Topic:"Cost Considerations" in M12350

M05002, NSUARB-NSPI P 878, NSUARB Order, August 1, 2003. DATE FILED: June 27, 2025 Page 3 of 20 (Multeese) in its SRMC memorandum dated August 27, 2010. The changes were to include the revenue adjustment mechanisms of the Demand Side Manag...

AI summary The document outlines a series of regulatory actions and decisions by the Nova Scotia Energy Board (NSEB) regarding the Short Run Marginal Cost (SRMC) test, including the inclusion of revenue adjustment mechanisms, the exclusion of specific rates, and the analysis of price elasticities. NS Power has been directed to continue monitoring and reporting on SRMC tests and to ensure that models reflect current consumer behavior.

1 (v) The following formula is used: 2 3 Δ q = q x price elasticity x Δ price / price 4 5 Where: 6 7 Δ q – Is the estimated inefficient usage of a rate class 8 9 q – Is the annual kWh sales to a rate class 10 11 Price Elasticity – Is the p...

AI summary The text discusses a formula used to estimate inefficient energy usage based on price elasticity. It references a -0.15 price elasticity value used by NS Power in the 2024 Load Forecast Report and notes that no inefficiency was observed in 2024 due to Marginal Cost being below unit Revenue. NS Power plans to monitor elasticity values and update them based on annual Load Forecast Reports.

3.0 RELATIONSHIP BETWEEN AVERAGE COST BASED RATES AND ACTUAL SHORT RUN MARGINAL COSTS SRMC test results are determined by comparing appropriately modified average unit revenues for each rate class to actual marginal costs, adjusted for cla...

AI summary This section discusses the relationship between average cost-based rates and actual short-run marginal costs (SRMC). It explains that SRMC test results are determined by comparing average unit revenues to marginal costs, adjusted for line losses. Rate setting is influenced by forecasted rather than actual costs, leading to variations between revenues and actual costs.

reflective of total costs of service of the four functional areas of generation, transmission, distribution, and retail. The marginal generation costs DATE REFILED: August 15, 2025 Page 12 of 20 used by the Company in the SRMC test reflect...

AI summary The text discusses the marginal generation costs used by the Company in the SRMC test, which include only fuel and generation, operation, and maintenance costs, not fixed costs. It explains how the marginal cost relationship changed in 2022 due to geopolitical events and reverted in 2023. The average system marginal cost increased by 14.7% from 2023 to 2024 due to changes in the generation mix and increased load.

September 5, 2025 [[email protected]](mailto:[email protected]) Michael Willett Director, Regulatory Finance Nova Scotia Power Inc. PO Box 910 Halifax NS B3J 2W5 Dear Mr. Willett: M12350 – Nova Scotia Power Inc. – 2024 Sh...

AI summary Nova Scotia Power Inc. submitted its 2024 Short Run Marginal Cost (SRMC) Test to Rates Report, which was re-filed after a discrepancy was identified. The report indicates that all rate classes passed the SRMC test, with average marginal costs increasing by 14.7% due to changes in generation mix to meet environmental standards.