N-1Report
11 passages
M05002, NSUARB-NSPI P 878, NSUARB Order, August 1, 2003. DATE FILED: June 27, 2025 Page 3 of 20 (Multeese) in its SRMC memorandum dated August 27, 2010. The changes were to include the revenue adjustment mechanisms of the Demand Side Manag...
AI summary The document outlines a series of regulatory actions and decisions by the Nova Scotia Energy Board (NSEB) regarding the Short Run Marginal Cost (SRMC) test, including the inclusion of revenue adjustment mechanisms, the exclusion of specific rates, and the analysis of price elasticities. NS Power has been directed to continue monitoring and reporting on SRMC tests and to ensure that models reflect current consumer behavior.
3.0 RELATIONSHIP BETWEEN AVERAGE COST BASED RATES AND ACTUAL SHORT RUN MARGINAL COSTS 2 1 SRMC test results are determined by comparing appropriately modified average unit revenues for each rate class to actual marginal costs, adjusted for...
AI summary This section discusses the relationship between average cost-based rates and actual short-run marginal costs, highlighting differences caused by timing discrepancies in regulatory ratemaking and fluctuations in fuel costs. Rate changes are often based on forecasts rather than actual costs, and multi-year rate plans help smooth rate changes over time, leading to variations between customer payments and actual service costs.
21 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 % Change in 2024 Total System Requirement (GWh) Net of LRT/ELIADC 9,968 10,102 9,837 9,970 10,252 10,342 9,884 9,940 10,178 10,469 10,561 0.9% versus Customers Average MC adj for Li...
AI summary The table presents data on total system requirements, average marginal costs, unit revenues, and variances between these metrics from 2014 to 2024. It highlights changes in fuel costs, system requirements, and the variance of unit revenues from marginal costs over the years.
3.1 Analysis of Variance between Average Unit Revenue and Average Marginal Cost As discussed above, there are reasons why marginal generation unit costs are more volatile than unit revenues. There are also reasons why unit revenues tend to...
AI summary This section discusses the variance between average unit revenue and average marginal cost, noting that unit revenues typically exceed unit marginal generation costs. Figure 3 expands on this comparison by breaking down unit revenues into fuel- and non-fuel related components, particularly during the period when the Fuel Adjustment Mechanism (FAM) has been in effect.
Figure 4. Long-term trend in differential between Marginal Costs and Unit Revenues broken down by fuel and non-fuel components. 2014 2015 2015 2017 2010 2010 2020 2024 2022 2022 2024 11 Years 2014 2015 2016 2017 2018 2019 2020 2021 2022 20...
AI summary Figure 4 shows the long-term trend in the differential between marginal costs and unit revenues, broken down by fuel and non-fuel components. The data highlights fluctuations over time, with significant year-over-year changes in both average marginal costs adjusted for line losses and unit revenues, including FAM-related costs and fixed costs.
e also significantly lower than unit revenues in each calendar year. This is because the unit revenues are reflective of total costs of service of the four DATE FILED: June 27, 2025 Page 12 of 20 functional areas of generation, transmissio...
AI summary The text discusses the relationship between marginal generation costs and unit revenues, noting that marginal costs typically do not exceed unit revenues due to the inclusion of fixed costs. However, in 2022, marginal costs surged above average system fuel costs due to geopolitical events. The average system marginal cost increased by 14.7% from 2023 to 2024, primarily due to changes in the generation mix and increased load.
DATE FILED: June 27, 2025 Page 13 of 20 1 3.3 Base Cost Rates 2 3 The 2024 base cost rates were increased in the 2023-2024 GRA proceeding subject to an overall 4 cap of 6.9 percent. The Residential rates increased by 6.8 percent, the Gener...
AI summary The document outlines the 2024 base cost rate increases, including residential, general, industrial, municipal, and unmetered rates. It also discusses the reinstatement of the DSM Cost Recovery Rider (DCRR) in 2023 and the SRMC test results, showing that all tested rate classes passed the tests. Adjustments related to FAM AA and FAM BA were made to class revenues for the SRMC test.
1 Figure 5: Actual and Test year Unit Variable Generation Costs 2024 Actual 2024 Test Year FAM Classes Unit Variable Generation fuel cost Capped Base cost of fuel Uncapped Base cost of fuel Net Fuel and Purchased Power (Millions) $958.4 $7...
AI summary Figure 5 compares the actual and test year unit variable generation costs for 2024, highlighting differences in fuel costs and sales volumes. The data shows a significant percentage change in unit variable generation costs between actual and test year values, indicating variations in fuel cost assumptions.
16-1"> The TVP tariffs, were approved for use to a limited number of customers on June 22, 2021, as a pilot program beginning November 1, 2021. The SRMC test for these classes was conducted for Multi-Unit Residential Building Time-Of -Use...
AI summary The document discusses the SRMC test for various tariff classes, including the approval of TVP tariffs as a pilot program and the passing of the SRMC test for the GRLF tariff in 2024. It explains how the SRMC test is conducted for time-varying pricing rates and highlights the differences between above-the-line and below-the-line classes.
CHANGES IN DEMAND ELASTICITIES DUE TO RESTRUCTURING As restructuring proceeds, more and more customers will purchase unbundled services. These will include differentiated products such as different levels of service quality and ancillary s...
AI summary As restructuring in the electricity industry progresses, more customers will have access to unbundled services and new market participants, which may affect the price elasticity of demand and supply. In the short run, consumer behavior may not change significantly, but long-term restructuring could lead to a more competitive market with greater consumer sensitivity to price changes.
Changes in Supply Elasticities Due to Restructuring Given that FERC open transmission access policies and the creation of an ISO will reduce transmission access constraints, supply elasticities should be higher in the long run. The incenti...
AI summary Restructuring and the introduction of ISOs are expected to increase supply elasticities in the long run by making generation more market-driven. However, during the transition period, the CTC may reduce supply elasticities for utility-owned plants. In the long term, without cost recovery mechanisms, uncompetitive units may be retired. 'Must-run' units will remain operational regardless of market prices due to performance-based rates.
N-2Report - Refiled
9 passages
(Multeese) in its SRMC memorandum dated August 27, 2010. The changes were to include the revenue adjustment mechanisms of the Demand Side Management (DSM) Cost Recovery Rider (DCRR) and the Fuel Adjustment Mechanism Actual Adjustment (FAM...
AI summary This text discusses the evolution and adjustments to the Short Run Marginal Cost (SRMC) test over time, including the inclusion of revenue adjustment mechanisms like the DSM Cost Recovery Rider (DCRR), Fuel Adjustment Mechanism Actual Adjustment (FAM AA), and Fuel Adjustment Mechanism Balance Adjustment (FAM BA). The Nova Scotia Energy Board (NSEB) has provided various directions and feedback to NS Power regarding the SRMC test, including the exclusion of certain rates and the need for updated price elasticities.
Note 2. There were six new TVP Tariffs, which came into effect in June 22, 2021 (M09777) by way of a pilot program with limited enrolment targets. The SRMC test did not include these Tariffs in the 2021 results due to the incomplete annual...
AI summary Note 2 discusses six new TVP Tariffs implemented in June 2021 as part of a pilot program with limited enrolment targets. These Tariffs were not included in the 2021 SRMC test results due to incomplete annual consumption records. Note 3 states that SRMC test results are based on unit revenue with FAM adjustments as shown in Figure 1.2 of Appendix B. The SRMC results in Figure 1 should be reviewed in light of the SRMC test drivers, which show volatility in the differential between average unit revenues and marginal costs.
Figure 2. Trends in annual Energy Requirement, Unit Revenues and Marginal Costs 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 % Change in 2024 Total System Requirement (GWh) Net of LRT/ELIADC 9,968 10,102 9,837 9,970 10,252 10,342...
AI summary Figure 2 presents trends in annual energy requirement, unit revenues, and marginal costs from 2014 to 2024. It shows fluctuations in average marginal costs, unit revenues, and variance between them over time, with notable increases in some years and a decrease in others. The data also reflects changes in fuel costs and their impact on the system.
3.1 Analysis of Variance between Average Unit Revenue and Average Marginal Cost As discussed above, there are reasons why marginal generation unit costs are more volatile than unit revenues. There are also reasons why unit revenues tend to...
AI summary The section discusses the variance between average unit revenue and average marginal cost, highlighting the volatility of marginal generation unit costs compared to unit revenues. It mentions Figure 3, which expands the comparison between unit marginal costs and unit revenues by breaking out fuel- and non-fuel related components during the period when the FAM has been in effect.
reflective of total costs of service of the four functional areas of generation, transmission, distribution, and retail. The marginal generation costs DATE REFILED: August 15, 2025 Page 12 of 20 used by the Company in the SRMC test reflect...
AI summary The text discusses the marginal generation costs used by the Company in the SRMC test, which include only fuel and generation, operation, and maintenance costs, not fixed costs. It explains how the marginal cost relationship changed in 2022 due to geopolitical events and reverted in 2023. The average system marginal cost increased by 14.7% from 2023 to 2024 due to changes in the generation mix and increased load.
DATE REFILED: August 15, 2025 Page 13 of 20 1 3.3 Base Cost Rates 2 3 The 2024 base cost rates were increased in the 2023-2024 GRA proceeding subject to an overall 4 cap of 6.9 percent. The Residential rates increased by 6.8 percent, the G...
AI summary The document discusses base cost rate increases from 2023-2024, including various rate class adjustments, and references the reinstatement of the DSM Cost Recovery Rider (DCRR) in 2023. It also outlines the results of the 2024 SRMC tests, which all rate classes passed, and discusses variable generation costs in 2024.
1 Figure 5: Actual and Test year Unit Variable Generation Costs 2024 Actual 2024 Test Year FAM Classes Unit Variable Generation fuel cost Capped Base cost of fuel Uncapped Base cost of fuel Net Fuel and Purchased Power (Millions) $958.4 $7...
AI summary Figure 5 compares actual and test year unit variable generation costs in 2024, showing differences in fuel costs, base costs, and unit variable costs in cents per kWh. The data highlights variations between actual and test year figures, including a 20.9% and 7.2% change in unit variable generation costs.
Multi-Unit Residential Building Time-Of -Use (MURB TOU) available to General Class was approved effective November 1, 2024. Due to the partial annual historic usage in 2024 being only available for the MURB Tariff, the Company did not cond...
AI summary The document discusses the SRMC test results for various rate classes, including the approval of the MURB TOU rate and the performance of the GRLF tariff. It highlights that the SRMC test for the MURB TOU rate was not conducted due to partial annual usage data, and the GRLF tariff passed the SRMC test in 2024 with a unit revenue 16% above marginal cost.
Figure 1.2 2024 Base Cost Rate Revenues with DSM and 2024 FAM Amounts (Based o n 2024 ave rage annual ma arginal cost of 1 8.122 cents /KVVN) Short Ru n Marginal Co Ineff icient l Jsage E stimate l Sales rice Elasticity-of- Demand Range nt...
AI summary Figure 1.2 presents 2024 base cost rate revenues with DSM and FAM amounts, showing various residential rate classes, line losses, unit revenues, marginal costs, and usage estimates. It highlights significant variances in revenue and usage across different time-of-use and demand categories.