Topic:"Prudency Reviews" in M12550

1 Table 8: Summary of Findings – Process Standardization & Cost Reduction Report Section Question Midgard Commentary 3.2 Did NSPI leverage pre-Phase 6 experience to standardize the Project's designs, streamline its processes, and hence red...

AI summary The report section evaluates whether NSPI leveraged pre-Phase 6 experience to standardize designs and reduce costs. While NSPI claims to have applied prior experience to improve execution consistency, the lack of formal lessons-learned reviews and quantitative metrics suggests efficiency gains were not empirically validated.

4 4.1.1 Conclusions – Delivery Model Justification - 5 NSPI fails to demonstrate that its internal resource model is more cost-effective than external alternatives. - 6 NSPI's indication that no formal comparative cost analysis was underta...

AI summary NSPI has not demonstrated that its internal resource model is more cost-effective than external alternatives. The lack of formal comparative cost analysis undermines the validation of its delivery model's efficiency as required by the CEJC. Qualitative justifications for internal resources are not supported by financial data or market benchmarks, raising concerns about the prudence of the overhead premium paid for internal labor.

3 5.4 Overall Project Prudence & Ratepayer Interest - 4 The following summarizes Midgard's conclusions from the review of the Project: - 5 1. Labour Hour Escalation and Scope Justification: The filed labour estimate of 1,939 hours per RTU...

AI summary Midgard's review of the Project highlights concerns with the labour estimate, noting insufficient evidence for the 1,939 hours per RTU. It recommends a 30% reduction in labour hours and enhanced reporting requirements. Material costs are deemed reasonable, and indirect cost allocation is considered prudent.

November 19, 2025 [[email protected]](mailto:[email protected]) Michael Willett Director, Regulatory Finance Nova Scotia Power Inc. PO Box 910 1223 Lower Water Street Halifax, NS B3J 3S8 Dear Mr. Willett: M12550 – To obta...

AI summary The Nova Scotia Energy Board has engaged Protech Engineering Inc., as a subcontractor to Midgard Consulting Inc., to conduct a cost reasonableness review of NS Power's RTU Replacements Program – Phase 6, which was submitted as part of the 2025 Annual Capital Expenditure Plan decision (M12012).

2025 M12550 NOVA SCOTIA ENERGY BOARD IN THE MATTER OF: The Public Utilities Act IN THE MATTER OF: An Application by Nova Scotia Power Incorporated to obtain a cost reasonableness review of NS Power – CI C0051815 - $5,959,515 – RTU Replacem...

AI summary This proceeding involves Nova Scotia Power Incorporated's application for a cost reasonableness review of the RTU Replacements Program – Phase 6, which is part of the 2025 Annual Capital Expenditure Plan decision (M12012).

1. 1. At page 11, Midgard states it assessed “whether the Project, as proposed, is justified, reasonable, and aligned with regulatory expectations for prudent utility investment”. Please explain what Midgard considers to be NSEB “regulator...

AI summary Midgard evaluated the Project's prudence and alignment with regulatory expectations, identifying a 33% variance in labour estimates. It recommended a 30% reduction in labour hours for cost reasonableness. Questions are raised about the impact of this reduction on prudent capital costs, the labour subtotal used, and a full recalculated total.

- Refer to M12550, Exhibit N-3, Midgard Evidence Report, (the "Report"), Page 24, Section 4.1.1 Conclusions – Delivery Model Justification, where Midgard concludes that NSPI failed to - demonstrate the cost-effectiveness of its use of inte...

AI summary Midgard's Report highlights that NSPI failed to demonstrate the cost-effectiveness of using internal resources over external ones and questions the prudence of the overhead premium for internal resources. The question asks whether Midgard has recommendations for NSPI regarding past failures and future actions.