Topic:"Prudency Review" in M12696

2.0 BACKGROUND In 2010, Emera and Nalcor (now Newfoundland & Labrador Hydro) announced the Term Sheet for development of the Lower Churchill Project Phase 1 and the Maritime Link. In 2013 NS Power applied to the Board for approval of const...

AI summary The Maritime Link project, developed by NSPML, was completed on time and on budget, with the NSEB approving its capital costs as prudent. The Board highlighted the project's significance as a renewable energy source and NSPML's effective project management despite challenges with the NS Block.

1 Q11. WHAT ARE YOUR OVERALL CONCLUSIONS? 2 A11. Good utility practice is critical to ensure that the bulk power system is able to generate and 3 deliver energy to customers and should be encouraged. NSPML should not be penalized 4 for pla...

AI summary NSPML qualifies for relief from the holdback mechanism as conditions for termination are met, with Nova Scotians receiving 140% of contractual energy volumes. The Maritime Link delivered $495MM in renewable energy, exceeding NSPML's costs. The Board's traditional oversight mechanisms are deemed sufficient for asset management and energy procurement.

13 Q13. DID THE BOARD PROVIDE A STATED PURPOSE FOR THE HOLDBACK 14 MECHANISM? 15 A13. Yes. In 2019, the Board noted that the holdback was put in place "to provide an incentive 16 to ensure that NSPML and NS Power achieved the promised bene...

AI summary The Board established the holdback mechanism in 2019 to incentivize NSPML and NS Power to deliver promised benefits of the Maritime Link before the NS Block. Subsequent 2022-2023 proceedings emphasized addressing imbalances between NSPML and ratepayers, who faced replacement energy costs due to poor deliveries, while addressing intergenerational equity concerns.

mage to transmission facilities in Newfoundland. Including make-up energy, April 2024 NS Block deliveries exceeded contractual requirements. 1 of the contractual annual amount of the NS Block with that figure essentially being 2 eliminated...

AI summary The text states that NS Block deliveries exceeded contractual requirements in April 2024, with the contractual annual amount effectively eliminated by June 2024. This operational performance supports terminating the holdback mechanism, though the Board acknowledges the need to account for planned/unplanned outages due to maintenance or severe weather, aligning with utility practices.

NON-CONFIDENTIAL 1 Acceleration Agreement. Although NSPML believes there were negative impacts on customers 2 during the pre-LIL commissioning period, they have also been materially mitigated by FLG II, 3 ~$30 million in holdback disallowa...

AI summary NSPML argues that negative impacts on customers during the pre-LIL commissioning period were mitigated by FLG II, holdback disallowances, and delivery of Make-up Energy. The Board's 2023 Decision in Matter 11009 rejected retroactive ratemaking for the Maritime Link and emphasized prudence in administering contractual terms between NSPML/NS Power and Nalcor, with FAM audits to review replacement energy costs.

NSPML (IG) IR-07 (a). NSPML (BW) IR-03, Attachment 1. NSPML (BW) IR-03, Attachment 1. NSPML Application, Attachment 1, page 6 lines 4 to 5. 1 owning utility, NSPML should not be held accountable for the operational decisions or 2 consequen...

AI summary The text discusses the responsibility of NSPML during outages, emphasizing that it is only accountable for its own operational decisions and not for outages beyond its control. Witness Powers suggests that the assessment of good utility practice should be limited to NSPML's own operations.

ny with Paul Chernick in rulemaking to revisit net energy metering (NEM) tariffs on behalf of the Small Business Utility Advocates. Rate design for NEM tariff. Method for analyzing NEM tariff program. California PUC Docket A.20-10-012, dir...

AI summary Expert testimony details regulatory proceedings involving rate design for net energy metering (NEM) tariffs, cost recovery analyses, and reasonableness reviews of infrastructure projects. Testimonies were provided on behalf of consumer advocates and organizations in Nova Scotia, California, and Colorado, focusing on utility rate cases and project cost justifications.

Request IR-1: - Reference: N-7, Evidence of Bates White, p. 8, lines 6-22. - (a) To paraphrase this summary, is it accurate to say that Bates White concludes that NSPML has clearly met its evidentiary burden to satisfy the "Reduction in Un...

AI summary The text requests clarification on Bates White's conclusion regarding NSPML meeting evidentiary thresholds for 'Reduction in Undelivered Volumes' but not 'Consistent Deliveries.' It also seeks objective criteria to reduce subjectivity in applying 'good utility practice' and confirms no recommendation to end the holdback. The focus is on regulatory scrutiny of NSPML's compliance and procedural fairness.

1 appropriate investments to mitigate the risk. 2 Mr. Wilson's evidence did not raise the issue of whether the original design of the 3 LIL included prudent engineering to address icing events. In the Board's decision 4 in the 2023 Holdbac...

AI summary The document discusses the prudence of NSPML's response to risks identified in 2021, referencing a previous Board decision (M11009) that rejected relitigating the original design of the LIL. Mr. Wilson does not dispute the original design's prudence but focuses on the response to the risk. He suggests that NSPML's argument may meet the Board's standard but acknowledges the Board could reach a different conclusion.

3 Q42. WHY IS THAT IMPORTANT? 4 A42. It is important because the existence of an outage is not evidence of imprudence. Electric 5 utilities routinely experience planned outages, forced outages, equipment failures, software 6 updates, inspe...

AI summary The response emphasizes that the existence of outages alone does not indicate imprudence by a utility. It highlights that utilities routinely experience various types of outages and that the key inquiry is whether the utility acted in accordance with prudent utility practice. The response also notes that the impact of the outages was minimal, as energy was still delivered to customers, and stresses that the focus should be on the quality of decisions and their impact, not just the existence of outages.

30 volumes affected. 1 2025 M12696 3 do you have any recommended objective criteria the Board could apply to 4 reduce subjectivity? 5 (c) Please confirm that you have not recommended that the Board grant 6 NSPML's request to end the holdba...

AI summary The text discusses a regulatory proceeding involving NSPML and Bates White, focusing on the timing and coordination of outages and maintenance work on the LIL and ML systems in September 2023. It requests clarification on whether the outages overlapped and whether ML maintenance completed before the LIL outage impacted capacity.

ather shall be determined based upon the consistency of the 25 practices, methods or acts when undertaken with the standard set forth in the 26 first two sentences of this definition at such time. 27 28 These definitions are consistent wit...

AI summary NSPML argues that downtime in NS Block deliveries below 90% in certain periods was due to good utility practice or exceptional circumstances. It references definitions from the Wholesale Market Rules and Regulations and the prudence standard applied by the Board to assess utility decisions.

7 3.3 Focus Should Remain on NSPML's Actions and Results for NS Customers 8 9 While NSPML submits that the evidence demonstrates good utility practice and 10 exceptional circumstances as discussed above, NSPML must also express concern ove...

AI summary NSPML argues that the focus should remain on its actions and results for NS customers, emphasizing its good utility practice and risk mitigation. It clarifies that it is not responsible for upstream assets or latent design deficiencies, and references the Board's previous decision (M12394) to support its position.

Delivered by E-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: M12696 – NSPML – Application to Review Holdback...

AI summary The Industrial Group opposes NSPML's request to terminate the Holdback mechanism, arguing that NSPML did not meet the required delivery thresholds during the Compliance Period and the Post-Compliance Period. The Group also disputes the application for relief and the claim for carrying costs at WACC due to the delay in filing the application.