Topic:"Incentive Structures" in M03413

1 Economic Analysis 2 - 3 NSPI has completed an economic analysis to determine the cost effect of this ownership - 4 structure on NSPI customers. The analysis compares the cost of this project under a PPA with - 5 the current proposal of N...

AI summary NSPI conducted an economic analysis comparing the cost of a project under a PPA versus its proposed ownership structure, concluding that the latter would result in lower costs for customers. The analysis used discounted cash flow and levelized cost models, showing a $4.9M NPV at P50 production and a lower levelized cost than the 2008 PPA. The ecoENERGY incentive's deadline for eligibility is noted as a potential barrier for future projects.

9. INCENTIVE - 9.1 Subject to the tenns and conditions ofthis Agreement, Canada shall pay an Incentive to the Proponent for the Eligible Production of the Project in accordance with At1icle 10 (Method of Payment) and Schedule A of this Agr...

AI summary The incentive structure outlines Canada's payment terms for project production, including a liability cap of $9,205,560 over 10 years, eligibility criteria tied to Point of Interconnection measurements, and a credit system for over/under production. Projects must be commissioned by March 31, 2011, and total government assistance cannot exceed 75% of capital costs.

10. METHOD OF PAYMENT - 10.1 Subject to terms and conditions of this Agreement, following receipt of a claim for payment ofthe Incentive for Eligible Production acceptable to the Minister, and in accordance with the requirements set out in...

AI summary The section outlines payment terms for incentives tied to eligible energy production. Payments require ministerial approval, quarterly submissions, and adherence to a 10-year eligibility window post-project commissioning. Incentives are set at $10 per MWh or $0.01 per kWh, with claims processed under Schedule B and Article 7 requirements.

11. PERFORMANCE - 11.1 The Minister will review the Expected Annual Production after the first eight full quarters of production from the Project. Notwithstanding the Article 28 (Amendments) of this Agreement, if the Project does not meet...

AI summary The Minister reviews project production after eight quarters, adjusting expected annual production if actual output falls below 90% of targets. If production meets or exceeds 90%, stated numbers in Schedule A are fixed. Otherwise, eligible production and incentive payments are revised accordingly.

Expected Annual Production in gigawatt bours: Equals 95 percent of best four consecutive quarters (365 days) Maximum Eligible Production over 10 Years in gigawatt hours: Equals Expected Annual Production divided by 365 days and multiplied...

AI summary The text outlines formulas for calculating expected annual production, maximum eligible production over 10 years, and corresponding production incentives. It defines metrics based on 95% of the best four consecutive quarters, annual averages, and a fixed rate of $10.00 per gigawatt-hour over a decade.

12. REPAYMENT OF CONTRIBUTION - 12.1 As per Schedule C, the Proponent shall report to the Minister the Cumulative Revenue, Cumulative Production and Net Cumulative Incentive Received from the Project on an annual basis determined as of eac...

AI summary The Proponent must annually report cumulative revenue, production, and incentive data to the Minister, calculate repayable amounts using ecoENERGY methodology, and repay excess incentives if the Current Unit Value exceeds the Standard Threshold Price. Repayment cannot exceed net cumulative incentives received.

EXPECTED ANNUAL PRODUCTION AND INCENTIVE PAYMENT Total Eligible Capacity of Project: 30MW Expected Annual Production (365 days): 91.98 GWblYeal' Maximum Eligible Production for 10 Years: Equals Expected Annual Production divided by 365 day...

AI summary The document outlines a 30MW project with an expected annual production of 91.98 GWb (likely gigawatt-hours). It calculates a 10-year maximum incentive payment of $9,205,560.00, with annual payments of $919,800.00 for 365-day years and $922,320.00 for 366-day years, based on production eligibility and a $10.00 per unit rate.

INVOICING OF PAYMENT DUE Claims for payment of the Eligible Production from the Project shall be submitted on a quarterly basis as stated in Paragraph 10.2 and shall include the following: An invoice from the Proponent to the Minister whic...

AI summary The document outlines requirements for submitting quarterly invoices for eligible production from a project, including detailed production data, proof of sales or consumption, and exclusion of taxes like GST and HST from reimbursement. Invoices must be submitted to the Minister by the Proponent.

Why do this project now? In 2008, NSP[ signed Power Purchase Agreements (PPA) for seven projects, a number of which were challenged by the eCCInomic climate for project financing. All PPA projects were required to register for the federal...

AI summary In 2008, NSP signed PPAs for seven projects, which relied on the federal ecoENERGY incentive program (paying $101/MWh for 10 years). This incentive was critical to securing favorable PPA pricing and remains a key benefit. Projects must be operational by March 31, 2011, to qualify, and NSPI confirms the schedule allows timely development.

Background NSPI intends to construct and seek approval of the Digby Wind Project on a schedule that should allow the energy to be delivered to NSPI customers no later than December 31, 2010. Similar to the Nuttby Mountain Wind Project, the...

AI summary NSPI seeks approval to construct the Digby Wind Project by December 31, 2010, to access ecoENERGY program funding and meet the 2013 Renewable Energy Standard target. The project faces risks if the Board rejects the Capital Work Order, and construction must proceed amid winter limitations. The federal ecoENERGY program provides $9.2M in benefits over a decade.

5.6 Premiums and Incentives Rates payable by NSPI for the purchase of Energy by NSPI pursuant to the PPA shall be as set forth in the PPA and, without linlitation: - (a) the Seller shall not be entitled to any remuneration which NSPT recei...

AI summary The section outlines NSPI's entitlement to premiums and incentives from the resale of energy under the PPA, excluding the Seller's recovery of specific expenses. NSPI retains full benefits from incentives related to emission reductions and renewable energy credits, with exceptions as specified in sections 7.1 (a), (c), and (d).

ARTICLE Al - THE WORK - 1.01 The CONTRACTOR shall perform the Work in accordance with the Contract including the supply all material, labour, supervision, tools, equipment and supplies necessary for the proper performance of all work neces...

AI summary The CONTRACTOR is obligated to construct and commission a wind farm at Gulliver's Cove, Nova Scotia, while the DEVELOPER must pay the Contract Price per Article A3. The DEVELOPER aims to meet Commercial Operation Date requirements under the PPA and Federal ecoENERGY funding obligations.

.10 Oil Temperature Gauges - .1 Operational Test - .1 Test each set point and reset point for all winding temperature gauges and record the results. - .2 Record discrepancies between the listed and actual winding temperature gauge settings.

AI summary The document outlines procedures for testing and recording the operational status of oil temperature gauges, specifically focusing on testing set and reset points and documenting discrepancies in winding temperature gauge settings.

.7 Current Transformers - .1 The manufacturer shall provide one (1) bushing transformer on each Recloser bushing, both load and line side. - .2 All bushing current transformers shall have 5A nominal secondary ratings. - .3 All bushing curr...

AI summary The document outlines specifications for current transformers, including requirements for secondary ratings, primary ratings, relaying accuracy, wiring, and connection ratios.

- .2 CSA Standards - .1 C156.1, Ceramic and Glass Station Post Insulators - .2 G164, Hot Dipped Galvanized or Irregularly Shaped Articles - .3 W59, Welded Steel Construction (metal-ark welding) - .3 NEMA Standards - .1 Std. SG-6, Power Swi...

AI summary This document outlines the standards and submittal requirements for electrical components, including CSA, NEMA, ANSI/IEEE, and ISO standards, as well as specifications for operation and maintenance data and manufacturer drawings for disconnect switches.

2.1 The overall assembly enclosure(s) shall provide protection from ingress of rodents, insects, and moisture; and the possibility of arcing faults within the enclosure. - 1.12.2 The material for all external sides of the enclosure and int...

AI summary The document outlines technical specifications for the assembly enclosures, including protection against environmental factors, material requirements, grounding provisions, environmental control, and fire suppression capabilities.

4 DOCUMENTATION 4.1 Manufacturers' Drawings - 4.1.1 The Pad Mounted Transformer assembly drawings submitted for review showing assembly, details, and layout showing anchor bolts, openings for cables, and all pertinent support structure loa...

AI summary This section outlines the requirements for manufacturers' drawings, specifically for Pad Mounted Transformer assemblies, including details on assembly, layout, anchor bolts, and component positioning.

- .8 Formwork: - .1 Forms: to CSA-A23.1, plywood and lumber, clean and free of loose knots, splits or metal. - .2 Form Ties: to CSA-A23.1, removable or snap-off metal ties, fixed or adjustable length. Form ties, tie wire, spacers or other...

AI summary The text outlines specifications for formwork and concrete mix, referencing various Canadian standards and testing methods. It details requirements for materials such as form ties, release agents, and curing compounds, as well as specifications for concrete mix proportions and air content.

& lt;sup>16 Transcript, page 197, line 18 – page 198, line 11. 1 renewable energy through avoided fuel costs of approximately $300,000-$500,000 per 2 month. 17 There was risk associated with this being lost for every month that constructio...

AI summary The text discusses the financial implications of a renewable energy project, including avoided fuel costs and risks due to potential construction delays. It also addresses NSPI's acquisition of the project and the inclusion of incentive payments in the EPC contract, with a focus on industry practices and evidence presented during the proceeding.

19 UARB IR-1, Attachment 1. 1 2 3 MR. BENNETT: I'm sure it's not the only examples because it's common practice in the industry to set up contracts that have incentives 4 5 and that have penalties. It's certainly a principle in our company...

AI summary The discussion revolves around the use of incentives and penalties in contracts by NSPI, which is considered a common industry practice to ensure quality and timely project completion. NSPI explains that incentives are used based on business management principles and that the inclusion of such provisions depends on the specific contract. An example is provided where an incentive led to early project completion and cost savings for customers.