, 2022 of $8.2 million, from
a two (2) year amortization to a four (4) year amortization. This adjustment reduces the
Revenue
Requirement Rate Base
Amount as Filed:37,462$ 1,034,938$
Adjustments:
a.)Cost of Capital (5,343)$
b.)Remove 2024 AMA Capital Additions (3,051)$ (17,554)$
c.)(2,062)$
d.)Remove Officer Incentives and 2023 Officer Labor Increases (418)$
e.)Remove 2024 Union and Non-Union Labor Increases (516)$
f.)Update Regulatory Assessment Fee and Conversion Factor (4)$
g.)Remove Pro Forma 401K Expenses (41)$
h.)Remove Escalated Miscellaneous O&M Expense (2,560)$
i.)Remove Pro Forma WRAP Expenses (121)$
j.)(500)$
k.)Adjust Pro Forma Insurance Expense (298)$
l.)(414)$ (59)$
Adjusted Amounts Effective September 1, 2021 22,134$ 1,017,325$
SUMMARY TABLE OF ADJUSTMENTS TO ELECTRIC REVENUE REQUIREMENT
EFFECTIVE SEPTEMBER 1, 2023
(000s of Dollars)
Revise Wildfire Deferral Amortizations
Miscellaneous Adjustments: Board of Director expenses, Fee Free expense
adjustment, cell phone savings, O&M expense, removal of Sandpoint
Weatherization loans and reclassification of other administrative and general
expenses.
Restate Net Pro Forma Power Supply Expense
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 5

overall revenue requirement by $2.062 million. See Wildfire Balancing Account
discussion at ¶13 below.
d. Remove Officer Incentives and 2023 Officer Labor. Reflects the removal of officer
incentives and 2023 incremental officer labor proposed by the Company. This
adjustment decreases the overall revenue requirement by $418,000.
e. Remove 2024 Union and Non-Union Labor Increases. This adjustment removes 2024
union and non-union labor increases included by the Company, reflecting 2023 labor
increases for union and non-union employees. This adjustment decreases the overall
revenue requirement by $516,000.
f. Update Regulatory Assessment Fee and Conversion Factor. This adjustment reflects
the April 2023 adjusted IPUC Regulatory Assessment Fee, per Order No. 35743, of
0.001982, and the impact on the Company’s Conversion Factor. This adjustment
decreases the overall revenue requirement by $4,000.
g. Remove Pro Forma 401K expenses. This adjustment removes certain pro formed 401K
expenses, leaving those actual 401K expenses per the filed historical test period. This
adjustment decreases the overall revenue requirement by $41,000.
h. Remove Escalated Miscellaneous O&M Expenses. This adjustment removes the
escalated O&M expense pro formed by the Company. This adjustment decreases the
overall revenue requirement by $2.56 million.
i. Remove Pro Forma WRAP Expenses. This adjustment removes the pro formed
Western Regional Adequacy Program (WRAP) expenses included by the Company.
This adjustment decreases the overall revenue requirement by $121,000.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 6

j. Restate Net Power Supply Expense. This adjustment revises net power supply costs as
discussed below, decreasing the overall revenue requirement by $500,000. See Power
Cost Adjustment (PCA) discussion at ¶11 below.
i. Authorized Net Power Supply. The Settling Parties agree to leave system
net power supply expense as approved in Case No. AVU-E-21-01 totaling
$149,279,000, adjusted to reflect items ii. and iii below, resulting in a
revised system net power supply expense of $177,585,000. Idaho’s share
of net power supply costs reflects a production and transmission (P/T) ratio
of 34.47%.
ii. Palouse and Rattlesnake Flat Wind. The Settling Parties agree to include
the Palouse Wind2 and Rattlesnake Flat Wind 3 Power Purchase Agreements
(“PPA”) in base rates at 90%. 90% of actual net power costs for these
projects will then be compared to this 90% base amount to calculate the
base-to-actual difference that will be reflected in the PCA mechanism. This
adjustment increases system net power supply expense $29,313,000.
iii. Remove Columbia Basin Hydro Transmission Costs. Remove cost of
Columbia Basin Hydro Transmission costs. This adjustment decreases
system net power supply expense by $1,007,000. See PCA discussion at
¶11 below.
k. Pro Forma Insurance Expense. This adjustment reduces pro formed insurance expense
for certain escalated assumptions used to calculate Rate Year 1 insurance expense

2 The Palouse Wind PPA is a 30-year contract that was executed in 2011 by the Company who purchases all of its
output (105 MW nameplate capacity) and environmental attributes. The project began commercial operation in
December 2012.
3 The Rattlesnake Flat Wind PPA is a 20-year contract which consists of 50 Siemen’s S-129 2.9 MW wind turbines
with a total capacity of approximately 145 MW’s. The project began commercial operation in December 2020.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 7

levels. This adjustment decreases the overall revenue requirement by $298,000. See
Insurance Balancing Account discussion at ¶15 below.
l. Miscellaneous Adjustments. Reflects the net change in operating expenses related to:
1) removing Board of Director expenses and fees ($242,000); 2) including cell phone
savings ($36,000); 3) removing pro forma Fee Free expense ($27,000); 4) removal of
historical Sandpoint Weatherization loans4 ($5,000 expense and $59,000 rate base);
and removal of other miscellaneous transmission O&M expenses associated with the
Company’s Wildfire Open Access Transmission Tariff ($102,000) and A&G expenses
($2,000). The net effect of this adjustment decreases the overall revenue requirement
by $414,000 and rate base by $59,000.
8. Overview of Electric Revenue Requirement (September 1, 2024) [Rate Year 2].
Below is a summary table and descriptions of the incremental electric revenue requirement
components agreed to by the Settling Parties effective September 1, 2024:

4 Sandpoint weatherization loans relate to weatherization and DSM investment included in rate base (FERC account
124.350). Beginning in July 1994, accumulation of allowance for funds used to conserve energy (AFUCE) ceased on
electric DSM and full amortization began on the balance based on the measure lives of the investment. Beginning in
1995, the amortization rates were accelerated to achieve a 14-year weighted average amortization period, which was
completed in 2010. Remaining as an Idaho rate base item is the weatherization loan balance of approximately $59,000.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 8

Table No. 2

a. Add Incremental 2023/2024 Related Capital and Expenses to Rate Year 2
(incremental above Rate Year 1).
i. AMA 2024 Capital Additions. Includes capital additions from September 1,
2023 through August 31, 2024 on an AMA basis, prior to the Rate Year 2
September 1, 2024, effective date. This adjustment increases the overall
revenue requirement by $4.888 million and increases net rate base by
$17.554 million.
ii. Property Tax Expense. Includes incremental property tax expense above
Rate Year 1 levels, associated with 2023 capital additions. This adjustment
increases the overall revenue requirement by $706,000.
iii. 2024 Union Labor Increases. Includes the 2024 union annualized labor
increases. This adjustment increases the overall revenue requirement by
$410,000.
Revenue
Requirement Rate Base
Rate Base Amount Effective September 1, 2023 1,017,325$
a.)Add Incremental 2023/2024 Related Capital and Expenses:
i. AMA 2024 Capital Additions 4,888$ 17,554$
ii. Property Tax Expense 706$
iii. 2024 Union Labor Increase 410$
iv. Employee Benefits 255$
v. 2024 Growth Revenue (1,939)$
vi. Revise Colstrip/CS2 Major Maintenance Expense 247$
vii. Remove Expiring Fee Free Amortization Expense (97)$
viii. Miscellaneous Other Expense Offsets (165)$
4,305$ 1,034,879$
EFFECTIVE SEPTEMBER 1, 2024
(000s of Dollars)
Incremental Revenue Adjustment to September 1, 2023 Rate Change
(see Table No. 1):
September 1, 2024 Incremental Revenue Adjustment and Rate Base
Amount (above September 1, 2023 Rate Change - see Table No. 1)

STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 9

iv. Employee Benefits. Includes 2024 incremental employee benefit expenses
above Rate Year 1 levels. This adjustment increases the overall revenue
requirement by $255,000.
v. 2024 Growth Revenue. Reflects the 2024 incremental revenue associated
with 2024 growth capital, matching the inclusion of 2024 capital
investment. This adjustment decreases the overall revenue requirement by
$1,939,000.
vi. Colstrip/CS2 Major Maintenance. Revises the Colstrip/CS2 Major
Maintenance expense level included in Rate Year 1 to reflect the revised
expense for Rate Year 2. This adjusts maintenance expense to one-third of
each amount deferred for calendar years 2022 through 2024. This
adjustment increases the overall revenue requirement by $247,000.
vii. Fee Free Expense. Reflects the removal of the expiring Fee Free
Amortization and expense at August 31, 2024. This adjustment decreases
the overall revenue requirement by $97,000.
viii. Miscellaneous O&M Expense. Reflects an agreed-to reduction of O&M
expense. This adjustment decreases the overall revenue requirement by
$165,000.

B. NATURAL GAS REVENUE REQUIREMENT

9. Overview of Natural Gas Revenue Requirement (September 1, 2023) [Rate Year
1]. Below is a summary table and descriptions of the natural gas revenue requirement
components agreed to by the Settling Parties effective September 1, 2023:

STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 10

Table No. 3

a. Cost of Capital. As previously described (see ¶6 above). This adjustment reduces the
overall revenue requirement by $1.066 million.
b. Remove 2024 AMA Capital Additions. This adjustment removes the Company’s
capital additions beyond August 31, 2023, included by the Company for Rate Year 1,
reflecting only plant investment prior to the September 1, 2023, effective date. This
adjustment decreases the overall revenue requirement by $142,000 and reduces net rate
base by $2.978 million.
c. Remove Officer Incentives and 2023 Officer Labor. Reflects the removal of officer
incentives and 2023 incremental officer labor proposed by the Company. This
adjustment decreases the overall revenue requirement by $98,000.
d. Remove 2024 Union and Non-Union Labor Increases. This adjustment removes 2024
union and non-union labor increases included by the Company, reflecting 2023 labor
increases for union and non-union employees. This adjustment decreases the overall
revenue requirement by $115,000.
Revenue
Requirement Rate Base
Amount as Filed:2,771$ 206,562$
Adjustments:
a.)Cost of Capital (1,066)$
b.)Remove 2024 AMA Capital Additions (142)$ (2,978)$
c.)Remove Officer Incentives and 2023 Officer Labor Increases (98)$
d.)Remove 2024 Union and Non-Union Labor Increases (115)$
e.)Update Regulatory Assessment Fee and Conversion Factor (1)$
f.)Remove Pro Forma 401K Expenses (10)$
g.)(87)$
Adjusted Amounts Effective September 1, 2023 1,252$ 203,584$
SUMMARY TABLE OF ADJUSTMENTS TO NATURAL GAS REVENUE REQUIREMENT
EFFECTIVE SEPTEMBER 1, 2023
(000s of Dollars)
Miscellaneous Adjustments: Board of Director expenses, Fee Free expenses,
cell phone savings, and injuries and damages expenses.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 11

e. Update Regulatory Assessment Fee and Conversion Factor. This adjustment reflects
the April 2023 adjusted IPUC Regulatory Assessment Fee, per Order No. 35743, of
.001982, and the impact on the Company’s Conversion Factor. This adjustment
decreases the overall revenue requirement by $1,000.
f. Remove Pro Forma 401K expenses. This adjustment removes certain pro formed 401K
expenses, leaving those actual 401K expenses per the filed historical test period. This
adjustment decreases the overall revenue requirement by $10,000.
g. Miscellaneous Adjustments. Reflects the net change in operating expenses related to:
1) removing Board of Director expenses and fees ($60,000); 2) including cell phone
savings ($6,000); 3) removing pro forma Fee Free expense ($18,000); and 4) injuries
and damages 6-year average expense ($3,000). The net effect of this adjustment
decreases the overall revenue requirement by $87,000.
10. Overview of Natural Gas Revenue Requirement (September 1, 2024) [ Rate Year
2]. Below is a summary table and descriptions of the incremental Natural Gas revenue
requirement components agreed to by the Settling Parties effective September 1, 2024:
Table No. 4

Revenue
Requirement Rate Base
Rate Base Amount Effective September 1, 2024 203,584$
a.)Add Incremental 2023/2024 Related Capital and Expenses:
i. AMA 2024 Capital Additions 823$ 2,978$
ii. Property Tax Expense (18)$
iii. 2024 Union Labor Increase 93$
iv. Employee Benefits 61$
v. 2024 Growth Revenue (798)$
vi. Remove Expiring Fee Free Amortization Expense (158)$
3$ 206,562$
EFFECTIVE SEPTEMBER 1, 2024
(000s of Dollars)
Incremental Revenue Adjustment to September 1, 2023 Rate Change
(see Table No. 1):
September 1, 2024 Incremental Revenue Adjustment and Rate Base
Amount (above September 1, 2023 Rate Change - see Table No. 1)
SUMMARY TABLE OF ADJUSTMENTS TO NATURAL GAS REVENUE REQUIREMENT
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 12

a. Add Incremental 2023/2024 Related Capital and Expenses to Rate Year 2
(incremental above Rate Year 1).
i. AMA 2024 Capital Additions. Includes capital additions from September 1,
2023 through August 31, 2024 on an AMA basis, prior to the Rate Year 2
September 1, 2024, effective date. This adjustment increases the overall
revenue requirement by $823,000 and increases net rate base by $2.978
million.
ii. Property Tax Expense. Includes the incremental change (reduction) in
property tax expense in Rate Year 2 versus Rate Year 1 levels. This
adjustment decreases the overall revenue requirement by $18,000.
iii. 2024 Union Labor Increases. Includes the 2024 union annualized labor
increases. This adjustment increases the overall revenue requirement by
$93,000.
iv. Employee Benefits. Includes 2024 incremental employee benefit expenses
above Rate Year 1 levels. This adjustment increases the overall revenue
requirement by $61,000.
v. 2024 Growth Revenue. Reflects the 2024 incremental revenue associated
with 2024 growth capital, matching the inclusion of 2024 capital
investment. This adjustment decreases the overall revenue requirement by
$798,000.
vi. Fee Free Expense. Reflects the removal of the expiring Fee Free
Amortization and expense at August 31, 2024. This adjustment decreases
the overall revenue requirement by $158,000.

STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 13

C. OTHER SETTLEMENT COMPONENTS
11. PCA Authorized Level of Expense. The new level of power supply revenues,
expenses, retail load, and Load Change Adjustment Rate resulting from the September 1, 2023,
settlement revenue requirement for purposes of the monthly PCA mechanism calculations are
detailed in Appendix A. The Settling Parties agree to the following:
i. Authorized Net Power Supply. The Settling Parties agree to leave system
power supply expense as approved in Case No. AVU-E-21-01 totaling
$149,279,000 (Power Supply), adjusted to reflect these items: (a.) 90%
Palouse Wind and Rattlesnake Flat Wind; and (b.) Remove Columbia Basin
Hydro Transmission Project, discussed below, resulting in a revised system
net power supply expense of $177,585,000.
a. Palouse and Rattlesnake Flat Wind. As noted in ¶ 7. j. ii. above, the
Settling Parties agree to include the Palouse Wind and Rattlesnake
Flat Wind Power PPA in base rates at 90%. 90% of actual net
power costs for these projects will then be compared to this 90%
base amount to calculate the base-to-actual difference that will be
reflected in the PCA mechanism. This adjustment increases system
net power supply expense $29,313,000.
b. Remove Columbia Basin Hydro Transmission Costs. As noted in ¶
7. j. iii. above, the Settling Parties agree to remove the cost of
Columbia Basis Hydro Transmission costs. This adjustment
decreases system net power supply expense by $1,007,000.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 14

ii. Authorized Transmission Revenues. The Settling Parties agree to leave
system transmission revenues as approved in Case No. AVU-E-21-01
totaling $23,471,000.
iii. Adjust Columbia Basin and Chelan 2023 – 2033 Contracts. The Settling
Parties agree that the actual cost of the Chelan and the Columbia Basin
contracts will be included in the PCA using the lower of market cost or
contract cost, with the PCA description and methodology as follows:
a. Avista agrees to protect Idaho customers against its executed
contracts resulting from the 2022 All-Source RFP with Columbia
Basin Hydro (CBH) and Chelan Public Utility District (Chelan),
from the potential of costs of each contract being higher than the
spot-market value of power. Avista will ensure the cost of each
contract does not exceed the time-valued delivery of power
calculated on a daily basis using the on and off-peak prices at the
Mid-Columbia trading hub, as reported by the Intercontinental
Exchange’s on- and off-peak firm energy indices. The Settling
Parties agree to meet and confer to determine a calculation method
prior to the Company filing its 2024 PCA application.
b. Avista will recover some or all of the approximately $1.007 million
annual cost of Columbia Basin Hydro transmission not included in
base rates to the extent that market prices are higher than the
Columbia Basin Hydro generation contract price as determined in
11.iii.a. above. The Settling Parties agree to meet and confer to
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 15

determine the calculation method prior to the Company filing its
2024 PCA.
12. Electric and Natural Gas Fixed Cost Adjustment Mechanisms Authorized Base.
The new level of baseline values for the electric and natural gas Fixed Cost Adjustment Mechanism
(FCA) resulting from the September 1, 2023 and September 1, 2024, settlement revenue
requirements are detailed as follows:
• Appendix B – September 1, 2023 Electric FCA Base
• Appendix C – September 1, 2024 Electric FCA Base
• Appendix D – September 1, 2023 Natural Gas FCA Base
• Appendix E – September 1, 2024 Natural Gas FCA Base

13. Wildfire Balancing Account. The Settling Parties agree to revise the two-way
Wildfire O&M Expense Balancing Account authorized “base” level to $4.367 million annually,
effective September 1, 2023. The incremental balance deferred, beyond the existing deferred
balance as of September 30, 2022 being amortized over a 4-year period in this proceeding (see ¶7
c. above), will be included for review and recovery in future general rate cases.
14. Wildfire Resiliency Plan. The Settling Parties agree to the following Wildfire
Resiliency Plan (“WRP”) changes:
(a) For the Distribution Risk Tree program, the Company will have a third party
conduct a study, within a year of Commission Order, to see what the most efficient
vegetation management cycle should be in their service area (i.e., 2- or 3-year cycles).
(b) The Company will develop a formal process for Undergrounding
Distribution Lines related to the WRP to include project criteria, a selection process, and
cost-benefit analysis for completed and future undergrounding distribution line projects
related to wildfire mitigation prior to the Company’s next general rate case.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 16

(c) The Company will develop process guidelines, including a least-cost least-
risk analysis, to evaluate pilot projects and to convert them to full programs within a year
of a Commission Order.
(d) The Company will detail all relationships (such as BLM and Forest Service)
it has that may benefit the wildfire mitigation program, contribute to program costs, or
provide cost sharing opportunities in its WRP.
(e) The Company will detail all funding alternatives and sources it pursued in
its WRP and provide an analysis and a comparison of alternatives it considered for each
pilot, project, or program when it requests recovery for these costs, including, among other
sources, any available funding from current or future federal infrastructure funds.
(f) The Company will file a copy of each version of its WRP with the
Commission.
15. Insurance Expense Balancing Account. The Settling Parties agree to a two-way
Insurance Expense Balancing Account to defer the difference in actual insurance expense, up or
down, from the authorized “base” level of insurance expense included of $4.009 million for electric
and $714,000 for natural gas, effective September 1, 2023. The balance in the deferral will be
included for review and recovery in future regulatory proceedings.
16. Regulatory Amortizations. The Settling Parties agree to the Regulatory
Amortizations as filed by the Company5, with the exception of the Wildfire Deferral amortizations
(i.e. Wildfire Resiliency Plan Deferred Expense and Wildfire Expense Balancing Account deferred
expense), which the Settling Parties agree to revise from a two-year amortization to a four-year
amortization, as discussed at ¶7 c. above.

5 The Regulatory amortizations are discussed in the direct testimony of Ms. Schultz at pages 38, 41 - 46 and 48.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 17

17. Revenue Normalization Adjustments. The Settling Parties agree to the test year
revenue normalization adjustments, as included by the Company in its as-filed case, inclusive of
the change to 20-year rolling average “normal” weather and monthly regression factors.
18. Depreciation Rates. The Settling Parties agree to the depreciation rates, as included
by the Company in its as-filed case, for purposes of the agreed-to depreciation expense included
in the Company’s filing and agreed to by the Settling Parties in this settlement.6 The depreciation
rates as-filed by the Company in this proceeding include the proposed depreciation rates per the
Company’s updated Depreciation Application in Case Nos. AVU-E-23-02 and AVU-G-23-02,
requesting approval for its proposed change to electric and natural gas book depreciation rates.7
To the extent depreciation rates included in this general rate case, or the effective date of approved
depreciation rates (i.e. September 1, 2023), as proposed by the Company, vary from the
depreciation rates or effective date ultimately approved in Case Nos. AVU-E-23-02 and AVU-G-
23-02, the Company will defer the difference in depreciation expense included and approved in
this case, versus the actual depreciation expense approved per Case Nos. AVU-E-23-02 and AVU-
G-23-02 on a monthly basis, for review and recovery or return to customers in a future general rate
case.

D. COST OF SERVICE/RATE SPREAD/RATE DESIGN
19. Cost of Service/Rate Spread (Base Rate Changes). The Settling Parties do not agree
on any particular cost of service methodology. In recognition, however, that certain rate schedules
are generally above their relative cost of service, the Settling Parties agree that Schedule 25P

6 Inclusion of the updated (proposed) depreciation study depreciation rates in this proceeding results in an overall
decrease in electric and natural gas annual depreciation expense from existing depreciation expense levels.
7 The Company also requested that the Commission approve deferred accounting treatment if allocated depreciation
rates are not approved by all jurisdictions prior to September 1, 2023, resulting in a difference between allocated
depreciation expense included in Case Nos. AVU-E-23-01 and AVU-G-23-01, and allocated depreciation expense
ultimately approved in the Depreciation Case Nos. AVU-E-23-02 and AVU-G-23-02.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 18

Effective September 1, 2023 (Rate Year 1)
Rate Schedule
Increase in Base
Revenue
Increase in
Billing Revenue
Residential Schedule 1 10.4%11.8%
General Service Schedules 11/12 2.9%3.0%
Large General Service Schedules 21/22 10.4%10.8%
Extra Large General Service Schedule 25 2.9%3.0%
Clearwater Paper Schedule 25P 2.8%2.9%
Pumping Service Schedules 31/32 10.4%10.9%
Street & Area Lights Schedules 41-48 2.9%2.9%
Overall 8.0%8.7%
should receive 35% of the overall percentage base rate changes. Schedules 1, 21/22 and 31/32
should receive 130% of the overall percentage base rate changes and the remaining revenue
requirement will be spread to Schedules 11/12, 25, and Street and Area Lights. For natural gas,
the Settling Parties agreed to apply the margin increase on September 1, 2023 and September 1,
2024 solely to Schedule 101.
20. Rate Design. The Settling Parties agree to the rate design changes8 proposed by
the Company in Mr. Miller’s direct testimony for the September 1, 2023, and September 1, 2024,
base rate increases with two exceptions. The basic charge for Schedule 31/32 will increase from
$13.00 to $18.00 in Rate Year 1 and from $18.00 to $20.00 in Rate Year 2. Also, the primary
voltage discount will increase from $0.20 per kW to $0.30 per kW in Rate Year 1, and from $0.30
per kW to $0.40 per kW in Rate Year 2 for all applicable rate schedules. Appendix F provides a
summary of the current and revised rates and charges (as per the Settlement) for electric and natural
gas service.
21. Resulting Percentage Change by Electric Service Schedule. The following tables
reflect the agreed-upon percentage change by schedule for electric service:

8 This includes an increase in the residential basic charge from $7.00 to $15.00 in Rate Year 1 and $15.00 to $20.00
in Rate Year 2, for both electric and natural gas.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 19

Effective September 1, 2023 (Rate Year 1)
Increase in Increase in
Rate Schedule Margin Revenue Billing Revenue
General Service Schedule 101 3.3%1.6%
Large General Service Schedules 111/112 0.0%0.0%
Interrupt. Sales Service Schedules 131/132 0.0%0.0%
Transportation Service Schedule 146 0.0%0.0%
Overall 2.7%1.2%
Effective September 1, 2024 (Rate Year 2)
Rate Schedule
Increase in Base
Revenue
Increase in
Billing Revenue
Residential Schedule 1 1.9%2.1%
General Service Schedules 11/12 0.4%0.5%
Large General Service Schedules 21/22 1.9%1.9%
Extra Large General Service Schedule 25 0.4%0.5%
Clearwater Paper Schedule 25P 0.5%0.5%
Pumping Service Schedules 31/32 1.9%2.0%
Street & Area Lights Schedules 41-48 0.4%0.4%
Overall 1.4%1.6%
Effective September 1, 2024 (Rate Year 2)
Increase in Increase in
Rate Schedule Margin Revenue Billing Revenue
General Service Schedule 101 0.01%0.00%
Large General Service Schedules 111/112 0.00%0.00%
Interrupt. Sales Service Schedules 131/132 0.00%0.00%
Transportation Service Schedule 146 0.00%0.00%
Overall 0.01%0.00%

22. Resulting Percentage Increase by Natural Gas Service Schedule. The following
tables reflect the agreed-upon percentage increase by schedule for natural gas service:

23. Primary Voltage Discount – Avista agrees to conduct a Primary Voltage Discount
study prior to its next general rate case filing. The purpose of the study will be to inform the proper
Primary Voltage Discount levels in the Company’s next general rate case.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 20

24. Schedule 111 Rate Design – Avista agrees to evaluate the rate design of Schedule
111, including the minimum charge level, and include any changes or modification in its next
general rate case filing.

IV. OTHER GENERAL PROVISIONS
25. The Settling Parties agree that this Stipulation represents a compromise of the
positions of the Settling Parties in this case. As provided in RP 272, other than any testimony filed
in support of the approval of this Stipulation, and except to the extent necessary for a Settling Party
to explain before the Commission its own statements and positions with respect to the Stipulation,
all statements made and positions taken in negotiations relating to this Stipulation shall be
confidential and will not be admissible in evidence in this or any other proceeding, unless all
Settling Parties to the negotiation agree to the contrary in writing.
26. The Settling Parties submit this Stipulation to the Commission and recommend
approval in its entirety pursuant to RP 274. Settling Parties shall support this Stipulation before
the Commission, and no Settling Party shall appeal a Commission Order approving the Stipulation
or an issue resolved by the Stipulation. If this Stipulation is challenged by any person not a party
to the Stipulation, the Settling Parties to this Stipulation reserve the right to file testimony, cross-
examine witnesses and put on such case as they deem appropriate to respond fully to the issues
presented, including the right to raise issues that are incorporated in the settlement terms embodied
in this Stipulation. Notwithstanding this reservation of rights, the Settling Parties to this Stipulation
agree that they will continue to support the Commission’s adoption of the terms of this Stipulation.
27. If the Commission rejects any part or all of this Stipulation or imposes any
additional material conditions on approval of this Stipulation, each Settling Party reserves the right,
upon written notice to the Commission and the other Parties to this proceeding, within 14 days of
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 21

the date of such action by the Commission, to withdraw from this Stipulation. In such case, no
Settling Party shall be bound or prejudiced by the terms of this Stipulation, and each Settling Party
shall be entitled to seek reconsideration of the Commission's order, file testimony as it chooses,
cross-examine witnesses, and do all other things necessary to put on such case as it deems
appropriate. In such case, the Settling Parties immediately will request the prompt reconvening of
a prehearing conference for purposes of establishing a procedural schedule for the completion of
the case, in accordance with law.
28. The Settling Parties agree that this Stipulation is in the public interest and that all
of its terms and conditions are fair, just and reasonable.
29. No Settling Party shall be bound, benefited or prejudiced by any position asserted
in the negotiation of this Stipulation, except to the extent expressly stated herein, nor shall this
Stipulation be construed as a waiver of the rights of any Settling Party unless such rights are
expressly waived herein. Execution of this Stipulation shall not be deemed to constitute an
acknowledgment by any Settling Party of the validity or invalidity of any particular method, theory
or principle of regulation or cost recovery. No Settling Party shall be deemed to have agreed that
any method, theory or principle of regulation or cost recovery employed in arriving at this
Stipulation is appropriate for resolving any issues in any other proceeding in the future. No findings
of fact or conclusions of law other than those stated herein shall be deemed to be implicit in this
Stipulation.
30. The obligations of the Settling Parties under this Stipulation are subject to the
Commission's approval of this Stipulation in accordance with its terms and conditions and upon
such approval being upheld on appeal, if any, by a court of competent jurisdiction.
31. This Stipulation may be executed in counterparts and each signed counterpart shall
constitute an original document.
STIPULATION AND SETTLEMENT – AVU-E-23-01 & AVU-G-23-01 Page 22

DATED this ____ day of June, 2023.

Avista Corporation

By:
David J. Meyer
Attorney for Avista Corporation

Idaho Public Utilities Commission Staff

By:
Chris Burdin
Deputy Attorney General

Clearwater Paper Corporation

By:
Peter Richardson
Attorney for Clearwater Paper
Corporation
Idaho Forest Group LLC

By:
Andrew Moratzka
Attorney for Idaho Forest Group LLC

Walmart, Inc.

By:
Justina A. Caviglia
Attorney for Walmart Inc.

DATED this day of June,2023
Avista Corporation Idaho Public Utilities Commission Staff
Chris Burdin
Deputy Attomey General
Idaho Forest Group LLC
By:
By:
By
By
David J. Meyer
Attorney for Avista Corporation
C
(
Peter l7 T?
Attorney for
Corporation
Vy'almart, Inc.
By:
Justina A. Caviglia
Attorney for Walmart Inc
Andrew Moratzka
Attomey for ldaho Forest Group LLC
STIPULATION AND SETTLEMENT _ AVU-E-23-OI & AVU.G-23-01 Page 22
DATED this day of June, 2023.
Avista Corporation Idaho Public Utilities Commission Staff
By: By:
David J. Meyer Chris Burdin
Attorney for Avista Corporation Deputy Attorney General
Clearwater Paper Corporation Idaho Forest Group LLC
By: By:
Wal
By.
Peter Richardson
Attorney for Clearwater Paper
Corporation
a A. Ca
Attorney fo art Inc.
Andrew Moratzka
Attorney for Idaho Forest Group LLC
STIPULATION AND SETTLEMENT - AVU-E-23-01 & AVU-G-23-01 Page 22