Topic:"Prudency Review" in M12588

between estimated costs for projects identified for subsequent submittal in ACE Plans and the subsequent capital applications. The need for such information should be assessed on a case-by-case basis. [55] In the present case, the cost est...

AI summary The Board acknowledges a 11.5% increase in project costs compared to the 2025 ACE Plan, attributing it to delays. It notes that with over 75% of costs already incurred, the focus shifts from estimating future costs to reviewing the prudence of incurred costs. The prudence test, as established in a prior Fuel Adjustment Mechanism Audit, applies here.

3.2.2.1 Findings [65] The Board finds it entirely reasonable that the shifting business plans and commercial operation dates anticipated by Renewall would have posed challenges for NS Power's management of the project and increased costs....

AI summary The Board finds that NS Power's management of the Renewall project was reasonable despite delays, and accepts NS Power's evidence regarding increased costs due to shifting business plans. Renewall's claims about delays being caused by NS Power or third parties are deemed speculative. The Board also supports NS Power's actions in pausing the project to minimize rework and protect developed code.

Via Electronic Mail Crystal Henwood Regulatory Affairs Officer/Clerk Nova Scotia Energy Board 3rd Floor, 1601 Lower Water Street PO Box 1692, Unit "M" Halifax NS B3J 3S3 Dear Ms. Henwood: Re: M12588 - NSPI – CI C0053699 Renewable to Retail...

AI summary Renewal Energy Inc. (REI) submits that Nova Scotia Power Inc. (NSPI) has not adequately demonstrated the prudence of several cost components in its Renewable to Retail project, including project delays, administrative overhead, and IT workstreams, despite not opposing the recovery of legitimate costs.

ISSUES REI identifies the following issues for the Board's consideration: - 1. Whether NSPI has demonstrated the prudency of the costs claimed in the Application, including costs arising from project delays; - 2. Whether the Application co...

AI summary REI presents four key issues for the Board's consideration, including the prudency of NSPI's costs, compliance with CEJC, adequacy of cost recovery evidence, and sufficiency of the proposed reporting framework and approval conditions.

1) Delay Costs Appear Inflated and NSPI Has Not Shown They Were Prudently Incurred NSPI attributes approximately $1 million in total cost increases to ramping up resources a second time as a result of a Commercial Operation Date (" COD ")...

AI summary Nova Scotia Power Inc. (NSPI) claims $1 million in increased costs due to a COD change, citing increased AO and AFUDC. However, NSPI provides no detailed breakdown, cannot show original estimates due to a cyber incident, and has not attributed delays to specific parties. These costs are considered material, with further estimates of $460,000 and $500,000.

Prudence and Support for Delay Related Costs REI submits that NS Power did not provide a detailed breakdown of delay related cost increases by labour type or task, advised that original estimates could not be 4 M11874 Decision, page 5. 5 I...

AI summary REI argues that NS Power did not provide a detailed breakdown of delay-related cost increases, did not attribute responsibility for delays, and did not pause costs as recommended. REI recommends the Board reduce or disallow these costs due to lack of prudence, causation, and incrementality.

Confirmation of Cyber Incident Cost Segregation and RtR System Integrity REI submits that the absence of the original detailed ACE Plan estimate, which NS Power advises cannot be recovered due to the cyber incident, limits the Board's abil...

AI summary REI is concerned that the absence of original detailed ACE Plan estimates due to a 2025 cyber incident limits the Board's ability to assess prudence. REI requests confirmation that cyber incident costs were segregated from the RtR project and that the system's integrity remains intact. NS Power confirms that the cyber incident did not impact the project's scope or costs and that costs were segregated using a dedicated project code.

esses, including system testing, training, business readiness confirmation, and internal approvals prior to proceeding to go-live. NS Power anticipates following these same processes for this project. As outlined in REI IR-16 and REI IR-21...

AI summary NS Power is following established processes for project implementation, including collaboration with REI and LRS. Demonstrations, testing, and training have been conducted to ensure readiness. NS Power asserts that existing mechanisms address prudence, incrementality, and cost segregation, making additional certifications unnecessary.

between estimated costs for projects identified for subsequent submittal in ACE Plans and the subsequent capital applications. The need for such information should be assessed on a case-by-case basis. [55] In the present case, the cost est...

AI summary The document discusses the 11.5% cost increase for a project compared to the 2025 ACE Plan, noting that NS Power has adequately explained the increase due to delays. With over 75% of costs already incurred, the focus shifts from reasonableness of estimates to prudence of incurred costs, referencing the Fuel Adjustment Mechanism Audit proceeding (2025 NSEB 10).

3.2.2.1 Findings [65] The Board finds it entirely reasonable that the shifting business plans and commercial operation dates anticipated by Renewall would have posed challenges for NS Power's management of the project and increased costs....

AI summary The Board finds that Renewall's claims about delays and costs in the project are speculative and insufficient to challenge NS Power's incurred costs. NS Power's actions were reasonable in managing the project, and the delay in pausing the project was due to ongoing work. Renewall agreed to pause the project due to a deferred commercial operation date.