N-52024-2025 Bates White FAM Audit Report - Redacted
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ommendation XV-7: The NSPSO or successor SO should be required to identify and record PHP real-time deviations from schedule, and the reason for each deviation using verifiable information from PHP. Conclusion XV-15: No load shifting benef...
AI summary The document discusses issues with the ELIADC tariff, including the need for better reporting and alternative pricing methods for real-time load deviations. It highlights the lack of load shifting benefits and potential net costs from real-time load deviations, as well as the need for improved transparency in annual reports.
. During the Audit Period, approximately 74% of the ratings of ERM employees were "1," a modest decline from the approximately 82% of "1" ratings received by ERM employees in the prior Audit Period.53 We reviewed the results of NSPI's calc...
AI summary The audit found that 74% of ERM employees received a rating of '1' during the Audit Period, a slight decrease from the prior period. NSPI's Commercial Incentive Program in 2024 and 2025 had six metrics aimed at lowering costs and risks for FAM customers, including achievements in fuel hedging, energy acceptance from Newfoundland, and solid fuel savings. An example of success was the negotiation of SO2 emissions relief, which contributed positively to the program's outcomes.
II.B.4. Bates White's 2022-2023 Recommendations We had one recommendation regarding Organization, Staffing, and Controls in our prior Audit Report. This was: Recommendation II-1: NSPI should review its Commercial Incentive Program metrics...
AI summary Bates White's 2022-2023 recommendations included a focus on improving the Commercial Incentive Program metrics to reduce after-the-fact adjustments and subjectivity. NSPI accepted this recommendation and implemented steps to address it, with Bates White considering the response as satisfactory.
SPI's forecasted load in 2025 and 2026 are higher than in the prior forecast. Moreover, NSPI is forecasting higher RTR growth in the remainder of the forecast horizon, reducing NSPI's forecasted load. Second, NSPI reduced the estimated imp...
AI summary NSPI's 2025 and 2026 load forecasts show higher values than prior forecasts, but RTR growth is expected to reduce load. NSPI also reduced its estimate of new EV load and increased its forecast of load reduction from behind-the-meter solar. Continued DSM and energy efficiency efforts are expected to limit load growth despite customer growth and electrification of heating.
III.B.1.d. Peak Demand Forecasting The long-term system peak forecast for the accrued classes is derived through a linear regression model that relates monthly peak demand (excluding large customer contribution) to heating, cooling, and ba...
AI summary The document discusses peak demand forecasting using a linear regression model that factors in weather, base load, and growth programs like heat pumps. It also references demand response savings from a third-party study and projects a 1.2% annual growth in peak load through 2035.
Figure III-2: NSPI's Estimated Firm System Peak and Actual Peak Load (MW, 2020 through 2025) 103 Year Actual Forecast Variance 2020 2,050 2,234 -8.24% 2021 1,968 2,243 -12.26% 2022 2,216 2,248 -1.42% 2023 2,455 2,155 13.92% 2024 2,088 2,22...
AI summary Figure III-2 presents NSPI's estimated firm system peak and actual peak load from 2020 to 2025, showing significant differences between forecasts and actual values. Most years show overestimated demand, with one year showing an underestimate. The data suggests caution in relying on single-year forecasts for long-term decisions.
101 NSPI, "Preliminary Outage Report for February 3-5, 2023 Cold Weather Event," M10987, February 21, 2023. 102 NSPI, "Preliminary Outage Report for February 3-5, 2023 Cold Weather Event," M10987, February 21, 2023, page 4. 103 2022-2023 B...
AI summary The document discusses NSPI's Smart Grid Nova Scotia Project, its testing of distributed energy resource management systems, and the impact of various programs on load management and peak demand reduction. It also highlights the cost challenges of residential batteries and the results of the Time Variable Pricing pilot, including load reduction percentages and factors influencing them.
III.B.1.e. Short-Term Load Forecast The system operator relies on short-term load forecasts in its day-ahead unit commitment and scheduling processes. NSPI's operations rely on day-ahead, 2-day-ahead, 3-day-ahead, 4-day-ahead, and 5-day-ah...
AI summary The system operator uses short-term load forecasts provided by a third-party vendor for day-ahead scheduling. The vendor's model, based on historical load data and weather forecasts, is monitored for accuracy. After a cyber event in April 2025, forecast accuracy, measured by MAPE, significantly worsened, averaging 10.22% compared to 2.41% before the event.
Figure III-6: PLEXOS Assumptions - Q4 2025 Fuel and Purchased Power Forecast Group PLEXOS Assumptions Update Required Notes Update Received Date Lood Base Load forecast - Monthly demand and energy Yes Load unchanged from previous in 2026 a...
AI summary The document outlines assumptions and updates for the PLEXOS model related to load forecasting, hydro generation, tidal storage, and unit performance parameters for Q4 2025. Some updates are required, particularly for load forecasts and maintenance schedules, while others are based on historical data or unchanged from previous models.
III.C. Conclusions Conclusion III-1: NSPI's load forecasting approach remains largely unchanged from the prior audit period. NSPI continues to file an annual 10-year load forecast with the Board and allows for stakeholder involvement in th...
AI summary NSPI's load forecasting approach has remained largely unchanged, with annual 10-year forecasts filed with the Board. The 2025 Load Forecast Report predicts a slight decrease in net system requirement due to factors like RTR load migration and increased energy efficiency. NSPI's actual peak loads have been lower than forecasted in recent years, suggesting a trend of over-forecasting.
XI.B.4. Port Hawkesbury Paper Port Hawkesbury Paper ("PHP") takes service from NSPI under the Extra Large Industrial Active Demand Control ("ELIADC") tariff. The tariff allows NSPI to manage PHP load to reduce system costs to the benefit o...
AI summary Port Hawkesbury Paper operates under the ELIADC tariff, allowing NSPI to manage its load for system cost reduction. However, the methodology for measuring ADC benefits is inadequate, and real-time dispatch deviations impact FAM customers. PHP's load is not consistently used for reserve requirements due to operational interruptions.
XIII.B.1.c.i. 2024 (First Quarter) Period in the discussion below. NSPI completed its quarterly rebalance for the first quarter of 2024 in March. NSPI's forecast of EAA Surplus Energy was limited to approximately GWh in 2024, and between a...
AI summary NSPI completed its first quarter 2024 rebalance, adjusting its forecast of EAA Surplus Energy and incorporating PHP's load into its 2026 hedging decisions. Uncertainty around full rating tests and software updates influenced the reduced forecast. NSPI also purchased power hedges for 2026 and updated its load forecast, leading to changes in fuel exposure and expected imports.
XIII.B.1.c.iii. 2024 (Third Quarter) Entering the Audit Period, NSPI was in the midst of a two-year sulfur emissions compliance period, which limited NSPI's total SO2 emissions to 31.6 kt in 2024. In November 2023, NSPI implemented a compl...
AI summary NSPI faced challenges in complying with sulfur emissions limits in 2024 and implemented a compliance buffer. It also adjusted its load and surplus energy forecasts, leading to a portfolio rebalancing. NSPI increased its compliance buffer to 6 kt in 2025 and 2026 due to forecast changes and uncertainty around LIL maintenance.
XV.A. Background Port Hawkesbury Paper ("PHP") has been taking service under the Extra Large Industrial Active Demand Control Tariff ("ELIADC") since January 1, 2020. The Tariff was approved for an initial term of three years, 2020-2023.80...
AI summary Port Hawkesbury Paper (PHP) has been under the ELIADC tariff since 2020, with extensions approved in 2023 and 2025. The tariff aims to improve efficiency in serving PHP's load and benefit other NSPI customers. However, the recorded benefits to FAM customers have been lower than anticipated, primarily due to mandatory fixed cost contributions.
XV.B.1. Implementation of the ELIADC There are several important features of the ELIADC that relate to active demand control and pricing: - PHP's load is incorporated within PortOps during the Day Ahead and Intra Day schedule creation and...
AI summary The ELIADC (Extra Large Industrial Active Demand Control Tariff) incorporates PHP's load into PortOps for scheduling and optimization, with fixed rate payments based on forecasted costs. Due to the 2025 cyber incident, PortOps was unavailable for a period, leading to manual scheduling using PLEXOS and impacting real-time schedules until August 2025.
XV.B.2. Active Demand Control Provisions Under the ELIADC, NSPI can control PHP's load within limits established under the tariff and associated protocols. Prior to the beginning of each tariff year, PHP provides NSPI a forecast of annual...
AI summary The ELIADC allows NSPI to control PHP's load within established limits, using forecasts and updates from PHP to set energy targets. Load is optimized as 'negative generation' across nine operating modes, with flexibility for PHP to adjust its load within specified ranges without triggering deviations.
XV.B.3. Scheduling and ADC Benefits Over the audit period, PHP's load (MWh) corresponded reasonably closely to the target energy (MWh) as adjusted for each month although there were several monthly outliers.839 Figure XV-9 compares PHP mon...
AI summary The document analyzes PHP's load performance in 2024 and 2025, comparing actual delivered energy to monthly and annual targets. It highlights significant deviations in August and October 2024 and notes the impact of paper product demand on 2025 performance. The ADC Benefit was positive in 2025, but factors like fuel costs and load variability can affect it.
XV.B.4.e. Cause Code 5: PDN Deviations – PHP Decision to Vary From Schedule NSPI identifies in its ELIADC annual reports the hours in which Cause Code 5: PDN deviations occur and the magnitude of those deviations. The cost or "penalty" for...
AI summary This section discusses the calculation and application of penalties for Cause Code 5: PDN deviations under the ELIADC Tariff. NSPI calculates penalties based on price differences and has reduced the penalty in 2025, but this reduction is criticized as not supported by the tariff and potentially weakening incentives for PHP to follow the schedule. The document also highlights a correction recommendation for the penalty calculation.
XV.B.5. Co-optimization Benefits of ADC The core of ADC benefits arises from the ability of NSP to schedule and dispatch PHP load across the year, both on a daily and seasonal basis, to reduce demand in high-cost periods and increase deman...
AI summary ADC benefits stem from NSP's ability to schedule and dispatch PHP load across different periods to optimize costs. PHP load can be adjusted based on wind output and FAM load, allowing for reduced demand during high-cost periods and increased demand during low-cost periods.
XV.B.5.a. Comparison of FAM and PHP Load Co-optimization of PHP load and NSPI generation should allow for PHP load to be reduced when FAM load is high and system conditions are relatively tight, and to increase PHP load when FAM load is lo...
AI summary The analysis compares the Fuel Adjustment Mechanism (FAM) load and Peak Hour Load (PHP) load, showing a modest inverse relationship (-0.28 correlation) over the audit period. In winter months, the correlation strengthens to -0.74, suggesting benefits from co-optimization. On-peak PHP load is smaller relative to FAM load compared to off-peak periods, consistent with daily co-optimization under the ELIADC.
transactions do not have costs or benefits in this context. For example, it would not be correct to conclude that there is a dis-benefit in an hour where actual costs are greater than the fixed rate. A potential secondary benefit of active...
AI summary The document discusses the challenges in measuring the costs and benefits of real-time load shifting and deviations in demand control. It highlights that NSPI lacks the tools, such as PortOps software, to quantify these impacts due to low load levels, model convergence issues, and reliance on assumptions.
XV.C. Conclusions Conclusion XV-1: The ELIADC tariff, as shown by benefits reported in the ELIADC annual reports, has minimally achieved the intent of the Board during the Audit Period. FAM customers did not bear the average costs to serve...
AI summary The conclusions highlight deficiencies in the ELIADC tariff's implementation, including flawed ADC benefit calculations, inadequate deviation tracking by NSPI, and lack of transparency in annual reports. The ELIADC tariff has not fully achieved its intended benefits, and there are inconsistencies in how PHP load is managed and reported.
XV.D. Recommendations Recommendation XV-1: In the 2026 ELIADC annual report and all future reports, NSPI should report the amounts collected under the $4/MWh (or any other) mandatory contribution to fixed costs, but should not characterize...
AI summary The recommendations focus on improving reporting and cost allocation practices related to the ELIADC and PHP. They include changes to how fixed costs are reported, modifications to ADC benefits, real-time deviation reporting, and adjustments to the calculation of Cause Code 5 penalties.