N-1Application
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15 3.4.1 Annual Net Interest Costs 16 The requested recovery of annual net interest costs in 2026 is $37.7 million. This represents total coupon interest costs of $37.5 million, Letter of Credit fees of $0.4 million, interest on long-term...
AI summary The document discusses the requested recovery of annual net interest costs in 2026, totaling $37.7 million, including coupon interest, letter of credit fees, and interest on long-term debt, partially offset by interest revenue and disallowed interest. It also references outstanding close-out matters and financing considerations for the NSPML Cable Protection Project.
1 expense as a result of a reduction in NSPML's approved Project Costs arising from the 2 Final Cost Decision. 3 4 The debt financing of ML under the ML Credit Agreement is based on the $1.3 billion 5 of bonds issued by ML Financing Trust...
AI summary The document discusses the impact of the Final Cost Decision on NSPML's Project Costs, including the amortization of Deferred Financing Charges and the debt financing under the ML Credit Agreement. The reduction in coupon interest costs and the recovery of Deferred Financing Costs in the 2026 revenue requirement are highlighted.
charges as of the commercial operation date of the ML for deferred recovery. The NSEB has previously directed NSPML to amortize these deferred financing charges over a period to match the term of the FLG bonds. Recovery of these charges wa...
AI summary The NSEB directed NSPML to amortize deferred financing charges over the term of FLG bonds, with recovery starting in 2020 over a 33-year period. By the end of 2025, NSPML will have recovered $8.0 million, leaving $37.7 million to be recovered, including $1.4 million sought in 2026.
N-8NSPML (NSEB) RIR 1 to 44 - Redacted
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REDACTED 1 Request IR-08: 2 3 IR-2 to IR-31 Reference Exhibit N-1 Pages 4 -29 4 5 Page 9 6 NSPML states: "The above items include material undertakings with potential for large 7 uncertainty relative to the relatively small variable portio...
AI summary NSPML explains that while the variable portion of its 2026 Assessment is relatively small, it is driven by OM&G costs, which include material contracts that are uncertain due to procurement timing and unpredictable demand, such as the Marine Survey contract. This uncertainty poses significant risk despite the small proportion of the overall Assessment.
NON-CONFIDENTIAL IR-2 to IR-31 Reference Exhibit N-1 Pages 4 -29 - Page 12 - NSPML states: "The Labour and Administration cost category is composed of costs related to regulatory and legal, consulting, and labour and incentive." - a) Pleas...
AI summary The document requests a detailed breakdown of Labour and Administration costs for the years 2024, 2025, and 2026, specifically separating legal, consulting, labour, and incentive costs. This is part of a regulatory proceeding related to cost transparency and reporting.
NSPML Responses to Nova Scotia Energy Board Information Requests 1 Request IR-39: 15 c) Please confirm, or explain otherwise, that flotation costs including "out-of-pocket 16 expenditures for the preparation, filing, underwriting, as well...
AI summary The Nova Scotia Energy Board has requested NSPML to confirm whether flotation costs for issuing common equity are one-time transactional costs and to clarify the calculation and actual costs associated with these flotation costs over the past five years.
NON-CONFIDENTIAL 1 Response IR-40: 2 3 a) Confirmed. See pages 45-46 of Concentric's report where we summarize the treatment of 4 flotation costs in Canada. While the OEB reduced the allowance for flotation costs from 5 50 basis points to...
AI summary The response discusses flotation costs in utility equity issuance, clarifying that they are ongoing costs, not one-time expenses. It notes that flotation costs are recoverable in rates and that most Canadian regulators approve a 50 basis point adjustment for these costs. Denying recovery could impact NSPML's ability to attract capital.
N-21UARB APPROVAL SHEET Replace L6513/Upgrade Line Terminals
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Reason for Variance The final costs of $2,982,714 for the project were $767,760 lower than the original submission of $3,750,474, primarily due to the use of internal versus external labour. At the time of the original submission, the Proj...
AI summary The final project cost was significantly lower than the original budget due to the use of internal labor instead of external resources. This shift led to cost savings across multiple categories, eliminated the need for contingency funds, and reduced AFUDC costs, although some increases were offset by market and unforeseen conditions.
ebruary 2023, at para. 332. 88 Nova Scotia Utility and Review Board, 2007 NSUARB 174, NSUARB-P-887, Decision issued December 10, 2007, at para. 76 & 92. Ibid, at para. 51. NSEB IR-102, pdf pg. 477: DBRS says: "There were several positive d...
AI summary The document discusses the recovery of fuel and purchased power costs through the Fuel Adjustment Mechanism (FAM), including recent regulatory actions such as the sale of FAM assets and a federal loan guarantee. These actions aim to reduce debt, regulatory lag, and rate pressure on customers. The analysis by Concentric is questioned in relation to these developments.
h. Regulatory Risk 2 There have been decisions by the UARB where operating and capital costs have been disallowed. 3 Cost disallowances are always within the scope of utility regulation, but in Concentric's 4 experience, significant disall...
AI summary The text discusses regulatory risks faced by Nova Scotia Power Inc. (NSPI), including past instances where the UARB disallowed certain operating and capital costs. These disallowances affect NSPI's return on equity and include examples such as the treatment of executive compensation, Hurricane Fiona-related costs, and compliance with annual performance standards under the Public Utilities Act.
Criteria Score Deemed Equity Below Average Allowed ROE Good Energy Cost Recovery Below Average Capital and Operating Cost Recovery Good Cost of Service vs. Incentive Rate Excellent Mechanism Political Interference Poor Stranded Cost Recove...
AI summary The document presents a table with various criteria and their corresponding scores, including Deemed Equity, Allowed ROE, Energy Cost Recovery, and others. It also mentions a section labeled '2 e. Capital Cost Recovery', indicating a discussion on capital cost recovery mechanisms.
NS Power's financial model for the opt-out charges is attached in PR-02 Attachment 1 . The model includes the estimated incremental costs that will be incurred as a result of providing customers the option to retain non-standard meter serv...
AI summary NS Power has updated its financial model for AMI opt-out charges, incorporating changes such as a 33% supervisor oversight factor and updated assumptions, to ensure actual costs are recovered from opt-out customers.
Non-standard Meter Service (AMI) Opt-out Fee 2026-2027 GRA Direct Evidence Appendix 13A Page 7 of 14 In addition, approximately 41.5 percent of the total AMI project costs were for the AMI meters themselves.[6](#page-120-2) Parsing project...
AI summary The document discusses the allocation of AMI project costs, emphasizing that 41.5% of costs are for AMI meters. It argues that charging only opt-out customers unfairly increases their costs, suggesting all customers should contribute to ensure fairness and operational efficiency.
Non-standard Meter Service (AMI) Opt-out Fee 2026-2027 GRA Direct Evidence Appendix 13A Page 9 of 14 The concept of non-participant[11](#page-122-0) contributions to the AMI capital project costs, as these costs are embedded in rates, is b...
AI summary The document discusses the rationale for non-participant contributions to the AMI capital project costs, emphasizing shared infrastructure costs and equitable distribution. It explains that even opt-out customers benefit from AMI infrastructure, and their costs are passed through to them, ensuring no over-recovery. The AMI project is deemed in the public interest, offering cost savings and operational benefits.
2.4 The Need, and Amount, of the Proposed Opt-out Fee has been Fully Explored and Justified NS Power's position is closely aligned with the principles and justifications established by HRWC in its 2016 AMI opt-out proposal and, more recent...
AI summary NS Power argues that an opt-out fee is necessary to cover the extra costs incurred from serving customers who have not installed AMI meters. These costs include manual meter readings and bill estimations, which are disproportionately borne by other customers. The fee is justified based on HRWC's 2020 general rate application and its previous AMI opt-out proposal.
N-22Decision Ontario Energy Board EB-2024-0063
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Regulatory and Rate-Setting Mechanisms LEI stated that as the perceived stability of future cash flows is a key consideration for investors, a regulated utility's ability to recover its capital and operating costs profoundly relies on avai...
AI summary LEI emphasized the importance of regulatory mechanisms in ensuring cost recovery for utilities, while Dr. Cleary supported retaining current risk assessment policies. Concentric suggested comparing Ontario's mechanisms to peer companies when assessing cost of equity. Nexus argued that Ontario's regulatory environment does not significantly reduce risk and warned against approving a lower ROE for electricity distributors due to systematic underearnings.
Regulatory and Rate-Setting Mechanisms OEB staff agreed with LEI and Dr. Cleary that any regulatory mechanism that can significantly impact the stability of future cash flows must be considered part of regulatory risks. OEB staff concluded...
AI summary The OEB staff, LEI, and Dr. Cleary agree that regulatory mechanisms significantly impacting cash flow stability are part of regulatory risk. The OEB's mechanisms since 2009 have moderately reduced utility risk. The OEA acknowledges this but cautions that business risk remains unchanged due to new risks like climate change. CCC and others emphasize that regulatory policies have substantially decreased risk and should influence the current ROE setting.
Submissions OEB staff noted that although the deemed ROE included a 50 basis point adder for "transactional costs" since the 2009 Report, the 2009 Report provided no rationale for embedding such costs in the ROE, nor for how the adder was...
AI summary OEB staff recommended eliminating the 50 basis point adder in the deemed ROE, as it was not justified in the 2009 Report and is no longer needed. AMPCO/IGUA agreed. Concentric and Nexus provided evidence supporting the retention of the adder, but OEB staff believed it overcompensates utilities and suggested alternative remedies.
Findings The flotation cost adder of 50 basis points currently added to the ROE presents several difficulties in addressing costs attributed to have been incurred by Ontario utilities for maintaining equity. The adder is meant to recognize...
AI summary The flotation cost adder of 50 basis points added to the ROE is questioned for its relevance, as few Ontario utilities use public equity markets. The 2009 Report lacks details on the derivation of this figure, and Nexus argues for its perpetual retention due to amortization over infinity, though no evidence supports this claim.
Use of the DLTDR No party took issue with the OEB's general policy to rely primarily on the embedded or actual cost for existing long-term debt instruments. As with the experts, the point of disagreement was whether the DLTDR should be use...
AI summary The document discusses the use of the Deemed Long-Term Debt Rate (DLTDR) as a cap for utilities. While no party opposed the OEB's general policy to rely on actual or embedded costs for existing long-term debt, there is disagreement over whether the DLTDR should be a universal cap. OEB staff and ratepayer groups support extending the cap to all utilities, while others argue that applying it to Enbridge Gas and OPG could lead to under-recovery of prudently incurred costs. The OEA opposes a universal cap, citing lack of evidence of issues with the current practice and differences in credit ratings.
Submissions Several ratepayer groups and OEB staff disagreed with LEI and submitted that the current approach of recording the actual transaction cost as an interest expense and amortizing the transaction cost over the term of the debt ins...
AI summary Ratepayer groups and OEB staff disagree with LEI's approach to recording debt transaction costs, supporting the current method of amortizing costs over the term of the debt instrument. CCC and OEA support the existing approach, while CCMBC agrees with LEI that transaction costs should be included as OM&A costs in the revenue requirement.
Findings The cost of capital parameters of ROE, DSTDR, and DLTDR are applicable to utilities rebasing rates for 2025 (if cost of capital is in scope). For other utilities, the new cost of capital parameters will be implemented on a one-tim...
AI summary The OEB outlines the application of new cost of capital parameters (ROE, DSTDR, DLTDR) for 2025 rate rebasing, emphasizing that they should be implemented alongside other cost of service reviews. Variance accounts are granted for utilities using interim parameters, and adjustments to base rates will be based on final revenue requirements. Prescribed interest rates for DVAs and CWIP are effective April 1, 2025.
cluded in rate base. If a utility were to apply the WACC to CWIP, CWIP would be treated the same as capital additions to rate base, even though the asset under construction is not yet used and useful. In the oral hearing, TFG/Minogi raised...
AI summary The discussion centers on the treatment of Construction Work in Progress (CWIP) in rate base calculations. TFG/Minogi argues that the current prescribed interest rate for CWIP hinders First Nations from investing in regulated assets during construction, as borrowing costs are often higher. They propose applying the Weighted Average Cost of Capital (WACC) to CWIP or adopting concurrent cost recovery (CCR) for First Nations' equity investment. OEB staff suggest continuing with project-specific Return on Equity (ROE) applications for large multi-year projects.
Table 2 – Summary of Revised Methodology – Cost of Capital Electricity Natural Gas Distributors Long-term debt rate Weighted average of embedded (actual) debt plus forecasted debt rate(s) of new debt in the test period. A deemed long-term...
AI summary This table outlines the revised methodology for calculating the cost of capital, focusing on long-term debt rates for electricity and natural gas distributors. It details how weighted averages of actual and forecasted debt rates are used, with specific considerations for affiliated debt and the application of deemed long-term debt rates as a ceiling in certain scenarios.
101936Board Decision
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[1] On July 18, 2025, NSP Maritime Link Incorporated (NSPML) applied to the Nova Scotia Energy Board under s. 64 of the Public Utilities Act and s. 8 of the Maritime Link Cost Recovery Process Regulations for approval of its 2026 revenue r...
AI summary NSP Maritime Link Incorporated (NSPML) applied to the Nova Scotia Energy Board for approval of its 2026 revenue requirement, seeking recovery through a cost assessment against Nova Scotia Power Inc. The cost assessment includes financing for the Maritime Link project and 2026 depreciation, sustaining capital costs, and operating and maintenance expenses.
where that court said: - [12] Even though cost of capital may be more difficult to estimate than some other costs, it is a real cost that the utility must be able to recover through its revenues. If the Board does not permit the utility to...
AI summary The text discusses the importance of allowing utilities to recover their cost of capital to ensure continued operations and service to customers. It references court decisions emphasizing that failing to permit recovery of cost of capital could lead to the utility going out of business, harming customers, especially in markets with limited competition.
't think it wasn't because of the disallowance that this happens. The disallowance, as an example, is what it's more about the consequences of how we're configured, from a corporate perspective. So what my colleague, Ms. MacEachern-Wilson,...
AI summary The discussion focuses on the impact of disallowance on the capital structure of a company, particularly how fixed equity and debt levels during a project affect the balance between equity and debt. Unrecoverable costs and the completion of projects below budget are also mentioned as contributing factors.
equity to be tied to NS Power's, although not necessarily set at the same rate. The Consumer Advocate considered it would be appropriate to tie NSPML's return on equity to NS Power's in some fashion. [126] The Consumer Advocate submitted t...
AI summary The Consumer Advocate argues that NSPML's return on equity should be tied to NS Power's, but not necessarily at the same rate. They disagree with Concentric's suggestion of a 75 to 100 basis point increase, citing insufficient analysis and noting NSPML's lower risk due to federal loan guarantees and financial stability.
8.0 MULTI-YEAR ASSESSMENTS [217] In the 2025 assessment decision, the NSUARB stated: [85] The Board notes that multi-year assessment applications could be more efficient and reduce regulatory costs for both NSPML and intervenors. The Board...
AI summary The NSUARB discusses the efficiency and regulatory costs of multi-year assessments, noting that NSPML's single-year approach is due to uncertainties in O&M costs. The Board encourages multi-year assessments and suggests that expensing marine survey costs over several years could reduce forecasting risks. The Small Business Advocate and Industrial Group highlight the need for balance between forecast accuracy and regulatory efficiency.
8.1 Findings [223] As the Board has previously noted, it is important that NSPML reduce costs, including regulatory costs, wherever possible. The Board is not convinced that the level of uncertainty surrounding NSPML's cost forecasts is en...
AI summary The Board emphasizes the importance of NSPML reducing costs, including regulatory costs, and is not convinced that uncertainty in cost forecasts justifies avoiding a multi-year assessment application. NSPML is directed to engage with interested parties and report on these discussions in its next cost assessment application.
99008NSEB (NSPML) IR 1 to 44
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Request IR-18: - Page 12 - NSPML states: "Of the $0.9 million increase, $0.5 million is attributed to consulting relating to - ongoing commercial matters, primarily between NSPML and NLH, and higher administrative fees - associated with FL...
AI summary The text outlines a series of questions related to NSPML's $0.9 million increase, with $0.5 million attributed to consulting for ongoing commercial matters with NLH and administrative fees from FLG2, and $0.4 million due to inflation. Questions focus on costs, reasons for increased fees, administrative duties, and inflation assumptions.
Request IR-40: Page 45 to 46: Flotation Costs and Financing Flexibility - a) Mr. Coyne states that seven of ten jurisdictions in Canada have historically granted a 50- basis point adjustment for flotation costs. Please confirm that Mr. Coy...
AI summary The document contains a series of questions regarding flotation costs and financing flexibility, particularly focusing on Nova Scotia Power Marketing Limited (NSPML). It asks for confirmation on flotation cost adjustments, investor behavior, the nature of flotation costs, financial implications, and historical cost data.
Request IR-44: - 19 Page 57 states: "Some may argue that the debt used to finance the Maritime Link project cost of - $1.7 billion issued by the Maritime Link Financing Trust and guaranteed by the government of - 21 Canada lowers NSPML's r...
AI summary The text discusses concerns about the Maritime Link project's financing, specifically the impact of a government-guaranteed debt on NSPML's risk and equity investors. It raises questions about whether disallowances by the Board would be due to NSPML's imprudence and whether these disallowances are fully assigned to shareholders.
101936Board Decision
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NOVA SCOTIA ENERGY BOARD IN THE MATTER OF the PUBLIC UTILITIES ACT and the MARITIME LINK ACT and the MARITIME LINK COST RECOVERY PROCESS REGULATIONS - and - IN THE MATTER OF AN APPLICATION by NSP MARITIME LINK INCORPORATED for approval of...
AI summary This regulatory proceeding involves NSP Maritime Link Incorporated's application for approval of its 2026 revenue requirement and cost assessment under the Public Utilities Act and Maritime Link Cost Recovery Process Regulations. Various intervenors, including the Consumer Advocate, Small Business Advocate, Industrial Group, and Nova Scotia Power Inc., are participating in the proceeding.
[1] On July 18, 2025, NSP Maritime Link Incorporated (NSPML) applied to the Nova Scotia Energy Board under s. 64 of the Public Utilities Act and s. 8 of the Maritime Link Cost Recovery Process Regulations for approval of its 2026 revenue r...
AI summary On July 18, 2025, NSP Maritime Link Incorporated applied to the Nova Scotia Energy Board for approval of its 2026 revenue requirement, seeking recovery through a cost assessment against Nova Scotia Power Inc. The cost assessment would cover financing the Maritime Link project and associated expenses.
4.1 Findings - [28] The significance of the LTAMP was reviewed by the NSUARB in its 2025 NSPML cost assessment decision: - [37] Beyond the LTAMP's importance to establishing expected NSPML capital needs, the LTAMP can also be used to estab...
AI summary The NSUARB reviewed the significance of the LTAMP in its 2025 NSPML cost assessment decision. The Board emphasized the importance of the LTAMP for establishing NSPML's capital needs and for multi-year cost assessments. NSPML responded to the CA's inquiry by explaining that single-year assessments continued due to uncertainties in operational matters, including the LTAMP. The Board's oversight role under the Public Utilities Act is highlighted, along with the need for certainty in operational and capital matters before considering multi-year assessments.
't think it wasn't because of the disallowance that this happens. The disallowance, as an example, is what it's more about the consequences of how we're configured, from a corporate perspective. So what my colleague, Ms. MacEachern-Wilson,...
AI summary The discussion explains that the disallowance of costs is not the main cause of discrepancies between equity and debt, but rather the result of how the company is structured corporately. Unrecoverable costs and capital projects influence how equity and debt are managed within the business.