Topic:"Cost Effectiveness" in M12550

1.1 Application Context[2](#page-6-1) - NSPI included CI C0051815 in its 2025 Annual Capital Expenditure (" ACE ") Plan for the replacement of 14 RTUs, - based on risk assessments identifying the equipment as obsolete. During the review of...

AI summary NSPI submitted a project for RTU replacement in its 2025 ACE Plan, but the NSEB withheld approval due to a significant increase in estimated labour hours. The NSEB requested further justification for the four-fold increase in labour hours, attributing it to infrastructure complexity and compliance requirements, and initiated a separate process to verify the budget estimate.

11 Table 10: Summary of Findings – Delivery Model Justification Report Section Question Midgard Commentary 4.1 Did NSPI demonstrate that its reliance on internal resources was more cost-effective than external alternatives? NSPI acknowledg...

AI summary NSPI did not conduct a formal make versus-buy analysis for Phase 6, and no quantitative evidence was provided to demonstrate that relying on internal resources was more cost-effective than external alternatives, despite competitive tendering for some aspects of the project.

5 ASSESSMENT OF COST REASONABLENESS - 2 This section evaluates the reasonableness of NSPI's cost estimate for the Project to determine whether the - 3 proposed expenditure represents a prudent allocation of ratepayer funds, considering the...

AI summary This section assesses the reasonableness of NSPI's cost estimate for the Project, focusing on whether the proposed expenditure is prudent. It examines increases in labor requirements, equipment and material costs, and indirect cost components to ensure appropriate cost recovery and value for ratepayers.

eneral application. Midgard's engagement is limited to assessing the cost reasonableness of the Phase 6 estimate. - c) Confirmed. Exhibit N-3, Section 4.2, Table 11, p. 26.

AI summary Midgard's engagement is limited to assessing the cost reasonableness of the Phase 6 estimate. The confirmation is noted in Exhibit N-3, Section 4.2, Table 11, p. 26.

Midgard Response IR-6: - a) Midgard's finding regarding the absence of formal lessons-learned assessments was documented as a risk observation. [13](#page-12-0) Midgard limited its formal recommendations to adjusting the labour hour estima...

AI summary Midgard's response to IR-6 highlights a risk observation regarding the absence of formal lessons-learned assessments. Midgard's recommendations focus on adjusting labour hour estimates and enhancing reporting requirements to ensure cost reasonableness in the proceeding.

- to demonstrate the cost-effectiveness of its use of internal resources v. external resources and that - NSPI can therefore not establish whether the overhead premium for those internal resources is - prudent. Request IR-1: a) Does Midgar...

AI summary The text discusses the inability of NSPI to demonstrate the cost-effectiveness of using internal resources compared to external resources, and questions whether Midgard has recommendations for addressing past failures and future actions.

Midgard Response IR-1: - a) NSPI's failure to demonstrate the cost-effectiveness of internal resources versus external resources is due to NSPI failing to provide a comparative cost analysis (as required under Section 17.1 of its Capital E...

AI summary Midgard criticizes NSPI for not providing a comparative cost analysis of internal versus external resources, as required by Section 17.1 of the Capital Expenditure Justification Criteria. This omission influenced Midgard's recommended actions, which include adjusting labour estimates and enhancing reporting requirements.

24 2.3 Use of Internal Resources 25 26 The Midgard Evidence provided the following conclusion regarding the cost effectiveness of NS 27 Power utilizing internal resources compared to external alternatives: 28 29 NSPI acknowledges that no f...

AI summary The Midgard Evidence evaluated the cost-effectiveness of NS Power using internal resources for Phase 6, noting that no formal make-versus-buy analysis was conducted. NS Power explains that internal resources were used based on task requirements, specialized skills, and availability, with external contractors used where necessary.

[[email protected]](mailto:[email protected]) Lana Myatt Manager, Regulatory Capital Nova Scotia Power Inc. PO Box 910 1223 Lower Water Street Halifax, NS B3J 3S8 Dear Ms. Myatt: M12550 – To obtain a cost reasonableness review of N...

AI summary This document is a request for a cost reasonableness review of Nova Scotia Power Inc.'s RTU Replacements Program – Phase 6, as outlined in Section 2.1 of the 2025 Annual Capital Expenditure Plan decision (M12012), with a total cost of $5,959,515.

2025 M12550 NOVA SCOTIA ENERGY BOARD IN THE MATTER OF: The Public Utilities Act IN THE MATTER OF: An Application by Nova Scotia Power Incorporated to obtain a cost reasonableness review of NS Power – CI C0051815 - $5,959,515 – RTU Replacem...

AI summary This proceeding involves Nova Scotia Power Incorporated's application for a cost reasonableness review of the RTU Replacements Program – Phase 6, which is part of the 2025 Annual Capital Expenditure Plan decision (M12012).

- Refer to M12550, Exhibit N-3, Midgard Evidence Report, (the "Report"), Page 24, Section 4.1.1 Conclusions – Delivery Model Justification, where Midgard concludes that NSPI failed to - demonstrate the cost-effectiveness of its use of inte...

AI summary Midgard's Report highlights that NSPI failed to demonstrate the cost-effectiveness of using internal resources over external ones and questions the prudence of the overhead premium for internal resources. The question asks whether Midgard has recommendations for NSPI regarding past failures and future actions.

M12550 NOVA SCOTIA ENERGY BOARD IN THE MATTER OF: The Public Utilities Act, R.S.N.S. 1989, c.380, as amended IN THE MATTER OF: To obtain a cost reasonableness review of NS Power - CI 11 C0051815 – $5,959,515 - RTU Replacements Program – Ph...

AI summary The Nova Scotia Energy Board is requesting responses regarding Midgard Consulting's conclusions on the cost-effectiveness of NSPI's use of internal resources versus external resources in the RTU Replacements Program. The Board is seeking recommendations for addressing past failures and future actions.

Submissions The Consumer Advocate has reviewed the Midgard Report, NS Power's Rebuttal, and all responses to Information Requests filed in this proceeding. As noted above, the purpose of this proceeding was to review the cost reasonablenes...

AI summary The Consumer Advocate reviewed submissions related to the cost reasonableness of Phase 6 of the RTU Replacements Project. The review highlights a lack of available data from Phase 1, making it difficult to assess the four-fold increase in average labour hours and whether this increase is justified.

April 24, 2026 VIA EMAIL Ms. Crystal Henwood Clerk of the Board Nova Scotia Energy Board 1601 Lower Water Street, 3rd Floor Halifax NS B3J 3S3 Dear Ms. Henwood: Re: M12550 - To obtain a cost reasonableness review of NS Power - CI C0051815...

AI summary NS Power submitted a revised cost estimate for the RTU Phase 6 project, which was previously rejected due to a significant increase in costs and insufficient justification. The Nova Scotia Energy Board established M12550 to allow Midgard Consulting to review the project's costs and management processes.