Topic:"Credit Ratings" in M12451

10.3.1 Debt and Interest - NS Power uses a mix of fixed (long-term) and floating rate (short-term) debt in its capital structure. - Long-term interest rates are generally higher, but less volatile than shorter-term interest rates. - Under...

AI summary NS Power uses a mix of fixed and floating rate debt, relying heavily on commercial paper for low-cost financing. Its BBB (High) DBRS rating, below market requirements, necessitates exemptive relief to maintain access. The relief expires in 2028, requiring NS Power to improve its rating. Forecast short-term rates for 2026-2027 are 3.15-3.25%, with long-term debt plans including $250 million issuance and energy storage funding.

10.3.3 Credit Ratings - Credit ratings are independent opinions that indicate the relative riskiness of a company's debt - securities, and affect a company's cost of capital, as well as its access to capital. All other factors - being equa...

AI summary Credit ratings are vital for utilities to secure capital, especially for NS Power, which must fund significant investments. NS Power's BBB- rating (S&P) and BBB (high) (DBRS) places it below the North American utility median (BBB+). Its rating is only investment-grade due to its parent company, Emera. Maintaining strong ratings is critical for NS Power's energy transition and capital access.

Figure 10-1 – S&P Global North American Regulated Utilities Ratings Distribution[20](#page-67-1) Credit ratings are determined based on an assessment of both business risk and financial risk. The key metric considered from a financial risk...

AI summary NS Power must maintain cash flow to debt above 10% to preserve its credit ratings. The company forecasts that with rate relief and thermal asset securitization, metrics will reach BBB+ (S&P) and A (low) (DBRS) by 2027. Without these measures, metrics would fall below 10%, risking credit downgrades and higher borrowing costs.

Requested Capital Structure and Cost of Capital - It is a well-established regulatory principle and is codified in the Public Utilities Act (PUA) that - NS Power's approved Capital Structure and Cost of Capital must be sufficient to allow...

AI summary The document discusses NS Power's request to maintain a 9.0% ROE and 40% equity ratio, contrasting with Concentric Evidence's recommendation of 9.9% ROE and 45% equity. It emphasizes the need to balance customer affordability with financial stability, referencing the Public Utilities Act and the role of the Storm Cost Recovery Rider in aligning NS Power's risk profile with proxy utilities.

jpeg) 1 increasing just to cover additional borrowing costs. It might even cause it to be excluded from participating in some debt markets altogether.[9](#page-40-1) 2 3 The assessment of whether the Fair Return Standard has been met requi...

AI summary The Fair Return Standard requires that a utility's return be equivalent to the opportunity cost of capital, ensuring investors receive adequate returns for the risk taken. It also emphasizes the need for a return sufficient to maintain financial integrity, credit ratings, and the ability to attract capital on reasonable terms.

- 8 a) Maintain credit ratings of at least BBB+ from S&P or Baa1 from Moody's; - 9 b) Consistently pay quarterly cash dividends, and have not reduced or eliminated those 10 dividends in the past two years; - 11 c) Have positive earnings gr...

AI summary The text outlines several criteria that must be met, including maintaining credit ratings, paying consistent dividends, having positive earnings growth projections, owning regulated generation assets, deriving income from regulated operations, and not being involved in significant mergers or transactions.

Further, as an integrated electric utility, S&P assesses NSPI's financial risk using its medial volatility table, under which financial risk is considered "Significant" when FFO / Debt is between 13 and 21 percent, whereas T&D utilities ar...

AI summary S&P assesses NSPI's financial risk using different volatility tables, moving NSPI from the low volatility table to the medial volatility table in May 2016, which increased its financial risk rating from 'Intermediate' to 'Significant' due to its substantial generation assets.

1 e. Change in NSPI's Credit Rating Since 2021 S&P Global downgraded NSPI by two notches to BBB- from BBB+ in February 2023, 2 [65](#page-88-0) and DBRS Morningstar downgraded NSPI to BBB (high) from A (low) in December 2022.[66](#page-88-...

AI summary S&P Global downgraded NSPI's credit rating in 2023 and 2022 due to concerns over political intervention and regulatory changes, including caps on base rate increases and return on equity. The rating agency also cited risks related to coal-based generation and limited financial cushion, though it reaffirmed the BBB- rating in 2024 with a negative outlook.

20 f. Conclusions on Financial Risk The 40.0 percent deemed common equity ratio for NSPI is similar to the Canadian average of 40.6 percent for investor-owned electric utilities, despite the fact that the Company owns substantial regulated...

AI summary The document discusses NSPI's financial risk, noting that its 40.0% deemed common equity ratio is lower than the U.S. Electric proxy group average but similar to the Canadian average. NSPI's credit rating from S&P is lower than its peers, indicating higher financial risk.

21 f. Recovery of Fuel and Purchased Power Costs NSPI recovers prudently incurred increases and/or decreases in its cost of fuel outside of general rate proceedings through periodic adjustments to customer rates via its Fuel Adjustment Mec...

AI summary NSPI uses a Fuel Adjustment Mechanism (FAM) to recover prudently incurred fuel and purchased power costs outside general rate proceedings. The mechanism was approved in 2007 with conditions, including external audits every two years. Credit rating agencies have raised concerns about the FAM's design, including regulatory lag and deferred fuel costs, which may increase customer bill pressures.

1 j. Conclusions on Business Risk 2 As discussed in this Section, NSPI's risk profile is characterized by the following factors: 1) 3 ownership of substantial regulated generation assets; 2) the need to retire a substantial amount 4 of the...

AI summary NSPI's business risk profile remains elevated due to factors such as the need to retire thermal generation assets and transition to renewable resources by 2030, regulatory lag from its FAM, and exposure to storms. NSPI is requesting the continuation of the storm cost rider on a pilot basis through 2027. Credit rating agencies are closely monitoring these risks.

b. Credit Rating Agency View on U.S. Regulatory Framework Some have argued in the past that U.S. utilities are riskier because the regulatory environment is more favorable in Canada than in the U.S. from the perspective of debt and equity...

AI summary The document discusses how credit rating agencies, specifically Moody's and Scotiabank, have evolved their views on the U.S. regulatory framework for utilities. They now see it as more favorable and comparable to Canada's, citing factors like automatic cost recovery and reduced regulatory lag. This shift has implications for utility valuations and credit ratings.

2026-2027 GRA OP-01 Attachment 02 Page 14 of 19 REDACTED (CONFIDENTIAL INFORMATION REMOVED) It is possible that volatility in commodity prices could cause the Company to have material credit risk exposures with one or more counterparties....

AI summary The document discusses the Company's credit risk management strategies, including transacting with counterparties, obtaining cash deposits, and entering into commodity master arrangements. It also notes the amount of past due financial assets and the allowance for credit losses.

Credit Ratings Emera's credit ratings are consistent with those disclosed in the Company's 2024 annual MD&A, with material updates noted below: On May 27, 2025, Fitch Ratings revised its outlook on Emera, TEC and PGS to stable from negativ...

AI summary Fitch Ratings updated its outlook on Emera, TEC, and PGS to stable from negative on May 27, 2025, without changing their existing credit ratings, consistent with the 2024 annual MD&A.

The Company is exposed to credit risk with respect to amounts receivable from customers, energy marketing collateral deposits, and derivative assets. Credit risk is the potential loss from a counterparty's non-performance under an agreemen...

AI summary The Company faces credit risk from customers, energy marketing collateral deposits, and derivative assets. It manages this risk through policies and procedures that include counterparty analysis, exposure measurement, and mitigation strategies. Credit assessments are performed on new customers and counterparties, and deposits or collateral are required for high-risk accounts.

2026-2027 GRA OP-01 Attachment 4 Page 27 of 37 REDACTED (CONFIDENTIAL INFORMATION REMOVED) The Company assesses the potential for credit losses on a regular basis and, where appropriate, maintains provisions. With respect to counterparties...

AI summary The Company regularly assesses credit risk, monitors counterparties, and implements procedures to manage credit exposure. It manages commodity price, FX, and interest rate risks through transactions with counterparties and uses commodity master arrangements to mitigate credit risk. As of June 30, 2025, the Company had $206 million in past due financial assets, with an allowance for credit losses of $12 million.

The Company's cash collateral positions consisted of the following: As at June 30 December 31 millions of dollars 2025 2024 Cash collateral provided to others $ 129 $ 198 Cash collateral received from others $ 5 $ 5 Collateral is posted in...

AI summary The Company's cash collateral positions are outlined, showing amounts provided to and received from others as of June 30, 2025, and December 31, 2024. Collateral is posted based on the Company's credit rating and may be required under derivative agreements in the event of a credit-related event.

Credit Objectives: - Maintain our investment grade credit ratings - Maintain our target capital structure - Sustained cash flow-to-debt metrics > 12% - Sustained holdco debt-to-total debt < 40%

AI summary The credit objectives focus on maintaining investment-grade ratings, target capital structure, and sustained cash flow-to-debt metrics above 12%, along with holdco debt-to-total debt below 40%.

Corporate Credit Ratings of Emera: Moody's Baa3 (Negative) S&P 1 (Negative) BBB Fitch BBB (Negative)

AI summary The document outlines the current corporate credit ratings of Emera, as assigned by Moody's, S&P, and Fitch, all indicating a negative outlook.

5. Credit Metrics • Achieve target credit metrics on a sustainable basis

AI summary The document emphasizes the need to achieve target credit metrics on a sustainable basis, indicating a focus on financial health and long-term stability.

2024 Credit Metric Forecast Cash Flow / Debt Dec 31, 2024 Forecast US GAAP View CFO / Debt Forecasted 2024 Including Rating Agencies Adjustments

AI summary The 2024 Credit Metric Forecast includes cash flow and debt projections under US GAAP, incorporating adjustments from rating agencies. Visual representations of these forecasts are provided in figures on page 53.

- Sustained holdco debt-to-total debt < 40% Moody's Corporate Credit Ratings of Emera: Baa3 (Negative) S&P 1 (Negative) BBB - Fitch BBB (Negative)

AI summary The document discusses the corporate credit ratings of Emera, with Moody's rating it Baa3 (Negative), S&P rating it BBB (Negative), and Fitch rating it BBB (Negative). The text also mentions a sustained holdco debt-to-total debt ratio below 40%.

Clear Financial Objectives Drive Reliable Outcomes Deliver 7%-8% Rate Base CAGR Through 2029 Translate Rate Base Growth Into 5%-7% Annual Adjusted EPS 1 Growth Through 2027 2 2 3 Deliver Sustainable Annual Dividend Growth Of 1%-2% Achieve...

AI summary The document outlines financial objectives including a 7%-8% annual rate base growth through 2029, translating into 5%-7% adjusted EPS growth through 2027, sustainable dividend growth of 1%-2%, and a target payout ratio of ~80% by 2027. It also emphasizes achieving credit metrics on a sustainable basis.

Funding Plan Supports Investment Grade Credit Ratings Reinvested cash flow is our primary source of funding

AI summary The document highlights that reinvested cash flow serves as the primary funding source, which is crucial for maintaining investment grade credit ratings.

Executive Summary Over the past year we have executed against our plan to improve our credit profile. Our actions have improved our FX normalized CFO pre-WC / debt 1 ratio to 11.6% and reduced our proportion of holding company debt to appr...

AI summary Over the past year, the company has improved its credit profile by enhancing its FX normalized CFO pre-WC / debt ratio to 11.6% and reducing holding company debt to 34%. The company has also reduced business risk by focusing on premium regulatory jurisdictions and derisking the recovery of regulatory assets. It remains committed to maintaining its investment grade rating.

Executive Summary Over the past year we have executed against our plan to improve our credit profile. Our actions have improved our FX normalized FFO / debt 1 ratio to 11.3% and reduced our proportion of holding company debt to approximate...

AI summary The company has improved its credit profile through actions that increased its FX normalized FFO/debt ratio to 11.3% and reduced holding company debt to 34%. It has also derisked the recovery of regulatory assets and remains committed to maintaining an investment grade rating. The improved financial risk profile is supported by a focus on premium regulatory jurisdictions, particularly in Florida.

FX NORMALIZED FFO / DEBT1,2 TRANSITION $185M USD of new base revenues at TEC , partially offset by rate base investment $700M USD of proceeds from NMGC sale used to retire Holdco debt $500M of thermal asset securitization reduces consolida...

AI summary The document outlines financial transitions involving $185M USD in new base revenues at TEC, $700M USD from the NMGC sale used to retire debt, and $500M from thermal asset securitization, which are expected to strengthen credit metrics and support the investment grade rating.

Improved Credit Outlook Reflects Balance Sheet Improvements

AI summary The improved credit outlook is attributed to balance sheet improvements, suggesting enhanced financial stability and potentially better access to financing.

CONFIDENTIAL (Attachment Only) 1 Request IR-1: 2 3 References: 4 5 On page 69 (lines 1-2) of the NS Power General Rate (GRA) Application, NS Power: 6 7 8 9 forecasts that the S&P and DBRS metrics would deteriorate and be below the minimum...

AI summary The document requests detailed source data and workpapers from NS Power regarding its financial forecasts, particularly concerning the deterioration of credit metrics below a 10% cash flow to debt threshold by 2027. NS Power refers to Confidential Attachment 1 for its calculations related to credit metrics for 2025-2027.

Outlook: Stable The stable outlook on Nova Scotia Power Inc. (NSPI) reflects that on Emera Inc. because S&P Global Ratings view NSPI to be a core entity to Emera under its group rating methodology. The stable outlook on Emera reflects S&P...

AI summary The stable outlook on Nova Scotia Power Inc. (NSPI) is tied to its parent company Emera Inc., as per S&P Global Ratings. The outlook reflects expectations of improved cash flows starting in 2018 and Emera's strong commitment to maintaining credit quality.

Downside scenario Because NSPI is core to Emera, there will be no change to our rating on NSPI unless we lower the group credit profile(GCP) on Emera. We could take a negative rating action if Emera does not achieve a funds from operations...

AI summary In the downside scenario, NSPI's credit rating will remain unchanged unless Emera's group credit profile is lowered. A negative rating action could occur if Emera fails to achieve a 13% FFO-to-debt ratio by 2019, potentially due to lower cash flow and lack of credit-supportive actions.

Upside scenario Because NSPI is core to Emera, there will be no change to our rating on NSPI unless we upgrade the GCP. Although unlikely during the outlook period, we could take a positive rating action if we believe forecast FFO-to-debt...

AI summary In the upside scenario, NSPI's credit rating will remain unchanged unless the GCP is upgraded. A positive rating action could occur if forecast FFO-to-debt exceeds 16%, potentially due to higher cash flow or greater deleveraging by Emera.

Financial Risk: Significant We assess NSPI's financial risk profile as significant using more relaxed financial benchmarks compared to the typical corporate issuer. This assessment primarily reflects regulated cash flows from NSPI's genera...

AI summary NSPI's financial risk is assessed as significant due to its reliance on regulated cash flows from generation operations. The base-case scenario projects a core credit ratio of 13%-15% and annual capital spending of approximately C$355.0 million, driven by IT projects, transmission initiatives, and dividend payments.

Liquidity: Adequate We assess NSPI's liquidity as adequate to cover its needs over the next 12 months. Based on our criteria, we expect that liquidity sources will be sufficient to cover uses more than 1.1x in the next 12 months. We expect...

AI summary NSPI's liquidity is assessed as adequate to cover its needs over the next 12 months, even in the event of a 10% decline in EBITDA. The company has strong bank relationships and a satisfactory credit market standing, supporting its liquidity position.

We apply a negative one-notch adjustment to the anchor score based on our comparative rating analysis because we are forecasting NSPI's financial metrics, specifically its FFO-to-debt, to be at the lower end of the range (13%-23%) for the...

AI summary The analysis applies a negative one-notch adjustment to NSPI's credit rating due to its FFO-to-debt ratio being forecasted at the lower end of the range, resulting in an SACP rating of 'bbb+'.

Group Influence We base our ratings on NSPI on our view that the subsidiary is core to the ultimate parent, Emera. We believe that NSPI is unlikely to be sold, and that it operates in regulated distribution that is integral to Emera's over...

AI summary The rating agency bases its 'BBB+' rating for NSPI on its integral role within Emera, long-term management commitment, and stable performance over more than five years without significant issues affecting its earnings targets.

Ratings Score Snapshot Corporate Credit Rating BBB+/Stable/ Business risk: Excellent

AI summary The document presents a snapshot of the corporate credit rating for Nova Scotia Power, indicating a BBB+ rating with a stable outlook and no downgrade factors. The business risk is assessed as excellent.

2026-2027 GRA Cleary IR-1 Attachment 2 Page 6 of 8 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Summary: Nova Scotia Power Inc. • Country risk: Very low • Industry risk: Very low • Competitive position: Excellent Financial risk: Significant...

AI summary The summary outlines Nova Scotia Power Inc.'s risk profile, noting very low country and industry risks, an excellent competitive position, and significant financial and cash flow/leverage risks. The anchor rating is listed as 'a-'.

Modifiers • Diversification/Portfolio effect: Neutral (no impact) • Capital structure: Neutral (no impact) • Financial policy: Neutral (no impact) • Liquidity: Adequate (no impact) • Management and governance: Satisfactory (no impact) • Co...

AI summary The document discusses the credit profile of Nova Scotia Power, noting a negative impact on the comparable rating analysis with a -1 notch, while other factors like diversification, capital structure, and liquidity remain neutral or satisfactory.

Issue Ratings Subordination Risk Analysis Capital structure Analytical conclusions NSPI's capital structure consist of about $2.3 billion of unsecured debt and all the debt is at the NSPI level. NSPI issues its debt at the same company and...

AI summary The analysis discusses NSPI's capital structure, which consists of approximately $2.3 billion in unsecured debt at the NSPI level. The debt is rated 'BBB+' with no notching due to the lack of subordination, aligning with the company's long-term corporate credit rating.

2026-2027 GRA Cleary IR-1 Attachment 2 Page 7 of 8 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Summary: Nova Scotia Power Inc. - General Criteria: Group Rating Methodology, Nov. 19, 2013 - Criteria Corporates Utilities: Key Credit Factors...

AI summary This document outlines credit rating methodologies and criteria used by rating agencies for evaluating Nova Scotia Power Inc. It includes various rating methodologies and assumptions from 2009 to 2013, focusing on corporate and utility credit factors.

Credit Highlights Overview Key Strengths Key Risks Nova Scotia Power Inc. (NSPI) is a low-risk, vertically integrated regulated electric utility with no exposure to non-utility operations. High reliance on riskier coal-based generation. Ge...

AI summary Nova Scotia Power Inc. (NSPI) is a low-risk, vertically integrated regulated electric utility with a credit-supportive regulatory framework. However, it faces risks such as high reliance on coal-based generation and limited financial cushion. NSPI has sufficient liquidity sources, including a C$600 million credit facility and a commercial paper program, to cover its needs over the next 6-12 months.

Downside scenario We could lower the ratings on NSPI over the next 12 to 24 months if the utility's financial measures deteriorate with FFO to debt consistently below 12%. We could also lower the rating on NSPI if we lower our ratings on E...

AI summary The downside scenario outlines potential credit rating reductions for NSPI if its financial metrics, specifically FFO to debt, fall below 12% or if Emera's ratings are downgraded.

Upside scenario Although unlikely, we could raise our ratings on NSPI over our outlook period if we raise our rating on Emera and if, at the same time, NSPI's FFO to debt is consistently above 15%.

AI summary The upside scenario suggests that NSPI's credit ratings could be upgraded if Emera's ratings are also upgraded and NSPI's FFO to debt ratio remains consistently above 15% over the outlook period.

We assess the company's liquidity as adequate because we believe its liquidity sources will likely cover uses by more than 1.1x over the next 12 months and meet cash outflows even if EBITDA declines 10%. The assessment also reflects the co...

AI summary The company's liquidity is assessed as adequate, with liquidity sources expected to cover uses by more than 1.1x over the next 12 months. This assessment considers the company's prudent risk management, strong banking relationships, and satisfactory credit market standing.

Group Influence We view NSPI as an insulated subsidiary within the Emera group, incorporated as a separate legal entity with financial performance and funding that are highly independent from the group, including issuing long- and short-te...

AI summary NSPI is considered an insulated subsidiary of Emera, operating as a separate legal entity with independent financial performance and funding. It maintains its own credit facilities and does not commingle funds with the rest of the group. Emera has a strong economic incentive to preserve NSPI's credit strength.

Analytical conclusions We rate the senior unsecured debt at NSPI the same as the issuer credit rating because it is unsecured debt of a qualifying investment-grade regulated utility. The rating of the CP program is 'A-1(Low)' on the Canada...

AI summary The senior unsecured debt of NSPI is rated the same as the issuer credit rating due to its status as unsecured debt of a qualifying investment-grade regulated utility. The CP program is rated 'A-1(Low)' on the Canada National Scale Commercial Paper.

Reconciliation Table 3 Reconciliation Of Nova Scotia Power Inc. Reported Amounts With S&P Global Ratings' Adjusted Amounts (Mil. C$)

AI summary This section presents a reconciliation table comparing Nova Scotia Power Inc.'s reported amounts with adjusted amounts by S&P Global Ratings, highlighting discrepancies in millions of Canadian dollars.

2026-2027 GRA Cleary IR-1 Attachment 3 Page 9 of 11 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Nova Scotia Power Inc. • Country risk: Very low • Industry risk: Very low • Competitive position: Excellent Financial risk: Significant • Cash...

AI summary The document provides a risk assessment for Nova Scotia Power Inc., highlighting very low country and industry risks, an excellent competitive position, but significant financial risk related to cash flow and leverage. The anchor rating is listed as 'a-'.

Modifiers - Diversification/portfolio effect: Neutral (no impact) - Capital structure: Neutral (no impact) - Financial policy: Neutral (no impact) - Liquidity: Adequate (no impact) - Management and governance: Satisfactory (no impact) - Co...

AI summary The document discusses the credit profile of Nova Scotia Power, noting a stand-alone credit rating of 'bbb+' and a group credit profile of 'bbb'. It also mentions that the entity is insulated within the group with no impact on its credit status.

Related Criteria - General Criteria: Hybrid Capital: Methodology And Assumptions, July 1, 2019 - General Criteria: Group Rating Methodology, July 1, 2019 - Criteria Corporates General: Corporate Methodology: Ratios And Adjustments, April 1...

AI summary This section lists various credit rating methodologies and criteria used by rating agencies, including corporate, utility, and country risk assessments. These documents outline the assumptions, factors, and approaches used in evaluating creditworthiness.

Nova Scotia Power Inc. Business And Financial Risk Matrix Financial Risk Profile Business Risk Profile Minimal Modest Intermediate Significant Aggressive Highly leveraged Excellent aaa/aa+ aa a+/a a- bbb bbb-/bb+ Strong aa/aa- a+/a a-/bbb+...

AI summary This document presents a business and financial risk matrix for Nova Scotia Power Inc., outlining various risk profiles and corresponding credit ratings as of April 9, 2020. It categorizes risk levels and maps them to credit ratings, providing a snapshot of the company's financial standing.

2026-2027 GRA Cleary IR-1 Attachment 3 Page 11 of 11 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Copyright © 2020 by Standard & Poor's Financial Services LLC. All rights reserved. No content (including ratings, credit-related analyses and...

AI summary This document contains a copyright notice from Standard & Poor's Financial Services LLC, prohibiting the modification, reproduction, or distribution of its content without prior written permission. It also includes disclaimers regarding the accuracy, completeness, and liability associated with the use of the content.

Credit Highlights Overview Key strengths Key risks Low-risk, vertically integrated regulated electric utility with no exposure to nonutility operations. High reliance on riskier coal-based generation. Generally credit-supportive regulatory...

AI summary Nova Scotia Power (NSPI) is a low-risk, vertically integrated utility with a credit-supportive regulatory framework, but faces challenges due to reliance on coal-based generation and financial metrics at the lower end of the risk profile. The fuel stability plan covers only the fuel component, with base rates increasing by 1.5% annually through 2022, and regulatory lag may occur if variances arise. NSPI is expected to file for new base rates for the nonfuel component by 2023, which could alleviate financial pressure.

Downside scenario We could lower the rating on NSPI over the next 12-24 months if: - Financial measures deteriorate, with FFO to debt consistently below 12%; or - We lower our rating on parent Emera.

AI summary The downside scenario outlines potential reasons for lowering the credit rating of NSPI, including if financial measures like FFO to debt fall below 12% or if the parent company Emera's rating is lowered.

Upside scenario We could raise our rating on NSPI over our outlook period if: - We raise our rating on Emera; and - NSPI's FFO to debt is consistently above 15%.

AI summary The upside scenario for NSPI's credit rating depends on raising the rating for Emera and maintaining an FFO to debt ratio consistently above 15% over the outlook period.

Table 2 Nova Scotia Power Inc Peer Comparison Industry sector: electric Nova Scotia Power Inc. Tucson Electric Power Co. Caribbean Utilities Co. Ltd. Hawaiian Electric Co. Inc. Ratings as of May 6, 2021 BBB+/Stable/ A-/Stable/NR BBB+/Negat...

AI summary Table 2 presents a peer comparison of Nova Scotia Power Inc. with other electric utilities, including financial metrics such as revenue, EBITDA, interest expense, and debt levels. The data highlights differences in financial performance and credit ratings among the companies.

2026-2027 GRA Cleary IR-1 Attachment 4 Page 6 of 12 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Nova Scotia Power Inc. capital structure, we forecast NSPI's FFO to debt at about 12%-13% for 2021 and 2022. NSPI's financial measures include...

AI summary The document discusses Nova Scotia Power Inc.'s (NSPI) capital structure, forecasting FFO to debt at 12%-13% for 2021 and 2022. A negative comparable rating analysis modifier was assigned due to NSPI's financial measures being at the low end of the financial risk category.

Nova Scotia Power Inc. Reconciliation Of Reported Amounts With S&P Global Ratings' Adjusted Amounts Fiscal year ended Dec. 31, 2020

AI summary The document presents a reconciliation of Nova Scotia Power Inc.'s reported amounts with S&P Global Ratings' adjusted amounts for the fiscal year ended December 31, 2020.

We assess the company's liquidity as adequate because we believe its liquidity sources will likely cover uses by more than 1.1x over the next 12 months and meet cash outflows even if EBITDA declines 10%. The assessment also reflects the co...

AI summary The company's liquidity is assessed as adequate, with liquidity sources expected to cover uses by more than 1.1x over the next 12 months, even if EBITDA declines by 10%. This assessment is based on prudent risk management, sound bank relationships, and a satisfactory credit market standing.

Group Influence We view NSPI as an insulated subsidiary within the Emera group, incorporated as a separate legal entity with financial performance and funding that are highly independent from the group, including issuing long- and short-te...

AI summary NSPI is considered an insulated subsidiary of Emera, operating as a separate legal entity with independent financial performance and funding. It maintains its own credit facilities and does not share financial resources with the rest of the group.

Analytical conclusions We rate the senior unsecured debt at NSPI the same as the issuer credit rating because it is unsecured debt of a qualifying investment-grade regulated utility. The rating on the commercial paper program is 'A-1(Low)'...

AI summary S&P Global Ratings assigns the same credit rating to NSPI's senior unsecured debt as the issuer's credit rating, considering it as unsecured debt of a regulated utility. The commercial paper program receives an 'A-1(Low)' rating on the Canada National Scale.

Issuer Credit Rating BBB+/Stable/ Business risk: Excellent • Country risk: Very low • Industry risk: Very low • Competitive position: Excellent Financial risk: Significant • Cash flow/leverage: Significant Anchor: a-

AI summary The issuer credit rating for Nova Scotia Power Inc. is BBB+/Stable/-. It has an excellent business risk profile but faces significant financial risks, particularly in cash flow and leverage. The anchor rating is a-.

Modifiers - Diversification/portfolio effect: Neutral (no impact) - Capital structure: Neutral (no impact) - Financial policy: Neutral (no impact) - Liquidity: Adequate (no impact) - Management and governance: Satisfactory (no impact) - Co...

AI summary The document outlines various modifiers related to a regulatory proceeding, noting that factors such as diversification, capital structure, and financial policy have a neutral impact, while liquidity is deemed adequate and management and governance are satisfactory. However, comparable rating analysis has a negative impact, resulting in a -1 notch.

Stand-alone credit profile : bbb+ - Group credit profile: bbb - • Entity status within group: Insulated (no impact)

AI summary The stand-alone credit profile for Nova Scotia Power Inc. is rated BBB+, while the group credit profile is BBB. The entity is insulated within the group, meaning it has no impact from the group's financial status.

2026-2027 GRA Cleary IR-1 Attachment 4 Page 10 of 12 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Nova Scotia Power Inc. - General Criteria: Methodology: Industry Risk, Nov. 19, 2013 - General Criteria: Methodology: Management And Governanc...

AI summary The document references credit rating methodologies used by Nova Scotia Power Inc., including industry risk and management and governance credit factors for corporate entities, as of 2013 and 2012.

- General Criteria: Use Of CreditWatch And Outlooks, Sept. 14, 2009 Business And Financial Risk Matrix Financial Risk Profile Business Risk Profile Minimal Modest Intermediate Significant Aggressive Highly leveraged Excellent aaa/aa+ aa a+...

AI summary The document provides a Business and Financial Risk Matrix and historical credit ratings for Nova Scotia Power Inc. and related entities, including Emera Inc., Tampa Electric Co., and Teco Energy Inc., as of May 11, 2021. It outlines credit ratings, outlooks, and historical changes in ratings.

Ratings Detail (As Of May 11, 2021)\ (cont.) across countries. S&P Global Ratings' credit ratings on a national scale are relative to obligors or obligations within that specific country. Issue and debt ratings could include debt guarantee...

AI summary This section discusses S&P Global Ratings' approach to credit ratings on a national scale, explaining that they are relative to obligors or obligations within specific countries and that issue and debt ratings may involve guarantees from other entities.

2026-2027 GRA Cleary IR-1 Attachment 4 Page 12 of 12 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Copyright © 2021 by Standard & Poor's Financial Services LLC. All rights reserved. No content (including ratings, credit-related analyses and...

AI summary This document contains a copyright notice and legal disclaimers from Standard & Poor's Financial Services LLC regarding the use of its content, including ratings, analyses, and data. It emphasizes that the content cannot be modified, reproduced, or distributed without prior permission and disclaims any warranties or liabilities associated with the use of the content.

Overview Key strengths Key risks Low-risk, vertically integrated regulated electric utility with no exposure to nonutility operations. Energy transition risks through its operations in electric generation, which are primarily coal, natural...

AI summary The overview discusses Nova Scotia Power Inc. (NSPI) as a low-risk, vertically integrated utility with a credit-supportive regulatory framework, but highlights energy transition risks due to reliance on fossil fuels. It expects NSPI to maintain financial performance with modest sales growth and capital spending of about $510 million over 2022-2024.

Outlook The stable outlook on NSPI in part reflects our outlook on parent Emera. In addition, the outlook reflects our view that NSPI will continue to generate stable cash flow and maintain FFO to debt of about 12%-15% during our two-year...

AI summary The stable outlook on NSPI is influenced by the stable outlook on its parent company, Emera, and the expectation of stable cash flow and FFO to debt of 12%-15% over the next two years, assuming no change in the insulation between NSPI and Emera.

Downside scenario We could lower the rating on NSPI within the next 12-24 months if: - Financial measures deteriorate, with FFO to debt consistently below 12%; or - We lower our rating on parent Emera.

AI summary The downside scenario outlines potential rating downgrades for NSPI within 12-24 months if financial measures like FFO to debt fall below 12% or if the parent company Emera's rating is lowered.

Upside scenario We could raise our rating on NSPI within our outlook period if: - We raise our rating on Emera; and - NSPI's FFO to debt is consistently above 15%.

AI summary The upside scenario for NSPI's credit rating depends on raising the rating on Emera and maintaining FFO to debt consistently above 15%.

Company Name Key Metrics\ Mil. $ 2021a 2022e 2023f FFO to debt (%) 11.9 12.0-13.0 12.0-14.0 FFO interest coverage (x) 3.7 About 4.0 4.0-5.0 Debt/EBITDA 5.9 5.5-6.0 5.0-6.0 \ All figures adjusted by S&P Global Ratings. a Actual. e Estimate....

AI summary The document presents key financial metrics for a company, including FFO to debt, FFO interest coverage, and debt/EBITDA ratios for the years 2021, 2022, and 2023. The figures are adjusted by S&P Global Ratings and include actual, estimated, and forecasted values.

Nova Scotia Power Inc. Peer Comparisons Nova Scotia Power Tucson Electric Hawaiian Electric Inc. Power Co. Co. Ltd. Co. Inc. BBB+/Stable/ A-/Stable/NR BBB+/Stable/ BBB/Stable/A-2 BBB+/Stable/ A-/Stable/NR BBB+/Stable/ BBB/Stable/A-2 Annual...

AI summary This document presents a peer comparison of Nova Scotia Power Inc. with other utility companies, including Tucson Electric Power Co., Hawaiian Electric Co. Ltd., and Caribbean Utilities. Financial metrics such as credit ratings and annual figures are listed for comparison purposes.

Financial Risk We assess NSPI's financial risk profile using our medial volatility financial benchmark tables rather than the financial benchmarks we use for a typical corporate issuer, which reflects the company's lower-risk regulated uti...

AI summary The document assesses NSPI's financial risk profile, noting its lower-risk regulated utility operations and effective management of regulatory risk. It highlights a proposed rate application with average base rate increases and the use of a Fuel Adjustment Mechanism. NSPI's large capital program and reliance on external financing are also discussed, along with projected FFO to debt ratios.

Environmental, Social, And Governance Environmental factors are a moderately negative consideration in our credit rating analysis of Nova Scotia Power Inc., reflecting energy transition risks through its operations in electric generation t...

AI summary Environmental factors are a moderately negative consideration in the credit rating analysis of Nova Scotia Power Inc., due to its reliance on coal, natural gas, and oil for electricity generation. However, the company's growth in renewable energy, particularly hydro and wind, somewhat mitigates this exposure.

Group Influence We view NSPI as a core subsidiary of Emera because we think NSPI is integral to Emera's strategy and is unlikely to be sold. NSPI is also likely to receive the long-term group support from its parent. We view NSPI as an ins...

AI summary NSPI is considered a core and insulated subsidiary of Emera, with financial independence and separate credit facilities. It is unlikely to be sold and is expected to receive long-term support from Emera, though defaults in other group entities are not expected to impact NSPI directly.

Analytical conclusions We rate the senior unsecured debt at NSPI the same as the issuer credit rating because we view it as debt issued by a qualifying investment-grade regulated utility.

AI summary The rating agency assigns the same credit rating to NSPI's senior unsecured debt as the issuer's credit rating, considering it as debt issued by a qualifying investment-grade regulated utility.

Rating Component Scores BBB+/Stable/ BBB+/Stable/ Excellent Very Low Very Low Excellent Significant Significant a Neutral (no impact) Neutral (no impact) Neutral (no impact) Adequate (no impact) Satisfactory (no impact) Negative (-1 notch)...

AI summary The document presents rating component scores, including BBB+/Stable, Excellent, Very Low, and other classifications. The related criteria section suggests the evaluation of factors impacting credit ratings, though no specific details are provided.

Ratings Detail (as of June 10, 2022)\ Nova Scotia Power Inc. Issuer Credit Rating BBB+/Stable/ Commercial Paper Canada National Scale Commercial Paper A-1(LOW) Senior Unsecured BBB+

AI summary The document provides credit ratings for Nova Scotia Power Inc. as of June 10, 2022, including an issuer credit rating of BBB+/Stable/ and a commercial paper rating of A-1(LOW) on the Canada National Scale.

Ratings Detail (as of June 10, 2022)\ Issuer Credit Ratings History 24-Mar-2020 BBB+/Stable/ 05-Dec-2018 BBB+/Negative/ 04-Dec-2017 BBB+/Stable/ Related Entities Emera Inc. Issuer Credit Rating BBB/Stable/ Preference Stock Canada National...

AI summary This section provides an overview of credit ratings for various entities as of June 10, 2022, including ratings for Emera Inc., Tampa Electric Co., TECO Energy Inc., and Teco Finance Inc., along with explanations of global and national scale ratings by S&P Global Ratings.

ing, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages. Credit-related and other analyses, inc...

AI summary The text outlines disclaimers related to credit analyses and ratings provided by S&P Global Ratings. It emphasizes that these are opinions, not recommendations, and that S&P assumes no obligation to update or verify the information. The content is not a substitute for the user's judgment and is not intended to be relied upon for investment decisions.

Nova Scotia Power Inc. Ratings Affirmed On Reduced Concerns Over Political Interference, Outlook Negative February 13, 2023

AI summary S&P Global Ratings affirmed Nova Scotia Power Inc.'s ratings due to reduced concerns over political interference, but maintained a negative outlook.

Rating Action Overview - On Feb. 4, 2023, Nova Scotia's Premier, Tim Houston, announced that the Nova Scotia Utility and Review Board (NSUARB) is an independent body and that if Nova Scotians have questions about its decisions, they are en...

AI summary The Premier of Nova Scotia emphasized the independence of the NSUARB, which S&P Global Ratings views as reducing political interference risk. As a result, S&P affirmed NSPI's credit ratings, but maintains a negative outlook due to the parent company, Emera Inc.'s, negative outlook.

redit quality because it impaired its regulator's ability to act independently to protect the utility's credit quality, undermining the regulatory construct and the utility's cash flow predictability. While government officials opposed the...

AI summary The document discusses the credit risk profile of Nova Scotia Power Inc. (NSPI), noting its strong business risk profile despite challenges such as regulatory changes, physical risks from events like Hurricane Fiona, and reliance on coal-based generation. The NSUARB's independent regulatory process is viewed as supportive, reducing political intervention risks.

Outlook The negative outlook on NSPI reflects our negative outlook on its parent Emera. We expect that NSPI's stand-alone financial measures will reflect FFO to debt of 10%-12% through 2025. Research Update: Nova Scotia Power Inc. Ratings...

AI summary The negative outlook on Nova Scotia Power Inc. (NSPI) is tied to its parent company Emera. It is expected that NSPI's financial metrics, specifically FFO to debt, will range between 10% and 12% through 2025.

Downside scenario We could lower our ratings on NSPI over the next 12 months if: - We downgrade Emera; or - NSPI's group status further weakens and its stand-alone financial measures consistently decline below our base case such that its F...

AI summary S&P Global Ratings may lower their ratings on Nova Scotia Power Inc. (NSPI) within the next 12 months if Emera is downgraded or if NSPI's financial measures, particularly FFO to debt, consistently fall below 10%.

Upside scenario We could affirm our ratings on NSPI and revise our outlook to stable over the next 12 months if we affirm our ratings on Emera and revise our outlook to stable. Alternatively, we could revise our outlook on NSPI to stable i...

AI summary S&P Global Ratings may affirm its ratings on NSPI and revise its outlook to stable if Emera's ratings are also affirmed and its outlook revised to stable. Alternatively, NSPI's outlook could be revised to stable if its stand-alone FFO to debt consistently improves above 12% without an increase in business risk.

Liquidity We assess NSPI's liquidity as adequate and anticipate its sources of cash will be 1.1x its uses over the coming 12 months. Furthermore, we project its net sources will remain positive even if its forecast consolidated EBITDA decl...

AI summary The analysis affirms that NSPI has adequate liquidity, with cash sources projected to exceed uses by 1.1x over the next 12 months. Even with a 10% decline in EBITDA, net sources are expected to remain positive, supported by a stable regulatory framework, committed credit facilities, and strong banking relationships. The company is expected to manage its 2025 debt maturity proactively.

Analytical conclusions - We rate NSPI's senior unsecured debt at the same level as our long-term issuer credit rating because we view it as debt issued by a qualifying investment-grade regulated utility. Further, we rate NSPI's commercial...

AI summary S&P Global Ratings has assigned NSPI's senior unsecured debt the same rating as its long-term issuer credit rating, considering it as debt from a regulated investment-grade utility. Commercial paper is rated 'A-3(Cdn)'.

Ratings Score Snapshot Issuer credit rating: BBB-/Negative/ Business risk: Strong - Country risk: Very low - Industry risk: Very low - Competitive position: Satisfactory Financial risk: Aggressive - Cash flow/leverage: Aggressive Anchor: b...

AI summary The Ratings Score Snapshot indicates a BBB- credit rating with a negative outlook for the issuer, highlighting strong business risk, very low country and industry risks, and an aggressive financial risk profile due to cash flow and leverage concerns.

Modifiers - Diversification/portfolio effect: Neutral (no impact) - Capital structure: Neutral (no impact) - Financial policy: Neutral (no impact) 2026-2027 GRA Cleary IR-1 Attachment 6 Page 5 of 7 REDACTED (CONFIDENTIAL INFORMATION REMOVE...

AI summary The document discusses credit ratings for Nova Scotia Power Inc., noting that S&P Global Ratings affirmed the company's ratings due to reduced concerns over political interference, though the outlook remains negative. The entity's stand-alone credit profile is rated 'bb+' and its group credit profile is 'bbb'.

Related Criteria - General Criteria: Hybrid Capital: Methodology And Assumptions, March 2, 2022 - General Criteria: Environmental, Social, And Governance Principles In Credit Ratings, Oct. 10, 2021 - General Criteria: Group Rating Methodol...

AI summary The document lists various credit rating methodologies and criteria from S&P Global Ratings, including those related to hybrid capital, environmental, social, and governance principles, liquidity descriptors, and industry risk assessments.

Ratings Score Snapshot

AI summary The document presents a Ratings Score Snapshot, which includes a visual representation of ratings data, likely related to credit ratings or similar evaluations. The image referenced is from page 51, labeled as Picture 6.

Outlook The negative outlook on NSPI reflects our negative outlook on its parent Emera. We expect NSPI's stand-alone financial measures will reflect funds from operations (FFO) to debt of 10%- 12% through 2025.

AI summary The negative outlook on NSPI is tied to its parent company Emera. It is expected that NSPI's financial measures, specifically funds from operations to debt, will remain between 10% and 12% through 2025.

Downside scenario We could lower our ratings on NSPI over the next 12 months if: - We downgrade Emera; or - NSPI's group status further weakens and its stand-alone financial measures consistently decline below our base case such that its F...

AI summary The downside scenario outlines potential rating downgrades for NSPI if Emera is downgraded or if NSPI's financial measures, particularly FFO to debt, fall below 10% due to weakened group status and declining stand-alone financial performance.

Upside scenario We could affirm our ratings on NSPI and revise our outlook to stable over the next 12 months if we affirm our ratings on Emera and revise our outlook to stable. Alternatively, we could revise our outlook on NSPI to stable i...

AI summary The upside scenario discusses potential rating affirmations and outlook revisions for NSPI and Emera, contingent on financial performance metrics such as stand-alone FFO to debt improving to consistently above 12% and absent increased business risk.

Nova Scotia Power Inc. - Criteria Corporates Utilities: Key Credit Factors For The Regulated Utilities Industry, Nov. 19, 2013 - General Criteria: Principles Of Credit Ratings, Feb. 16, 2011

AI summary The document includes two general credit rating criteria documents from S&P, dated November 19, 2013, and February 16, 2011, which outline key credit factors for the regulated utilities industry.

Emera Inc. Issuer Credit Rating BBB/Negative/ Preference Stock Canada National Scale Preferred Share P-3(High) Preference Stock BB+ Preferred Stock Canada National Scale Preferred Share P-3(High) Preferred Stock BB+ Senior Unsecured BBB-Su...

AI summary Emera Inc. provides credit ratings for its preferred and senior unsecured debt, with ratings ranging from BBB to BB+ across different scales, indicating varying levels of creditworthiness.

Tampa Electric Co. Issuer Credit Rating BBB+/Negative/A-2 Commercial Paper Local Currency A-2 Senior Unsecured BBB+ TECO Energy Inc. Issuer Credit Rating BBB/Negative/NR Teco Finance Inc. Issuer Credit Rating BBB/Negative/NR \ Unless other...

AI summary The document presents credit ratings for Tampa Electric Co., TECO Energy Inc., and Teco Finance Inc., including BBB+/Negative/A-2 and BBB/Negative/NR ratings, along with a note on the global and national scale ratings provided by S&P Global Ratings.

ing, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages. Credit-related and other analyses, inc...

AI summary The text outlines disclaimers related to credit analyses and ratings provided by S&P Global Ratings. It emphasizes that these are opinions, not recommendations, and that S&P assumes no obligation to update or verify the information. The content is not a substitute for the user's judgment and is not intended to be relied upon for investment decisions.

January 28, 2025 What's new: Nova Scotia Power Inc. (NSPI) recently received a Canadian federal loan guarantee to securitize C$500 million of current and future fuel balances at NSPI; the company used proceeds toward reducing debt at NSPI....

AI summary Nova Scotia Power Inc. (NSPI) received a C$500 million loan guarantee from the Canadian federal government to securitize deferred fuel costs, helping reduce debt and regulatory lag. This, along with provincial support, is expected to improve NSPI's credit measures and reduce rate impacts on customers. S&P Global Ratings revised Emera Inc.'s outlook to stable from negative due to these developments and other initiatives.

Recent Research - Research Update: Emera Inc. And Subsidiaries Outlook Revised To Stable From Negative On Improving Credit Strength, Ratings Affirmed, Jan 22, 2025 - Research Update: Emera Inc. And Subsidiaries Outlook Remains Negative On...

AI summary Recent research updates indicate that Emera Inc. and its subsidiaries have had their credit outlook revised to stable from negative due to improved credit strength, while Nova Scotia Power Inc. is mentioned in a research update from February 2024.

Upside scenario We could raise our rating on NSPI within our outlook period if: - We raised our rating on Emera, or - The company's business risk strengthened while FFO to debt remained above 10%.

AI summary The upside scenario for NSPI's credit rating depends on either an upgrade in Emera's rating or an improvement in NSPI's business risk with FFO to debt above 10%.

Environmental factors are a negative consideration in our credit rating analysis of Nova Scotia Power Inc., reflecting energy transition risks through its operations in electric generation that are primarily coal, natural gas, and oil. Rel...

AI summary Environmental factors negatively affect Nova Scotia Power Inc.'s credit rating due to its reliance on coal, natural gas, and oil for electricity generation. This reliance increases exposure to stricter environmental regulations in Canada, though the company's growth in renewable energy, especially hydro and wind, somewhat mitigates this risk.

Nova Scotia Power Inc. • General Criteria: Principles Of Credit Ratings, Feb. 16, 2011

AI summary The document references a general criteria document on the principles of credit ratings dated February 16, 2011, which is relevant to Nova Scotia Power Inc.

ing, without limitation, lost income or lost profits and opportunity costs or losses caused by negligence) in connection with any use of the Content even if advised of the possibility of such damages. Some of the Content may have been crea...

AI summary The text outlines disclaimers and legal notices regarding the use of content, emphasizing that analyses and ratings provided are opinions and not recommendations. It also mentions the potential use of AI in content creation and the lack of obligation to update the content post-publication.

Ratings Debt Rating Rating Action Trend Issuer Rating A (low) Confirmed Stable Unsecured Debentures & Medium-Term Notes A (low) Confirmed Stable Commercial Paper R-1 (low) Confirmed Stable Cumulative Preferred Shares Disc./repaid Disc./rep...

AI summary The document presents a rating update from S&P Global Ratings for Nova Scotia Power Inc., confirming stable ratings for various debt instruments, including issuer ratings, unsecured debentures, medium-term notes, and commercial paper.

On December 22, 2017, DBRS Limited (DBRS) confirmed the Issuer Rating of Nova Scotia Power Inc. (NSPI or the Company) at A (low) and the ratings on NSPI's Unsecured Debentures & Medium-Term Notes and Commercial Paper at A (low) and R-1 (lo...

AI summary DBRS confirmed Nova Scotia Power Inc.'s credit ratings at A (low) with stable trends, citing a stable regulatory environment and strong franchise strength. While renewable energy costs may lead to higher rate increases post-2019, DBRS expects the 2020 rate increase to be manageable.

2. Reasonable financial profile Overall key credit metrics for the last 12 months ended September 30, 2017, remained within DBRS's "A" rating category.

AI summary The document states that the overall key credit metrics for the last 12 months ended September 30, 2017, remained within DBRS's 'A' rating category, indicating a reasonable financial profile.

Summary - NSPI's key credit metrics remained reasonable for the current rating. - Operating cash flow saw a modest increase in 9M 2017 versus 9M 2016, as the Company benefited from higher earnings. - NSPI's capex during 9M 2017 was higher...

AI summary NSPI's credit metrics remained reasonable, with increased operating cash flow and higher capex in 9M 2017 due to IT and transmission projects. The company manages its dividend payout to maintain its regulatory capital structure and debt-to-capital ratio within the current rating range.

- As at September 30, 2017, the Company had a Credit Facility of $600 million, of which $342 million was available. - The Credit Facility is used to back stop the Company's $500 million commercial paper program and to partially fund its wo...

AI summary NSPI amended its Credit Facility in June 2017, extending its maturity and adjusting the debt-to-capital ratio. As of September 30, 2017, the Credit Facility had a remaining available amount of $342 million and was used to support the company's commercial paper program and capex requirements.

Rating History Current 2016 2015 2014 2013 2012 Issuer Rating A (low) A (low) A (low) A (low) A (low) NR Unsecured Debentures & Medium-Term Notes A (low) A (low) A (low) A (low) A (low) A (low) Cumulative Preferred Shares DiscRepaid Pfd-2...

AI summary The document presents a rating history table for various financial instruments, showing the current and historical credit ratings from 2012 to 2016. It includes ratings for issuer ratings, unsecured debentures, preferred shares, and commercial paper, with ratings from agencies such as S&P Global Ratings and DBRS Limited.

Previous Report • Nova Scotia Power Inc.: Rating Report, December 13, 2016.

AI summary The document references a rating report from Nova Scotia Power Inc. dated December 13, 2016, which may pertain to credit ratings or financial assessments relevant to regulatory proceedings.

Notes: All figures are in Canadian dollars unless otherwise noted. For the definition of Issuer Rating, please refer to Rating Definitions under Rating Policy on www.dbrs.com. Generally, Issuer Ratings apply to all senior unsecured obligat...

AI summary This document provides a disclaimer from DBRS regarding the use and interpretation of its ratings and credit opinions. It outlines the limitations of the information provided, the sources of data, and the liability disclaimers applicable to DBRS and its representatives.

On December 21, 2018, DBRS Limited (DBRS) confirmed the ratings of Nova Scotia Power Inc. (NSPI or the Company) as listed above. All trends are Stable. The ratings reflect the stable operations of the Company's regulated utilities in Nova...

AI summary DBRS Limited confirmed the credit ratings of Nova Scotia Power Inc. (NSPI) as stable, noting that NSPI's key credit metrics and operations remain robust. The rating outlook considers post-2019 rate increases due to renewable energy costs, but expects 2020 rate increases to be manageable. NSPI operates under a reasonable regulatory framework allowing a return on equity of 8.75% to 9.25% and is preparing for Nova Scotia's carbon cap-and-trade program.

- As at September 30, 2018, the Company had a Credit Facility of $600 million, of which $217 million was available. - The Credit Facility is used to back stop the Company's $500 million commercial paper program and to partially fund its wo...

AI summary NSPI amended its Credit Facility in October 2018, extending its maturity from October 2021 to October 2023. The facility, worth $600 million, backs the company's $500 million commercial paper program and supports working capital and capex needs. As of September 30, 2018, $217 million of the facility was available and the company was in compliance with debt covenants.

Rating History Current 2017 2016 2015 2014 2013 Issuer Rating A (low) A (low) A (low) A (low) A (low) A (low) Unsecured Debentures & Medium-Term Notes A (low) A (low) A (low) A (low) A (low) A (low) Commercial Paper R-1 (low) R-1 (low) R-1...

AI summary The document provides a rating history for NSPI from 2013 to 2017, showing consistent ratings across various financial instruments including Unsecured Debentures, Medium-Term Notes, and Commercial Paper.

Previous Action • "DBRS Confirms Nova Scotia Power Inc. at A (low), Stable trend," December 22, 2017.

AI summary DBRS Limited confirmed Nova Scotia Power Inc.'s credit rating at A (low) with a stable trend on December 22, 2017.

On November 29, 2019, DBRS Limited (DBRS Morningstar) confirmed the ratings of Nova Scotia Power Inc. (NSPI or the Company) as listed above. All trends are Stable. The ratings reflect stable operations in the Company's regulated utilities...

AI summary DBRS Limited confirmed Nova Scotia Power Inc.'s credit ratings as stable, citing strong operations and credit metrics. The company operates under a reasonable regulatory system that allows it to earn a return on equity within a specified range. Its business risk assessment is favorable, though challenges related to high electricity rates and fuel cost-recovery mechanisms are noted.

- As at September 30, 2019, NSPI had a Credit Facility of $600 million, $330 million of which was available. The Credit Facility matures in October 2024. - The Credit Facility is used to backstop the Company's $500 million CP program and t...

AI summary NSPI has a Credit Facility of $600 million, with $330 million available as of September 30, 2019. The facility matures in October 2024 and is used to backstop the Company's $500 million CP program and partially fund working capital and capex. The facility is subject to a debt-to-capital ratio covenant, which NSPI is compliant with.

Notes: All figures are in Canadian dollars unless otherwise noted. For the definition of Issuer Rating, please refer to Rating Definitions under Rating Policy on www.dbrs.com. Generally, Issuer Ratings apply to all senior unsecured obligat...

AI summary This section provides information about DBRS Morningstar and its regulatory status, including definitions of Issuer Ratings and the composition of the DBRS group of companies. It also notes that Morningstar Credit Ratings, LLC is a separately registered NRSRO and affiliate of DBRS, Inc.

[[email protected]](mailto:[email protected]) Ratings Debt Rating Rating Action Trend Issuer Rating A (low) Confirmed Stable Unsecured Debentures & Medium-Term Notes A (low) Confirmed Stable Commercial Paper...

AI summary The document provides an update on the credit ratings for Nova Scotia Power Inc. (NSPI), with all ratings confirmed as stable, including an issuer rating of A (low) and ratings for unsecured debentures and commercial paper.

On December 2, 2020, DBRS Limited (DBRS Morningstar) confirmed Nova Scotia Power Inc.'s (NSPI or the Company) Issuer Rating and Unsecured Debentures & Medium-Term Notes rating at A (low). DBRS Morningstar also confirmed NSPI's Commercial P...

AI summary DBRS Limited confirmed Nova Scotia Power Inc.'s credit ratings at A (low) and R-1 (low) with stable trends, citing a reasonable regulatory framework by the NSUARB and the Company's ability to recover fuel costs through a fuel adjustment mechanism. The Company's reliance on coal-based generation and transition to renewables is noted as a long-term challenge.

(50% of 2019 installed generation capacity) to lower emitting sources. This is expected to be achieved through increasing contributions from renewable energy, including from the Muskrat Falls Project. NSPI's key credit metrics have been su...

AI summary NSPI's credit rating remains stable at A (low) due to strong key credit metrics, supported by prudent debt and dividend management. While the impact of the pandemic has affected industrial and commercial usage, increased residential usage and the absence of significant customer defaults have offset these effects. DBRS Morningstar does not expect a near-term positive rating change but notes that a negative rating could occur if metrics weaken.

2. Reasonable financial profile NSPI's overall key credit metrics for the last 12 months ended September 30, 2020 (LTM 2020) remained within DBRS Morningstar's "A" rating category.

AI summary NSPI's key credit metrics for the last 12 months ended September 30, 2020, remained within DBRS Morningstar's 'A' rating category, indicating a reasonable financial profile.

2019 Summary - NSPI's key credit metrics have been in line with the A (low) rating. - The Company's cash flow-to-debt and EBIT-interest coverage both weakened modestly in 2019 because of the lower earnings and higher debt load for the year...

AI summary In 2019, NSPI's credit metrics remained at an A (low) rating. Although cash flow-to-debt and EBIT-interest coverage weakened slightly due to lower earnings and higher debt, debt-to-capital decreased following a $119 million common stock issuance to Emera. NSPI managed its dividend payout within regulatory capital structure limits and funded its capex deficit through stock and commercial paper issuances.

2020 Summary/Outlook • DBRS Morningstar expects NSPI's key credit metrics to remain stable over the medium term. 2 Adjusted for operating leases. 3 Adjusted for accumulated other comprehensive income. - The Company has forecast capex to be...

AI summary DBRS Morningstar anticipates stable credit metrics for NSPI over the medium term. NSPI forecasts $310 million in capex for 2020, reduced due to pandemic measures. NSPI is in a tax dispute with the CRA, having prepaid $22.7 million of a $62.3 million dispute. Emera is expected to support NSPI through dividends and equity injections.

Liquidity (CAD millions as at September 30, 2020) Amount Drawn/Letter of Credit Available Expiry Cash & Cash equivalents 17 - 17 N/A Committed Revolving Facilities 600 4 596 Total 617 4 613 - DBRS Morningstar deems the Company's liquidity...

AI summary The document presents liquidity information for Nova Scotia Power Inc. as of September 30, 2020, indicating that the company has adequate liquidity with sufficient headroom under its committed revolving credit facility to support operating requirements.

- As at September 30, 2020, NSPI had a Credit Facility of $600 million, $596 million of which was available. The Credit Facility matures in October 2024. - The Credit Facility is used to backstop the Company's $500 million CP program and t...

AI summary As of September 30, 2020, NSPI had a $600 million Credit Facility with $596 million available, set to mature in October 2024. The facility supports the company’s $500 million CP program, working capital, and capex needs. Availability is reduced by CP issuance, and NSPI complies with a 70.0% debt-to-capital ratio covenant.

Rating History Current 2019 2018 2017 2016 2015 Issuer Rating A (low) A (low) A (low) A (low) A (low) A (low) Unsecured Debentures & Medium-Term Notes A (low) A (low) A (low) A (low) A (low) A (low) Commercial Paper R-1 (low) R-1 (low) R-1...

AI summary The document provides a rating history table showing consistent credit ratings for Nova Scotia Power Inc. (NSPI) across multiple years, with no changes observed from 2015 to the current year. The table includes ratings for issuer ratings, unsecured debentures, and commercial paper.

On December 20, 2021, DBRS Limited (DBRS Morningstar) confirmed Nova Scotia Power Inc.'s (NSPI or the Company) Issuer Rating and Unsecured Debentures & Medium-Term Notes rating at A (low) and the Commercial Paper rating at R-1 (low). All t...

AI summary DBRS Morningstar confirmed Nova Scotia Power Inc.'s credit ratings on December 20, 2021, citing stable regulated electricity operations and key credit metrics aligned with the current ratings.

r rating at R-1 (low). All trends are Stable. The confirmations reflect the stability of the Company's regulated electricity operations and key credit metrics that are in line with the current rating. NSPI's business risk assessment was st...

AI summary NSPI maintains a stable credit rating due to its reasonable regulatory framework and ability to recover prudent expenditures. However, challenges such as transitioning from coal-based generation and meeting renewable energy targets may impact its credit metrics if not managed prudently.

BRS Morningstar could also take a negative rating action should the retirement of the coalfired generation plants by 2030 lead to stranded costs for NSPI that significantly pressure its balance sheet. NSPI's key credit metrics have remaine...

AI summary DBRS Morningstar notes that NSPI's current A (low) credit rating is supported by its key credit metrics and prudent debt and dividend management. However, a negative rating could occur if the retirement of coal-fired plants by 2030 leads to stranded costs that significantly impact NSPI's balance sheet.

(2) Reasonable financial profile NSPI's overall key credit metrics for the last 12 months ended September 30, 2021 (the last 12 months (LTM) 2021), remained within DBRS Morningstar's "A" rating category.

AI summary NSPI's key credit metrics for the last 12 months ended September 30, 2021, remained within DBRS Morningstar's 'A' rating category, indicating a reasonable financial profile.

2020 Summary - NSPI's key credit metrics weakened in 2020 but remained in line with the A (low) rating. - The Company's cash flow-to-debt and debt-to-capital both weakened in 2020 because of the lower cash flows and higher debt load for th...

AI summary In 2020, NSPI's credit metrics weakened due to lower cash flows and higher debt, though it remained in line with its A (low) rating. The company experienced a net free cash flow deficit, funded by a $300 million notes issuance, while maintaining its debt-to-capital ratio within regulatory limits.

2021 Summary/Outlook - DBRS Morningstar expects NSPI's key credit metrics to remain stable over the medium term. - The Company's cash flow-to-debt and debt-to-capital ratios both recovered to more historical levels because of the higher ca...

AI summary DBRS Morningstar anticipates stable credit metrics for NSPI over the medium term, with improved cash flow ratios. NSPI forecasts $415 million in capex for 2021 and is in a tax dispute with CRA, having prepaid $22.7 million. Emera is expected to support NSPI with dividends and equity injections to maintain leverage within regulatory limits.

- As at September 30, 2021, NSPI had a Credit Facility of $600 million, $402 million of which was available. The Credit Facility matures in October 2024. - The Credit Facility is used to backstop the Company's $500 million CP program and t...

AI summary NSPI has a Credit Facility of $600 million, with $402 million available as of September 30, 2021, used to backstop its $500 million CP program and fund working capital and capex. The facility matures in October 2024 and is subject to a debt-to-capital ratio covenant of 70.0%, which NSPI has been compliant with.

Page 11 of 14 Nova Scotia Power Inc. January 4, 2022 Operating Statistics For the year ended December 31 Net purchased electricity 2,471 2,540 2,368 2,471 2,540 Current 2020 2019 2018 2017 2016 Issuer Rating A (low) A (low) A (low) A (low)...

AI summary The document presents operating statistics for Nova Scotia Power Inc., including net purchased electricity and credit ratings for various financial instruments over multiple years. The credit ratings for unsecured debentures, medium-term notes, and commercial paper remain consistently rated A (low) or R-1 (low) across the years 2016 to 2020.

[[email protected]](mailto:[email protected]) Ratings Debt Rating Rating Action Trend Issuer Rating BBB (high) Downgraded Stable Unsecured Debentures & Medium-Term Notes BBB (high) Downgraded Stable Commercial Pap...

AI summary DBRS Morningstar has downgraded the issuer rating and related debt ratings of Nova Scotia Power Inc. to BBB (high) and R-2 (high), respectively, with a stable trend, indicating a decrease in creditworthiness.

On December 20, 2022, DBRS Limited (DBRS Morningstar) downgraded Nova Scotia Power Inc.'s (NSPI or the Company) Issuer Rating and Unsecured Debentures & Medium-Term Notes rating to BBB (high) from A (low) and its Commercial Paper rating to...

AI summary DBRS Morningstar downgraded Nova Scotia Power Inc.'s credit ratings in December 2022 due to a deteriorating regulatory environment and uncertainty surrounding the company's ability to meet renewable generation targets and shut down coal-fired plants following provincial intervention in the General Rate Application process.

2. Reasonable financial profile NSPI's overall key credit metrics for the last 12 months ended September 30, 2022 (LTM 2022), were supportive of the BBB (high) rating.

AI summary NSPI's key credit metrics for the last 12 months ended September 30, 2022, support a BBB (high) rating, indicating a reasonable financial profile.

2021 Summary - NSPI's key credit metrics were in line with the A (low) rating in 2021. - The Company's cash flow-to-debt ratio improved modestly because of the stronger cash flows for the year. 2 Adjusted for operating leases. 3 Adjusted f...

AI summary In 2021, NSPI maintained key credit metrics aligned with its A (low) rating. Cash flow-to-debt ratios improved slightly due to stronger cash flows, but the company faced a net free cash flow deficit from its capital expenditures, which were funded by commercial paper. NSPI managed its dividend payout to remain within its regulatory capital structure of $80 million.

2022 Summary/Outlook - DBRS Morningstar expects NSPI's key credit metrics to weaken in the near term because base rate increases are capped at 1.8% over 2022 to 2024. - The Company has forecast capex to be at around $525 million for 2022....

AI summary DBRS Morningstar anticipates NSPI's credit metrics will weaken due to capped base rate increases. NSPI has reduced capex to focus on reliability and safety, forecasting around $350 million in 2022. A dispute with the CRA over tax deductions for 2006-2010 could affect operating cash flow. Emera is expected to support NSPI with dividends and equity injections.

- As at September 30, 2022, NSPI had a Credit Facility of $600 million, $480 million of which was available. The Credit Facility matures in December 2026. - In December 2022, the Company increased the size of its credit facility to $800 mi...

AI summary NSPI increased its credit facility from $600 million to $800 million in December 2022, extending its maturity to December 2027. The facility is used to backstop the company’s $500 million CP program and fund working capital and capex needs. A debt-to-capital ratio covenant of 70.0% was met as of September 30, 2022.

Social There were no social factors that had a relevant or significant effect on the credit analysis. For more details about which social factors could have an effect on the credit, please refer to the following checklist.

AI summary The document states that no social factors had a relevant or significant effect on the credit analysis. It directs readers to a checklist for more information on potential social factors that could influence credit.

Governance There were no governance factors that had a relevant or significant effect on the credit analysis. For more details about which governance factors could have an effect on the credit analysis, please refer to the following checkl...

AI summary The credit analysis was not significantly affected by governance factors. DBRS Morningstar's approach to ESG factors in credit ratings is detailed in a provided document.

Page 14 of 17 Nova Scotia Power Inc. January 19, 2023 Operating Statistics For the year ended December 31 Issuer Rating BBB (high) A (low) A (low) A (low) A (low) A (low) Unsecured Debentures & Medium-Term Notes BBB (high) A (low) A (low)...

AI summary The document presents operating statistics for Nova Scotia Power Inc., including credit ratings for different financial instruments such as unsecured debentures, medium-term notes, and commercial paper. Ratings range from BBB (high) to A (low) for debentures and medium-term notes, while commercial paper is rated R-2 (high) to R-1 (low).

© 2023 DBRS Morningstar. All Rights Reserved. The information upon which DBRS Morningstar credit ratings and other types of credit opinions and reports are based is obtained by DBRS Morningstar from sources DBRS Morningstar believes to be...

AI summary This document outlines the disclaimers and limitations of liability associated with DBRS Morningstar's credit ratings and other credit opinions. It emphasizes that the information used is obtained from sources believed to be reliable but is not independently verified in every instance.

+1 416 597-7596 [email protected] Credit Ratings Debt Rating Rating Action Trend Issuer Rating BBB (high) Confirmed Stable Unsecured Debentures & Medium-Term Notes BBB (high) Confirmed Stable Commercial Paper R-2 (high) Confirmed...

AI summary The document provides an update on credit ratings for debt instruments, including issuer ratings and unsecured debentures, all of which are confirmed at BBB (high) with a stable trend.

On December 20, 2023, DBRS Limited (Morningstar DBRS) confirmed the Issuer Rating and Unsecured Debentures & Medium-Term Notes rating of Nova Scotia Power Inc. (NSPI or the Company) at BBB (high), and its Commercial Paper (CP) rating at R-...

AI summary DBRS Limited confirmed Nova Scotia Power Inc.'s credit ratings at BBB (high) and R-2 (high), noting stable trends despite weakened credit metrics due to provincial intervention in the GRA process. The NSUARB approved rate increases for nonfuel, fuel, and DSM costs as part of the 2022 to 2024 GRA settlement.

under an ambitious time frame. Morningstar DBRS will continue to monitor the Company's progress, especially with the release of a Clean Electricity Solutions Task Force report expected early in 2024. Morningstar DBRS had noted in its most...

AI summary DBRS Morningstar has updated its credit rating for NSPI, noting that the company's earnings and credit metrics were affected by the rate cap under Bill 212. Despite this, the current rating remains supportive, and NSPI is expected to manage capex and dividends prudently. Emera Inc. has supported NSPI through equity injections and a flexible dividend policy.

obal Criteria: Commercial Paper Liquidity Support for Nonbank Issuers . Morningstar DBRS is of the view that the increase in NSPI's CP program limit has no impact on the credit profile of the Company. A negative credit rating action could...

AI summary DBRS Morningstar assesses that the increase in NSPI's commercial paper program limit does not affect its credit profile. However, a negative rating could occur with political interference or weakened credit metrics, while a positive rating would require regulatory independence, progress on the 2030 Clean Power Plan, and improved credit metrics.

2022 Summary - NSPI's key credit metrics weakened as expected in 2022 as base-rate increases were capped at 1.8% over 2022 to 2024, and the timing of the dividend payment. - Overall, the Company's key credit metrics are now supportive of t...

AI summary In 2022, NSPI's credit metrics weakened due to capped base-rate increases and dividend timing, though they remain supportive of a BBB rating. Cash flow from operations declined due to lower net income, and the company maintained its dividend within regulatory limits. Gross capex rose to $540 million for reliability and customer growth, funded through CP issuances and credit facilities.

2023 Summary/Outlook - Morningstar DBRS expects NSPI's key credit metrics to be stronger in 2023 because of the higher earnings and the equity injection from its parent. - While the Company's metrics are expected to be weaker than in previ...

AI summary In 2023, Morningstar DBRS anticipates stronger credit metrics for NSPI due to higher earnings and equity injections from its parent, Emera. Capex is expected to be around $440 million, reduced due to Bill 212, which limits base rate increases to reliability improvements. An equity injection of $125 million was received by September 30, 2023.

- NSPI has an $800 million Credit Facility maturing in December 2027. - The Credit Facility is used to backstop the Company's $800 million CP program and to partially fund its working capital and capex requirements. Availability under the...

AI summary NSPI has an $800 million Credit Facility maturing in December 2027, used to backstop its CP program and fund working capital and capex. The facility is subject to a 70.0% debt-to-capital ratio covenant, which NSPI has complied with as of September 30, 2023.

Environmental Carbon and GHG costs had a relevant effect on the credit analysis of NSPI. Morningstar DBRS considers the Company's transition from reliance on coal-based generation (51% of 2023 installed generation capacity) to lower-emitti...

AI summary The transition of NSPI from coal-based generation to renewable sources is a challenge for credit analysis due to the need for significant investments and government funding support to meet the 2030 Clean Power Plan targets.

Page 13 of 16 Nova Scotia Power Inc. January 12, 2024 Operating Statistics For the year ended December 31 Total Fixed Costs (GWh) Net generated electricity 7,123 7,354 7,557 7,930 8,249 Net purchased electricity 3,333 2,842 2,471 2,540 2,3...

AI summary The document presents operating statistics and credit ratings for Nova Scotia Power Inc. for the years 2018 through 2022, including net generated and purchased electricity, as well as credit ratings for various financial instruments.

r credit opinion is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. Morningstar DBRS may receive compensat...

AI summary This text outlines the terms and conditions of Morningstar DBRS credit opinions, emphasizing that they are not investment substitutes and are subject to specific definitions and limitations. It also notes potential compensation sources and disclaimers regarding third-party website content.

Steven Lin +1 416 597-7596 [[email protected]](mailto:[email protected]) Credit Ratings Obligation Rating Rating Action Trend Issuer Rating BBB (high) Confirmed Stable Unsecured Debentures & Medium-Term Notes BBB (high) C...

AI summary The document discusses credit ratings for Nova Scotia Power Inc. (NSPI), including the current ratings and factors that could influence future rating actions. Positive drivers include regulatory independence and the establishment of the NSIESO, while negative drivers include political interference and weakening credit metrics.

Financial Outlook NSPI's key credit metrics strengthened in the last 12 months ended September 30, 2024 (LTM 2024), because of the stronger earnings and cash flows, and the reduction in debt following the sale of the $117 million balance i...

AI summary NSPI's credit metrics improved in LTM 2024 due to stronger earnings, cash flows, and reduced debt from the FAM sale. The company expects further improvement in 2024 from a $500 million transfer from NSPML. NSPI has a large capex program, but it plans to finance it prudently to maintain its BBB credit rating. Emera Inc. has supported NSPI through flexible dividends and equity injections.

1. Reasonable financial profile NSPI's key credit metrics are reasonable for the current rating category. For the LTM 2024, the Company's cash flow-to-debt ratio was in line with the BBB rating category, while the stronger debt-tocapital r...

AI summary NSPI's credit metrics are considered reasonable for its current rating category. The cash flow-to-debt ratio for the LTM 2024 aligns with the BBB rating, and a stronger debt-to-capital ratio compensates for a weaker EBIT-to-interest coverage.

2026-2027 GRA Cleary IR-4 Attachment 1 Page 12 of 32 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Avera ge % ( Chang e on F Previo us Cal endar Year Experian S&P Global Ratings Fitch Ratings JP Morgan NatWest Markets Oxford Economics Capita...

AI summary The document presents a table with various entities and their associated metrics, including percentages, changes, and other financial indicators. The data appears to be related to credit ratings and economic analysis from multiple organizations.

2026-2027 GRA Cleary IR-4 Attachment 1 Page 24 of 32 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Avera ige % Chan ge on Previ ous ( Calend ar Yea ır Annua al Tota al Rates on S Survey y Date S&P Global Ratings 1.4 1.5 na na 1.5 1.4 -1.2 1....

AI summary The table presents ratings and related metrics from various organizations such as S&P Global Ratings and Moody's Analytics. It includes averages, changes, and standard deviations across different categories, indicating a focus on financial and economic analysis.

2026-2027 General Rate Application (M12451) NSPI Responses to CLEARY Information Requests 1 Request IR-5: 2 3 Preamble: 4 5 On pages 30-32 of Appendix 10-A, Concentric discusses the integration of Canadian and U.S. 6 capital markets in ord...

AI summary The document discusses a request for confirmation of recent (July 2025) sovereign debt ratings for Canada and the U.S. from reputable agencies, noting that Canada has higher ratings with S&P and Moody's. It also raises the issue of 'home bias' among Canadian and global investors, citing statistics on equity allocations.

CONFIDENTIAL (Attachment Only) 1 Request IR-2: 2 3 References: Direct Evidence p. 64: 4 5 "NS Power currently has access to a syndicated revolving bank line of credit." 6 7 Question: 8 9 Please provide a copy of this credit agreement. 10 1...

AI summary A request for a copy of Nova Scotia Power's syndicated revolving bank line of credit agreement is made, with a response directing to a confidential attachment that has been removed due to confidentiality.

2026-2027 General Rate Application (M12451) NSPI Responses to MPA Information Requests 1 Request IR-3: 2 3 References: Direct Evidence p. 65: 4 5 "NS Power plans to continue participating in the Commercial Paper market 6 throughout 2026-20...

AI summary NSPI responded to MPA information requests regarding its 2026-2027 General Rate Application, stating that it plans to continue using the Commercial Paper market and providing estimates based on Bloomberg's 3-month T-Bill forecast. It also noted that a credit rating downgrade would increase borrowing costs significantly.

Designated Rating Organization Rating DBRS Limited 1 R-2 (mid) Fitch Ratings, Inc. F1 Moody's Canada Inc. P-1 S&P Global Ratings Canada A-3 (Cdn) (Canada national scale) and having no rating below:

AI summary The document lists credit ratings assigned by various designated rating organizations, including DBRS Limited, Fitch Ratings, Inc., Moody's Canada Inc., and S&P Global Ratings Canada. The ratings provided are 1 R-2 (mid), F1, P-1, and A-3 (Cdn) (Canada national scale), respectively.

LEGAL_1:77984731.6 1 NSPI's Notes are currently rated R-2 (high) by DBRS which, based on the scale used by rating agencies, is on par with a rating of A-1 (low) or A-2 (Cdn) by S&P. The rating of R-2 (mid) has been included in Section 12(c...

AI summary NSPI's Notes are currently rated R-2 (high) by DBRS, which is equivalent to A-1 (low) or A-2 (Cdn) by S&P. The R-2 (mid) rating is included in Section 12(c) as it aligns with S&P's A-3 (Cdn) rating, in line with the policy objectives of NI 45-106.

Page 5 Designated Rating Organization Rating DBRS Limited 1 R-2 (mid) Fitch Ratings, Inc. F2 Moody's Canada Inc. P-2 S&P Global Ratings Canada A-3 (Cdn) (Canada national scale) - (d) The Exemption Sought would expire on the fifth anniversa...

AI summary The document lists credit ratings from designated rating organizations and notes that the exemption sought would expire on the fifth anniversary of its issuance.

2026-2027 GRA MPA IR-4 Attachment 1 Page 11 of 13 REDACTED (CONFIDENTIAL INFORMATION REMOVED) - 3 - Nova Scotia Utility and Review Board and limit the increase in the Filer's non-fuel rate to 1.8% until the end of 2024. - 9. As a result of...

AI summary The document outlines the impact of credit downgrades on the Filer's ability to use the Commercial Paper Exemption, limiting the maturity of Notes to 365 days and restricting their sale to accredited investors through registered investment dealers in Canada.

- 4 - Designated Rating Organization Rating DBRS Limited R-2 (mid) Fitch Ratings, Inc. Fl Moodv's Canada Inc. P-1 S&P Global Ratings Canada A-3 (Cdn) (Canada national scale) and has no rating below: Designated Rating Organization Rating DB...

AI summary The text presents credit ratings assigned by various designated rating organizations for a particular entity. Ratings include R-2 (mid), Fl, P-1, A-3 (Cdn), F2, and P-2. These ratings are relevant for assessing financial standing and creditworthiness.

-4- ed O D i R in iz io at at at n gn g rg es an R in at g ed D B R S L im it ( ) R -2 h gh i ch F it R in , I at gs nc Fl M dv 's C ad In oo an a c. 1 p- S G lo ba l R C ad & P in at gs a an ( ) (C ) A -3 C dn ad al le io at an a n n s ca...

AI summary The text contains fragmented and partially encoded information, likely from a regulatory document involving credit ratings, financial instruments, and possibly a distribution process for Notes. The content is not fully legible or coherent.

Receivables and Allowance for Credit Losses Customer receivables are recorded at the invoiced amount and do not bear interest. Standard payment terms for electricity sales are 30 days for bi-monthly customers and 20 days for monthly custom...

AI summary The document outlines how customer receivables are recorded and managed, including payment terms, late fees, and the allowance for credit losses. The Company assesses credit risk for new customers and maintains provisions for expected credit losses based on historical data, current events, and forecasts.

Credit Risk The Company is exposed to credit risk with respect to amounts receivable from customers and derivative assets. Credit risk is the potential loss from a counterparty's non-performance under an agreement. The Company manages cred...

AI summary The Company manages credit risk by assessing counterparty performance, requiring deposits or collateral, and using agreements such as ISDA and NAESB to mitigate exposure. As of December 31, 2024, the maximum credit risk exposure was $448 million, with $56 million in past-due financial assets and an allowance for credit losses of $2 million.

The Company's concentrations of risk as at December 31, consisted of the following: As at 2024 2023 millions of % of total millions of % of total dollars exposure dollars exposure Receivables, net Residential $ 206 45% $ 183 42% Commercial...

AI summary The document outlines the Company's concentrations of risk as of December 31, focusing on receivables and derivative instruments. Residential and commercial receivables are the largest components, while cash collateral and credit ratings are also highlighted as significant risk factors.

Interest Rate Risk: NSPI utilizes a combination of fixed and floating rate debt financing for operations and capital expenditures, resulting in an exposure to interest rate risk. The allowed range of ROE will generally follow the direction...

AI summary NSPI uses a mix of fixed and floating rate debt, exposing it to interest rate risk. The allowed ROE range correlates with interest rates, with a lag due to the regulatory process. 95% of NSPI's debt is fixed rate as of December 31, 2024, with an average term of 17 years.

Credit Ratings On December 20, 2024, DBRS affirmed its BBB (high) rating and stable trend for NSPI. On January 22, 2025, S&P Global Ratings affirmed its BBB- issuer rating and revised its outlook to stable from negative.

AI summary DBRS and S&P Global Ratings affirmed their BBB ratings for Nova Scotia Power Inc. (NSPI) in late 2024 and early 2025, with S&P revising its outlook to stable from negative.

Physical Risk: Climate change may negatively impact the Company's operations as a result of increased frequency and intensity of weather events and related physical risks, any of which could result in a Material Adverse Effect (for more in...

AI summary Climate change may increase the frequency and intensity of weather events, impacting the Company's operations and leading to a Material Adverse Effect. This could also affect insurance costs, deductibles, and credit ratings, influencing the availability and cost of long-term debt and credit facilities.

Liquidity and Capital Market Risk Liquidity risk relates to NSPI's ability to ensure sufficient funds are available to meet its financial obligations. NSPI's access to capital and cost of borrowing is subject to several risk factors, inclu...

AI summary The document discusses liquidity and capital market risks faced by Nova Scotia Power Inc. (NSPI), including the impact of financial market conditions, credit ratings, and interest rate fluctuations on its ability to access capital and manage financing costs. A decrease in credit ratings could lead to higher borrowing costs and the need for additional collateral.

Actual was 39.9%, which is being treated here as 40%. 1 Accrued Refund Interest Error Correction 2 During 2018, the Canada Revenue Agency ("CRA") accepted NS Power's request to 3 amend the 2011, 2012 and 2013 corporate income tax returns t...

AI summary The document discusses corrections made by NS Power to its corporate income tax returns for 2011-2013, including the removal of incorrectly reported accrued refund interest and reallocation of biomass generation asset costs. It also includes a request and response for recent credit rating reports for NS Power.

Steven Lin +1 416 597-7596 [[email protected]](mailto:[email protected]) Credit Ratings Obligation Rating Rating Action Trend Issuer Rating BBB (high) Confirmed Stable Unsecured Debentures & Medium-Term Notes BBB (high) C...

AI summary The credit ratings for Nova Scotia Power (NSP) remain stable at BBB (high) for issuer rating and unsecured debentures, and R-2 (high) for commercial paper. Positive factors include regulatory independence, establishment of the NSIESO, and credit metrics aligning with the 'A' category. Negative factors include political interference or weakening credit metrics, such as cash flow-to-debt below 10%.

The ratings of Nova Scotia Power Inc. (NSPI or the Company) are based on its integrated electricity operations under the Nova Scotia Utility and Review Board (NSUARB). The Stable trends reflect the Company's key credit metrics which are in...

AI summary Nova Scotia Power Inc. (NSPI) has seen positive credit developments in 2024, including the sale of regulatory assets and a federal loan guarantee. However, concerns remain about potential political interference in future regulatory reviews that could impact NSPI's ability to recover costs.

Financial Outlook NSPI's key credit metrics strengthened in the last 12 months ended September 30, 2024 (LTM 2024), because of the stronger earnings and cash flows, and the reduction in debt following the sale of the $117 million balance i...

AI summary NSPI's credit metrics improved in LTM 2024 due to stronger earnings, cash flows, and reduced debt from the sale of the FAM balance to the Province. Further improvements are expected in 2024 with the $500 million transfer from NSPML. NSPI has a large capex program but is expected to manage financing prudently to maintain BBB credit ratings. Emera Inc. has supported NSPI through flexible dividend policies and equity injections.

1. Reasonable financial profile NSPI's key credit metrics are reasonable for the current rating category. For the LTM 2024, the Company's cash flow-to-debt ratio was in line with the BBB rating category, while the stronger debt-tocapital r...

AI summary NSPI's credit metrics are considered reasonable for the BBB rating category. The cash flow-to-debt ratio for the LTM 2024 was in line with expectations, while a stronger debt-to-capital ratio offset a weaker EBIT-to-interest coverage.

Governance There were no governance factors that had a relevant or significant effect on the credit analysis. NSPI's board of directors includes nine members, seven of whom are independent directors. The board has oversight over climate-re...

AI summary The governance structure of NSPI is described, noting that seven of its nine board members are independent and that the board oversees climate-related issues. The credit analysis was not significantly affected by governance factors. Morningstar DBRS's approach to ESG factors in credit ratings is referenced.

Rating History Current 2023 2022 2021 2020 2019 Issuer Rating BBB (high) BBB (high) BBB (high) A (low) A (low) A (low) Unsecured Debentures & Medium-Term Notes BBB (high) BBB (high) BBB (high) A (low) A (low) A (low) Commercial Paper R-2 (...

AI summary The rating history table shows the credit ratings for Nova Scotia Power across different financial instruments from 2019 to the current year. The ratings for issuer ratings and unsecured debentures have remained stable at BBB (high), while commercial paper ratings have shifted from R-1 (low) to R-2 (high).

Previous Report • Nova Scotia Power Inc.: Rating Report, January 12, 2024. Notes: All figures are in Canadian dollars unless otherwise noted. For the definition of Issuer Rating, please refer to Rating Definitions under Rating Policy o[n d...

AI summary The document references a rating report for Nova Scotia Power Inc. dated January 12, 2024, and notes that issuer ratings apply to senior unsecured obligations unless there is significant secured debt. The report is part of a regulatory proceeding in Nova Scotia.

January 28, 2025 What's new: Nova Scotia Power Inc. (NSPI) recently received a Canadian federal loan guarantee to securitize C$500 million of current and future fuel balances at NSPI; the company used proceeds toward reducing debt at NSPI....

AI summary Nova Scotia Power Inc. (NSPI) received a Canadian federal loan guarantee to securitize C$500 million in fuel balances, reducing debt and regulatory lag. This, along with provincial support, will improve NSPI's credit measures and reduce rate impacts on customers. S&P Global Ratings revised Emera and its subsidiaries' outlook to stable from negative due to these developments.

Recent Research - Research Update: Emera Inc. And Subsidiaries Outlook Revised To Stable From Negative On Improving Credit Strength, Ratings Affirmed, Jan 22, 2025 - Research Update: Emera Inc. And Subsidiaries Outlook Remains Negative On...

AI summary Recent research updates on Emera Inc. and its subsidiaries indicate a revised outlook to stable from negative due to improved credit strength, with ratings affirmed. Nova Scotia Power Inc. is also mentioned in a research update from February 2024.

Downside scenario We could lower our ratings on NSPI over the next 12-24 months if: - Financial measures deteriorated, with FFO to debt consistently below 10%, or - We lowered our rating on parent Emera.

AI summary The downside scenario discusses potential rating reductions for NSPI if financial metrics like FFO to debt fall below 10% or if the parent company Emera's rating is lowered.

Upside scenario We could raise our rating on NSPI within our outlook period if: - We raised our rating on Emera, or - The company's business risk strengthened while FFO to debt remained above 10%.

AI summary The upside scenario for NSPI's credit rating depends on either an improved rating for Emera or a strengthening of NSPI's business risk profile with FFO to debt above 10%.

Environmental factors are a negative consideration in our credit rating analysis of Nova Scotia Power Inc., reflecting energy transition risks through its operations in electric generation that are primarily coal, natural gas, and oil. Rel...

AI summary Environmental factors negatively impact Nova Scotia Power Inc.'s credit rating due to its reliance on coal, natural gas, and oil for electricity generation. This exposes the company to stricter environmental regulations, though its growth in renewable energy, particularly hydro and wind, somewhat mitigates this risk.

Rating Component Scores Foreign currency issuer credit rating BBB-/Stable/ Local currency issuer credit rating BBB-/Stable/ Business risk Strong Country risk Very Low Industry risk Very Low Competitive position Satisfactory Financial risk...

AI summary The document presents credit ratings and risk assessments for a utility entity. It highlights a foreign and local currency issuer credit rating of BBB-/Stable, along with various risk factors such as business, country, and industry risks. The entity is noted as strategically important within its group, with a stand-alone credit profile of bb+ and a group credit profile of bbb.

Nova Scotia Power Inc. • General Criteria: Principles Of Credit Ratings, Feb. 16, 2011 Nova Scotia Power Inc. Copyright © 2025 by Standard & Poor's Financial Services LLC. All rights reserved. No content (including ratings, credit-related...

AI summary This document outlines the copyright and usage terms for a credit ratings report on Nova Scotia Power Inc. issued by Standard & Poor's Financial Services LLC. It emphasizes the restrictions on modification, reproduction, and distribution of the content, along with disclaimers of warranties and liability.

Request IR-117: - Reference: Exhibit N-8, Appendix 10A, Cost of Capital Report Figure 32: 2023 S&P Credit - Metrics Comparison. (a) Please breakout the column for Canadian by the Canadian Electric Utilities listed in Figure 31. (b) Please...

AI summary The request asks for a breakdown of Canadian electric utilities in Figure 31 and an update using 2024 S&P Credit Metrics. The response provides a table with Hydro One Ltd. and Fortis Inc., noting that ATCO Electric is not rated by S&P Global.

Request IR-122: Reference: Exhibit N-3, GRA Direct Evidence - On pages 68-69 of the application, NS Power states that it forecasts to be above the 10% - FFO-to-Debt requirement to maintain its current credit ratings, assuming approval of t...

AI summary NS Power forecasts that its FFO-to-Debt ratio would fall below 10% by 2027 if securitization does not occur, impacting its credit ratings. The response provides estimated FFO-to-Debt percentages for S&P and DBRS for both test years under the assumption of no securitization.

Power? - 4 (c) Given the above developments, why was Concentric's recommended ROE for NS 5 Power not materially lower than in its evidence in the 2023-2024 GRA? - 7 Response IR-123: 3 6 8 - 9 (a) Impact on NSPI's business and/or financial...

AI summary The response discusses the impact of the Fuel Adjustment Mechanism (FAM) Rider and a Supplemental Assessment on NS Power's financial risk and customer benefits. These provisions help manage short-term fuel cost issues over a longer period, improving NS Power's cash position and credit outlook, although they do not fully resolve prior fuel cost recovery issues.

1 66 of its Report, the design of NSPI's FAM, including the bi-annual audit and the 2 associated regulatory lag, translate into elevated risk on this factor relative to its 3 Canadian and U.S. peers. These transactions do not alter this co...

AI summary The document discusses the impact of the Bank of Canada's interest rate changes and the Energy Reform (2024) Act on NSPI's operational and financial risks. It highlights that while short-term interest rates have decreased, long-term rates have increased, affecting NSPI's cost of capital. The creation of the Nova Scotia Independent Energy System Operator (NSIESO) under the Energy Reform Act introduces regulatory and operational changes, increasing uncertainty for investors.

Description S&P Fitch DBRS Moody's Maturity Date Bid Yield Ask Yield Mid-Point Fortis Alberta Inc A- A(low) Baa1u Oct-52 4.799 4.737 4.768 Fortis BC Inc A(low) Baa1 Jul-47 4.966 4.898 4.932 CU Inc A A(high) Nov-50 4.783 4.736 4.7595 Enbrid...

AI summary The text provides a table of credit ratings and bond yields for various utility companies, with a focus on Nova Scotia Power Inc. It suggests that 4.94% is a suitable starting point for estimating the bond yield plus risk premium (BYPRP) for Nova Scotia Power, based on its higher mid-point yield compared to the average for Canadian utilities.

The table above shows that the November 20 th yield on NS Power bonds maturing in March 2042 was 4.94%, which is 0.15% above the 4.79% average for the other five utilities. This is reflective of the fact that the other five utility yields...

AI summary The text compares the yield on NS Power bonds to other Canadian utilities, noting a 0.15% higher yield due to lower credit ratings and shorter maturities. It calculates a cost of equity (Ke) estimate of 7.44% using a 2.5% risk premium, and 7.94% after adding flotation costs. This is compared to other estimates like CAPM (6.84%) and DCF (7.86%), suggesting the 7.94% estimate may be high for low-risk utilities.

6.1 NS Power's Credit Rating Reports NS Power's January 2025 debt ratings are BBB high (stable) from DBRS Morningstar (DBRS); and, BBB-(stable) from S&P. Both reports mention the $117 million received from the provincial government for fue...

AI summary NS Power's January 2025 debt ratings are BBB high (stable) from DBRS Morningstar and BBB- (stable) from S&P. Both reports highlight favorable developments such as $117 million from the provincial government and a $500 million federal loan guarantee. NS Power's business risk is assessed as low or strong, and it benefits from its parent company Emera Inc.'s higher debt ratings.

2 6.4 NS Power's Financial Risk and Credit Metrics As noted in Section 6.1, the January 2025 DBRS report notes that NS Power has a "reasonable financial profile," while S&P noted "The stable outlook on NSPI reflects the stable outlook of i...

AI summary This section discusses NS Power's financial risk and credit metrics, referencing reports from DBRS and S&P. It outlines credit metrics from 2018 to 2023 and provides forecasts for 2024 to 2026, including estimated ratios from DBRS and S&P, as well as NS Power's own forecasts.

14 TABLE 14 15 NS POWER DBRS AND S&P CREDIT METRICS (2020-2026) S&P DBRS Year Debt/EBITDA FFO/DEBT (%) FFO/Cash Interest CF/Debt (%) Total Debt (%) EBIT Interest Coverage 2020 6.0 12.0 3.8 12.6 66.6 2.02 2021 5.9 11.9 3.7 12.9 66.3 1.97 20...

AI summary Table 14 presents credit metrics for NS Power from 2020 to 2026, including Debt/EBITDA, FFO/Debt, and EBIT interest coverage ratios, as evaluated by S&P and DBRS. The data shows fluctuations in these metrics over the years, with some estimates and forecasts provided.

17 \ \ September 2024 estimated metrics from DBRS. 18 \ \ \ Forecast metrics from S&P. 19 \ \ \ \ Forecast metrics from NS Power in response to NS Power (NSEB-Cleary) IR-01 Attachment 1. Table 14 shows that NS Power's DBRS metrics have gen...

AI summary The text discusses NS Power's credit ratings, referencing DBRS metrics and S&P forecasts. It notes that NS Power's DBRS ratings have been near the top of the BBB range and close to the A range, based on DBRS' methodology for rating regulated utilities.

Regulated Utility – FRA Metri cs Metric AA A BBB BB/B Cash flow-to-debt (%) > 17.5 12.5 to 17.5 10.0 to 12.5 0.0 to 10.0 Debt-to-capital (%) < 55 55 to 65 65 to 75 75 to 90 EBIT-to-interest (x) > 2.8 1.8 to 2.8 1.5 to 1.8 1.0 to 1.5 While...

AI summary The document compares NS Power's credit metrics against S&P's guidelines for regulated utilities, noting that while S&P rates NS Power as 'aggressive' in financial risk, most of its metrics fall into less risky categories, with only the Debt/EBITDA ratio falling into the 'aggressive' range.

6.5 Summary Overall, this section highlights that NS Power is a low-risk Canadian utility; however, it is slightly riskier than the average A-rated Canadian operating utility. This conclusion is consistent with the following main points re...

AI summary NS Power is characterized as a low-risk Canadian utility, though slightly riskier than average A-rated utilities. Its BBB ratings from DBRS and S&P are stable, and its financial risk profile is reasonable. A 40% equity ratio is deemed reasonable, considering its lower debt ratings and higher generational assets, though supported by Emera Inc.'s higher debt ratings.

Q: What is NS Power's current proposal in this case? A: NS Power outlined its proposal regarding securitization at pages 52 and 53 of its GRA, as follows: The increase in NS Power's average capital assets due to capital investment is parti...

AI summary NS Power proposes to securitize approximately $700 million of DDA assets by December 2025, contingent on regulatory approval and credit rating agency processes. If securitization is delayed, NS Power requests deferral of depreciation and financing costs. Otherwise, the assets will be included in the rate base and revenue requirement to recover prudently incurred costs.

Report to the Nova Scotia Energy Board Review of Certain Credit Issues Related to the Nova Scotia Power 2026-2027 GRA Prepared by MPA Morrison Park Advisors Inc. December 2, 2025

AI summary This report reviews certain credit issues related to the Nova Scotia Power 2026-2027 GRA, prepared by MPA Morrison Park Advisors Inc. for the Nova Scotia Energy Board.

- Nova Scotia Power Inc. ("NSPI") has requested approval from the Nova Scotia Energy Board for - electricity rate increases for 2026 and 2027. Among many reasons for the requests, NSPI asserted that it - is critical for the utility to meet...

AI summary Nova Scotia Power Inc. (NSPI) is requesting rate increases for 2026 and 2027 to meet a financial target (FFO:Debt of 10%) necessary for maintaining its current investment-grade credit rating. The rate increases also aim to potentially improve the rating. Failure to secure the rate increases or complete a securitization transaction could lead to a credit downgrade and financial risks for NSPI.

Credit-related Issues Raised in the Application - Like all utilities, NSPI makes use of both debt and equity in its capital structure. Several issues were - raised relevant to debt in the Application: - A. NSPI's credit rating is currently...

AI summary NSPI argues that approval of its requested Revenue Requirements for 2026 and 2027 and average rate increases is essential to improving its credit ratings, which are currently at the low end for North American utilities. It also claims that resolving the proposed securitization of the Decarbonization Deferral Account will contribute to this improvement.

Issues Addressed in this Report - The cost of debt is an important component of Revenue Requirement, representing over 5% of the total - for both 2026 and 2027. - NSPI argued in its application that a significant driver of the cost of its...

AI summary The report discusses the importance of the cost of debt in the Revenue Requirement for NSPI, highlighting credit ratings and securitization of DDA assets as key factors. NSPI argues that its credit rating, influenced by the GRA and financial performance, affects its cost of debt, and that securitization is necessary to improve finances. The report will examine these claims and their impact on ratepayers.

2. Credit Ratings - In the most general terms, a credit rating is an independent assessment of the ability of a company or - government (or any other debt issuer) to repay its debts. A credit rating is typically provided by one of - severa...

AI summary Credit ratings are independent assessments of a debt issuer's ability to repay debts, conducted by rating agencies. These agencies analyze the issuer's financial history and prospects, and their analyses are based on publicly available information to ensure objectivity. While different agencies may use varying methodologies, their ratings are generally consistent in substance.

Figure 2 Combining The Business And Financial Risk Profiles To Determine The Anchor Financial risk profile Business risk profile 1 (minimal) 2 (modest) 3 (intermediate) 4 (significant) 5 (aggressive) 6 (highly leveraged) 1 (excellent) aaa/...

AI summary The chart in Figure 2 combines business and financial risk profiles to determine an anchor, with each profile ranging from 1 (minimal) to 6 (highly leveraged). It indicates that business risk analysis is equally weighted with financial risk analysis in the S&P process.

Credit Ratings and the Cost of Debt - Lending arrangements are contracts between a Lender and a Borrower. Credit Ratings agencies do not - participate directly in that relationship. Credit Ratings can sometimes be an important influence on...

AI summary The text explains that credit ratings influence the interest rates negotiated between lenders and borrowers, but their role is not always direct or significant in private debt arrangements. Credit ratings are more commonly used in public debt markets where bonds are transferable and require standardized credit information for a variety of investors.

The Special Case of "Investment Grade" - An "Investment Grade" debt security is one that is rated no lower than BBB- (or the equivalent). - Securities with ratings at this level or higher are considered to have a low risk of default, to ha...

AI summary The text explains the significance of 'investment grade' debt securities, noting that they are rated BBB- or higher and have a low risk of default. It highlights the implications of credit rating changes, such as the impact on access to debt markets, using NSPI's experience with downgrades and loss of automatic access to the Canadian commercial paper market as an example.

NSPI Credit Ratings - From December 2001 to November 2022 NSPI held a credit rating of BBB+ from S&P. Referencing the - "anchor" chart in Figure 2 above, during this extended period of time, NSPI was considered to have an - "Excellent" bus...

AI summary NSPI's credit rating was downgraded from BBB+ to BBB- in 2022 due to Nova Scotia's Bill 212, which limited rate increases and was seen as a political intervention by S&P. The downgrade was based on reduced business and financial risk ratings, though NSPI retained investment grade due to its parent company, Emera.

r NSPI: - Hydro One provides transmission and distribution services to its customers, but not generation. - As such, it does not face the same fuel risk management issues as NSPI, nor the challenge of - replacing a fleet of fossil fuel-bur...

AI summary The text compares the credit ratings and debt financing of NSPI, Hydro One, and Fortis Inc. It highlights that Hydro One has a higher credit rating than NSPI and that Fortis Inc., while similarly rated, operates across multiple jurisdictions. Bond yields are compared to Canadian government bonds and provincial benchmarks.

4. NSPI's Requests and Associated Costs - NSPI has claimed that approval of its requests is required to prevent a credit downgrade and a - consequent increase in the utility's cost of debt. - S&P has indicated that if FFO:Debt is consisten...

AI summary NSPI has requested regulatory approval for changes in revenue requirements and rates for 2026 and 2027 to prevent a credit downgrade. A downgrade could increase the utility's cost of debt, which would be passed on to ratepayers. NSPI's proposed changes, along with a securitization transaction for the DDA, are expected to achieve FFO:Debt ratios of 12.3% and 12.8% in 2026 and 2027, respectively, potentially avoiding a downgrade.

5. Consequences for Ratepayers - NSPI has asserted that it is critical to maintain and ideally improve its financial results, so that it will not - be in jeopardy of a credit rating downgrade, and instead will possibly in the future achiev...

AI summary NSPI argues that maintaining or improving its financial results is crucial to avoid a credit rating downgrade and potentially achieve an upgrade. The text questions the consequences for ratepayers, including the impact of a downgrade and whether the cost of rate increases, which would generate $180 million in additional revenue over two years, is justified.

Consequences of a Downgrade - NSPI has a portfolio of more than $3 billion of long-term debt outstanding. However, as mentioned - above, the interest rate on those instruments is fixed, and a downgrade would not change those. New - debt is...

AI summary A downgrade in NSPI's credit rating would significantly increase borrowing costs, potentially leading to higher annual costs for customers. NSPI is forecasting a $250 million bond issue in 2027, and a downgrade could increase the interest rate by at least 2.0%, adding approximately $5 million annually. Refinancing and other obligations could add up to $25 million or more per year, with long-term implications for ratepayers.

6. Summary Observations - Is NSPI in danger of a credit downgrade if the requested rate increases are denied? - NSPI is currently rated by S&P Global at BBB- (with a similar rating from DBRS). This is the lowest level - that is still "inve...

AI summary The document discusses concerns about Nova Scotia Power Inc. (NSPI) potentially facing a credit downgrade if requested rate increases are denied. It highlights the financial impact of such a downgrade, including higher debt costs and covenant breaches, while also questioning whether ratepayers should accept higher rates to achieve credit rating upgrades.

of publicly held electric utility companies (OCC Electric Proxy Group). Woolridge Prefiled Test., Feb. 13, 2025, p. 20. OCC also evaluated the group developed by the Company (Company Proxy Group). Id. OCC's screening criteria incorporated...

AI summary OCC evaluated two proxy groups for publicly held electric utility companies, using specific screening criteria that included revenue sources, credit ratings, dividend history, and analyst forecasts to ensure the selection of suitable companies.

Id., p. 21. OCC's assessment is that the OCC Electric Proxy Group on average receives 85% of its revenues from regulated operations, has an S&P bond rating of BBB+ and a Moody's bond rating of a Baa2, has a common equity ratio of 40.9%, an...

AI summary The document discusses the proxy groups used to assess UI's cost of capital, comparing risk metrics and financial indicators with other utility companies. The Authority adjusts the proxy group by including Consolidated Edison and excluding companies that do not meet the 70% regulated revenue threshold, resulting in a more accurate representation of UI's financial profile.

c. Credit Rating Effect Another factor the Authority considers is how the capital structure may affect the credit rating of the Company. The record indicates that the Company maintains an Arating from S&P, Baa1 from Moody's, and A- from Fi...

AI summary The Authority considers the impact of capital structure on the Company's credit rating, noting historical improvements in ratings while maintaining a 50% equity/50% debt structure. The Company argues that while a higher equity allocation may improve credit metrics, it may not significantly affect ratings or borrowing costs.

d. Conclusion Regarding the overall capital structure, the Authority considered (1) the approved and actual capital structure of the utility, (2) the capital structures of the companies in the proxy groups, and (3) the credit rating effect...

AI summary The Authority evaluated the utility's capital structure, credit ratings, and proxy groups, concluding that a 51.00% equity component is allowable, given the utility's higher credit ratings and historical equity capitalization compared to proxy groups.

a. Company's Financial Risk The Authority considers the financial risk of the Company as it compares to the Authority Proxy Group to determine if there are unique financial risks or risk mitigations to consider when establishing an ROE. Th...

AI summary The Authority evaluates the financial risk of the Company compared to the Authority Proxy Group and finds that UI's risk profile does not warrant special consideration in determining ROE. Bond ratings and risk mitigation mechanisms such as RAM and C&LM programs reduce financial risk, leading to the conclusion that UI's risk is comparable to other companies in the proxy group.

ccordingly, the 58 The Company did report a deferred credit of ($747,000) related to Fee Free Program expenses. Late Filed Ex. 1, Att. 2 Supp., Sch. WP C-3.21. 59 The Company states that non-residential customers will continue to pay a con...

AI summary The Company reported a deferred credit related to Fee Free Program expenses and revised its forecast for credit and debit card usage, projecting increased expenses for the Rate Year. Non-residential customers will continue to pay a fixed rate convenience fee for using certain payment methods.

UTILITY RATE PROCEEDINGS IN WHICH TESTIMONY HAS BEEN PRESENTED BY JACOB POUS ALASKA Southern Union Gas Company 2738, 2958, 3002, 3018, 3019 Cons. Cost of Service, Rate Design, Depreciation Southern Union Gas Company 6968 Interim & Cons. Af...

AI summary Jacob Pous has provided testimony in multiple utility rate proceedings involving Southern Union Gas Company, covering topics such as cost of service, rate design, depreciation, affiliate transactions, and rate base. These proceedings include various consolidated and interim cases with different focus areas.

explicit adjustments to its ROE or capital structure recommendations on the basis of the energy transition, as these effects were captured in the financial models used to analyze the cost of capital. The EDA noted the point raised by certa...

AI summary The EDA and OEA argue that the energy transition does not reduce risk for electricity and natural gas utilities, as increased demand projections may not materialize, and capital spending may impact creditworthiness. They also note that stranded assets and operational risks are significant concerns for Enbridge Gas.

Expert Report Proposals The expert reports differed on their assessment of the OEB's current approach to the determination of debt and equity from the perspective of investors. LEI and Dr. Cleary both generally agreed that the OEB's existi...

AI summary Expert reports differ on the OEB's approach to determining debt and equity for investors. LEI and Dr. Cleary support the OEB's current methods, while Concentrics highlights challenges with ROE formulas. Nexus argues the OEB's approach fails to meet the FRS and does not adequately serve equity investors.

ler number of comparators. As noted earlier, the OEB also has concerns about the ability to find true comparators from the U.S., which limits the number of comparators that might be definitively used. However, a significant recommended cha...

AI summary The OEB is cautious about using U.S. utility data as comparators and is concerned about the limited availability of true comparators. It also warns against significant changes to the ROE formula, citing potential negative impacts on credit ratings, debt financing, and investor confidence, as highlighted by the OEA and EDA.

d, in particular the acute risks to the natural gas distribution segment caused by the energy transition, Concentric found natural gas distribution to be riskier than electric distribution operations. Nexus proposed that the OEB retain its...

AI summary The expert report discusses risks in natural gas distribution due to the energy transition and recommends adjustments to allowed equity ratios for Hydro One and Enbridge Gas. Dr. Cleary suggests lowering Hydro One's allowed equity ratio to 36% over two to three years and maintaining Enbridge Gas's ratio at 36%, citing factors like credit ratings, debt costs, and financial risk.

Concentric suggested that an additional consideration is that not all Ontario utilities have an A-rating and the OEB should monitor any impacts on the DLTDR for utilities that have different credit ratings. Using Canadian data over the 201...

AI summary Concentric recommended monitoring the impact of credit ratings on the DLTDR for Ontario utilities without an A-rating. Dr. Cleary found that using historical Government of Canada 30-year bond yields improves forecast accuracy and identified a 0.4% upward bias in forecasts.

Specific Items Monitored LEI stated that consistent with the OEB's existing policy, OEB staff should continue to monitor the cost of capital parameters and test their reasonableness in the context of prevailing macroeconomic conditions on...

AI summary LEI, Dr. Cleary, and Nexus recommend quarterly monitoring of cost of capital parameters by the OEB, with Nexus and Concentric disagreeing on the frequency and scope of reporting. LEI also suggests including credit ratings and debt/equity issuance details in annual reports, while Concentric opposes this due to administrative burden. Concentric and Nexus propose annual benchmarking of ROEs against other jurisdictions and macroeconomic indicators.

Findings The OEB will continue to monitor market conditions. It is expected that OEB staff will undertake this monitoring at least quarterly and will report internally on their assessment. This monitoring will include quarter-over-quarter...

AI summary The OEB will monitor market conditions, including DSTDR, DLTDR, and ROE formulas, and credit ratings for Ontario utilities. It will require reporting of major long-term debt issuances over $50 million by rate-regulated utilities. The OEB will provide annual assessments on the reasonableness of cost of capital parameters and whether FRS continues to be met.

A.1 Credit Ratings Match When matching credit ratings, we use Companies (Classic) Screener [(2021)](#page-75-5) and Compustat S&P legacy credit ratings [(2019)](#page-75-6). Most investor-owned utilities are subsidiaries of publicly traded...

AI summary The document discusses the methodology used to match credit ratings for investor-owned utilities using two data sources. It highlights that credit ratings for electricity and natural gas utilities have remained relatively stable over the past 35 years, with the median rating for electricity utilities remaining at A− and natural gas utilities decreasing slightly from A to A−.

nuary. Accessed March 17, 2021. [https: / /platform.marketintelligence.spglobal.com /web /client?auth=inherit#office /](https://platform.marketintelligence.spglobal.com/web/client?auth=inherit#office/screener) [screener](https://platform.m...

AI summary The text provides a list of references to various data sources and academic materials related to credit ratings, cost of capital, and historical returns on financial instruments. These resources are used for analytical purposes in regulatory proceedings.

NON-CONFIDENTIAL 1 Undertaking U-7: 2 - 3 To provide the forecast S&P and DBRS cashflow-to-debt credit metrics under the Average - 4 Life Group methodology. 5 - 6 To also show the true difference with the $20 million added to the Per GRA S...

AI summary The response to Undertaking U-7 provides NS Power's forecast credit metrics under both the Equal Life Group (ELG) and Average Life Group (ALG) methodologies, and highlights the impact of adding $20 million to the Per GRA Settlement on FFO-to-debt ratios.

SOUS-SECTION B Code criminel Sections 315-318 Articles 315-318 Credit of excess to account Attribution des sommes non partagées 16 At the prescribed times, all amounts credited to the 16 Aux moments fixés par règlement, les sommes por- Pro...

AI summary This text outlines the legal process for crediting excess amounts from the Proceeds Account to a designated Canadian account, following the sharing of proceeds under sections 10 and 11 of the Criminal Code. It references the Forfeited Property Sharing Regulations and the associated legislative instrument.

27 (71) ELECTRICAL WIRING INSPECTION - FIELD 2 88 (72) REVENUE OPS ADMIN - - (73) CREDIT SERVICES - - (74) BAD DEBT EXPENSE 2 95 (75) MARKETING & SALES - - (76) METER SERVICES - INSPECTORS - - (77) TOTAL CUSTOMER SERVICE 9 557 REDACTED (CO...

AI summary The text contains a list of financial and operational categories, including revenue operations, credit services, bad debt expense, marketing and sales, meter services, and total customer service, along with associated costs. It also mentions a redacted compliance filing related to GRA for the period 2026-2027.

e from January 1, 2026, onwards, related to the $704 million in coal-related assets it intends to retire. The amount collected in the deferral is proposed to be added to the total securitized amount. [8] Morrison Park Advisors, a consultan...

AI summary The document discusses the credit rating downgrade of NS Power to BBB- in November 2022 and the potential risk of further downgrades to 'junk bond' status. Morrison Park Advisors highlights that maintaining a minimum FFO:Debt ratio of 10% is crucial for credit ratings. The approval of securitization proceeds and rate increases is expected to improve credit metrics, while delays or partial approvals could lead to higher borrowing costs of up to $25 million annually.

at the expense of future customers. The self-interest of some parties to the agreement in deferring costs to future customers is understandable, but it does create intergenerational inequity concerns. [185] As identified in NS Power's resp...

AI summary The text discusses adjustments to net salvage rates affecting NS Power's revenue requirement and potential rate increases. It highlights intergenerational inequity concerns and the impact of depreciation adjustments on credit ratings and ratepayer costs. The uncertainty surrounding asset securitization within the DDA is also mentioned.

y risks associated with ELG accelerated recovery in earlier periods. Mr. Wiedmayer characterized these effects as neutral timing differences that can be addressed through ongoing depreciation studies. [226] The Board does not necessarily d...

AI summary The Board weighs ELG vs. ALG depreciation methods for NS Power, favoring ALG for rate stability and fairness despite Mr. Wiedmayer's neutral timing difference claim. Mr. Madsen argues ALG reduces volatility, while the Board notes potential credit rating risks from ALG changes impacting FFO:Debt metrics and securitization under DDA.

d, with FFO to debt consistently below 10%, or We lowered our rating on parent Emera." It is perhaps worth emphasizing the term "consistently below 10%", in the quote above. [Exhibit N-36, pp. 12-13] [297] Morrison Park explained the conse...

AI summary The text discusses the potential financial implications of a credit rating downgrade for NS Power, including higher interest costs on bond issuances and financing for key projects. A downgrade could lead to increased costs for ratepayers, with estimates of up to $5 million annually and significant increases in financing costs for projects such as the Battery Energy Storage Project and the Wasoqonatl Transmission project.

27, … In the GRA negotiation process, securitization received unanimous support from customer representatives as the preferred solution for financing the DDA assets. … Not only have customer representatives viewed securitization favourably...

AI summary The document discusses support for securitization of DDA assets by customer representatives and credit rating agencies (S&P, DBRS Morningstar). The Board accepts evidence that securitization lowers financing costs, citing the 2024 FAM receivables purchase as a precedent. Intervenors oppose retroactive deferral effectiveness but acknowledge securitization's benefits. Morrison Park notes improved bond yields due to positive developments like securitization.

[469] Dr. Cleary supported NS Power's requested 40% equity ratio, stating it is reasonable given its lower debt rating of BBB- and because NS Power holds a higher percentage of generation assets compared to other Canadian utilities.

AI summary Dr. Cleary supports NS Power's requested 40% equity ratio, arguing it is reasonable given its BBB- debt rating and higher percentage of generation assets compared to other Canadian utilities.

Comment These four transmission assets were part of the 2023-2024 GRA process and were agreed by the parties to the 2023-2024 GRA Settlement Agreement to be included in rate base. However, the Board determined that the assets must meet the...

AI summary NS Power argues that four transmission assets included in the 2023-2024 GRA Settlement Agreement meet the threshold test for rate base inclusion, as demonstrated in the GRA. They submit that the issue does not require further evidence in the hearing, pending the Board's confirmation of meeting the threshold test. The comment also references securitization and credit rating issues.

Request IR-6: References: (A) In Figure 16, on page 35 of Appendix 10A, Concentric provides its North American Electric T&D proxy group that is comprised of three Canadian utilities and 10 U.S utilities, as copied below: Ibid. Source[: Sov...

AI summary The text references a proxy group provided by Concentric, consisting of Canadian and U.S. utilities, and includes sources related to Sovereigns Ratings List 2025 and a Finiki.org article on home country bias.

Request IR-6: References: Direct Evidence p. 68: "However, this forecast assumes approval of the rates requested in this Application and a successful securitization of the net book value of the thermal assets. Absent an increase in general...

AI summary NS Power forecasts that failure to secure rate increases and securitize thermal assets may cause its credit ratings to deteriorate below the 10% cash flow to debt threshold by 2027, impacting access to capital and increasing borrowing costs. The request asks for specific financial statement line items affected by credit rating deterioration and commentary linking past threshold breaches (2022-2023) to current credit ratings.

Request IR-8: References: Direct Evidence p. 72: " Maintaining [emphasis added] the current approved common equity ratio is particularly important to maintaining NS Power's current credit ratings given the significant capital investments r...

AI summary NS Power argues maintaining its approved common equity ratio is critical to preserving credit ratings amid large capital investments. While AFUDC boosts earnings, it does not improve cash flow, leading to deteriorating credit metrics during construction. Increasing the equity ratio is deemed necessary to secure financing for transformative projects.

Request IR-9: References: Direct Evidence p. 67 "NS Power's senior unsecured debt is currently rated BBB- with a Stable Outlook by S&P Global ("S&P") and BBB (high) with a Stable Trend by DBRS."

AI summary NS Power's senior unsecured debt is currently rated BBB- with a Stable Outlook by S&P Global and BBB (high) with a Stable Trend by DBRS. This information is referenced from Direct Evidence page 67.

Request IR-102: - Please provide the most recent credit rating reports for NS Power from S&P and DBRS - Morningstar.

AI summary The request seeks the latest credit rating reports for NS Power from S&P, DBRS, and Morningstar, focusing on financial assessments relevant to Nova Scotia's energy sector.

Request IR-122: - Reference: Exhibit N-3, GRA Direct Evidence - On pages 68-69 of the application, NS Power states that it forecasts to be above the 10% FFO- - to-Debt requirement to maintain its current credit ratings, assuming approval o...

AI summary NS Power claims its FFO-to-Debt ratio will remain above 10% if the proposed rates and thermal asset securitization are approved, but projects it would fall below 10% by 2027 without securitization, citing figures 10-2 and 10-3.

DATE FILED: January 30, 2026 Page 27 of 55 1 2 3 change…Ultimately though, it is likely fair to conclude that out of all the options available, securitization would be the "least-bad" option.48 4 The evidence of Board Counsel Consultant, P...

AI summary The text discusses the potential consequences of not approving NSPI's rate increases and securitization plan, highlighting risks such as failing financial tests, credit downgrades, and missing financial targets. Testimony from Pelino Colaiacovo of MPA emphasizes the importance of securitization to avoid these outcomes.

DATE FILED: January 30, 2026 Page 41 of 55 1 3.10 Cost of Capital and Capital Structure 9 10 11 12 13 14 15 16 17 18 19 20 21 This means that the utility must, over the long run, be given the opportunity to recover, through the rates it is...

AI summary The text discusses the importance of allowing utilities to recover their operating and capital costs through rates to ensure they can earn their cost of capital. A fair return on the rate base is highlighted as crucial for the sustainability of NS Power's service, with a low return potentially leading to poor credit ratings and increased borrowing costs.

MPA on behalf of Board Counsel did not present direct evidence on the cost of capital but did provide opinions pertaining to the Company's credit ratings. Most poignantly, MPA concludes "NSPI is currently rated by S&P Global at BBB- (with...

AI summary MPA, on behalf of Board Counsel, discusses NSPI's credit ratings and the impact of potential rate increases on maintaining investment grade status. A downgrade could increase bond issuance costs, affecting ratepayers through higher interest expenses and long-term financial burdens.

Exhibit N-8, 2026-2027 GRA Appendix 10A, CEA Report, Figure 30, p 52 (PDF page 57). Exhibit N-32, Evidence - Cleary, p 5, lines 17-31. existing credit rating"[114](#page-50-0) . This framing misunderstands both the purpose of the cost of c...

AI summary The text discusses the misunderstanding of the revenue requirement's purpose, clarifying that it is intended to recover the Company's cost of service and maintain financial integrity, not to target specific credit metrics. It references the NS Power panel's explanation regarding the Company's precarious financial position, near non-investment grade.

Figure 3-1 – S&P Global North American Regulated Utilities Ratings Distribution And so sir, when we look at this table, you'll see generally in the middle of that table, there's a rating, triple B minus, and a rating double B plus. And if...

AI summary The text discusses Nova Scotia Power's (NSP) credit ratings, noting its standalone double B plus (non-investment grade) rating versus the triple B minus (investment grade) rating with Emera. It highlights NSP's reliance on a CREUE exemption until 2028 and argues that maintaining the current investment grade is imprudent. The NSUARB is tasked with determining a just revenue requirement for NSP's financial health.

e from January 1, 2026, onwards, related to the $704 million in coal-related assets it intends to retire. The amount collected in the deferral is proposed to be added to the total securitized amount. [8] Morrison Park Advisors, a consultan...

AI summary The document discusses the credit rating downgrade of Nova Scotia Power (NSP) to BBB- in 2022 and the risks of further downgrades to 'junk bond' status. Morrison Park Advisors, engaged by Board Counsel, warns that failing to approve both securitization proceeds and rate increases could lead to higher financing costs, potentially adding at least $25 million annually to customer rates.

at the expense of future customers. The self-interest of some parties to the agreement in deferring costs to future customers is understandable, but it does create intergenerational inequity concerns. [185] As identified in NS Power's resp...

AI summary The adjustment to net salvage rates results in a revenue requirement reduction for NS Power, but may lead to a small rate increase if not approved. The Board acknowledges potential intergenerational inequity concerns and notes that other depreciation-related issues and the uncertainty of securitization could impact NS Power's credit rating and increase costs for ratepayers.

d, with FFO to debt consistently below 10%, or We lowered our rating on parent Emera." It is perhaps worth emphasizing the term "consistently below 10%", in the quote above. [Exhibit N-36, pp. 12-13] [297] Morrison Park explained the conse...

AI summary A downgrade in NS Power's credit rating could lead to higher borrowing costs, increasing annual costs for ratepayers by up to $25 million or more. This includes higher interest rates on bond issuances, refinancing of maturing debt, and increased costs for renewable and reliability projects.

27, … In the GRA negotiation process, securitization received unanimous support from customer representatives as the preferred solution for financing the DDA assets. … Not only have customer representatives viewed securitization favourably...

AI summary The document discusses support for securitization as a financing solution for DDA assets, endorsed by customer representatives and credit rating agencies. Intervenors oppose retroactive deferral effectiveness but agree on securitization's benefits, citing lower financing costs and past examples like the 2024 FAM receivables purchase. The Board acknowledges evidence that securitization reduces costs, citing improved bond yields and market responses to NS Power's actions.

INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 to make that calculation? And just for context, Mr. 2 Flemming, if I might, if we could call up Exhibit N-3, 3 page 69? 4 So you're familiar with these Figures, 5 10-2 and 10-3, Mr....

AI summary The text discusses a request to recalculate data in charts (Figures 10-2 and 10-3) for the years 2026 and 2027, incorporating specific methodological adjustments identified by Mr. Madsen. The discussion focuses on recalculating forecast S&P and DBRS ratings.

INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS it as a percentage of the net income of the company, and that's how an investor would experience such a disallowance. Q. And in your you had provided that same comment a similar commen...

AI summary The discussion centers on debt rating reports and their implications for business risk, referencing previous comments from 2022 and the presentation of the most recent S&P analyst reports in the context of a regulatory proceeding.

NSP COST OF CAPITAL PANEL 419 Cr-ex, (Mahody) 1 report? 26 time to review it, Mr. Coyne, if you could indicate to me 27 where S&P is saying that the design of the FAM translates INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 into...

AI summary The text is a transcript from a regulatory proceeding involving Nova Scotia Power Inc. (NSP) and discusses credit rating considerations, referencing reports from S&P and DBRS. The discussion includes DBRS's mention of NSP's exposure and highlights of positive developments in credit ratings.

NSP COST OF CAPITAL PANEL 429 Cr-ex, (Mahody) 1 type that operates in Canada. So there's no other utility 2 in Canada that needs a FAM the same way that Nova Scotia 3 Power does. So that's distinguishing. 4 When we turn to the U.S. peers t...

AI summary The discussion centers on Nova Scotia Power's Fuel Adjustment Mechanism (FAM), highlighting its unique situation compared to other utilities in Canada and the U.S. The FAM balance has been addressed with government cooperation, and credit rating agencies like DBRS and S&P have noted improvements in the company's financial position.

1 integrated. And each of these vertically integrated 2 it should occur, for the company. 3 Right. And I think on your last Q. 4 sentence of this bullet, it says: 5 6 7 8 9 10 11 12 On balance, Concentric views the securitization plan as a...

AI summary Concentric views the securitization plan as beneficial for Nova Scotia Power's credit metrics, customer rates, and the Province's energy transition. The discussion considers whether a downward risk adjustment should be made for Nova Scotia Power's business risk, given the challenges of transitioning from fossil fuel-heavy generation.

the any of the Alberta utilities because they don't have that obligation at all. Q. Right. A. (Coyne) So we're mitigating a significant issue, in terms of transitioning that generation fleet, but that doesn't mean it goes away. But it is b...

AI summary The discussion highlights concerns raised by Morningstar regarding Nova Scotia Power's need for federal and provincial assistance in transitioning its generation fleet. The response acknowledges these concerns but notes that credit rating agencies like S&P and DBRS have recognized recent positive developments in this area, despite Nova Scotia Power's current lower credit rating.

INTERNATIONAL REPORTING INC. CERTIFIED COURT REPORTERS 1 in helping to mitigate rate impacts for customers. 2 Q. Right. 3 A. (Williams) So certainly didn't 4 want anyone listening in or reading after the fact to be 5 under the impression t...

AI summary The text discusses the acknowledgment of projects by a company and references Mr. Coyne's report regarding costs of capital and capital structure, which are relevant to credit rating agencies.

U-16. 1 UNDERTAKING U-16 - To advise why 6 7 8 9 10 11 12 13 14 The entirety of the proposed rate increase may not be required to support NSPI's existing credit rating. It may be possible to trim the rate increase requests marginally witho...

AI summary The text discusses the potential trimming of a proposed rate increase by Nova Scotia Power Inc. (NSPI) to avoid undue risk to its credit rating, while also considering whether pursuing higher credit ratings is worth the cost to ratepayers. The company argues that the rate application is primarily to cover service costs, not to improve credit metrics, though better credit ratings are seen as a potential byproduct.

1 increase from the perspective of what its impact is on the 2 credit metrics that you're referring to, Morrison Park has 3 made the comment that you may be able to trim some of that 4 revenue requirement without impacting the credit metri...

AI summary The discussion centers on the potential impact of trimming the revenue requirement on credit metrics, with Morrison Park suggesting it may be possible without negatively affecting credit ratings. Nova Scotia Power emphasizes that the application is not aimed at improving credit metrics but rather at presenting a cost of service.

tially, from a 17 credit metrics standpoint, yeah, there's a range. There's 18 certainly a range that the company can be within. But 19 again, lowering that range would not allow the company to recover its cost of service. A. (Williams) Mr...

AI summary The discussion revolves around the appropriate credit metrics for a utility company, emphasizing that the focus should be on developing the correct revenue requirement for electricity rates rather than debating credit metrics alone. The speaker argues that Morrison Park is asking the wrong question in this context.

place. 1 Q. I suppose it will be up to the 2 Board to determine whether or not Morrison Park, in their 3 37 pages of evidence, has answered the right question or 4 not, but let me focus in on 5 A. (Williams) Just to be clear, 6 sorry, Mr....

AI summary The discussion revolves around the Board's determination of whether Morrison Park's evidence addresses the correct question, with a focus on the revenue requirement being tied to the cost of service rather than credit metrics. Nova Scotia Power's credit rating is noted as non-investment grade, making it challenging to assess the impact of changes to the revenue requirement on credit metrics.

1 would be above our current range right now, above 13 2 percent, where Nova Scotia Power was has been 3 traditionally, or in the current range. 4 And the other thing that I would say 5 is that the credit rating agencies don't look at sole...

AI summary The discussion addresses the FFO-to-debt ratio of Nova Scotia Power in the context of revenue requirements and credit ratings, noting that credit rating agencies consider both quantitative and qualitative factors beyond just credit metrics.

1 projects that the FFO-to-debt ratio for 2026, now this is 2 provided the GRA is approved exactly as applied for, rates 3 January 1, that type of thing, so that's the information I 4 have, Mr. Mahody, would be a little bit under 13 percen...

AI summary The discussion focuses on the FFO-to-debt ratio for Nova Scotia Power, projecting it to be under 13% in 2026 and returning to 13.5% in 2027. This is considered important for maintaining credit ratings and potentially achieving investment grade status.

1 MR. FLEMMING: On an overall basis, 2 Mr. Mahody, roughly in the 10 to 11 percent range, with 3 some a little bit of plus or minus there, but overall 4 in that range. 5 BY MR. MAHODY: 6 Q. And within the last year and a 7 half or so, one...

AI summary The discussion centers on Nova Scotia Power's credit rating improvement and its FFO-to-debt ratio, with the witness clarifying the change in outlook from negative to stable.

1 on a longer term basis, would like to get back to an 2 investment grade credit rating to preserve its ability to 3 access capital and favourable terms for customers. 4 And Mr. Williams, if you have 5 something to add, please. 6 A. (Willi...

AI summary The discussion centers on NSPI's desire to maintain its existing credit rating and the potential need for a rate increase to support it. Williams references a specific statement regarding the proposed rate increase and its relation to maintaining the credit rating.

narrative that would assist with our views, in terms of what our views on what that impact may be and what it may mean. I mean, I think going back to the discussion we had prior earlier this morning, Mr. Mahody, about the precarious nature...

AI summary The discussion centers on the potential impact of trimming the revenue requirement on credit metrics and credit ratings, with concerns raised about adverse effects on customers' best interests. The speaker references Morrison Park's evidence suggesting there may be room to trim the revenue requirement to maintain credit metrics, but expresses reservations about this approach.

1 there's some valuable aspects of it, and they talk about 2 the consequences of a downgrade, and those are dire; those 3 are very significant consequences. And so anything that 4 is moving us closer to that line, or keeping us in that 5 p...

AI summary The speaker expresses concern over the potential negative impact on credit metrics and customer interests if a proposed action is taken, emphasizing that it could lead to a downgrade and adverse financial consequences. They also indicate that they are not opposed to providing a narrative but are against the action due to its negative implications.

1 PELINO COLAIACOVO, Solemnly Affirmed: 2 historically, probably interest rates are fairly low now 3 compared to prior years? 4 A. Interest rates have been coming 5 down, yes. 6 Q. And it would seem to me that 7 longer-term bonds you know,...

AI summary The discussion centers on Nova Scotia Power's debt refinancing strategy, noting that replacing high-interest debt with lower-interest debt could affect credit ratings. The speaker highlights that approximately $700 to $800 million in bonds will need refinancing over the next decade, and mentions the regulatory focus on credit ratings as an indicator of market cost of debt.

1 where you say, "...it could be argued that NSPI should be 2 downgraded further, except for the support of...Emera..." 3 So that is based on other tests and metrics apart from FFO 4 to debt, or you're referring to FFO to debt? 5 A. The cr...

AI summary The discussion focuses on the credit rating of Nova Scotia Power (NSP), noting that a downgrade in business risk evaluation in 2022 has made it more challenging for NSP to achieve the highest credit ratings. This is due to the need to meet higher financial metrics as a result of the downgrade.

1 to that second level of business risk, the emphasis 2 becomes very much does the utility continue to meet the 10 3 percent FFO-to-debt metric? And it, as noted in the 4 report, the Nova Scotia Power Application is very clear in 5 saying...

AI summary The discussion focuses on Nova Scotia Power's financial metrics, specifically the FFO-to-debt ratio, and how potential regulatory decisions could impact its credit rating. Concerns are raised about the risk of government intervention affecting the utility's financial stability.

1 guarantee, it's a contingent liability of the federal 2 government. They are both reliant on the credit of the 3 government, in a sense. In the loan guarantee, it's an 4 actual financial credit. In the case of securitization, 5 it's a le...

AI summary The discussion revolves around the financial implications of loan guarantees and securitization, highlighting their reliance on government credit and the impact on a company's balance sheet. The conversation also references a report to the Nova Scotia Power panel.

ratings. So yeah, I think that's the response that I would have to that. It was Nova Scotia Power that brought up the issue of its relative positioning in relation to other utilities. Q. And if it does recover its cost of service, includin...

AI summary Nova Scotia Power discusses its credit rating and the importance of consistent regulatory treatment for achieving a reasonable return on investment. The speaker emphasizes that recovering cost of service and maintaining a reasonable rate of return will eventually lead to an improved credit rating, such as triple BBB plus, and reduce the need for government intervention.

1 Q. And in terms of exceeding the 2 metric, does it have to show that it's exceeding the 3 metric, or that it's improving? Like, if it was 11.5 4 across the board, versus, you know, 10.5 11, 11.5, 12, I 5 suppose if it's going up is bette...

AI summary The discussion focuses on credit rating requirements, specifically the need for consistent and reasonable performance metrics above 10% to avoid downgrades. It also touches on the impact of changing depreciation methodologies on cash flow and credit metrics.