N-52024-2025 Bates White FAM Audit Report - Redacted
62 passages
adequate and have a proper focus on both regular, annual training in crucial risk management and code of conduct issues, as well as employee-specific training to further develop NSPI's human capital. Conclusion II-6: NSPI's performance-bas...
AI summary The document discusses NSPI's training programs, performance-based incentives, succession planning, and the Fuel Manual. It highlights the importance of these initiatives in managing risk, improving employee performance, and ensuring accountability in fuel and power purchasing decisions.
other assumptions regarding NSPI's units operation (such as alternative fuel blends and associated emissions); (5) purchased power costs; and (6) the topology and capacity of the transmission system. To account for future changes in the No...
AI summary This section discusses how NSPI uses the PLEXOS model to forecast fuel requirements, account for environmental constraints, and adjust for events like the Certificate of Variance and cyber events that impacted system availability.
General Service sales are forecast using a combination of historical information and customer surveys to determine electricity requirements over the next three years. In the absence of information on individual customer load changes via su...
AI summary General Service electricity sales are forecast using historical data and customer surveys, with load levels assumed flat before DSM impacts. In 2025, 14 of 19 Large General Service customers reported no decrease, with nine indicating an increase. NSPI forecasts a 12 GWh decrease by 2035 due to DSM outweighing growth. SAE models are well-suited for forecasting residential and commercial loads, considering energy-efficient technologies and end-use intensity trends.
III.B.2. Fuel and Purchased Power Forecasting Fuel and Purchased Power ("F&PP") forecasts are prepared annually and updated quarterly, or more frequently if there are significant changes that suggest the forecast is no longer reliable (suc...
AI summary Fuel and Purchased Power (F&PP) forecasts are prepared annually and updated quarterly using PLEXOS. The process involves dispatch simulation modelling and financial model production. NSPI continued using PLEXOS during a cyber event by accessing local data. The forecasts are reviewed by relevant management teams as per the Fuel Manual.
III.B.2.b. Environmental Considerations in Unit Commitment and Dispatch Forecasting NSPI is subject to air quality regulations that dictate its fleetwide emissions of SO2, NOx, mercury, and GHGs. NSPI's F&PP forecasts incorporate these lim...
AI summary NSPI must comply with air quality regulations, which influence its unit commitment and dispatch forecasting. It uses tools like PLEXOS and PortOps to model emissions constraints, manage fuel blends, and incorporate OBPS cost adders for GHG emissions. Emissions compliance is reviewed by multiple teams, and adjustments are made to ensure adherence to environmental regulations.
Figure III-6: PLEXOS Assumptions - Q4 2025 Fuel and Purchased Power Forecast Group PLEXOS Assumptions Update Required Notes Update Received Date Generating unit start-up costs / shut down penalties No Updated from the unit performance mode...
AI summary Figure III-6 outlines PLEXOS assumptions for Q4 2025 fuel and purchased power forecasts, including updates to generating unit parameters, wind and tidal energy profiles, fuel prices, and market constraints. Some assumptions require quarterly updates, while others are permanent or unchanged.
Figure III-9: Comparison of Forecast Budgets vs. Actual Supply by Resource (2024) (MWh) 126 Detail Actual FAM Budget Variance Variance (%) Generation Lingan 1,559,503.40 1,541,984.50 17,518.90 1.14% Tufts Cove 1,614,389.19 557,559.58 1,056...
AI summary Figure III-9 compares forecast budgets with actual supply by resource in 2024, showing significant variances. Actual generation exceeded forecast budgets for most resources, while purchased power fell below forecasts. The total MWhs available slightly exceeded the forecast, indicating a minor overall surplus.
Figure III-10: Comparison of Forecast Budgets vs. Actual Supply by Resource (2025) (MWh) 127 Detail Actual FAM Budget Variance Variance (%) Generation Lingan 2,195,760.27 1,413,123.10 782,637.16 55.38% Tufts Cove 978,803.66 1,310,053.96 (3...
AI summary Figure III-10 compares forecast budgets with actual supply by resource for 2025, showing significant variances across different generation and purchased power sources. Some resources, like Lingan and Point Tupper, had large positive variances, while others, like Tufts Cove and Point Aconi, had negative variances. The total generation and purchases show small overall variances. The section also references Bates White's 2022-2023 audit recommendations.
IV.A. Background Solid fuel—i.e., coal and petcoke—has historically been NSPI's largest fuel expenditure. The same remained true in this Audit Period. Figure IV-1 and Figure IV-2 show that for both 2024 and 2025, solid fuel accounted for 6...
AI summary This section provides background on Nova Scotia Power Inc.'s (NSPI) solid fuel procurement during the audit period, focusing on coal and petcoke as the largest fuel expenditures. It outlines the review of NSPI's solid fuel-fired fleet, consumption data, fuel sources, pricing, contracts, and procurement processes. Biomass is excluded and covered in a separate chapter.
Figure IV-4: NSPI's Solid Fuel Consumption vs. Forecast (2024, 2025)133 2024 2025 Solid Fuel Type Consumption (MT) Forecast (MT) Comparison Consumption (MT) Forecast (MT) Comparison Solid Fuel There were a few key factors driving solid fue...
AI summary The figure compares NSPI's solid fuel consumption with forecasts for 2024 and 2025. Key factors include discrepancies in energy imports and increased coal-fired generation to compensate for lower-than-forecasted Surplus Energy imports.
132 NSPI 2025 Annual FAM Report, A-2. 133 Q4 2024 FAM Report, 3(3); Q4 2025 FAM Report, 3(3). 134 Q4 2024 FAM Report, 2(3); Q4 2025 FAM Report, 2(3). explained later in this chapter, NSPI changed the fuel blends at several solid fuel-fired...
AI summary NSPI adjusted fuel blends at solid fuel-fired plants in 2024 to comply with sulfur emissions limits, leading to increased coal consumption. A certificate of variance in 2025 allowed higher SO2 emissions, enabling greater use of solid fuel. Additionally, the OBPS regime favored solid fuel over natural gas, further increasing consumption. Actual solid fuel consumption was higher than forecasted in most months of the audit period.
155 Q1 2024 FAM Report through Q4 2025 FAM Report, inclusive, 3, 3(2), and 3(3). The missing data points for domestic coal and pet coke indicate months in which there was zero recorded consumption of either product, respectively. 156 Q4 20...
AI summary The text discusses the Fuel and Actual Management (FAM) reports from Q1 2024 to Q4 2025, noting missing data points for domestic coal and pet coke due to zero recorded consumption in certain months. It also highlights that the increase of 5.8% is heavily influenced by the cost of environmental adders, while other factors are impacted by 4-5 percent.
Figure IV-18: NSPI New Solid Fuel Supply Contracts (Q3 2024) 164 Supplier Product Quantity (MT) Term 5 Mid-Sulfur purchases On May 27, 2024, NSPI issued an RFP for mid-sulfur coal, inviting over a dozen parties to submit an offer. The RFP...
AI summary NSPI issued an RFP for mid-sulfur coal in May 2024, seeking between 100,000 and 400,000 tonnes/year for 2024–2026. Offers were evaluated based on sulfur content and quality, with some disqualified due to potential derates and opacity issues. The remaining offers were assessed on delivered basis, considering environmental and quality attributes.
NSPI's evaluation process allows for direct comparisons of LSL with LSH offers, as it adjusts for coal quality, heat content, and environmental attributes, and does so on a fully-delivered basis (therefore accounting for transportation). A...
AI summary NSPI evaluated coal options, selecting LSH over LSL despite higher costs, citing performance and availability. The decision was approved by the FST, with NSPI providing rationale for temporary risk exposure exceedances. CROC highlighted risks associated with the transaction and NSPI's coal procurement practices.
Second Quarter 2025 NSPI reported entering into three new contracts for solid fuel supply in the second quarter of 2025. This is shown in Figure IV-21. LSL, LSH Purchases and Deferrals in Wake of CoV: On March 7, 2025, NSPI issued an RFP f...
AI summary NSPI entered into new solid fuel contracts in Q2 2025, but after receiving an SO2 CoV, adjusted its procurement strategy. The CoV allowed higher coal consumption and more use of mid-sulfur coal, reducing the need for LSH. NSPI deferred some LSH supply to 2026 and declined additional LSH procurement in 2025.
IV.B.8. Other Solid Fuel Contracts and Procurement NSPI's significant procurements in other services or products related to solid fuels are included in this section. Coal Trucking Contracts, Costs: During the Audit Period, circumstances le...
AI summary NSPI contracted two trucking companies to transport coal from Point Tupper Marine Terminal to Trenton due to early return of Trenton 5 from layup, leading to increased coal consumption. This decision aimed to maintain inventory levels at Trenton 6, crucial for SO2 compliance.
IV.C. Conclusions Conclusion IV-1: Consumption of solid fuel was 26.9% higher than the base cost of fuel forecast, due largely to lower than forecasted Surplus Energy, changes in fuel blends, and the sulfur emissions CoV. NSPI's Audit Peri...
AI summary NSPI's solid fuel consumption was 26.9% higher than forecast, driven by lower surplus energy and changes in fuel blends. NSPI relies heavily on imported coal, with South American coal increasing to 52% of total consumption. NSPI has no domestic coal sources and adjusted fuel blends at its plants to meet SO2 emissions constraints. Coal prices moderated during the 2024-2025 audit period.
NSPI's Approach NSPI's approach to solid fuel inventory management is contained in its Fuel Manual. It defines a governing principle, a series of targets that guide NSPI, and a series of thresholds that, if breached, require specific actio...
AI summary NSPI's approach to solid fuel inventory management is outlined in its Fuel Manual, focusing on 'winter readiness' to ensure sufficient fuel during peak demand. The approach includes defined targets, thresholds, and circuits (Point Tupper and Sydney), with specific storage locations and inventory levels to support continuous operation during the winter months.
g solid fuel supply that, during the Audit Period, were carried out effectively. NSPI's ability to schedule vessel shipments to either of its two receipt terminals is a useful contractual flexibility. Conclusion V-4: During the April 25, 2...
AI summary The document outlines conclusions regarding NSPI's solid fuel supply processes, including the use of spreadsheets for tracking deliveries, the continued operation of PI and DCS/SCADA systems post-cyber event, and a reduction in fuel handling costs at two marine terminals.
V.D. Recommendations Recommendation V-2: NSPI should correct any previously-reported heat rate data for Trenton 5, Trenton 6, and Point Tupper that were impacted by incorrect assumptions about the fuel mix consumed by Trenton 5 from the fo...
AI summary Recommendation V-2 requires NSPI to correct previously-reported heat rate data for Trenton 5, Trenton 6, and Point Tupper due to incorrect assumptions about the fuel mix consumed by Trenton 5 from Q4 2023 to Q3 2024.
VI.A. Background In this chapter, we review and assess NSPI's procurement and supply management of biomass fuel. We begin by explaining NSPI's biomass fuel-fired generator, the Port Hawkesbury Biomass Unit ("PHB"). Next, we look at NSPI's...
AI summary This section provides an overview of NSPI's biomass fuel procurement and supply management during the Audit Period. It covers topics such as the PHB generator, fuel consumption, supply contracts, procurement process, and inventory adjustments, as well as actions taken in response to prior audit recommendations.
VI.B.2. Biomass Fuel Consumption NSPI consumed green metric tonnes ("GMT") of biomass fuel during the Audit Period.252 Figure VI-1 provides this data in more detail, as broken down between 2024 and 2025. Consumption in 2025 was than in 202...
AI summary NSPI consumed a historically high amount of biomass fuel during the Audit Period, leading to increased PHB output and OBPS credits. The high consumption was driven by the OBPS program and PHB's strong availability factors. Biomass fuel consumption was a small portion of the total fuel and cost serving FAM customer load.
VI.B.7. New Biomass Supply Agreements during the Audit Period During the Audit Period, NSPI entered into several new contracts for solid fuel supply. We reviewed each of these contracts and the process by which those contracts were execute...
AI summary During the Audit Period, NSPI signed new solid fuel supply contracts. The audit highlights increased forecasted output from PHB in 2025 and 2026, which influenced higher procurement targets. The review includes how suppliers were selected and the rationale for seeking additional supply.
supply, which had the highest forecasted biomass consumption of any forecast observed. Also, in the table below, we are including the November 2024 contract for GMT of 275 " Biomass Amendment." 276 " Biomass Purchase Sale Agreeme...
AI summary NSPI procured more primary biomass fuel than forecasted, leading to surplus purchases and increased costs for FAM customers. However, the PHB unit generated significant OBPS credits, reducing costs for FAM customers. The procurement decisions reflect the dynamics of the biomass fuel market in Nova Scotia.
fuel either in the inventory piles, the boiler, or both. In each of our prior two audit reports, we have recommended that the energy balance process be codified into the Shared Services Agreement.293 On March 7, 2025, NSPI and PHP executed...
AI summary The text discusses the amendment to the Shared Services Agreement between NSPI and PHP, introducing a new Schedule 13 titled 'Energy Balance Process.' The amendment includes the use of an Energy Balance Excel Worksheet to calculate energy balances and the development of an Energy Balance Flow Diagram to illustrate the process.
VI.B.11. Quantity and Quality Control of Solid Fuel NSPI receives all biomass deliveries to the Port Hawkesbury plant by truck. Trucks are weighed as they enter the plant (with a full cargo) and as they exit (empty), with the delta being r...
AI summary NSPI manages biomass deliveries at the Port Hawkesbury plant, using truck weigh-ins and LIMS for data tracking. PHP conducts quality control testing on biomass, including moisture content and fuel type, in compliance with ASTM standards.
VI.C. Conclusions efficiency of the PHB boiler. NSPI stated that the risk associated with long periods of storage was limited to logs on the outside of the pile (the portion exposed to the elements). NSPI also stated that the logs were hel...
AI summary The document discusses NSPI's biomass procurement challenges and the impact of surplus fuel purchases on FAM customers. It highlights the need for NSPI to revise its RFP process and notes the value of the PHB unit under the OBPS regime, which generates credits and reduces costs for customers.
losses over the sample years, but to a lesser extent. NSPI concluded that this FT capacity would be uneconomic and did not bid on the capacity. The reasons listed supporting their conclusion follow: • Given the increased volatility in the...
AI summary NSPI concluded that the MN365 FT capacity would be uneconomic due to increased volatility in gas demand forecasts, binary utilization, and risks of stranded capacity. They also highlighted the potential for alternative solutions to gas supply problems and the impact of toll changes on delivered gas costs.
hat may evolve. Bates White offers its perspective on this position noting that the uncertain role of the new NS IESO in procuring gas for any new, gas-fired generation makes NSPI's role less certain. Bates White does not agree with ERM's...
AI summary Bates White disagrees with ERM's position on NSPI's management of natural gas procurement, emphasizing that natural gas is procured dynamically and requires continuous adjustments. Selling unneeded gas or releasing FT capacity is a standard practice, not speculative, and asset managers can manage FT contracts effectively.
VII.C. Conclusions Conclusion VII-1: NSPI does not appear to have completed the analyses made in Recommendation VII-1 from the previous FAM audit, which recommended that "[t]his quantification should include a quantification of risk mitiga...
AI summary The conclusions highlight that NSPI did not complete risk mitigation analyses as recommended, excluded such analyses in evaluating FT contracts, and appropriately managed some FT contracts and tariff negotiations. NSPI also expects reduced reliance on natural gas due to environmental changes and has an evolving philosophy on long-term FT contracts.
VII.D. Recommendations Recommendation VII-1: NSPI should conduct the analysis described in Recommendation VII-1, that was accepted by NSPI, from the 2022 – 2023 FAM Audit. 331 Bates White's February 21, 2025, Rebuttal Evidence, page 9 line...
AI summary The recommendations outline actions for NSPI, including re-analyzing Freepoint FT capacity offers, formalizing ERM positions on FT capacity, and clarifying risk allocation related to over-paying for unneeded FT capacity and mitigation strategies.
VIII.A. Background In this chapter, we assess NSPI's natural gas procurement processes and results during the Audit Period. The natural gas market in Nova Scotia remains supply constrained, which limited the number of natural gas suppliers...
AI summary This section examines NSPI's natural gas procurement processes during the Audit Period, noting supply constraints in Nova Scotia's market, NSPI's role as a price taker, and the increase in natural gas prices from 2024 to 2025. The focus includes procurement decisions, contract management, and transactions with counterparties and Emera Energy.
Energy L.P. Emera Energy L.P. Emera Energy L.P. Emera Energy L.P. Emera Energy L.P. Emera Energy L.P. Emera Energy L.P. Emera Energy L.P. Emera Energy L.P. Counterparty BAILEYVILLE BAILEYVILLE BAILEYVILLE BAILEYVILLE BAILEYVILLE BAILEYVILL...
AI summary The text lists multiple late-day natural gas trades between Emera Energy L.P. and Baileyville, including trade IDs, dates, and classifications. This data appears to be related to energy trading activities and may be used for regulatory or accounting purposes.
Figure IX-1: Comparison of Adjusted HFO Costs from Aligne to Reported Q4 FAM Costs370 2024 2025 Total Barrels Cost Barrels Cost Barrels Cost Aligne Q4 FAM Report Difference The prior audit period saw the testing and inspection of the HFO t...
AI summary This section discusses the movement and management of HFO inventory at Lingan, including the transportation of HFO from Tufts Cove and Point Tupper, and a new contract entered into by NSPI in May 2024 for HFO transportation to multiple locations.
IX.B.1.b. Pre-Approval of HFO Cargo Purchase On December 18, 2025, a recommendation for standing approval to purchase HFO was approved. With a Dec 2025-Feb 2026 price forecast of delivered gas being at or above HFO, materially higher natur...
AI summary On December 18, 2025, a recommendation for standing approval to purchase Heavy Fuel Oil (HFO) was approved due to higher natural gas prices compared to HFO and active dispatch of Tufts Cove units. NSPI purchased one HFO cargo on the approval date, following an RFP issued on December 8, 2025.
IX.B.1.c. Light Fuel Oil (LFO) NSPI used LFO as start-up fuel, motor vehicle fuel, and for other applications at its generation plants, and burned diesel fuel at its combustion turbine facilities, such as Burnside and Victoria Junction. In...
AI summary NSPI used Light Fuel Oil (LFO) at its generation plants and combustion turbine facilities. The supply contracts for LFO had no minimum or maximum quantity provisions and expired on December 31, 2024. NSPI's diesel consumption was below budget, while furnace oil consumption was above budget. There was a discrepancy between the LFO costs recorded in Aligne and the Q4 FAM Report, which NSPI attributed to year-end true ups and General Ledger entries outside of Aligne.
X.B.3.b.i. Fuel Switching Results In a prior Audit Report, we concluded that Tufts Cove's dual-fuel units had numerous instances during the Audit Period of being limited in their ability to burn HFO.429 We concluded that limitations on the...
AI summary The audit found that Tufts Cove Unit 1 cannot fuel switch, while Units 2 and 3 successfully switched fuels multiple times during the audit period. However, external factors such as pipeline pressure limitations prevented fuel switching in some cases, potentially impacting the effectiveness of NSPI's natural gas price hedging strategy.
Figure X-26: Average Annual OM&G Costs During Audit Period ($/MW) 485 Plant Audit Period Annual Average ($mm) Capacity (MW) Average Annual OM&G Costs per MW Biomass $6.3 43 $146,826 Wind $9.4 81 $116,660 Pt. Tupper $8.9 150 $59,661 Pt. Aco...
AI summary The text presents average annual OM&G costs during an audit period for various power plants in Nova Scotia, including biomass, wind, and hydroelectric facilities. It also notes that NSPI's OM&G costs averaged $13.32/MWh, with a slight decrease in thermal average costs compared to the prior audit period.
XI.B.4. Port Hawkesbury Paper Port Hawkesbury Paper ("PHP") takes service from NSPI under the Extra Large Industrial Active Demand Control ("ELIADC") tariff. The tariff allows NSPI to manage PHP load to reduce system costs to the benefit o...
AI summary Port Hawkesbury Paper operates under the ELIADC tariff, allowing NSPI to manage its load for system cost reduction. However, the methodology for measuring ADC benefits is inadequate, and real-time dispatch deviations impact FAM customers. PHP's load is not consistently used for reserve requirements due to operational interruptions.
Figure XII-3: Output, Cost of COMFIT Resources (by project) 602 Canacity l Total Cost Counterparty Location Capacity (MW) 2024 MWh 2025 MWh Cost (2024) Cost (2025) ($/MWh) Colchester-Cumberland Wind Field Spiddle Hill (Large Wind) COMFIT 0...
AI summary The table presents the output and cost of COMFIT resources by project, including capacity, energy production, and associated costs for various locations in Nova Scotia. It includes details for wind fields, municipalities, and other entities involved in the COMFIT program.
Short-Term Purchases The Fuel Manual allows the NSPI and NSPEMI Energy Marketers to make day-ahead and hourahead power purchases and sales.626 Specifically, the Fuel Manual notes that NSPI's energy marketers will " ."627 The Fuel Manual re...
AI summary The Fuel Manual allows NSPI and NSPEMI Energy Marketers to make short-term power purchases and sales, with transactions requiring human decision-making and compliance with risk and credit policies. Most of NSPI's total system requirements during the audit period were met through imported power, largely due to increased deliveries from Muskrat Falls via the Maritime Link.
XII.B.1.c.i.1. Economic Imports We begin here with economic imports. Deciding to import power into Nova Scotia is not always based on a simple comparison of the cost of energy at the external source and . There are several other costs invo...
AI summary The document discusses the economic considerations of importing power into Nova Scotia, including transmission costs, fees, and the use of tools to evaluate the full cost of imports. NSPI's traders acted prudently, with most transactions providing economic benefits to customers, though one exception resulted in a loss due to unexpected price increases.
ly, the ECA calls for the delivery of 0.986 TWh/year of Base Block644 for the 35-year contract term, and approximately 0.240 TWh/year of Supplemental Block for the first five years of the contract.645 The second key contractual document is...
AI summary The document outlines the Energy and Capacity Agreement (ECA) and the Energy Access Agreement (EAA), which govern the delivery of energy from NLH to NSPI. The ECA specifies the quantity of Base Block and Supplemental Block energy to be delivered over a 35-year period, while the EAA allows NSPI to purchase Surplus Energy at market prices, with guaranteed right of first refusal. The agreements were key components of the Board's approval of the Maritime Link project in 2013.
Valuation of Undelivered, Makeup NS Block Volumes In our prior audit report, we explained NSPI's efforts to ensure that makeup volumes of NS Block energy meets the terms of the ECA. We also explained NSPI's mechanism for tracking the value...
AI summary The audit report discusses NSPI's efforts to ensure makeup volumes of NS Block energy meet the terms of the ECA, noting that NSPI has met requirements except for 82,341 MWh. The report highlights the importance of understanding the net impact on FAM customers and recommends continued pursuit of undelivered volumes.
XII.B.1.d.iii. Surplus Energy Deliveries (Pursuant to EAA) Under the terms of the EAA, NSPI may (at its sole option) issue a competitive market solicitation ("EAA RFP") by June 15 for energy to be delivered in the next contract year.694 NL...
AI summary Under the EAA, NSPI can issue an EAA RFP by June 15 for surplus energy delivery. NLH must respond in good faith if it forecasts positive available energy, defined as energy beyond its native load and NS Block obligations. NLH is required to provide a forecast to NSPI by March, and forecasts for the Audit Period were received.
XII.B.1.e. Final Audit Period Data for Imported Power 704 2025 Maritime Link Benefits Reports (Q1-Q4). 705 EAA, section 4.1 (a). Looking deeper at the data, the flows on the LIL were less than the hourly output of Muskrat Falls in about %...
AI summary The audit period data for imported power from Muskrat Falls shows that flows on the Labrador-Island Link (LIL) were less than the hourly output of Muskrat Falls in most hours. NSPI argues that the LIL's capacity limitation has not hindered energy imports, though increased capacity may help during peak demand. High power testing was completed in March 2026, and the LIL is expected to be upgraded to a higher rating soon.
XII.B.2. Power Exports NSPI's energy marketers also export power on a short-term basis—i.e., day-ahead or real-time. In general, these export opportunities fall into two categories, but both categories are based on economics. One set of tr...
AI summary NSPI's energy marketers export power on a short-term basis when prices elsewhere are higher or during periods of high wind output. Exports during the Audit Period were minimal, totaling 4.5 GWh, or 0.02% of total system requirements, with limited revenue and gains.
Our second recommendation read: Recommendation XII-2: NSPI should maintain its pursuit of recovery of missing NS Block energy volumes in a manner that recognizes the contractual provisions pertaining to missing and makeup energy, seeks to...
AI summary Recommendation XII-2 advises NSPI to recover missing NS Block energy volumes while adhering to contractual provisions and maximizing value for FAM customers. NSPI accepted the recommendation and committed to providing further context on 82,341 MWh of ineligible replacement energy. The response was deemed satisfactory.
ws: Recommendation XII-4: NSPI should consider pursuing the long-term capacity value of the undelivered quantities of NS Block from NLH, conservatively estimated at the carrying cost of Lingan 2. NSPI accepted this recommendation and state...
AI summary The document discusses NSPI's response to a recommendation regarding the long-term capacity value of undelivered NS Block quantities from NLH. NSPI stated it would consider approaches to recover this value but did not agree with the view that there was a loss of value. The text highlights that NSPI's planned approach does not fully deliver the long-term capacity value of the NS Block due to frequent capacity reductions.
to those of the previous period, import volume is 6% higher than the previous Audit Period. This is the result of deliveries of larger amounts of Muskrat Falls energy delivered via the Maritime Link. Conclusion XII-7: NSPI was a net import...
AI summary The text discusses NSPI's power import activities, including increased imports from Muskrat Falls via the Maritime Link, reliability-based imports, and the resolution of undelivered energy balances. NSPI's actions were deemed reasonable despite high import prices, and underdeliveries were minimal after reaching zero undelivered volumes for Base and Supplemental Blocks.
). Figure XIII-4 shows NSPI's hedge positions in three different time periods: end of first quarter, 2024; end of fourth quarter, 2024, and end of fourth quarter, 2025. 779 Fuel Hedging Plan, page 9. NSPI acknowledged that it was, at times...
AI summary NSPI acknowledges that it occasionally deviated from target hedge percentages due to limited liquidity, particularly with natural gas at basis price risk. Following the receipt of the SO2 CoV in March 2025, NSPI had an over-hedged position in natural gas and power imports, which was rebalanced. NSPI also directly hedges exposure to forecasted EAA Surplus Energy priced at the ISO New England Mass Hub day-ahead price.
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.ii. 2024 (Second Quarter) In the second quarter of 2024, NSPI engaged in moderate rebalancing for purchased power, solid fuel, and natural gas. NSPI purchased an additional GWh of power hedges for 2026, initiating hedging for of...
AI summary In Q2 2024, NSPI engaged in moderate rebalancing for purchased power, solid fuel, and natural gas, including additional power hedges for 2026 and basis hedges to reduce winter 2024/2025 exposure. NSPI used all 2023 GHG OBPS performance credits to offset 2023 obligations, despite a lower net present value of spreading credits over seven years, to reduce the FAM balance and manage program risks.
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.
XIII.B.1.c.v. 2025 (First Quarter) NSPI completed its quarterly rebalance for the first quarter of 2025 in March. NSPI noted no material changes to expectations regarding the timing of EAA Surplus Energy deliveries and made only modest reb...
AI summary NSPI completed its Q1 2025 rebalancing with minimal changes, unwound on-peak power hedges, and adjusted marine freight exposure. The CoV for SO2 emissions allowed higher emissions limits, making solid fuel consumption more economic. NSPI is expected to emit the maximum allowed SO2 in 2025.
XIII.B.1.c.xiii. NSPI's Hedge Procurement Process NSPI's process for procuring hedges remains reasonable. NSPI can transact for hedges through a variety of vehicles, depending on the commodity, including the Intercontinental Exchange ("ICE...
AI summary NSPI's hedge procurement process is considered reasonable, allowing transactions through various platforms and brokers, with standardized agreements to reduce risk and costs. Traders execute transactions within a set price range, and unexecuted hedges were often due to market price shifts or lack of liquidity. NSPI reassessed and rebalanced its portfolio in some cases.
XIII.C. Conclusions Conclusion XII-1: The hedging program as executed during the Audit Period generally conformed with the objectives of the Fuel Hedging Plan. Conclusion XIII-2: Our review shows that NSPI conducted quarterly rebalancing a...
AI summary The hedging program executed by NSPI during the Audit Period generally aligned with the Fuel Hedging Plan. Quarterly rebalancing was consistent with plan requirements, though impacted by liquidity issues and SO2 compliance verification. NSPI's success in shielding FAM ratepayers depends on the accuracy of fuel consumption forecasts, and changes in energy flows from NLH on the Maritime Link also influenced hedging activities.
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.
Figure XV-4: PHP Costs and Payments833 Year Total Delivered Energy (MWh) Total Billed Charge Total Cost to Serve PHP Load ADC Benefit Off Schedule Charge Additional PHP Payment 2020 $55,507,679 $45,864,745 $6,624,312 $276,000 N/A 2021 $60,...
AI summary Figure XV-4 presents the PHP Costs and Payments from 2020 to 2025, showing variations in total billed charges, total cost to serve PHP load, ADC benefits, off-schedule charges, and additional PHP payments over time. The data highlights fluctuations in costs and benefits associated with the PHP program.
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.7. Bates White's 2022-2023 Audit Recommendations In our report for the prior audit period, we made three recommendations related to the ELIADC benefits calculation, the CBL Energy Charge, and annual reporting. Recommendation XV-1: NSP...
AI summary Bates White recommends that NSPI develop a benefits calculation considering hourly PHP load deviations based on quantities and prices by cause code type. ADC benefits are calculated from scheduling PHP load in lower cost hours, with benefits being the difference between actual costs and a fixed rate, netted annually.