Topic:"Operating Expenses" in M12282

ded by NS Power on August 23, 2024[1](#page-68-0) in M12249, E1 2026 DSM Extension Application, Exhibit 8(i), E1 Response to Synapse, RIR-05, Attachment 1, June 25, 2025. which NS Power applied a 9% unforced capacity (UCAP) PRM adjustment;...

AI summary E1 responds to NS Power's avoided cost methodologies, using system-wide T&D costs for DSM calculations. E1 advocates for forward-looking T&D cost analysis per NSPM Principle 5, considering future electrification and infrastructure costs. NS Power's PRM adjustment and constrained-system costs are noted, though locational-specific DSM remains under development.

- decision making tool to approve or reject the DSM Plan as is the case with the approved screening test." 8 - This includes the following: - "E1 currently provides and intends to continue to provide the results from the Program Administra...

AI summary E1 proposes using the Benefit-Cost Analysis (BCA) as the primary decision-making tool for approving DSM Plans, while providing Program Administrator Cost (PAC) results for informational purposes. E1 argues that non-binding metrics like PAC and BCA at the measure/program level will inform portfolio development, which also considers criteria such as balanced investment and equitable access. The NSUARB retains discretion to evaluate DSM components beyond the BCA.

- assessment can include benefits to the utility in terms of added revenue, which is the fundamental benefit to the utility and its customers from added sales. - Under either of Option 1 or Option 2 above, E1 would need to continue to incl...

AI summary The document evaluates whether E1's Proposed BCA is the optimal response to criticism. It critiques the TRC's limitations in addressing NSPI customer interests and argues for a PAC-focused approach instead. Option 3 is suggested to align with Canadian peer utilities, while the Proposed BCA is deemed overly expansive and disconnected from utility/customer funding.

1 For conversion of electric resistance heating to heat pumps (energy efficiency): Proposed BCA (societal perspective) PAC (utility and its customers perspective) Benefits = NPV of avoided electric generation and Benefits: NPV of avoided e...

AI summary The document compares the societal benefits of converting electric resistance heating to heat pumps (avoided generation and transmission costs, health benefits, GHG reductions) with the costs (installation and program administration) from the utility and customer perspective. This analysis is part of a regulatory proceeding in Nova Scotia.

- decision making tool to approve or reject the DSM Plan as is the case with the approved screening test."[8](#page 1-9) - This includes the following: - "E1 currently provides and intends to continue to provide the results from the Progra...

AI summary E1 proposes using the BCA test for DSM Plan approval, committing to provide PAC test results and other data for informational purposes. It suggests non-binding metrics like PAC and BCA at measure/program levels will inform portfolio development, while the NSUARB retains discretion to consider non-BCA compliant components. E1 emphasizes balanced portfolio design and equitable sector allocation.

Response: The TRC test, as outlined in IR-2, suffers from a number of issues. First, the TRC test provides incomplete insight into the impact on a utility and its customers. It only looks at the aggregated impact on those parties, when com...

AI summary The response critiques the TRC test for aggregating impacts and ignoring subsidies, which can mask adverse effects on utilities and non-participating customers. It cites a Newfoundland board order and argues for the PAC measure as a more accurate assessment tool for utility and customer impacts.

3.3 Small Business Advocate [45] The Small Business Advocate agreed to the Consensus Agreement and recommends the Board adopt the proposed BCA test as amended by the Consensus Agreement. In closing submissions, the Small Business Advocate...

AI summary The Small Business Advocate agreed to the Consensus Agreement, recommending the Board adopt the amended BCA test. Concerns were raised about quantifying non-energy benefits like amenity and empowerment, with recommendations to set unquantified benefits to zero or adopt the PAC test instead. The Advocate emphasized the need for further work on quantifying non-energy benefits.

ficiency and conservation activities". However, the requirement that what is undertaken is "cost-effective" and done to try to "reduce costs for customers" is the same as it was before the amendments. [103] It is reasonable that the refere...

AI summary The document clarifies that 'cost-effective' under the Public Utilities Act refers to reducing customer costs, not utility costs. It emphasizes that the requirement for cost-effectiveness remains unchanged post-amendments, with references to sections 79I, 79H, and 79C. The NSUARB's 2020 decision focuses on customer costs, though the interpretation of 'costs for customers' beyond electricity costs is not explicitly addressed.

Public Utilities Act directs the screening assessment to be conducted at the portfolio level, it is likely that some measures and programs that may not be cost-effective on their own may be allowed. [140] As for the Consumer Advocate's cri...

AI summary The Public Utilities Act requires portfolio-level assessments for demand-side management, allowing some measures to be approved even if not individually cost-effective. The NSUARB emphasizes that statutory requirements override policy considerations, with s. 6(2) implying a hierarchy via 'ensure' vs. 'support' language. DSM cost-effectiveness must focus on utility costs, not broader impacts.

Request IR-5: - Refer to Table 3 on pages 10 and 11 of the Evidence of David Hill. - a. Please describe the basis for allocating 50% of transmission and distribution capacity to transmission and 50% to distribution. - b. What specific assu...

AI summary Request IR-5 includes three questions: allocating 50% transmission/distribution capacity, EFG's assumptions on program administration and direct incentive costs, and measure costs. It references Table 3 from David Hill's evidence.

Request IR-13: - Page 30 of 38 of E1's Evidence states: "The impact of changes in pipeline gas consumption are based on commodity prices, and do not reflect gas utility system impacts. However, presuming gas commodity prices are the larges...

AI summary E1's Evidence in Request IR-13 questions whether avoided gas costs in DSM include base energy and transportation charges, not just commodity prices. The BCA test is based on commodity prices as an approximation. The request is for confirmation if avoided costs include those other charges.

Request IR-22: - Page 8 of 18 of Mr. Hill's Evidence states: "For the gas system, only gas commodity costs were - considered. The gas utility system non-commodity impacts were not recommended for - quantification for the new jurisdictional...

AI summary The document requests clarification on the additional data required to quantify non-commodity gas system impacts, which were excluded from the jurisdictional test due to insufficient data on gas system costs.

Request IR-31: - Text Box 1: Summary of Key EFG Recommendations item 3) states that actual avoided capacity - cost stream should have a planning reserve margin adjustment. It also states that constrained - and unconstrained locations can b...

AI summary Request IR-31 seeks explanations on three aspects of E1's costing methodology: (a) avoided capacity adjustment and data sources, (b) constrained/unconstrained transmission/distribution locations influenced by E1 programs, and (c) basis for estimating transmission/distribution cost growth.

Request IR-36: - Page 20 describes the example in Table 5 as showing that the cost effectiveness of the 1,000 - heat pump replacements is influenced by which fuel is displaced. - a) Are the costs to E1 for heat pump incentives and programs...

AI summary The text examines the cost-effectiveness of 1,000 heat pump replacements, questioning whether E1's costs are limited to Financial Incentives and Program Administration, and how displaced fuel affects cost-effectiveness. It references Table 5 and seeks clarification on additional costs incurred by E1.

23 Request IR-15: - 24 Please provide a mathematical representation of the proposed BCA test, including each value 25 that would be summed as part of the "benefit" portion of the calculation, and each that would be 26 summed as part of the...

AI summary The document requests a mathematical representation of the proposed BCA test, detailing components of benefits and costs, including incentives to customers, energy efficiency industry participants, and utility administrative costs.

iciency test", suggesting he is focusing on the PAC test to achieve something other than "cost-effectiveness" or "benefit-cost" test. Indeed, in his oral evidence, Mr. Bowman emphasized that the Board can, and should, use the cost-effectiv...

AI summary Mr. Bowman argues that using the PAC test, rather than BCA, signals to E1 its obligations to NS Power customers, emphasizing conservation's role in IRP. He contends PAC is not optimal for cost-effectiveness but serves as a directional tool. Critics assert this is an inappropriate use of the cost-effectiveness test.

page 16-17. [ 59 ](#page-16-9) E-6, E1(SBA) RIR-19. [ 60 ](#page-16-11) E-14, Evidence of P. Bowman, page 13, lines 17-19. Mr. Bowman has been clear that he is not proposing a strict pass/fail application of the PAC, nor is he suggesting t...

AI summary Patrick Bowman argues that the Program Administrator Cost (PAC) should not be viewed as a restrictive test for Demand-Side Management (DSM) programs. He emphasizes that PAC complements secondary testing and aligns with the National Standard Practice Manual (NSPM) guidelines. Bowman highlights that PAC results in the 2023-2025 DSM plan were more favorable than the TRC test, and secondary testing helps inform decisions on DERs and program prioritization.

CONCLUSION The Industrial Group respectfully requests that the Board: - 1. Direct E1 to use the PAC as its primary test for further DSM Plan applications, and a modified version of the PAC in relation to the strategic electrification progr...

AI summary The Industrial Group requests the Board to direct E1 to use the Program Administrator Cost (PAC) as the primary test for DSM Plan applications, apply primary testing at multiple levels, confirm secondary testing, modify the BCA test if accepted, and reject a 2% social discount rate for cost-effectiveness evaluations.

CONCLUSION In conclusion Eastward respectfully requests that the Board: - 1. make a preliminary and final order that Eastward be added as a full member of the DSMAG in accordance with the Board's general supervision of E1 pursuant to secti...

AI summary Eastward requests the Board to add it as a DSMAG member, prioritize hybrid heating in E1's DSM plan, use marginal emissions in modelling, guide benefit-cost thresholds, assess natural gas reliability impacts, confirm ancillary costs from Nova Scotia Power, adjust electrification values, balance legislative requirements in BCA tests, and consider EFG's sustainable development emphasis.

ge-2-5)ages 10 and 11 of Dr. Hill's evidence, Appendix A to Exhibit E-1, lines 7-10; see also page 12, lines 4-6. 4 [P](#page-2-7)age 14 of Dr. Hill's evidence, Appendix A to Exhibit E-1. - 4 - 5 E1's rebuttal evidence critiques the eviden...

AI summary EfficiencyOne (E1) submits rebuttal evidence addressing critiques from multiple parties, including Patrick Bowman (Industrial Group), Courtney Lane (Synapse), Melissa Whitten (Daymark Energy Advisors), and others. E1 defends its BCA test, critiques the PAC Test, and responds to arguments about proxy values, non-energy benefits, demand-side management, and discount rate usage. The rebuttal also engages with evidence from the Consumer Advocate, Small Business Advocate, and Eastward Energy.

31 v. Industrial Group 32 33 The Industrial Group filed evidence from Patrick Bowman of Bowman Economic Consulting Inc. 34 In his evidence, Mr. Bowman provided the opinion that the proposed BCA test is "excessively 35 expansive as a primar...

AI summary The Industrial Group submitted evidence from Patrick Bowman, criticizing the proposed BCA test as overly expansive and misaligned with utility and customer interests. Bowman recommended adopting the PAC Test instead, emphasizing the inclusion of beneficial electrification benefits, such as revenue gains for utilities.

26 [201] … The word "expenditure" is not expressly qualified by any language in 27 the PUA which would limit its meaning to expenditures net of third-party funding. Reading 28 in such a qualification might have been justified under histori...

AI summary The text discusses the interpretation of 'expenditure' under the Public Utilities Act (PUA), arguing that the Board's role extends beyond economic regulation to consider broader impacts. It references legal precedents like Nova Scotia Power Incorporated (Re) and Nova Scotia (Attorney General) v. Nova Scotia (Utility and Review Board) , and notes amendments to s. 35(2) of the PUA effective April 1, 2025, requiring alignment with the Energy Act .

ii. PAC Does Reflect GHG Impacts The Industrial Group also refers to Appendix A to NSPI's submissions, where it sets out what NSPI states is a side-by-side comparison of the Program Administrator Cost (" PAC ") test, the TRC test, and E1's...

AI summary The Industrial Group argues that the Program Administrator Cost (PAC) test accurately reflects GHG impacts, countering claims in Appendix A of NSPI's submissions. They reference Exhibit E-33's Venn Diagram, which shows 'Generation Energy' and 'Society Factors' include GHG charges and social costs, respectively, confirming GHG impacts are accounted for in PAC.

Response to E1 Unsurprisingly, E1 takes a vastly different approach to statutory interpretation which has largely been addressed in the Industrial Group's initial submissions. Without repeating those, the Industrial Group will address some...

AI summary The Industrial Group addresses E1's differing statutory interpretation approach, focusing on critiques of Mr. Bowman's endorsement of PAC and DSM application review methods. References include prior submissions, diagrams, and cross-examination testimony confirming GHG inclusion in social cost of carbon calculations.

i. PAC is Not "Too Narrow" and Suite of Tests is not "Cumbersome" and "Complex" E1 claims the PAC test "is too narrow to serve as the main assessment for portfolio-level decisionmaking["](#page-2-0) 5 . The Industrial Group emphasizes that...

AI summary E1 argues the PAC test is too narrow and the proposed tests are complex, while the Industrial Group counters that PAC is foundational and targeted. E1 focuses on environmental goals, whereas PUA mandates cost reduction for NSPI customers. The combination of tests proposed by Mr. Bowman is deemed balanced and not overly burdensome.

Conclusion The Industrial Group maintains its position that the legislation, as currently drafted, does not allow for a broad societal test to be used for primary cost-effectiveness testing of DSM, and that the PAC should be used as the pr...

AI summary The Industrial Group argues that current legislation does not permit a broad societal test for DSM cost-effectiveness, advocating for PAC as the primary test. Mr. Bowman's proposed tests are deemed manageable for E1 and should guide the DSM Plan application. The submission is signed by Nancy G. Rubin and Brianne Rudderham, with a carbon copy to participants.

3.3 Small Business Advocate [45] The Small Business Advocate agreed to the Consensus Agreement and recommends the Board adopt the proposed BCA test as amended by the Consensus Agreement. In closing submissions, the Small Business Advocate...

AI summary The Small Business Advocate agreed to the Consensus Agreement, recommending the Board adopt the amended BCA test. Concerns were raised about quantifying non-energy benefits like amenity and empowerment, with suggestions to set unquantified benefits to zero or adopt the PAC test instead. The Advocate emphasized the need for further analysis on non-energy benefits.

ficiency and conservation activities". However, the requirement that what is undertaken is "cost-effective" and done to try to "reduce costs for customers" is the same as it was before the amendments. [103] It is reasonable that the refere...

AI summary The document discusses the interpretation of 'cost-effective' under the Public Utilities Act, emphasizing that customer costs primarily refer to utility costs. It links sections 79I, 79H, and 79C to demand-side management requirements, noting that the NSUARB's 2020 decision did not address broader interpretations of customer costs beyond utility-related expenses.