Topic:"Cost Deferral" in M12663

Orders Sought On the basis of the foregoing, IESO Nova Scotia hereby applies to the NSEB for Orders, on or before February 27, 2026: - 1) Directing NS Power to begin paying, no later than April 1, 2026, monthly payments to IESO Nova Scotia...

AI summary IESO Nova Scotia is requesting the NSEB to direct NS Power to make monthly payments of $950,000 starting February 1, 2026, and to approve a revenue requirement of $14.85M for the 2026-2027 fiscal year. They also seek approval for a Net OM&A Deferral and Variance Account and request an in-person hearing.

1 2 3 4 /2026 revenue requirement application (currently before the NSEB 5 under M12412) requested approval of an OM&A deferral and variance account referred to as 6 the Net OM&A Deferral and Variance Account . The rationale for the initia...

AI summary IESO Nova Scotia seeks continuation of the Net Revenue Requirement Deferral and Variance Mechanism (formerly Net OM&A Deferral and Variance Account) for 2026/2027 and beyond to track revenue requirement variances. The mechanism, initially established under M12412, will account for forecasted Total Revenue Requirement Costs and actual cost variances, with renaming to reflect expanded scope.

lief be made on or before February 27, 2026, and include the - 22 following components: - 1. Direction to NS Power to begin paying, no later than April 1, 2026, monthly payments to - 24 IESO Nova Scotia in the amount of Nine Hundred Fifty...

AI summary NS Power is directed to pay IESO Nova Scotia $950,000 monthly starting February 1, 2026, until March 31, 2027, or a permanent fee recovery mechanism is approved. Authorization is granted to defer and recover these payments via FAM, deemed a prudent cost by the NSEB.

NON-CONFIDENTIAL 1 Request IR - 2 2 Reference: Exhibit A-1 (page 8, lines 24-26) 20 IESO Nova Scotia states that "any references to 3 capital costs in this Application are not included for approval at this time. The regulatory 4 pathways f...

AI summary The document discusses the review and approval process for capital costs by the Nova Scotia Energy Board (NSEB). IESO Nova Scotia states that capital costs will not be recorded in the deferral mechanism prior to NSEB approval. Approved capital costs will be tracked and compared against the approved budget, with variances included in the deferral mechanism.

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.

NON-CONFIDENTIAL 20 WACC on the Monthly Assessment amounts if the Monthly Assessment is approved 21 retroactively as requested and continuing to March 2027. 22 23 Response IR - 7 24 (a-g) Please note that the NSEB has approved IESO Nova Sc...

AI summary The NSEB approved temporary financial relief for IESO Nova Scotia, allowing NS Power to defer costs in a separate account with interest at its weighted average cost of capital (WACC). IESO Nova Scotia plans to apply for a permanent fee recovery mechanism in Q1 2026/27.

NON-CONFIDENTIAL 1 Request IR - 29 2 Reference: N-1(i), Exhibit C-1, pdf p.37-39 proposes a permanent Net Revenue Requirement 3 Deferral and Variance Mechanism ("DVM") with a simplified annual calculation and potential 4 inclusion of capit...

AI summary The text outlines a request for the IESO-NS to confirm details regarding the Deferral and Variance Mechanism (DVM), including sub-account management, eligibility criteria, and reporting requirements for a permanent Net Revenue Requirement. The request includes specific questions about sub-accounts, annual caps, eligibility conditions, carrying costs, and capital cost inclusion.

NON-CONFIDENTIAL 1 Request IR - 27 2 The application in Matter M12412 described a Provincial grant of $2.68 million to cover transition 3 costs. IESO Nova Scotia projected to use $1.23 million of that amount to pay for transition costs 4 i...

AI summary The document discusses a Provincial grant of $2.68 million intended to cover transition costs. As of March 31, 2026, $2.48 million is expected to be applied to transition costs, leaving approximately $0.20 million remaining from the grant.

Nova Scotia Independent Energy System Operator (IESO Nova Scotia) Responses to Nova Scotia Energy Board (NSEB) Information Requests 1 Request IR - 28 2 On pages 38 and 39 of its application, IESO Nova Scotia provides a "simplified calculat...

AI summary The Nova Scotia Energy Board (NSEB) has requested detailed information from the Nova Scotia Independent Energy System Operator (IESO Nova Scotia) regarding its proposed Net Revenue Requirement Deferral and Variance Mechanism, including administration manuals, interest costs, reporting requirements, and risk transfer to customers.

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.

NON-CONFIDENTIAL 1 Request IR - 6 2 Refer to the Application and Exhibit C-1 – Net Revenue Requirement Deferral and Variance 3 Mechanism, starting on page 37: 4 (a) IESO NS is proposing that the Net OM&A Deferral and Variance Account, as d...

AI summary The Nova Scotia Independent Energy System Operator (IESO NS) is proposing the establishment of a permanent Net Revenue Requirement Deferral and Variance Mechanism. The Small Business Advocate (SBA) is requesting information on the true-up schedule, variance policies, consequences of imprudence, and audit procedures related to this mechanism.

Nova Scotia Independent Energy System Operator (IESO Nova Scotia) Responses to Consumer Advocate (CA) Information Requests 33 Delaying these significant cost categories to potentially manage liabilities due was not 71 that work and associa...

AI summary The IESO Nova Scotia is addressing the Consumer Advocate's information requests regarding the deferral of costs and the use of the FAM for cost recording and deferral. The IESO explains that the delay in cost categories was to align with the NSEB's potential approval of a permanent fee recovery mechanism. The FAM was chosen as a pre-existing NS Power mechanism, but the NSEB did not approve it for cost recording and deferral.

- 4 Figure 1 Summary of findings, observations and conclusions # Report section Findings, observations, and conclusions As part of the interrogatory process, IESO Nova Scotia provided 2025/2026 actual results as well as variance explanatio...

AI summary The document discusses the 38% increase in 2025/2026 actual costs compared to the prorated budget, primarily due to higher consulting costs from an expanded scope of work. It also reviews IESO Nova Scotia's Net Revenue Requirement Deferral Mechanism, noting that deferral accounts are common practice among utilities and ISOs for rate stabilization and compliance with regulatory frameworks.

- 4 We note that 2025/2026B listed in the Application includes one-time transitional costs in the total. - 5 IESO Nova Scotia explained the variance at December 31, 2025, as follows: - 6 Transition costs to December 31, 2025, are 38% highe...

AI summary The document notes that the 2025/2026B application includes one-time transitional costs. IESO Nova Scotia explained that transition costs to December 31, 2025, are 38% higher than the prorated budget, mainly due to increased consulting costs for program and project management, as well as financial advisory work due to a greater scope of work than originally planned.

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.

10 Figure 26 – Summary of IESO Nova Scotia's response to Intervenors Topic Intervenor concern IESO Nova Scotia's explanation/supporting evidence provided101 Fuel Adjustment Mechanism Intervenors expressed significant concern regarding the...

AI summary Intervenors raised concerns about the use of the Fuel Adjustment Mechanism (FAM) by IESO Nova Scotia, including potential misalignment with its statutory purpose and unfair cost distribution. IESO Nova Scotia responded by emphasizing the exceptional and temporary nature of the FAM's use, proposing an interim sub-account or a stand-alone deferral account to address concerns while maintaining regulatory clarity.

Response - IR-9 (a) GUP generally includes having clear guidelines, accounting policies, thresholds, and controls in place. As noted in our report conclusion for M12412, at the time of our review NSIESO had basic financial controls in plac...

AI summary The response addresses concerns regarding the absence of financial guidelines, accounting policies, and controls for the OM&A deferral and variance account at NSIESO. While the Deferral Mechanism is approved, the report emphasizes the need for safeguards. It also raises questions about the deferral of capital costs by ISOs and their alignment with GUP.

Response - IR-10 - (a) Yes. Utilities typically own and operate transmission and generation assets and recover capital investments over time. This allows utilities to stabilize customer rates when expenses differ from forecasted amounts, m...

AI summary The response discusses the differences between utilities and ISOs regarding capital deferral practices, emphasizing the need for governance and control measures. It references prior Board direction for the IESO to develop guidelines and highlights the importance of prudence reviews and accounting policies.

BEFORE THE NOVA SCOTIA ENERGY BOARD 1 2 3 IN THE MATTER OF: 4 5 The More Access to Energy Act, 1998, SNS 2024, c 2, Sch B, (the "Act") 6 7 and - 8 9 IN THE MATTER OF: 10 11 12 an application by the Nova Scotia Independent Energy System Ope...

AI summary The document outlines the opening statement of the Small Business Advocate in a proceeding before the Nova Scotia Energy Board regarding the Nova Scotia Independent Energy System Operator's (IESO-NS) application for approval of its proposed expenditure and revenue requirements for the test year ending March 31, 2027. The IESO-NS was created in October 2024 and has filed two annual applications, with the first being approved in February 2026.

- 2 requirement application on January 20, 2026 (the "Application"). - 3 Like the previous annual application, IESO-NS has requested a variance account to address any - 4 over or under collection and/or spending as compared to its Board ap...

AI summary The IESO-NS has requested a permanent variance account to address spending discrepancies, including capital and procurement costs. The SBA raises concerns about proper spending oversight, debt from ratepayers, potential duplication of effort with NS Power, and risk allocation for IESO-NS, especially with upcoming changes by 2030.

17 Request IR-29: - 18 Reference: N-1(i), Exhibit C-1, pdf p.37-39 proposes a permanent Net Revenue 19 Requirement Deferral and Variance Mechanism ("DVM") with a simplified annual 20 calculation and potential inclusion of capital and procu...

AI summary The text discusses a proposed permanent Net Revenue Requirement Deferral and Variance Mechanism ('DVM') with simplified annual calculations and potential inclusion of capital and procurement categories in the future. It requests confirmation from IESO-NS regarding the maintenance of separate sub-accounts for various categories.

versus new 2026/27 scopes. 2. Please confirm whether any 2025/26 transitional scopes slipped into 2026/2027, quantify the carry-forward and explain why they remain “transition” versus ongoing OM&A. Reference: N-1(i), Exhibit C-1, pdf p.37-...

AI summary The text outlines a series of questions regarding the Net Revenue Requirement Deferral and Variance Mechanism (DVM), including sub-account management, annual caps, eligibility criteria, carrying costs, and retroactive assessments. It references a proposed simplified DVM calculation and asks for templates and sensitivities.

29 Request IR-13: 30 1. Reference: Application page 37, “IESO Nova Scotia is requesting a continuation of the Net OM&A 2. Deferral and Variance Account for 2026/2027 and in perpetuity for the purpose of tracking and 3. deferring any varian...

AI summary IESO Nova Scotia is requesting the continuation of the Net OM&A Deferral and Variance Account for 2026/2027 and in perpetuity to track and defer any variance from the approved revenue requirement.

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.

rral and Variance Mechanism to reflect its potential use in truing up various other cost categories in the future.” With regards to proposed changes in deferral account, please provide the following: 1. The proposed revised definition of t...

AI summary The document discusses the proposed changes to the deferral account, including its definition, parameters, and the rationale for these changes. It also raises questions regarding the review and recovery of capital costs, reimbursement of procurement costs, and the minimum monthly funding requirement to meet liabilities.

2025/2026 annualized amount based on the 2025/2026 budget and not adjusted based on “the most recent assumptions on the number of employees and salaries as currently planned by the end of 2025/2026.” Regarding the Phase II readiness assura...

AI summary The text includes questions and comments regarding the 2025/2026 budget, consultant readiness for Phase II, the Net OM&A Deferral and Variance Account, and the use of a provincial grant. It also requests additional information on the account's rationale, balance, and recovery, as well as clarification on the application of grant funds.

IESO Nova Scotia projected to use $1.23 million of that amount to pay for transition costs in fiscal 2025/2026. It also forecast to apply the balance of $1.44 million against the “Ongoing OM&A costs”. 1. How much of the Provincial grant of...

AI summary IESO Nova Scotia is projected to use $1.23 million of a $2.68 million provincial grant for transition costs in fiscal 2025/2026, with the remaining $1.44 million applied to ongoing OM&A costs. The application includes a simplified calculation for the Net Revenue Requirement Deferral and Variance Mechanism.

he Net OM&A Deferral and Variance Account? On pages 38 and 39 of its application, IESO Nova Scotia provides a “simplified calculation for the Net Revenue Requirement Deferral and Variance Mechanism”:

AI summary The document discusses the Net OM&A Deferral and Variance Account, referencing a simplified calculation provided by IESO Nova Scotia on pages 38 and 39 of its application.

1. Will IESO Nova Scotia be preparing an administration manual detailing the policies and procedures applicable to its proposed deferral and variance account (and if so when)? 2. Please explain if interest or financing costs will be associ...

AI summary The text presents a series of questions directed at IESO Nova Scotia regarding the administration, financial implications, reporting requirements, and risk management of its proposed Net Revenue Requirement Deferral and Variance Mechanism.

6/2027 revenue requirement) and the impact of accumulating deferrals if IESO Nova Scotia does not apply for a permanent fee and cost recovery mechanism in time for it to be approved by March 31, 2027. 1. Given that none of the costs associ...

AI summary The text discusses the need for a permanent cost recovery mechanism for IESO Nova Scotia, the use of the Fuel Adjustment Mechanism for proposed Monthly Assessment costs, and the deferral of rate recovery mechanism approval. It also raises concerns about financial liabilities and the impact of deferrals on rate classes.

13 14 IESO Nova Scotia also requested that the Net OM&A Deferral and Variance Account continue to 15 be used as a mechanism to true-up variances in actual Total OM&A Costs, but should be inclusive 16 of other cost categories (i.e.: not jus...

AI summary IESO Nova Scotia requested the continuation of the Net OM&A Deferral and Variance Account, but with an expanded scope to include all cost categories, not just OM&A. The mechanism was proposed to be renamed the 'Net Revenue Requirement Deferral and Variance Mechanism.'

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.

15 6) Approval of Net Revenue Requirement Deferral and Variance Mechanism 16 17 Through this Application, IESO NS requests approval to maintain its Net OM&A Deferral and 18 Variance Account, which would be more appropriately renamed as the...

AI summary IESO NS requests approval to rename and continue using the Net Revenue Requirement Deferral and Variance Mechanism. Concerns have been raised about the risk of imprudence and who would bear the associated costs, with the CA emphasizing that customers, not IESO NS, would ultimately bear these costs due to its non-profit status.

Delivered by Email Crystal Henwood Regulatory Affairs Officer/Clerk Nova Scotia Energy Board 3rd Floor, 1601 Lower Water Street PO Box 1692, Unit M Halifax, NS B3J 3S3 Dear Ms. Henwood: Re: M12663 – IESO Nova Scotia – 2026/2027 Revenue Req...

AI summary The Industrial Group opposes the proposed Deferral Account and questions the quantum of the Revenue Requirement (RR) for IESO-NS. They also raise concerns about the lack of transparency, procurement practices, and cost duplication between IESO-NS and NSPI, while requesting clarifications and improvements.

scope to include capital cost variances and, essentially, allow it to act as a catch-all account for all unforeseen costs. The Industrial Group respectfully submits that this is not a reasonable ask. The Industrial Group agrees with the co...

AI summary The Industrial Group opposes expanding the proposed deferral and variance account, citing concerns over lack of financial guidelines and governance controls. They reference Doane Grant Thornton LLP's analysis, which highlights risks such as cost overruns, reduced transparency, and potential burdens on ratepayers.

a. No expansion for Capital Costs IESO-NS seeks approval to expand its proposed Deferral Account to include capital cost variances. However, IESO-NS has not sought Board approval of any specific capital costs in either its 2025/2026 or 202...

AI summary IESO-NS seeks to expand its Deferral Account to include capital cost variances, but has not yet sought Board approval for specific capital costs in its revenue requirement applications. The Industrial Group and DGT argue that including capital costs in the Deferral Account is premature and inconsistent with Good Utility Practice without proper governance, accounting policies, and Board approval.

CONCLUSION In reliance on the above submissions, the Industrial Group requests that the Board: - 1. decline to make the Deferral Account Mechanism permanent, and decline to expand its scope to include capital cost variances or catch-all un...

AI summary The Industrial Group requests the Board to not make the Deferral Account Mechanism permanent or expand its scope, and if approved for 2026/2027, to implement it on a limited, interim, and conditional basis with specific governance requirements.

24 M12633 Transcript, June 25, 2026, pages 396. 544 545 In principle, the DVM is merely an extension of the Board-approved Net OM&A Deferral and 546 Variance Account under M12412, which was revised in order to achieve two main objectives:...

AI summary The DVM is an extension of the Net OM&A Deferral and Variance Account under M12412, aimed at simplifying its calculation and capturing all aspects of IESO Nova Scotia's revenue requirements. DGT responded to concerns about bifurcating costs into sub-accounts, stating that while sub-accounts may be used for tracking, they do not affect the overall efficiency or transparency of financial statements.

26 DGT response to IG IR-5, M12663, May 12, 2026. 572 presentation as provided in the Application. DGT found in its report in this proceeding that "The 573 modified calculation of the Deferral Mechanism fosters simplicity for tracking purp...

AI summary DGT discusses the modified calculation of the Deferral Mechanism and its alignment with the NSEB's Decision under M12412, including the +/- 10% variance threshold for OM&A Deferral and Variance Account. IESO Nova Scotia clarifies that the new DVM aligns with the Board's guidance and that prudency review thresholds would naturally extend to the DVM.

32 M12633 Transcript, June 17, 2026, pages 234 - 235. 654 655 And: 656 Q. And as I understand the evidence as it's come in in this hearing, the request that 657 categories such as capital would be included, you've modified that in your tes...

AI summary The discussion centers on the clarification of capital cost recovery, specifically the inclusion of depreciation and interest expenses rather than deferring capital itself. The testimony acknowledges the need for clarity in the Application and references the DVM guidelines and final accounting policies to be submitted to the NSEB.

t, is there some sort of mechanism that 754 you intend to also implement beside this that would ensure that your costs, your actual 755 costs that you're flowing through there, are as low as possible? 756 I'm asking from the context of if...

AI summary The discussion revolves around the implementation of a deferral and variance mechanism to manage costs and the need for internal controls to ensure cost control and prudent budgeting. The speaker emphasizes the importance of financial controls and segregation of duties to manage costs effectively.

38 M12633 Transcript, June 25, 2026, page 507-508. 799 844 to deem a cost imprudent, I think, because we have spent some time talking about today. 845 The challenge, of course, will be what to do with that. 846 Has that cost already been i...

AI summary The discussion centers on the establishment of a Net OM&A Deferral and Variance Account and the need for thresholds to manage cost variances. The NSEB's previous decision in M12412 emphasizes the importance of regulatory review for significant variances, while Doane Grant Thornton recommends defined thresholds to ensure accountability and control over cost overruns.

LIST OF UNDERTAKINGS NO. PAGE NO. 6 System Operator was created in October 2024 and has been 7 active, first through a Board of Directors appointed in 8 February of 2025, and then through the hiring of various 9 staff, starting in the summ...

AI summary The document outlines the creation of the System Operator in October 2024 and the filing of two annual applications by IESO NS for the recovery of expenditures and revenue requirements. The first application, approved in February 2026, included the creation of an OM&A Deferral and Variance Account, while the second application, filed in January 2026, requested a permanent variance account with additional cost categories.

that reason. 1 the time that's put towards those. 2 MS. MacADAM: Okay. And then if we go 3 to page 60 of 82? 4 BY MS. MacADAM: 5 Q. In response to question (a) or 6 sorry, 25(a), it says: 7 8 9 10 11 12 13 14 15 16 17 18 The rationale [for...

AI summary The discussion revolves around the recovery of deferred amounts from the 2025/2026 fiscal year, with a focus on how these amounts will be recovered through a combination of interim and permanent fee mechanisms. The entity mentions an expected rebate of approximately $300,000 to be returned to customers due to underspending against the approved allowance.

IESO NOVA SCOTIA PANEL 195 Cr-ex, (MacAdam) 1 MR. JOHNSTON: So this is well, 2 this is complicated. So maybe it's worth and I might 3 not be helping with my language, and so, Mr. Chair, I 4 apologize if that's the case. 5 THE CHAIR: I gues...

AI summary The discussion revolves around revenue requirements and deferral accounts, with Mr. Johnston explaining the approved revenue requirement for '25/'26 and the need to recover costs through a permanent fee. The Chair suggests that the variance is irrelevant due to zero revenue and all costs going to the deferral account.

IESO NOVA SCOTIA PANEL 197 Cr-ex, (MacAdam) 1 then the actual audited financial costs. 2 THE CHAIR: And I guess it may be 3 semantics. You divert your entire revenue requirement, is 4 the way I'm looking at it. And here, you're just 5 adju...

AI summary The discussion revolves around the cost recovery mechanism and the application for the 2026/2027 revenue requirement. The witness clarifies that the permanent fee mechanism is tied to the approved revenue requirement and how it flows into rates for recovery, rather than waiting for a future application.

IESO NOVA SCOTIA PANEL 233 Cr-ex, (Rudderham) 1 (Johnston) Yes. So like the A. 2 concept is we have an approved revenue or revenue for 3 the year. We then have actuals, and then once you get to 4 sort of truing-up at the end of the year, t...

AI summary The discussion centers on a revenue requirement mechanism that is being proposed to operate in perpetuity and be expanded to include additional cost categories, such as capital costs. The mechanism is intended to capture variances between approved revenue and actuals, with adjustments made through a deferral account.

IESO NOVA SCOTIA PANEL 237 Cr-ex, (Rudderham) 1 the deferral, a need for us to have depreciation on an 2 asset that we hadn't intended to buy but circumstances 3 laid out that it needed to happen. 4 Okay. Let's bring it back to Q. 5 anothe...

AI summary The discussion revolves around the deferral of capital costs related to synchronous condensers. The IESO NS does not intend to include these costs in the deferral account unless there is a directive for them to purchase such assets, which is currently not expected.

IESO NOVA SCOTIA PANEL 239 Cr-ex, (Rudderham) 1 deal with it. 2 I believe you've indicated that Q. 3 you're open to the possibility of interim adjustments to a 4 deferral account; is that right? 5 A. (Johnston) So I mean, at least as 6 we...

AI summary The discussion centers on the possibility of interim adjustments to a deferral account and the process of reviewing prudence and reasonableness of expenses. The speaker questions the lack of interim reporting and how the Board can assess variances without a basis for comparison. The response outlines the revenue application process and quarterly reporting as mechanisms for transparency.

IESO NOVA SCOTIA PANEL 241 Cr-ex, (Rudderham) 1 application to say why we believe we need to continue to 2 spend those costs. 3 Okay. And in the last revenue Q. 4 requirement proceeding, Matter M12412, the Board had 5 directed that specifi...

AI summary The discussion revolves around the deferral account mechanism and the need for specific accounting policies to be developed and approved before recovery under the deferral mechanism. The application refers to Matter M12412, where the Board directed the development of guidelines and accounting policies. The testimony indicates that these policies are still underway and will be addressed in the next Revenue Application.

INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 is the approval of the revenue requirement, but IESO Nova 2 Scotia is also asking for approval of a deferral and cost 3 variance account; correct? 4 MR. FUREY: It is, correct. 5 THE...

AI summary The discussion centers on the approval of a deferral and cost variance account by IESO Nova Scotia, with a clarification that such accounts do exist and are relevant to how they will be operated if approved in perpetuity. The concern is about what ratepayers can expect under this account and the need for finalization of the document.

IESO NOVA SCOTIA PANEL 247 Cr-ex, (Rudderham) 1 got a whole bunch of unanswered questions, and it would be 2 beneficial to the ratepayers to see more information, 3 rather than less. And the direction from the Board in the 4 last revenue r...

AI summary The discussion centers on the need for clarity in accounting policies related to deferral accounts and capitalization, as well as the timing of filings for revenue requirements. Concerns are raised about the lack of finalized policies and guidelines, which create uncertainty in how deferral accounts should be managed and capitalized.

IESO NOVA SCOTIA PANEL 249 Cr-ex, (Rudderham) 1 THE CHAIR: So, Mr. Furey, we have 2 requests by the company for the approval of deferral and 3 variance account, which these accounting policies would 4 apply. They're not currently approved,...

AI summary The discussion centers on the approval of a deferral account and variance account by the Board, with concerns raised about the current draft status of the accounting policies and their approval process. The Chair and Mr. Furey question whether the Board can rely on incomplete and unapproved policies for decision-making.

INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS point in time. Q. What I'm trying to understand is why it would be more appropriate to put these costs in a deferral account rather than expect IESO NS to apply to the Board for interi...

AI summary The discussion focuses on the IESO's approach to managing unforeseen costs and the use of a deferral account. The IESO emphasizes its commitment to presenting costs to the Board in advance and operating within approved budgets, even in years of uncertainty.

1 However, if something were to come up 2 where there was deemed to be some sort of rate impact or 3 shock, then I think the Board, when it came back to our 4 time of seeking recovery and approval, would very much be 5 in the position to d...

AI summary The discussion revolves around the potential for rate impacts and how the Board might handle such situations by deferring recovery over multiple years. There is clarification about the undertaking to provide accounting policies and related mechanisms, as well as a mention of revenue requirements and their impact on rates.

IESO NOVA SCOTIA PANEL 267 Cr-ex, (Rudderham) 1 deferral account, and in response to an IR from the IG 2 I don't believe we need to bring it up, but it's Exhibit 3 N-5, IR-30(a) the IESO NS had confirmed that the 4 subledger template for t...

AI summary The discussion revolves around the deferral account and its tracking, with the IESO NS confirming that the subledger template for the account has not yet been developed. The organization plans to set it up after finalizing audited financials for '25/'26. The tracking of the account balance is based on annual audited figures, not real-time, and the weighted average cost of capital is being calculated to determine carrying costs.

IESO NOVA SCOTIA PANEL 269 Cr-ex, (Rudderham) 1 We've also talked that the mechanics, the procedures 2 associated with the deferral account are still being 3 documented. And I think it is the actual calculation 4 of interest associated wit...

AI summary The discussion revolves around the deferral account mechanics, including how interest is calculated and when it starts accruing. The IESO acknowledges that the policy and procedures are still being developed and that definitive answers are not yet available. There is also mention of financial implications for customers based on spending decisions.

IESO NOVA SCOTIA PANEL 271 Cr-ex, (Rudderham) 1 terms of our overall costs, but exactly how that's going 2 to look through coming through the deferral account, I 3 think it would be helpful for us to save that for our 4 documentation. 5 TH...

AI summary The discussion centers on the use of a deferral account to manage variances between forecasted and actual costs, with the organization seeking approval in principle for a mechanism that would allow for future recovery of these costs from customers. The Chair questions why the documentation was not filed with the application for approval.

October and December, correct. Q. Okay. And so during any given Revenue Requirement Application, it will be both the revenue requirement for the forthcoming year along with a prudence review of actual expenditures under the deferral accoun...

AI summary The discussion focuses on the prudence review of actual expenditures under a deferral account during a Revenue Requirement Application. It explains how a true-up process would adjust the revenue requirement by offsetting discrepancies between the deferral account and the applied revenue, potentially resulting in a net revenue requirement.

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.

LIST OF UNDERTAKINGS NO. PAGE NO. 1 2 You see that there? 3 (Johnston) M'hm. A. 4 So I just want to confirm IESO's Q. 5 understanding is that for the actual expenditure for 6 2025/2026, the prudency review is at the cost category 7 level;...

AI summary The discussion revolves around prudency reviews and reporting requirements for expenditure variances, particularly in the context of the IESO's deferral account and the 2025/2026 revenue requirement. The IESO seeks clarification on whether the prudency review for the deferral account would follow the same reporting standards as the 2025/2026 revenue requirement.

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 345 Cr-ex, (Rudderham) 1 the possibility it could end up in the deferral account. 2 And sorry Q. 3 THE CHAIR: Sorry; can I just I'm a 4 little unclear in terms of the distinction there with the 5 implementation budge...

AI summary The discussion centers on the potential capitalization of implementation costs for Phase II and the timeline for submitting an application to the ISEO Board. The ISEO anticipates submitting the application by the end of July, with subsequent steps dependent on approval.

IESO NOVA SCOTIA PANEL 347 Cr-ex, (Rudderham) 1 factor that in before we could bring it forwards. So 15 costs, is it IESO NS's intention to include those 16 capitalized implementation costs as part of the deferral 17 account? 18 (Johnston)...

AI summary The discussion revolves around the inclusion of capitalized implementation costs in a deferral account, with the IESO NS indicating that such costs would be used for variances in depreciation and interest expense rather than being directly included. The IESO NS plans to seek approval for the implementation budget before allocating funds to the deferral account.

IESO NOVA SCOTIA PANEL 387 Cr-ex, (Rudderham) 1 Oh, it do you mind just zooming out 16 the administration of those of contracts means? 17 (Johnston) So I think the A. 18 position of the IESO is that section 30 is for us to bring 19 forward...

AI summary The IESO discusses the administration of contracts under section 30, explaining that costs are brought forward when energy resources provide customer benefits. Procurement costs are included in the revenue requirement application, with an intent to transfer some costs to future proponents and refund customers.

1 what was budgeted for the 2025/2026 year; correct? Give 2 or take. 3 A. (Johnston) Give or take, that's 4 correct. 5 Q. That 300,000, is that actual 6 savings or are those amounts that are being deferred to a 7 future year? 8 A. (Johnsto...

AI summary The discussion focuses on budgeting for the 2025/2026 year, specifically addressing $300,000 in savings and whether these amounts are actual savings or deferred to a future year. The response highlights the use of a deferral account and the need to recover $5 million from customers, noting that this is less than initially budgeted.

IESO NOVA SCOTIA PANEL 407 Cr-ex, (Rudderham) 1 Q. What I'm wondering, is that 2 300,000 that would have been included in the first revenue 3 requirement, has that now pushed over into the current 4 revenue requirement, or is that actual t...

AI summary The discussion revolves around a deferred expense of $300,000 that was not spent in the '25/'26 revenue application. The entity explains that this amount is intended to be offset in the '27/'28 revenue application, provided that the costs in the previous year were deemed prudent. The intent is to compartmentalize expenses by year, ensuring that future spending is justified in future applications.

IESO NOVA SCOTIA PANEL 441 Cr-ex, (Rudderham) 1 Q. You've alluded to changes not of 24 SBA. And I quote. Question of the IG: 25 26 27 And I know we've talked about, you know or my friend [has] raised some questions about disallowances. Wha...

AI summary The discussion revolves around the Nova Scotia Energy Board's authority to disallow costs, particularly in cases of material unforeseen costs applied to a deferral account and deemed imprudent. The witness, Johnston, acknowledges a previous response regarding handling such costs at a later stage.

1 provide some draft accounting policies. But from a 2 completion perspective, the filing of the all of those 3 items with the Board, is there an impediment any 4 impediment for IESO committing to filing those by, say, 5 September of 2026?...

AI summary The discussion revolves around the timing of filing accounting policies and guidelines with the Board, particularly in alignment with the '25/'26 Board's findings. The IESO plans to file these by the time of the '27/'28 revenue requirement application. The deferral mechanism's impact on future revenue requirements is also discussed.

IESO NOVA SCOTIA PANEL 481 Cr-ex, (Mahody) together, I believe. Q. You could agree though, that as much clarity as possible be provided regarding the terms and provisions of the deferral and maintenance deferral account, whatever detail co...

AI summary The discussion focuses on the clarity needed regarding the deferral and maintenance account terms and provisions, with the witness suggesting that the mechanism for approved amounts can be considered independently of the approval process.

1 of those policies and guidelines, the IESO would comply 2 with whatever direction is provided in that regard? 3 A. (Johnston) As with everything, we 4 will do what we can to follow the Board's guidelines. 5 MR. MAHODY: Mr. Norwood, could...

AI summary The IESO Nova Scotia is requesting the continuation of the Net OM&A Deferral and Variance Account for 2026/2027 and in perpetuity to track and defer variances from the approved revenue requirement, including additional cost categories such as capital costs and energy resource procurements.

account; is that correct? A. (Johnston) Yes, I think that's that was the intent here and I think it was really just trying to recognize that we know that every year whatever we forecast and what we actually spend will vary by hopefully a s...

AI summary The witness confirms the intent behind an accounting approach that acknowledges annual variances between forecasts and actual spending. They also clarify that the request to include capital categories has been modified to focus on depreciation and interest-related expenses rather than deferring capital itself.

IESO NOVA SCOTIA PANEL 501 Questions, (Chair) 1 unexpectedly there was to be a determination that that 2 need had somehow changed we would certainly be attentive 3 to that, and the timing allows for that, of the two 4 processes. So I would...

AI summary The discussion focuses on the deferral and variance account mechanism, which aims to ensure that IESO Nova Scotia passes through actual costs and revenue requirements to customers annually. The mechanism is designed to handle both underspending and overspending scenarios, ensuring that surplus or deficit is appropriately managed without holding onto excess funds or requiring external funding.