Topic:"Cost Considerations" in M12835

Cost of Removal The Company recognizes non-ARO costs of removal ("COR") as regulatory liabilities or regulatory assets. The non-ARO COR represents funds received from customers through depreciation rates to cover estimated future non-legal...

AI summary The Company accounts for non-ARO costs of removal (COR) as regulatory liabilities or assets, funded by customer depreciation rates. These costs cover estimated future decommissioning expenses for PP&E, accrued over asset lifetimes based on NSEB-approved depreciation studies and historical data.

2025 Annual Financial Statements Attachment 2 Page 39 of 48 REDACTED (CONFIDENTIAL INFORMATION REMOVED) As at December 31, 2025, the revolving credit facility has standby fees of 0.2 per cent calculated on the limit of the revolving credit...

AI summary The document details the revolving credit facility's standby fees at 0.2% and weighted average interest rates of 2.76% (2025) and 3.88% (2024). These figures highlight the cost structure of the facility and its evolution over the period.

2025 Annual Financial Statements Attachment 3 Page 2 of 30 REDACTED (CONFIDENTIAL INFORMATION REMOVED) The forward-looking information is based on reasonable assumptions and is subject to risks, uncertainties and other factors that could c...

AI summary The document outlines forward-looking information for NSPI, highlighting risks and uncertainties that could impact financial results, including regulatory, economic, operational, and environmental factors. It cautions against overreliance on these projections due to potential material differences between expectations and actual outcomes.

Highlights of the changes in fuel for generation and purchased power are summarized in the following table: For the Three months ended Year ended millions of dollars December 31 December 31 Fuel for generation and purchased power – 2024 $...

AI summary The document highlights changes in fuel costs for generation and purchased power for the periods ending December 31, 2024, and December 31, 2025, with various factors influencing these changes, including the increased Maritime Link assessment, changes in generation mix, and commodity prices. The FAM and FAM Regulatory Deferral are also discussed.

Per- and polyfluoroalkyl substances ("PFAS"): PFAS are man-made chemicals that are widely used in consumer products and can persist and bioaccumulate in the environment. The Company does not manufacture PFAS but because these contaminants...

AI summary PFAS, man-made chemicals persistent in the environment, may impact NSPI's operations despite not being manufactured by the company. Regulatory changes on PFAS could impose new costs for cleanup and alter land acquisition strategies, potentially causing a Material Adverse Effect.

Coal: A substantial portion of NSPI's coal supply comes from international suppliers, which was contracted at or near the market prices prevailing at the time of contract. The Company has entered into fixed-price and index price contractua...

AI summary NSPI sources a significant portion of its coal from international suppliers through fixed-price and index-linked contracts. As of December 31, 2025, 81% of 2026 coal needs and 8% of 2027 needs are hedged, reflecting a strategic approach to fuel procurement and cost management.

Natural Gas: NSPI periodically enters into physical and/or financial contracts based on forecast natural gas consumption to meet load and system security requirements. Volumes exposed to market prices are managed using financial instrument...

AI summary NSPI uses contracts and hedging to manage natural gas costs, with 99% of 2026 and 55% of 2027 requirements hedged as of December 31, 2025.

Charges Related to Wind-Down Costs and Certain Asset Impairments: In Q4 2024, the Company recognized $26 million, after-tax, in wind-down costs and certain asset impairments, primarily at Block Energy LLC ("Block Energy"). For further deta...

AI summary In Q4 2024, the Company recognized $26 million (after-tax) in wind-down costs and asset impairments, primarily at Block Energy LLC. These charges are detailed in the 'Significant Items Affecting Earnings' section of the document.

Financial Highlights

AI summary The document provides an overview of key financial highlights, including management's discussion and analysis, capital expenditures, and various regulatory and compliance considerations relevant to Nova Scotia Power Incorporated.

Q3 2025 compared to Q3 2024 For Q3 2025, net income attributable to common shareholders, compared to Q3 2024, increased $224 million, primarily due to charges related to the pending sale of NMGC recognized in Q3 2024; and increased earning...

AI summary Net income attributable to common shareholders increased by $224 million in Q3 2025 compared to Q3 2024, driven by charges from NMGC's pending sale and higher TEC earnings, partially offset by MTM losses, lower NSPI and NMGC earnings, and higher corporate costs. EPS changes were also influenced by increased weighted average shares.

Q2 2025 compared to Q2 2024 Q2 2025 net income attributable to common shareholders increased by $6 million primarily due to decreased MTM losses; increased earnings at TEC, EES, and NMGC; higher Corporate income tax recovery; and decreased...

AI summary Q2 2025 net income increased by $6 million due to reduced MTM losses, higher earnings from TEC, EES, and NMGC, tax recovery, and lower OM&G costs. Offsetting factors included the 2024 LIL sale gain, NMGC sale charges, lower NSPI earnings, reduced LIL equity earnings, and higher interest expenses. EPS remained consistent with Q2 2024.

Q1 2025 compared to Q1 2024 Q1 2025 net income attributable to common shareholders increased by $376 million and EPS – basic and diluted increased by $1.23 compared to Q1 2024. The increases were primarily due to decreased MTM losses; incr...

AI summary Q1 2025 net income and EPS increased by $376 million and $1.23, respectively, due to reduced MTM losses, higher earnings from TEC, NSPI, EES, and NMGC, a weaker CAD, and lower Corporate OM&G. These gains were partially offset by reduced equity investment income from LIL's sale and increased shares outstanding.

Cost of Removal ("COR") TEC, PGS, NMGC and NSPI recognize non-ARO COR as regulatory liabilities or regulatory assets. The non-ARO COR represent funds received from customers through depreciation rates to cover estimated future non-legally...

AI summary TEC, PGS, NMGC, and NSPI recognize non-ARO COR as regulatory liabilities/assets, funded via depreciation rates to cover future PP&E removal costs. Costs are accrued over asset lifetimes using regulator-approved studies, based on historical data and future cash outlay estimates.

Superfund and Former Manufactured Gas Plant Sites Previously, TEC had been a potentially responsible party ("PRP") for certain superfund sites through its Tampa Electric and former PGS divisions, as well as for certain former manufactured...

AI summary TEC and its divisions, including Peoples Gas System, Inc., are PRPs for superfund and former manufactured gas plant sites, with estimated liabilities of $15 million (USD $11 million) as of December 31, 2025. These liabilities are reflected in long-term liabilities and are recoverable through customer rates. Remediation costs are expected to span many years, with uncertainties from PRP creditworthiness and regulatory changes.

Inflation Risk: The Company may be exposed to changes in inflation that may result in increased operating and maintenance costs, capital investment, and fuel costs compared to the revenues provided by customer rates.

AI summary The Company may face increased operating and maintenance costs, capital investment, and fuel costs due to inflation, which could exceed revenues from customer rates, potentially impacting financial performance.

30. Non-Controlling Interest in Subsidiaries As at millions of dollars December 31 2025 December 31 2024 Preferred shares of GBPC $ 14 $ 14 Preferred shares of GBPC

AI summary This section discusses the preferred shares of GBPC as of December 31, 2025, and December 31, 2024, showing a value of $14 million in both years.

A summary of the activity related to employee PSUs for the year ended December 31, 2025 is presented in the following table: Employee PSU Weighted Average Grant Date FV Aggregate intrinsic value Outstanding as at December 31, 2024 832,093...

AI summary This section provides a summary of employee Performance Share Unit (PSU) activity for the year ended December 31, 2025, including outstanding units, grants, exercises, forfeitures, and associated compensation costs, tax benefits, and cash payments.

INTRODUCTION The Oracle account number consists of a twenty-nine digit "Accounting Flexfield" . The flexfield is made up of eight segments as shown below. CO Account Line of Bus Location CC Inter-Company Future Use Future Use XXX XXXXXX XX...

AI summary The document describes the structure of the Oracle account number, known as the 'Accounting Flexfield,' which is composed of eight segments used to categorize financial transactions for Nova Scotia Power and related entities. Each segment serves a specific purpose, such as identifying the company, account type, location, and cost center.

ACCOUNT SEGMENT Account Segment Value Account Segment Description 507150 REG FIXED COST RECOVERY ADJUSTMENT 507200 REG RATE STABILIZATION ADJ FIXED COST RECOVERY 507250 REG DSM DEFERRAL 507300 REG DSM EXPENSE 530050 REGULAR LABOUR 530060 R...

AI summary This document outlines various account segments and their descriptions, including categories related to fixed cost recovery, rate stabilization, demand-side management deferral and expenses, labour costs, benefits, travel, materials, contracts, security, and other operational expenses.

Employee Benefits The costs of the Company's pension and other post-retirement benefit programs for employees are expensed over the periods during which employees render service. The Company recognizes the funded status of its defined-bene...

AI summary The Company expenses pension and post-retirement benefit costs over service periods, recognizes funded status on the balance sheet, and accounts for gains, losses, and past service costs in AOCL. Refer to note 14 for details.

Inflation Risk: The Company may be exposed to changes in inflation that may result in increased operating and maintenance costs, capital investment, and fuel costs compared to the revenues provided by customer rates.

AI summary The Company faces inflation risks that could increase operating, maintenance, and fuel costs beyond revenue generated by current customer rates, potentially impacting financial stability.

2025 Annual Financial Statements Attachment 3 Page 2 of 30 REDACTED (CONFIDENTIAL INFORMATION REMOVED) The forward-looking information is based on reasonable assumptions and is subject to risks, uncertainties and other factors that could c...

AI summary The document outlines forward-looking information and associated risks, including regulatory, economic, commodity price, credit rating, rate base growth, capital investment, and environmental factors that could affect NSPI's financial results. It emphasizes uncertainties in energy consumption, technology, climate, and market conditions.

2025 Annual Financial Statements Attachment 3 Page 5 of 30 REDACTED (CONFIDENTIAL INFORMATION REMOVED) The Company implemented business continuity processes for certain impacted business and administrative functions. The systematic restora...

AI summary The Company incurred $7 million in after-tax costs for a cybersecurity incident in 2025, with $1 million recognized in Q4 2025. Cyber insurance is being utilized for claims, and IT system restoration continues. Cybersecurity risks are detailed in the 'Enterprise Risk and Risk Management' section.

Interest Rate Risk: NSPI utilizes a combination of fixed and floating rate debt financing for operations and capital expenditures, resulting in an exposure to interest rate risk. The allowed range of ROE will generally follow the direction...

AI summary NSPI uses fixed and floating rate debt, exposing it to interest rate risk. ROE adjustments follow interest rates with a lag, and credit ratings affect interest rates. Inflation may increase operating and capital costs beyond customer rate revenues.

Coal: A substantial portion of NSPI's coal supply comes from international suppliers, which was contracted at or near the market prices prevailing at the time of contract. The Company has entered into fixed-price and index price contractua...

AI summary NSPI sources coal internationally with hedging strategies, with 81% of 2026 and 8% of 2027 coal requirements hedged.

Future Employee Benefit Plan Performance and Funding Risk NSPI has both defined benefit and defined contribution employee benefit plans that cover both employees and retirees. The defined benefit plan is closed to new entrants. The cost of...

AI summary NSPI's defined benefit pension plan, closed to new entrants, faces funding risks influenced by investment performance, interest rates, inflation, and actuarial assumptions. These factors could necessitate larger future contributions, potentially leading to a Material Adverse Effect.

2025 Annual Financial Statements Attachment 3 Page 27 of 30 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Approximately 42 per cent of the full-time and term employees within the NSPI labour force are represented by a union and subject to a...

AI summary Approximately 42% of NSPI employees are unionized under a collective agreement expiring March 31, 2026. Failure to renew could lead to high labor costs, service disruptions, and a Material Adverse Effect. No labor disruptions have occurred since 1975.

Q1 2025 compared to Q1 2024 Q1 2025 net income increased by $53 million compared to Q1 2024. The increase is due to decreased income tax expense due to recognition of clean technology investment tax credits in 2025 and increased operating...

AI summary Q1 2025 net income rose by $53 million compared to Q1 2024, driven by lower income tax expenses from clean technology investment tax credits and higher operating revenues from increased sales volumes linked to favorable weather conditions.

5–7% average adjusted EPS (2) growth target through 2030 (3) - (1) Based on 2025 adjusted net income attributable to common shareholders ("adjusted net income"), excluding Corporate costs of $380 million. Adjusted net income is a non-GAAP...

AI summary The text outlines an average adjusted EPS growth target through 2030, based on 2025 adjusted net income excluding corporate costs of $380 million. Adjusted EPS and rate base growth forecasts use 2024 as the base year. These are non-GAAP measures, with details provided in Emera's Q4 2025 MD&A.

Highlights of net income changes are summarized in the following table: For the millions of USD Three months ended December 31 Year ended December 31 Contribution to consolidated net income – 2024 $ 83 $ 468 Increased operating revenues, p...

AI summary The document highlights changes in net income, showing an increase in operating revenues due to factors such as storm cost recovery revenue, new base rates, and customer growth, though partially offset by unfavourable weather. There are also increases in fuel costs, OM&G, depreciation, interest expense, and taxes, with some offsets from regulatory deferrals and tax credits.

Inflation Risk: The Company may be exposed to changes in inflation that may result in increased operating and maintenance costs, capital investment, and fuel costs compared to the revenues provided by customer rates.

AI summary The Company faces inflation risks that could increase operating, maintenance, and fuel costs beyond revenue generated by current customer rates, potentially impacting financial stability.

Supply Chain Risk Emera's ability to meet customer energy requirements, respond to storm-related disruptions and execute on the capital investment program in a cost-effective and timely manner are dependent on maintaining an efficient supp...

AI summary Emera's operations are vulnerable to supply chain risks, including delays, increased costs, and shortages caused by domestic and global disruptions. Factors such as trade restrictions, inflation, labor shortages, and government policies may exacerbate these risks, potentially leading to a Material Adverse Effect.

Pension and Other Post-Retirement Employee Benefits The Company provides post-retirement benefits to employees, including defined benefit pension plans. The cost of providing these benefits is dependent upon many factors that result from a...

AI summary The Company provides post-retirement benefits to employees, including defined benefit pension plans. Accounting for these benefits is a critical estimate, with factors such as employee demographics and actuarial assumptions significantly impacting financial statements. Pension plan assets are primarily equity and fixed income investments, and fluctuations in market returns and interest rates affect future pension costs. The Company uses smoothed asset values to reduce volatility in reported pension costs, with the discount rate being the main source of volatility.

Based on management's estimate, the reported benefit cost for defined benefit and defined contribution plans was $51 million in 2025 (2024 – $56 million). The reported benefit cost is impacted by numerous assumptions, including the discoun...

AI summary The reported benefit cost for defined benefit and defined contribution plans was estimated at $51 million in 2025, influenced by assumptions such as discount rates and asset returns. A 0.25% change in these assumptions would have impacted the 2025 benefit cost by approximately $0.5 million and $2.0 million, respectively.

Goodwill Impairment Assessments Goodwill is calculated as the excess of the purchase price of an acquired entity over the estimated FV of identifiable assets acquired, and liabilities assumed at the acquisition date. Goodwill is subject to...

AI summary The document discusses goodwill impairment assessments for Emera, including the calculation of goodwill, the annual impairment tests, and the impact of the sale of NMGC. It also highlights the results of qualitative assessments for PGS and TEC in Q4 2025 and the change in goodwill carrying value from 2024 to 2025 due to FX translation.

Stock-Based Compensation The Company has several stock-based compensation plans: a common share option plan for senior management; an employee common share purchase plan; a deferred share unit ("DSU") plan; a performance share unit ("PSU")...

AI summary The Company has multiple stock-based compensation plans, including options, share purchase, deferred, performance, and restricted share units. These are accounted for using the FV-based method, with costs recognized over the service period and re-measured at each reporting date for liability-based plans.

Employee Benefits The costs of the Company's pension and other post-retirement benefit programs for employees are expensed over the periods during which employees render service. The Company recognizes the funded status of its defined-bene...

AI summary The document discusses how the Company expenses pension and post-retirement benefit costs over the service periods of employees, recognizes the funded status of its defined-benefit and postretirement plans on the balance sheet, and accounts for unamortized gains, losses, and past service costs in AOCI or regulatory assets.

Improvements to Income Tax Disclosures The Company adopted Accounting Standard Update ("ASU") 2023-09, Income Taxes (Topic 740), Improvements to Income Tax Disclosures, effective December 31, 2025. The standard enhances the transparency, d...

AI summary The Company adopted ASU 2023-09, effective December 31, 2025, to improve income tax disclosures by enhancing transparency and decision usefulness through consistent categories and greater disaggregation of information in tax reconciliations and jurisdictional tax payments.

A summary of the activity related to employee PSUs for the year ended December 31, 2025 is presented in the following table: Employee PSU Weighted Average Grant Date FV Aggregate intrinsic value Outstanding as at December 31, 2024 832,093...

AI summary This document summarizes the activity related to employee Performance Share Units (PSUs) for the year ended December 31, 2025, including changes in outstanding PSUs, compensation costs, tax benefits, and cash payments. The weighted average grant date fair value and intrinsic value are also presented.

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AI summary The text appears to be a fragmented and incomplete section of a document, likely containing financial or accounting data related to materials and supplies, with references to percentages and numbers that are not fully elaborated.

2025 Cost of Removal (COR) Incurred by Capital Item $ millions CI Number Funding Project Description COR Incurred C0070728 IR 673 TPIF - Benjamins Mill Wind - C0073632 POA Facilities/Security upgr. 2025 - C0073958 LIN Grating Refurbishment...

AI summary The document outlines the 2025 Cost of Removal (COR) incurred by various capital items, listing projects such as facility upgrades, equipment replacements, and infrastructure refurbishments. A table provides details on the CI numbers, funding project descriptions, and the COR incurred, though most values are listed as '-' indicating no data. A section on Capital Recovery includes depreciation and accretion expenses for the distribution plant.

ova Scotia Power Incorporated 11931 4938 RC0001 1 2 3 4 5 6 Row Name of CFA Amounts determined for variable A in the definition of IFE for the affiliate Proportion determined under subsection 18.2(2) Amount G in Part 2K % Denied amount und...

AI summary The text provides a table with various financial and tax-related calculations, including amounts determined for variable A in the definition of IFE, proportions under subsection 18.2(2), denied amounts, and the corporation's share of denied amounts. The table includes references to tax years, percentages, and specific tax-related clauses.

NON-CONFIDENTIAL 1 • Meter and Inspection Services costs increased primarily due to higher wiring 2 inspection activity. The increase reflects greater demand associated with new 3 construction, renovations, and customer electrical service...

AI summary The document discusses the increase in Meter and Inspection Services costs due to higher wiring inspection activity linked to new construction, renovations, and customer electrical service upgrades. It also provides a detailed breakdown of electric revenues by customer segment for 2020 and 2021, including residential, commercial, industrial, and other categories.

Average Short-Term Borrowing Rate 3.39% 5.29% 2)Short-Term Interest Expense 2025 2024 Average Short-Term Borrowing ($ millions) 693.0 594.0 Average Short-Term Borrowing Rate 3.39% 5.29% 2025 Total Expense 2024 Total Expense ($ millions) ($...

AI summary The document presents data on short-term interest expenses for 2025 and 2024, showing an increase in average short-term borrowing from $594 million to $693 million, with a decrease in the average borrowing rate from 5.29% to 3.39%.

Nova Scotia Power Inc. Changes to Chart of Accounts Account Number Account Description Explanation for adding Previously recorded under Account 130 COMMERCIAL INVESTMENTS AND FINANCIAL ANALYSIS This cost centre is not typically used by NS...

AI summary Nova Scotia Power Inc. (NSPI) is proposing changes to its Chart of Accounts, specifically related to several cost centres. These changes involve correcting the allocation of expenses and ensuring accurate financial reporting. Some accounts were misclassified, while others were newly established in 2025. The adjustments do not affect the overall presentation of NSPI's regulated financial statements.

Request IR-16: - a) Please identify any indirect costs recognized in 2025 that arose from the Cybersecurity incident, including insurance premium changes, deductibles, business continuity costs, temporary staffing, billing and collection c...

AI summary Request IR-16 asks for the identification of indirect costs from a 2025 Cybersecurity incident and an explanation of their accounting and regulatory treatment, including insurance, legal, and customer notification expenses.

Request IR-18: - With regards to Attachment 1, Summary of Unregulated Adjustments: - a) Please provide further details of the Unregulated Retained Earnings line item "Extended customer credit monitoring service costs and manual meter readi...

AI summary The document contains two regulatory requests. Request IR-18 asks for details on unregulated retained earnings, specifically related to customer credit monitoring and manual meter reading costs, as well as a breakdown of unregulated compensation for the years 2023 to 2025. Request IR-19 seeks a breakdown of accounts payable by category and the main factors contributing to its increase in 2024.