Topic:"Cost Considerations" in M11094

Report on Other Legal and Regulatory Requirements We have audited the Corporation's compliance, as at December 31, 2022, with the cost allocation criteria established by the Efficiency Nova Scotia Cost Allocation Methodology Report as file...

AI summary The audit confirms that the Corporation complied with the cost allocation criteria established by the Efficiency Nova Scotia Cost Allocation Methodology Report as of December 31, 2022. The audit was conducted by Chartered Professional Accountants and the responsibility for compliance lies with the Corporation's management.

Expense recognition The Corporation recognizes incentive costs, such as customer rebates, when energy savings are recognized. Energy savings are recognized at milestones within a contract or when the contract is complete. An accrued liabil...

AI summary The Corporation recognizes incentive costs, such as customer rebates, when energy savings are recognized, either at milestones within a contract or upon completion. An accrued liability is established when energy savings are recognized but payment is pending. Other expenses are recorded when incurred.

Cost allocation methodology The Corporation follows a Cost Allocation Methodology ("CAM") to allocate expenses not directly related to a fund, as disclosed in Note 13. There was no change to the CAM from prior years.

AI summary The Corporation uses a Cost Allocation Methodology (CAM) to allocate expenses not directly related to a fund, as disclosed in Note 13. There was no change to the CAM from prior years.

FINANCIAL POSITION 2022 2021 Assets $ 145 $ 198 Liabilities 3 54 Equity 142 144 Total Liability and Equity $ 145 $ 198 RESULTS OF OPERATIONS 2022 2021 Revenue $ 4 $ 55 Expenses (including a provision for (recovery of) income tax) 6 60 Net...

AI summary The financial position of the Corporation shows a decrease in assets from 2021 to 2022, along with a reduction in liabilities and a slight decrease in equity. Revenue and expenses also decreased, resulting in a smaller net loss in 2022. The Corporation provides services to EfficiencyOne Services Inc. on a fully allocated cost basis, with costs amounting to $3 in 2022.

9. CONTINGENCIES The Corporation has an agreement with NS Power to extend financing to certain Business, Non-Profit and Institutional ("BNI") customers participating in either the Small Business Energy Solutions, Affordable Multi-Family Ho...

AI summary The Corporation has an agreement with NS Power to provide financing to BNI customers in specific programs, with the Corporation contingently liable for defaults. A liability of $52 has been established for accounts at risk, and total financing extended was $2,030 as of December 31, 2022.

b) Liquidity risk Liquidity risk is the risk of being unable to meet cash requirements or fund obligations as they come due. It stems from the possibility of a delay in realizing the fair value of investments. The Corporation manages its l...

AI summary Liquidity risk involves the inability to meet cash obligations as they come due. The Corporation manages this risk by monitoring cash flows and holding liquid assets. Accounts payable and accrued liabilities, including customer incentives and HST, are typically paid within 90 days or monthly, depending on contract terms and loan schedules.

The costs in each fund include direct costs of the programs which are comprised of, but not limited to, customer payments, program support costs, and other program and administrative costs directly attributable to a program. The Corporatio...

AI summary The document outlines how the Corporation allocates both direct and non-direct costs among its programs, using metrics such as Full-Time Equivalents and Direct Costs as defined in the ENSC Cost Allocation Methodology Report. The CAM is regularly reviewed by the NSUARB.

EfficiencyOne Statement of Operations & Changes in Fund Balance - Details by GL Account - Demand-Side Management (DSM) Fund For the Year Ended December 31, 2022 GL Account GL Account Description Financial Statement Grouping GL Balance Dire...

AI summary The document presents the EfficiencyOne Statement of Operations and Changes in Fund Balance for the Demand-Side Management (DSM) Fund for the year ended December 31, 2022. It includes detailed line items for salaries, benefits, training, and development, with allocations between direct expenses and cost allocation methodology.

The Provincial ("PNS") Fund is used to account for the operations of the Corporation including the fee-for-service revenues received and expenses incurred for the delivery of PNS programs and services according to the terms of the contract...

AI summary The Provincial Fund and Other Business Fund are used to account for operations of EfficiencyOne, including program delivery and subsidiary activities. The Cost Allocation Methodology (CAM) is used to allocate shared expenses and is subject to oversight by the NSUARB. EfficiencyOne is required to maintain confidentiality of information under contractual agreements with the Province of Nova Scotia.

canada.ca/my-cra-business-acco unt. 1 Request IR-14: 20 i. Does E1 staff keep track of hours spent on DSM versus other programs? Is this 21 used in the cost allocation? Please provide details. 22 23 (c) Does E1 expect all non-DSM related p...

AI summary The document contains questions regarding the allocation of expenses between DSM and non-DSM programs, including how hours spent on DSM versus other programs are tracked, whether non-DSM programs may require more resources, and discrepancies between allocated expenses and financial statements.

(a) Yes. EfficiencyOne (E1) does consider its current operational resources, specifically staff, sufficient to administer the DSM and non-DSM related programs efficiently and effectively in the present and will increase as necessary for th...

AI summary EfficiencyOne (E1) confirms it has sufficient current operational resources to administer DSM and non-DSM programs and will scale as needed. E1 uses a Cost Allocation Methodology (CAM) approved by the NSUARB in 2011 to allocate costs based on causality, using Direct Cost or FTE allocators.

2 ENSC'S NEW SYSTEM OF ACCOUNTS ENSC is in the process of implementing a new system of accounts. In this system of accounts each transaction will be coded in four ways: - 1. Account code: Each entry is assigned an account code. The account...

AI summary ENSC is implementing a new system of accounts with four coding methods: account code, fund, department, and program. The system includes four funds, 12 departments, and 26 programs, with specific coding for administrative and general costs.

3 COST ALLOCATION METHODOLOGY ENSC's cost allocation model relies on standard fully allocated costing concepts that are generally accepted by Canadian regulators for rate-setting purposes. In particular, ENSC's fully allocated costing meth...

AI summary ENSC's cost allocation model uses fully allocated costing concepts to distribute 100% of costs to customer classes based on cost causality principles. The model distinguishes between taxpayer-funded and ratepayer-funded programs, with the latter further divided into ratepayer classes. Direct program cost accounts are allocated to specific programs, such as the Small Business Energy Solutions program.

4 CONCLUSION The methodology used to allocate ENSC's total "costs for electric and other fuel mandates" is consistent with the standard approach to the fully allocated costing models that are used for rate setting purposes by regulated ele...

AI summary The document outlines the methodology used to allocate ENSC's costs for electric and other fuel mandates, emphasizing consistency with standard rate-setting practices. Costs are directly or proportionally allocated based on program-specific factors, and recovery mechanisms involve rate riders approved by the NSUARB and government payments for other fuel mandates.

INTRODUCTION The NSUARB has requested an accounting procedures document to accompany the Cost Allocation Methodology (CAM) Report filed by Efficiency Nova Scotia Corporation (ENSC) on September 30, 2011, that will provide greater procedura...

AI summary The NSUARB requested an accounting procedures document to accompany ENSC's CAM Report, providing guidance on how program costs are allocated within ENSC's accounting system. The Appendix outlines procedural direction, includes examples, and notes that Admin/General costs are allocated to the General Fund and corporate departments.

ENSC COST ALLOCATION PROCESS 1. Invoice is received by ENSC All invoices are forwarded to the Accounts Payable Department for review and coding (this is done to ensure that costs are objectively and consistently allocated). - 2. Invoice co...

AI summary The document outlines the ENSC cost allocation process, detailing how invoices are reviewed, coded, and allocated to specific programs or the General Fund when necessary. It emphasizes the role of the Accounts Payable Department and the use of the CAM for future analysis and allocation.

CONCLUSION The cost allocation and procedural direction outlined above creates an accounting methodology and procedure designed to satisfy the regulatory requirement to ensure that costs are properly and fairly allocated between programs p...

AI summary The conclusion outlines a cost allocation methodology and procedure to ensure fair distribution of costs between programs funded by electricity ratepayers and taxpayers. Directly allocable costs are assigned to EDSM and PNS funds using vendor-provided measures, while other costs are placed in the General Fund and allocated via the CAM model for reporting to the NSUARB.

EXAMPLE # 1 – DIRECT BILLING An invoice is received by the Accounts Payable Clerk from Vendor "A" in which the subject line reads: "ENS‐0062‐R Retail Product Markdown Program Phase II August 16 – 31, 2011". The subject line specifically id...

AI summary This example describes how an invoice related to ENSC's Efficient Products Retail Markdown Program is processed and allocated to specific funds, departments, and programs within the organization.

Line item ‐ Travel Travel is supported by a schedule breaking out the cost of travel per day, referencing the completed evaluation numbers. These costs cannot be directly allocated due to lack of information provided by the vendor indicati...

AI summary The document discusses the allocation of travel costs incurred during an evaluation, noting that the costs are nominal compared to the overall evaluation cost. A proportional basis is used to allocate costs between different funds, with 98% of the costs allocated to the EDSM fund as direct costs and 2% to the General Fund as indirect costs.

EXAMPLE # 3 – IDENTIFIED AND INDIRECT An invoice is received by the Accounts Payable Clerk from Vendor "C" in which the subject line reads: "ENS‐0039 BER Brochures". The subject line specifically identifies an ENSC program – Business Energ...

AI summary An invoice for ENSC's Business Energy Rebates program brochures is received, but the Accounts Payable Clerk cannot directly allocate costs between New Construction and Retrofit subcategories. A 20% to New Construction and 80% to Retrofit allocation rate was determined by the Program Manager for internal reporting and cost allocation through the CAM.

Request IR-1: - With regards to the Consolidated Statement of Operations, Demand Side Management Fund: - a) Please provide an explanation for the increase in incentives from $22 million in 2021 to $27 million in 2022. - b) Please provide a...

AI summary Request IR-1 asks for explanations regarding increases in incentives, bad debt, and salaries and benefits costs for the Demand Side Management Fund between 2021 and 2022, as well as changes in the number of employees at E1.

Request IR-15: - Regarding responses to IR-2, IR-4 b) h), IR-7: - a) The cash receipt and deferred revenue related to the Provincial Fund have grown significantly in 2022, with revenues and expenses slightly increasing in the year as well....

AI summary The document raises concerns about E1's ability to manage DSM and non-DSM programs with current resources, questions differences in cost allocations between funds, and seeks explanations for discrepancies in financial reporting. It also inquires about the structure of non-DSM programs and the rationale behind different allocators for certain expenses.