Topic:"Cost Deferral" in M11927

CI 50518 CA IR-5 Attachment 19 Page 174 of 423 REDACTED (CONFIDENTIAL INFORMATION REMOVED) 3 # Indicators Condition Choices Data Definitions/Explanations Protection and off road vehicles appear to effectively exclude or divert visitors and...

AI summary The text outlines various indicators and condition choices related to environmental protection, consumptive uses, domestic wells, and calcareous fen within a specific area. It includes data on wildlife disturbance, sustainable consumptive uses, proximity of domestic wells, and calcareous fen identification.

CI 50518 - HYD - Ruth Falls Main Dam Refurbishment ATO (NSUARB M11927) NSPI Responses to The Consumer Advocate Information Requests 1 (b) Cost minimization will be realized by using internal labour rather than contracted labour 2 at a mark...

AI summary NS Power is responding to information requests regarding cost minimization efforts for the Ruth Falls Main Dam Refurbishment project. They mention using internal labor instead of contracted labor and employing competitive procurement to reduce material costs by approximately $780,000.

NON-CONFIDENTIAL 1 Request IR-15: 2 3 Reference: NS Power states that costs for Administrative Overhead will increase by 4 $341,503, compared to an original budget of $72,085. 5 6 (a) Please provide a full breakdown of these costs. 7 8 (b)...

AI summary NS Power has requested an increase in administrative overhead costs for a project, citing a significant increase from the original budget. The response indicates that administrative overhead is calculated based on NSUARB-approved accounting policies and includes regular and overtime labour costs.

2 (b) The cost minimization efforts related to Contract costs, as described in CA IR-11 (b), 3 would have a direct impact on the minimization of contract AO, as every dollar of Contact 4 investment attracts Contract AO. 1 2024 includes act...

AI summary The text discusses how cost minimization efforts related to contract costs, as outlined in CA IR-11 (b), directly impact the minimization of contract asset obligations (AO), noting that each dollar invested in contracts attracts contract AO. It also mentions that 2024 data includes actual costs up to August 31, 2024, and forecasted costs for the remainder of the year.

- 1. OWNER ADMINISTRATION AND OVERHEAD COSTS ARE NOT INCLUDED. - 2. COSTS FOR HYDRO UNIT DOWN TIME RESULTING FROM INSTALLATION ARE NOT INCLUDED. - 3. COSTS ASSOCIATED WITH SALES TAX, HST, AND INSURANCE ARE NOT INCLUDED. - 4. MOBILIZATION A...

AI summary The text outlines several excluded costs in a project, including owner administration, hydro unit downtime, sales tax, insurance, mobilization, and indirect costs like permitting and engineering. The total direct construction cost is listed as $7,444,000 CAD.

REDACTED 1 Request IR-10: 2 3 Regarding the Account Variance Sheet on pages 5 and 6 of the current Application: 4 5 (a) For the "Materials" Line Item: 6 7 (i) Please identify the percentage increase in materials cost that NS Power has 8 al...

AI summary The text outlines an information request (IR-10) directed at NS Power concerning cost variances in the Account Variance Sheet related to the 2019 ACE Plan Application, specifically focusing on materials, contracts, and additional costs such as archaeological site security and pumping expenses.

REDACTED Description Increase in costs (in Thousands) ADDITIONAL SCOPE: NEW PERMITTING REQUIREMENTS Fish Passage upgrades $1,630 Engineering support for environmental permit $15 application Barn Swallow nest removal $11 Pre-tree clearing n...

AI summary The text outlines various cost increases associated with a project, including fish passage upgrades, archaeological engagement, and extended construction timelines. The table details specific line items with associated costs, such as engineering support, environmental permits, and construction-related expenses.

REDACTED Request IR-3: Refer to N-1 ATO page 3 of 10, para 2. Extended Construction Timeline, in which the Company concluded that the extended timeline led to increased project costs, associated with Contracts and Consulting detailed on pa...

AI summary The document contains a request (IR-3) and response from Nova Scotia Power Inc. (NSPI) regarding increased project costs due to an extended timeline, delays in work, and additional work scope. NSPI refers to NSUARB IR-10 (b) (i) for details on contract cost variances and provides a table outlining consulting cost variances, including environmental permitting requirements.

- The IPPI data suggests that an increase for inflationary reasons on the order of 25.4% across all sectors is in - line with general economic trends. However, more specific categories, such as fabricated metal products and - construction...

AI summary The text discusses the impact of inflation on material costs for a construction project, noting a 25.4% overall increase, with higher increases in specific sectors like fabricated metal and construction materials. A 47% increase in material costs is attributed to an extended construction timeframe, though savings in certain line items reduced the overall increase to 85% of the original budget, with concrete costs alone contributing $689,000 of the increase.

3.1.3 Conclusion - In general Midgard concludes that NS Power did face an environment of dramatically increasing costs from - the time of its original submission to the time of the ATO Application. Inflationary pressures, as seen in both -...

AI summary Midgard concludes that NS Power faced significant cost increases due to inflation and other factors between the original submission and the ATO Application. Inflationary pressures, as seen in CPI and IPPI data, contributed to a 35-40% increase in certain categories, though the 85% increase in some line items may also be due to localized impacts or scope changes.

6.2.1 Material Cost Increases - In general Midgard concludes that NS Power did face an environment of dramatically increasing costs from - the time of its original submission to the time of the ATO Application. On its face the available in...

AI summary Midgard concludes that NS Power faced significant material cost increases from the time of its original submission to the ATO Application, which may not be fully explained by general inflation data. The analysis suggests that localized impacts and potential scope increases may have contributed to the overspending.

Table 3: Nova Scotia CPI Trend19 Table 4: Canada IPPI Trend20 Table 5: Ruth Falls Archaeological Costs24 Table 6: Comparison of Recent Project Archaeological Costs25 Table 7: Ruth Falls Main Dam Refurbishment Variance Summary28 Table 8: 20...

AI summary The document presents a series of tables detailing various cost-related data, including archaeological costs, labour costs, materials costs, administrative overhead, and other expenses associated with projects such as the Ruth Falls Main Dam Refurbishment and the 2019 ACE and ATO applications.

3.1.1 Analysis - Midgard has referenced additional metrics to provide context to NS Power's claim that an extended - construction timeline contributed significantly to the $2 million cost variance. The Consumer Price Index - (" CPI ") is a...

AI summary Midgard has referenced the Consumer Price Index (CPI) to provide context for NS Power's claim that an extended construction timeline caused a $2 million cost variance. The CPI measures inflation and is used to track price trends in Nova Scotia from May 2019 to October 2024.

3.1.2 Conclusion - In general Midgard concludes that NS Power did face an environment of dramatically increasing costs from - the time of its original submission to the time of the ATO Application. Inflationary pressures, as seen in both -...

AI summary Midgard concludes that NS Power faced significantly increased costs due to inflation, as reflected in CPI and IPPI data, particularly in categories like concrete and fabricated metal products, which saw increases of 35-40% between the original submission and the ATO Application.

7 5.1.1 NS Power Submission 3 8 NS Power reported labour cost increases from the 2019 ACE to the ATO Application as detailed in [Table 8](#page-28-0) and 9 [Table 9](#page-28-1) which resulted in labour expense overspending of $545,477. co...

AI summary NS Power reported labour cost increases from the 2019 ACE to the ATO Application, resulting in a labour expense overspending of $545,477. The details are outlined in Table 8 and Table 9.

5.2.1 NS Power Submission - NS Power reported material cost increases from the 2019 ACE to the ATO Application as detailed in [Table 11](#page-30-0) - an[d Table 12,](#page-30-1) which resulted in labour expense overspending of $1,408,689....

AI summary NS Power submitted a report detailing material cost increases from the 2019 ACE to the ATO Application, resulting in a labour expense overspending of $1,408,689, as outlined in Table 11 and Table 12.

5 5.2.3 Analysis – Extended Construction Timelines - 6 The extended project timeline, resulting from delays in securing environmental permitting approvals, - 7 contributed to fluctuations in the costs of key construction materials, includi...

AI summary Extended construction timelines caused delays in environmental permitting, leading to increased material costs for NS Power. The cost increase of $741k is attributed to factors beyond inflation, with some line items showing savings. The original 2019 ACE application had limited material categories, raising questions about the scope of additional costs.

4 5.3.1 NS Power Submission - 5 NS Power reported contract cost increases from the 2019 ACE to the ATO Application as detailed in [Table 14](#page-33-0) - 6 an[d Table 15,](#page-34-0) which resulted in contract expense overspending of $2,...

AI summary NS Power reported increased contract costs from the 2019 ACE to the ATO Application, leading to an overspending of $2,595,802 as detailed in Table 14 and Table 15.

2 1. Fish Passage Upgrades ($1,630,000): Updated environmental permit requirements, including design, 3 construction, and installation 4 2. Construction Supervision ($241,000): Extended timeline and project execution delays 5 3. Security S...

AI summary The document outlines increased contracting costs for a project due to expanded scope items, including fish passage upgrades, construction supervision, and security services. These increases are attributed to changes in design, environmental permit requirements, and compliance with regulations. NS Power attempted to minimize costs through a Limited Notice to Proceed (LNTP), but this resulted in additional expenses.

- 1. Increased Contract Costs: AO charges are directly proportional to total contract costs. These costs rose significantly due to new scope items, higher commodity prices, and additional work required to meet regulatory demands. - 2. Exte...

AI summary The text discusses increased administrative overhead (AO) charges due to rising contract costs, driven by new scope items, higher commodity prices, and regulatory demands. Delays in environmental permits extended the project timeline, increasing AO costs. NS Power highlighted that cost minimization efforts helped control AO variance.

5.3.5 Conclusion - 1. Contracts: The $2,689,000 increase in contract costs reflects the expanded project scope and evolving requirements, including fish passage upgrades, construction supervision, and archaeological mitigation. While the $...

AI summary The conclusion discusses the reasons for increased contract and contractor administrative overhead (AO) costs, attributing them to expanded project scope, regulatory delays, and environmental permitting. Midgard concludes that these cost increases are reasonable, except for archaeological costs, which may not be a valid reason for variance.

Power states: "Cost minimization will be realized by using internal labour rather than contracted labour at a marked-up rate during the upcoming monitoring during the nine months drawdown of Ruth Falls reservoir. NS Power also sought to mi...

AI summary NS Power implemented cost-saving measures by using internal labor, leveraging regulatory experience, and assigning familiar staff to the Sheet Harbour Hydro Project. The AO variance of $341,503 is justified by project complexities and extended timelines. Midgard concludes that the increased administrative overhead is reasonable.

5.8.2 Analysis - The increase in the additional travel, legal, and meal expenses can be attributed to the extended construction - timeline and associated environmental permitting requirements. Specific comments on each of expense is as - f...

AI summary The analysis discusses increased travel, legal, meal, and equipment costs due to project delays, environmental permitting, and expanded project scope. These costs are attributed to extended timelines, regulatory requirements, and unexpected vendor selections. NS Power explains these variances as necessary for project compliance and cost efficiency.

Table 31: Cost Increase – Other Goods & Services (Contingency)[89](#page-50-1) Description NSUARB Approved ($) ATO Submission ($) Variance ($) Other Goods & Services (Contingency) $842,715 $1,342,714 $499,999 5.9.2 Analysis

AI summary Table 31 shows a significant variance between the NSUARB-approved amount and the ATO submission for Other Goods & Services (Contingency), with the ATO requesting an additional $499,999.

Table 32: Summary of Overspending Amount Conclusions Cost Category Midgard Conclusion Labour Reasonable Materials Recommend that NS Power provide additional clarity on the source of the material cost overspending. Contracts Reasonable, wit...

AI summary Table 32 summarizes conclusions regarding cost category overspending. Most categories are deemed reasonable, but additional clarity is requested for material costs, and archaeology-related costs are questioned as valid reasons for variance.

NON-CONFIDENTIAL 1 Request IR-21: 2 Reference: N-9, Revised Report, page 40, lines 9-15. 3 4 5 6 7 Contracts: The $2,689,000 increase in contract costs reflects the expanded project scope and evolving requirements, including fish passage u...

AI summary The document discusses a request to reconcile how Midgard concluded that the $331,000 incurred under the LNTP was counterintuitive to cost savings but deemed reasonable. It also asks whether some contract cost increases are unrelated to the project scope and whether a factual finding about NSPI's knowledge of an FAA would affect Midgard's opinion on the reasonableness of the costs.

12 While Midgard ultimately concludes that the archaeological costs sought for approval in the Ruth 13 Falls ATO are not overstated, and are in line with other projects, Midgard concludes that NS Power 14 ought to have known the archaeolog...

AI summary Midgard concludes that NS Power's archaeological costs for the Ruth Falls ATO are not overstated but were significantly underestimated, particularly in categories such as Contracts, Consulting, and Mi'kmaq Engagement, suggesting there may not be a valid reason for the variance.

E application. As such, the Company asserts that the need for an FAA, driven by the 2019 amendments to the Fisheries Act and changing regulatory expectations, added substantial costs to the project. [14] Another reason cited by NS Power in...

AI summary NS Power attributes the need for an Authorization to Overspend (FAA) to changes in the Fisheries Act and extended construction timelines due to additional environmental permitting requirements, resulting in increased project costs of approximately $2 million.

Date Filed: November 12, 2024 CA (NSPI) Page 4 of 7 1 associated with the lowering of the Ruth Falls Reservoir 18 feet below the minimum operating 2 level. This has led to additional costs of approximately $400,000." (ATO, p. 3) 3 (a) 4 Pl...

AI summary The document outlines several requests for information regarding additional costs incurred by NS Power, including engagement with the Mi'kmaq of Nova Scotia, cost increases due to labor, materials, contracts, and consulting, as well as cost minimization efforts.

33 is related to interactions with the DFO, rather than the NSECC? 1 Please elaborate, and explain how this may or may not have impacted the 28 inflation data available may not account for localized impacts related to 29 specific regions,...

AI summary The text discusses inflationary escalation and material cost increases in a project, referencing Midgard's analysis and the potential impact of localized factors. It also refers to a specific page in a report and asks for clarification on assumptions and explanations for discrepancies in cost increases.

1 2 reasonable; what is Midgard's recommendation to the Board on how to proceed? 3 4 (g) Does Midgard have any recommendation on how cost estimates for archeological costs can be improved on future hydro projects? 5 Request IR-20: 6 Refere...

AI summary The document contains requests for clarification regarding cost estimates, confidentiality of contract amounts, and the reasonableness of increased contract costs in a 2019 ACE application. Midgard concludes that the increased costs are reasonable, citing expanded project scope and regulatory delays.

- 1 Preamble: In Midgard's Original Report (section 5.2.2), which is identical to that in the second - 2 excerpt, Midgard expressed confusion with the calculation of the offsetting costs outlined by NSPI. - 3 In the Revised Report, Midgard...

AI summary The text discusses discrepancies in Midgard's reports regarding the calculation of offsetting costs and contingency amounts related to a project. It requests clarification on the reasonableness of these calculations, the basis for certain assumptions, and whether additional communications have occurred with NSPI.

been in a position to provide any type of reasoned estimate of the additional cost as a result of those potential changes, but that docs not mean that they should not have identified it as a concern. The uncertainty as to the future approv...

AI summary The SBA argues that NS Power should provide regular updates to the Board regarding project delays and costs related to fisheries infrastructure and archaeological expenses. Concerns include uncertainty about DFO approval and past overspending on archaeological work.

increased project costs of approximately $2 million. [Exhibit N-1, p. 3] The cost increase associated with the extended construction timeline includes both increased labour and materials expenses. - [15] The final reason noted by NS Power...

AI summary The document outlines increased project costs of approximately $2 million for the ATO application, primarily due to extended construction timelines, archaeology and Mi'kmaq engagement costs, and increased contingency amounts. NS Power has attributed these increases to various factors, including the need for additional archaeological assessments and evolving expectations around Mi'kmaq engagement.

- NS Power has not provided additional detail on these cost adjustments. Previously NS Power had provided the following explanation of its cost estimates for offsetting projects: - "NS Power estimated that approximately 20,000 m 2 could be...

AI summary NS Power's estimated cost for offsetting the West River Project has decreased, but the exact reasons for the decrease are unclear. The original estimate was based on 20,000 m² at $25/m², with a $500,000 contingency for up to 40,000 m². The final offsetting area is 27,601 m², suggesting a lower cost per square metre than initially estimated.

4.1 Updated Information - As discussed in Section [2](#page-5-1), the Project's FAA sets strict limits on the construction window for the Project. In - particular, NS Power may only decrease the headpond level from July 21, 2025 through Ma...

AI summary NS Power must complete construction of the Project between July 21, 2025, and March 31, 2026, as per the FAA. Delaying the project would lead to cost escalations and require an amendment to the FAA, which would be subject to the same regulatory timelines as a new application.

REDACTED Ruth Falls Main Dam Refurbishment Contingency Report 1 Appendix A Page 1 of 2 REDACTED (CONFIDENTIAL INFORMATION REMOVED) NSEB Approved Contingency/ Unbudgeted Spend Membership/Fleet/Comp Hrdware&Sftware (532600, 532700, 532900) T...

AI summary The document outlines contingency and unbudgeted spending related to the Ruth Falls Main Dam Refurbishment. It includes expenses for meals and entertainment, personal equipment, and other goods and services, with some costs incorrectly applied to account codes and planned for correction in Q1 2026.

REDACTED Ruth Falls Main Dam Refurbishment Contingency Report 2 Appendix A Page 1 of 1 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Account NSEB Approved Amount Spend-to-Date Contingency/ Unbudgeted Spend-to-Date Comments Freight/Postage/De...

AI summary The document outlines contingency and unbudgeted spending for the Ruth Falls Main Dam Refurbishment project, including freight, consulting, legal, and meal expenses. It details additional costs incurred due to unforeseen circumstances and adjustments in cost codes.

REDACTED Ruth Falls Main Dam Refurbishment Contingency Report 3 Appendix A Page 1 of 1 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Account NSEB Approved Amount Spend-to-Date Contingency/ Unbudgeted Spend-to-Date Comments Contracts (531550)...

AI summary The document outlines contingency spending for the Ruth Falls Main Dam Refurbishment project, detailing additional costs incurred due to varying site conditions, design modifications, and extended monitoring requirements. These include increased contract and labour costs, freight expenses, and consulting fees for engineering and archaeological assessments.