Topic:"Program Evaluation" in M11990

3 Forecasting Methodology 4 - 5 While acknowledging NS Power's position that the changes to forecast methodology are in - 6 alignment with the Board approved methodology from the 2016 WACC Decision, the CA opines - 7 that the adjustments (...

AI summary The CA acknowledges NSP's alignment with the 2016 WACC Decision but raises concerns about adjustments (Bloomberg and CORRA), suggesting a potential review of the methodology in future proceedings.

Findings The Board previously noted in matter M11563 that the difference between using the Bloomberg forecast and the approved forecasting method for short-term interest rates was negligible. Using external data could increase efficiency a...

AI summary The Board evaluates NS Power's use of Bloomberg forecasts for short-term interest rates, finding no significant accuracy advantage over other methods. It directs NS Power to use a 4.86% rate for WACC/AFUDC calculations and mandates a methodology review by 2026. The Board also requires compliance filings and ongoing updates on credit rating changes affecting borrowing costs.

ORDER On November 28, 2025, Nova Scotia Power Inc. (NS Power) filed an application requesting approval of its Weighted Average Cost of Capital (WACC) and Allowance for Funds Used During Construction (AFUDC) rates for 2025 rate of 6.66% for...

AI summary Nova Scotia Power Inc. (NS Power) applied for approval of its 2025 WACC/AFUDC rates at 6.66% (initial) and 6.65% (revised). The Board approved the 6.65% rate effective April 1, 2025, and imposed requirements for annual filings, interest rate sourcing, methodology reviews, and credit rating notifications.

1. Forecasting Methodology NS Power indicates in its Application that its forecasting methodology is consistent with the methodology "used in the past General Rate Application (GRA) and WACC/AFUDC Application.["](#page-1-0) 3 However, in t...

AI summary NS Power's forecasting methodology for short-term debt rates uses Bloomberg and CORRA, differing from prior approaches that relied on Canadian Banks and CDOR. The Consumer Advocate questions whether the 2016 WACC Decision's methodology remains applicable, citing discrepancies in calculated debt rates (5.19% vs. quarterly rates of 3.88%-4.47%). NS Power defends its approach as consistent with prior approvals but acknowledges methodological changes.

Findings The Board previously noted in matter M11563 that the difference between using the Bloomberg forecast and the approved forecasting method for short-term interest rates was negligible. Using external data could increase efficiency a...

AI summary The Board acknowledges the negligible difference between Bloomberg and approved forecasting methods for short-term interest rates but directs NSP to use 4.86% for WACC/AFUDC calculations. NSP must continue submitting forecasts via the Board-approved method and file a compliance filing by March 2025. A broader methodology review is required for the 2026 application, with potential discussions on forecasting alternatives and calculation approaches.