Topic:"Fuel Cost Adjustment" in M06733

lting in lower unit costs than found in prior approved DSM Plans. Navigant, 2015 Investing in Demand-side Resources: Considering Affordability, February 26, 2015, page 4 ENS has addressed short-term affordability considerations in multiple...

AI summary The document discusses ENS's approach to affordability in its DSM Plan, noting that the proposed Plan requires less investment than initially modeled, resulting in lower unit costs and addressing short-term affordability concerns. It also references the 2014 IRP and the impact of DSM-related rate increases on the Fuel Adjustment Mechanism.

Assumptions used in ENS's 2016-2018 Rate and Bill Impact Analysis Stakeholder Stakeholder Comment ENSC's Response Inclusion in the model expressed as $/kW, rather than $/MWh. The value of avoided capacity is usually assessed by determining...

AI summary The stakeholder comments highlight concerns with the assumptions used in ENS's 2016-2018 Rate and Bill Impact Analysis, particularly regarding the outdated avoided capacity cost and the exclusion of fuel cost benefits from DSM in the model. ENS acknowledges the concerns and is open to refining the analysis.

Societal NEBs While we have discussed participant and utility NEBs, DSM is also known to generate non-energy benefits for society as a whole, primarily through (1) environmental benefits (to the extent they are not already internalized in...

AI summary The text discusses societal non-energy benefits (NEBs) from demand-side management (DSM), including environmental and macroeconomic benefits. Environmental benefits include reduced emissions, while macroeconomic benefits involve increased GDP and job creation. It critiques the Total Resource Cost (TRC) method for being biased against energy efficiency and not fully capturing societal benefits. The document notes that in Nova Scotia, carbon emissions are already partially internalized due to legislation.

2012 Executive Summary Recommendations The Evaluator noticed that four of the five recommendations were implemented by ENSC and allowed for overall program improvement. The only recommendation that was not implemented is the one requesting...

AI summary The Evaluator noted that four of five recommendations were implemented by ENSC, leading to program improvements. The unimplemented recommendation involved documenting the AIR MILES approach. The removal of CFLs and changes to refrigerator and washer eligibility were made based on recommendations to improve energy efficiency and market penetration.

Filed: March 27, 2015 E1 (NSPI) IR-27 Page 1 of 2 2016-2018 Supply Agreement for EECA M06733 (E-ENS-R-15) E1 Responses to NSPI Information Requests NON-CONFIDENTIAL 1 All else being equal, these amendments would have caused a reduction in...

AI summary The document discusses the financial implications of the 2015 DSM deferral and its impact on the FAM under-recovery balance. It notes a $53 million offset from the deferral, along with other contributions, which are expected to largely repay the FAM under-recovery in 2015. The 2015 DSM level of activity is $39 million, with $35 million to be recovered over 8 years starting in 2016.

NON-CONFIDENTIAL 1 Request IR-5: 2 3 Reference: 2016-2018 DSM Plan NS Power Evidence Appendix B 4 - 5 Please provide residential increases in rates and Fuel Adjustment Mechanism charges in - 6 both absolute and percentage terms since 2011?...

AI summary The document includes a request (IR-5) asking for residential rate increases and Fuel Adjustment Mechanism charges since 2011, in both absolute and percentage terms, along with a reference to the 2016-2018 DSM Plan evidence appendix.

9 Year Revenue increase due to GRA ($) % increase due to GRA Revenue increase due to FAM (all components combined including: BCF, AA, BA) ($) % increase to FAM (all components combined including: BCF, AA, BA) Composite revenue increase ($)...

AI summary The table shows revenue increases from the GRA and FAM mechanisms from 2011 to 2015, including dollar amounts and percentage changes. The data highlights fluctuations in revenue contributions from these mechanisms over the years.

NON-CONFIDENTIAL 1 Request IR-12: 2 3 Reference: 2016-2018 DSM Plan NS Power Evidence 4 - 5 Please provide annual spending by the largest categories of expenditures by NSPI since - 6 2011 and the absolute and percentage increase in them si...

AI summary The document contains a request (IR-12) for NSPI to provide annual spending data by category (fuel, salaries, capital expenditures, etc.) since 2011, with details on absolute and percentage increases.

NON-CONFIDENTIAL 1 Request IR-14: 2 3 Reference: 2016-2018 DSM Plan NS Power Evidence Appendix B 4 5 Please provide the fuel costs as percentage of expenditures for Canadian jurisdictions. 6 7 Response IR-14: 8 9 NS Power does not have thi...

AI summary The document contains a request for fuel costs as a percentage of expenditures for Canadian jurisdictions under the 2016-2018 DSM Plan. NS Power responded that it does not have this information.

CONFIDENTIAL (Attachments Only) 1 (d) For each of the five plans, please provide the annual capacity factor for each coal- or 2 gas-fired plant. 3 4 (e) For each of the five plans, please provide the annual projected variable cost of each...

AI summary The document contains a series of information requests from the Consumer Advocate (CA) to Nova Scotia Power Inc. (NSPI) regarding the 2016-2018 DSM Plan (NSUARB M06733). Requests include capacity factors, variable costs, renewable energy supply comparisons, and analyses of the Port Hawkesbury biomass plant and Lingan FGDs' cost impacts under different scenarios.

Fuel and Purchased Power, Thermal and Hydro O&M, Capital for new resources in the plan, DSM program administrator costs, sustaining capital (k$) Half Low Base CRP Mid/FGD cents/kWh CRP1-1-FGD CRP2-17-FGD No DSM Plan CRP Mid/FGD Low DSM Pla...

AI summary The text presents a table of fuel and purchased power costs, capital expenditures, and DSM program administrator costs over multiple years, showing variations between different scenarios such as 'No DSM Plan' and 'Low DSM Plan'. The data includes cents per kWh and percent changes compared to the 'No DSM Plan' scenario, highlighting the impact of demand-side management on costs.

Cost of Fuel Avoided for DSM Scenarios Avoided Fuel Cost ($000) 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 Solid Fuel $ 12,216 $ 20,103 $ 11,317 $ 1,383 $ 30,238 $ 27,516 $ (2,261) $ 31,007 $ 31,911 $ 36,137 $ 35...

AI summary The table presents the avoided fuel costs ($000) for various fuel types and overall totals from 2016 to 2029. It shows fluctuations in costs for solid fuel, natural gas/oil, and net imports, with renewables contributing significantly in 2022. This data is used to evaluate the cost of fuel avoided under different Demand Side Management (DSM) scenarios.

2016-2018 DSM Plan (NSUARB M06733) NSPI Responses to Multeese Information Requests 1 Request IR-15: 17 18 (d) Given that the FAM adjustment is calculated with reference to a Base Cost of Fuel 19 expressed in cents per Kwh, would fuel savin...

AI summary The NSPI responded to information requests regarding the FAM adjustment mechanism and DSM plan. It explained that the FAM adjustment is calculated using a base cost of fuel and that the IRP analysis was used to determine DSM levels. NSPI stated that increased DSM spending could lead to higher customer rates and bills in the near-term.

5 Amount ($K) Unit Cost ($/MWh) Relative Share Fixed Cost $829,119,139 $84.50 65% Fuel costs $448,026,861 $45.66 35% Total $1,277,146,000 $130.16 100% Load (MWh) 9,811,994 6

AI summary The text presents a breakdown of costs, showing fixed costs and fuel costs with their respective amounts, unit costs, and relative shares. Total costs amount to approximately $1.277 billion, with fixed costs making up 65% and fuel costs 35%.

1 Request IR-5: 9 FAM). No amounts for future commitments are included in the fuel expense as fuel is 10 expensed as consumed. NS Power makes application to the UARB for approval for 11 capital expenditures and they are included in rate ba...

AI summary NS Power explains that fuel and capital expenditures are expensed as consumed and included in the rate base upon meeting accounting asset definitions. Future commitments are not recovered in advance, and costs are included in revenue requirement once incurred. NS Power follows GAAP for accruing future obligations and references Section 9 of its Evidence for further details on E1 costs.

Request IR-11: Utilities, whether traditional for-profit generating utilities or the new not-for-profit energy conservation/energy efficiency utilities operate under regulatory oversight and using planning processes. In their nature, plann...

AI summary The text contrasts NSPI's use of the Fuel Adjustment Mechanism (FAM) for financial risk buffering with E1's use of a reserve fund, questioning whether these approaches equitably address utility financial responsibility. It highlights differences in regulatory mechanisms for managing cost overruns and operational uncertainties between traditional and energy efficiency utilities.

NON-CONFIDENTIAL (c) Is the FAM essentially a balancing account such that if NSPI has a cost overrun in this area in a particular year, NSPI can be eventually made whole by a rate adjustment to collect additional revenue from customers tha...

AI summary The Fuel Adjustment Mechanism (FAM) ensures customers pay actual fuel costs, not acting as a reserve fund. NSPI emphasizes FAM's audit process and distinction from non-fuel cost mechanisms. E1's reserve request is contrasted with FAM's design, which manages rate adjustments based on prudently incurred fuel costs, not operational reserves.

NON-CONFIDENTIAL 2 (c) Please refer to parts (a) and (b). 4 (d) The table below provides the 2015 FAM AA/BA Riders by class as approved by the

AI summary The text references a table providing 2015 FAM AA/BA Riders by class as approved by the regulatory body, with a note to refer to previous parts for more details.

5 UARB, in absolute and percentage terms. FAM Amounts as a percentage of Base Cost Rate Revenues in 2015 Rate Class Revenues at base cost rates FAM Amounts FAM Amounts as a percentage of Revenue FAM AA FAM BA Total FAM AA FAM BA Total Resi...

AI summary The table presents the Fuel Adjustment Mechanism (FAM) amounts as a percentage of base cost rate revenues across various rate classes in 2015. It highlights the distribution of FAM AA, FAM BA, and total FAM amounts relative to revenue for different customer segments.

NON-CONFIDENTIAL Project Year Application Matter No. Date Filed Exhibit No. Fuel Adjustment Mechanism (FAM) – Base Cost of Fuel 2011 2011 FAM Base Cost of Fuel M03285 August 16, 2010 N-10 2010 P-887(1) – Nova Scotia Power Inc. (NSPI) – Ann...

AI summary This table lists various Fuel Adjustment Mechanism (FAM) proceedings related to Nova Scotia Power Inc. (NSPI) from 2010 to 2015, including matter numbers, dates filed, and exhibit numbers associated with each proceeding.

ccount. NSPI candidly admitted it was unaware that $8.4 million in surplus existed in the hands of El which can be applied to next year's DSM Plan but, in any event, is for the benefit of ratepayers. [84] NSPI appeared to take the position...

AI summary NSPI admitted it was unaware of a surplus of $8.4 million held by EL, which could be used for next year's DSM Plan. The Board clarified that all of NSPI's costs, not just DSM costs, determine the need for a rate increase. Factors such as increased fuel costs, under-recovery under FAM, and amortization of the DSM 2015 program contribute to cost pressures, while offsets like the end of fixed costs recovery and the 2014 DSM surplus reduce them.

The Affordability of DSM in the Context of other Rate Pressures - 16. The Province's Electricity System Review engaged the general public and stakeholders about their views on key elements of our future electricity system and more than 130...

AI summary The Province's Electricity System Review gathered feedback from over 1300 Nova Scotians, highlighting ratepayer pressure. Evidence shows Nova Scotia has some of Canada's highest electricity rates. NSPI projects significant under-recovery from its fuel adjustment mechanism and expects higher base fuel costs. Additional costs from the Maritime Link and DSM amortization are also expected to impact rates.

10 DSM Included in Rate Impacts 11 12 During the hearing, NS Power vigorously rejected the concept that any monies were "in rates" 13 for DSM on the basis that the DSM rate rider was to be effectively removed from bills effective 14 Januar...

AI summary NS Power claims that DSM investments are not in rates, arguing that removing the DSM rate rider would not increase rates. However, the document highlights that DSM has historically been funded by ratepayers, with investments ranging from 2011 to 2014. The Board Chair challenges this claim, noting that funds were not reduced but merely diverted.

61 Transcript, June 18, 2015, Page 778, line 14 to Page 786, line 3. 1 5 The Chair: So how did the rate reduction occur? The rates haven't changed. 6 7 Mr. Blunden: The non-fuel costs didn't change. The rate rider came off the bill and 8 t...

AI summary The discussion centers on the rate reduction and the role of the DSM rate rider. Nova Scotia Power's non-fuel costs remained unchanged, but the rate rider for DSM was removed, leading to no rate increase despite rising fuel costs. The Chair notes that Nova Scotia Power opposed the legislative change that allowed the funds to be used for fuel costs.

(III) AFFORDABILITY - 59. All participants have spoken about affordability and what it means. The Industrial Group wishes to make it clear that it does not favour short-term affordability at the expense of long-term risks. The Industrial G...

AI summary The Industrial Group emphasizes balancing short-term and long-term affordability, advocating for a 10-20 year IRP horizon and regular reviews of DSM spending. They note NSPI's existing rate capacity for DSM and recommend future transparency and scenario modeling by E1 and NSPI.

he level of DSM programing was unaffordable. Nor does the evidence support the suggestion that the cost of the DSM program over the threeyear term would necessitate NSPI seeking in increase in rates. CONSISTENCY Consistency is an aspect of...

AI summary The affordability of DSM programs is debated, with evidence suggesting their cost over three years would not necessitate rate increases. Consistency in affordability aids ratepayer planning. NSPI predicts stable rates, offsetting fuel costs with fixed cost amortization. The Consumer Advocate argues considering other rate pressures is essential for assessing DSM affordability.

Exhibit E-1, EfficiencyOne Evidence, Page 21, Figure 3.1. 13 Transcript, June 19, Page 925, Lines 16-19. IRP periods in other jurisdictions is largely due to the increasing level of uncertainty the further out in time one tries to predict/...

AI summary The text discusses planning horizons for Integrated Resource Planning (IRP), critiquing NS Power's approach and referencing Synapse's report. It highlights Oregon's 20-year planning period with an end effects period, contrasting with Arizona's 15-year and Colorado's variable periods. Fuel costs and financial benefits for customers under the E1 DSM Plan are also addressed, noting a 19-year timeline for financial improvement.

& lt;sup>30 2016-2018 Demand Side Management Resource Plan (M06733), Transcript, June 19, 2015, pages. 901-903. 1  Estimated increase of $50 million in the base cost of fuel in 2016, primarily as a 2 result of the increase in COMFIT proje...

AI summary The document discusses the estimated increase in the base cost of fuel in 2016 due to COMFIT projects, a forecasted under-recovery under the FAM in 2015, and the amortization of 2015 DSM costs. It highlights the flexibility of DSM to adjust expenditure and avoid short-term rate impacts, with input from Mr. Blunden and Mr. Outhouse.

ccount. NSPI candidly admitted it was unaware that $8.4 million in surplus existed in the hands of El which can be applied to next year's DSM Plan but, in any event, is for the benefit of ratepayers. [84] NSPI appeared to take the position...

AI summary NSPI admitted it was unaware of a surplus of $8.4 million in the hands of EL, which could be applied to next year's DSM Plan for ratepayer benefit. The Board clarified that all of NSPI's costs, not just DSM costs, determine if a rate increase is needed. Factors like COMFIT program costs, FAM under-recovery, and DSM amortization contribute to cost pressures, but offsets include fixed cost recovery mechanism amortization and surplus funds.