Topic:"Cost Recovery" in M03097

Incremental NPV Benefit of TUC 6 Duct Fired - Operating Cost Benefits from Hatch Analysis Revised April/2010 - In-service • its from flaten Analysi Capital Cost = $93M Capital Cost = $78M Operating Operating Capital Costs Capital Costs Cap...

AI summary The document presents a table analyzing the incremental net present value (NPV) benefit of the TUC 6 Duct Fired project, focusing on operating cost benefits from Hatch Analysis. It compares capital costs and cumulative benefits over time, showing a net benefit in the early years but a decline in later years.

NON-CONFIDENTIAL 1 Request IR-4: 2 3 Reference: Attachment 3, Page 6 of 7 – "Approval to proceed in June will allow this project 4 to be in service for the winter of 2010/11 peak season. The sooner it is undertaken; the 5 sooner NSPI custo...

AI summary The request asks for an estimate of benefits lost to NSPI customers in 2010 due to a project delay. The response refers to UARB IR-7 and UARB IR-12 (b) for information on the projected change in net present value and the lack of quantification of the delay's impact on 2010 fuel costs.

NON-CONFIDENTIAL 1 Request IR-5: 2 3 Reference Pages 2 and 3 of the May 3, 2010 ATO. 4 5 a) Please confirm that, as stated in the first paragraph on page 2, the cost increases are 6 due to "changes to specific project cost elements unfores...

AI summary The document is a response to a request regarding the Authority to Overspend (ATO) for the Tufts Cove 6 Waste Heat Recovery Project. NSPI confirms that cost increases were due to unforeseen changes in project cost elements and refers to the May 2008 original capital filing. A breakdown of the cost increase is provided in an attachment.

ion measures. Prudence allows for a range of reasonable and appropriate actions to acceptably manage risk, and requires neither perfect accuracy or guaranteed elimination of all risk. [emphasis added] In this case, NSPI's approved capital...

AI summary The document discusses NSPI's overspending of its 2008 contingency fund by $8.7 million, questioning whether the costs were prudently incurred. It highlights the lack of a general contingency cushion and NSPI's claim that risk was incorporated into individual budget components. The analysis raises concerns about the prudence of capital expenditures and their impact on the rate base.

James A. MacDuff Direct 902.444.8619 [email protected] Purdy's Wharf Tower II 1300-1969 Upper Water Street PO Box 730 Halifax NS Canada B3J 2V1 Tel 902.425.6500 Fax 902.425.6350 Our File: G-2907 July 22, 2010 Ms. Nancy McN...

AI summary NPB submits concerns regarding NSPI's ATO application for the Tufts Cove 6 project, citing prior economic concerns and rising equipment costs. The Board's 2008 approval was conditional on completing the project at or below $84.296 million.

of both components of this project is strictly based on the revised cost of $84,296,764, and its clear understanding that this project can successfully be completed at or below this approved amount. NSPI has confirmed, in response to NPB I...

AI summary NSPI seeks an Authority to Overspend (ATO) of $8.7M above a previously approved contingency amount for the Tufts Cove 6 project, citing increased capital costs and a delayed in-service date. The application claims the project's benefits to ratepayers will be delayed, impacting projected cost savings. McInnes Cooper advises the Board to consider these issues.

BACKGROUND - 2. On September 12,2007, NSPI submitted a capital work order to the DARB in respect ofthe project, then estimated by NBPI to cost approximately $66.3 million. In a decision dated December 21, 2007, the UARB approved the Projec...

AI summary NSPI's project cost increased from $66.3M (2007) to $84.3M (2008) and now $93M, with UARB approving revisions but warning of scrutiny if costs exceed approved amounts. NSDOE notes the current forecast omits a $7.2M contingency previously included.

SUBMISSIONS 5. Based upon its review of the application materials and NSPI's responses to information requests, NSDOE respectfully submits that NSPI's application for authority to overspend should be approved. 6. NSDOE is ofthe general vie...

AI summary NSDOE submits that NSPI's overspending application should be approved, emphasizing thorough cost estimates for capital projects and the need to manage costs within approved budgets. While acknowledging increased costs, NSDOE asserts they are not due to imprudence and that the project will benefit ratepayers.

August 6, 2010 Ms. Nancy McNeil Regulatory Affairs Officer/Clerk Nova Scotia Utility and Review Board 1601 Lower Water Street, 3 rd Floor Halifax, NS B3J 3S3 Re: Nova Scotia Power Inc. - TUC6 Waste Heat Recovery Project - CI 28098 - Author...

AI summary Nova Scotia Power Inc. (NSPI) submits a reply to its ATO application for the TUC6 Waste Heat Recovery Project, defending cost increases as either beneficial or due to unforeseen circumstances. NSPI asserts the project maintains customer benefits, with the Nova Scotia Department of Energy endorsing the application. Intervenors did not oppose full cost recovery.

General All of the decisions for this Project were made with the technical information available at the time and were considered by teams consisting of design engineers, operating engineers, maintenance staff, and suppliers' technical supp...

AI summary NSPI defended project decisions that preserved a 2010 in-service date, arguing they minimized delays, maintained customer savings, and ensured prudence in cost recovery. Avon challenged cost exceedances, but NSPI cited prudence and customer benefits. Fuel savings and operational cost reductions were central to the dispute.

nditure; the reasonableness and transparency of the costs involved; and the resulting benefit to customers of NSPI as a result of the proposed project." [Board Letter to NSPI, December 21,2007, p. 1] - [4] The amount approved by the Board...

AI summary The Board approved a capital expenditure of $55.5 million for the combined cycle component of the Tufts Cove 6 Waste Heat Recovery Project in 2007. In 2008, NSPI requested approval for a revised cost of $84.3 million, which the Board approved after public comment, emphasizing that the project must be completed at or below the approved cost.

nal project funding". What the Board would really like you to do is to assume that there is going to be or there will be a further increase and then tell us what process you would follow in that case. Mr. Janega: Madam Chair, we are close...

AI summary The document discusses the economic analysis of a project, including the net present value (NPV) and the impact of factors such as fuel price, load assumptions, and wind generation on the project's viability. NSPI argues that the base plan understates benefits due to potential additional value from reduced loading on Tufts Cove Units and increased opportunities for wind development.

IV SUBMISSIONS [38] Avon, NPB, and the NSDOE provided written submissions prior to NSPI's request for a hearing. All three submissions referred to the same comments from the Board's approval letter of September 16, 2008 (set out in paragra...

AI summary Avon, NPB, and the NSDOE submitted written comments prior to NSPI's request for a hearing, referencing the Board's 2008 approval letter and the reduction of contingency in the ATO application. NPB highlighted the loss of benefits to ratepayers due to delays in the Project's commercial operation and revenue reduction projections. Avon emphasized the depletion of NSPI's contingency cushion.

[41] Avon stated: The issue for the Board in considering this ATO is whether the Project continues to be economically justified and in the best interest of ratepayers and, in addition, whether NSPI has managed the Project to the lowest rea...

AI summary Avon questions the economic justification and cost management of the Tufts Cove 6 Waste Heat Recovery Project, arguing that costs were not prudently incurred and suggesting shareholders should bear some increased costs. NSDOE does not find evidence of imprudence, while MEUNSC emphasizes the responsibility of the company to manage project costs and protect ratepayers from financial risk.

By Email Dear Participants: Nova Scotia Power Inc. - TUC6 Waste Heat Recovery Project - CI# 28098 - Authority to Overspend (ATO) - P-128.07 On May 3, 2010, Nova Scotia Power Inc. ("NSPI") submitted to the Nova Scotia Utility and Review Boa...

AI summary Nova Scotia Power Inc. submitted an ATO application for the TUC6 Waste Heat Recovery Project in 2010. The Board established a timetable for reviewing the application, including deadlines for information requests, responses, and written submissions from participants.

Request IR-5: Reference Pages 2 and 3 of the May 3, 2010 ATO. a. Please confirm that, as stated in the first paragraph on page 2, the cost increases are due to "..changes to specific project cost elements unforseen at the time of NSPI's or...

AI summary The document outlines several requests for clarification regarding the May 3, 2010 ATO and ATD filings by NSPI. The requests pertain to cost increases, assumptions, project changes, and the impact on NPV. The focus is on verifying the original capital filing, identifying assumptions, and quantifying the financial impacts of specific project changes.

c. Please quantify these additional benefits. 1 Request IR-9: 30 in the original cost estimate. 31 f. Please provide the estimated operating cost saving due to this design change. 1 Request IR-14: 2 Reference Capital Cost Breakdown Table 3...

AI summary The text contains a series of requests related to quantifying benefits, operating cost savings, and economic analyses of design changes and capital expenditures. Questions focus on cooling loads, pump models, maintenance costs, and NPV economic analysis for capital spending.

And In the Matter of an Application by Nova Scotia Power Inc. for Authority to Overspend (ATO) under NSPI CI#28098 - TUC Waste Heat Recovery Process P 128.07/M03097 Submission on behalf of the Municipal Electric Utilities of Nova Scotia Oc...

AI summary The Board approves Nova Scotia Power Inc.'s capital expenditures contingent on ratepayer benefits and positive net present value. The submission emphasizes that ratepayers should not bear risks from cost overruns, and the company must ensure prudent planning. Shareholders, not ratepayers, should bear overrun risks unless beyond the company's control.

By email: [email protected] Mr. Rene Gallant General Manager, Regulatory Affairs Nova Scotia Power Inc. 10th Floor, Barrington Tower P.O. Box 91 0, Scotia Square Halifax, NS B3J 2W5 Dear Mr. Gallant: Nova Scotia Power Inc. - CI#28098...

AI summary Nova Scotia Power Inc. (NSPI) is requested to provide oral submissions on the TUC6 Waste Heat Recovery Project, addressing specific concerns regarding fish ladder costs, Mitsubishi Power Systems options, discrepancies in net present value calculations, and contingency planning for potential capital cost increases.

nditure; the reasonableness and transparency of the costs involved; and the resulting benefit to customers of NSPI as a result of the proposed project." [Board Letter to NSPI, December 21,2007, p. 1] - [4] The amount approved by the Board...

AI summary NSPI requested approval for a revised capital expenditure of $84.3 million for a project, following initial approval of $55.5 million. The Board approved the revised cost after considering intervenor submissions and emphasized that the project must be completed at or below the approved amount. The Board acknowledged the economic benefits of the project, including significant fuel cost reductions.

[41] Avon stated: The issue for the Board in considering this ATO is whether the Project continues to be economically justified and in the best interest of ratepayers and, in addition, whether NSPI has managed the Project to the lowest rea...

AI summary Avon questions whether the TUC6 Project remains economically justified and if NSPI managed it at the lowest reasonable cost. NSDOE suggests the increased costs are not due to imprudence and recommends approving the ATO. NSPI argues for full cost recovery, while MEUNSC emphasizes the need for careful planning and responsibility for cost overruns.