Providing customers with safe, reliable energy that powers their lives is what we at Avista are here to do, and it’s our number one priority. But, in my day-to-day, I also think about the work of our employees, the unique jobs they do each day to serve our customers, and how we are “turning the lights on” for our customers and communities, beyond that light bulb. In addition to providing reliable energy, it’s our intent to build value and serve our communities through our work. We seek to partner with and serve our customers and communities, large and small, in meaningful ways. A commitment to this is woven throughout our company, and it drives our approach to fulfilling our purpose of improving life’s quality with energy. What does building value and serving communities look like? It looks like Avista taking action to upgrade our century-old dams so they can continue to generate renewable hydropower for customers. It looks like our employees developing innovative ways to contain oil in transformers to protect our environment. It looks like installing LED streetlights that are more efficient and improve the safety of our citizens. It looks like providing funds and other resources that support non- profits and other organizations across our communities in fulfilling their important missions. It looks like leadership in a Shared Energy Economy pilot program that’s creating a microgrid, testing technology and shaping the way communities may leverage energy assets in the future. It’s all of this, and much more. What each of these examples demonstrate is that building value, in our view, isn’t simply creating value for Avista. It’s creating shared opportunities and value for Avista, our customers, and the communities we serve. This means aligning our strategic business interests and goals in powerful ways that create the opportunity to bring value to our stakeholders.
This is the basis for the 2017 report on our operations. Throughout the following pages, you’ll read stories that paint the picture of how we approach our work and delve deeper into the numbers behind our operations. The content highlighted in this report underscores the power of working together for a shared outcome — one that is meaningful and has a lasting impact but also serves to move Avista and our communities toward our goals. Thank you for your interest in Avista and this report. We hope that you will give us your feedback on the report and that you will share it with others.
A MESSAGE FROM OUR LEADERSHIP We each begin our day ready to head out and tackle our respective jobs. These day-to-day activities might look different for each of us, but many of us will begin in the same ways, fueled by the same thing — energy. When I wake up in the morning, I turn the lights on, take a hot shower, and make a cup of coffee. These things require electricity and natural gas, which aren’t only powering my day-to-day, they are my day-to-day. As the President of Avista, the role we at the utility play in our customers’ daily lives is never far from my mind. When I go about my morning routine, I’m reminded of this.
Dennis P. Vermillion President Avista Corporation
CREATING SHARED VALUE
Shared Value Opportunity
Corporate Assets & Expertise
ABOUT THE REPORT
This is our ninth annual voluntary report on our operations, with an emphasis on corporate social responsibility and shared value opportunities.
Materiality Materiality involves identifying those topics and issues that matter most to Avista and our stakeholder groups. We balance providing content that aligns with certain GRI guidelines and industry expectations with content that is stakeholder-relevant. Throughout this report, we’ve included and highlighted those items that have been identified as material. You will notice the icons on this page that call attention to these items.
This report was developed with consideration of Global Reporting Initiative standards, but does not align specifically with these metrics. The most recent previous report was published in September 2016. This report maintains a consistent format and structure as in previous years. Content is informed not only by the G3 Guidelines but by what our stakeholders have told us is important and relevant to them. Information contained here is focused solely on Avista Utilities, a regulated business unit of Avista Corporation. Avista Utilities had no significant changes in size or structure in 2016 and 2017. Data in the report is current as of Dec. 31, 2017, except where otherwise noted. This report is available for review online at myavista.com.
SYSTEM RELIABILITY Consistency of energy delivery
CUSTOMER SATISFACTION Company performance in ways that meet customer needs
RESOURCE PLANNING Short and long-term outlook to meet customers’ energy needs
ENVIRONMENTAL PERFORMANCE Stewardship of environmental elements impacted by operations
Importance to Stakeholders
CORPORATE CITIZENSHIP Community relations, volunteerism, philanthropy, sponsorships
Relevance for Avista
The materiality of information included in this report is determined by the level of significance each issue has in terms of: • Stakeholder interest, as measured by surveys, focus groups, formal and informal discussions and anecdotal information; • Its impact on our business today and in the future, as determined by state and federal regulatory and voluntary data reporting, and financial significance;
We’ve identified five material topics which informed the majority of content for this report: • System Reliability • Customer Satisfaction • Resource Planning • Environmental Performance • Corporate Citizenship
• Society’s interest, in terms of its impact on the communities we serve and its importance, relevance or perception in part as reflected by coverage through traditional and social media channels; and
Review of the Report While this report was not reviewed by outside stakeholders prior to its publication, we anticipate sharing it with the stakeholder groups we regularly interface with throughout the coming year. In doing so, we hope to engage individuals and organizations in an ongoing dialogue about our business operations and solicit suggestions about opportunities to further build shared value. This report contains forward-looking statements regarding the company’s current expectations. Forward-looking statements are all statements other than historical facts. Such statements speak only as of the date of the report and are subject to a variety of risks and uncertainties, many of which are beyond the company’s control, which could cause actual results to differ materially from the expectations. These risks and uncertainties include, in addition to those discussed herein, all of the factors discussed in Avista Corp’s Annual Report on Form 10-K for the year ended Dec. 31, 2017.
Acknowledgements This report is produced through a partnership of knowledgeable and talented Avista employees, stakeholders and creative vendors within our service territory. We thank all of them for their time, contributions and support.
This report is available online at: myavista.com
For additional information about this report, or to give us feedback on our performance, please contact us at: SharedValue@avistacorp.com
Editor: Casey Fielder Communications Manager
We welcome your questions and comments.
Design: Klündt | Hosmer
“We hope to engage individuals and organizations in an ongoing dialogue about our business operations and solicit suggestions about opportunities to further build shared value.”
UTILITY OPERATIONS Energy for Life — Innovation for the Future
Year after year, we are making intentional decisions about how we engage in responsible use of our resources, invest in our infrastructure and empower customers to manage their energy use.
Across Avista, we focus on running our business to meet our customers’ expectations, efficiently and effectively. From generating and delivering energy to empowering communities and embracing new technologies, we keep our stakeholders’ needs at the forefront of all we do. We strive to: • Provide safe, reliable service that is there when you need it • Bring value to our customers through services, programs and methods for using energy efficiently • Plan for the future through investments in utility infrastructure, resource planning and exploration of new technologies It’s our responsibility to build and maintain the infrastructure and systems necessary to generate and deliver electricity and natural gas to our customers safely and reliably. Beyond generation and delivery, the energy must be available in a cost-effective and environmentally- responsible manner. This is no simple task.
We know that technology continues to transform the energy industry, and that we’ll continue to make significant investments in our grid to accommodate technology and serve our customers into the future. Year after year, we are making intentional decisions about how we engage in responsible use of our resources, invest in our infrastructure and empower customers to manage their energy use. Our utility operations encompass a broad range of projects and actions all with a common focus on efficiency, reliability, forward-thinking and customer benefit so that we can deliver on our purpose of improving life’s quality, with energy.
Inside Our Operations
Organizational Profile Selected Company Statistics (as of Dec. 31, 2017)
AVISTA CORP. TOTAL ANNUAL REVENUE $ 1,445,929,000
AVISTA CORP. NET INCOME $ 115,916,000
NUMBER OF CUSTOMER ACCOUNTS
RESIDENTIAL — ELECTRIC 334,848
COMMERCIAL/INDUSTRIAL — ELECTRIC 43,482
RESIDENTIAL — NATURAL GAS 307,375
COMMERCIAL/INDUSTRIAL — NATURAL GAS 35,443
AVISTA UTILITIES NUMBER OF EMPLOYEES 1,744
POPULATION OF SERVICE AREA 1.6 MILLION
Hydro (41.5% Avista & 7.5% Contracts) 49%
Natural Gas 35%
ELECTRICITY GENERATION RESOURCE MIX As of Dec. 31, 2017 Excludes AEL&P
Customer Satisfaction Customer satisfaction is an essential element in all we do at Avista. From our Call Center representatives who seek to provide answers in 60 seconds or less to the line workers and service personnel in the field and from finance to environmental, every Avista employee has an impact on our interactions with customers. We set clear customer satisfaction goals for our company, have established metrics for tracking this and provide our employees the tools needed to be successful. One way we measure customer satisfaction is through a quarterly survey — “Voice of the Customer” — to measure and track the satisfaction of customers who have contact
A Diverse Generation Mix Avista uses different kinds of fuel to produce the electricity that powers the lives and businesses of our customers. The company maintains a diversified generation portfolio, including hydroelectric, biomass, natural gas, coal and wind that is a combination of Avista-owned generating facilities and long-term contracts. We choose a diverse energy mix that is the foundation for providing our customers with clean, reliable power at fair, reasonable prices. Making decisions about the energy mix must balance reliability, cost and the environment.
Customers are asked to rate the importance of several service attributes (time for connection to representative, representative being courteous and friendly, representative being knowledgeable, being informed of job status, leaving property in condition found, etc.) and then to rate Avista’s performance with respect to the same attributes. Customers are also asked to rate their satisfaction with the overall service received from Avista. Customer verbatim comments are also captured and recorded. Customer satisfaction ratings have exceeded 90 percent in each of the past 18 years.
with Avista through the Call Center and/or work performed through an Avista construction office.
What role does the resource play in making sure the power is there when customers expect? The wind is not always blowing, the sun is not always shining, and hydroelectric output changes throughout the year.
What role does the resource play in customer rates? Some resources are more expensive than others. Having a diverse energy mix also allows us to keep electricity rates as low as possible by providing flexibility to shift between generating resources when it makes economic sense.
What are the implications of the resource for our environment? Our diverse energy mix is why Avista is ranked by the National Resource Defense Council in its “Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States” as one of the cleanest utilities when it comes to greenhouse gases. The smart meter equipment is installed outside the home and transmits less than three minutes per day. The RF power level of smart meters is comparable to and in most cases significantly lower than those used by many common wireless devices, such as cell phones, baby monitors, garage door openers, wireless routers (Wi-Fi), cordless telephones or other common electronic devices inside homes today. The RF level of advanced meters also falls well below state and federal safety standards, including the exposure standards for wireless devices adopted in 1996 by the Federal Communications Commission. Avista is committed to providing safe and reliable electric service for our customers and a safe work environment for our employees.
The company complies with renewable portfolio standards set out in Washington’s Energy Independence Act (EIA) by using qualified renewable resources, renewable energy credits (RECs) or a combination of both to meet the following annual targets: 9 percent of energy used to meet customer load in Washington by Jan. 1, 2016 and 15 percent by Jan. 1, 2020. Avista met the 2017 targets with qualifying hydroelectric upgrades, biomass and wind. As Avista joins many other utilities across the country to deploy smart meters in Washington, some people may wonder whether or not exposure to the electromagnetic fields (EMF) associated with radio frequencies (RF) emitted by wireless smart grid technologies pose health risks. It’s important to keep in mind that many devices emit RF transmission in our homes, public buildings and private businesses, so we’re exposed to these EMF fields in varying Advanced Meters, Electric and Magnetic Fields and the Utility
intensity all day long. Today, more than half of all U.S. households have smart meters, with approximately 76 million deployed across the country. Smart meters are becoming the new utility standard across the U.S. and Europe, and it will become the new standard for Avista because we want every customer to experience the benefits it enables. Based on current research, Avista is confident that smart meters and other smart technologies do not pose additional safety or health hazards to our customers.
Serving Our Customers with Natural Gas Avista provides natural gas services to 355,000 customers in eastern Washington, northern Idaho and parts of southern and eastern Oregon and maintains 7,800 miles of natural gas distribution pipeline on behalf of the communities and residences throughout our service area. We believe natural gas has an important role to play for our residential and business customers across our service area. Customers’ direct use of natural gas is efficient and clean, compared to other choices such as wood or oil. Natural gas is also used to generate electricity to meet the energy needs of our region. Additionally, it supports renewable energy sources such as wind and solar — providing reliable energy when the wind doesn’t blow or the sun doesn’t shine. We’re committed to our natural gas operations and value the benefits natural gas can provide in our future energy mix and energy delivery. The natural gas pipeline replacement program currently underway is a result of Avista’s commitment to maintain a safe and reliable natural gas pipeline system. Over the life of the 20-year program, we will replace approximately 737 miles of natural gas pipeline, which was installed prior to 1987. In addition, we are performing preventative maintenance by replacing aged equipment in a structured manner in our service area. These kinds of programs help control impacts to neighborhoods and manage construction resources more effectively by repairing leaks as they are discovered through annual leak surveys.
Coeur d’ Alene Noxon
AVISTA SERVICE TERRITORY Electric and Natural Gas Natural Gas
Resource Planning Avista’s biennial Integrated Resource Plan (IRP) for electric and natural gas services guides the utility’s resource acquisition strategies and the overall direction of resource procurements for a 20-year planning horizon. It is a key part of how we plan for and determine how to meet the future energy needs of our customers. The IRPs provide a snapshot of the company’s resources and forecasted loads and guidance regarding resource needs and acquisitions. The 2017 Electric Integrated Resource Plan In the 2017 IRP, Avista anticipates adding almost 90,000 retail customers with a 0.47 percent annual growth in electric demand. The plans to meet this growth in the 2017 plan include a mix of new natural gas-fired generation resources, efficiency upgrades at existing generation facilities, energy storage, demand response, solar and various energy efficiency measures. The IRP describes strategies to meet projected energy demand and renewable portfolio standards through energy efficiency and a careful mix of energy resources. This plan helps us balance meeting customers’ needs for safe, reliable energy with satisfying renewable portfolio standards over the next 20 years. The plan calls for Avista to continue system upgrades and improvements to deliver energy to our customers efficiently and reliably. Each IRP is a thoroughly researched and data-driven document to guide responsible resource planning for the utility. It also builds on input from the TAC and recommendations from state utility commissions to address future needs and a changing energy landscape. The IRP is updated every two years and looks 20 years into the future.
Avista’s management, along with stakeholders from the Technical Advisory Committee (TAC), play a key role in guiding the development of the IRP. TAC members include customers, utility staff, consumer advocates, academics, utility peers, government agencies, environmental groups and other interested parties. The TAC provides significant input on modeling, resource assumptions and the general direction of the planning process. Public participation is an important part of the IRP Avista’s 2017 electric IRP was filed with the Washington and Idaho state commissions on August 31, 2017. Highlights of the plan include: • Avista’s current generation resources remain cost effective and reliable sources of power to meet future customer needs over the next 20 years. • Energy storage costs are significantly lower than the last IRP which for the first time makes the technology operationally attractive in meeting energy needs in the 20-year timeframe of the 2017 IRP. • Avista is working to construct a 28 MW solar facility for the company’s new Solar Select Program for commercial and industrial customers. • This study estimates conservation will serve 53.3 percent of future load growth. The 2017 Preferred Resource Strategy The 2017 Preferred Resource Strategy (PRS) is a plan for a mix of additional energy efficiency, upgrades at existing generation and distribution facilities, solar, energy storage, demand response and new natural gas-fired generation. After the solar project, Avista’s next resource acquisition would be a demand response program in 2025, followed by thermal upgrades from 2026 through 2029 and a
development process. The experience of this group provides a robust forum for the exchange of ideas and discussion of issues and risks that affect the planning process. Regulators in Washington, Idaho and Oregon ensure that reliability, environmental impact, conservation, efficiency, and cost are factored into our forecasting and the decisions we make on behalf of our customers.
natural gas-fired peaking plant in 2026. Estimated total capital needs for generation resources in the PRS are $538 million over the next 20 years. Conservation and system efficiency spending will increase over time; a total of $630 million will acquire 125 aMW over 20 years. The 2019 Electric Integrated Resource Plan The 2019 Electric IRP is currently in process and will be published in the second half of 2019. It will be available on our website at https://www.myavista.com/about-us/our- company/integrated-resource-planning. The 2016 Natural Gas Integrated Resource Plan The IRP for our natural gas operations was filed in August of 2016. The IRP identifies a strategic natural gas resource portfolio that includes both supply-side and demand-side resources to meet customer needs for the next 20 years in a safe, reliable and least-cost manner, considering multiple levels of uncertainty. To meet this goal, our philosophy is to develop a plan that incorporates an appropriate balance of price certainty and prudent cost management utilizing our portfolio of supply contracts, storage and firm pipeline capacity rights.
We work collaboratively with our Technical Advisory Committee (TAC), which is comprised of members from regulatory staff, industry stakeholders, customers, peer utilities, and company representatives from several departments. Avista’s 2016 natural gas IRP was filed with the Washington, Idaho and Oregon state commissions on Aug. 29, 2016. Highlights of the plan include: • Avista has sufficient natural gas resources to meet customer needs well into the future. • There is no expected resource needs in Washington, Idaho or Oregon during the 20 year planning horizon. • Demand continues to be lower than previous plans, driven by lagging economic recovery and declining use per customer across our service territory. • This prolonged flat demand poses a risk that should load growth increase sooner or greater than expected the need for additional resources would accelerate. • The long-term forecasted price of natural gas remains relatively low, and while this is good for customers, it challenges the cost-effectiveness of natural gas demand side management programs.
Energy Efficiency and Conservation Programs Avista has more than 30 years of experience in offering Demand Side Management (DSM) or energy efficiency programs, creating shared value for our residential, commercial/ industrial and limited-income customers. To our customers, DSM means managing energy use from the customer side of the meter. For Avista, it also means implementing programs that help customers use less energy as well as ways Avista can generate energy, through better equipment and processes. DSM also involves much, much more. It’s how we plan, implement, measure and monitor energy efficiency as a way to ensure it’s being used wisely. At Avista, we make choices everyday about the best and most affordable source of energy to deliver to our customers. Energy efficiency gives us one more choice — and one that is lower cost. This is why it is an important element of our Integrated Resource Plan as we look to the future. Our approach to energy efficiency is based on two key principles: to pursue cost-effective electric and natural gas energy savings by offering financial incentives for qualifying energy saving measures, and to use the most effective means to deliver energy efficiency services to customers. These mechanisms are varied and include: • Prescriptive programs or “standard offers” such as high efficiency equipment rebates; • Site-specific or “customized” analyses at commercial and industrial customer premises; • “Market transformational” or regional efforts with other utilities; • Low-income weatherization services through local Community Action Agencies; • Robust multichannel communication efforts to build awareness of programs and low-cost/no-cost advice.
At Avista, we make choices everyday about the best and most affordable source of energy to deliver to our customers. Energy efficiency gives us one more choice — and one that is lower cost.
Washington and Idaho DSM Programs and Outcomes
Oregon DSM Programs and Outcomes Avista provides only natural gas to customers in our Oregon service territory. Starting in 2017, the Energy Trust of Oregon operates and manages all DSM programs for our residential and commercial customers. Avista continues to operate and manage the DSM programs for our low income customers. Energy Efficient Streetlights Beginning in 2015, Avista’s Washington and Idaho service area has received new, more energy efficient streetlights as part of Avista’s streetlight change out program. The effort includes replacement of thousands of company-owned streetlights with energy efficient LED lights, over five years. As current High Pressure Sodium (HPS) streetlights burn out, they are being replaced with LED technology. When Avista completes the transition to LED technology for company-owned streetlights, the energy savings are expected to be enough each night to power about 2,300 homes, and the change-outs have already resulted in hundreds of thousands of dollars in energy savings. The energy savings is good for customers and Avista, while providing savings through reduced maintenance, equipment, material and other costs associated with continued use of 1980s-era HPS lights. Through the Relight Washington program launched by Washington State’s Transportation Improvement Board (TIB), funding is provided directly to small cities owning their own streetlights, helping them convert to LED lights and benefit from the energy saving technology.
Energy Efficiency in Avista’s Facilities Avista practices energy conservation and efficiency in our buildings and facilities. The focus of these efforts is to reduce energy consumption and manage energy costs while providing comfort to building occupants. Over the last few years, Avista has made great strides in improving energy efficiency and reducing annual energy usage in our facilities through a number of different projects. Some of these projects have included: • Lighting retrofit projects in a number of areas to reduce usage and take advantage of more efficient lighting fixtures; • Replacing aging HVAC systems to improve energy efficiency and take advantage of the controls that new technology offers; and • Upgrading to high efficiency windows, providing better insulation and helping to reduce heat gain in the summer months. receipt of the Building Owners and Managers Association (BOMA) 360 designation, which acknowledges Avista’s best practices in building operations and management and promoting standards of operational and management excellence in commercial properties. • Through Avista’s building upgrade efforts, each of the floors of the corporate headquarters building has received LEED Gold certification. • Avista’s corporate headquarters building received an Energy Star rating in 2017 based on our efficient use of energy and best practices. Facilities recognition for sustainable practices: • These efforts have been recognized through Avista’s
Avista’s DSM services provide energy efficiency programs to the company’s Washington and Idaho electric and natural gas customers, funded through the DSM Tariff Rider. In preliminary results Avista’s DSM programs delivered 118.8 MWh and nearly 1,352,000 therms in efficiency savings in 2017. This achieved 297 percent of the company’s electric Integrated Resource Planning (IRP) conservation goal and 197 percent of Avista’s natural gas IRP conservation goal. Approximately 78 percent of the 2017 local program expenditures of $35.9 million were returned to customers in the form of rebates toward energy efficiency measures installed. In addition to these local programs, Avista funds regional programs, in partnership with other utilities, through the Northwest Energy Efficiency Alliance (NEEA) to deliver additional savings to Avista’s customers. Including NEEA funds, 2017 energy efficiency funding was over $38.25 million. The DSM department works in partnership with Avista’s DSM Advisory Group, which is comprised of a wide variety of industry and regulatory professionals. During 2017, over 15,000 rebates for residential energy efficiency projects were processed benefiting approximately 8,000 households. Over $11.2 million in rebates were provided directly to residential customers to offset the cost of implementing energy efficiency upgrades. Residential programs, including third party vendor programs, contributed 39.8 MWh and approximately 1,010,000 therms in energy savings. For non-residential customers, the company processed approximately 3,500 energy efficiency project submissions in 2017, resulting in the payment of $16.8 million in rebates paid directly to customers to offset the cost of their energy efficiency projects. These projects contributed 78.5 MWh and over 341,000 therms in savings.
Distributed Generation: Solar Avista is embracing the opportunities that distributed generation brings for our customers and the utility. One area that reflects this is our efforts around solar generation. Solar Concierge Avista offers online information and a tool that allows customers to evaluate the feasibility of rooftop solar on their premises. This tool helps customers compare the cost of service from Avista to costs of rooftop solar, incorporating state and federal incentives that are available for such installations. Community Solar Avista provides community solar for a number of customers in Spokane, Washington that allows residential customers to participate in solar and receive bill credits to offset their energy use while also helping the environment and supporting Washington’s renewable energy initiatives. Launched in 2015, the 425 kW array serves about 500 customers and is fully subscribed. Solar Select In 2017, Avista selected a partner and location to build a solar facility of up to 20 megawatts in the town of Lind, Washington. Solar Select is designed for certain non- residential customers in Washington, and will expand the renewable generation options available. At completion, it is the largest solar array in the state of Washington, and Avista purchases all the generation output to serve these customers.
The Movement Toward Distributed Generation The utility industry has seen broad adoption of distributed generation, with the majority of that being rooftop solar installations. Adoption rates vary throughout the United States. In Avista’s service territory, less than 500 customers (or about 0.1%) have distributed generation installed. The relatively low adoption rate in Avista’s service territory, and across the Pacific Northwest more broadly, is primarily attributed to the lower utility retail rates in the region and the less favorable solar profile that exists. Avista recognizes the potential opportunities and risks associated with further penetration of distributed generation and is evaluating opportunities with respect to solar generation. In our Integrated Resource Plan, which is filed every two years, we evaluate distributed, community, and grid-scale solar as an alternative to other more traditional sources of generation. We also consider how growing adoption of rooftop solar could impact our customers’ consumption patterns in the future. We will continue to monitor and assess how changes in the costs of solar generation, changes in federal and state incentives, changes in customer preferences related to solar generation, and changes in our retail rates impact the viability of solar generation as a resource at the premise, community, and utility-scale levels, and our Integrated Resource Plan will reflect that analysis going forward.
Paving the Way for Electric Vehicles The electrification of transportation isn’t a new concept for Avista. In the early 1900s, Avista’s electric streetcars transported thousands of Spokane residents to their destinations in the greater downtown area. In recent years, consumers and businesses alike are expressing more interest and seeing value in the use of electric vehicles (EVs). To meet customer expectations, provide value beyond traditional energy service, further our commitment to the environment and prepare for the future, Avista implemented a strategic initiative focused on electrification of transportation. In 2016, we launched a pilot program related to Electric Vehicle Supply Equipment (EVSE). The program, the first of its kind in Washington state and one of a few in the nation, will include installation of 272 Avista-owned electric vehicle charging port connections in approximately 200 locations in our Washington service area. Current plans include the installation of charging stations in the homes of 120 customers and 80 workplace and public locations, including seven high-power DC fast chargers that will support regional travel. Two DC fast-chargers were installed in 2017, supporting regional travel for EV drivers in Washington. The first installation was in Rosalia, Washington, between Spokane and Pullman. This charging station serves as an important connection point for EV transportation on this corridor in eastern Washington. The second installation was in the more urban Kendall Yards neighborhood of Spokane. On the edge of downtown, this charging station provides opportunity for those who need access while they conduct business, run errands, shop or eat in the neighborhood.
Installation of charging stations in customer homes and other workplace and public locations continues. We’ve also received approval to extend and expand the program into 2019. Through this pilot program, Avista will gain an understanding of customer EV charging behavior. We’ll learn how the electric loads from additional EVs will impact the system and how we can maximize the value of EVs for customers and Avista.
Avista has offered electric vehicle charging at the main campus for employee and public use for several years. This expands our commitment to electrification and supporting efforts that lower emissions and protect our environment.
Supply Chain Avista is committed to maximizing the value created through timely and effective supply chain services to meet our needs and the needs of the customers and communities we serve. We strive to ensure a competitive contracting environment while developing strong partnerships with our suppliers. We engage with suppliers who meet our requirements, with a particular interest in their capabilities, price and the overall value they provide for our organization and customers. We focus on building and maintaining diverse supplier relationships, keeping things local when possible and providing opportunities for our contractors to develop their capabilities that align with our business needs. Avista’s Supplier Recognition Program was created in 2015 to annually recognize our top performing suppliers in a formal way. We have approximately 30 companies that have been selected to participate in Avista’s supplier scorecard program and each has the potential to earn a “top performer” designation via their official scorecard results. Each spring, one contractor, supplier and professional service provider receive an engraved commemorative hardwood plaque to affirm Avista’s genuine appreciation of outstanding service and performance. The primary goal of this endeavor is to highlight specific areas of accomplishment as well as demonstrate the significant value of aligned goals and the required collaborative efforts to attain them.
IN 2017 WE SPENT $161,082,866 34.13% OF OUR TOTAL GOODS AND SERVICES SPEND IN OUR COMMUNITY DIVERSITY SPEND IN2017 WAS $18,311,418 3.77% OF OUR GOODS AND SERVICES TOTAL SPEND OR OR AND
Engaging Our Stakeholders Identification of Stakeholders Avista engages a diverse array of stakeholders, in different settings, depending on the specific need or business context. Effective stakeholder engagement improves our business decisions and our overall performance. Our stakeholders include residential, commercial and industrial customers; investors, financial analysts, credit rating and financial institutions; active and retired employees; residents of the communities we serve and those of neighboring cities and towns; non-profit and low income advocates; environmental groups; federal and state regulators; vendors; elected officials; media channels; and other companies in the energy industry.
Approaches to Stakeholder Engagement Across the company, Avista values the interaction we have with our stakeholders. Some of these interactions are: • Issue-Focused Meetings with key groups e.g. Technical Advisory Committees, Energy Efficiency Advisory Group, regulatory hearings, community meetings, presentations, etc.; • Customer Outreach With Two-Way Communications — issue-focused emails, social media channels (Facebook, Twitter, Instagram), listening posts, focus groups, surveys, community meetings, print and digital media channels, electronic and print newsletters, bill inserts, etc.;
• Customer Satisfaction Surveys — asking 1,600 residential and business customers each year who have completed a transaction with the company to report on components of the interaction as well as their overall satisfaction. In addition, we subscribe to J.D. Power for customer satisfaction information, and Avista conducts an annual survey to assess perceptions and attitudes about the company; • Customer Research — ongoing research on a variety of topics, including products and services, new technologies and more; • Regular Meetings with Media Editors and Staff to discuss industry and utility issues and a commitment to providing timely response to media inquiries.
Key Topics Raised by Stakeholders Customers have told us their key concerns include power outages and restoration, reliability, energy pricing and bills, energy generation sources, new customer programs/ offerings, customer service and corporate issues. We have developed a comprehensive, multi-channel customer communication program which is intended to provide more information about these topics and increase customers’ awareness of the rate-making process, rate components, energy bill drivers, new customer programs and choices, energy efficiency, energy assistance, ongoing investments we make in our infrastructure and what Avista is doing to manage our costs.
Avista works with federal and state agencies, conservation organizations, and area tribes to bring a variety of perspectives and interests to the table in implementing federal and state mandated environmental measures associated with our dams on the Spokane and Clark Fork rivers. Representatives of federal and state agencies address issues such as water quality, endangered species and fish passage. Tribal representatives are concerned with protecting the area’s cultural and natural resources. Other stakeholders represent local non-profits, community groups and customers. For our energy planning and infrastructure development, the electric and natural gas Technical Advisory Committees (TACs) provide opportunities for input from three main groups of stakeholders. These groups include 1) those who provide technical input and review of the resource options, modeling and results (utility commission staff, other utilities, academics and consultants);
2) those who have an interest in a particular aspect of our Integrated Resource Plan (environmental groups, resource developers and government agencies); and 3) members from regional planning organizations (Northwest Power and Conservation Council). In addition, we are in partnership with our energy efficiency Advisory Group which is comprised of a wide variety of industry and regulatory professionals, as well as Avista staff members. This group advises us on planning and implementing a broad range of energy efficiency programs.
Stakeholder Participation in Decision Making for Energy Planning and Infrastructure Development
We seek out and encourage stakeholder involvement in our activities on a regular basis on a variety of issues, including transmission and distribution projects, implementing vegetation management programs and the requirements of our hydroelectric licenses.
Business Continuity Planning Avista operates in a part of the country where heavy snows, ice storms, fire storms, volcanoes, floods and earthquakes are genuine probabilities. In addition to these natural threats to normal business operations, Avista must also consider possible man-made threats such as sabotage, terrorism and cyber-related issues. To ensure our continued utility and business operations, we have implemented an Enterprise Business Continuity (EBC) Program.
Enterprise Business Continuity Program Avista has developed an EBC Program to facilitate and administer emergency operating plans, business continuity and disaster recovery plans and activities simultaneously across multiple departments in response to any scope of disruption to normal business operations. It establishes the governing structure for the coordination of Avista’s EOPs during an emergency response situation. Business continuity and disaster recovery activities may occur concurrently with the emergency response activities of the EOPs and are focused on sustaining Avista’s critical business processes. Our EBC program ensures that emergency response activities occur in a coordinated and timely fashion, maximizing resources and reducing further disruption to normal business operations.
Incident Management Avista has formally adopted and implemented the Incident Command System (ICS) as the means by which all emergencies will be managed. In recent years, the ICS methodology has been widely adopted across many utilities and is required among local, state and federal agencies. Use of this standardized incident management process ensures Avista is better prepared and positioned for rapid response, restoration and recovery during an interruption, whether a service outage or a disruption to business. Avista is also able to integrate with local emergency responders as well as peer utilities under the ICS framework.
Our incident response, business continuity and disaster recovery plans are designed to safeguard life and property.
They are also designed to provide for the restoration of electric and natural gas services and the continuation of business functions critical to the support of Avista operations in case of natural disasters, accidents or other realized threats to the company.
Emergency Operating Plan (EOP) Avista has developed Emergency Operating Plans (EOPs) to respond to varying types of incidents from utility outages, cyber security breaches and internal incidents such as fires, or other unplanned emergencies. Each EOP aligns with the use of ICS. These plans are designed to enable Avista operations to successfully respond to an emergency or severe disruption, resuming operations in a timely and orderly fashion. Emergency response activities are focused on responding to the initial event and subsequent impacts in an effort to prevent further damage to life, property, and the environment, and to stabilize the situation by activating recovery and back-up processes and procedures. The plans are exercised regularly, and have been implemented successfully to manage operations as needed. emergency at any Avista hydroelectric facility is remote, we have developed Emergency Action Plans (EAPs) to help ensure public safety at our hydroelectric facilities. The plans are designed to minimize potential dangers to people and property downstream of the dams. Based on computer simulations of catastrophic failures at each site, the EAPs provide guidelines for notification and early warning in the event of an actual or potential dam breach. Each EAP is evaluated annually and exercised and revised every five years. Emergency Action Plans (EAPs) Even though the probability of a major structural
Business Continuity Plans Avista prepares and regularly updates Business Continuity Plans (BCP) for its critical business functions. The BCPs include incident response, crisis communications and business specific recovery procedures. Disaster Recovery Avista has established system and data backup and recovery capabilities to support the recovery of critical business functions. Exercising the Plans Avista exercises its Plans and conducts an annual exercise of the disaster recovery process, site and strategy. Alternate Facilities/Work Area Recovery Strategy Avista has implemented an alternate facilities recovery strategy as part of the EBC program to support the relocation of staff and resumption of business should one or more facilities be impacted by an event.
Enterprise Business Continuity Program Management
Avista employs a cross-section of subject matter experts, including a Certified Business Continuity Professional, that participate in the maintenance, exercise and review of the program and specific plan elements to ensure that Avista maintains the highest standards for business continuity. Board of Directors Updates The EBC program objectives and results are reported to the board of directors annually.
Utility Operations—by the numbers
Installed Capacity, Generation Capability Net Energy Output by Primary Energy Source Present Generating
Net Energy Output (MWh)
(Installed Capacity) (MW)
Hydro Projects Upper Falls Monroe Street
10.2 15.0 37.6 15.0 40.4 88.0
10.0 14.8 37.6 14.8 40.4 70.8
68,396 95,459 114,367 79,120 183,422 508,341
Nine Mile Post Falls Little Falls Long Lake
Cabinet Gorge Noxon Rapids
265.0 487.8 941.2
1,062,811 1,866,144 3,978,060
Thermal Projects Kettle Falls GS
Kettle Falls CT Boulder Park
24.6 295 64.8
24.6 295 61.8
Coyote Springs 2
Northeast CT Rathdrum CT
166.5 222.0 833.3
166.5 233.4 839.2
Colstrip Units 3 & 4
Total Generation Properties
Average Generation Efficiency of Thermal Plants by Energy Source Thermal generation is approximately 44 percent of Avista’s total generation capability. Each facility has a specific purpose in Avista’s diversified generation portfolio — whether it is for economic or load demand efficiencies.
Heat Rate (Btu/kWh)
Colstrip Units 3 & 4 Coyote Springs 2
Kettle Fall CT
Natural Gas Natural Gas Natural Gas
2016 & 2017 Average Plant Availability by Energy Source Plant Energy Source 2016 Availability
91.0% 85.8% 91.9% 91.2% 93.8% 82.0% 90.0%
86.0% 86.4% 93.5% 81.2% 87.4% 74.0% 72.0%
Colstrip Units 3 & 4 Coyote Springs 2
Kettle Falls CT
Natural gas Natural Gas Natural gas
*Peaker unit — used only in times of significant energy demand
Length of Above and Underground Transmission and Distribution Lines
Transmission Lines 230kV
Natural gas distribution mains
Avista does not own any interstate natural gas transportation pipelines, only contractual rights, and receives natural gas at over 60 points along interestate pipelines.
Electric And Natural Gas Loads
Electric average hourly load (aMW) Peak electric native load (aMW) Summer (retail)