Topic:"Cost Recovery" in M13042

Our team - successfully handled international supply-chain issues; - managed delays in the interconnection process; - supported the challenging implementation of new technologies on the Nova Scotia grid; - gained social license for multi-m...

AI summary SWEB Development Limited Partnership highlights challenges with the draft Power Purchase Agreement (PPA) under Green Choice Program II, noting that it may not balance risks and pricing fairly between Nova Scotia Power and developers. They argue that the PPA may lead to higher energy rates and lower participation, and suggest releasing a final draft before registration deadlines to allow better risk assessment.

Previous Section 16.9 – Inability to Secure CIB or SREP Funding In Section 1.5 of the draft RFP, Proponents " are encouraged to explore all federal funding opportunities to make their Energy Rate more competitive, including investment tax...

AI summary The document discusses the removal of Section 16.9 from the PPA, which previously allowed termination if CIB or SREP funding could not be secured. Proponents argue that this removal increases project financial risk, potentially leading to higher prices and reduced participation. They urge reinstating the section with revisions to protect developers and ensure project viability.

New Section 16.9 – Adjustment for Post-Proposal Applicable Tariffs The Minimum Threshold outlined in Section 16.9 b) - Adjustment for Post-Proposal Applicable Tariffs is set at 7.5%. Please be advised that we consider this threshold unreas...

AI summary The document argues that the 7.5% Minimum Threshold in Section 16.9 is unreasonably high, as it fails to adequately protect sellers from potential tariff impacts. It references a study showing that even a 25% steel surtax had an impact below 7.5%, and warns that developers will price in higher risks, leading to increased costs for ratepayers. The document suggests lowering the threshold to 2.5% and cautions against using Ontario’s procurement as a basis for Nova Scotia's threshold.

Post-COD indexation of 20% of the Energy Rate to CPI This is a new, open-ended cost pass-through that did not exist in the 2024 Board-approved PPA . The 2024 Board-approved PPA only escalated the Energy Rate for CPI during a fixed adjustme...

AI summary The document discusses a new, open-ended cost pass-through mechanism in the GCP PPA, which indexes 20% of the Energy Rate to CPI for the full 25-year term, unlike the 2024 PPA which had a fixed adjustment period. The IG recommends an analysis of the ratepayer impact and suggests limiting the indexation to a fixed period if the 20% figure is not justified.

Elimination of the Congestion Management Alternative/Forgo Network Upgrade Reimbursement These options have been eliminated in favour of ERIS-only interconnection with IESO-led deliverability testing8 [.](#page-2-2) The Application states...

AI summary The document discusses the elimination of the Congestion Management Alternative and Forgo Network Upgrade Reimbursement options, replacing them with ERIS-only interconnection and IESO-led deliverability testing. The Application claims this change does not impose additional costs on ratepayers, but the IG recommends providing evidence to support this assertion.

S UMMARY OF RECOMMENDATIONS For the reasons set out above, the IG recommends that the Board direct the PA to provide, or that the PA otherwise provide in its reply, the following before the GCP PPA is approved: - An analysis of the expecte...

AI summary The IG recommends that the Board require the PA to provide analyses on ratepayer costs related to CPI indexation, early completion incentives, curtailment compensation, and jurisdictional security data before approving the GCP PPA. These analyses are intended to ensure cost-effectiveness and protect ratepayers.

11 https://www.novascotia.ca/sites/default/files/documents/1-3582/nova-scotia-clean-power-plan-presentation-en.pdf Commencement Date ." 16.4(a): "Notwithstanding Section 16.2 and Section 16.3, but subject to Article 12 and excluding any en...

AI summary Natural Forces requests the removal of the Minimum Threshold to ensure full recovery of increased capital costs caused by tariff adjustments. The opposing party argues against lowering the threshold, stating that the current 7.5% level allows the Seller to account for risk in its energy rate submissions, and that a materiality filter helps avoid minor cost fluctuations from affecting the process.

16.9 Adjustment for Post-Proposal Applicable Tariffs - a) If any Post-Proposal Applicable Tariffs are introduced, the Seller shall use Commercially Reasonable Efforts to avoid or mitigate the cost of any such Post-Proposal Applicable Tarif...

AI summary This section outlines the process for adjusting energy rates due to Post-Proposal Applicable Tariffs. If such tariffs increase the Seller's capital cost by more than 7.5%, the Seller must notify NSPI and propose a revised energy rate to address the impact.

16.9 Adjustment for Post-Proposal Applicable Tariffs - a) If any Post-Proposal Applicable Tariffs are introduced, the Seller shall use Commercially Reasonable Efforts to avoid or mitigate the cost of any such Post-Proposal Applicable Tarif...

AI summary The section outlines the adjustment process for Post-Proposal Applicable Tariffs, including requirements for the Seller to mitigate costs and procedures for submitting a Tariff Adjustment Notice to NSPI if costs increase by more than 7.5% due to such tariffs.