Topic:"Cost Considerations" in M12663

2 A. Overview - 3 This is the second revenue requirement application (Application) of the Nova Scotia Independent - 4 Energy System Operator (IESO Nova Scotia), and is for the fiscal period beginning on April 1, - 5 2026 and ending March 3...

AI summary IESO Nova Scotia is submitting a revenue requirement application for the fiscal year 2026/2027, seeking approval for OM&A costs and transitional costs. The application is submitted under the More Access to Energy Act, and there is overlap with the ongoing approval process for the 2025/2026 application. IESO Nova Scotia also requests financial relief from NS Power through a fee, and proposes a permanent variance and recovery mechanism.

- 4 Various Insurance Coverages: IESO Nova Scotia has secured regular and customary 5 insurance to cover commercial risks affecting the enterprise, arising from IESO Nova 6 scope of operations. - 7 Communications: These costs are associate...

AI summary The text discusses various insurance coverages, communication costs, stakeholder engagement, and office costs for IESO Nova Scotia. It highlights a shift in website development costs from operational to capital, and notes a budget increase due to unforeseen office costs, which were offset by internal hiring.

3 Table 4: Summary of Transitional Cost Category Transitional Costs Category Transitional Costs Budget ($) Total Transitional Costs 1.77M PMO Support 0.57M Subject Matter Expert Phase II 0.86M Compliance Preparedness & Assurance 0.34M 4

AI summary Table 4 outlines the budget for transitional costs, including categories such as PMO support, subject matter expert Phase II, and compliance preparedness and assurance, with a total of 1.77 million dollars allocated.

11 B. Subject Matter Expertise Phase II - 12 The costs for Phase II subject matter expertise is budgeted at $0.86M. - 13 These costs address the individual consultants which IESO Nova Scotia will require to ensure - 14 Phase II preparednes...

AI summary The budget for Phase II subject matter expertise is estimated at $0.86M, covering advisory support for control room operations and adjustments to electricity market arrangements as IESO Nova Scotia assumes dispatch and control responsibilities. These costs are estimates as the projects are not yet fully scoped.

2.2.1. Stage II - Define Control Center and Operational Strategy Purpose: Build and evaluate a set of 4–5 strategic options for how IESO Nova Scotia can deliver dispatch and control functions independently while maintaining system reliabil...

AI summary This section outlines Stage II of the process, which involves defining the control center and operational strategy for IESO Nova Scotia. The purpose is to develop and evaluate strategic options for delivering dispatch and control functions independently while ensuring system reliability and cost efficiency.

NON-CONFIDENTIAL 21 • Corporate Administrative – Insurance costs were revised lower based on the actual 22 premium costs for policies bound in 2025. 23 • Corporate Administrative – Office costs were added to the 2026/2027 revenue requireme...

AI summary The document outlines various cost adjustments and assumptions for 2026/2027, including revisions to insurance, office, governance, legal, procurement, facilities, finance, and transition costs based on actual 2025 results and expected future activities.

- IESO Nova Scotia notes that actual expenditures for fiscal year 2025/2026 are materially - tracking against its proposed 2025/2026 Revenue Requirement, and IESO Nova Scotia has no - further amendments to the assumptions or costs noted in...

AI summary IESO Nova Scotia states that actual expenditures for fiscal year 2025/2026 are materially tracking against its proposed Revenue Requirement, with no further amendments to its assumptions or costs. Variances will be addressed through the Net Revenue Requirement Deferral and Variance Mechanism.

Nova Scotia Independent Energy System Operator (IESO Nova Scotia) Responses to Consumer Advocate (CA) Information Requests 21 (f) On what basis did IESO NS assess the potential turnover rate of "2-3 employees"? 61 market data and providing...

AI summary IESO Nova Scotia provided responses to the Consumer Advocate's information requests regarding employee turnover rate assumptions, fringe rate, and compensation adjustments. The estimates were based on market data, external consulting, and general HR assumptions rather than detailed calculations.

- 92 ii. All of the software tools continue to be in use at NS Power and in general 93 software license agreements prohibit the transfer of licenses between 94 organizations. Notwithstanding, IESO Nova Scotia was successful in a 95 signifi...

AI summary The text discusses the continued use of software tools by NS Power and mentions a successful cost mitigation negotiation by IESO Nova Scotia with a vendor, specifically referencing PSSE.

- IESO Nova Scotia states that "Office costs were not anticipated in the 2025/2026 budget, thus - increasing the total costs in the Office costs subcategory from $nil to approximately $100,000 for - the fiscal year. Additionally, IESO Nova...

AI summary IESO Nova Scotia explains an increase in office costs for the 2025/2026 fiscal year, which was not initially anticipated in the budget. They offset this by reducing external consultancy costs through internal hiring. Questions are raised regarding budgeting methodology, supporting calculations, and variances in corporate administrative costs.

44 (d) The increase in corporate administrative costs is due to the increase in office costs which 45 are reviewed in part (c). 46 47 (e) The variance in insurance costs is based on the results of policies that were placed in 2025 48 at co...

AI summary The document discusses increases in corporate administrative and insurance costs, as well as expected declines in communication costs. These changes are attributed to office cost reviews, lower insurance costs in 2025, and internal support additions by IESO Nova Scotia.

- IESO Nova Scotia states that "This cost category increased $300,000 from IESO Nova Scotia's - 2025/2026 Revenue Requirement Application to cover the anticipated increased workload and - additional costs for external legal counsel which w...

AI summary IESO Nova Scotia has requested an increase in legal and regulatory costs due to anticipated increased workload and external legal counsel costs related to the Phase II transition. The request includes questions about budgeting methodology, supporting calculations, assumptions, and future cost trends.

NON-CONFIDENTIAL 21 (a) The budgeting methodology for facilities and technology costs involved: 22 • Reviewing actual costs incurred in 2025/2026 at the time of budget preparation; 23 • Reviewing expense drivers for facilities and technolo...

AI summary The budgeting methodology for facilities and technology costs involves reviewing actual costs from 2025/2026, expense drivers such as office leases and IT services, and employee planning. The office lease and IT services were annualized for the 2025/2026 fiscal year, with costs spanning the full fiscal year of 2026/2027.

NON-CONFIDENTIAL 1 Request IR - 16 2 Reference: Exhibit B-2 (page 28, lines 11-13, Finance) 3 IESO Nova Scotia states that "The greatest change in the Finance cost category between 4 2025/2026 budget and the 2026/2027 budget is the interes...

AI summary The document outlines a request for information regarding the finance cost budgeting methodology, supporting calculations for payroll and accounting subscription services, and the reasons for significant increases in finance costs and payroll expenses. The request also asks for the impact of temporary financial relief on projected financing costs.

NON-CONFIDENTIAL (a) The $0.36M in additional advisory support associated with Phase II was estimated that a team of 5 resources would be required for 3 months or 60 working days using the assumptions below. Barrington Consulting based the...

AI summary The text discusses the estimated cost of $0.36M for additional advisory support in Phase II, requiring a team of 5 resources for 3 months or 60 working days, based on historical consulting fees from local and international firms.

25 This resulted in a range of estimated costs from $321,600 to $535,200. Recognizing the 26 range of uncertainty at this stage, the IESO Nova Scotia used $360,000 (towards the bottom 27 of this range) in its application. 28 The $0.50M in...

AI summary The IESO Nova Scotia used an estimated cost of $360,000 for its application, acknowledging the uncertainty in the range of $321,600 to $535,200. Additionally, $0.50M in adjustments to electricity market arrangements and rules for Phase II was estimated to require a team of 4 for 5 months.

NON-CONFIDENTIAL 1 Request IR - 15 2 Reference: N-1(i), Exhibit B-2, pdf p.13-15 states that 23 administration employees are assumed 3 for the year, compensation targets the 50th percentile, and the fringe load factor is 15% (up from 4 14....

AI summary The text discusses a request for detailed compensation information for 23 administration employees, including position-by-position listings and market survey data. The IESO Nova Scotia responds by referencing previous responses and expresses concerns about revealing exact compensation details, offering anonymized data instead.

NON-CONFIDENTIAL 70 71 Formal support for all significant assumptions and expenditures in the 72 application, such as quotes, any referenced market information, correspondence 73 from discussions surrounding estimates, market data supporti...

AI summary The document discusses the need for formal support for significant assumptions and expenditures in an application, including quotes, market information, and expert opinions on the reasonableness of costs. The IESO is noted as being involved in setting evidentiary standards, and a third-party compensation firm is expected to provide an expert opinion on administration employee costs.

NON-CONFIDENTIAL 48 • Transition and operational planning costs to December 31, 2025 are $0.28 (38%) higher 49 than the prorated budget primarily due to higher consulting costs for program and project 50 management as well as financial adv...

AI summary The document highlights that transition and operational planning costs to December 31, 2025, are 38% higher than the prorated budget due to increased consulting and financial advisory costs. In contrast, operations (Systems Planning) costs are 61% lower than the prorated budget due to a later-than-expected start.

13 (a) Costs associated with contract negotiations include legal and consulting fees as required. Nova Scotia Independent Energy System Operator (IESO Nova Scotia) Responses to Nova Scotia Energy Board (NSEB) Information Requests

AI summary The text mentions costs related to contract negotiations, including legal and consulting fees. It also references the Nova Scotia Independent Energy System Operator responding to information requests from the Nova Scotia Energy Board.

7 Facilities and Technology Cost Category 2025/2026 Actual 2025/2026 2026/2027 budget ($) 2025/2026 Annualized Proposed Difference ($) (Millions) at Dec 31 Expenditures Budget ($) (Millions) Cost category ($) ($) (Millions) (Millions) (inc...

AI summary The document provides a table detailing budget and actual costs for the Facilities and Technology Cost Category for various years, including differences between proposed and actual expenditures. It highlights discrepancies such as a $0.41M decrease in the Facilities and Technology category and a $0.89M difference in IT Application costs.

Nova Scotia Independent Energy System Operator (IESO Nova Scotia) Responses to Nova Scotia Energy Board (NSEB) Information Requests 1 Request IR - 28 22 Power's Fuel Adjustment Mechanism). 23 (h) How does IESO Nova Scotia propose to ensure...

AI summary The Nova Scotia Independent Energy System Operator (IESO Nova Scotia) is responding to information requests from the Nova Scotia Energy Board (NSEB) regarding its Net Revenue Requirement Deferral and Variance Mechanism, budget accuracy, cost containment strategies, and accounting policies for variances. The response references a prior Board order (M12412) and outlines requirements for financial controls and accounting guidelines.

NON-CONFIDENTIAL 76 requirement and fees applications. Therefore, IESO Nova Scotia must, in its applications, provide an explanation for cost category variances exceeding +/-10%." 4 77 At this time there 78 is no established methodology on...

AI summary The document discusses the requirement for IESO Nova Scotia to explain cost variances exceeding +/-10% in its applications. It also mentions the lack of established methodology for handling NSEB disallowances and references a Board order establishing a +/-10% threshold for variances requiring prudency review.

NON-CONFIDENTIAL 1 Request IR - 12 2 Reference: Application page 33, Table 4: Summary of Transitional Cost Category 3 (a) For each of the three identified sub-categories in Table 4 please describe the basis on how 4 the estimate of the cos...

AI summary The response to Request IR - 12 outlines how transitional cost estimates were developed using a bottom-up methodology with reasonable planning assumptions. The PMO support cost of $0.57M was based on a team of 3 resources over 12 months, with a range of estimated costs from $539,600 to $958,400. The IESO Nova Scotia used $570,000 in its application, based on historical consulting fees from local and international firms.

23 • Subject Matter Expertise Phase II: Please refer to the response to DGT IR-24 20. 25 • Compliance Preparedness and Assurance: The $0.34M was based on a team 26 of 4 resources required for up to 12 months or 240 working days, at fractio...

AI summary The IESO Nova Scotia provided a response to Port Hawkesbury Paper LP regarding compliance preparedness and assurance, estimating costs based on historical consulting fees and using a figure of $340,000 for its application.

- 4 Figure 1 Summary of findings, observations and conclusions # Report section Findings, observations, and conclusions In addition to analyzing 2026/2027B, we also compared 2025/2026A to 2025/2026B and noted any significant variances. In...

AI summary The analysis compared 2025/2026A to 2025/2026B and noted a 75% increase in total OM&A expenses, driven by increases in employee administration, corporate administration, facilities and technology, and operations. IESO Nova Scotia provided explanations for these variances.

2026/2027 Revenue Requirement Application by the Nova Scotia Independent Energy System Operator - Note 1: 2025/2026B provided by NSEB in this table is the total OM&A costs from M12412, which included one-time transitional costs. - Note 2:...

AI summary The 2026/2027 Revenue Requirement Application by IESO Nova Scotia outlines variances in actual costs compared to the prorated budget for 2025/2026. Key variances include lower employee and finance costs, higher corporate administrative and legal costs, and significantly higher facilities and technology costs due to unanticipated expenses.

13 ($ millions) 2025/2026B 2025/2026A 2026/2027B 2025/2026A vs 2025/2026B % change 2026/2027B vs 2025/2026B % change 2026/2027B vs 2025/2026A % change Governance 0.51 0.52 0.49 0.01 2% (0.02) -4% (0.03) -6% 5 This cost category primarily c...

AI summary The table shows governance costs for IESO Nova Scotia, with figures for 2025/2026A, 2025/2026B, and 2026/2027B. The costs are slightly higher in 2025/2026A compared to 2025/2026B, with a decrease projected for 2026/2027B.

20 The following table details the breakdown of operations (system planning) costs by sub-category for 2025/2026B, 21 2025/2026A, and 2026/2027B. ($ millions) 2025/2026B 2025/2026A 2026/2027B 2025/2026A vs 2025/2026B % change 2026/2027B vs...

AI summary The text presents a table showing the breakdown of operations (system planning) costs for different periods, including changes in salaries, third-party recoveries, and consulting fees. The budgeting methodology assumes roles transferred from NS Power are compensated at least the same rate as before.

1 Figure 17 – Summary of actual transitional costs at December 31, 2025 ($ millions) 2025/2026B1 Prorated 2025/2026B at Dec 31, 2025 2025/2026 actuals at Dec 31, 2025 2025/2026 actuals vs prorated 2025/2026B % change Transitional costs 1.0...

AI summary Figure 17 provides a summary of actual transitional costs at December 31, 2025, showing a 38% increase compared to prorated estimates. The note clarifies that the 2025/2026B estimate from the IESO does not include one-time transitional costs.

1 Figure 22 – Summary of net OM&A deferral and variance account Sub-account name Description of recorded funds per the M12412 Application Net Ongoing OM&A Deferral Account ("Sub-Account No. 1") Records the approved forecast Net Ongoing OM&...

AI summary The document outlines three sub-accounts related to Net Ongoing OM&A (Operations and Maintenance) deferral and variance. Sub-Account No. 1 records approved forecast costs, Sub-Account No. 2 tracks the variance between forecast and actual costs, and Sub-Account No. 3 records the trued-up actual costs. This structure enhances tracking and transparency.

20 Figure 23 – Net revenue requirement deferral and variance mechanism calculation # Cost category Description 1. Budgeted Revenue Requirement The NSEB approved budgeted revenue requirement for the fiscal year period beginning April 1 and...

AI summary The text describes the net revenue requirement deferral and variance mechanism calculation, which involves comparing budgeted revenue requirements with actual costs incurred. A positive variance indicates actual costs exceeded the budget, while a negative variance indicates actual costs were lower than the budget. These variances are carried forward into future revenue requirement applications.

10 Figure 26 – Summary of IESO Nova Scotia's response to Intervenors Topic Intervenor concern IESO Nova Scotia's explanation/supporting evidence provided101 Financial position The financial request is unsubstantiated, and it is unclear why...

AI summary IESO Nova Scotia explains that its financial request is supported by evidence showing that OM&A costs are partially offset by provincial funding, but procurement-related development costs require cash funding. The Provincial Line of Credit is insufficient beyond April 2026, and without interim relief, insolvency is expected to begin in May 2026.

- were unaudited, however, NSEB has directed IESO Nova Scotia to include audited financial - statements in future applications ". Further, at pdf page 4, DGT states: " Except as stated, - we have not audited or otherwise attempted to verif...

AI summary The document raises concerns about the reliability of forecasts and assessments due to reliance on unaudited actuals, questioning whether this limited DGT's ability to evaluate OM&A cost trends and variance explanations, and asking about compensating procedures undertaken by DGT.

Response – IR-7: - (a) No, the scope of our review did not include long-term cost analysis or assessment of alternatives.

AI summary The response to IR-7 indicates that the scope of the review did not include long-term cost analysis or assessment of alternatives, suggesting a focus on immediate or short-term considerations.

RETURN THIS SHEET WITH YOUR COST PROPOSAL

AI summary This document is a directive to submit a cost proposal along with the sheet, indicating a regulatory process involving cost considerations and submissions.

is expected to be recovered from ratepayers. Also in 2026/2027, the IESO-NS assumes the full Provincial $10 million facility will be drawn down, at an interest rate of prime plus 0.5%.[17](#page-4-4) Considering these figures, it is unclea...

AI summary The text questions the justification for a monthly assessment of $950,000 over a 14-month period, suggesting it may be inflated or that revenue requirements are understated. It highlights the lack of explanation, breakdown, or supporting analysis for the calculation of this figure.

(4) Alternatives to FAM-Based Bridge Financing Better alternatives exist that would protect ratepayers and maintain appropriate risk allocation and regulatory frameworks. The IESO-NS has presented the Board with a single option, with limit...

AI summary The document discusses alternatives to FAM-based bridge financing, suggesting provincial financing, phased fee implementation with guarantees, and expenditure pacing. It argues that the Province, not ratepayers, should provide bridge financing, and highlights the need for proper regulatory oversight to protect ratepayers and maintain cost causation.

28 response(s), specific (verbatim) criteria to qualify for financing and steps 1 2026 M12663 18 19 20 (a) Where the Monthly Assessment request is "exclusive of any applicable taxes, please show the tax treatment and confirm the total paym...

AI summary The document outlines specific requests related to the 2026 Monthly Assessment, including tax treatment clarification, sensitivity analyses under different fee approval dates, and details on financing approaches by IESO-NS. These requests are tied to regulatory proceedings.

11 Request IR-9: - 12 Reference: N-1(i) Exhibit A-1, pdf p. 3-4, acknowledges submissions from Board 13 consultant Doane Grant Thornton (DGT) and stakeholders regarding the 2025/2026 14 application, but indicates IESO-NS was unable to addr...

AI summary The document requests clarification from IESO-NS regarding deficiencies in the 2025/2026 application, specifically concerning the lack of documentation to verify financial forecasts. It also asks whether IESO-NS can now address these concerns by providing supporting evidence for assumptions and costs in the 2026/2027 revenue requirement application.

- 5 Reference: N-1(i) Exhibits A-1 and B-2 in multiple places describe phase transfer and - 6 evolving scope with duplication risks while NSPI retains functions. - 7 Have the IESO-NS and NSPI prepared a transition term sheet with milestone...

AI summary The text raises concerns about the transition between IESO-NS and NSPI, questioning whether a transition term sheet has been prepared to address duplication risks and ensure a smooth transition with clear milestones and decommissioning dates.

17 Request IR-15: - 18 Reference: N-1(i), Exhibit B-2, pdf p.13-15 states that 23 administration employees are assumed for the year, compensation targets the 50th 19 percentile, and the fringe load factor 20 is 15% (up from 14.75%). - 21 (...

AI summary The document requests detailed information on 23 administration FTEs, including their positions, compensation assumptions, and fringe benefits, as well as market survey data supporting the 50th percentile compensation targets and normalization of Atlantic-Canada comparators for ISO skill sets.

1 Request IR-16: - 2 Reference: N-1(i), Exhibit B-2, pdf p.15-16 and p.32-33 which compares 2025/26 3 annualized to 2026/27 for administrative and operations categories.

AI summary The document references specific pages in Exhibit B-2, comparing annualized administrative and operations categories from 2025/26 to 2026/27, as part of a regulatory proceeding.

14 Request IR-20: - 15 Reference: N-1(i), Exhibit B-2, pdf p.21-24 (Procurement) and Table 10 include footnotes - 16 noting renamings/roll ups from the 2025/26 Application (e.g., "other capacity contract"; - 17 300 MW RFP consolidation). -...

AI summary The document outlines requests for reconciliation and explanation of procurement cost changes between the 2025/26 and 2026/27 fiscal years, including the shift from a 300 MW RFP to additional capacity procurement, with a request for timelines and spending details.

22 Request IR-24: - 23 Reference: N-1(i), Exhibit B-2, pdf p.27-29 (Tables 13 and 14), forecast $0.58 million - 24 financing costs on a $10 million provincial operating line at prime (4.5% plus 0.5%) with an - 25 assumption that the entire...

AI summary The document references a forecast of $0.58 million based on financing costs for a $10 million provincial operating line at a rate of 5% for the years 2026/2027, assuming the full amount is advanced.

s that IESO-NS “ has determined that a minimum of Nine Hundred and Fifty Thousand Dollars ($950,000) revenue is needed each month to ensure it continues to meet its liabilities as they become due .” 1. Please provide a copy of IESO-NS’s in...

AI summary The request seeks detailed financial and operational information from IESO-NS regarding its monthly revenue requirements, cash flow projections, expense categorization, and sensitivity analyses under different fee approval timelines. It focuses on the $950,000 monthly revenue figure, its rationale, and implications for liabilities and cash flow.

Request IR-3: Reference: Application page 14, "Cost of living increases are foreseen to give rise to an overall 3% increase in the Administration Salaries compared to those in the 2025/2026 Revenue Requirement Application".

AI summary The document references a 3% increase in Administration Salaries due to cost of living increases, as outlined on Application page 14 of the 2025/2026 Revenue Requirement Application.

Questions: 2 1. a) Please provide the basis for the 3% increase. 2. b) Do all Administration Salaries have a built-in annual cost of living increase? If so, what is 3. the identified basis for determining that increase. 4. c) Do any IESO N...

AI summary The questions focus on the basis for a 3% increase, whether administration salaries include annual cost-of-living increases, and if IESO Nova Scotia employees have incentive or bonus plans, including the positions and criteria involved.

11 Request IR-4: 12 13 Reference: Application page 17, “ Office Costs : these costs cover various office administrative 14 fees and resources.” 15 16 Question: Please break down the proposed $100,000 for this cost category into each respec...

AI summary The document includes a request to break down a $100,000 allocation for office costs into individual administrative fees and resources, referencing an application page that describes these costs as covering various office administrative fees and resources.

19 Request IR-5: 20 21 Reference: Application Page 19, “Table 7: OM&A Costs for the Legal and Regulatory Cost 22 Category” 23 24 Questions : 25 1. a) Please confirm that these costs are in addition to the Legal and Regulatory Compliance 2....

AI summary The text references a request (IR-5) asking for clarification on whether legal and regulatory costs listed in Table 7 are in addition to those in Table 3 and whether they are incurred by external or in-house legal and regulatory resources.

17 Request IR-12: 18 19 Reference: Application page 33, Table 4: Summary of Transitional Cost Category 20 21 Questions: 22 1. a) For each of the three identified sub-categories in Table 4 please describe the basis on how 2. the estimate of...

AI summary The document presents questions related to the basis for cost estimates in Table 4 and whether IESO Nova Scotia has retained a change management or program and project management consultant, including whether this was done via RFP.

Request IR-11: - Reference: Exhibit B-2 (page 17, lines 3-7, Corporate Administration) - IESO Nova Scotia states that " Office costs were not anticipated in the 2025/2026 budget, thus - increasing the total costs in the Office costs subcat...

AI summary The document outlines questions regarding the 2025/2026 and 2026/2027 budgets for corporate administrative costs, including explanations for variances in subcategories such as 'office costs,' 'web hosting,' and 'various insurance coverages.' It also requests details on budgeting methodologies and supporting calculations.

Request IR-14: - Reference: Exhibit B-2 (page 23, lines 4-7, Facilities and technology) - IESO Nova Scotia states that "IESO Nova Scotia is budgeting $1.56M in ongoing expenses as - part of the facilities and technology cost category. This...

AI summary The document requests detailed explanations regarding the budgeting methodology and cost variances for the 'facilities and technology' category, specifically addressing the 2025/2026 and 2026/2027 budgets, with a focus on subcategories like 'office lease' and 'managed IT services'.

Request IR-20: - Reference: Exhibit B-3 (page 34, lines 14-22) - IESO Nova Scotia states that "While significant uncertainty remains around the exact scope of - Phase II and all the work that will be required, two specific pieces of work h...

AI summary IESO Nova Scotia outlines two estimated costs for Phase II: $0.36M for advisory support in control room operations and $0.5M for adjustments to market rules. The request asks for budgeting methodology, assumptions, and details on the scope and duration of the advisory support.

oyed from April 1, 2026 to March 31, 2027 are expected to represent the staffing level going forward. If not, please explain why. Reference: Exhibit B-2 (page 17, lines 3-7, Corporate Administration) IESO Nova Scotia states that " Office c...

AI summary The text discusses budgeting methodology and variances in corporate administrative costs for IESO Nova Scotia, including unexpected office costs, changes in subcategories such as 'web hosting' and 'stakeholder engagement', and reductions in 'various insurance coverages' and 'communications'. Questions are raised regarding the reasons for these changes and the supporting calculations.

.56M in ongoing expenses as part of the facilities and technology cost category. This cost category consists of costs incurred in respect of IESO Nova Scotia's physical premises and technology needs." 1. Please provide the budgeting method...

AI summary The document outlines inquiries regarding budgeting methodology, supporting calculations, and variances in the 'facilities and technology' cost category for IESO Nova Scotia. It also references the removal of the 'Employee Technology Hardware and Software' subcategory from operational expenses and its treatment as a capital expenditure.

26/2027 budget for payroll and accounting subscription services is 50% higher than the 2025/2026 budget. What is the reason for this increase? Reference: Exhibit B-2 (page 31, lines 8-18, Operations) IESO Nova Scotia states that "The diffe...

AI summary The document discusses the increase in the 2026/2027 budget for payroll and accounting subscription services compared to the 2025/2026 budget, citing differences in estimated personnel costs, compensation increases, and burden assumptions. It also requests detailed budgeting methodologies and supporting calculations for various cost categories.

7 Request IR-6: 9 Reference: Application, Exhibit B-1 - 11 (a) With respect to the various budget items noted in Table 1, please provide a table that 12 includes each budget item and the IESO NS's understanding of whether each budget item...

AI summary The text outlines a request for information regarding cost savings, cost proportionality, and information sharing between IESO NS and NS Power during the transition of responsibilities. It also asks about discussions on minimizing transition costs and the availability of historical data.

- 43 i. Lease arrangements and use of facilities (including, for example, whether 44 IESO NS and NS Power discussed the possibility of IESO NS leasing 45 space at any properties owned by NS Power) 1 2 3 4 ii. Employee compensation (includi...

AI summary The document discusses lease arrangements and employee compensation between IESO NS and NS Power, including the possibility of leasing space and transitioning employees. It also requests addressing other topics related to cost minimization discussed between the two entities.

1. With respect to the various budget items noted in Table 1, please provide a table that includes each budget item and the IESO NS’s understanding of whether each budget item reflects cost savings that should occur at NS Power as a result...

AI summary The document outlines requests for information regarding budget items, cost savings, and coordination between IESO NS and NS Power during the transition of responsibilities. It also asks about historical financial data and discussions on cost minimization during the transition.

hould be considered as illustrative: 8. Lease arrangements and use of facilities (including, for example, whether IESO NS and NS Power discussed the possibility of IESO NS leasing space at any properties owned by NS Power) 9. Employee comp...

AI summary The document outlines a list of topics to be considered in a regulatory proceeding, including lease arrangements, employee compensation, historical financial information, and software license transitions between NS Power and IESO NS, with a focus on cost minimization.

to the above, please also address any other topics that have been discussed between NS Power and IESO NS with respect to cost minimization. Request IR-7: Reference: Application, Exhibit B-2

AI summary The text requests an analysis of topics discussed between NS Power and IESO NS related to cost minimization, referencing Application, Exhibit B-2.

there be an audit of the Net Revenue Requirement Deferral and Variance Mechanism? Request IR-7: Refer to the Application and Exhibit A-1 – Introduction, which states at page 5, Lines 14 – 19: IESO Nova Scotia notes that actual expenditures...

AI summary The text includes several requests for clarification regarding the Net Revenue Requirement Deferral and Variance Mechanism, employee turnover estimates, vendor quotes, and budget comparisons. These requests aim to understand the implications of variances, the timeline for transferring responsibilities, and the assumptions behind cost estimates.

27 1 (iii) quantitative testing of underlying assumptions. 13 14 (a) Please explain whether DGT evaluated whether functions performed by consultants could be internalized at lower long-term cost. 15 16 (b) Please clarify whether DGT assess...

AI summary The document contains regulatory requests aimed at clarifying DGT's evaluation of internalization of consultant functions, overlap risk between internal and external advisors, and governance costs. It also asks for an explanation of the absence of finalized guidelines for the Deferral Mechanism and its alignment with regulatory principles.

u to be accurate in your forecasts? 45 MR. JOHNSTON: You absolutely should expect us to be accurate in our forecasts. 46 And I think what we're trying what I tried to acknowledge in my opening 8 18 27 33 35 41 42 43 1 statement is when we...

AI summary Mr. Johnston emphasizes the importance of accurate forecasting and acknowledges that initial forecasts were based on best guesses due to limited resources. He commits to improving forecast accuracy through operational experience and increased diligence in obtaining third-party cost information.

34 4) OM&A – Reasonableness of Proposed Costs 36 Given the concerns expressed above regarding transparency and potential lack of accuracy, the CA 37 remains generally concerned about the IESO's forecasted costs, especially given the IESO's...

AI summary The Commissioner of the Environment and Sustainable Resource Development (CA) expresses concerns about the IESO's forecasted OM&A costs, particularly in the Employees (Administration) and Governance categories, citing transparency and accuracy issues and the IESO's limited track record.

7 As noted in the Application, for the purpose of preparing its expenditure budget, "IESO Nova 8 Scotia has assumed that the 23 employees responsible for functional management and administrative matters are fully employed during the 26/27...

AI summary The document discusses the IESO Nova Scotia's assumption of full-time employment for 23 employees during the fiscal year and the methodologies used to establish compensation ranges. The Commissioner of the Environment and Sustainable Resource Development raises concerns about these assumptions.

ok into those numbers 28 you would see that we were underspent on our FTA costs and we were overspent 29 on our consulting and external support costs and net got to about the same dollar 30 value. 31 32 And so sort of our position coming i...

AI summary The discussion addresses staffing assumptions and cost overruns, noting underspending on FTA costs and overspending on consulting and external support. The CA criticizes the IESO's inaccurate employee cost forecasts and suggests a more accurate planning approach.

approving 16 the IESO's prior application, and any further measures as the Board may direct, the IESO should 17 also be directed to file monthly reports to update the Board on spending against budget. 19 In these monthly reports, IESO shou...

AI summary The document discusses the need for the IESO to file monthly reports detailing spending against budget, including explanations for variances of +/-10%, and cost minimization efforts. The Commissioner of the Environment and Sustainable Resource Development emphasizes transparency and advocates for pre-approval of unexpected costs rather than post-hoc approval.

b. Labour and Compensation Costs The single largest driver of the RR is employee compensation. The total revenue requirement includes an "Employees (administration)" component of $4.44M and an "Operations (system planning)" component of $3...

AI summary Employee compensation is the largest driver of the revenue requirement, with specific components for administration and system planning. The Industrial Group argues that the budget is overstated due to the lack of vacancy rate adjustment, insufficient independent support for salary benchmarking, and unassessed executive compensation.

10 M12633 Transcript, June 25, 2026, page 58. 196 Q. Okay. And so given that the roles haven't been filled and we're still looking at, you 197 know, mid-August to mid-September and potentially longer, we don't know, I guess 198 what is IES...

AI summary The IESO discusses projected costs related to unfilled roles and the impact on revenue requirement calculations. They explain that while there are delays in hiring, the overall cost remains similar due to offsetting variances in consulting expenses. The IESO did not include a vacancy adjustment in their labour expenses due to uncertainty in timing.

So can you explain to me kind of how that 50th percentile works with the selection of 392 the highest salary in the band? 16 IESO Nova Scotia response to DGT IR-10, M12663, March 10, 2026. 393 A. (Johnston) Yes. So this was really a simpli...

AI summary The 50th percentile was used as a simplifying assumption in budgeting for employee salaries, placing it at the top of each band to account for additional costs like travel and training not covered by historical data. Third-party consultant data informed compensation targets and staffing budgets for Administration employees.

s Application. Administration employees' salaries are 409 reasonable based on the best information and market research made available to IESO Nova Scotia 410 through its compensation consultants. 411 With respect to budgeting, IESO Nova Sc...

AI summary The application's employee salary figures are deemed reasonable by IESO Nova Scotia, based on market research and compensation consultants. The 50th percentile salary was used at the top of each band to simplify budgeting and account for indirect costs like travel and training, due to a lack of historical data.

33 M12633 Transcript, June 25, 2026, pages 483 - 484. 682 stakeholders regarding IESO Nova Scotia's full expected expenditures, inclusive of both OM&A 710 account? 711 A. (Johnston) So I think the view of the IESO that we've tried to come...

AI summary The IESO Nova Scotia acknowledges uncertainty in forecasting expenditures, particularly OM&A costs, due to unforeseen events. They mention the absence of hard caps on over-expenditures, referencing reports from DGT under M12412, which detail deferral and variance mechanisms in Ontario and Alberta.

41 NSEB Decision, M12412, February 25, 2026, p.20. 875 that circumstance, the variance is subject to a further reasonableness review by the NSEB. IESO 890 as they arise, and their treatment determined on a case-by-case basis. 891 892 Cost...

AI summary The NSEB Decision M12412 outlines that variances in cost categories exceeding +/-10% require explanation and prudence review by the IESO, placing the burden on them to demonstrate the prudence of expenditures.

20 SBA Closing Submission (M12633), July 24, 2026, p.13. 1 The SBA also provided that "Just as NS Power files monthly fuel adjustment mechanism reports, 2 which has a similar requirement for NS Power ratepayers to pay for all prudently inc...

AI summary The SBA argues that IESO Nova Scotia should provide monthly fuel adjustment mechanism reports similar to NS Power. IESO Nova Scotia opposes this, citing the small scale of its operations and the high administrative burden of monthly reporting. It also highlights the difference in scale and risk profile between IESO Nova Scotia and NSPI, noting that IESO's operational costs are much lower and more stable.

1 Benchmarking - 2 Another focus of intervenors with respect to staffing and compensation is related to the general - 3 reasonableness of compensation based on the associated benchmarking information used to inform - 4 the Application. 5 6...

AI summary The text discusses concerns raised by intervenors about the reasonableness of compensation based on benchmarking information. It highlights issues with the benchmarking approach used by HUB, including the inflation of the comparator group and the lack of actual benchmarking data. Additionally, it notes an underspend in administration salaries and questions the reasonableness of the proposed labour and salary budget.

1 7 CONCLUSION 2 For the reasons set out in this Reply to Closing Submission, IESO Nova Scotia respectfully submits 3 that the Application should be approved as submitted. 4 5 The intervenor closing submissions raise a number of issues reg...

AI summary IESO Nova Scotia submits that its application should be approved as submitted, emphasizing the need for funding to continue its operations during the 2026/2027 fiscal year. It acknowledges the importance of future transparency and improvements but argues that the current application is reasonable and necessary, and that proposed adjustments to staffing-related costs should not be adopted.

OPENING STATEMENT 27 IESO NOVA SCOTIA 1 In these roles, I've testified in 2 approval for a total revenue requirement of $14.85 million 3 for the '26-'27 fiscal year. This amount compromises of 4 $13.8 million in ongoing operating maintenan...

AI summary IESO Nova Scotia requests approval for a revenue requirement of $14.85 million for the '26-'27 fiscal year, citing prudent budgeting based on historical data and necessary costs for system planning, procurement, and compliance. The application reflects a phased transition and acknowledges the unique procedural context of its submission.

IESO NOVA SCOTIA PANEL 45 Cr-ex, (Murphy) 1 to progress a facility that has an extremely long lead 2 time, sometimes on the order of three to four years, it is 3 necessary for certain expenditures to be made even to 4 develop the project i...

AI summary The discussion centers on the necessity of making expenditures for long-lead-time projects, even before regulatory approval, to avoid losing potential reuse of equipment. The concern raised is about the risk of spending $15 million if the project is not approved, and the suggestion is to seek Board approval first.

INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 that we needed to move fast. It was going to be 2 impossible to know exactly how quickly we could get 3 everybody on board. 4 And so in terms of trying to be 5 transparent to the Boa...

AI summary The speaker discusses the need for transparency in reporting costs to the Board and intervenors, explaining the use of contracting resources to manage workload before filling full-time positions. They also mention underspending on FTA costs and overspending on consulting and external support costs in the '25/'26 Application.

IESO NOVA SCOTIA PANEL 61 Cr-ex, (Murphy) dollar value. And so sort of our position coming in here is absolutely we try to be very transparent on our hiring process and that it's taking certainly longer than we put into the Application, bu...

AI summary The discussion centers on the costs incurred by the organization in relation to hiring processes and consulting expenses. The organization acknowledges that there are additional costs not initially included in the application, and there is a request for a detailed comparison of actual costs to the budget. The speaker also mentions that the 2025–2026 figures are still pending audit and Board approval.

IESO NOVA SCOTIA PANEL 105 Cr-ex, (Murphy) 1 I guess from my concern is Q. 17 or avoidance of cost duplication as between IESO and Nova 18 Scotia Power? 19 A. (Milligan) Yes. That's a core INTERNATIONAL REPORTING INC. CERTIFIED COURT REPOR...

AI summary The discussion focuses on cost duplication and minimization between IESO and Nova Scotia Power during the transition process. Both parties are working collaboratively to ensure the lowest possible cost for customers, and there have been no specific disagreements on this point.

osts, and that was a accomplished as part of the transition. It wouldn't be the intention that that would happen on an ongoing basis, if that was your question, that we keep independent organizations? INTERNATIONAL REPORTING INC. CERTIFIED...

AI summary The discussion touches on cost-sharing between organizations during a transition, with examples like software licenses and office equipment. It also references the Synchronous Condenser Project, previously managed by Nova Scotia Power, in the context of an ACE Application.

1 We're waiting, like Nova Scotia Power, I think, for any 2 change in direction. 3 Q. CA IR-3. We had asked the IESO 4 to explain what is meant by "Materially tracking" because 5 the reference there was that: 6 7 8 9 10 IESO Nova Scotia no...

AI summary The discussion revolves around the IESO Nova Scotia's explanation of 'Materially tracking' in relation to its 2025/2026 actual expenditures compared to its proposed revenue requirement. The entity is questioned on whether the term implies alignment with the budget and whether the variances observed are significant.

IESO NOVA SCOTIA PANEL 119 Cr-ex, (Murphy) the example earlier, there's areas where we've been under able to be underspent, for example in our employee cost, because we didn't have employees, but we were then over in sort of contractor/con...

AI summary The discussion revolves around budget management and the use of contractor/consulting costs versus employee administration costs. Concerns are raised about using funds approved for one purpose for another, and the response emphasizes prudent budgeting and alignment with legislative mandates.

INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 to remain stable, so therefore they're kind of known or 2 assumed to be known costs. The Facilities, which are 3 currently an unknown cost, and IT software, which you 4 indicate are...

AI summary The discussion focuses on categorizing different types of costs, distinguishing between known and unknown costs, with an emphasis on Facilities costs as the primary variable moving forward. Operations and Administration salaries are considered stable or known, while Facilities costs remain uncertain.

IESO NOVA SCOTIA PANEL 153 Cr-ex, (MacAdam) 1 Costs is an unknown amount, but that the IT software costs 2 are well known in the industry. 3 And so it strikes me that of those 4 four heads that you refer to, the only one that is the 5 sign...

AI summary The discussion focuses on cost estimation for an organization, particularly the stability of various cost categories. The speaker notes that most costs are known or will be known soon, with Facilities costs being the only significant variable. The response also addresses administrative and operational salaries, noting that they are stable or well understood for the current year's application.

IESO NOVA SCOTIA PANEL 155 Cr-ex, (MacAdam) 1 [12:10:19] Okay. But you do reference Phase Q. 2 II Transitional Costs within the answer. On line 71, you 3 say: 4 5 6 7 For example, after Phase II Transitional Costs, the next largest OM&A co...

AI summary The discussion centers on clarifying the distinction between Phase II Transitional Costs and other OM&A cost categories, specifically addressing the Facilities and Technology costs. The speaker emphasizes that the Phase II implementation project is not included in the Revenue Application and highlights the uncertainty surrounding Facilities costs.

INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 where it talks about overall actual expenditures of 5.05 2 million, how does that compare to the 5.48 million as of 3 December 1st or sorry; December 31st? 4 A. (Johnston) So I think...

AI summary The discussion centers on discrepancies between two figures for overall actual expenditures as of December 31, 2025 — 5.05 million and 5.48 million — with one attributed to timing differences and the other reflecting the latest figures before full auditing.

IESO NOVA SCOTIA PANEL 175 Cr-ex, (MacAdam) 1 undertake to investigate the difference between the 5.05 higher than the prorated budget primarily due to higher consulting costs for program and project management as well as financial advisor...

AI summary The discussion revolves around the increased consulting costs for program and project management, as well as financial advisory work, due to a greater scope of work than originally planned. The lack of a formal management team during the budgeting process contributed to this increase, as the team underestimated the amount of work required to establish an organization from scratch.

IESO NOVA SCOTIA PANEL 215 Cr-ex, (MacAdam) 1 50 of 79, IR-19. And this talks about it indicates 2 question talks about the forecast .58 million financing 3 cost and a $10 million provincial operating line. And 4 then question (c) says sor...

AI summary The text discusses the financial assumptions and rate forecasts related to a potential loan for the IESO, which was initially considered for financing but later deemed unfeasible. The additional $0.08 million relates to interest costs from this loan, which is no longer included in the 2026/2027 Application.

IESO NOVA SCOTIA PANEL 227 Cr-ex, (MacAdam) 1 employee salary costs, you have things like travel, 2 training and other things that you won't see anywhere in 3 the budgeted items because we have no historical data to 4 put that data into ou...

AI summary The discussion revolves around budgeting for employee salary costs, including travel and training expenses not accounted for in the initial budget due to lack of historical data. The 15% figure is tied to benefits costs, and there is uncertainty about the 'Other Expense' category, which is the highest expense item in the budget.

IESO NOVA SCOTIA PANEL 277 Cr-ex, (Rudderham) 1 way, you would true-up where the variance account and the 18 would see these costs coming forward. 19 Do you mind if we just pull that Q. INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTER...

AI summary The discussion revolves around the calculation and handling of cost variances, specifically the difference between actual costs and budgeted amounts. These variances are accounted for and carried forward to the next revenue requirement, which is subject to oversight by the Board.

IESO NOVA SCOTIA PANEL 293 Cr-ex, (Rudderham) 1 included. So that is not the implementation cost. 2 No, but I'm asking you, the cost Q. 3 here, from what you've learned from IBM or what you've 4 been working on, does IESO anticipate the co...

AI summary The discussion centers on whether the IESO Nova Scotia anticipates changes in implementation costs by plus or minus 10 percent, and how such changes would be reported or addressed. The IESO indicates that approval from the Board is required before any clear view of cost changes can be determined, and that material changes would be noted in quarterly reports.

IESO NOVA SCOTIA PANEL 341 Cr-ex, (Rudderham) 1 requirement there are and we went over this last week 2 $1.77 million forecast for in relation to the Phase 3 II transition costs; correct? 4 A. (Johnston) That would be correct. 5 And this 1...

AI summary The discussion centers on the $1.77 million forecast for Phase II transition costs, which does not include implementation or regulatory process costs. The entity acknowledges that regulatory and legal costs may need to be deferred and accounted for separately as they arise.

IESO NOVA SCOTIA PANEL 363 Cr-ex, (Rudderham) 1 PDF page 21. 19 there are no capital costs included for approval in the INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 revenue requirement; correct? 2 (McFeters) That's correct. A....

AI summary The proceeding discusses the revenue requirement and operating expenses related to procurement costs, including capacity contracts and managing multiple RFPs for additional capacity. The discussion centers on the approval of these costs and their inclusion in the budget.

IESO NOVA SCOTIA PANEL 371 Cr-ex, (Rudderham) 1 Q. So this is a table of spending by 19 Is the IESO NS able to provide Q. INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 the actuals as an undertaking for the I'm only looking 2 at...

AI summary The proceeding discusses the IESO's procurement expenses over a four-month period, with the IESO acknowledging that actual spending data is not readily available but estimating it to be approximately $2 million based on forecasts. The discussion centers on financial transparency and the availability of procurement data.

INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 referring to there. That was the cost to put that 2 agreement in place. 3 Q. So okay. 4 And so then the IESO is taking the 5 position that none of the RFP costs would be included 6 u...

AI summary The discussion revolves around the interpretation of section 30 regarding the inclusion of RFP costs in the procurement process. The IESO argues that these costs are not included under section 30 until a contract is executed, while the witness seeks clarification on this interpretation.

IESO NOVA SCOTIA PANEL 435 Cr-ex, (Rudderham) 1 passed on their cost the customers, would still be having 16 NS had indicated that they intend to file an application 17 or a filing with the Board in relation to the 18 implementation budget...

AI summary The text discusses Nova Scotia Power's intent to file an application with the Energy Board regarding an implementation budget or plan. It also addresses whether regulatory costs are included in the current revenue requirement and mentions the use of a variance account for unanticipated costs.

IESO NOVA SCOTIA PANEL 467 Cr-ex, (Kayter) 1 I don't think it raises a particular 2 that in that matter, the March 2026 revenue requirement, 3 for the period ending there, that Doane Grant Thornton 4 provided evidence, a report that was pu...

AI summary The text references a Board decision in Matter 12412, which discusses the IESO's Net OM&A Deferral and Variance Account, noting that it lacked cost management controls and proper accounting policies, as highlighted in a report by Doane Grant Thornton.

IESO NOVA SCOTIA PANEL 489 Questions, (Chair) 1 Canadian Analysis that came out in 2025, which was just 6 categories, rather than allocating labour costs across 7 these various functions? 8 (Johnston) That's a really good A. 9 question. I...

AI summary The discussion revolves around the consistency of cost categories used in the '25/'26 Application and whether they should be changed to allocate labour costs across various functions. The speaker acknowledges that the current approach may not be optimal but justifies it as a matter of consistency.

1 procurement, for example, if you're not allocating labour 2 to that function and you intend to recover it from third 3 parties under the resource contracts, you know, is that 4 being missed? 5 A. (Johnston) So the good news, 6 maybe to t...

AI summary The discussion centers on the allocation of labour costs within procurement processes and whether they are being appropriately captured and accounted for, with a consideration of whether consolidating or separating these costs would be more rational.

IESO NOVA SCOTIA PANEL 495 Questions, (Chair) 1 you get visibility to the total magnitude of costs and 2 where are they sitting, in terms of putting the context of 3 a particular application together? So let us think 4 through how we can s...

AI summary The discussion focuses on cost visibility, recovery mechanisms, and allocation among customer classes. The Chair raises considerations about how costs are passed on to load-serving entities and ultimately to customers, emphasizing the need for transparency and ongoing dialogue around cost recovery.

IESO NOVA SCOTIA PANEL 503 Questions, (Chair) 1 that would be impactful and that are outside of the 12 budget, assuming that that's approved by the Board, to 13 then live within the means of that. 14 And, you know, whilst we've talked 15 a...

AI summary The CEO emphasizes the importance of accountability and prudent financial management, highlighting internal controls and budgeting processes to ensure spending aligns with the More Access to Energy Act. The CEO also stresses that the organization is committed to operating within approved budgets and being held accountable by both the board of directors and the regulatory body.

BROWN In-ch, (Mahody) 1 Q. So for costs, particularly of any 6 please, that you've filed a report in this matter and it's 7 been marked as Exhibit N-11? 8 Yes. A. 9 And that you responded to IRs Q. 10 from the Industrial Group, and that's...

AI summary The document outlines the qualification of Ms. Brown as an expert in revenue requirement, utility practices, OM&A costs, and deferral and variance mechanisms. It includes her prior testimony before regulatory bodies and her acceptance as an expert by the Board.