Topic:"Fuel Cost Adjustment" in M12591

due to changes to the eligibility dates for Federal Funding which initially extended into the end of Q1 2026. Changes to the funding program resulted in cost eligibility ending at the end of Q1 2025.

AI summary The reason for variance is due to changes in the eligibility dates for Federal Funding, which initially extended into the end of Q1 2026 but were adjusted to end at the end of Q1 2025.

1. Motivation In its 2018-2019 Fuel Adjustment Mechanism ("FAM") Audit Report ("Audit Report"),1 the Nova Scotia Utility and Review Board's ("NSUARB", Board) auditor, Bates White, LLC ("Bates White" or the "Auditor"), noted certain finding...

AI summary The Nova Scotia Utility and Review Board's auditor identified issues with Nova Scotia Power's dispatch process, including suboptimal dispatch and the need for better tracking tools. NS Power disagreed with some conclusions but agreed to improve automation and system modeling. A dispatch study was commissioned by Concentric Energy Advisors to address these concerns and align with industry standards.

2. Objective/Purpose The scope of the Dispatch Study includes the items proposed by NS Power in its 2018-2019 FAM Audit Reply Evidence, additional items proposed by NS Power, items proposed by the Consumer 1 Audit of Nova Scotia Power, Inc...

AI summary The Dispatch Study's objective is to evaluate NS Power's Fuel Adjustment Mechanism (FAM) based on its 2018-2019 audit reply evidence and additional proposals. The study also references an audit report prepared by Bates White, LLC, and mentions Concentric Energy Advisors, Inc., a consulting firm specializing in the energy industry.

C0032664 NSEB IR-5 Attachment 1 Page 9 of 92 REDACTED (CONFIDENTIAL INFORMATION REMOVED) FINAL NS POWER DISPATCH STUDY Advocate witness John Wilson in his 2018-2019 FAM Audit Intervenor Evidence, and items proposed by Bates White in its 20...

AI summary The document outlines a request to commission a study on industry standards and tools for economic dispatch applicable to the NS Power System Operator, focusing on reducing discrepancies between actual and modeled dispatch and improving optimization.

C0032664 NSEB IR-5 Attachment 1 Page 14 of 92 REDACTED (CONFIDENTIAL INFORMATION REMOVED) FINAL NS POWER DISPATCH STUDY - O5: Natural gas and fuels markets do not follow the same dynamics and schedule of electricity markets and, as a resul...

AI summary The dispatch study discusses the challenges of aligning natural gas procurement with electricity market schedules, highlights the role of fuel switching at Tufts Cove, and explains how Wreck Cove and Tufts Cove will function as swing units as renewable energy grows. It also notes the use of PortOps® and PLEXOS® for economic dispatch and long-term planning.

2.1 Motivation In its 2018-2019 Fuel Adjustment Mechanism ("FAM") Audit Report ("Audit Report"),14 the Nova Scotia Utility and Review Board's ("NSUARB", Board) auditor, Bates White, LLC ("Bates White" or the "Auditor"), noted certain findi...

AI summary The Nova Scotia Utility and Review Board's auditor identified issues with Nova Scotia Power's dispatch process, including suboptimal dispatch and the need for better tracking tools. NS Power disagreed with these findings but agreed to improve its dispatch programs and tracking tools to increase automation. A dispatch study was commissioned to evaluate industry standards and best practices, with Concentric Energy Advisors, Inc. retained to perform the work.

2.2 Uniqueness of Nova Scotia's System Nova Scotia's system is quite unique in many ways and this uniqueness defines some of the challenges that give rise to this Dispatch Study. Some of the features that make the Nova Scotia system unique...

AI summary Nova Scotia's energy system is highlighted as unique due to specific features that influence the Dispatch Study. The uniqueness is underscored by references to an audit of the Fuel Adjustment Mechanism and the involvement of Concentric Energy Advisors, Inc.

2.3 Objective/Purpose This Report addresses the items proposed by NS Power in its 2018-2019 FAM Audit Reply Evidence, additional items proposed by NS Power as noted below, items proposed by the Consumer Advocate witness John Wilson in his...

AI summary This section outlines the objective of the report, which is to address various proposals related to the Fuel Adjustment Mechanism (FAM) audit. It includes requests for a study on economic dispatch standards, tools, and best practices for NS Power's system to address complexities and improve dispatch accuracy.

2.4 Approach The approach to the Dispatch Study used by Concentric is based on analysis and undertanding of the procedures, the flow of information and how decisions regarding dispatch are made (i.e., a "structural" approach). The informat...

AI summary Concentric's approach to the Dispatch Study focuses on analyzing the structural processes and information flow involved in dispatch decisions, rather than recreating NS Power's dispatch results. The study relies on interviews and documents provided by NS Power, including those reviewed by Bates White in the FAM Audit Report.

TUFTS COVE The Bates White Audit observed that the Tufts Cove Units continue to be committed and dispatched outside of PortOps® under certain conditions.24 As a result, Bates White recommended that NS Power should investigate options avail...

AI summary The Bates White Audit found that Tufts Cove Units are dispatched outside of PortOps® under certain conditions, leading to discrepancies between forecast budgets and actual supply. The audit recommends investigating PortOps® options to align dispatch with gas purchase decisions. The variance is attributed to market dynamics and the flexibility of Tufts Cove units, not software configuration issues.

C0032664 NSEB IR-5 Attachment 1 Page 26 of 92 REDACTED (CONFIDENTIAL INFORMATION REMOVED) FINAL NS POWER DISPATCH STUDY variances observed in Tufts Cove as forecast pricing may differ from actual which can affect consumption materially.

AI summary The document discusses variances observed in Tufts Cove, noting that forecast pricing may differ from actual pricing, which can significantly affect consumption levels.

During winter months, the use of bunker fuel oil to generate electricity at Tufts Cove can increase due to factors such as economics and/or pipeline pressure drops driven by increased gas demand. The availability (including scheduled maint...

AI summary During winter months, bunker fuel oil may be used at Tufts Cove for electricity generation due to factors like economics and pipeline pressure drops. NS Power considers the availability and cost of bunker fuel oil versus natural gas, along with pipeline maintenance schedules, in its optimization calculations for fuel dispatch.

3.4 Forecasting of Fuel Needs According to the Forecasting Methodology described in Appendix B of the FAM's POA ("Appendix B"), NS Power produces fuel forecasts required to set the Base Cost of Fuel a year or more in advance in an exercise...

AI summary NS Power uses PLEXOS® and PortOps® to forecast fuel needs, optimizing for least cost and transmission security. Forecasts are prepared annually and updated quarterly, with methodologies aligned to best practices. Both tools are industry-leading and not customized by NS Power.

C0032664 NSEB IR-5 Attachment 1 Page 33 of 92 REDACTED (CONFIDENTIAL INFORMATION REMOVED) FINAL NS POWER DISPATCH STUDY Another important factor in the gas purchase process is that gas purchases made at daily index prices must be made prio...

AI summary The document discusses the gas purchase process, highlighting that daily index priced gas must be purchased before the index price is known, while fixed price deals are known in advance. The index price is determined by a weighted average of fixed price deals, which are traded later in the day.

Figure 4: Daily Modeling Timeline Day Time (Atlantic) Activity Day (-1) 7:30AM PortOps® used to produce economically optimized system dispatch for following day (starting at midnight) based on information available as of 7:30AM Results pro...

AI summary This text describes the daily modeling timeline used for economically optimized system dispatch, focusing on the process of purchasing natural gas for Tufts Cove. Gas is procured at 10:15 a.m. based on expected dispatch, but actual dispatch may vary due to weather, outages, and power trades over the following 48 hours. Gas traders adjust the initial model output based on their experience.

C0032664 NSEB IR-5 Attachment 1 Page 44 of 92 REDACTED (CONFIDENTIAL INFORMATION REMOVED) FINAL NS POWER DISPATCH STUDY forecast precipitation, forecast temperature, freezing and melting conditions and expectations, and other operational r...

AI summary The document discusses the operational challenges faced by Wreck Cove due to unpredictable weather patterns in Nova Scotia, which impact water levels and facility operations. It also outlines how GHG emission costs are integrated into the energy optimization process through a shadow price mechanism used in dispatch planning.

a. Observations - O1: The Marketing Desk optimizes the dispatch schedule to solve for the economics of the dispatch of the facilities for energy and ancillary services that yield the smallest cost possible. The Control Center reassesses an...

AI summary The document outlines observations regarding the coordination between the Marketing Desk and the Control Center in optimizing dispatch schedules, addressing discrepancies in natural gas procurement timing, and the importance of fuel switching at Tufts Cove. It emphasizes the challenges in aligning dispatch schedules across different market timelines and the role of intermittent resources in affecting these differences.

b. Recommendations R7: Plan natural gas procurement based on the Day-Ahead market and allow the flexibility to accommodate a potential swing in usage to support real-time economic dispatch optimization (long or short). The allowable swing...

AI summary The recommendation suggests planning natural gas procurement based on the Day-Ahead market, allowing flexibility to adjust for potential usage swings. This flexibility should be informed by historical data and economic dispatch outputs, with future adjustments based on performance and cost considerations.

5.13.Load Management NS Power has customers on interruptible (i.e., non-firm) rates including Generation Replacement/Load Following ("GRLF"), Shore Power and Large Industrial Interuptible Rider ("LIIR")124. Load interruption for this group...

AI summary NS Power manages load interruption for customers on interruptible rates, including GRLF, Shore Power, and LIIR, solely through the system operator. The section references an audit of NS Power's Fuel Adjustment Mechanism for 2018-2019.

M10453 – Nova Scotia Power Inc. – 2018/2019 FAM Dispatch Study On February 11, 2022, NS Power filed the 2018-2019 FAM Dispatch Study. The Nova Scotia Utility and Review Board invited comments from stakeholders and reply comments from NS Po...

AI summary NS Power filed a 2018-2019 FAM Dispatch Study in February 2022, followed by an Action Plan in July 2022. The Board invited stakeholder comments, and the Consumer Advocate, Small Business Advocate, and others submitted feedback. Bates White's FAM Audit Report found NS Power's dispatch was suboptimal, prompting the Board to require a Dispatch Study by December 2021.

Background In the 2018-2019 Fuel Adjustment Mechanism ("FAM") Audit Report ("Audit Report"), the Nova Scotia Utility and Review Board's ("NSUARB" or "Board") and Nova Scotia Power ("NS Power" or the "Company") agreed to commission a Dispat...

AI summary The 2018-2019 Fuel Adjustment Mechanism Audit Report recommended that Nova Scotia Power invest in Automation and Optimization Tools to improve economic dispatch, particularly as the grid transitions to intermittent resources. The NSUARB agreed that these recommendations should be implemented as soon as possible and requested an estimation of the economic benefits of the proposed IT infrastructure investment.

Variations to the Analysis Table 2 also uses an incremental $5/MWh delta as an example of the cost of suboptimization, but the distribution of this price delta is also a stochastic process that is not explored in this Memorandum. This mean...

AI summary The text discusses the use of an incremental $5/MWh delta in Table 2 to illustrate the cost of suboptimization, noting that the distribution of this delta is a stochastic process not explored in the Memorandum. It highlights that when wind is unavailable, it may be replaced by fuel-oil, natural gas, or water generation, each with its own economic dynamics. Adding a layer of stochastic dynamics to the price delta is feasible but not elaborated.

CI C0032664 – Energy Control Centre – Optimization Tools (NSEB M12591) NSPI Responses to NSEB Information Requests 1 Request IR-6: 2 3 (a) Please explain the differences between the proposed optimization tools in the current 4 application...

AI summary NSPI explains that the Optimization Tools project and the Wind Integration Project serve different purposes and are not interconnected. The Optimization Tools focus on system dispatch and data reporting, while the Wind Integration Project addresses windfarm transactions and IPP settlements. They were kept separate to avoid interdependencies and ensure focused implementation.

REDACTED 1 Request IR-9: 4 Energy Control Centre? If a financial analysis has been prepared on the impact of 5 the new optimization tools, please provide it. 6 7 (b) Please explain whether additional recruitment is required for the new sol...

AI summary The document discusses a request for a financial analysis of new optimization tools at the Energy Control Centre and the recruitment of five Energy Optimization Analysts to support dispatch optimization. The response indicates that no financial analysis has been performed yet, as the project is part of essential development aligned with the 2018-2019 FAM Dispatch Study Report. The request also asks for quantification of expected benefits in terms of NPV cost savings.

CONFIDENTIAL (Attachment Only) 1 Request IR-19: 2 3 In "Reason for Variance", NS Power noted that 4 5 6 7 8 The increase of approximately $3,156,918 from the 2024 ACE Plan subsequent submittal estimate of $4,329,150 is due to changes to th...

AI summary The document outlines a request (IR-19) to NS Power regarding changes in federal funding eligibility for the 2024 ACE Plan, specifically related to the Electricity Predevelopment Program (EPP). The request asks for explanations on the program's nature, the source of the lost funding, reasons for the eligibility change, and the impact on the project.

CI C0032664 Energy Control Centre – Optimization Tools $7,486,068 Board staff issued Information Requests (IRs) about this matter on January 16, 2026, to which NS Power's responses were received on February 6, 2026. Although the original f...

AI summary This proceeding discusses NS Power's proposed capital expenditure of $7,486,068 for Energy Control Centre optimization tools, including software solutions for automation and stakeholder communication. The project was initially included in the 2024 Annual Capital Expenditure Plan but saw budget increases due to Federal funding changes. NS Power has redirected some funds to other projects and provided responses to Board staff's Information Requests.

Conclusion The Board recognizes that Concentric's quantification of the benefits of the new IT infrastructure involved assumptions about real-time wind output and its potential replacement by the next lowest variable-cost generation resour...

AI summary The Board accepts Concentric's quantification of benefits for new IT infrastructure, noting assumptions about real-time wind output and economic dispatch. It finds the project necessary and justifies the associated costs, approving $7,486,068 for NS Power. The project supports the Evergreen IRP objectives and 2030 renewable electricity targets.

due to changes to the eligibility dates for Federal Funding which initially extended into the end of Q1 2026. Changes to the funding program resulted in cost eligibility ending at the end of Q1 2025.” 1. Please explain the Electricity Pred...

AI summary The text discusses changes in federal funding eligibility for the Electricity Predevelopment Program (EPP), impacting project timelines and funding amounts for NS Power. It includes questions about the program's explanation, source of funding, reasons for eligibility changes, and project details such as task scope, software solutions, and consulting services.

re of these tasks remains unchanged, the increasing number and diversity of resources will increase dispatch complexity, resulting in increased dispatch deviations and the need for system adjustments. In response to multiple IRs, including...

AI summary NS Power is proposing optimization tools for the Energy Control Centre, which would address dispatch complexity and system adjustments due to increasing resource diversity. The Board has requested quantified benefits for these tools, but NS Power provided only a theoretical estimate from Concentric, noting it represents the likelihood of closing the gap between current and future dispatch methods.

Conclusion The Board recognizes that Concentric's quantification of the benefits of the new IT infrastructure involved assumptions about real-time wind output and its potential replacement by the next lowest variable-cost generation resour...

AI summary The Board accepts Concentric's quantification of the benefits of new IT infrastructure, noting its alignment with the 2018-2019 Fuel Adjustment Mechanism Audit Dispatch Study and support for the Evergreen IRP objectives and 2030 renewable electricity target. The Board approves $7,486,068 for the project, finding it necessary and justified.