Topic:"Cost Considerations" in M03632

23 Q. HOW DO ASSUMPTIONS ABOUT THE OPERATION OF A CHP PLANT AFFECT 24 THE COST OF ELECTRICITY? 25 A. They affect the COMFIT rate in three ways. First, the equipment needed to install a 26 system that can generate electricity when steam is...

AI summary Assumptions about the operation of a CHP plant influence the COMFIT rate through equipment costs, fuel use, and capacity factor. Condensing turbines require more expensive equipment and consume more fuel, increasing electricity costs, but they also have a higher capacity factor, which can lower the tariff rate by spreading fixed costs over more electricity generated.

26 Q. WHAT HAVE YOU ASSUMED ABOUT OPERATING COSTS FOR HYDRO 27 PROJECTS? 28 A. We assume $50,000 per year for equipment O&M and $157,250 per year for "all-in" 29 O&M, including insurance and property taxes. The $50,000 figure includes the...

AI summary The respondent assumes annual operating costs for hydro projects, including equipment O&M at $50,000 and 'all-in' O&M at $157,250, based on data from the Vermont FIT proceeding and a Hatch Energy report, as well as discussions with Seaforth Engineering.

24 Q. WHAT HAVE YOU ASSUMED ABOUT OPERATING COSTS FOR TIDAL 25 PROJECTS? 26 A. We have assumed $75,000 in routine O&M, calculated as $150 per kW. We also include 27 a $62,500 major maintenance event every 6 years. The Ernst & Young study e...

AI summary The respondent assumes routine O&M costs of $75,000 per tidal project, based on $150 per kW, and includes a $62,500 major maintenance event every 6 years. These assumptions are informed by an Ernst & Young study and a developer's detailed business plan indicating lower operating costs.

3. Line Extensions/Upgrade Costs - Estimated cost for line extensions (installed): $55,000 per kilometer (2011$) - Average for In-service Projects (Table A: Actual): $54,000 (2005$ to 2010$) - Typical line extension length is closer to 1 k...

AI summary The document provides estimates and averages for line extensions and distribution upgrade costs, noting variations in project sizes and cost per kilometer over different years.

Table 2. Cost and Performance Assumptions for Wind ≤50 kW ($2012) As t io su m p n Va lu e Ca lc la t io u n Eq i ty Co ts d Fe u s an es $ 6, 7 2 0 4 % f t he i ty lue o e q u va Co In te t Du ing tru t ion re s r ns c $ 9, 3 7 7 ( Co ) (...

AI summary Table 2 outlines the cost and performance assumptions for wind energy systems with a capacity of ≤50 kW, including equity costs, installation costs, total project costs, and operational expenses, calculated for the year 2012.

Existing Boiler Replaced in Year 10 in Steam-Only Scenario As t io su m p n S te -O ly am n Sc io en ar C H P Sc io en ar Ca lc la t io u n In te t ion rc on ne c $ 0 $ 1 9 9, 0 0 0 In t a t ion ( Ex h i b i t F ) p u ss um p se e M in te...

AI summary The document presents a comparison of financial figures between a steam-only scenario and a combined heat and power (CHP) scenario in the context of replacing an existing boiler in year 10. It includes various cost categories such as interest, maintenance, working capital, debt service, and debt coding fees.

03-01-2011 Nov a S ia C OM FIT Mo del cot Win d ≤ 50 kW Ca sh Flo w W ork she Top et: Syn e E aps xhi bit I h O Majo r Ma inte ce R Fun ded Thr tion nan ese rve oug pera s Beg innin g Ba lanc e Fun ding Rele of F und ase s End ing Bala nce...

AI summary The text presents a table with headings related to financial and maintenance information, including terms such as 'Major Maintenance Funded Through Reserves,' 'Beginning Balance,' 'Funding Release,' and 'Ending Balance.' It also includes terms like 'Major Maintenance Costs' and 'Occurrence' for different events. The table appears to be related to financial planning and budgeting for maintenance activities.

Total Nov a S ia C OM FIT Mod el cot Lar Win d C ge ash Flo w W ork she et: Top Syn aps e E xhi bit J Expe nses Fuel Cos t 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 O&M (55,0 00) (56, 056) (57, 132) (58, 229) (59, 347) (60, 487) (61, 648) (6...

AI summary The document presents a table showing expenses, specifically fuel costs and operations and maintenance (O&M) costs, for various years. O&M costs are listed in negative numbers, indicating expenses, and increase over time.

Scenarios in $2012 Va lue fo r S On ly tea m- Gr s V alu e f CH P os or Ne t V alu e f CH P or Steam energy 117852.1344 Electric Energy 43115 Fuel Use 313045 Biomass CHP ( (condensinc ı turbine: : new boiler in steam-onl v scenario in vear...

AI summary The document presents a table with various financial and operational data related to energy scenarios in 2012, including steam energy, electric energy, fuel use, and biomass CHP. It includes assumptions such as general inflation factors, capital costs, reserves, financing details, and project cost calculations, all net of a steam-only scenario.

Synapse Exhibit L Assumptions: Notes: Operating Inputs Net Generator Capacity (MW) 1.00 Energy Production: Net Capacity Factor Net of plant availability and other loss factors Net Output in MWhs 4,818 Annual Operating Expenses Annual Fuel...

AI summary This exhibit outlines financial and operational assumptions for a project, including net generator capacity, annual operating expenses, revenue assumptions, and tax rates. It includes details on fuel costs, maintenance, and tax implications, as well as metrics such as the 20-year equity IRR and debt service coverage ratio.

Synapse Exhibit M Assumptions: Notes: Operating Inputs Net Generator Capacity (MW) 0.50 Energy Production: Net Capacity Factor 37% Net of plant availability and other loss factors. Net Output in MWhs 1,621 The of plant availability and oth...

AI summary This exhibit outlines operating inputs and assumptions for a project, including net generator capacity, energy production, annual operating expenses, and revenue assumptions. It includes metrics such as net capacity factor, annual fuel cost, and return on investment metrics like 20-year equity IRR.

Yearly$Costs$and$Financial$Structure: - ! 60%"debt @"8%"=""$3"million""for"15"year"(approx."yr.)""""""""""""$"""345,000/yr."" - ! Reserve"Fund :"one"year"of"costs"$675,000,"100%""borrowed" as"part"of"finance,"plus"finance"fees"="$700,000"@...

AI summary The document outlines the yearly costs and financial structure for a project, including debt, reserve fund, outside equity, operating costs, and miscellaneous expenses, totaling $775,000 per year before any profit share for the CEDIF.

- A BFB Boiler Budget Price - B Steam Turbine Budget Price - C Financial Analysis

AI summary The text lists items related to a financial analysis, including the budget prices for a BFB Boiler and a Steam Turbine.

1 EXECUTIVE SUMMARY The purpose of this report is to evaluate the feasibility of installing an 8 MW gross (7 MW net) biomass cogeneration system in Antigonish. This system would supply electricity to the grid as well as steam to the existi...

AI summary This report evaluates the feasibility of installing an 8 MW biomass cogeneration system in Antigonish, Nova Scotia. It outlines technical and economic considerations, including a 13% return on equity if electricity is sold at 0.213$ per kWh. The report also highlights benefits such as local job creation and reduced dependence on fossil fuels, and references the use of high-efficiency boilers and sensitivity analyses around fuel costs and electricity prices.

COMMENTS - .1 Scale. At 8 MW (7 MW net) electrical output, the specific capital cost is high. This plant will cost approximately $4,500,000 per 1 MW electrical output. Larger biomass plants can be built for $1.5 - $2.0 million per MW. - .2...

AI summary The comments highlight the high specific capital cost of the biomass plant at $4,500,000 per 1 MW electrical output, the high operating labour costs due to 24/7 staffing requirements, and the potential high cost of fuel, as whole tree chips may not be available and sustainable hardwood is expensive. A sensitivity analysis was conducted on fuel cost, electrical sale price, and capital contribution.

6.4 Sensitivity Analysis The financial model was run by varying the fuel costs, electric sales cost and capital costs to see what impacts they had on Return on Equity. Return on Equity vs Delivered Fuel Price Figure 8 Sensitivity Analysis...

AI summary A sensitivity analysis was conducted to evaluate the impact of varying fuel costs, electric sales cost, and capital costs on Return on Equity (ROE). The analysis includes visual representations of how changes in delivered fuel price affect ROE and how electricity sales price interacts with fuel price for a 13% ROE.

(All costs in 2011 CAN$) Operating and Maintenance - Fixed Manager 125,000 Admin. Personnel 40,000 Maintenance Contract 200,000 Operators13 total @85K 1,105,000 Consultants 50,000 Insurance 348,000 General Supplies 50,000 Miscellaneous 50,...

AI summary The text outlines operating and maintenance costs for a project in 2011, including fixed costs such as salaries, contracts, insurance, and supplies. Fuel costs are also detailed, with a total first-year cost of $5,555,000 and an annual escalation rate of 2.0%.

100.0% Total annual revenue - amount in A/R at end of year 50 8.3% Total potential revenue 12,718,915 12,947,855 13,180,917 13,418,173 13,659,700 13,905,575 14,155,875 14,410,681 14,670,073 14,934,134 15,202,949 15,476,602 15,755,181 16,03...

AI summary The text provides a table detailing financial data for a regulatory proceeding, including total annual revenue, potential revenue, gross revenue, and various expenses such as operating and maintenance, interest on debt, and depreciation and amortization. The data spans multiple years and includes percentages of available revenue.

3 Q: Please summarize your review of the Synapse proposal. 4 A: I have two major complaints about the Synapse report, and a few minor points. 5 The first major point is that Synapse did not interpret its charge from the Board 6 to include...

AI summary The reviewer has two major complaints about the Synapse proposal: it failed to consider the impact of capacity development on rates and misinterpreted the concept of 'community' by excluding community support. The reviewer also highlights technical competence but notes several errors and assumptions that require attention.

2 Q: How does the Synapse team view the effect of community involvement in 3 development of COMFIT projects? - 4 A: Synapse assumes that community involvement adds to the costs of project 5 development, and ignores almost all the benefits...

AI summary The Synapse team argues that community involvement in COMFIT projects increases costs and risks, leading to higher required returns and rates. They assume community investors behave like traditional capital market investors, ignoring the unique aspects of community ownership and its potential benefits. Synapse also contrasts COMFIT projects with purely profit-driven initiatives like Heritage Gas.

6 For community renewables projects, major parts of the installation process 7 are likely to be beyond the capabilities of local firms, but grading access roads, 8 erecting utility poles and stringing conductor for the customer portion of...

AI summary The text discusses the potential for local involvement in community renewables projects, noting that certain tasks can be handled by local organizations and volunteers, which can reduce development costs. It also references Synapse's estimate of development cost reductions and their impact on revenue requirements for large wind and tidal projects.

6 VIII.Potential Rate Effects of COMFIT - 7 Q: Please describe your analysis of the rate impacts from implementation of 8 the COMFIT program. - 9 A: I estimated the impact on the Company's system-average rate from the purchase 10 of power...

AI summary The analysis estimates the impact on the Company's system-average rate from implementing the COMFIT program, considering both increased costs from COMFIT payments and reduced power-supply costs from purchases of renewable energy.

18 Q: Are there any of the COMFIT technology categories that particularly 19 concern you? - 20 A: Yes. It would be difficult to justify imposing on consumers the exorbitant prices 21 that Synapse proposes for small wind and tidal contracts...

AI summary The respondent expresses concern over the high proposed COMFIT rates for small wind and tidal projects, arguing that these rates are not justified given the significantly lower costs of wind energy and the environmental costs of coal. They also mention potential benefits of small wind and tidal projects, such as promoting household and small business participation and attracting tidal-power development in Nova Scotia.

- "Demand-Side Bidding: A Viable Least-Cost Resource Strategy" (with John Plunkett and Jonathan Wallach), in Proceedings from the NARUC Biennial Regulatory Information Conference , September 1990. - "Incorporating Environmental Externaliti...

AI summary The document text lists various academic publications and conference proceedings related to energy efficiency, utility planning, and environmental externalities, authored by individuals and organizations in the energy sector. These works explore topics such as demand-side management, least-cost planning, and the economic evaluation of energy resources.

ADVISORY ASSIGNMENTS TO REGULATORY COMMISSIONS District of Columbia Public Service Commission, Docket No. 834, Phase II; Least-cost planning procedures and goals; August 1987 to March 1988. Connecticut Department of Public Utility Control,...

AI summary The text lists two regulatory commission advisory assignments: one involving the District of Columbia Public Service Commission's Least-cost planning procedures and goals from 1987 to 1988, and another involving the Connecticut Department of Public Utility Control's Rate design and cost allocations from 1988 to 1989.

industrial model specification, documentation of price forecasts and wholesale forecast. 18. MDPU 558; Western Massachusetts Electric Company Rate Case; Massachusetts Attorney General; May 1981. Rate design including declining blocks, marg...

AI summary The text provides references to various regulatory proceedings and rate cases from multiple jurisdictions, discussing topics such as rate design, conservation programs, revenue allocations, and cost calculations. These references include cases from Massachusetts, New Hampshire, and Illinois, among others.

NOTE: Green Fields are the assumptions differences which we believe to bee more reasonable. TEMPLATE COMPARISON TO CBCL ST> FX BIOMASS REPORT CBCL MODEL CBEX MODEL EXHIBIT-B-5 Assumptions Annual Electricity Sold Annual Steam Sold Annual Fu...

AI summary The text presents a comparison between the CBCL model and the CBEX model, focusing on assumptions related to annual electricity and steam sold, fuel prices, investment, inflation rates, debt/equity ratios, and return on equity. Green fields are noted as assumptions that are considered more reasonable.

- investigations have uncovered a problem that may impact more than my proposed projects. There is little or no room for feed in. - 16. Sub stations throughout the area are unable to accept much power. Many substations cannot accept more t...

AI summary The text discusses challenges in implementing renewable energy projects in Nova Scotia due to limited substation capacity, which restricts project sizes and may hinder the achievement of a 100mw target. Additional costs not captured in existing models are also mentioned, and the author requests adjustments to the Synapse model to account for these constraints.

1. The text above is taken from an email of February 9, 2011 from Synapse to Jonathan Barry of Seaforth Energy which included a Word document attachment, the text of which appears exactly as above. Nova Scotia Utility & Review Board FIT Mo...

AI summary The document outlines the assumptions and financial details for a small wind project under the Nova Scotia Utility & Review Board FIT Model. It includes capital costs, operating expenses, inflation factors, and energy production estimates.

Q. WHAT ARE YOUR FINDINGS AND RECOMMENDATIONS? A. Synapse assumed 60% debt 1 , 9.5% cost of debt 2 , and 13% after-tax cost of equity 3 . In my opinion it is unrealistic to assume such a project will secure 60% of its financing through deb...

AI summary The expert recommends adjusting the capital structure and return on equity assumptions for a biomass CHP project, arguing that 60% debt financing is unrealistic and suggests 100% equity. A 17.5% return on equity is recommended without an effective fuel cost hedge, or 13% with one.

DEBT-EQUITY RATIO

AI summary The section introduces the topic of the debt-equity ratio, which is a financial metric used to assess a company's leverage and financial health. It is relevant in regulatory proceedings as it impacts cost-of-capital considerations and rate-setting decisions.

Q. WHAT IS THE BASIS FOR YOUR OPINION THAT 100% EQUITY IS REALISTIC FOR A 2.0 MW BIOMASS CHP PROJECT? A. Synapse assumes a capital structure that is 40% equity and 60% debt for a 2.0 MW biomass-fired facility. 4 Due to the risks of biomass...

AI summary The response argues that a 100% equity capital structure is realistic for a 2.0 MW biomass CHP project due to the risks and small size of the facility, while questioning the viability of debt financing. Synapse proposes a fuel cost index, but B&Co doubts its effectiveness in mitigating fuel cost risk.

Q. PLEASE CONTINUE TO EXPLAIN WHY 100% EQUITY FINANCING Is REALISTIC FOR A 2.0 MW BIOMASS CHP PROJECT? A. Financing a biomass-fired power project presents unique and difficult challenges. In particular, the magnitude and potential volatili...

AI summary The response explains that 100% equity financing is more realistic for a biomass CHP project due to the high volatility of fuel costs, which makes debt financing risky. Fuel costs are a major portion of operating expenses and are difficult to hedge, unlike natural gas projects. B&Co highlights the lack of reliable long-term fuel contracts and the financial instability of many biomass fuel suppliers.

Q. WHAT IS CAPM AND YOUR CAPM-RELATED EVIDENCE? A. Although it is based on strong assumptions and the subject of much controversy, the capital asset pricing model ("CAPM") is an often-employed theoretical method of estimating the cost of e...

AI summary The response explains the Capital Asset Pricing Model (CAPM), which is used to estimate the cost of equity. It notes that while CAPM is widely used, it is based on strong assumptions and is controversial. The NSUARB has previously considered CAPM-related evidence in rate approval proceedings. The speaker presents CAPM evidence for completeness but considers market-based evidence more reliable.

Beta, ß: - A statistical measure that evaluates the risk of a particular security relative to the systematic risk of a market portfolio of stocks. When CAPM is employed to estimate an unlevered cost of capital, ß must reflect the underlyin...

AI summary The text discusses the use of beta (ß) in financial analysis, particularly in the context of biomass CHP projects. It highlights that beta values for companies in the forest, lumber, and housing industries tend to be high, while utilities have lower betas. Variability in biomass project EBITDA is influenced by fuel costs tied to these industries.

Unsystematic risk premium, Ru: - A controversial additional risk premium associated with investment-specific factors that cannot be diversified or hedged away. - While power projects do involve many risks that are difficult to manage, B&Co...

AI summary The text discusses the unsystematic risk premium (Ru) in power projects, noting that it is a controversial additional risk premium not easily diversified or hedged. B&Co acknowledges the difficulty in estimating this premium and provides an estimated cost of equity using the CAPM model, which includes adjustments for development and construction risks, leading to a final estimate of 17.5%.

Q. WOULD YOU PLEASE SUMMARIZE YOUR FINDINGS? A. Yes. I disagree with Synapse' assumed 60% debt, 9.5% cost of debt, and 13% after-tax cost of equity. In my opinion, 100% equity is a realistic capital structure for 2.0 MW biomass CHP project...

AI summary The respondent disagrees with Synapse's assumptions about the capital structure and cost of capital for 2.0 MW biomass CHP projects, suggesting 100% equity is more realistic and a 17.5% after-tax average cost of capital is appropriate without an effective fuel cost hedge.

Q. Please summarize your recommendations and conclusions. - A. The following are general statements summarizing the more detailed explanations provided herein and in the attachements. - i. A condensing / extracting turbine model should be...

AI summary The recommendations include using a condensing/extracting turbine model for small steam users, splitting steam generation costs between users, adjusting Synapse's capital and O&M cost estimates, including parasitic load in the model, and correcting boiler efficiency from 80% to 69.9% for accurate fuel cost calculation.

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. What is the calculated steam usage of the facility? - The steam usage of the condensing / extracting facility will include the steam to the process host, the steam used in the deaerator, and the steam used in turbine blade cooling in th...

AI summary The calculated steam usage of the facility includes steam for the process host, deaerator, and turbine blade cooling, totaling a 25,000 pph boiler design. The extraction steam flow to the host facility is assumed to be returned as condensate at 95% efficiency. Only one feedwater heater is used due to low ROI for additional heaters.

Table IV: Non-fuel O&M Cost Comparison of Facility Synapse ESI Model model $/unit Power Cost ($000/yr) ‐ parasitic 0.0 102.9 0.08822 $/kw Water Cost ($000/yr) 0.0 30.5 1.00 $/000gal Chemical Cost ($000/yr) 0.0 13.7 0.45 $/000gal Sewer Cost...

AI summary Table IV compares non-fuel operating and maintenance (O&M) costs for a facility using the Synapse and ESI models. The table includes costs for power, water, chemical, sewer, landfill, and maintenance, with totals and unit prices provided for each category.

OPERATING AND MAINTENANCE COST ESTIMATE PREDICTED OPERATING AND MAINTENANCE COSTS FOR FACILITY CATEGORIES DESCRIPTION Hours Per Year 5,256 Capacity factor 60% Process Steam Demand lb/hr 21,190 $40/metric tonne (See Note 1) Annual Steam Con...

AI summary The document provides operating and maintenance cost estimates for two facility options, detailing fuel costs, non-fuel operational expenses, and commercial costs such as insurance and property taxes. It includes data on steam consumption, capacity factors, and annual maintenance costs for both options.

A. In part. - 1. Significant components of the capital cost estimate for the CHP plant appear to be missing from the Synapse estimate as identified in the ESI Study. - 2. Costs for producing the extraction steam in the Synapse model are fu...

AI summary The document outlines several discrepancies and recommendations regarding the capital cost estimate for a CHP plant. Key issues include missing components in the Synapse estimate, incorrect allocation of steam costs, absence of parasitic power losses, and overestimation of boiler efficiency. ANSS provides alternative figures and recommends adjustments to financing assumptions and equity cost based on expert testimony.

Q. What has the ANSS done to understand the costs associated with constructing and operating a CHP plant? A. In order to determine an appropriate CHP COMFIT rate, a sufficiently detailed study was required to determine critical cost compon...

AI summary The ANSS engaged ESI Inc. to conduct a detailed study on the costs of constructing and operating a biomass CHP plant in order to determine an appropriate CHP COMFIT rate.

Q. Do you believe the "Net of steam-only scenario" assessment performed by Synapse is appropriate? A. No. We believe the "Net of steam-only scenario" costs should be split evenly as previously outlined and not allocated 100% to the heat us...

AI summary The respondent disagrees with the 'Net of steam-only scenario' assessment by Synapse, arguing that costs should be split evenly rather than allocated entirely to the heat user, which they consider a fair method for calculating the COMFIT rate.

Q. Do you believe that the "Net of steam-only" costs are accurately estimated? A. The "net of steam" cost analysis requires an evaluation of the boiler costs. ESI has not performed this analysis and we therefore cannot positively identify...

AI summary The respondent questions the accuracy of Synapse's 'Net of steam-only' cost estimates, citing omissions in the CHP plant analysis and suggesting Synapse may have underestimated the costs. ESI claims it can provide a more accurate estimate and recommends further investigation.

Q. Is this accurate in your experience? A. No. All boilers operated by ANSS members are operated by one 4th class boiler engineer. The labour cost of a 4th class boiler engineer in the experience of Marwood is about $40,000 per year. There...

AI summary The respondent disagrees with Synapse's cost estimate for the 'boiler only scenario,' stating that it is approximately $260,000 too high, based on the experience that all ANSS member boilers are operated by a single 4th class boiler engineer costing about $40,000 annually.

Q. What mechanism would the ANSS suggest to deal with the fuel risk? - A. We would suggest two possible solutions to mitigate fuel risk: - 1. A fuel adjustment mechanism whereby the cost of fuel is simply passed through to the electricity...

AI summary The ANSS suggests two mechanisms to mitigate fuel risk: a fuel adjustment mechanism similar to NSPI's approach and a CPI/Diesel index with periodic re-openers to adjust fuel prices. The re-opener would require CHP COMFIT participants to submit fuel cost data and ensure consistency and market incentives for cost efficiency.

Biomass Gasification In addition to differentiation based on size and renewable energy type we feel that it is important to consider differentiation based on alternative technologies within a renewable energy type. We are specifically refe...

AI summary The text discusses the advantages of biomass gasification for CHP COMFIT, including higher efficiency, reduced biomass fuel use, lower emissions, and potential cost competitiveness with conventional systems as fuel prices rise. It argues for a separate COMFIT to incentivize gasification technology over conventional systems.

Data Sources The Vermont model appears to provide reasonable sources to derive data for the model. It is important that capital cost estimates, O&M costs, capital structure estimates, borrowing rates and all other variables are drawn from...

AI summary The text discusses the importance of using current and local data for modeling, particularly for Combined Heat and Power (CHP) generation costs in Nova Scotia. It outlines plans to conduct an engineering study with a local firm and consult the Canadian financial community and the forestry industry to determine key parameters such as fuel costs and capital structure.

t history. We can see this in Figure 1.0 which depicts the lumber market over the past 10 years. Figure 1.0 Western SPF Lumber Price History USD per 1000 board feet If a sawmill is required to use a backpressure turbine and market conditio...

AI summary The document argues that requiring sawmills to use backpressure turbines is financially risky, as shutdowns due to poor lumber market conditions would lead to fixed costs for the power plant that cannot be covered by revenue. This would compound existing losses and make CHP projects unfeasible under current market conditions.

ishing an auditor to review COMFIT project's actual costs. A weakness of this approach is that it accounts for the cost of the labor and fuel needed to harvest biomass but not the biomass fuel itself. Hiring a third‐party auditor to audit...

AI summary The Alliance of Nova Scotia Sawmillers (ANSS) discusses the weaknesses of hiring an auditor to review COMFIT project costs, noting that this approach does not account for the cost of biomass fuel itself. It also highlights challenges in establishing a reliable market price for biomass fuel due to confidentiality. Synapse is still researching the appropriate mechanism to address fuel cost risk for biomass CHP developers.

ANSS IR 10. Reference p.10, preconstruction development costs (cell B5) Please describe all factors and data reviewed to estimate these costs including environmental engineering consultation, environmental impact study, site selection, con...

AI summary The entity provided a preliminary estimate of preconstruction development costs as 20% of Equipment and Installation costs, acknowledging that detailed research was not conducted prior to draft rate distribution. They are now researching these costs with stakeholders.

ANSS IR 11. Reference p.11, (cell B44 and Tax Depreciation Worksheet) - (a) Why is it assumed that biomass CHP plants benefit from accelerated depreciation while other technologies do not? - Answer: The biomass CHP rate was calculated assu...

AI summary The document addresses depreciation assumptions for biomass CHP projects under COMFIT, insurance cost assumptions for COMFIT projects, and the allocation of steam-related costs between host facilities and electric ratepayers. Answers clarify that accelerated depreciation applies to taxable corporations, insurance costs are based on preliminary data, and some steam benefits may be shared with ratepayers.

ANSS IR 14. Reference, p.15, and footnote 5 (a) Please provide a copy of the referenced US EPA, Biomass Combined Heat and Power Catalog of Technologies, September 2007 . Answer: We will distribute this with these responses. (b) Why did Syn...

AI summary The document discusses Synapse's use of 2006 EPA data for biomass CHP cost estimates, the escalation to 2009 dollars, and the collection of more current data from Canadian sources. It also addresses the reliance on verbal input from unnamed experts and the inclusion of turbine and installation costs in the equipment and installation estimate.

Answer: EPA 2007 estimates turbine O&M costs at $4.00 per MWh. For a turbine this small, this figure seemed low, and several people knowledgeable about steam turbines agreed and advised us to assume $5.00 per MWh. The figure used in the mo...

AI summary The text discusses cost estimates for various components of a turbine project, including O&M costs, major maintenance, fuel type, balance of electric plant, and installation. Assumptions and preliminary estimates are noted, with some figures subject to further research.

r research. It was calculated as 10% of the sum of turbine and balance of electric plant costs. (g) Please provide the underlying data and analyses to estimate fuel cost expense (FIT Model, line 19). Answer: The last row in Table 7 of our...

AI summary The entity provided data on fuel cost estimation, using a fuel cost of $3.50 per mmBtu and allocating 8% of total losses to electricity production. Annual fuel costs to electricity production were calculated as $74,709, with supporting data in Table 2.

4. Installed Cost – The experience has been $4.2 million On page 22 of the testimony, from line 21, nine entities are cited as having been consulted in order to inform Synapse's assumption of a $3.7 million total project cost. The only com...

AI summary The testimony highlights that Eon WindElectric Inc. and Watts Wind Energy have real-world experience with a 1.5MW wind project costing $4.2 million, which should be given more weight than the $3.7 million estimate based on consultations with nine entities, as Eon is the only entity with actual project experience.

tor like Nova Scotia"s. - 6. I believe that the debt rate assumed by Synapse, namely 8%, is in the right range, though some projects may be able to obtain lower than this based on a number of factors. However, based on experience in Ontari...

AI summary The text discusses the assumptions regarding debt rates and amortization periods for COMFIT projects, suggesting that an 8% debt rate is reasonable but 15-year amortization periods may be optimistic. It also highlights the importance of periodically revising financing costs, recommending an 18-month schedule for stability and predictability.

Outline of Significant Differences Between the Synapse Model and ANSS Model In cell B6 we can see the single biggest and most influential difference between the two models in the capital cost estimates between Synapse and ESI. On a per MW...

AI summary The text outlines key differences between the Synapse model and the ANSS model, including capital cost estimates, handling of steam-only scenarios, financing assumptions, plant size, capacity factors, fuel requirements, O&M expenses, and overall COMFIT prices. These differences significantly impact the financial and operational analysis of the project.

Items that increase the COMFIT price in the ANSS model that should be noted and addressed: 1. The capital cost estimate for the boiler in the "Value of Steam Only Scenario" was an estilnate from Synapse and we are comparing it to the ESI C...

AI summary The text discusses factors that may increase the COMFIT price in the ANSS model, including potential underestimation of capital costs for a boiler by Synapse compared to ESI estimates, and the omission of certain O&M costs in the Synapse model. These issues could significantly affect the rate calculation and require further assessment.

- 4. If ESI performed a study to determine the capital cost and O&M costs for an 18,000 pph boiler than one could address all ofthe above issues. Nova Scotia COMFIT Model Biomass CHP (condensing turbi Assumptions 10.00 Notes: General Infla...

AI summary The text discusses a study by ESI to determine the capital and O&M costs for an 18,000 pph boiler, which could address several issues. The table provides details on the Nova Scotia COMFIT Model, including assumptions, project costs, capital structure, and debt terms related to a biomass CHP project.

Scenarios in $2012 Scenarios in $2012 Value for Steam-Only Shared Value Steam Gross Value for CHP Net Value for CHP Property taxes $0 $3,567 Year-10 Turbine overhaul ($) $0 $152,880 $152,880 Year-10 Boiler overhaul ($) $0 $203,840 $203,840...

AI summary The text presents a comparison of financial scenarios in 2012, including costs and values associated with steam-only and combined heat and power (CHP) systems. It details expenses such as property taxes, turbine and boiler overhauls, fuel use, and project costs, with a focus on the differences between scenarios.

OPENING STATEMENT OF THE SYNAPSE CONSULTING TEAM Good morning Mr. Chairman, members ofthe Panel, other parties. We appear before you today to propose Community Feed-In Tariffs (COMFIT's). Our prefiled evidence presents our specific proposa...

AI summary Synapse Consulting proposes Community Feed-In Tariffs (COMFITs) with specific rates for wind, biomass CHP, hydro, and in-stream tidal projects. They developed the rates using a three-step utility ratemaking process, considering capital costs, operating expenses, and required revenues, and aligned their approach with relevant legislation and the Renewable Electricity Plan.

The Alliance ofNova Scotia SawlnillersOpeningStatell1ent Mr. Chair, Melnbersofthe Board, thank you for opportunity to provide this Opening Statement...The ANSS is a group ofsawmillers in the province of Nova Scotia with an interestin the d...

AI summary The Alliance of Nova Scotia Sawmillers (ANSS) presents an opening statement emphasizing the need for a reasonable rate to support biomass combined heat and power (CHP) projects. They collaborated with ESI Tennessee and Mr. Jeff Bodington to analyze engineering and financing aspects of a small CHP plant in Nova Scotia.

ass power projects. Mr. Bodington was asked to take into consideration all ofthe variables for a small CHP plant in the 2MW range and to determine what the terms offinancing would be. Capital Cost TheANSSworkhas demonstrated two areasofsub...

AI summary The text discusses differences in capital cost estimates and financing terms for a CHP plant between ANSS and Synapse. ESI argues that Synapse's lower capital cost estimate is due to not accounting for balance of plant costs, while Synapse's boiler efficiency estimate is higher than ESI's. Other O&M expenses are also not included in Synapse's analysis.

Table 1 – Differences Between ANSS and Synapse Differences Between ANSS and Synapse Item ANSS Synapse Capital Cost ($/MW) $6.56 million $3.77 million Equity Assumption 100% at 17.5% 40% at 13% Debt Assumption 0% 60% at 9.5% Labour ($/yr) $...

AI summary The text compares the capital cost and financing assumptions between ANSS and Synapse, highlighting that these differences significantly impact the COMFIT rate for small-scale biomass CHP plants. ANSS aimed to establish an accurate cost to support the construction of these plants, supported by expert evidence and analysis.

Biomass CHP (condensing turbine; new boiler in steam-only scenario in year 10) Assumptions Notes: , General Inflation Factor (revenue and expenses) 1 02% From NSPI 2009 IRP Update Capital Costs (Uses of Funds) 1.52% 1 1511 1401 1 2005 INF...

AI summary The document outlines the assumptions and financial details for a biomass CHP project with a condensing turbine and a new boiler in a steam-only scenario in year 10, including inflation factors, capital costs, and funding sources, which are all net of the steam-only scenario.

Nova Scotia COMFIT Model O tin Ye pe ra g ar Ca le nd Y ar ea r 0 20 10 1 20 11 2 20 12 3 20 13 4 20 14 Ot he r 0 0 0 0 0 M ajo r M ai nt en an ce An al De iat ion nu pr ec 13 ,52 7, 11 2 0 3, 27 4, 02 8 0 4, 91 1,0 42 0 2, 45 5, 52 1 0 1,...

AI summary The document presents a table outlining maintenance and occurrence expenses related to the Nova Scotia COMFIT Model over several years, highlighting major maintenance analysis and deviation classifications.

Scenarios in $2012 r S On Va lue fo ly tea m- Sh e S d V alu tea are m Gr CH s V alu e f P os or CH Ne t V alu e f P or De bt Clo sin Co & Fe sts g es $ 10 9, 64 6 $ 0 $ 0 C C Eq uity los ing & F ts os ee s $ 48 71 8 , $ 24 35 9 , $ 66 5,...

AI summary The text presents a table of financial scenarios from 2012, including values related to debt closure costs, equity losses, interest during construction, routine maintenance, ash disposal, water, sewer, and labor costs. These figures appear to be part of a financial analysis or planning process.

Mr. Livingston's Exhibit Mr. Livingston assumes that COMFIT hydro and wind projects can only be financed through a CEDIF, and performs some computations for a project half owned by a CEDIF and half owned by some market investor who demands...

AI summary The exhibit discusses Mr. Livingston's assumptions about financing COMFIT hydro and wind projects through a CEDIF, and critiques his calculations regarding reserve fund costs and debt service periods. Corrections to his model reduce the reserve fund cost and suggest a 4% return to the CEDIF, with tax credits increasing it to 9.5%. The exhibit also notes that Mr. Livingston's Black River Wind has signed contracts with NSPI at prices relevant to Synapse's proposed rates.

Mr. Pynn's Evidence Mr. Pynn suggests that large wind requires 10-year loan amortization, 20% interest during construction, equity "returns in excess of 20-30%," and a capital costs of $4.2 million, rather than Synapse's $3.7 million, base...

AI summary Mr. Pynn presents evidence that large wind projects require specific financial parameters, including 10-year loan amortization and high equity returns, citing the Watts Section CEDIF-financed plant as an example. He compares the Watts Section's costs and contract prices to Synapse's estimates, suggesting lower returns.

Nova Scotia Utility and Review Board In the Matter of: The Electricity Act and a hearing to determine Renewable Energy community based Feed -in Tariffs Opening Statement of Daniel Roscoe On behalf of Scotian Wind Fields Inc April t h or 8t...

AI summary Scotian Wind Fields Inc. presents an opening statement to the Nova Scotia Utility and Review Board, addressing concerns regarding the accuracy of assumptions in Synapse's Exhibit I, particularly regarding interconnection costs, O&M costs, and debt financing rates for community-based renewable energy projects. They argue that the 8% interest rate proposed by Synapse is too low and request a 10% rate, citing the lack of prior debt financing experience in Atlantic Canada for such projects.

5.4 Whether all potential projects should be economically feasible [57] The Board refers again to the general approach adopted by Synapse in developing COMFIT tariffs for the respective classes of electricity generation facilities. Synapse...

AI summary The Board acknowledges Synapse's approach to setting COMFIT tariffs, which balances cost-based rates with fostering project development. It emphasizes that not all projects will be economically feasible under the approved tariffs, as setting higher rates to ensure feasibility would contradict legislative goals of just and reasonable rates and reasonable development activity.

tenance reserve, debt service reserve and a working capital account. ... [Synapse Report, Exhibit B-1, p. 13] [80] financing: Finally, Synapse assumed that all capital projects would require interim ... We estimate interest during construc...

AI summary The document discusses Synapse's assumptions regarding financing for capital projects, including interest during construction and loan periods for various energy projects. It also highlights challenges to the cost of debt and return on equity, with Mr. Chernick arguing that Synapse overestimated financing costs for community projects and recommending adjusted COMFIT rates based on lower capital costs and returns for certain projects.

his approach may be an increase of wind turbine R&D in Nova Scotia to improve small wind turbines and associated projects to attain an improved capacity factor. [Seaforth Evidence, Exhibit B-7, p. 2] - [124] Scotian WindFields agreed that...

AI summary The text discusses concerns raised by intervenors regarding the assumptions made in Synapse's analysis of small wind systems, including O&M costs, interconnection costs, and general administrative expenses. Scotian WindFields and Seaforth provided alternative estimates and highlighted potential underestimations in Synapse's calculations.

8.2 Findings [130] With respect to the capacity factor, Synapse proposed a rate of 23%. The Board considers Seaforth's comments to be reasonable in terms of supporting the 23% recommendation. Based on its review of the evidence, the Board...

AI summary The Board accepts Seaforth's support for a 23% capacity factor for small wind projects. It adjusts Synapse's interconnection cost from $13,300 to $21,550 based on evidence from Scotian WindFields. The Board also increases Routine O&M costs from $1,642 to $4,500 annually, citing evidence from small wind operators. These changes are to be addressed in the Compliance Filing.

9.2.1 Findings on Cost Allocation [159] The Board finds that there are two methodologies being suggested for cost allocation: one based on incremental cost (an economic model), and one based on the ratio of the value of the outputs (an acc...

AI summary The Board is evaluating two cost allocation methodologies for Biomass CHP projects: incremental cost and output value ratio. Only incremental capital costs related to electricity production and operating costs beyond steam host requirements are eligible for consideration.

[163] When Synapse was questioned by Ms. Rubin about these differences, they responded: - Q: ... the balance of the plant, the sewer, HVAC, pre-engineering, building, painting, fire protection, water treatment, storage tanks, air compresso...

AI summary The document discusses discrepancies in cost estimates for CHP projects between Synapse and ANSS, with Synapse noting uncertainty in actual costs and ANSS pointing out the inconsistency in Synapse's capital cost assumptions for a 2-megawatt project compared to a 25- to 40-megawatt project.

9.3.1 Findings on Capital Costs [170] The opinion of Mr. Hayes, together with the analysis of costs per MW to construct a full CHP, is indicative that the capital costs for equipment and installation used by Synapse might be too low. Synap...

AI summary The Board questions the accuracy of Synapse's capital cost estimates for a biomass CHP project, noting that Mr. Hayes' analysis suggests they may be too low. While Synapse made adjustments based on intervenor input, the Board prefers a conservative approach to avoid overburdening ratepayers and accepts Synapse's base cost for the tariff calculation.

[188] Synapse projected operating costs were based on the following: Steam Combined Net Routine Maintenance ($/yr) $130.557 $173.264 $42.707 Labour ($) $305,760 $356,720 $50,960 General & Admin. $0 $0 $0 Insurance $9,691 $39,443 $29,752 Pr...

AI summary Synapse projected operating costs for different systems, including Steam, Combined, and Net, with details on routine maintenance, labour, insurance, and overhaul costs for year-10. The data is sourced from Synapse Report, Exhibit B-1, and Exhibit K.

[197] The potential labour cost misallocation was highlighted by ANSS in its closing submission: 45. Synapse has estimated that the labour to operate in the steam only scenario is $300,000 and that labour to operate in the CHP scenario is...

AI summary ANSS highlighted a potential misallocation of labour costs in Synapse's estimates, noting that Synapse overestimated the cost of operating boilers by $260,000. Synapse defended its high-granularity cost estimates, stating that they included specific costs like ash handling, and believed their recommendation was reasonable.

9.5.2 Findings on Non-Fuel Operating Costs [200] Because of the high aggregate approach taken by Synapse, the Board must take care in ascribing any precision to the components of any operating cost figure. Even with this limitation, the Bo...

AI summary The Board highlights concerns with Synapse's high aggregate approach to operating costs, noting that parasitic power and labour costs require further consideration. It suggests an adjustment for parasitic power based on a 5% difference between full parasitic power and a steam-only scenario. Additionally, the Board recommends increasing the labour cost differential between a 15 psi plant and a 600 psi CHP.

[213] Synapse also reviewed all of ANSS's costs and said: ... And when we plugged all of these assumptions into our model we came out with a rate of $330 per megawatt hour compared to the rate that we had proposed of 156. And when we looke...

AI summary Synapse evaluated ANSS's costs and found a proposed feed-in tariff rate of $330 per megawatt hour to be significantly higher than market rates in Ontario and Vermont. Synapse recommended a more conservative approach to setting the rate, balancing the risk of no project development against the risk of long-term overpayment.

Large Wind 8-2-11 no tax Page 1 Nova Scotia COMFIT Model Large Wind (Over 50 kW) Tota l Re ven ue 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 556 ,3...

AI summary The document presents a financial table related to the Nova Scotia COMFIT Model and Large Wind (Over 50 kW) projects. It shows total revenue, expenses, fuel costs, O&M site maintenance, finance G&A, and insurance costs over time. The table highlights increasing expenses and consistent revenue for the projects.

Page 2 Large Wind 8-2-11 no tax Nov a S ia C OM FIT Mo del cot Ca sh Flo w W ork she Bot et: tom Syn e C aps lian om p ce Lar Win ge d n o ta x Up-Front Maintenance (Half of year-one O&M)

AI summary The document contains a table with entries related to a financial model for a large wind project, including a row labeled 'Up-Front Maintenance' with a note indicating it represents half of the year-one O&M costs. The table appears to be part of a larger financial analysis, though the context is limited.

Page 2 Small Wind 8-2-11 no tax Sc CO No otia MF IT M ode l va Ca sh Flo w W ork she et: Bo tto m Sy nap Co se mp Sm lian ce all Wi nd Tax no Debt Closing Costs & Fees $9,960 (Summed from below) Equity Closing Costs & Fees $6,424 (Estimate...

AI summary The text presents a cash flow worksheet for a small wind project, detailing costs such as debt and equity closing fees and interest during construction. These figures are estimated and summed for financial planning purposes.

Nova Scotia COMFIT Model Depreciation Worksheet: Top Synapse Compliance Small Wind Taxable Owner Ope ratin Yea g r 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Les s: In tere st (470 ,097 ) ( 454 ,704 ) ( 437 ,849 ) ( 419 ,393 ) (...

AI summary The document presents a depreciation worksheet for the COMFIT model, focusing on interest expenses for a small wind taxable owner in Nova Scotia. It outlines interest costs over a 20-year period, starting with a significant expense in year 0 and gradually decreasing over time.

Page 2 Biomass 8-2-11 85% availability no fuel Nova Scotia COMFIT Model Cash Flo w worksh eet: Botto om Synapse Complian ice 85% A vailability No Fuel r SL 20-y 8,24 7,31 7 412 ,366 412 ,366 412 ,366 412 ,366 412 ,366 412 ,366 412 ,366 412...

AI summary The text presents a table from the Nova Scotia COMFIT Model, which outlines financial data related to biomass availability at 85% with no fuel. It includes figures for different time periods and maintenance costs, providing a snapshot of cash flow and other financial metrics.

Biomass CHP Cost Scenarios Synapse Compliance 85% Availability No Fuel Capacity I act 013. Othe r Re ven ues Inte rest Rev enu e 0 23,7 47 0 24,5 00 0 25,2 54 0 26,0 07 0 26,7 60 0 27,5 13 0 28,2 66 0 29,0 19 0 29,7 72 0 30,5 25 0 31,2 78...

AI summary The document presents a table showing financial data related to a biomass CHP project with 85% availability and no fuel costs. It includes revenue, expenses, and other financial metrics across various time periods.

Page 2 Biomass 8-2-11 90% availability no fuel Nova Scotia COMFIT Model Cash Flov w workshe et: Botton n Synaps e Complia ance 90% / Availabilit / no Fuel Operating Year 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

AI summary The text presents a table from the Nova Scotia COMFIT Model, which outlines financial data related to a biomass project with 90% availability and no fuel costs. The table includes operating years from 0 to 20 and various financial metrics, though the specific details are not fully visible.

Scenarios in $2012 $ Sc ios in 2 0 1 2 en ar Va lue for S On ly tea m- Gro Va lue for C H P ss Ne Va lue for C H P t Co t mp on en Sc io en ar Sc io en ar Sc io en ar Pro j dev lop t nt ec e me $ 4 2, 1 3 4 $ 2 8 0, 2 8 0 $ 2 3 8, 1 4 6 $...

AI summary The document presents financial scenarios from 2012, including projected development costs, boiler and turbine installation costs, emissions, and equipment installation costs, with various figures and percentages provided for different scenarios.

Provide the work papers used to analyze Mr. Chernick's submission The attached tables show Synapse's analysis of total COMFIT program costs under several different scenarios. This analysis was performed after Synapse filed its direct evide...

AI summary Synapse analyzed COMFIT program costs under various scenarios, including different resource mixes and avoided cost assumptions. The analysis assumed a fully subscribed COMFIT program and used a 2018 baseline with a 2.5% annual escalation rate for biomass CHP. Avoided costs were based on fuel costs, generic replacement energy, and the NSPI 2011 DSM plan.

Scenarios in $2012 Va lue for S On ly tea m- Gr Va lue for C H P os s Ne Va lue for C H P t Eq i C los ing Co & Fe ty ts u s es $ 4 9, 1 6 6 $ 1 7 9, 1 3 5 $ 1 2 9, 9 6 8 Tu b ine ize ( k W ) r s : 1 5 5 0 2 0 5 0 Co In Du ing ion ter t tr...

AI summary The text presents a table with various financial and operational metrics from 2012, including values for different scenarios, costs, and efficiency percentages. The data includes figures related to closing costs, maintenance, labor, and fuel usage, as well as turbine sizes and boiler efficiency.

4.0 Study Deliverables The cost of generating electricity can be categorized into 4 principal components; capital cost, non-fuel O&M, fuel cost and financing. The purpose of this study is to determine values for the capital cost, non-fuel...

AI summary This section outlines the study's deliverables, focusing on determining capital cost, non-fuel O&M, and operating parameters of the plant. Wood fuel cost and financing details will be sourced externally, including target return on equity, capital structure, amortization, and tax considerations.

Provide copies of the spreadsheet calculations for each of the sensitivities using the ANSS cost inputs, plus the calculations using all of those inputs combined Each of the sensitivity analyses requested in this undertaking is described b...

AI summary The document requests the provision of spreadsheet calculations for sensitivity analyses using ANSS cost inputs, including results summarized in Table 1.

6.1 Allocating the Cost of Steam Production ANSS recommends allocating half the cost of steam production to electricity ratepayers. We have analyzed the impact of this change in the Excel file "Synapse U-6 Steam Cost Allocation." In the st...

AI summary ANSS suggests allocating half the cost of steam production to electricity ratepayers, with a detailed analysis provided in an Excel file. This allocation changes various cost components and results in a total 2012 tariff rate of $217 per MWh.

6.3 Installed Costs ANSS has proposed an installed cost of $13,456,757 for the CHP plant (Direct Testimony of Fenton Travis, p. 4). We have analyzed the impact of this change in the Excel file "Synapse U-6 Installed Cost." In this file, we...

AI summary ANSS proposed an installed cost of $13,456,757 for the CHP plant, which was analyzed and adjusted to 2012 dollars. This change impacts the fixed portion of the rate, increasing it to $165 per MWh, with the full 2012 rate being $229 per MWh.

6.4 Labour Costs ANSS recommends labour costs of $40,000 for the steam-only scenario and $214,000 for the CHP scenario (Direct Testimony of Fenton Travis, p. 3). We have analyzed the impact of this change in the Excel file "Synapse U-6 Lab...

AI summary ANSS recommends different labour costs for steam-only and CHP scenarios. These figures were analyzed and escalated to 2012 dollars, affecting the fixed portion of the rate. The resulting fixed rate is $106 per MWh, with the full 2012 rate being $170 per MWh.

6.6 Parasitic Loads ANSS recommends including the cost of parasitic loads equal to 14% of CHP plant generation, or 1,769 MWh. We have analyzed the impact of this change in the Excel file "Synapse U-6 Parasitic Loads14%." In this file, we c...

AI summary ANSS recommends including the cost of parasitic loads at 14% of CHP plant generation, impacting operating expenses and increasing the fixed portion of the COMFIT rate to $107 per MWh. This recommendation is based on an analysis in the Excel file 'Synapse U-6 Parasitic Loads14%'.

6.8 All ANSS Assumptions In addition to the individual sensitivities discussed above, we also entered all the ANSS assumptions into the model at the same time. This model run is the Excel file "Synapse U-6 All." The various changes to assu...

AI summary This section discusses the assumptions used in the ANSS model, including fuel cost calculations and the impact of various adjustments on the 2012 rate. The fuel cost is calculated as $105 per MWh, and the fixed rate is determined as $269 per MWh, resulting in a total rate of $374 per MWh. The analysis also considers the correction of errors and the inclusion of net parasitic load costs.

Table 1. The Impacts of the Changes Analyzed in U-2, U-6 and U-6(a) Change Analyzed Fixed Component ($/MWh) Variable Component ($/MWh) Full 2012 Rate ($/MWh) Rate Proposed by Synapse 3/2/11 $94 $62 $156 U-2: Offsetting Errors in Fuel Cost...

AI summary This table outlines the impacts of various changes analyzed in U-2, U-6, and U-6(a) on fixed and variable components of costs, as well as full 2012 rates, with specific figures provided for each change and associated assumptions.

Scenarios in $2012 Val for Ste -On ly ue am Gro ss V alu e fo r C HP Net Va lue for CH P Co nt mp one Sce io nar Sce io nar Sce io nar Pro jec t de vel opm en $ 21, 067 $ 280 280 , $ 259 213 , st ( $ B oile r in sta lled co $ 842 685 , $ 3...

AI summary The text presents a table of financial scenarios from 2012, including project development, boiler and turbine installation costs, emissions controls, cooling townships, equipment installation, maintenance reserves, and working capital reserves. These figures are part of a regulatory proceeding analysis.

Nova Scotia COMFIT Model Synapse U-6 Capital Structure Assumptions Notes: 1 Notes: General Inflation Factor (revenue and expenses) 1.92% From NSPI 2009 IRP Update Operating Inputs Capital Costs (Uses of Funds) Net Generator Capacity (MW) 2...

AI summary The document outlines the Nova Scotia COMFIT Model, detailing capital structure, assumptions, and financial inputs related to a project. It includes inflation factors, capital costs, energy production metrics, and operating expenses, with notes on net of steam-only scenarios and cost escalations.

4/12/11Synapse U-6 Parasitic Loads 14% Nova Scotia COMFIT Model Cash Flo w worksh eet: Botto m Synapse e U-6 Para sitic Load s at 14% Debt Loan Balance Interest 9.50% Principal 4,864,421 (4,456,566) (4,864,421) (462,120) (159,279) 4,530,73...

AI summary The text presents a financial table related to the Nova Scotia COMFIT Model, focusing on debt loan balances, interest rates, and principal amounts. It includes various figures and percentages, indicating financial tracking for a project or initiative.

Scenarios in $2012 fo r S On Va lue tea ly m- Gr e f CH s V alu P os or e f CH Ne t V alu P or $ Wo rki ita l re ( ) ng ca p se rve $ 22 3, 00 4 $ 28 6, 49 7 $ 63 49 3 , ( $ ) De bt rvi se ce re se rve $ 21 3, 49 8 $ 77 7, 90 5 $ 56 4, 40...

AI summary The text presents financial scenarios from 2012, including figures related to working capital reserves, debt service reserves, equity losses, and maintenance costs. It includes calculations for fuel costs and turbine efficiency, but lacks detailed discussion or arguments.

Include the full amount of parasitic power in the calculations as well as a separate calculation using the differential of approximately 5 percent As part of U-6, we added in the cost of electricity associated with parasitic loads, using A...

AI summary The text discusses the inclusion of parasitic power in cost calculations, using both total and incremental estimates. It explains that parasitic loads add $55,600 annually to operating costs, with a fixed rate component of $99 per MWh and a full 2012 rate of $163 per MWh after adding fuel costs.

Scenarios in $2012 Val for Ste -On ly ue am Gro ss V alu e fo r C HP Net Va lue for CH P Co nt mp one Sce io nar Sce io nar Sce io nar Pro jec t de vel ent opm $ 42, 134 $ 280 280 , $ 238 146 , $ B oile r in lled st ( ) sta co $ 1, 685 370...

AI summary The text presents a table of financial scenarios from 2012, detailing project development, boiler installation, turbine installation, emissions, cooling townships, equipment installation, connection costs, maintenance reserves, and working capital reserves. These figures are likely related to energy projects involving Combined Heat and Power (CHP).

Nova Scotia COMFIT Model Large Wind (Over 50 kW) Synapse U-7 Nova Scotia Comfit Model Large wind (Over 50 kw) 1 Synapse U-7 Assumptions Notes: Assumptions: Notes: General Inflation Factor (revenue and expenses) 1.92% From NSPI 2009 IRP Upd...

AI summary The document outlines the financial assumptions and costs associated with a large wind energy project in Nova Scotia, including capital costs, operating expenses, and inflation factors. It details the project's net capacity, energy production, and various financial components such as debt service, reserves, and maintenance costs.

After-Tax Internal Rate of Return 16.50% Nova Scotia COMFIT Model Cash Flow worksheet: Bottom Sy Synapse U-7 Operating Year 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

AI summary The document presents a financial model with an after-tax internal rate of return of 16.50% and includes a cash flow worksheet from the Nova Scotia COMFIT Model. It outlines operating years from 0 to 20, indicating a long-term financial planning approach.

serve ($AVI) Image: Reserve ($AVI) Image: Reserve ($AVI) Image: Reserve ($AVI) Image: Reserve ($AVI) Image: Reserve ($AVI) Image: Reserve ($AVI) Image: Reserve ($AVI) Image: Reserve ($AVI) Image: Reserve ($AVI) Image: Reserve ($AVI) Image:...

AI summary The text contains a list of financial terms and values, including 'Interest During Construction' and 'Insurance' with a value of 8,379, which escalates at inflation. The content appears to be part of a financial or accounting report related to a wind energy project.

Biomass CHP (condensing turbine; new boiler in steam-only scenario in year 10) Assumptions Notes: , General Inflation Factor (revenue and expenses) 1 02% From NSPI 2009 IRP Update Capital Costs (Uses of Funds) 1.52% 1 1511 1401 1 2005 INF...

AI summary This document outlines the financial and capital assumptions for a biomass CHP project, including inflation rates, capital costs, and funding sources. It details project costs, reserves, and capital structure, with all financing coming from equity and no debt or grants involved.

Nova Scotia COMFIT Model O tin Ye pe ra g ar Ca le nd Y ar ea r 0 20 10 1 20 11 2 20 12 3 20 13 4 20 14 Oc 3 cu rre nc e Oc 4 cu rre nc e 0 0 0 0 0 0 0 0 0 0 0 0 Bo ok D ci io at ep re n Ca r C sif len da r Y r D cia tio las ica ea ep re n...

AI summary The document presents a table related to the Nova Scotia COMFIT Model, showing data across several years (2010–2014) with percentages and dollar figures. It includes categories such as 'Book Dcioat epren' and 'Calendar Year Dcia tor Clas fica ean pren pe 20 r SL -y', suggesting it relates to financial or accounting classifications and maintenance costs.

Scenarios in $2012 r S On Va lue fo ly tea m- Sh e S d V alu tea are m Gr CH s V alu e f P os or CH Ne t V alu e f P or Co t mp on en Sc ari en o On ly Sc ari en o Sc ari en o Sc ari en o Pro jec t d elo t ev pm en $ 42 13 4 , $ 28 0, 28 0...

AI summary The text presents a table of financial scenarios from 2012, including projected development costs, equipment installation, maintenance reserves, and other related expenses, with various scenarios outlined for analysis.

Darren Hartlen P.Eng Direct: 902 421 7241 E-Mail: [email protected] Nova Scotia Utility & Review Board FIT Model Biomass CHP condensing turbine; Biomass CHP condensing turbine Year One Percent 25.0% (Based on the "half year rule") Year One A...

AI summary The document presents a financial model for a biomass CHP condensing turbine project, including initial costs, revenue projections, and assumptions related to inflation, fuel costs, and operating expenses. It outlines the project's capital and operating costs, as well as fuel requirements and pricing assumptions.

Page 5 of 6 NS_COMFIT_Biomass_45% Cost Allocation.xls Component Scenario Scenario Scenario Project development $0 $275,000 $275,000 Boiler installed cost ($) $20,298,000 $36,818,000 $16,520,000 Turbine installed cost ($) $0 $0 $0 Emission...

AI summary The document presents a cost allocation analysis for a biomass project under the Community Feed-in Tariff (COMFIT) program, comparing different scenarios including steam-only, gross CHP, and net CHP. It outlines various financial components such as equipment costs, reserves, insurance, and fuel expenses, as well as project details like boiler and turbine specifications.

Page 5 of 6 NS_COMFIT_Biomass_87% Cost Allocation.xls Value for Steam-Only Gross Value for CHP Net Value for CHP Component Scenario Scenario Scenario Project development $0 $275,000 $275,000 Boiler installed cost ($) $20,298,000 $36,818,00...

AI summary The document presents a cost allocation analysis for a biomass project, comparing steam-only and combined heat and power (CHP) scenarios. It details various costs such as installation, maintenance, debt and equity reserves, and fuel expenses, along with financial metrics like loan values and equity amounts for different project configurations.

AGENDA 1 - Introduction, Process and Timetable, Objectives 2 - Synapse Presentation Tariff Design Parameters 3 - Synapse Presentation Cost Models Break 4 - Participant Questions and Comments Document Number: 183800

AI summary The agenda outlines the structure of the proceeding, including an introduction to the process and timetable, presentations on tariff design parameters and cost models, a break, and a session for participant questions and comments. Document Number: 183800.

Inp j uts for Project Costs - •E i t d l b ("i t ll d t ") Equipment and labor ("installed costs") - •O&M costs - •Fi i t nancing costs - •Interest during construction - •Required reserve escrows - •Property taxes and insurance - • Interco...

AI summary The text outlines various project cost categories including equipment and labor, O&M costs, financing costs, interest during construction, reserve escrows, property taxes, insurance, and interconnection costs. It raises a question about whether these costs should be technology specific.

Wind Pricing Model Assumptions: Notes: Debt costs 7.50%

AI summary The document outlines an assumption related to debt costs at 7.50% within the context of a Wind Pricing Model. This figure is likely a key input for financial modeling and analysis.

• Significant Issues and Ouestion There have been significant changes from the initial draft tariffs circulated by Synapse with respect to Biomass CHP and the final tariff. ANSS and other Intervenors had the opportunity to ask IRs on the i...

AI summary The text discusses concerns raised by ANSS regarding the final biomass CHP tariff, including reliance on outdated data and lack of current evidence supporting financial assumptions. ANSS plans to provide expert evidence on capital costs and financing, while noting insufficient time for review and discussion of Synapse's final model.

sistent with as a result the cents per kilowatt hour result with tariffs adopted elsewhere and projects costs that we've seen in the province and elsewhere. (Transcript, April 4, 2011, pp.29-32) - 17. NSDOE and NSE respectfully submit that...

AI summary NSDOE and NSE support Synapse's approach to setting COMFIT rates, emphasizing the importance of benchmarking and caution in deviating from established rates. They acknowledge uncertainties in project costs and plan to review the COMFIT program in 2012 to ensure it meets its 100 MW target.

Now, what he was asking about the range of options and you started talking about the useful life of the boiler. But what is the range of options for the allocation of the cost to produce the steam? 16 MR. KEITH: Well, there's generally two...

AI summary The discussion centers on the allocation of costs for steam production in a biomass facility, with two approaches being considered: a steam-only scenario versus a combined heat and power (CHP) scenario. The regulations require that biomass energy sold under the COMFIT rate must be CHP energy, but there is ambiguity in defining this. The Sawmillers argued that tying the electric plant to the boiler was too risky, leading to the choice of a condensing turbine, which may result in a facility that generates little electricity in CHP mode.

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.

4. Small Wind Tariff Small wind should be the easiest of the all the technology categories to site and develop by municipalities, universities, COMFITs and other community entities. It is also the technology most amenable to community assi...

AI summary The document discusses the Small Wind Tariff, noting that small wind is easy to site and develop with community assistance. A lower cost of capital could reduce Synapse's estimated cost from $452/MWh to $400/MWh, potentially increasing adoption. However, the proposed rates are higher than those achieved by NSPI in recent RFP processes.

2) Small Wind: There appears to be a full head-on charge by Government, to push the small wind category, even in advance of this hearing, and without understanding the implications on small investors and energy production related to greenh...

AI summary The text criticizes the government's push for small wind energy projects, arguing that the policy lacks analysis of reliability and long-term outcomes compared to solar power. Concerns are raised about the short lifespan and low power output of small wind turbines, which could lead to higher costs and risks for ratepayers and investors.

Re: Renewable Energy Community Feed-In Tariffs - BRD-E-R-10/Matter No: M03632 - 1. This is the submission of the Alliance of Nova Scotia Sawmillers ("ANSS"). It focuses on the Tariff to be established by the Nova Scotia Utility and Review...

AI summary The Alliance of Nova Scotia Sawmillers submits that the Tariff for a biomass CHP Facility should be based on cost-based rates rather than least-cost principles, emphasizing the need to consider capital costs, operating costs, debt-equity ratio, internal rate of return, and fuel cost reset mechanisms.

CAPITAL COSTS - 11. In deriving its proposed rate, Synapse assumed that the most likely developer of a Biomass CHP Facility would be a small to medium sized sawmill. Synapse chose a condensing turbine with extraction design which allows th...

AI summary Synapse proposed a Biomass CHP Facility using a condensing turbine with extraction design, arguing it allows for higher capacity factors and lower electricity costs. Ms. Shaw provided cost and operational assumptions, while ANSS prefers the evidence of Patrick (Mitch) Hayes and ESI, Inc. over Ms. Shaw's, citing their extensive qualifications in biomass and solid fuel projects.

DEBT EQUITY RATIO - 57. Synapse suggests that financing of 60% debt and 40% equity at a cost of debt of 9.5% and internal rate of return at 13% is appropriate. - 58. The ANSS submits that the evidence of Jeff Bodington ought to be preferre...

AI summary Synapse recommends a 60% debt and 40% equity financing model for biomass CHP projects, but ANSS argues that this is not feasible due to fuel cost volatility and lack of precedent for such financing. ANSS supports 100% equity financing, citing the expert testimony of Jeff Bodington, who has extensive experience in power project financing.

that are being built or are we using an existing facility and adding a boiler to it? And the costs are going to differ more in biomass, project by project, I would suspect, than for wind projects, … In terms of the escalator, I actually –...

AI summary The discussion revolves around the fuel cost adjustment mechanism, its design, and the need for periodic reviews. The speaker acknowledges the formula's reasonable compromise but emphasizes the necessity for future revisions due to changing factors like CPI and diesel prices. The review frequency is discussed, with suggestions for quarterly or annual adjustments, and environmental concerns related to biomass extraction are mentioned.

A CONSERVATIVEApPROACH The Nova Scotia Department of Energy and the Nova Scotia Depaliment of Environment make the following points at paras. 17 and 20 oftheir submission. - 17. ...NSDOE and NSE further submit that while the approach taken...

AI summary The Nova Scotia Department of Energy and the Department of Environment emphasize uncertainty in COMFIT project costs and advocate for a conservative approach to setting rates. The Consumer Advocate supports this, suggesting that rates and capacity caps should be set at the lower end of the reasonable range.

The Regulations Do Not Mandate That Incremental Costs Only Be Recoverable in the Tariff - 20. The Province suggests that allocation of 100% of the steam costs to the host and incremental costs only for electricity generation in biomass CHP...

AI summary The Province argues that allocating 100% of steam costs to the host and incremental costs only for electricity generation in biomass CHP projects aligns with the Regulations. ANSS agrees that CHP facilities produce both heat and power but emphasizes that they are not designed for 24/7 operation. The Province also suggests that Synapse’s cost allocation is more appropriate for new facilities, but ANSS argues that existing steam hosts are not suitable for high-pressure CHP and that a punitive cost allocation is unnecessary.

tenance reserve, debt service reserve and a working capital account. ... [Synapse Report, Exhibit B-1, p. 13] [80] financing: Finally, Synapse assumed that all capital projects would require interim ... We estimate interest during construc...

AI summary The text discusses Synapse's assumptions regarding financing for capital projects, including interest during construction and loan periods for different project types. It also references Mr. Chernick's challenge to the cost of debt and ROE, and his recommendation for COMFIT rates based on community support and lower returns for tidal projects.

his approach may be an increase of wind turbine R&D in Nova Scotia to improve small wind turbines and associated projects to attain an improved capacity factor. [Seaforth Evidence, Exhibit B-7, p. 2] - [124] Scotian WindFields agreed that...

AI summary The text discusses various financial and operational considerations for small wind projects in Nova Scotia, including R&D investments, O&M costs, and interconnection expenses. Intervenors such as Scotian WindFields and Seaforth have raised concerns over underestimated costs and suggested adjustments for more accurate assumptions.

8.2 Findings [130] With respect to the capacity factor, Synapse proposed a rate of 23%. The Board considers Seaforth's comments to be reasonable in terms of supporting the 23% recommendation. Based on its review of the evidence, the Board...

AI summary The Board accepts Synapse's proposed tariff for small wind projects but adjusts the capacity factor, interconnection costs, and O&M expenses based on evidence from Seaforth, Scotian WindFields, and small wind operators. Adjustments include increasing the capacity factor to 23%, interconnection costs to $21,550, and O&M expenses to $4,500 per year.

9.2 Cost Allocation [153] In preparing the tariff for Biomass CHP, Synapse had to allocate the capital and operating costs between the steam host and electricity generation. They did so as follows: ... So we decided to ensure that biomass...

AI summary In allocating costs for Biomass CHP under the COMFIT, Synapse assigned a large portion of boiler costs to the steam host to ensure that electricity generated is truly combined heat and power. This approach encourages steam hosts needing consistent steam to support these facilities.

9.2.1 Findings on Cost Allocation [159] The Board finds that there are two methodologies being suggested for cost allocation: one based on incremental cost (an economic model), and one based on the ratio of the value of the outputs (an acc...

AI summary The Board is evaluating two cost allocation methodologies: incremental cost (economic model) and output value ratio (accounting model). It also determines that only incremental capital and operating costs for Biomass CHP plants producing electricity beyond steam host needs are eligible for consideration.

[163] When Synapse was questioned by Ms. Rubin about these differences, they responded: - Q: ... the balance of the plant, the sewer, HVAC, pre-engineering, building, painting, fire protection, water treatment, storage tanks, air compresso...

AI summary The text discusses discrepancies between Synapse and ANSS regarding the costs of CHP projects, with Synapse noting uncertainty and ANSS highlighting the infeasibility of Synapse's estimates. ANSS also comments on the higher costs of smaller electricity projects and the inadequacy of Synapse's capital cost estimates for a 2-megawatt project.

9.3.1 Findings on Capital Costs [170] The opinion of Mr. Hayes, together with the analysis of costs per MW to construct a full CHP, is indicative that the capital costs for equipment and installation used by Synapse might be too low. Synap...

AI summary The Board found that Synapse's capital cost estimates for a biomass CHP project may be too low, but accepted Synapse's base cost for setting a COMFIT tariff. The Board emphasized the need for more detailed cost comparisons and opted for a conservative approach to avoid burdening ratepayers.

9.4 Financing [173] Synapse in its evidence stated: ... In addition, the lenders we talked to who were familiar with biomass felt that CHP projects could be financed with 60% debt if the question of fuel cost risk were addressed in a satis...

AI summary The financing of biomass CHP projects is discussed, with Synapse suggesting a higher debt cost due to fuel risk. Jeffrey Bodington argues that increasing the interest rate does not adequately compensate lenders for fuel risk and highlights the significant financial impact of fuel cost increases on lenders.

[197] The potential labour cost misallocation was highlighted by ANSS in its closing submission: 45. Synapse has estimated that the labour to operate in the steam only scenario is $300,000 and that labour to operate in the CHP scenario is...

AI summary ANSS highlighted a potential misallocation of labour costs in Synapse's estimates, noting that Synapse's figures for the 'boiler only scenario' were significantly higher than the actual experience of ANSS members. Synapse defended its high granularity approach, stating that its recommendations were reasonable and aimed at stimulating projects under the tariff.

[213] Synapse also reviewed all of ANSS's costs and said: ... And when we plugged all of these assumptions into our model we came out with a rate of $330 per megawatt hour compared to the rate that we had proposed of 156. And when we looke...

AI summary Synapse reviewed ANSS's costs and found that a proposed feed-in tariff rate of $330 per megawatt hour was significantly higher than market rates in Ontario and Vermont. Synapse recommended a more conservative approach, balancing the risk of low project uptake against the risk of long-term overpayments if rates were set too high.

Large Wind 8-2-11 no tax Page 1 Nova Scotia COMFIT Model Large Wind (Over 50 kW) Tota l Re ven ue 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 558 ,451 556 ,3...

AI summary This document presents financial data from the Nova Scotia COMFIT Model for Large Wind (Over 50 kW), showing total revenue and various expenses over time. The data includes fuel cost, operations and maintenance expenses, financing and general administrative expenses, and insurance costs.

Page 2 Large Wind 8-2-11 no tax Nov a S ia C OM FIT Mo del cot Ca sh Flo w W ork she Bot et: tom Syn e C aps lian om p ce Lar Win ge d n o ta x h O Maj or M aint Res Fun ded Thr ena nce erve oug pera Beg innin g Ba lanc e Fun ding Rele of...

AI summary The text presents a table related to the COMFIT model, focusing on financial aspects such as major maintenance, funding, and balance. It includes various financial terms and categories but does not provide specific details or arguments.

Nova Scotia COMFIT Model Depreciation Worksheet: Bottom Synapse Compliance Large Wind, Taxable Owner Ope ratin Yea g r 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Assumptions Notes: General Inflation Factor (revenue and expenses)...

AI summary This document presents a depreciation worksheet for the Nova Scotia COMFIT Model, focusing on Bottom Synapse Compliance Large Wind with a taxable owner. It includes an assumption for a General Inflation Factor of 1.92% for both revenue and expenses.

Page 2 Small Wind 8-2-11 no tax Sc CO No otia MF IT M ode l va Ca sh Flo w W ork she et: Bo tto m Sy nap Co se mp Sm lian ce all Wi nd Tax no Debt Closing Costs & Fees $9,960 (Summed from below) Equity Closing Costs & Fees $6,424 (Estimate...

AI summary The text presents a cash flow worksheet with details on debt and equity closing costs and fees, as well as interest during construction for a small wind project. The figures are estimated and calculated based on specific percentages and values.

Biomass CHP Cost Scenarios Synapse Compliance 85% Availability No Fuel Capacity I act 013. Extraction 60% Condensing 25% Total 85% Calculation of fuel costs: extraction Condensing turbine size (kW): 1550 2050 Boiler efficiency (%) 70% 70%...

AI summary The text presents a detailed breakdown of fuel costs and capacity calculations for a biomass combined heat and power (CHP) project with 85% availability and no fuel. It includes turbine sizes, boiler efficiency, fuel use in mmBtu, and various cost components such as development, equipment, interconnection, and financing.

Page 2 Biomass 8-2-11 90% availability no fuel Nova Scotia COMFIT Model Cash Flov w workshe et: Botton n Synaps e Complia ance 90% / Availabilit / no Fuel Orig inal Boo k Va lue 8,29 0,81 6 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Plus : Ma j...

AI summary The text presents a table from the Nova Scotia COMFIT Model related to biomass with 90% availability and no fuel. It includes original book value and major maintenance costs, indicating financial considerations for a biomass project.

- THE CHAIR : Thank you. Page 6 NSUARB-BRD-E-R.10 22 Biewald, I believe you have an opening statement you wish 1 NSUARB-BRD-E-R.10 Page 21 technologies such as solar or additional differences in 2 the rate paid for projects within an area...

AI summary The speaker outlines the rate-making process used in developing proposed rates, emphasizing the use of a three-step procedure involving COMFIT capital costs, operating expenses, and revenue calculations. The process introduces significant uncertainty, which is greater than that encountered in regulated utility rate setting.

- settled upon, and considered the structures and cost 1 Page 24 NSUARB-BRD-E-R.10 approved by the Board for the major utilities in Nova 2 Scotia. Our assumptions reflect our assessment that hydro 3 projects will be perceived as least risk...

AI summary The document discusses the development of COMFITs (Cost of Money, Fuel, Interest, and Taxes) for major utilities in Nova Scotia, focusing on capacity factors and the treatment of year-to-year changes. It outlines assumptions about risk levels for different energy projects and explains how capacity factors influence required rates. The approach to fuel cost adjustments for CHP projects is also detailed, balancing risk and incentive structures.

DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS THE CHAIR: I think we'll mark the 1 NSUARB-BRD-E-R.10 Page 27 Opening Statement as Exhibit B-16. 20 assumptions or choose among various assumptions in 21 deciding how to evaluate the tariff? 22...

AI summary The discussion revolves around the selection of representative projects for tariff evaluation, emphasizing the need to choose feasible and cost-effective options rather than extreme cases. The approach aims to set reasonable tariffs based on typical projects and comparable experiences.

- Many of those but once you're - talking about magnitudes, many of those wouldn't matter. - You know, you could pick a number within a range and it - would affect the result in some trivial way if you - selected a different number. - For...

AI summary The discussion revolves around the use of reasonable input numbers in assessments, with a focus on judgment and experience. The conversation also touches on the lack of prior experience with community feed-in tariffs and COMFIT among panel members.

limitations to that and, you know, you'll get a chance to 1 examine such people later in the week, right? 2 MR. KEITH: Can I add a point there? 3 MR. MERRICK: Sure. 4 MR. KEITH: When we thought about our 5 cost of capital, we intentionally...

AI summary The discussion revolves around the cost of capital for community-based projects, specifically how the cost of capital for NSPI was adjusted to account for additional risks. The conversation also touches on potential biases in developer advice regarding tariff rates.

- The idea is to select you know, - pick a reasonably attractive project development - opportunity or opportunities as the prototype, if you - will, and then cost that out. - So there are judgments, as we - discussed earlier, in picking th...

AI summary The discussion focuses on selecting prototype projects for development, balancing project viability with consumer cost considerations. The speaker acknowledges awareness of overall impacts on consumers and mentions rough cost calculations and tariff-based projections.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS the quantities of each type of resource and multiplying 1 and adding it up. 2 MR. KEITH: Can I make a clarification 3 there? 4 MR. MERRICK: Sure. 5 MR. KEITH: You may be misreading that 6 sen...

AI summary The discussion centers on the COMFIT program and how its cost is balanced against the cost of electricity, with clarification that the approach focuses on achieving a reasonable level of development activity within each resource class rather than comparing against a specific measure of electricity cost.

- all you can think of? Page 64 NSUARB-BRD-E-R.10 15 would be a very low appetite for COMFIT projects by 16 municipalities in the province because of the budgetary 17 constraints on municipalities and they urged us not to 18 rely heavily o...

AI summary The text discusses concerns about the low appetite for COMFIT projects among municipalities due to budgetary constraints. It also references challenges in implementing projects, such as delays in getting cities interested in initiatives like a wind project in Boston.

based organization? 1 MR. BIEWALD: Well, I think we 2 3 4 subsidies and so on. That's indeed different from 5 Heritage Gas. 6 7 8 9 commercially viable, but is subject to all sorts of 10 11 12 that it's completely apples and apples. 13 MR....

AI summary The text discusses the participation of lenders in the COMFIT market and renewable energy markets in Nova Scotia, including the availability of funding and its potential impact on required tariffs. It also touches on the financial viability of projects and the role of lenders in the region.

- data for costs for other facilities and had that as a - basis of comparison. - MS. RUBIN : Okay. So the answer when - I said do you have standardized metrics to build your - capital costs, the answer was no, but? - MS. SHAW : We didn't u...

AI summary The discussion centers on the lack of standardized metrics for building capital costs and the use of external reports, such as those from the U.S. Department of Energy, as a basis for comparison. The conversation highlights the challenges in obtaining specific data sources and their reliability.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS annual report. I looked at the latest version. I thought 1 NSUARB-BRD-E-R.10 Page 111 I had the title of the report here, but I don't. 2 MS. RUBIN: Okay. And how did you use 3 that report? 4...

AI summary The discussion revolves around the use of a report as a comparator for numbers and the benchmarking of capital costs against data from the U.S. Department of Energy, including projects of 20 and 50 megawatts. The participants also mention consulting with vendors for equipment costs and using standardized metrics for operating and maintenance costs.

the sawmill companies are represented by the Alliance of - Nova Scotia Sawmillers? - MR. KEITH: Yes. - MS. RUBIN: And given that the level - of development activity is a factor in setting the rates - would the interest of the sawmillers at...

AI summary The discussion involves the Alliance of Nova Scotia Sawmillers and their interest in CHP project development, highlighting uncertainty around costs and the need for specific tariff rates. St. Francis Xavier also mentions a required tariff rate for their project.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MS. RUBIN: Right. Because that risk Page 126 NSUARB-BRD-E-R.10 10 benchmarked it against some other rates and you decided 11 that that was fine and so you didn't look at other capital 12 cost...

AI summary The discussion centers on the justification for a proposed rate, which is compared to rates in Vermont and Ontario. The speaker references market data and the uncertainty in developing the rate, emphasizing the need to align the proposed rate with empirical data from other regions.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MS. RUBIN: So your cost per megawatt 1 NSUARB-BRD-E-R.10 Page 137 is lower than plants of the scale 10 times to 20 times 2 greater than what's being developed proposed to be 3 developed here....

AI summary The discussion centers on the cost per megawatt of a project, with Synapse's analysis based on total project costs rather than just equipment and installation costs. The figures provided are around 5,300 per kilowatt, and the discussion includes questions about the benchmarks used to assess the reasonableness of these costs.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MS. SHAW: No, I think I'm saying NSUARB-BRD-E-R.10 Page 155 12 allocating using their boiler cost allocation 13 methodology. 14 Let me pull up the sensitivities we 15 did look at. So we took...

AI summary The discussion involves analyzing the allocation of boiler costs using a recommended methodology by ANSS and evaluating the COMFIT rate under different assumptions. The analysis includes sensitivity testing and determining the resulting rate of $219 per megawatt.

- We looked at the financing analysis - and we plugged in 100 percent equity at 17.5 percent and - we got a rate of $194 per megawatt hour. - We plugged in the capital cost that - the alliance recommended and we got a rate of $183 per - me...

AI summary The discussion revolves around a financing analysis where different equity and capital cost scenarios are evaluated, resulting in varying rates per megawatt hour, with specific figures mentioned and questions asked about the capital cost recommendations.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MR. KEITH: That's correct. 1 NSUARB-BRD-E-R.10 Page 161 MS. RUBIN: changed the one 19 They've also listed costs associated with water, 20 chemicals, sewer, landfill and maintenance. 21 Now, n...

AI summary The discussion centers on the allocation of costs in a model, specifically whether certain costs like water, chemicals, sewer, and landfill are included for a CHP plant. There is a clarification that these costs are not allocated in the model, leading to a discussion about the model's design and assumptions.

process would be working as well. 1 Page 172 NSUARB-BRD-E-R.10 maybe you can help me out then. The only way I can assess 11 Would you agree with that? 12 MR. RICKERSON: I think there's a 13 trade-off between granularity and precision. Ther...

AI summary The discussion revolves around the balance between granularity and precision in rate setting and project development. The participant suggests that while detailed data is important for individual projects, broader figures may be sufficient for rate setting. The conversation also touches on the accuracy of capital cost estimates for CHP plants.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS reasons for doing so; what are the other policy factors to Page 188 NSUARB-BRD-E-R.10 1 MS. SHAW: The steam host bears the 2 full cost that they would have had under a scenario where 3 they h...

AI summary The discussion revolves around the allocation of costs in combined heat and power (CHP) systems, comparing a CHP plant with a condensing steam turbine to a plant that only produces steam. The focus is on how costs are distributed between steam and electricity generation, with the steam host bearing the full cost of steam production and the electricity side covering incremental costs.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MS. RUBIN: A revenue allocation. NSUARB-BRD-E-R.10 Page 195 1 MS. SHAW: M'hm. 2 MS. RUBIN: Can you elaborate on that? 3 MS. SHAW: So there is a revenue 4 stream that is driven by the electric...

AI summary The discussion revolves around revenue allocation between electricity generation and heat/steam sales, as well as the team effort involved in determining the debt/equity split and cost of equity, particularly for biomass CHP. Experts discuss their qualifications and experience in utility finance and risk assessment.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS fact to inquire about? When size of the project is a risk 1 NSUARB-BRD-E-R.10 Page 201 factor, would you not inquire about the size of the 5 MS. RUBIN: Okay. And then you also 6 referenced Ve...

AI summary The discussion revolves around the use of an escalator mechanism tied to the CPI and diesel prices for fuel costs in a biomass project. The escalator does not fully account for the fluctuating price of stumpage, and the rate is only fixed for a limited period, raising concerns about long-term cost risk.

probably produce projects, or we could bump the rates up 1 NSUARB-BRD-E-R.10 Page 239 much higher in an effort to be certain that we produce a 2 robust activity in the first year or two of the program. 3 You know, if we took the former 4 a...

AI summary The discussion revolves around the risk of setting rates too low or too high for a program, with the concern that low rates may not produce projects, while high rates could lock in overpayments for 20 years. The speaker suggests that the proposed rates are reasonable and have a good chance of producing projects, though not guaranteed.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS it. SDIFs are great." They've been holding, you know, 1 public information sessions before this hearing, but 20 directions within the range of what seemed reasonable, our 21 final rate seemed...

AI summary The discussion centers on the feasibility of borrowing money at high interest rates and the cost of equity for a project. Mr. Livingston suggests running a model based on assumptions that include a 20% interest rate during construction and a cost of equity between 20% and 30%, despite disagreements with these assumptions.

we're actually not clear what government's ultimate plan Page 262 NSUARB-BRD-E-R.10 7 I guess my comment was, we presumed 8 that either those managing the SDIF or the facilitation, 9 technical assistance, and financial services the 10 gove...

AI summary The discussion centers on the uncertainty surrounding the government's plan regarding the SDIF and its role in financing the EON Electric project, highlighting risks and the need for clarity on capital costs and project funding mechanisms.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MS. SHAW: I would say that that was 1 NSUARB-BRD-E-R.10 Page 273 outside of what we were asked to do, which was to come up 18 procurement in your evidence and in your responses to Ms. 19 Rubi...

AI summary The discussion centers on the risk associated with biomass facility development, particularly fuel cost and pricing risks. Mr. Keith explains that these risks were accounted for in the tariff recommendation by adjusting the cost of debt and equity and including a fuel indexing mechanism.

- 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 and you're very convincing in terms of the challenges. And so I think...

AI summary The discussion focuses on setting a reasonable tariff for COMFIT projects to create a viable sector without unnecessarily spending customer money. The aim is to balance affordability and sector development.

here - we're talking about two different things, in a way. - One is development costs, which I - DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS think my colleague, Mr. Keith, just said we did calculate - development costs. - In terms of dev...

AI summary The discussion revolves around development costs and risk assessments for First Nations communities, particularly in relation to debt and equity considerations. The speaker mentions that more in-depth interviews were conducted for First Nations compared to other groups, and some lenders reported higher interest rates than modeled.

Development Corporation? 1 Page 336 NSUARB-BRD-E-R.10 Minas Basin Pulp & Power? 8 Okay, then here's, I guess, the next 9 question. Is it true that distributed generation reduces 10 the transmission cost of electricity; that generation 11 c...

AI summary The text discusses whether distributed generation reduces transmission costs in Nova Scotia and whether studies have been conducted on these savings. It also touches on the consideration of these savings in cost balancing of programs and the approach to setting tariffs based on costs rather than value.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS individual shareholder is there some projection of how 1 NSUARB-BRD-E-R.10 Page 353 much that might result in for that individual? 15 as a cost comparable to other 16 COMFIT projects" 17 What...

AI summary The discussion revolves around the treatment of the cost of capital in COMFIT projects and how it compares to other financing methods. The speaker references past investments in solar systems and emphasizes the inclusion of the cost of money in project costs as per regulations.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS factor of one of their turbines whether they're talking Page 380 NSUARB-BRD-E-R.10 18 process, did you get a general feeling for what's an 19 appropriate percentage of total capital costs tha...

AI summary The discussion revolves around the appropriate percentage of total capital costs allocated to annual O&M, referencing testimony from Ontario and Vermont, and CanWEA's input on O&M costs for small wind, suggesting a lower rate of 1.6 cents per kilowatt hour for FIT prices.

aggregated O&M cost. The new one, they suggested, was Page 384 NSUARB-BRD-E-R.10 - significantly below the one that you ultimately produced. - MR. ROSCOE: Can you repeat that? - That was 1.6 percent is what they recommended? - MR. RICKERSO...

AI summary The discussion centers on the comparison of operational and maintenance (O&M) costs for wind energy, specifically discussing figures such as 1.6 cents per kilowatt hour and 4.3 cents per kilowatt hour, with references to small and large wind projects, and whether insurance is included in these costs.

- was the 1.5 percent as well? Page 388 NSUARB-BRD-E-R.10 17 hundred or $400,000 small wind project that's a huge cost 18 and a long time to wait. 19 So my concern is that the information 20 that you received was going to be contingent on...

AI summary The discussion revolves around concerns about capital costs and financing for small wind projects, with a focus on whether financial institutions would provide financing without met tower data. A rate of 8% was independently suggested by financiers and stakeholders as a reasonable and representative rate.

soften, there we did see some community groups have 1 Page 424 NSUARB-BRD-E-R.10 development, again, so that's a very broad definition. 13 yesterday you agreed that you had not included the cost of 14 an EPC contractor in your model. It wo...

AI summary The discussion focuses on the use of EPC contractors in cost modeling to mitigate construction risks. It highlights that EPC contractors provide a turnkey price and assume some risks, which is a risk management strategy used by companies like Nova Scotia Power and EPCOR.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS So on the question of cost allocation; 1 NSUARB-BRD-E-R.10 Page 433 I mean, this is actually a nice example of the other 2 appropriate method of cost allocation. Yesterday I 3 described that...

AI summary The text discusses a method of cost allocation for combined heat and power (CHP) projects, emphasizing the need to ensure that projects meet the intent of the law by using the province's resources efficiently. It highlights the potential conflict of interest between steam hosts and electricity ratepayers.

those type of things just for the difference? Because I'm Page 460 NSUARB-BRD-E-R.10 1 presuming a lot of those costs would be incurred if you 2 built your plant to meet whatever steam needs you need. 3 MS. SHAW: Yes. So really we were 4 f...

AI summary The discussion focuses on differential costs associated with building a plant to meet steam needs, with specific attention to parasitic load and its impact on overall calculations. The parties involved are discussing assumptions and figures for parasitic load, with estimates around 5 percent.

which is not quite the way you did it. 1 Page 464 NSUARB-BRD-E-R.10 well as a separate calculation 12 MR. KEITH: Yeah. 13 MR. DOEHLER: or whatever you do 14 to operate these things. 15 MS. SHAW: So excuse me. To follow-up 16 on Mr. Keith's...

AI summary The discussion revolves around the differences in capital and operating costs between 15-pound and 100-pound use scenarios, as well as the decreasing trend in wind power component costs and its potential impact on future rates.

- that's what you're trying to aim at? - MR. KEITH : Yes. - MR. DOEHLER : The nod isn't picked up - well on the microphones. - MR. KEITH : Sorry. And that's the - challenge here in being directed to set one rate. And - that's the reason th...

AI summary The discussion revolves around the challenge of setting a single rate for different projects within a resource class, emphasizing the need for tariff differentiation based on a supply curve derived from stakeholder input, lender perspectives, and jurisdictional analysis.

money into these projects. We need a few. 1 of the questions that went to you know, this particular 7 that's all the electricity should bear," versus an 8 accounting allocation which may be some other basis. 9 Is this what the difference m...

AI summary The discussion focuses on the economic rationality of project decisions, emphasizing the use of incremental cost analysis over accounting-based allocations. The speaker argues that for investment decisions, considering the incremental cost relative to alternative scenarios is the correct approach, rather than relying on accounting methods.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS it's costing everybody to be here, including you guys. 1 NSUARB-BRD-E-R.10 Page 481 MR. BIEWALD: Understood. And there's 2 also the cost, I think, in terms of market certainty that 3 it's if...

AI summary The discussion focuses on the need for periodic reviews of rate-setting to reduce uncertainty in the market and ensure that the province is not overpaying or underpaying for energy projects. A review within one to two years is suggested as a way to provide reassurance and avoid windfall profits.

Page 510 NSUARB-BRD-E-R.10 reasonably expect to get land donations or charitable donations. And we thought that it well, it didn't get us to the 100 megawatts of potential capacity. Otherwise, if there were that level of altruism, 100 mega...

AI summary The discussion revolves around the challenges of securing land and charitable donations for renewable energy projects, particularly in the context of the COMFIT rate and its impact on community willingness to donate. There is also a mention of cost considerations for different types of energy projects, including biomass, wind, and hydro, with varying amounts allocated for development and environmental costs.

Page 534 NSUARB-BRD-E-R.10 1 project financing assumptions. 6 in capital cost and financing, there were a number of 7 other variables that had a significant influence on the 8 COMFIT rate difference. 9 We believe that Synapse has 10 undere...

AI summary The text discusses concerns regarding the underestimation of labor costs due to Nova Scotia's regulatory requirements for boiler engineer staffing, and the omission of parasitic load in the Synapse model, which could affect the COMFIT rate and cost allocation for biomass CHP plants.

the price gets adjusted accordingly. 1 Page 564 NSUARB-BRD-E-R.10 MR. SIMPSON: But in addition to that, 2 you've managed to convince the consultant, Synapse, to 3 increase the cost of borrowing from eight percent to 9.5 4 percent and you'r...

AI summary The discussion revolves around the perceived risk of fuel supply and its impact on the cost of borrowing, with arguments made about historical fuel prices and the adequacy of the fuel adjustment mechanism.

id our - DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS comparison, we didn't have we didn't do a capital cost Page 598 NSUARB-BRD-E-R.10 we weren't able to do there was a lot of missing - information on that side of the equation. - When yo...

AI summary The discussion revolves around the challenges in accurately estimating capital costs and their impact on rate calculations. The speaker notes that missing information and errors in analysis could significantly affect the final rate, but an exact figure is not yet determined.

- of budget towards that and determine, okay yes, we assumed - piping was going to be okay but now they know that 15 PSI - piping certainly does not work for 600 pound pressure. - They're going to have to replace the piping, they're going...

AI summary The discussion revolves around the need for a delta analysis to estimate the impact of replacing piping and conducting construction due to pressure issues. Counsel suggests that such an analysis could help approximate a recommended rate adjustment. The Chair proposes leaving the matter to counsel for further discussion.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS There's other issues that come into 1 NSUARB-BRD-E-R.10 Page 607 play. Some of us have very new boilers, in which case, 2 you know, you have to do an economic assessment. If you 3 spent $10 m...

AI summary The text discusses the economic considerations of replacing existing boilers, highlighting concerns about ratepayers subsidizing the replacement of still-functional equipment. It mentions COMFIT and CHP plants, and references the decision-making process of some entities, such as Marwood, in relation to these projects.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS some cases you have to a million dollars on a system NSUARB-BRD-E-R.10 Page 615 impact study, you can identify these kinds of constraints 14 through. So the starting point is eight to 10 perc...

AI summary The text discusses the additional risk premiums investors may require when taking on risks related to biomass fuel and project development, particularly when these risks cannot be passed on to others. These risks contribute to a higher required rate of return, which is observed at around 17.5% in the market.

April 4, 2011 Hearing opens 1 2 $320 per megawatt hour? 3 MR. HAYES: I believe that's correct. 4 MR. OUTHOUSE: I'm just looking at the 5 6 MR. HAYES: At the top sheet. And 7 honestly, yes, I wasn't involved in the economic side of 8 the mo...

AI summary During a hearing on April 4, 2011, a discussion occurred regarding a rate of $320 per megawatt hour. Mr. Hayes confirmed the figure and explained his involvement in the model, focusing on capital and operating costs rather than the economic side. Mr. Travis clarified that he inputted data leading to the $320 result.

- lower. 1 Page 660 NSUARB-BRD-E-R.10 My response to that would be because 2 somebody looked at actual costs and determined what the 3 actual numbers needed to be. 4 And I'm not advising you that that's - 5 - that this is what you should p...

AI summary The speaker argues that Synapse's capital and operating cost estimates for a biomass project are unrealistic, citing the speaker's experience in building cost-effective biomass plants recognized internationally. The speaker emphasizes that the estimates do not align with actual project costs.

- up so high that it's just not economic to go out and try - to get non-recourse financing for a 2-megawatt project. - THE CHAIR: Thank you. - Sorry, Mr. Outhouse, I didn't mean to - get in the middle of that. - MR. OUTHOUSE: Of course we'...

AI summary The discussion revolves around the economic feasibility of non-recourse financing for a 2-megawatt project, with concerns raised about the high costs and the likelihood of sawmill owners pursuing such financing. The conversation highlights challenges in securing financing and the practicality of large-scale projects.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS You know, when we talk to people about 1 this we liken it to try and get, you know, five people 2 from five different provinces to arrive at this meeting at 3 exactly the same time. That's ho...

AI summary The text discusses the challenges of coordinating multi-provincial projects and the need for a high rate of $320 per megawatt hour to develop certain plants in Canada. It also touches on the use of models for cost calculations and the classification of entities like biomass CHP projects and universities as businesses.

- MR. OUTHOUSE: Sure. And by too low I - meant too low to make it worthwhile for the sawmills to - become involved in biomass projects. - MR. TRAVIS: Yes. - MR. OUTHOUSE: You were looking at the - cost of your project and what that would d...

AI summary The discussion revolves around the cost considerations and feasibility of biomass projects for sawmills in Nova Scotia, with input from various parties influencing the final tariff rates set by Synapse. The conversation highlights the importance of cost assessments and the impact of external evaluations on tariff adjustments.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS the wood fibre. NewPage, as an example, is going to 1 NSUARB-BRD-E-R.10 Page 735 construct a 60-megawatt power plant, and they're going to 8 high-pressure utility unit, it's still only a smal...

AI summary The discussion revolves around the cost considerations for a CHP plant, with arguments focusing on allocating only 20% of fuel costs to electricity generation and the rest to heat users. The conversation includes references to a handout and a specific page in a document related to biomass CHP cost scenarios.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS that got that changed into a feed-in tariff which removed 1 NSUARB-BRD-E-R.10 Page 779 the CEDIF restrictions. I just wondered if you or the 10 submitted those into our own model which we was...

AI summary The discussion revolves around the use of a CBCL model for rate derivation and the submission of evidence related to a biomass CHP plant. The original evidence included an EPC contract and capital and O&M costs, while financing assumptions were taken from Synapse's model.

- posture would be that let's see what the COMFIT comes in - at and then we can quantify what's missing. And hopefully - nothing's missing. - But the priority is such that they - would have to find a way to fill the hole. And that's not -...

AI summary The discussion centers on the financial aspects of a project, referencing a fuel cost of $16 per million BTU and the need to await a Board decision before quantifying potential gaps. There is mention of capital and operating costs, but no clear resolution or detailed analysis is provided.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS energy problems, which most of them had. And St. F.X. has 1 Page 798 NSUARB-BRD-E-R.10 we've looked at that. We are going to move the plant out 19 MS. RUBIN: What I'm looking at is 20 Year 20...

AI summary This text from a regulatory proceeding discusses the allocation of costs and revenue streams related to electrical and thermal energy production. It references a model used for cost allocation and a Synapse model, with a question raised about whether the same figures can be run through the Synapse model using an Excel spreadsheet.

Page 812 NSUARB-BRD-E-R.10 NSUARB-BRD-E-R.10 Page 813 21 MR. CHERNICK: So there's no way for 22 anybody to set a single rate that's going to work for each DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS 1 Page 820 NSUARB-BRD-E-R.10 location....

AI summary The discussion centers on the challenges of setting a single rate for hydroelectric projects, highlighting concerns about minimum flow requirements reducing potential power output and the risks involved in project feasibility. There is a suggestion that higher returns may be necessary to attract investment, but there are also risks of not being compensated if projects are deemed unfeasible.

- that they might put the brakes on some of them to give - somebody else a chance under that cap. - But that's a very it's a much more - limited problem than other jurisdictions have experienced - with having two rates for different size p...

AI summary The discussion addresses the potential impact of different financing assumptions on overall cost of capital, particularly focusing on the role of CEDIF in providing attractive returns through tax credits. It also notes errors in an exhibit that claimed no money was left for CEDIF investors.

- And the capacity factors that I Page 834 NSUARB-BRD-E-R.10 22 tax deductions. But we basically had a negative 65 DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS NSUARB-BRD-E-R.10 Page 841 1 percent or so return on our investment. 2 MS. CAM...

AI summary The text discusses how in-kind contributions, such as road construction and gravel donations, are treated by banks as non-cost items in the context of renewable energy projects. This is relevant to the financial evaluation of such projects and may impact cost considerations and financing alternatives.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS Livingston to move it along. 1 NSUARB-BRD-E-R.10 Page 871 THE CHAIR: I agree, Mr. Livingston. 11 MR. CHERNICK: assumed $3 million 12 of debt financing and $1 million of very expensive equity...

AI summary The discussion revolves around a financial arrangement involving debt and equity financing, with participants debating the implications of a 50/50 versus 51/49 split. Concerns are raised about potential outcomes for CEDIF investors and the feasibility of such a split under the presented formula.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS whether it's a 2-megawatt unit on one hill and a 2- 1 megawatt on another or 10 2-megawatt units in the same 2 windy rural location, I think the benefits for the 3 community would be very sim...

AI summary The speaker discusses the potential benefits and costs of different renewable energy projects, including small hydro and biomass, noting that while there may be some community benefits, there are also environmental and economic trade-offs. They express uncertainty about the viability and impact of these projects.

- 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. 6 be raised for those projects at an average of 8.5 percent. 7 Is that what you're saying? 8 MR....

AI summary The discussion centers around the cost of capital for community projects, with a proposed average of 8.5 percent. The conversation questions whether this rate is reasonable, noting that it is similar to Nova Scotia Power's weighted average cost of capital. The participants express uncertainty about the feasibility and implications of this rate.

- put it into the rate from the beginning as a levelized - cost, so inflation at the general inflation rate was - included. And then if you assumed the general inflation - rate and I had to pick a diesel rate, so I used the EO - forecast....

AI summary The speaker explains a calculation error in biomass cost forecasting, where a 4.2% inflation rate was mistakenly used instead of the intended 2.2%, due to double counting in the levelized cost calculation. The speaker clarifies that this was not a forecast of biomass pricing but an explanation of the error.

- comment on those, no. Page 1062 NSUARB-BRD-E-R.10 1 MR. BARRY: Do you know specifically 2 what was included in the cost estimate that was supplied 3 to you by your members? 4 MR. LEVY: No, I don't. I'd have to 5 drill down with those ind...

AI summary The discussion revolves around the challenges of identifying and estimating soft costs for a 50 kW project, including travel, technician time, and land lease. The witness acknowledges the difficulty in providing specific figures and suggests that these costs should be considered but may vary between projects.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS So there's significantly higher risk, 1 and that risk means that the investors that are investing 7 small service. They have a very small hydro facility and 8 I guess what I'm wondering is, i...

AI summary The discussion centers on the potential impact of a feed-in tariff on the Town of Berwick, particularly concerning the risk to small communities and the effect on electricity rates if a new facility is introduced. The concern is tied to the procurement costs of the utility and the potential for higher rates.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS So I think, broadly, the without NSUARB-BRD-E-R.10 Page 1189 1 having costed it out, I think that using diesel as a 2 component is certainly just justified, insofar as 3 transport costs come...

AI summary The discussion revolves around the use of diesel in a biomass project and the justification of its cost component, particularly in relation to transport costs and volatility. The debate centers on the appropriate ratio of diesel to other components, with a need for evidence to determine the correct proportion.

- add a boiler and start generating electricity is actually - not a very big leap, so your capital cost assumptions are - going to have to change. - In terms of the escalator, I actually - I think the formula, as designed, is a fairly - re...

AI summary The speaker discusses the need to adjust capital cost assumptions when transitioning to electricity generation and the importance of revising the escalator formula in light of changing factors such as CPI and diesel prices. They also suggest that adjustments should be made based on prevailing market prices, similar to coal contracts, and that this applies to renewable energy resources dependent on fuel.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS record, we'll note it and then we'll come back we'll 1 clear the room at the end of your cross-examination and 3 yesterday, that equity is where costs of projects often go 4 up because of the...

AI summary The text discusses the cost of equity in projects, suggesting that government involvement as an equity partner could reduce the financial burden on ratepayers and provide returns to investors. It mentions the Industrial Expansion Fund at NSPI and the potential for high returns on renewable energy projects.

- I guess is my question? - Do you think there should be a - difference or - MR. LIVINGSTON: I'm sure if you're - familiar with my example from my evidence, but I was - suggesting that in my example, that there's a very high - risk that th...

AI summary The speaker discusses the financial challenges of the CEDIF, noting that it relies on a 5% dividend from an investment in Black River Hydro to cover its annual costs. There is concern about the risk of CEDIF shareholders not receiving a return and the low tax payments made to the provincial government.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS and they say, "Well, it's just a high-risk project. You 1 NSUARB-BRD-E-R.10 Page 1263 know, it's small, you know, failures." And we say, "Oh, 11 capital of that project? You have since mentio...

AI summary The discussion centers on the cost of equity for a project, with a focus on a 4 percent figure assumed in Synapse's analysis. Mr. Livingston explains that equity is often raised through brokers with associated fees, similar to debt sourcing, and highlights the significance of this cost in project planning.

- haven't actually locked the deal in, so I'm not sure what - our final overall in that will be. So I could say 4 - percent is reasonable, but we might end up paying six, or - we might end up paying two, so I think four isn't a bad - fee....

AI summary The speaker discusses the uncertainty of final costs for a project, using a hypothetical example of a $5 million project with a 5% fee. They mention that CEDIF typically uses a 6% fee, which affects the overall budget and delivery. The discussion highlights considerations around project costs and fee structures.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS you think about needing another 5 percent in your budget, 1 is that extra 5 percent in your budget, is that extra 5 2 percent in your budget also gets the fees attached to it. 3 So we found i...

AI summary The discussion highlights the importance of accounting for additional fees when estimating project budgets, specifically mentioning that CEDIF administration can add 5 to 6 percent to costs. It also clarifies that CEDIF fees should not be conflated with the costs of running the CEDIF itself.

- make a profit that's reasonable, or a profit at all. - So I disagree profoundly with Mr. - Chernick's analysis, which I don't think he understands - the reality of small projects and the cost of doing them - and the capital raise. - Also...

AI summary The speaker strongly disagrees with Mr. Chernick's analysis, arguing that it does not account for the realities of small projects and their capital costs. They also mention that CEDIF shareholders did not receive additional tax breaks, contrary to some information suggesting otherwise.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS Thunder Bay we were involved in the 1 NSUARB-BRD-E-R.10 Page 1323 development side of that. That was 100 megawatts. Digby 11 MR. PYNN: Yeah. I guess what I can 12 say is that there's a CEDIF...

AI summary The discussion involves financing details for a 100-megawatt project, including a CEDIF component, and considerations around the COMFIT rate and cost of debt. Some information is shared publicly, while other details are requested to be answered in confidence.