Spokane Journal of Business

Power Moves: Avista to invest over $104M in series of energy, gas upgrades

Company develops two substations, replaces 20 miles of natural gas pipe

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-Wolfe Architectural Group PS
Construction is expected to start later this year on an ornate security wall, as envisioned above, that will surround the planned new $73 million substation in downtown Spokane.
-Erica Bullock
Josh DiLuciano, vice president of energy delivery at Avista Corp., says the company’s projects have been challenged by supply-chain issues in recent years.

(Updated at 2 p.m. Pacific on June 8 to reflect total near-term spending on improvements.)

Avista Corp. is investing $104 million in a series of projects to update its electricity and natural gas distribution systems in Washington and Idaho.

In all, the Spokane-based power company plans to spend $475 million annually through 2025 on improvements to its transmission and distribution, generation, natural gas infrastructure, enterprise technology, and other upgrades.

Josh DiLuciano, vice president of energy delivery at the Spokane-based power company, says electric facility improvements here include two new substations, valued at a combined $83 million, that will provide increased capacity and accommodate future customer growth on the West Plains and in downtown Spokane. 

Also, nearly 20 miles of natural gas pipelines in Spokane and Kootenai counties are up for replacement this year in projects valued at more than $21.1 million.

“(The natural gas facilities replacement program) is really focused on replacing some pipe that is failing earlier in its life than we would have expected, so we need to replace it proactively,” says DiLuciano.

Natural gas pipelines are typically manufactured with a combination of steel and plastic, he says.

“There was an industrywide issue with some plastics that were manufactured where they’re just prone to cracking more than the rest of the pipe,” he explains.

The program is part of a long-term plan to address 730 miles of aging and failing pipes over the next 20 years throughout Avista’s natural gas service areas in Eastern Washington, northern Idaho, and southern and eastern Oregon.

He says a 20-year timeline is required to address the companywide pipeline replacement needs around a targeted economic optimum.

“Shortening the project would have been really costly and not have mitigated the risk a lot, but 30 years would have been too long to mitigate the risk,” he says. “So the 20-year plan spreads out that cost appropriately.”

Phoenix-based NPL Construction Co., which has a Spokane Valley presence, is the contractor for Avista’s natural gas pipe replacement program.

On the electric side of business, Avista can expect increased distribution capacity with the addition of two new electric substations, says DiLuciano.

Avista has committed to spending $73 million to bring the Spokane metro substation online. The substation will be located on a vacant 1-acre site on the 700 block of Third Avenue in downtown Spokane. A Domino’s Pizza storefront, a grocery store, and surface parking previously located on the land were demolished to make way for the substation.

The metro facility will replace aging power transformers and other power equipment that currently serve the downtown area from a smaller the site about three blocks northwest of site on Third Avenue.

“It got to the point where we just can’t find the parts and pieces to replace it and maintain it reliably,” says DiLuciano.

As previously reported in the Journal, an existing substation located at 158 S. Post, near the Steam Plant Square complex, will be decommissioned once the new facility is operational.

DiLuciano says that the $73 million cost to develop the new downtown distribution facility is much higher than other substation costs due to the location of the property and substantial equipment costs. 

Even though the metro substation is an open-air facility, electrical towers or transmission lines won’t be visible from street level due to a security wall.

Spokane-based Bouten Construction Co. will begin constructing the security wall this summer and it will take about a year to complete, he adds.

“The wall is kind of a neat part of the project, because we worked with the community on what it’s going to look like so that it’s aesthetically pleasing in that downtown area,” he says.

The new substation’s capacity will be 150% greater than the current substation.

On the West Plains, the $10 million Flint Road substation is nearing completion. Grading for the substation began in November 2021, followed by foundation and steel work in April 2022. Electrical construction started last July, and in May, workers were preparing to energize equipment. Avista is acting as its own contractor for the construction of the Flint Road facility, located at 1206 S. Flint Road.

Project information from the company states that the substation’s two distribution transformers are capable of serving about 48,000 homes.

“We’ve just seen enough commercial and industrial growth out there it was time to build another substation in that area,” DiLuciano says.

He explains that Avista selects and prioritizes where to update with a five-year capital planning cycle that addresses both immediate energy improvements for the next one to two years, and projected future needs for the next three to four years.

DiLuciano says the projects are selected through many drivers, such as by customers, load growth, or aging equipment.

He says that capital projects require a long lead time to ensure that materials and equipment are available when construction is ready to begin.

In the case of the downtown substation, he says it took the company 10 years to move forward with the project.

“Supply chain has been one of the biggest challenges from our capital perspective,” he says, adding that some projects have equipment available within six months while others can take 18 months to three years to receive needed items.

“It’s pushed some of our planning horizons way out,” DiLuciano says. “We track on-time deliveries and over the last three years, our on-time deliveries from vendors is around 70%. It’s been a bit of a challenge.”

Avista provides electric service to 411,000 customers and delivers natural gas to 377,000 customers, according to information provided by the company.

Erica Bullock
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Reporter Erica Bullock has worked at the Journal since 2019 and covers real estate and construction. She is a craft beer enthusiast, who loves to garden and go camping with friends.

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