Topic:"Capacity Market Participation" in M03632

3 Q: How did you estimate the change to the current system-average rate due to 4 COMFIT projects? 5 A: I derived the rate impact from COMFIT purchases by estimating both the annual 6 payments at COMFIT rates and the annual power-supply cos...

AI summary The response explains how the rate impact of COMFIT projects was estimated by comparing annual payments at COMFIT rates with avoided power-supply costs. The analysis considers different cases, including limitations on capacity due to distribution constraints and assumptions about renewable resource utilization.

dards for Palo Verde nuclear units 1, 2, and 3. 53. Illinois Commerce Commission 86-0325; Iowa-Illinois Gas and Electric Co. Rate Investigation; Illinois Office of Public Counsel; August 13 1986. Determination of excess capacity based on r...

AI summary The text presents a list of regulatory proceedings and hearings from various jurisdictions, focusing on topics such as excess capacity determination, prudence reviews of generation planning, transfer of utility assets, and rate-setting processes. It includes cases related to nuclear power, rate investigations, and insurance rate adjustments.

feed in tariffs as proposed by Synapse will be counterproductive to the objectives of the ANSMC and their respective communities to meaningfully participate in the Nova Scotia renewable energy sector. - 1.2 The position of KMKNO with respe...

AI summary The KMKNO argues that Synapse's proposed feed-in tariffs are not suitable for Mi'kmaq communities due to financial and legal constraints under the Indian Act, and that a two-tiered COMFIT model is necessary for their participation in the renewable energy sector.

II. Overview and General Issues - Q. Are you proposing flat COMFIT rates or variable rates? - A. We are commenting strictly on technical and budgetary considerations. Rates will be addressed under separate testimony by ANSS.

AI summary The document discusses the technical and budgetary considerations of COMFIT rates, with the note that rate proposals will be addressed in separate testimony by ANSS.

Q. Who is the Alliance of Nova Scotia Sawmillers (ANSS)? A. The ANSS is a group of companies that own forest products manufacturing facilities located in Nova Scotia that have unified to ensure that the COMFIT CHP rate set by the NSUARB is...

AI summary The Alliance of Nova Scotia Sawmillers (ANSS) is a group of forest products manufacturing companies in Nova Scotia that have joined together to ensure the COMFIT CHP rate set by the NSUARB accurately reflects the rate needed for successful project development in the province.

Q. Has Synapse included an assessment of the power required to operate the CHP plant? - A. I do not see where Synapse has accounted for parasitic power losses associated with operating the power plant in their model. This is a significant...

AI summary Synapse has not accounted for parasitic power losses in the CHP plant model, which consume 14% of gross electricity production. Two options are presented: purchasing power at NSPI rates or self-consumption. Option 1 is deemed less costly for rate payers, but parasitic power losses must be included in the COMFIT rate calculation.

Introduction The Alliance of Nova Scotia Sawmillers (ANSS) is a group of forest industry companies that have unified to pursue the common goal of ensuring that there is a COMFIT available for biomass CHP and that the rate set for the COMFI...

AI summary The Alliance of Nova Scotia Sawmillers (ANSS) supports the NSUARB and Synapse's transparent process for determining COMFIT rates for biomass CHP. ANSS seeks to contribute to ensuring fair rates that reflect accurate generation costs and provide a fair return to project proponents.

4. IRs from the Alliance of Nova Scotia Sawmillers (ANSS) ANSS IR 1. Reference Draft COMFIT Tariffs: Initial Calculations and Discussions, p. 7, Table 1, (a) Why has Synapse assumed 100% corporate ownership of biomass CHP projects? Answer:...

AI summary The Alliance of Nova Scotia Sawmillers (ANSS) raises questions about Synapse's assumption of 100% corporate ownership of biomass CHP projects and the mechanisms available to account for fuel risk in ROE calculations for biomass CHP projects.

ANSS IR 7. Reference p. 4, Risk Factors (a) Does Synapse assume that proponents developing biomass CHP plants will have project management skills and resources beyond other technology developers for the COMFIT? What is the basis for that a...

AI summary Synapse initially assumed that biomass CHP plant developers would be corporations with strong project management skills, but is reevaluating this assumption after being advised that community-based groups may also develop such projects. Synapse acknowledges that Aboriginal groups, municipalities, universities, and other community groups may construct CHP plants in Nova Scotia.

revisions, rather than introducing revisions based on the attainment of capacity targets, as the former increases stability and predictability in the market, both for investors and for the Government. - 8. The following paragraphs turn to...

AI summary The text highlights a disparity between <50kW and >50kW tariffs, suggesting it could lead to regulatory arbitrage by encouraging smaller projects to exploit higher rates. This may result in less renewable electricity and higher costs, referencing a similar issue in Spain. The COMFIT wind market is at risk of clustering around the 50kW size, reducing efficiency.

COMFIT goals Synapse repeatedly claimed that it needed to set COMFIT rates to attract commercial, noncommunity investors because it had a mandate to set rates that would result in 100 MW of COMFIT projects. The basis for that purported man...

AI summary Synapse argued that COMFIT rates must be set to attract noncommunity investors to achieve the 100 MW goal for community/small-scale renewable projects. However, the government may adjust the program in 2012, and setting rates too high could negatively impact electricity rates. NSPI has already acquired power from other projects at lower prices.

iscounted cash flow model. The intent of this approach is to determine a reasonable tariff which will facilitate a reasonable level of development activity for typical projects in that resource class. [54] The Board is mindful that differe...

AI summary The Board discusses the use of a 'typical cost' approach in determining COMFIT tariffs, aiming to balance reasonable rates for ratepayers with encouraging development activity. This approach considers different project characteristics but sets a single tariff per resource class.

[212] ANSS, in its reply submission stated: 30. Likewise, the risk of undue costs being borne by ratepayers is tempered by the reality that only a limited number of CHP Facilities will be likely to participate due to inherent limitations i...

AI summary ANSS argues that the risk of ratepayers bearing undue costs is limited due to the cap on biomass in the Act and Regulations, which restricts the number of CHP Facilities that can participate.

[217] When discussing the St. FX project, Synapse had problems with it being considered a CHP: ... And frankly, that's one of the concerns I would have about this project because it has an overall efficiency of 28 percent, and I would have...

AI summary The discussion centers on the St. FX project's classification as a CHP and its efficiency concerns, with Synapse criticizing its low efficiency and higher costs. St. FX recalculates the rate using the Synapse model but argues the model is not suitable for a university heating plant. The Board accepts Synapse's conservative COMFIT rate approach and plans a review in three years.

10.1 Submissions [235] Synapse proposed a tariff of $652 per megawatt hour for in-stream tidal projects. They based this tariff on a 500 kilowatt installation employing one or more instream tidal generators. Synapse assumed total project c...

AI summary Synapse proposed a $652 per megawatt hour tariff for in-stream tidal projects, based on estimated costs and a 37% capacity factor. The Consumer Advocate recommended a lower rate of $398 per megawatt hour, while Mr. Couture supported the higher rate but suggested tariff degression. The Province responded by indicating that tariff degression could be considered in future reviews.

[254] Brian Giroux also addressed this matter with the Synapse panel: '" did you guys do any analysis of the space within our distribution system to see if, in fact, there was room for some of these classes or some of these projects at all...

AI summary Brian Giroux raised concerns about the lack of analysis regarding distribution system capacity for COMFIT projects, suggesting that setting rates without considering available space may be ineffective. The EAC recommended a transparent grid information resource to support COMFIT and investor confidence, while NSPI argued that direct communication with developers was sufficient. The Board agreed that publicly available capacity information would assist developers and directed NSPI and municipal utilities to create such a resource.

[262] In its Closing Submission, the CA stated: The Consumer Advocate further recommends that the tariffs include the following express provisions that are to be met by the project. - Approval from the Energy Minister. - The requirements o...

AI summary The Consumer Advocate recommends that tariffs for renewable energy projects include provisions requiring approval from the Energy Minister, compliance with specific regulations, and adherence to capacity limits. The Board also imposed a limit on tidal power under the COMFIT rate to manage rate impacts similarly to small wind limitations.

2. Large Wind Generators As discussed in Mr. Chernick's evidence, wind projects in the size range covered by the large wind category of COMFIT have recently sought and obtained contracts with NSPI at prices considerably below those recomme...

AI summary The text discusses the pricing of large wind generators under the COMFIT program, noting that recent contracts with NSPI are significantly lower than Synapse's recommendations. It suggests that the Board should not set COMFIT prices higher than the average from Exhibit PLC-2, Table 2, and that adjusting Synapse's estimates could lower prices further, reducing the impact on retail rates.

Biomass $0.156 per kWh in year 2012 for biomass CHP projects, composed of a fixed component of $0.094 per kWh and an escalating component of $0.062 per kWh representing the cost of fuel - 1. EAC is strongly opposed to the utilization of bi...

AI summary The Energy Advisory Committee (EAC) opposes the inclusion of biomass CHP in the COMFIT program due to unclear definitions, lack of efficiency standards, and concerns about carbon neutrality. It also highlights potential unfair advantages for biomass proponents and the risk of increased costs for rate-payers due to biomass fuel price escalations and reduced forest biomass availability.

Recommendations: 1. Based on the Board"s own consideration of distribution zone constraints in the Net Metering decision earlier this year (EAC Exhibit A), The Board should consider distribution zone availability and capacity issues as unr...

AI summary The EAC recommends that the Board address unresolved distribution zone capacity issues by requiring NSPI to provide a grid assessment and introduce an access guarantee for COMFIT projects. They also suggest implementing a transparent grid information tool to support investor confidence and financial mechanisms for COMFIT development.

Re: Community Feed-in-TariffHearing 2010 - BRD-E-R-I0 Please acceptthe briefcommentsinthis letter asreply submissionsinthe above-noted proceeding onbehalf ofthe Nova Scotia Department ofEnergy ("NSDOE"). Upon reviewofthe closing submission...

AI summary The Nova Scotia Department of Energy (NSDOE) submits that the Nova Scotia Utility and Review Board does not have the jurisdiction to impose capacity caps on renewable energy generators under the Electricity Act or Renewable Electricity Regulations, as these matters are already addressed in the regulations. NSDOE also states that certain tariff provisions recommended by the Consumer Advocate are already covered by existing regulations and may be subject to change during a 2012 COMFIT program review.

ANSS Fuel Reset Mechanism Lessens Ratepayer Risk - 5. The EAC also expresses concern that ratepayers will be "burdened" by a COMFIT biomass fuel adjustment escalator. - 6. There is, indeed, a risk associated with biomass costs. With the Sy...

AI summary The EAC is concerned that ratepayers may be burdened by a COMFIT biomass fuel adjustment escalator. The ANSS biennial fuel cost reset mechanism is seen as less risky for ratepayers, as it allows for rate adjustments based on biomass price fluctuations. In contrast, the Synapse proposal places the initial risk of escalating fuel costs on the CHP Facility, potentially leading to project failure and loss of RES energy.

No Jurisdiction to Cap Biomass Generation 12. The Consumer Advocate further suggests that if the Board approves a rate of $320/MWh as recommended by the ANSS, the Board should set a cap of no more than 8MW. 1 Decision, NSUARB-P-128.10, 201...

AI summary The Consumer Advocate suggests capping biomass generation at 8MW if the Board approves a $320/MWh rate. However, the Board argues it lacks jurisdiction to impose such a cap, as the Electricity Act and Renewable Electricity Regulations do not grant this power. The COMFIT program is inherently self-limiting, and the Department of Energy has reduced the biomass cap to 350,000 dry tonnes per year.

manner, 31 32 b. An access guarantee requirement is introduced that 33 NSPI connect a certain MW capacity of COMFIT 34 projects by 2015, with grid upgrade costs following 35 on NSPI, 1 9 15 23 34 - 2 2. These issues of grid access must be...

AI summary The text discusses the need for an access guarantee requirement for COMFIT projects in Nova Scotia, emphasizing the importance of resolving grid access issues through transparent grid information resources, such as an online mapping tool, to boost investor confidence and support the development of renewable energy projects.

eferred to as "Biomass CHP" or "CHP". - [18] The Regulations also contain the following provisions relating to the generation capacity of various facilities: - 3(1) In the Act and these regulations, "developmental tidal array" means a gene...

AI summary The document outlines provisions in the Renewable Electricity Regulations, including definitions for tidal generation facilities and restrictions on biomass and wind power capacity. It specifies limits on primary forest biomass usage and feed-in tariff approvals for small wind power facilities.

5.5 Consideration of tariffs in other jurisdictions - [61] In assessing whether the proposed COMFIT tariffs are reasonable, Synapse, in addition to considering stakeholder feedback, compared the proposed tariffs "...to FIT prices adopted i...

AI summary The document discusses the evaluation of the proposed COMFIT tariffs in Nova Scotia by comparing them to FIT rates in other jurisdictions like Vermont and Ontario. Key differences include tax credits in the U.S., ownership requirements in Vermont, and project size eligibility. The Province supports Synapse's benchmarking approach, emphasizing the importance of considering these differences when assessing tariff reasonableness.

6.2.1 Submissions [71] In developing proposed tariff rates under the COMFIT models, Synapse did not make any specific assumptions about the project ownership. As noted earlier in this Decision, the approach that was adopted was to determin...

AI summary Synapse developed COMFIT tariff rates using a 'typical cost' approach, assuming no specific project ownership. The Board approved this method, but Synapse also considered the impact of different ownership structures on cost of capital and income tax treatment. Taxable and non-taxable project statuses significantly affect COMFIT rates, with larger impacts observed for tidal projects.

9.1.1 Findings on Definition [151] The Board finds that for a CHP facility to be entitled to a COMFIT it must produce both heat and steam, and that the primary purpose of the plant is to supply a steam host. [152] The Board also finds that...

AI summary The Board determines that a Combined Heat and Power (CHP) facility must produce both heat and steam with the primary purpose of supplying steam to a host, and that tariff costing for a typical CHP plant should be based on producing approximately 2MW of electricity.

[212] ANSS, in its reply submission stated: 30. Likewise, the risk of undue costs being borne by ratepayers is tempered by the reality that only a limited number of CHP Facilities will be likely to participate due to inherent limitations i...

AI summary ANSS argues that the risk of ratepayers bearing undue costs is limited due to the expected low participation of CHP facilities, constrained by system limitations and a biomass cap in the Act and Regulations.

10.1 Submissions [235] Synapse proposed a tariff of $652 per megawatt hour for in-stream tidal projects. They based this tariff on a 500 kilowatt installation employing one or more instream tidal generators. Synapse assumed total project c...

AI summary Synapse proposed a $652/MWh tariff for in-stream tidal projects, citing high costs and technology immaturity. The Consumer Advocate suggested a lower rate of $398/MWh. Mr. Couture supported the higher rate but raised concerns about uncertainties in tidal power. The Province suggested tariff degression and deferred detailed consideration to future reviews.

12.1 Distribution system capacity [253] During the proceedings, the parties made several references to limited capacity being available on certain distribution feeders, which could restrict the number or size of generators that could be co...

AI summary During the proceedings, parties highlighted concerns about limited distribution feeder capacity affecting generator connections. The EAC questioned Synapse on the importance of transparency in grid capacity information for COMFIT project development, with Synapse affirming that public availability would improve efficiency by removing barriers related to grid congestion visibility.

[254] Brian Giroux also addressed this matter with the Synapse panel: '" did you guys do any analysis of the space within our distribution system to see if, in fact, there was room for some of these classes or some of these projects at all...

AI summary Brian Giroux raised concerns about the lack of analysis on distribution system capacity for COMFIT projects. The EAC recommended a transparent grid information resource, while NSPI argued that current processes already provide sufficient information. The Board agreed that public capacity information would help developers and directed NSPI and municipal utilities to create and maintain such a resource by September 30, 2011.

[286] The Board adopted the following tariffs recommended by Synapse for the five classes of renewable low-impact electricity noted below, with the changes as directed by the Board in this Decision: - Wind power projects greater than 50 kW...

AI summary The Board approved Synapse's recommended tariffs for various renewable energy projects, with specific adjustments. The tariffs are set for 20 years, and a review of COMFIT tariffs is scheduled in three years. NSPI and municipal electric utilities are directed to provide publicly available information on generation interconnection capacity and file annual reports on COMFIT program participants.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MR. VOGEL : I'll try and be brief. 1 NSUARB-BRD-E-R.10 Page 285 THE CHAIR: No, I didn't mean to hurry 2 My question is with respect to this 3 precedent of the claimed reasons by NSPI in their...

AI summary The discussion centers on the 20-megawatt cap on net metering imposed by NSPI, citing distribution capacity constraints and inability to guarantee connection requests. The Chair questions whether this precedent would raise perceived risks for COMFIT's interconnection and equity through debt lending. Mr. Keith responds that a project would confirm capacity and interconnection queue placement before financing, thus not necessarily raising the cost of capital.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS You know, I'm a fisherman. You want 1 NSUARB-BRD-E-R.10 Page 301 to find good bait, you want to cast it out there and get 6 I'm assuming that the people who did the analysis of the 7 availabl...

AI summary The text includes a portion of a regulatory proceeding with participants discussing the analysis of available capacity and the implications of setting rates if there is insufficient capacity. There is also a mention of cross-examination and the involvement of Synapse Energy Economics.

- have any disagreement with. Page 372 NSUARB-BRD-E-R.10 1 In general, would you be able to 2 comment on whether they're gross capacity factors or net 3 capacity factors? 4 MR. RICKERSON: In the model, in the 5 margins it says "net of plan...

AI summary The discussion revolves around the distinction between gross and net capacity factors in a model, with the model using net capacity factors after accounting for plant availability and other loss factors. The model's approach was based on stakeholder consensus, and the net capacity factors range from 26% to 32% according to different reports.

- That difference, there's a - transformation in voltage between those two differences - which can also add to the electrical losses. - In addition, that distance, if you're - assuming 60 metres, well, then there's likely not going to - be...

AI summary The discussion focuses on the impact of distance on electrical losses in power lines, with a specific example of how losses increase with longer distances. The Chair references the Hatch Report and asks about capacity factors, but the witnesses are unable to provide a definitive answer.

- representative of appropriate gross capacity factors NSUARB-BRD-E-R.10 - rather than net, and that the uncertainty regarding the

AI summary The text discusses the consideration of appropriate gross capacity factors rather than net, highlighting uncertainty in the process. It references a specific board document (NSUARB-BRD-E-R.10) and touches on regulatory considerations related to capacity factors.

- interconnection specifically of which side of the - transformer the meter will be on is a significant unknown. - I mean, it's up to 5 percent. That's 5 percent of - revenue. It's a direct effect on revenue. - THE CHAIR: I guess what I'm...

AI summary The discussion focuses on the uncertainty regarding the location of a meter on a transformer and its impact on revenue, as well as the importance of accounting for losses in capacity factor models used by Nova Scotia Power.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS version of this exhibit, as an undertaking, we'd like to Page 406 NSUARB-BRD-E-R.10 1 instead of holding up the whole group. 2 Okay. MR. KEITH: 3 MR. DOEHLER: So if I understand, the 4 number...

AI summary The discussion revolves around the capacity factor (COMFIT) and the ability of different community groups, including municipalities and First Nations, to participate in the program. The witness explains that a representative midpoint was used to model participation, rather than considering each group's individual constraints. The conversation also includes an introduction from a representative of a wind energy company involved in projects in Nova Scotia.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS exposed to so far in my career, 2-megawatt projects just 1 NSUARB-BRD-E-R.10 Page 693 aren't economic, primarily for the economics of scale 2 reasons that we've discussed earlier. 3 MR. OUTHO...

AI summary The discussion revolves around the economic feasibility of 2-megawatt projects, with the witness stating that such projects are not economically viable due to scale issues. The witness clarifies that while they have worked on smaller natural gas and biomass projects, they have not been involved in any 2-megawatt projects or projects in Nova Scotia prior to this.

Nova Scotia Power. Page 930 NSUARB-BRD-E-R.10 1 Most of the projects which are to come 2 have either recently or are to come online with Nova 3 Scotia Power are in areas of the province which are noted 4 for their high capacity factor. 5 I...

AI summary The discussion centers on the capacity factors of wind energy projects in Nova Scotia, with concerns raised about whether projects in high-capacity areas may distort evidence and affect the relevance of proposed adjustments. The Hatch Report is referenced, noting that no regions have lower capacity factors than estimated by Synapse. A trade-off between resource distribution and efficiency is highlighted, and the use of COMFIT for certain projects is mentioned.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS difference, but there may be some, depending upon how you 2 MR. PYNN: Okay, that's all I have. 14 reasonable thing from a market perspective? 15 MR. CHERNICK: Well, again, not 16 necessarily...

AI summary The discussion revolves around the feasibility of financing community projects using municipal, university, and community funds, and the capacity factors of various locations as outlined in the Hatch Report.

- percent. NSUARB-BRD-E-R.10 Page 1029 2 question, that you think that there's evidence that a 37 3 percent capacity factor exists to make you think that 4 that's the one that the Board should be using in a 5 reasonable fashion. Is that co...

AI summary The discussion revolves around the use of a 37 percent capacity factor for renewable energy projects, with the question of whether this is based on actual production data or theoretical projections from unfunded projects. The witness clarifies that the data comes from filings by project proponents and is used by NSPI for compliance with its renewable electricity standard.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS inputs, is it appropriate to consider the cost of putting 1 a plant on the ground in practice or in theory? 2 MR. COUTURE: It's necessary to 3 consider the costs that a real project would inc...

AI summary The discussion centers on the challenges of obtaining debt financing for biomass CHP projects, citing factors such as project size, inexperience, fuel volatility, grid connection delays, and reliability concerns. The witness acknowledges these challenges but suggests that while debt may be available, it would likely come with more stringent terms.