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Commitments and Contingencies | 6 Months Ended
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Jun. 30, 2021
Commitments And Contingencies Disclosure [Abstract] |
Commitments and Contingencies | NOTE 15. COMMITMENT S AND CONTINGENCIES In the course of its business, the Company becomes involved in various claims, controversies, disputes and other contingent matters, including the items described in this Note. Some of these claims, controversies, disputes and other contingent matters involve litigation or other contested proceedings. For all such matters, the Company intends to vigorously protect and defend its interests and pursue its rights. However, no assurance can be given as to the ultimate outcome of any particular matter because litigation and other contested proceedings are inherently subject to numerous uncertainties. For matters that affect Avista Utilities’ or AEL&P's operations, the Company intends to seek, to the extent appropriate, recovery of incurred costs through the ratemaking process. Boyds Fire (State of Washington Department of Natural Resources (DNR) v. Avista) In August 2019, the Company was served with a complaint, captioned “State of Washington Department of Natural Resources v. Avista Corporation,” seeking recovery up to $4.4 million for fire suppression and investigation costs and related expenses incurred in connection with a wildfire that occurred in Ferry County, Washington in August 2018. Specifically, the complaint alleges that the fire, which became known as the “Boyds Fire,” was caused by a dead ponderosa pine tree falling into an overhead distribution line, and that Avista Corp. was negligent in failing to identify and remove the tree before it came into contact with the line. Avista Corp. disputes that the tree in question was the cause of the fire and that it was negligent in failing to identify and remove it. Additional lawsuits have subsequently been filed by private landowners seeking property damages, and holders of insurance subrogation claims seeking recovery of insurance proceeds paid. The lawsuits were filed in the Superior Court of Ferry County, Washington and subsequently consolidated into a single action. The Company intends to vigorously defend itself in the litigation. However, the Company cannot predict the outcome of these matters. Labor Day Windstorm General In September 2020, a severe windstorm occurred in eastern Washington and northern Idaho. The extreme weather event resulted in customer outages and the cause of multiple wildfires in the region. The Company has become aware of instances where, during the course of the storm, trees and limbs, located in areas outside its maintenance right-of-way, broke under the extraordinary wind conditions and caused damage to its energy delivery system at or near what is believed to be the potential area of origin of a wildfire. Those instances include what has been referred to as: the Babb Road fire (near Malden and Pine City, Washington); the Christensen Road fire (near Airway Heights, Washington); and the Mile Marker 49 fire (near Orofino, Idaho). These wildfires covered, in total, approximately 22,000 acres. The Company currently estimates approximately 230 residential, commercial and other structures were impacted. Parallel investigations by applicable state agencies are ongoing, and the Company is cooperating with those efforts. With respect to the Christensen Road Fire and the Mile Marker 49 Fire, the Company’s investigation determined that the primary cause of the fires was extreme high winds. To date, the Company has not found any evidence that the fires were caused by any deficiencies in its equipment, maintenance activities or vegetation management practices. See further discussion below regarding the Babb Road Fire. In addition to the instances identified above, the Company is aware of a 5-acre fire that occurred in Colfax, Washington, which damaged several residential structures. The Company’s investigation determined that the Company’s facilities were not involved in the ignition of this fire in any way. The Company contends that there is no evidence of negligence and intends to vigorously defend any claims for damages that may be asserted against it with respect to the wildfires arising out of the extreme wind event. Babb Road Fire On May 14, 2021 the Company learned that the DNR had completed its investigation and issued a report on the Babb Road Fire. The Babb Road fire covered approximately 15,000 acres and destroyed approximately 220 structures. There are no reports of personal injury or death resulting from the fire. The DNR report concluded, among other things, that  the fire was ignited when a branch of a multi-dominant Ponderosa Pine tree was broken off by the wind and fell on an Avista Corp. distribution line;  the tree was located approximately 30 feet from the center of Avista Corp.’s distribution line and approximately 20 feet beyond Avista Corp.’s right-of-way;  the tree showed some evidence of insect damage, damage at the top of the tree from porcupines, a small area of scarring where a lateral branch/leader (LBL) had apparently broken off in the past, and some past signs of Gall Rust disease. The DNR report concluded as follows: “It is my opinion that because of the unusual configuration of the tree, and its proximity to the powerline, a closer inspection was warranted. A nearer inspection of the tree should have revealed the cut LBL ends and its previous failure, and necessitated determination of the failure potential of the adjacent LBL, implicated in starting the Babb Road Fire.” The DNR report acknowledged that, other than the multi-dominant nature of the tree, the conditions mentioned above would not have been easily visible without close-up inspection of, or cutting into, the tree. The report also acknowledged that, while the presence of multiple tops would have been visible from the nearby roadway, the tree did not fail at a v-fork due to the presence of multiple tops. The Company contends that applicable inspection standards did not require a closer inspection of the otherwise healthy tree, nor was the Company in any way negligent with respect to its maintenance, inspection or vegetation management practices. The Company intends to vigorously defend any such assertion, if made. At this time, no material claims have been asserted against Avista Corp. for damages resulting from the Babb Road Fire. Colstrip The Washington CETA imposes deadlines by which coal-fired resources, such as Colstrip, must be excluded from the rate base of Washington utilities and by which electricity from such resources may no longer be delivered to Washington retail customers. Not all of the co-owners of Colstrip Units 3 & 4 are Washington utilities subject to CETA, and the co-owners have differing needs for the generating capacity of these units. Accordingly, business disagreements have arisen among the co-owners, including, but not limited to, disagreements as to the shut-down date or dates of these units. These business disagreements, in turn, have led to disagreements as to the interpretation of the Ownership and Operating Agreement, including, but not limited to, the rights of the co-owners to discontinue operations of, or otherwise terminate their interest in, Unit 3 and/or Unit 4. The Ownership and Operating Agreement does contain an arbitration clause that dictates a dispute resolution process to address and resolve these disagreements. At least one owner, Talen Montana, has challenged the validity of the arbitration clause contained in the Ownership and Operating Agreement on the basis that it is not consistent with recently-enacted amendments to Montana Code Section 27-5-323. Along with a majority of the owners of Colstrip, the Company has initiated legal proceedings in Washington to compel arbitration in accordance with the Ownership and Operating Agreement, as well as legal proceedings in Montana to challenge the constitutionality of the amendments to Montana Code Section 27-5-323. In addition to amending Montana Code Section 27-5-323, during the course of the 2021 legislative session the Montana Legislature passed Senate Bill 266, which amended Montana’s Consumer Protection Act (MC 30-14-103 et seq.) to make (i) the failure or refusal of an owner of Colstrip to fund its share of operating costs, and (ii) conduct by one or more of the owners of Colstrip to bring about permanent closure of a generating unit of Colstrip without seeking and obtaining the unanimous consent of the owners, an unfair or deceptive act or practice in the conduct of trade or commerce under Montana’s Consumer Protection Act. Along with a majority of the owners of Colstrip, the Company has initiated legal proceedings to challenge the constitutionality of Senate Bill 266. The Company intends to vigorously defend and protect its interests (and those of its stakeholders) in this and all other legal proceedings relating to Colstrip. The Company is not able to predict the outcome, nor an amount or range of potential impact in the event of an outcome that is adverse to the Company’s interests. National Park Service (NPS) - Natural and Cultural Damage Claim In March 2017, the Company accessed property managed by the National Park Service (NPS) to prevent the imminent failure of a power pole that was surrounded by flood water in the Spokane River. The Company voluntarily reported its actions to the NPS several days later. Thereafter, in March 2018, the NPS notified the Company that it might seek recovery for unspecified costs and damages allegedly caused during the incident pursuant to the System Unit Resource Protection Act (SURPA), 54 U.S.C. 100721 et seq. Almost three years later, in January 2021, the United States Department of Justice (DOJ) requested that the Company and the DOJ renew discussions relating to the matter. By letter dated July 7, 2021, the DOJ communicated that it may seek damages of approximately $2 million in connection with the incident for alleged damage to "natural and cultural resources". In addition, the DOJ indicated that it may seek treble damages under the SURPA and state law, bringing its total potential claim to approximately $6 million. The Company disputes the position taken by the DOJ with respect to the incident, as well as the nature and extent of the DOJ’s alleged damages, and will vigorously defend itself in any litigation that may arise with respect to the matter. The Company and the DOJ have agreed to engage in fact finding discussions to understand their respective positions and determine whether a resolution of the dispute may be possible. However, the Company cannot predict the outcome of the matter. Other Contingencies In the normal course of business, the Company has various other legal claims and contingent matters outstanding. The Company believes that any ultimate liability arising from these actions will not have a material impact on its financial condition, results of operations or cash flows. It is possible that a change could occur in the Company’s estimates of the probability or amount of a liability being incurred. Such a change, should it occur, could be significant. See "Note 22 of the Notes to Consolidated Financial Statements" in the 2020 Form 10-K for additional discussion regarding other contingencies.

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