Topic:"Cost Recovery" in M06733

4.1.2 Balance of Long-Term and Short-Term Considerations The IRP was an important starting point in the development of the 2016-2018 DSM Resource Plan because it provides a longer-term context within which to view short-term decisions requ...

AI summary The Integrated Resource Plan (IRP) provided a long-term context for the 2016-2018 Demand Side Management (DSM) Resource Plan. However, Efficiency Nova Scotia (ENS) notes that the Mid-Level DSM Scenario may lead to short-term rate increases due to a mismatch between DSM investment and rate recovery, particularly under an eight-year amortization term and a legislated cap on DSM amortization.

5.3 Cost Allocation Method The new legislative structure, under which NS Power is required to purchase cost- effective, reasonably available DSM, NS Power is able to recover UARB-approved DSM investments from ratepayers. For this reason, i...

AI summary NS Power must recover DSM costs from ratepayers under UARB approval. ENS and NS Power agree on NS Power's responsibility for cost allocation, but ENS awaits NS Power's proposal. ENSC monitors rate class expenditures to inform UARB and stakeholders, with 2014 data referenced in Figure 5.1.

Deferral and Amortization At the request of stakeholders, ENS has incorporated functionality into the model to assess the impacts of deferral and amortization on rates and bills. Two scenarios have been provided: DSM being 100 percent expe...

AI summary ENS analyzed deferral and amortization impacts on rates and bills, presenting two scenarios: 100% expensing of DSM or 50% amortization over eight years. The eight-year period aligns with the 2015 DSM plan, while the 50% cap avoids exceeding the $100M legislative limit. Short-term benefits are noted, but long-term rate increases are minimal (<1%) compared to avoided capacity costs.

NOTES ON APPLICATION Beyond the choice of tests, the way in which they are applied is also important. Indeed, screening tests can be applied in a number of ways: as information to be balanced with other considerations; as a hard threshold...

AI summary The document discusses the application of cost-effectiveness screening tests for Demand Side Management (DSM) within Nova Scotia Power Inc.'s (NSPI) Integrated Resource Plan (IRP). It argues against applying thresholds at the 'program' level, advocating instead for sector-level screening to avoid artificial delineations and ensure equity. Portfolio-level screening risks cross-subsidization between sectors, while sector-level screening allows flexibility for Efficiency Nova Scotia (ENS) to optimize its portfolio.

Figure 9: Resource Value Framework - NS Qualitative Assessment Program Name: Electric DSM Date: December 2014 1. Key Assumptions, Parameters and S ummary of Resu its Analysis Level ✓ Program Alialysis Level □ Portfolio Measure Life n/a Dis...

AI summary Figure 9 presents a qualitative assessment of the Resource Value Framework for the Electric DSM program in Nova Scotia as of December 2014. It outlines key assumptions, monetized program administrator costs and benefits, participant costs and benefits, public costs and benefits, and non-monetized public benefits.

1 PROGRAM DESCRIPTION Home Energy Report (HER) helps Nova Scotian households reduce their energy consumption by changing their behaviours. More specifically, HER compares participating households' energy usage with similar neighbouring hom...

AI summary The Home Energy Report (HER) program in Nova Scotia aims to reduce household energy consumption through behavioral changes by comparing participants' usage with neighbors. Delivered via a tripartite agreement between Efficiency Nova Scotia Corporation (ENSC), Opower (DA), and Nova Scotia Power, HER was launched in 2013 with funding from rate-payers and tax-payers. It targeted 15.4 GWh energy savings and 3.6 MW demand savings in 2014 under the Energy Savings Actions program.

1 PROGRAM DESCRIPTION Home Energy Report (HER) helps Nova Scotian households reduce their energy consumption by changing their behaviours. More specifically, HER compares participating households' energy usage with similar neighbouring hom...

AI summary The Home Energy Report (HER) program, managed by Efficiency Nova Scotia Corporation (ENSC) and delivered by Opower, aims to reduce energy consumption through behavioral changes. It compares households' energy use with neighbors and provides personalized tips. Funded by rate-payers and tax-payers, HER targets 15.4 GWh energy savings and 3.6 MW demand savings by 2014, with savings credited to the Energy Savings Actions program.

Filed: March 27, 2015 E1 (NSPI) IR-15 Page 1 of 1 2016-2018 Supply Agreement for EECA M06733 (E-ENS-R-15) E1 Responses to NSPI Information Requests NON-CONFIDENTIAL 1 Request IR-16: 2 3 Reference: EfficiencyOne, Evidence - Page 51, Section...

AI summary E1 responds to NSPI's information request regarding the incorporation of ITCs into the 2016–2018 budget, revisions to figures if ITCs differ from budgeted results, and processes for crediting customers if ITCs are claimed. E1 confirms that ITCs have been incorporated into the budget.

Filed: March 27, 2015 E1 (NSPI) IR-27 Page 1 of 2 2016-2018 Supply Agreement for EECA M06733 (E-ENS-R-15) E1 Responses to NSPI Information Requests NON-CONFIDENTIAL 1 All else being equal, these amendments would have caused a reduction in...

AI summary The document discusses the financial implications of the 2015 DSM deferral and its impact on the FAM under-recovery balance. It notes a $53 million offset from the deferral, along with other contributions, which are expected to largely repay the FAM under-recovery in 2015. The 2015 DSM level of activity is $39 million, with $35 million to be recovered over 8 years starting in 2016.

3 Affordability of electricity service is of paramount concern to NS Power customers. This 4 is evident through NS Power engagements with our customers and stakeholders, both in 5 regulatory forums such as General Rate Applications and the...

AI summary NS Power emphasizes the affordability of electricity service for customers and highlights the impact of demand-side management (DSM) on rate pressure. The company notes that removing the energy efficiency charge from bills has left no dedicated funding for DSM, and additional DSM spending increases revenue requirements, thereby raising rates. NS Power seeks to balance DSM efforts with cost-effectiveness to avoid economic impacts on the province.

Savings Portfolio , April 8, 2015, page 6. 22 E1 (NSPI) IR-35, March 27, 2015. 1 2 In each year, Nova Scotia's cost of installed DSM has been higher than that in other Canadian jurisdictions.23 3 4 23 ENS has filed for approval of its cost...

AI summary Nova Scotia's cost of installed Demand Side Management (DSM) has been higher than in other Canadian jurisdictions. ENS collected $8.8 million in excess DSM costs in 2014, which raises concerns about recovery and whether these costs should have been collected in the first place.

is, and accounting for the time value of money, the 22 collective payback period for recovering these up-front DSM costs is approximately 7 23 years. 24 DATE FILED: April 10, 2015 Page 22 of 51 30 Please refer to Appendix A, Attachment B,...

AI summary The text discusses the payback period for DSM costs, noting a 7-year mid-term realization of benefits but near-term rate pressures. It highlights concerns about intergenerational inequity and cost recovery limits under Section 79M(6) of the Act, and notes that not all customers benefit from DSM in the short-term, raising affordability concerns.

(b) Codes and Standards Energy efficiency improvements can also be achieved in ways other than through rate-payer-funded DSM, such as through the enhancement of codes and standards and financing. E1 has indicated its support for, and parti...

AI summary NS Power and E1 (NSPI) advocate for enhancing energy efficiency through codes and standards, reducing reliance on DSM incentives. Strengthening appliance and building codes can improve efficiency and address cross-subsidization issues without direct incentives.

DATE FILED: April 10, 2015 Page 39 of 51 1 6.0 FORM OF AGREEMENT 2 3 Since September 2014, NS Power worked to negotiate a Supply Agreement with E1 that 4 served the best interests of NS Power's customers taking into account the issues of b...

AI summary NS Power negotiated a Supply Agreement with E1 but could not agree on key terms, including the quantity and cost of DSM deliverables. NS Power does not support the proposed level of DSM or its associated contract price, finding it inconsistent with Canadian standards and unaffordable for ratepayers.

1 8.0 RATE IMPACT, BILL IMPACT AND PARTICIPATION RATES 2 3 As part of the E1 DSM Plan, E1 filed a Rate and Bill Impact analysis as Appendix C to 4 its Application. NS Power and other stakeholders had provided feedback on the Rate and Bill...

AI summary E1's Rate and Bill Impact Model (RBIM) does not account for the recovery of fixed costs lost due to reduced energy consumption from DSM programs, leading to an incomplete and understated analysis of rate and bill impacts. NS Power has pointed out this critical issue and supports future improvements to the model.

DATE FILED: April 10, 2015 Page 48 of 51 1 11.0 ICFI EVIDENCE 16 ensure the greatest value for customers over the Contract Period while balancing near 17 term affordability and long term savings potential. 18 19 Notwithstanding the level o...

AI summary NS Power requests the Board not to approve E1's application as filed and to direct the creation of a revised DSM Plan with specific spending and savings targets. The request also includes provisions for annual contract price allocation, deferral of cost decisions, and rejection of a reserve fund.

1 Reasonableness of the Proposed Costs 2 - 3 Q. WHY DO YOU BELIEVE THAT THE COSTS OF CERTAIN PROGRAMS - 4 MAY BE EXCESSIVE? - 5 A. Given the limited information provided with respect to each program 6 discussed above, it is difficult to ma...

AI summary The witness questions the reasonableness of EfficiencyOne's proposed program costs, suggesting they may be higher than those of other DSM providers. Benchmarks from 2013 and adjusted for inflation are referenced to compare costs between 2013 and 2016-2018.

ENERGY EFFICIENCY PROGRAMS, POLICY, AND IMPLEMENTATION For a confidential Southwestern electric utility, provided a detailed assessment of DSM cost recovery mechanisms including financial modeling of alternative DSM cost recovery, lost mar...

AI summary ICF International provided energy efficiency and DSM program analysis, cost recovery modeling, regulatory filings, and stakeholder engagement for multiple utilities and states, including Entergy, Maryland Energy Administration, Hawaii Electric Light Company, and others. Services included DSM potential studies, rate design assessments, and shareholder incentive mechanisms.

Appendix A DSM Program Implementer Profiles Efficiency Nova Scotia Business Structure Franchise DSM Funding Mechanism DSM Cost Recovery Rate, Rate Smoothing Adjustment Population Served Number of Customers Planned DSM Savings C, 31% 942,70...

AI summary This appendix outlines the DSM Program Implementer Profiles for Efficiency Nova Scotia, detailing its business structure, funding mechanisms, customer base, and DSM savings targets. It includes financial data such as planned and actual DSM costs, savings, and energy usage metrics.

69 Plan Gobal En Efficacity Energetique Budget 2015, http://publicsde.regieͲenergie.qc.ca/projets/282/DocPrj/RͲ3905Ͳ2014ͲBͲ 0038ͲDemandeͲPieceͲ2014_08_01.pdf, Accessed January 30, 2015 Efficiency New Brunswick Business Structure Crown Corp...

AI summary The document compares energy efficiency programs in New Brunswick and Nova Scotia, focusing on the DSM funding mechanism, customer numbers, and efficiency targets. It highlights differences in program structures, funding, and performance metrics between the two regions.

NON-CONFIDENTIAL 1 Request IR-4: 2 3 Reference: 2016-2018 DSM Plan NS Power Evidence Appendix B 4 5 How do the lifetime energy and demand savings and costs of NSPI DSM plan and E1's plan 6 compare with the projected marginal fuel cost of g...

AI summary The response compares the lifetime energy and demand savings and costs of NSPI's DSM plan and E1's plan with the projected marginal fuel cost of generating electricity in Nova Scotia. It notes that the Low DSM case has lower lifetime costs than E1's plan and both are below the projected marginal cost range of $50–$70 per MWh.

NON-CONFIDENTIAL 1 Request IR-4: 2 3 Reference: On page 21 of its Evidence, lines 7-8, NS Power states "These changes alone 4 should allow E1 to realize reductions, not increases, from the 2015 spending level of $35 5 million." 6 7 Please...

AI summary NS Power claims that changes to the E1 DSM Plan, including the removal of low-income homeowner program costs and reduced HST costs via ITCs, should result in cost reductions rather than increases from the 2015 spending level of $35 million. This is supported by quantitative analysis and alternative DSM portfolio designs that could achieve 100 GWh savings at lower costs.

NON-CONFIDENTIAL 1 Request IR-3: 2 3 What is the position of NSPI on how E1's DSM-related charges should be allocated and 4 reflected in rates? Please explain the basis for the position. 5 6 Response IR-3: 7 8 NS Power's Evidence at page 4...

AI summary NSPI responds to a request regarding the allocation of DSM-related charges in rates, stating it does not believe there are compelling reasons to change the current methodology. It references the Board's 2009 decision on DSM cost allocation, which accepted a 25% system cost and 75% participant cost approach. NSPI suggests deferring a decision on timing and amounts of cost recovery to a subsequent proceeding.

- 17 classes. 1 Request IR-2: 2 3 Under current legislation, the 2015 DSM program costs cannot be expensed during 2015 4 but must be recovered by NSPI over an 8-year period beginning in 2016. 5 6 (a) Please estimate the additional cost to...

AI summary The document discusses the cost recovery approach for the 2015 DSM program, which requires an 8-year recovery period starting in 2016, and the lack of a recommended approach for the 2016-18 DSM Plan. It also addresses whether NSPI has analyzed the cost of DSM programs compared to fuel and other costs, referencing a 'ceteris paribus' analysis in the IRP final report.

13 1 (c) Attachment 1 uses the avoided energy costs on a $/MWh, to determine the energy 2 savings over the lifetime of the 2016 to 2018 DSM programs. The annual incremental 3 energy savings for each plan are assumed to have an average meas...

AI summary The text discusses the calculation of net costs or savings for the Scenario D DSM plan and the E1 DSM plan, using avoided energy costs and assumptions about the lifespan and distribution of energy savings over time.

Ε G В F C Low DSM Plan Scenario D DSM Plan Scenario D DSM Plan Net Cost (-) or Avoided Cost Incremental Annual Cumulative Energy Savings Scenario D Net Savings (+) Energy Savings Energy Savings \ (B \ D) (E + F)of Energy DSM Investment $/M...

AI summary The document presents two scenarios (Scenario D and E1 DSM Plan) for the Demand Side Management (DSM) Plan, detailing annual net savings or costs, energy savings, and DSM investments from 2015 to 2031. The data highlights the financial implications and energy savings associated with each plan over time.

1 Request IR-5: 4 p.55 of 64, with respect to such future costs, please provide: 5 6 (a) Detail of how NSPI covers future severance, pension and retirement obligations. 7 8 (b) The total revenue collected through rates, by NSPI, in the pas...

AI summary The document includes a request for details on how NSPI covers future pension, retirement, and capital obligations, as well as the revenue collected through rates related to these obligations. It also asks how NSPI's approach differs from E1's and what would happen if E1's franchise is terminated. A response outlines that future costs are accrued under GAAP and included in revenue requirements.

3 1 Request IR-12: 2 3 With reference to performance expectations and the expectation of buffering by additional 4 funding collected from NS Power customers (Page 45 of 51, lines 21-22): 5 6 (a) Does NSPI have an account in its system of a...

AI summary The document discusses NSPI's accounting practices for uncollectible accounts and bad debt expenses. It clarifies that bad debt expenses are based on current period costs and are not carried forward for recovery in future periods, nor are they used as a financial buffer.

he $53 million that was in rates for DSM in 2014 and which amount was subsequently repurposed by Order of the Board for 2015 fuel expenses. It expanded on these points in its post-hearing submission: - It is $69 million, or 38 percent. les...

AI summary The document discusses the repurposing of funds allocated for demand-side management (DSM) in 2014 for 2015 fuel expenses and outlines the proposed DSM Plan's investment levels. It emphasizes affordability, cost-effectiveness, and participation balance across sectors, ensuring long-term planning and avoiding new capacity additions until 2032.

ccount. NSPI candidly admitted it was unaware that $8.4 million in surplus existed in the hands of El which can be applied to next year's DSM Plan but, in any event, is for the benefit of ratepayers. [84] NSPI appeared to take the position...

AI summary NSPI admitted it was unaware of a surplus of $8.4 million held by EL, which could be used for next year's DSM Plan. The Board clarified that all of NSPI's costs, not just DSM costs, determine the need for a rate increase. Factors such as increased fuel costs, under-recovery under FAM, and amortization of the DSM 2015 program contribute to cost pressures, while offsets like the end of fixed costs recovery and the 2014 DSM surplus reduce them.

3.8 Establishment of a Reserve Fund [115] As a part of the Consensus Agreement, El withdrew its request for a reserve fund.

AI summary El withdrew its request for a reserve fund as part of the Consensus Agreement, indicating a resolution related to the establishment of a reserve fund under the proceeding.

3.11 Compliance with Electricity Efficiency and Conservation Restructuring (2014) Act [122] Section 79J of the PUA contemplates that El and NSPI will enter into an agreement for electricity efficiency and conservation. That implies to the...

AI summary The Board notes the litigious nature of the proceeding between El and NSPI over the DSM budget, emphasizing the need for good faith negotiations. Despite significant costs, a Consensus Agreement was reached post-hearing. The Board criticizes the lack of early agreement on non-budget issues and highlights the budget dispute's negative impact on negotiations, funded by ratepayers.

2) ESTABLISHMENT OF A RESERVE FUND - a) In lieu of development of a OSM reserve fund, the Parties agree they will not challenge EfficlencyOnes ability to apply on an expedited basis to the Board for recovery of funds to address extraordina...

AI summary Parties agree not to challenge EfficiencyOne's expedited fund recovery for extraordinary circumstances if mitigation efforts are made. Surplus from the three-year contract is returned to NSPI for ratepayers. The clause does not preclude challenging recovery merits.

4) COST ALLOCATION - a) The Parties agree to collaboratively work to develop new OSM cost allocation and p5Mcost recovery models to be submitted by October 31) 2015 for approval or Decision by the Board, or within a reasonable period of ti...

AI summary Parties agree to collaboratively develop OSM cost allocation models and p5M cost recovery by October 31, 2015, for Board approval. Topics include 2015-2018 cost allocation, RSA adjustments, and mid-course changes. Nova Scotia Power retains discretion over DSM cost treatment.

IT IS HEREBY ORDERED that: - 1. The Board approves a DSM Plan for 2016-2018 in the aggregate amount of $102,150,000 with a target of total cumulative energy savings of 405.9 GWh and demand savings of 62.5 MW. Approved spending is $33,210,0...

AI summary The Board has approved a DSM Plan for 2016-2018 with a total budget of $102,150,000, setting energy and demand savings targets. It also approved a supply agreement between E1 and NSPI, and directed E1 and NSPI to file various reports and analyses, including on financing deferrals, accounting treatments, and locational DSM efforts.

2) ESTABLISHMENT OF A RESERVE FUND - a) In lieu of development of a DSM reserve fund, the Parties agree they will not challenge EffidencyOne's ability to apply on an expedited basis to the Board for recovery of funds to address extraordina...

AI summary The Parties agree not to challenge EffidencyOne's expedited application for fund recovery under extraordinary circumstances, provided cost mitigation efforts are made. A surplus from the three-year contract period will be returned to NS Power for ratepayers, subject to Board determination. Rights to challenge recovery claims remain intact.

4) COST ALLOCATION 1111 - a) The Parties agree to collaboratively work to develop new DSM cost allocation and DSM cost recovery models to be submitted by October 31, 2015 for approval or Decision by the Board, or within a reasonable period...

AI summary Parties agree to develop DSM cost allocation models by October 31, 2015, for the Board's approval, including 2015 and 2016-2018 allocations, a 2014 rate-smoothing adjustment, and mid-course adjustments. It clarifies that NSPI's discretion regarding DSM cost applications to UARB is not restricted.

5) EVALUATION AND REPORTING - Advisory in 2016 for discussion. - b) EffidencyOne will explore methodologies of demand savings evaluations with its evaluator. - c) EffidencyOne agrees to provide a full report on its 2016-2018 Performance Re...

AI summary EfficiencyOne must report on demand savings evaluations, provide annual performance reports, explain substantial changes in energy savings, and avoid rate class impacts. Reporting timelines and contents are governed by Schedule 1, with Board input. EfficiencyOne may not provide advance notice for mid-course adjustments based on third-party evaluations.

Equity and Low Income Households For reasons very well explained in Alice Napoleon's July 14, 2014 testimony for the Utility and Review Board hearing on Efficiency Nova Scotia's 2015 DSM Plan, low income programming is more expensive becau...

AI summary Alice Napoleon testified that low-income energy programs are more costly due to 100% financing but have greater impact. Statistics Canada data shows lower electricity usage in lower income quintiles. The argument emphasizes equitable access to efficiency services despite higher costs, citing Case M06247.

Page 34: VI. Affordability Issues Q: How should the Board deal with affordability of the DSM portfolio? 8 A: The concern with affordability requires a two-step process. First, the Board (or 9 parties working under the Board's guidance) mus...

AI summary The NSUARB must address DSM affordability through a two-step process: assessing rate impacts on customer groups and adjusting via cost allocation, enhancing cost-effective DSM services for underserved groups, and managing spending without lost revenues.

. . The creation of the fund is intended to provide financial protection to the organization against unforeseen or unexpected risks, not normal operational risks that can be effectively managed ... 6 2 June 16, 2015, Testimony EOne, page 5...

AI summary The Reserve Fund aims to protect against unforeseen risks, not normal operational ones. The SBA supports DEJC development, with NSP agreeing despite not signing the Monetary Consensus. The Consumer Advocate questioned NSP on DEJC, and NSP affirmed support for the criteria.

ower Incorporated Direct Evidence, p. 15; Exhibit E-40, Direct Evidence from Drazen Consulting Group, Inc. on Behalf of the Industrial Group, pp.7-9. 24 Transcript, June 19, 2015, pp. 901. 25 Transcript, June 19, 2015, pp. 902-903. 26 Dire...

AI summary The document discusses the affordability of Demand Side Management (DSM) amid rising fuel costs and other rate pressures. Key factors include the amortization of NSPI's 2012 cost recovery mechanism, FAM AA/BA's role in offsetting DSM costs, unspent funds from E1, and the impact of the Province's Community Feed-in Tariff program on fuel costs. Balancing DSM with broader public policy goals is emphasized to ensure rate stability.

Deferral and Amortization - 41. The Province submits that a decision on how DSM costs should be recovered (i.e. whether they are deferred or expensed) should generally be made at the same time as the DSM budget is set. The Province submits...

AI summary The Province argues that decisions on deferring or expensing DSM costs should align with DSM budget approvals, balancing affordability and iterative processes. It acknowledges discussions with the Consensus Settlement Agreement parties on cost allocation and suggests deferring DSM expenses due to both short-term and long-term benefits. The Province clarifies that s.79M(6) may apply to NSPI, not E1, and proposes that E1's financing outside NSPI's rate base should be discussed within the Consensus Settlement Agreement framework.

Consensus Settlement Agreement and Terms of Consensus Agreement 47. The Province supports some aspects of the terms of Consensus Agreement but does not agree with the DSM investment level and performance targets. The Province notes that in...

AI summary The Province supports aspects of the Consensus Agreement but disagrees with DSM investment levels and performance targets. Other topics for discussion include standardized filing, rate impact analysis, DSM expenditure criteria, and cost-effectiveness testing. The Province supports mid-course adjustments, flexibility for E1, and the Principles of Equity and Performance Targets.

17 2016-2018 Demand Side Management Resource Plan (M06733), Transcript, June 16, 2015, page 538, lines 5-6. 18 Ibid, page 538, lines 12-13. Mr. Faulkner, on behalf of E1, also acknowledged on cross-examination by the IG that it would be ap...

AI summary NS Power acknowledges the benefits of DSM but emphasizes the need to balance short-term affordability with long-term savings. It recommends a DSM plan that provides 100 GWh of annual energy savings at a cost of $22 million per year, avoiding additional capacity requirements until 2032. E1 acknowledges that NS Power's proposal aligns with compliance requirements and could be more affordable for customers over the long term.

average (per customer) DSM spending in such jurisdictions. 33 It is clear that the average Canadian contributes far less than what E1 is recommending Nova Scotians contribute. 25 26 27 28 Of note is that E1's response was to argue they can...

AI summary The text discusses E1's argument that eliminating a low-cost program and replacing it with higher-cost items has increased DSM spending, but there is no evidence that E1 attempted to replace it with another low-cost plan or reduce costs elsewhere. It also notes that E1 could achieve significant energy savings at a lower cost if it maintained its 2014 cost per kWh level.

lines 10-22 and lines 1-3. 1 2 NS Power submits E1's incentives are artificially high as E1 is biased to providing high 3 incentives in order to achieve their energy savings targets. NS Power refers to the 4 comments of the IG in its Openi...

AI summary NS Power argues that E1's incentives are artificially high, as E1 is motivated to achieve energy savings targets. NS Power references the Industrial Group's comments, suggesting that many DSM programs are cost-effective for customers without the need for incentives, especially given current higher rates. An example is provided where a dishwasher upgrade would recoup its cost in 3.5 months due to energy savings.

72 2016-2018 Demand Side Management Resource Plan (M06733), Transcript, June 18, 2015, page 635. 1 DSM spending is not immediately offset by reduced fuel costs within the year the funds 2 are spent on DSM activities. The funds are spent bu...

AI summary The text discusses the delayed financial benefits of DSM spending, highlighting that while DSM activities reduce fuel costs over time, the initial costs are borne by customers in the short term. It notes that customers may face increased rates in the near term, with financial benefits only becoming apparent after 19 years if energy savings are achieved as forecasted.

3 11.1 Non-Financial Settlement 4 5 NS Power, E1, IG, CA, SBA, AEC and EAC entered into a Consensus Settlement Agreement dated as of June 16, 2015 (Non-Financial Settlement Agreement).76 6 The 7 Non-Financial Settlement Agreement provides...

AI summary A Non-Financial Settlement Agreement was signed by NS Power, E1, IG, CA, SBA, AEC, and EAC on June 16, 2015, addressing standardized filings, cost allocation models, performance targets, and rate impact analysis. Disputes unresolved by the DSM Advisory Group will be referred back to the Board. NS Power supports the agreement's approval.

1 12.0 CONCLUSION 2 3 E1 has failed to discharge the burden placed on it under the Act. E1 has not provided the 4 evidence necessary to justify the DSM programs and level of expenditure put forward in 5 the E1 DSM Plan as being affordable...

AI summary E1 has not met its burden of proof to justify the DSM programs and expenditure levels in its plan as affordable or in customers' best interests. The proposed energy savings and costs are not necessary for regulatory compliance or system demand, and many incentives are deemed unreasonable. NS Power recommends a reduced DSM plan to support affordability and avoid additional capacity needs until 2032.

4 Evaluation and Verification Reports and Additional Reporting - 5 The Consensus Agreement addressed evaluation and reporting 1 , by which there would be annual - 6 program impact evaluations, as well as process evaluations at the organiza...

AI summary The Consensus Agreement outlines EfficiencyOne's obligations for annual program impact evaluations, process evaluations, and reporting on performance requirements. It addresses handling 'substantial changes' (≥25% variance), mid-course adjustments requiring advance notice, and avoiding annual rate-class impacts. EfficiencyOne seeks Board approval for the agreed evaluation reporting procedure.

1 Establishment of a Reserve Fund 2 EfficiencyOne withdrew its request for the establishment of a reserve fund[12](#page-10-1) 3 upon signing the Consensus Agreement[13](#page-10-2) 4 . 5 - 6 In lieu of the establishment of a reserve fund,...

AI summary EfficiencyOne withdrew its request for a reserve fund after signing the Consensus Agreement. Parties agreed not to challenge EfficiencyOne's ability to seek Board recourse for unforeseen circumstances, with surplus budgets returned to NS Power for ratepayers. EfficiencyOne views this as a balanced concession with oversight.

& lt;sup>16 Exhibit E-40, Evidence of Mark Drazen, p.19. & lt;sup>17 Exhibit E-40. Evidence of Mark Drazen, p.19. - 25. As to the reduced benefits, it is the nature of DSM, that participants will enjoy energy savings by lowering their ener...

AI summary The text critiques E1's lack of evidence on DSM cost impacts and cross-subsidization concerns, while highlighting Mr. Pickles' argument for flexible DSM capacity. The Board emphasizes evidence-based decisions, contrasting E1's vague risk claims with Pickles' testimony on DSM's adaptability to demand needs.

4 is another CRA study from February 2012 respecting LED lighting. That study did not focus on reducing incentive levels per se but rather to identify what conditions might prompt Nova Scotians to purchase LED light bulbs. It appears that...

AI summary The CRA study's outdated data on LED bulb costs questions the necessity of E1's proposed high incentives, which could cost over $2.5 million annually. E1's justification for the incentives is unclear, especially given current market trends indicating decreasing bulb prices.

within an envelope of spending? Mr. Faulkner: Yes. Ms. Rubin: And do you recognize that your management obligation extends to ratepayer classes who will ultimately be paying for those programs? Mr. Faulkner: Yes. And with the caveat that d...

AI summary The exchange between Mr. Faulkner and Ms. Rubin centers on managing obligations related to program costs and ratepayer classes. Mr. Faulkner acknowledges challenges in cost allocation methodology and operational difficulties, while Ms. Rubin emphasizes the need for commitment to manage obligations within forecasted spending ranges by customer classes.

SUMMARY The Ecology Action Centre wishes to: - (1) express support for the stakeholder settlement agreement presented to the Board; - (2) articulate that the proposed settlement agreement represents a significant concession in the interest...

AI summary The Ecology Action Centre supports a stakeholder settlement agreement but highlights its deviation from the Integrated Resource Plan's activity levels, emphasizing short-term affordability concessions. They advocate linking avoided costs to program benefits, reaffirming mid-course adjustments, proposing a revised discount rate for DSM programming, and requesting cost-recovery.

AVOIDED COSTS AND BENEFIT Tim Woolf's evidence (Exhibit 37) on behalf of Synapse and as the Board's consultant suggests it would be appropriate for the Board to consider avoided costs beyond avoided capacity costs for DSM. Specifically, Mr...

AI summary Tim Woolf's evidence suggests the Board should consider avoided costs beyond capacity costs for DSM, including energy, transmission, and distribution costs, as well as environmental benefits. A 2015 ACEEE report by Brendon Baatz highlights that energy efficiency programs benefit both participants and non-participants through avoided costs.

COST RECOVERY As a non-profit organization, EAC respectfully submits the request to recover costs in the amount of $27,500 . Details are appended below.

AI summary EAC, a non-profit organization, requests to recover costs of $27,500. The request is submitted respectfully and details are provided in the document.

COST RECOVERY DETAILS Vermont Energy Investment Corporation: $20,000 (see invoice) Jamie Thomson, Consultant: $1,500 ($50/hr x 30hrs) Ecology Action Centre: $6,000 (see spreadsheet) TOTAL: $27,500 Invoice July 2, 2015 Invoice No: 9301272 T...

AI summary The document outlines the cost recovery details for the proceeding, including invoices for the Vermont Energy Investment Corporation, Jamie Thomson, and the Ecology Action Centre, totaling $27,500.

utility under the Public Utilities Act.4 However, the Closing Submissions of the Consumer Advocate, page 2. 2 Closing Submissions of the Consumer Advocate, page 2. Exhibit E-61, Item 2. &# x27;Public Utilities Act, R.S.N.S. 1989, c. 380,s....

AI summary The Consumer Advocate's submission is challenged for not considering NSPI's 8-year cost recovery period, arguing that amortizing DSM settlement amounts under the Public Utilities Act's section 79R ensures consistency with transitional expenditures.

OTHER ITEMS In its closing submission, the Industrial Group states: The holiday light exchange is an example of a 100% E1 funded initiative whereby customers exchange old inefficient holiday lights for new ones, at no cost to the customer....

AI summary The Industrial Group argues that the LED Holiday Light Exchange, a 100% E1-funded initiative, should be reallocated to the Residential Sector. EfficiencyOne counters that reclassification would not affect investment levels, energy savings, or cost allocation under existing methodologies.

3 Ramping DSM up and down has consequences It is suggested that one of the advantages of DSM programs is their flexibility. When facing the need for generation capacity additions, DSM can be "ramped up" and when there is no need in the rea...

AI summary The text discusses the flexibility of Demand Side Management (DSM) programs but highlights the long-term costs and challenges of ramping them up and down. It references the Office of Energy Efficiency's experience with home retrofit programs, where past incentive removals caused contractor reluctance. The Consumer Advocate warns that reducing the DSM budget could harm existing infrastructure and programs.

14 CA Closing Submission, July 8, 2015, page 5. 1 4.0 NOVA SCOTIA DEPARTMENT OF ENERGY CLOSING SUBMISSION 2 3 In its discussion of the affordability of DSM in the context of other rate pressures, the 4 DOE referred to costs included in rat...

AI summary The Nova Scotia Department of Energy discusses the affordability of Demand Side Management (DSM) in the context of rate pressures. It notes that the FAM AA/BA is being used to pay down underrecoveries from 2013 and 2014, but some rate classes will not see a reduction in 2016 due to extended repayment obligations.

Exhibit E-13, NS Power (E1) IR 12(g)(iv). 42 2016-2018 Demand Side Management Resource Plan (M06733), Transcript, June 16, 2015, page 339, lines 7-22. 43 Ibid, page 485, lines 20-22. Note: The transcript incorrectly attributes this testimo...

AI summary The document discusses the cost-effectiveness of Demand Side Management (DSM) programs, highlighting that DSM investment at a cost of 3 cents per kWh is affordable compared to generation costs of 12 cents per kWh. NS Power disputes this, arguing that the 12 cents/kWh figure includes all utility revenue requirements, and that first-year DSM costs are significantly higher at 29 to 31 cents per kWh.

& lt;sup>46 Exhibit E-33, NS Power Revised Evidence, June 1, 2015, Figure 3.8, page 33 1 2 3 the application's accepted, $38.5 million on DSM to save 6 to $8 million on fuel. So it'll be an incremental cost to customers in that year of app...

AI summary The document discusses the financial implications of a DSM (Demand Side Management) plan, including a proposed investment of $38.5 million, expected savings on fuel costs, and potential incremental costs to customers. It also highlights the debate over the optimal level of DSM investment and the importance of consistency in funding.

1 6.0 2014 BALANCE ADJUSTMENT 2 3 NS Power, E1, the IG, the CA, the SBA, the AEC and the EAC entered into a Consensus 4 Settlement Agreement dated as of June 16, 2015 (Non-Financial Settlement Agreement).56 5 As noted by the Company in its...

AI summary The 2014 Balance Adjustment, amounting to $8.4 million, was omitted from the Non-Financial Settlement Agreement and should be included in DSM cost allocation and recovery models. NS Power supports its inclusion but suggests it should be applied over the Contract Period to alleviate rate pressure.

ccount. NSPI candidly admitted it was unaware that $8.4 million in surplus existed in the hands of El which can be applied to next year's DSM Plan but, in any event, is for the benefit of ratepayers. [84] NSPI appeared to take the position...

AI summary NSPI admitted it was unaware of a surplus of $8.4 million in the hands of EL, which could be applied to next year's DSM Plan for ratepayer benefit. The Board clarified that all of NSPI's costs, not just DSM costs, determine if a rate increase is needed. Factors like COMFIT program costs, FAM under-recovery, and DSM amortization contribute to cost pressures, but offsets include fixed cost recovery mechanism amortization and surplus funds.

3.11 Compliance with Electricity Efficiency and Conservation Restructuring (2014) Act [122] Section 79J of the PUA contemplates that El and NSPI will enter into an agreement for electricity efficiency and conservation. That implies to the...

AI summary The Board emphasizes the need for good faith negotiations between El and NSPI under the PUA regarding DSM budgets. Despite significant litigation and costs, the parties eventually reached a Consensus Agreement. The Board criticizes the unnecessary litigation and highlights that ratepayers fund both parties' activities.

2) ESTABLISHMENT OF A RESERVE FUND - a) In lieu of development of a OSM reserve fund, the Parties agree they will not challenge EfficlencyOnes ability to apply on an expedited basis to the Board for recovery of funds to address extraordina...

AI summary Parties agree not to challenge EfficiencyOne's expedited fund recovery for extraordinary circumstances, provided good faith mitigation efforts. Surplus from the three-year contract will be returned to NS Power for ratepayers. Other parties retain rights to challenge the application's merits.

4) COST ALLOCATION - a) The Parties agree to collaboratively work to develop new OSM cost allocation and p5Mcost recovery models to be submitted by October 31) 2015 for approval or Decision by the Board, or within a reasonable period of ti...

AI summary Parties agree to develop OSM cost allocation and p5M cost recovery models by October 31, 2015, for Board approval. Key items include 2015 and 2016-2018 allocations, 2014 RSA, and mid-course adjustments. Nova Scotia Power retains discretion in DSM cost treatment.

Annual avoided costs, calculated using ENSC's DSM Potential Study at the Base Level, were provided by NS Power. They include the cost of energy and capacity. 19 c PAC is a benefit/cost ratio comparing lifetime benefits to ENS's costs. d Re...

AI summary The text discusses annual avoided costs calculated using ENSC's DSM Potential Study, including energy and capacity costs. It also references the PAC and TRC benefit/cost ratios, developed by EfficiencyOne and Navigant's ELRAM model, in relation to program-level investments and savings.

EAC COSTS EfficiencyOne was directed to discuss the issue of costs with Ecology Action Centre (EAC). Per the Board's direction, EfficiencyOne and the Ecology Action Centre have resolved the issue of the EAC's cost recovery for this proceed...

AI summary EfficiencyOne and the Ecology Action Centre (EAC) resolved the issue of EAC's cost recovery under the direction of the Nova Scotia Utility and Review Board (UARB) in this proceeding.

4. PRICE & PAYMENT - 4.1 NSPI agrees to pay EfficiencyOne for EECA as set out in Schedule "B" Compensation (the " Contract Price "). - 4.2 The Contract Price shall constitute full compensation for the EECA, and no additional compensation s...

AI summary NSPI agrees to pay EfficiencyOne for EECA services under Schedule B's Contract Price, which covers full compensation. Payments are monthly, include HST, and exclude additional taxes. NSPI may withhold taxes per Canadian laws, with potential waivers from Canada Revenue Agency.

Currency Investment is expressed in 2016nominal dollars. Columns may not add correctly, due to rounding. Annual avoided costs, calculated using ENSC's DSM Potential Study at the Base Level, were provided by NS Power. They include the cost...

AI summary The text discusses annual avoided costs from NS Power's DSM Potential Study, expressed in 2016 nominal dollars. It highlights lifetime benefits as the net present value of avoided energy and capacity costs, and introduces TRC and PAC as benefit/cost ratios comparing these benefits to total and ENS-specific costs, respectively.

3 4 Figure 1.2 - 2016 DSM Resource Plan Investment and Savings 2016 Investment ($ million) Lifetime Benefits ($ million)a Incremental Annual Net Energy Savings at Generator (GWh) Incremental Annual Net Demand Savings at Generator (MW) Tota...

AI summary The document presents a comparison of investment and savings data from the 2016 DSM Resource Plan, detailing various residential and business programs, their investments, benefits, and cost tests. It includes metrics such as lifetime benefits, energy and demand savings, and cost tests like TRC and PAC.

Concerns about Future Cost Allocation and Recovery Uncertainty The SBA is limited in its review and comment on spending levels for EfficiencyOne programs on a total level. It is difficult for comment and review on specific program budgets...

AI summary The SBA highlights uncertainty regarding cost allocation and recovery for EfficiencyOne programs, noting that NS Power's payments to EfficiencyOne may not be clearly recoverable from specific rate classes. Two scenarios are outlined: either costs are recovered without triggering a rate application, or they are included in a General Rate Application with unclear allocation. The SBA requests the Board to address future cost recovery principles to avoid rate class impacts.

4. PRICE & PAYMENT - 4.1 NSPI agrees to pay EfficiencyOne for EECA as set out in Schedule "B" Compensation (the " Contract Price "). - 4.2 The Contract Price shall constitute full compensation for the EECA, and no additional compensation s...

AI summary NSPI agrees to pay EfficiencyOne for EECA services per Schedule B's Contract Price, which covers all compensation. Payments are monthly, include HST, and exclude additional taxes. NSPI may withhold taxes for non-residents unless waived by Canada Revenue Agency.

IT IS HEREBY ORDERED that: - 1. The Board approves a DSM Plan for 2016-2018 in the aggregate amount of $102,150,000 with a target of total cumulative energy savings of 405.9 GWh and demand savings of 62.5 MW. Approved spending is $33,210,0...

AI summary The Board approves a DSM Plan for 2016-2018 with a budget of $102.15 million and sets targets for energy and demand savings. It also approves a supply agreement, consensus agreement, and various filing requirements. The TRC test is maintained, and E1 is directed to explore alternate DSM budget scenarios and improve incentive determination processes.

1 The term "Balance Adjustment" refers to the 2014 surplus of DSM funds in the amount of $8,518,030 that is to be returned by EfficiencyOne in accordance with the UARB-approved cost-allocation methodology. The return of the Balance Adjustm...

AI summary The document discusses the 'Balance Adjustment' of $8,518,030, which is a surplus from the 2014 DSM funds to be returned by EfficiencyOne. This adjustment reduces the 2016 portion of the Contract Price paid by NSPI to EfficiencyOne, limiting the 2016 payment to $24,691,970 and the total payment over the Term to $93,631,970.

4) COST ALLOCATION 1111 - a) The Parties agree to collaboratively work to develop new DSM cost allocation and DSM cost recovery models to be submitted by October 31, 2015 for approval or Decision by the Board, or within a reasonable period...

AI summary Parties agree to collaboratively develop DSM cost allocation and recovery models by October 31, 2015, covering 2015, 2016-2018, a 2014 rate-smoothing adjustment, and mid-course adjustments. The agreement clarifies that Nova Scotia Power retains discretion to apply to the UARB regarding DSM cost accounting and recovery.

Potential financing alternatives and cost 413 Overview 414 Investments in energy efficiency produce savings that last many years after the initial investment. For 415 example, investments in electricity efficiency made in the 2016 to 2018...

AI summary The document discusses NSPI's approach to recovering costs from ratepayers for energy efficiency investments over time, aligning with long-term benefits. It explores whether EfficiencyOne can secure lower financing costs than NSPI's WACC (7.78% pre-tax, 6.49% after-tax). Grant Thornton conducted preliminary market research with potential lenders to assess financing options for EfficiencyOne's energy efficiency initiatives.

Proposed financing process and timeline 608 609 financing. We propose the following next steps and associated timeline in support of securing long term 685 s US Department of Energy website: http://energy.gov/savings/sustainable-energy-tru...

AI summary The proposed financing process and timeline involve assumptions about how NSPI will recover the cost of efficiency investments over time, including the potential deferral of cost recovery and the relevance of third-party financing. The UARB's role in allowing cost deferral is also discussed.

Summary of NSPI's proposed DSM plan 2016-2018 3 NSPI recommends a DSM plan with a spending level of approximately $22 million per year or $66 million over the three year period. NSPI also made, among others, the following requests: - The c...

AI summary NSPI proposed a DSM plan with a spending level of approximately $22 million annually over three years. Key requests included annual allocation of contract prices, deferring cost allocation decisions, rejecting a reserve fund and a change in cost effectiveness methodology, and establishing standardized filings for future DSM applications.

E1 is seeking long-term financing in the form of a committed term loan facility, with E1's annual principal and interest payment requirements being back-stopped with payments from NSPI to E1. Initially, E1 is looking to secure financing fo...

AI summary E1 is seeking long-term financing for energy efficiency investments through a committed term loan, with NSPI backing payments. The total investment for the first Supply Agreement (2016-2018) is estimated at $100M. E1 plans to finance subsequent instalments separately. Energy efficiency investments are expected to provide long-term benefits, and NSPI may recover costs over time aligned with benefits. E1 aims to secure financing at a lower cost than NSPI's WACC of approximately 7.78% (pre-tax) and 6.49% (after-tax).