101354Board Decision
45 passages
IN THE MATTER OF THE PUBLIC UTILITIES ACT - and - IN THE MATTER OF A GENERAL RATE APPLICATION by NOVA SCOTIA POWER INCORPORATED for approval of certain revisions to its Rates, Charges and Regulations BEFORE: Stephen T. McGrath, K.C., Chair...
AI summary Nova Scotia Power Inc. seeks approval for rate revisions under the Public Utilities Act. The proceeding involves intervenors including the Consumer Advocate, Small Business Advocate, and other groups. The Board members reviewing the application include Stephen T. McGrath, Roland A. Deveau, and Steven M. Murphy.
1.0 SUMMARY - [1] The Nova Scotia Energy Board is keenly aware that electricity rates are already challenging for many customers, and any rate increase will be difficult, especially for those with low or fixed incomes. However, the Board d...
AI summary The Nova Scotia Energy Board acknowledges the difficulty of electricity rate increases for low-income customers but lacks authority to set special rates under the Public Utilities Act. NS Power filed a GRA proposing 1.8%-4.1% rate increases for 2026-2027, with residential rates rising more sharply. The Board emphasizes its role in recovering prudently incurred costs, while NS Power claims the application resulted from collaborative negotiations with customer representatives.
2.0 BOARD'S AUTHORITY UNDER THE PUBLIC UTILITIES ACT [25] The Board is an administrative body, established under the Energy and Regulatory Boards Act , SNS 2024, c 2, Schedule A. It must follow legislative requirements and administrative l...
AI summary The Nova Scotia Utility and Review Board (NSUARB) derives its authority from the Public Utilities Act (PUA) and the Energy and Regulatory Boards Act. Its powers are statutory, not inherent, and must align with legislative intent. Judicial review by the Nova Scotia Court of Appeal and Supreme Court of Nova Scotia is possible. The NSUARB's jurisdiction is limited to express statutory grants or necessary implication, as outlined in Re Nova Scotia Power Incorporated and ATCO Gas & Pipelines Ltd. v. Alberta (Energy & Utilities Board) .
Powers and duties - 5 (1) The Energy Board has those functions, powers and duties that are conferred or imposed upon it - (a) by this Act; - (b) by the More Access to Energy Act ; - (c) respecting the production, transmission, delivery or...
AI summary The Energy Board's powers and duties are defined by multiple acts, including the More Access to Energy Act and Public Utilities Act, and may be expanded by the Governor in Council through regulations. The Governor in Council can also assign powers to the Energy Board, discontinuing existing boards during the assignment period.
Approving and fixing rates, regulatory powers - 6 (1) In approving or fixing just and reasonable rates, tolls, charges or tariffs pursuant to this Act or any other enactment, the Energy Board may adopt any method or technique that it consi...
AI summary The Energy Board is authorized to approve rates and tariffs using appropriate methods, considering factors like competition, sustainability, and reliable energy supply. It regulates entities including the IESO, franchise holders, and the Halifax Water district energy project. Regulations may exclude entities from its jurisdiction, and approved rates must be publicly disclosed.
Jurisdiction of Board - 30 (1) A Board has exclusive jurisdiction in all cases and in respect of all matters in which jurisdiction is conferred on the Board. - (2) The Boards, as to all matters within their jurisdiction pursuant to this Ac...
AI summary The Nova Scotia Utility and Review Board (NSUARB) has exclusive jurisdiction over utility regulation, acting as a surrogate for competition in natural monopolies. Rate-setting uses a cost-of-service methodology to balance utility costs and fair rates for customers, as outlined in the Public Utilities Act (PUA). Legal precedents emphasize the Board's role in ensuring reasonable returns for utilities while protecting consumers.
Amount utility entitled to earn annually - 45 (1) Every public utility shall be entitled to earn annually such return as the Board deems just and reasonable on the rate base as fixed and determined by the Board for each type or kind of ser...
AI summary The Nova Scotia Utility and Review Board (NSUARB) determines annual returns for utilities, deducting required amortization reserves. The Public Utilities Act (PUA) mandates 'just and reasonable' returns, with the Board's discretion tempered by statutory purposes. Legal precedents, including the 2019 NSCA 66 case, emphasize the Board's public interest obligations and statutory limits.
CRITERIA OF A SOUND RATE STRUCTURE - 1. The related, "practical" attributes of simplicity, understandability, public acceptability, and feasibility of application. - 2. Freedom from controversies as to proper interpretation. - 3. Effective...
AI summary The document outlines eight criteria for a sound rate structure, emphasizing simplicity, revenue stability, fairness, and efficiency. It references James Bonbright's principles and legal precedents, including the Public Utilities Act and statutory interpretation requirements. The criteria are used to assess current applications under Nova Scotia regulatory frameworks.
3.2.2.2 Fuel Manual and Hedging Plan [64] On page 29 of its application, NS Power stated: NS Power's currently approved version of the Confidential Fuel Manual, which sets out the requirements for fuel and purchased power procurement, is i...
AI summary NS Power submitted administrative updates to its Fuel Manual and Hedging Plan, including generic references to the Hedging Plan and minor language changes. The Board typically does not approve these documents but accepts them for informational purposes, with changes intended to extend beyond the prior rate stability period.
ently justified the Company's departure from industry standards and asks that the Board critically consider reductions to NS Power's staffing request to eliminate any unnecessary burden on ratepayers. - 104. Considering NS Power's large gr...
AI summary The Department of Energy urges the Board to reduce NS Power's staffing requests and conduct a Savings Review due to increased FTEs and unexplained costs. The NDP and Liberal Caucus emphasize ensuring just rates and independent reviews of NS Power's operations. NS Power cites population growth and load increases as reasons for higher OM&G costs.
ffairs (Corporate Groups) $2,000,000; - Grid Modernization and Customer Integration (Customer Experience and Innovation) - $2,000,000; and - Corporate Human Resources (Corporate Groups) $2,000,000. [103] The Board directs that the above $8...
AI summary The Board mandates an $8M annual cost reduction for NS Power, applied alongside prior OM&G cuts, setting a reasonable cost envelope for 2026-2027. The Department of Energy requested an independent savings review under the Public Utilities Act, but the Board declined, prioritizing affordability concerns raised by the NDP, Liberal Party, and commenters.
3.3.2 Executive Compensation [108] The Public Utilities Act prohibits NS Power from recovering bonuses and incentives paid to an executive employee. Other remuneration may only be recovered as prescribed by regulation: - 64B (8) Nova Scoti...
AI summary The Public Utilities Act prohibits NS Power from recovering executive bonuses and incentives, allowing only other remuneration as per regulations. The 2012 Nova Scotia Power Incorporated Regulations permit recovery of certain executive remuneration, though specifics are not detailed here.
Salary and compensation recoverable from rates, charges or fees 3 For the purpose of subsection 64B(8) of the Act, Nova Scotia Power Incorporated may recover the following remuneration from its rates, charges or fees approved by the Board:...
AI summary Nova Scotia Power Inc. (NSP) may recover executive compensation from rates, limited by compa-ratios under the Public Utilities Act. The new Senior Officials Pay Plan (2023-138) replaced the old plan (2007-85), altering pay scales and affecting recoverable compensation. NSP calculates CEO remuneration as 10% above the new plan's maximum, while other executives are capped at 100% compa-ratio plus 13% benefits.
[121] As it relates to regulation of depreciation, s. 38 of the PUA states:
AI summary Section 38 of the Public Utilities Act (PUA) addresses depreciation regulation. This section is part of a Nova Scotia regulatory proceeding analyzing utility depreciation policies under the PUA framework.
Annual depreciation - 38 (1) Every public utility shall make provision for proper and adequate annual depreciation of its property and assets used and useful in furnishing, rendering or supplying each type or kind of service, and shall in...
AI summary Regulatory requirements mandate public utilities to apply proper annual depreciation methods (e.g., straight-line) for their assets, with the Board authorized to set, determine, and revise depreciation rates for different property classes. Utilities must report applied rates and conform to Board-determined rates.
Further, Sections 40 and 41 of the PUA state:
AI summary Sections 40 and 41 of the Public Utilities Act (PUA) are referenced, outlining provisions relevant to regulatory proceedings in Nova Scotia.
Rates of utility to include allowance for depreciation 41 In fixing rates, tolls and charges to be paid to a public utility for any service, the Board shall include proper allowances for depreciation. [122] NS Power owns significant assets...
AI summary The Nova Scotia Utility and Review Board (NSUARB) mandates that utility rates include depreciation allowances. NS Power uses asset pools to track depreciation, recovering original costs and salvage expenses over asset lifetimes. The Public Utilities Act (PUA) permits recovery of prudently incurred costs, including depreciation, from customers.
ing them. So I would agree that there's a –– an inconsistency, perhaps, with traditional or normal utility practice if those were to be partially decommissioned and retained as assets of the utility. - Q. Right. If they were no longer used...
AI summary The discussion centers on the cost allocation for partially decommissioned utility assets. Williams notes inconsistencies in traditional utility practices, emphasizing that retaining large assets post-decommissioning may shift costs to ratepayers. He argues that while ratepayers might bear some costs, partial decommissioning could lower customer expenses, though not through direct service benefits.
uch items as legislative changes requiring certain assets to be retired by 2030, technological advancements to improve/extend asset lives, climate change and an evolving NS Power generation asset mix. [233] Given this background, the Board...
AI summary The NSUARB directs NS Power to update its depreciation study to evaluate ALG vs. ELG methodologies, citing changes in generation assets and new transmission projects. The study should align with the IESO's IRP and include detailed analysis of ALG's appropriateness. NS Power agreed to this in its reply submissions.
. And second, he asserts that the average service lives put forward by NS Power are materially lower and inexplicably different than its peer utilities, particularly other Atlantic Canadian utilities. [249] Throughout his hearing testimony...
AI summary Mr. Wiedmayer testified that NS Power's average asset service lives are lower than peer utilities but emphasized peer comparisons are reasonableness checks, not substitutes for historical data. He disputed claims about simulated aged data, clarifying he used actual installation data with simulated retirement ages.
rvenor comments. The Board directed a meaningful investigation of the potential use of securitization with a report due no later than April 30, 2025. [MEUs Closing Submission, January 30, 2026, p. 4] [289] As is the case in other jurisdict...
AI summary The Nova Scotia Utility and Review Board directed an investigation into securitization, requiring a report by April 30, 2025. Securitization requires legislative authorization, which was amended in the Energy Reform (2024) Act but remains unproclaimed. The 2024 Task Force recommended enabling the Board to use securitization for managing coal plant retirement costs.
about the value of coal plant assets that would be securitized, submitting that this amount should be reduced (as canvassed elsewhere in this decision). The Province described its position as follows: 92. For initiatives that demonstrably...
AI summary The Province opposes securitization of coal plant assets due to uncertainty in asset valuation and risk to ratepayers. It emphasizes the need for clear ratepayer benefits and rejects NS Power's proposal until proven cost-effective. The Province clarifies no regulatory commitment exists for securitization of Decarbonization Deferral Account liabilities.
322] As noted above, the approval of the potential securitization is not before the Board in this application. Whether securitization ultimately proceeds is a policy matter for the Province to decide. [323] NS Power requested the deferral...
AI summary The Board approves the securitization deferral account requested by NS Power, noting that depreciation and financing costs relate to assets under the Decarbonization Deferral Account (DDA). The Province opposes immediate securitization due to asset valuation concerns but supports the deferral. NS Power's request was motivated by potential customer benefits from early securitization, which the Board finds justifiable.
ond these agreed terms [of the settlement agreement]", noting that the utility uses language such as "including but not limited to..." in referring to variances to be included in the deferral account. - [345] The Industrial Group also refe...
AI summary The Industrial Group questions NS Power's criteria for the PHP Deferral account, arguing it may expand the scope of deferrals and create unpredictability. NS Power responds that their criteria are based on the Settlement Agreement and General Rate Application, aiming to ensure clarity while allowing flexibility for unforeseen variances.
3.5.1.6 Payment of Interest on Deferral Accounts [362] The payment of interest to NS Power on its deferral accounts is subject to s. 64AB of the Public Utilities Act . In its 2023-2024 GRA Decision, the Board concluded that it was appropri...
AI summary The Nova Scotia Utility and Review Board (Board) determines interest rates on Nova Scotia Power Inc.'s (NS Power) deferral accounts under s. 64AB of the Public Utilities Act. The Board set interest at NS Power's WACC in its 2023-2024 GRA Decision and reaffirmed this approach in the 2025 DCRRC proceeding (M11912). A generic proceeding will address s. 64AB issues, with London Economics International LLC preparing a report.
3.6.1 Capital Additions [365] NS Power's capital outlook for 2026-2027 for additions to Plant reflects the company's best estimate of capital investment over the test years at a point in time. The test period investment is intended to supp...
AI summary NS Power outlines its 2026-2027 capital investment plans to ensure safe electricity delivery, environmental compliance, and alignment with Renewable Electricity Standards. The proposed investments support the 5-Year Reliability Plan and growing customer demand. Rate base growth will depend on DDA securitization proceeds, with potential offsets if securitization fails.
3.6.3 Valuation and "Writing Down" of the Rate Base [377] The Department of Energy requests that the Board take steps to ensure that NS Power's coal assets are written down by an amount that the Board deems appropriate based on a transpare...
AI summary The Department of Energy requests the Nova Scotia Utility and Review Board to write down NS Power's coal assets, arguing their value is over-inflated and ratepayers should not subsidize outdated infrastructure. The Department attributes this to NS Power's failure to conduct timely depreciation studies and imprudent investments post-2016, despite knowing coal assets must retire by 2030.
Power to determine value of property of utility - 30 (1) The Board may at any time, with the assistance of such engineers, accountants, valuators, counsel and others as it deems wise or advisable to employ, inquire into and determine the e...
AI summary The Nova Scotia Utility and Review Board (Board) has authority to assess utility property values using prudent original cost or prescribed methods, deducting depreciation. It mandates valuation of Nova Scotia Power Incorporated's assets by March 31, 2024, and setting differentiated return on equity (ROE) levels for capital assets to align investment incentives with ratepayer objectives.
3.6.3.1.1 The Value of the Rate Base [399] The "value" of NS Power's rate base, as framed in the Department's submissions, is based on an historic concept that has been displaced by the widely accepted prudent original cost method for valu...
AI summary The document argues that Nova Scotia Power's rate base valuation should use the prudent original cost method, as mandated by the Public Utilities Act since 1943, rather than the Department's outdated approach. Two expert witnesses supported this method, and the Department failed to provide evidence or cross-examine them. Bonbright's 1988 work is cited as historical context.
definite and immediately determinable. The accounting objectives of verifiability and neutrality are also satisfied. [Emphasis added] [ Depreciation Expense: A Primer for Utility Regulators , p. 12] [408] In 2022, the Public Utilities Act...
AI summary The 2022 amendment to the Public Utilities Act added s. 30(5), directing the Board to assess NS Power's assets. In 2023, the NSUARB initiated a proceeding, hiring consultants to review asset management and accounting policies. The Department's request under s. 30(2) is deemed duplicative of the ongoing proceeding under s. 30(5).
[410] The NSUARB's decision in M11067 (2024 NSUARB 59) outlined how NS Power's property is valued under the Public Utilities Act : - [8] Subsection 30(2) of the Act contemplates that the value of NS Power's property and assets is determine...
AI summary The NSUARB's decision in M11067 outlines that NS Power's property is valued under the Public Utilities Act using net book value (prudent original cost minus depreciation) and straight-line depreciation. Annual reporting of net book value is required in regulated financial statements.
test years. Depending on the extent of the decline, this could put significant upward pressure on the depreciation expense in the test years, and therefore the revenue requirement and proposed rates. [417] The complexity and uncertainty as...
AI summary The text discusses the impact of asset depreciation on revenue requirements and proposed rates, arguing that an alternative valuation method would lead to higher return on equity but has been rejected in favor of the prudent original cost method as per the Public Utilities Act.
within the discretion of the Commission, to be exercised consistently with the words of the Electric Utilities Act , having regard to all relevant considerations, while disregarding irrelevant ones. - [61] In conclusion, the decision under...
AI summary The text discusses judicial review of rate-setting decisions, emphasizing the Commission's discretion under the Electric Utilities Act and Public Utilities Act . It highlights errors in the original decision regarding asset recovery, leading to a redetermination by the AUC allowing recovery of destroyed assets' net book value. The Alberta Court of Appeal's ruling aligns with the NSUARB's approach to asset valuation.
3.6.3.1.3 The Requirement for Prudence [429] Prudence is, of course, always a consideration. The language used in s. 30(2) of the Public Utilities Act is not simply "original cost" but "prudent original cost". A utility is entitled to the...
AI summary The regulatory proceeding discusses the legal requirement for prudence in utility cost recovery under the Public Utilities Act. The Board emphasizes that costs must be 'prudent original cost,' with a presumption of prudence for Nova Scotia Power Inc. (NSPI) that can be rebutted using hindsight. Disagreements arise over applying these principles in Fuel Adjustment Mechanism (FAM) audits, particularly regarding thresholds for rebutting prudence and whether human error constitutes imprudence.
ovide all stakeholders with transparency around transfers to or from the DDA in any given year and the Board may choose to review any of these transfers. [NS Power Reply to Closing Submissions, p. 5] [74] Based on this, it is possible that...
AI summary The Board emphasizes transparency in DDA transfers but rejects mandatory prudence applications for costs transferred to the DDA, aligning with the Public Utilities Act. NS Power's expenditures are presumed prudent, and the Department failed to meet the threshold to rebut this presumption due to insufficient evidence and general allegations in the GRA proceeding.
3.7.1 The Fair Return Requirement [442] NS Power operates as a natural monopoly in Nova Scotia, where the absence of meaningful competition means the competitive forces of the market do not apply. Section 45 of the Public Utilities Act ent...
AI summary NS Power, a natural monopoly in Nova Scotia, requires a fair return on its rate base to ensure financial stability and attract investment. The Board must set parameters for returns to maintain investor confidence, prevent rising borrowing costs, and avoid loss of debt market access, which could increase customer costs. Legal standards for approving returns are rooted in the Public Utilities Act.
sked the NSUARB to conduct an independent review of the utility's state of preparedness before the storm. Many questioned why a rate increase should be considered in the circumstances. The Board said: - [14] Just prior to November 15, 2004...
AI summary The NSUARB was requested to review Nova Scotia Power Inc.'s preparedness for a 2004 storm that caused power outages. The public hearing was delayed due to the outages, and Premier John Hamm urged the Board to conduct an independent review under the Public Utilities Act to assess restoration program improvements.
Cleary and D. D'Ascendis. - 168. Dr. Cleary's recommended risk premium of 2.50 per cent is subjective, not supported by any analysis and does not take into the account the changing market environment. [548] In this case, the Board finds th...
AI summary The Board rejects Concentric's and Dr. Cleary's ROE recommendations, finding them too high and too low, respectively. It adopts the settlement agreement's proposal to maintain NS Power's current 9% ROE with an 8.75%-9.25% earnings band, returning excess earnings to customers under the Public Utilities Act.
3.8 Cost of Service Study [561] Under the PUA , a utility is afforded the opportunity to recover its "reasonable and prudent" costs of providing service and a "just and reasonable" return on its rate base. The total amount of these costs a...
AI summary The section outlines the regulatory framework under the Public Utilities Act (PUA) for cost recovery and rate setting, emphasizing 'reasonable and prudent' cost recovery and 'just and reasonable' returns. It references the Nova Scotia Court of Appeal's decision in Dalhousie Legal Aid Service v Nova Scotia Power Inc. , which prohibits rate discrimination based on customer ability to pay, and highlights factors for grouping customers into classes.
3.8.2 Minimum System v. Basic Customer Methods [586] NS Power's cost-of-service study classifies portions of its distribution system as customer-related using the minimum system method. Under this approach, a minimum system study estimates...
AI summary NS Power's cost-of-service study classifies distribution system costs using the minimum system method, deeming costs of a hypothetical minimum system as customer-related. The Board considers evidence supporting this approach as standard in Canada, with references to general rate applications and prior studies.
[634] NS Power submitted: NS Power applied the approved OATT and COS methodologies, as amended in the Settlement Agreement, to determine the proposed bundled and OATT charges. The transmission costs are allocated to the bundled rate classe...
AI summary NS Power applied OATT and COS methodologies to allocate transmission costs using 3CP and 12CP approaches. Renewall Energy Inc. raised concerns about a discrepancy in coincident factors (78.6% vs. 91.66%) affecting network service charges. NS Power clarified the factors served different purposes and were not directly used in rate calculations.
ordingly, LIIR interruptible load equipped with Telemetry and Control will be included in managing realtime 10-minute reserve at all times, not just when it is not available from generation resources. [663] On the issue of alternative cost...
AI summary NS Power argues that +/-16 MW regulation capability is necessary for system stability, with Reg Down service capacity requiring separate cost recovery under OATT. They assert the current methodology fairly allocates costs without double-counting.
4.1 Demand Side Management Cost Recovery Rider [686] In this GRA, NS Power proposed changes to the methodology for calculating the Balance Adjustment (BA) but did not propose changes to the Demand Side Management (DSM) rider amounts for 20...
AI summary NS Power proposed changes to the Balance Adjustment (BA) methodology without altering DSM rider amounts for 2026/2027. It filed a DCRR application (M12521) for 2026 DSM expenses, with the Board approving continuation of 2025 DCRR charges until further order. The 2026 DSM expenditure was set at $63.75M by legislation, with assumptions extended to 2027. NS Power argued that extending end-of-term variance recovery periods would reduce rate volatility and align with new five-year DSM planning terms.
ts available until reliable operation of replacement generation has been established and that decommissioning activities are not expected to begin until after 2029. [Exhibit N-23, GT IR-26, pp. 1-2]. [718] In a recent application for Linga...
AI summary NS Power is keeping Lingan 2 in cold reserve until replacement generation is operational, expected after 2029. The Department of Energy opposes sustaining capital costs for Lingan 2, urging the Board to assess the need for additional investment.
4.5 Rate Setting – Alternative Form of Regulation [723] In its closing submissions the Nova Scotia Liberal Caucus urged the Board to exercise its statutory authority to move Nova Scotia toward a five-year rate plan that delivers stability,...
AI summary The Nova Scotia Liberal Caucus advocates for a five-year rate plan under the Public Utilities Act, emphasizing stability and fairness. The 2024 amendment allows the Energy Board to approve alternative regulation methods, aligning with the Energy and Regulatory Boards Act's definition of 'alternative form of regulation.'
101354Board Decision
44 passages
IN THE MATTER OF THE PUBLIC UTILITIES ACT - and - IN THE MATTER OF A GENERAL RATE APPLICATION by NOVA SCOTIA POWER INCORPORATED for approval of certain revisions to its Rates, Charges and Regulations BEFORE: Stephen T. McGrath, K.C., Chair...
AI summary Nova Scotia Power Inc. seeks approval for rate revisions under the Public Utilities Act. The proceeding involves multiple intervenors, including consumer advocates, small business representatives, and industry groups, with legal counsel from various organizations. The board members overseeing the case are Stephen T. McGrath, Roland A. Deveau, and Steven M. Murphy.
1.0 SUMMARY - [1] The Nova Scotia Energy Board is keenly aware that electricity rates are already challenging for many customers, and any rate increase will be difficult, especially for those with low or fixed incomes. However, the Board d...
AI summary The Nova Scotia Energy Board cannot set special rates for low-income customers due to legal constraints under the Public Utilities Act . NS Power filed a GRA proposing rate increases (1.8% in 2026, 2.4% in 2027) with variations across customer classes. The Board must allow recovery of prudent costs, and NS Power's application was supported by a settlement agreement filed in November 2025.
2.0 BOARD'S AUTHORITY UNDER THE PUBLIC UTILITIES ACT [25] The Board is an administrative body, established under the Energy and Regulatory Boards Act , SNS 2024, c 2, Schedule A. It must follow legislative requirements and administrative l...
AI summary The Nova Scotia Utility and Review Board (NSUARB) derives its authority from the Public Utilities Act (PUA) and the Energy and Regulatory Boards Act. It operates as a statutory entity with powers limited to those explicitly or implicitly granted by legislation. Legal principles from cases like Re Nova Scotia Power Incorporated [2018 NSUARB 45] and ATCO Gas [2006] SCC 4 emphasize that the Board's jurisdiction must align with legislative intent and cannot exceed statutory boundaries.
Powers and duties - 5 (1) The Energy Board has those functions, powers and duties that are conferred or imposed upon it - (a) by this Act; - (b) by the More Access to Energy Act ; - (c) respecting the production, transmission, delivery or...
AI summary The Energy Board's powers and duties are derived from multiple legislative acts, including the More Access to Energy Act and Public Utilities Act, as well as regulations set by the Governor in Council. The Governor in Council may also assign responsibilities to the Energy Board, discontinuing other boards or agencies during the assignment period.
Approving and fixing rates, regulatory powers - 6 (1) In approving or fixing just and reasonable rates, tolls, charges or tariffs pursuant to this Act or any other enactment, the Energy Board may adopt any method or technique that it consi...
AI summary The Energy Board is authorized to approve rates and tariffs using appropriate methods, considering factors like competition, sustainability, and reliability. It regulates entities including the Independent Energy Systems Operator and Halifax Water's district energy project, while adhering to legislative frameworks such as the Public Utilities Act and More Access to Energy Act .
Jurisdiction of Board - 30 (1) A Board has exclusive jurisdiction in all cases and in respect of all matters in which jurisdiction is conferred on the Board. - (2) The Boards, as to all matters within their jurisdiction pursuant to this Ac...
AI summary The Nova Scotia Utility and Review Board (NSUARB) has exclusive jurisdiction over utility regulation, acting as a surrogate for competition in natural monopoly sectors. Rate-setting balances utility costs with fair customer rates, guided by the Public Utilities Act (PUA) and judicial precedents like Dalhousie Legal Aid Service v Nova Scotia Power Inc. (2006 NSCA 74). The Board ensures utilities recover reasonable costs while maintaining financial stability.
Amount utility entitled to earn annually - 45 (1) Every public utility shall be entitled to earn annually such return as the Board deems just and reasonable on the rate base as fixed and determined by the Board for each type or kind of ser...
AI summary Regulatory framework dictates public utilities' annual earnings based on the Board's determination of a 'just and reasonable' return on the rate base. The Board may require amortization fund contributions, reducing allowable earnings. Legal references emphasize the Board's discretion under the Public Utilities Act (PUA) and its public interest mandate, citing court cases like Nova Scotia (Attorney General) v NSUARB (2019 NSCA 66) and Nova Scotia (Public Utilities Board) v Nova Scotia Power Corporation (1976).
CRITERIA OF A SOUND RATE STRUCTURE - 1. The related, "practical" attributes of simplicity, understandability, public acceptability, and feasibility of application. - 2. Freedom from controversies as to proper interpretation. - 3. Effective...
AI summary The document outlines seven criteria for a sound rate structure, emphasizing simplicity, revenue stability, fairness, and efficiency. It references James Bonbright's principles and cites legal precedents, including the Public Utilities Act and the Supreme Court of Canada's Vavilov decision, to guide regulatory assessment.
3.1.1 Findings [41] As noted above, the NSUARB has considered settlement agreements in past matters. The Board appreciates the efforts of parties to resolve contested issues in matters coming before it and encourages such initiatives to co...
AI summary The NSUARB acknowledges the value of settlement agreements but emphasizes they must be just and in the public interest. While recognizing efforts to resolve disputes, the Board notes this settlement occurred before the application was filed, reducing its evidentiary weight. The Board approves some terms but requires amendments to ensure fair rates.
3.3 Operating, Maintenance and General Costs
AI summary This section discusses Operating, Maintenance and General (OM&G) costs, a critical component in utility regulatory proceedings. It likely addresses cost structures, recovery mechanisms, and compliance with Nova Scotia's energy regulations, involving entities like Nova Scotia Power Inc. and the Nova Scotia Utility and Review Board.
ently justified the Company's departure from industry standards and asks that the Board critically consider reductions to NS Power's staffing request to eliminate any unnecessary burden on ratepayers. - 104. Considering NS Power's large gr...
AI summary The Department of Energy requests staffing reductions and a Savings Review for NS Power due to increased costs. NDP and Liberal Caucus urge cost justification and affordability. NS Power cites increased service demands as reasons for OM&G cost increases.
ffairs (Corporate Groups) $2,000,000; - Grid Modernization and Customer Integration (Customer Experience and Innovation) - $2,000,000; and - Corporate Human Resources (Corporate Groups) $2,000,000. [103] The Board directs that the above $8...
AI summary The Board directs an $8,000,000 reduction in costs for NS Power, to be reflected in a compliance filing and applied in addition to OM&G reductions from a settlement agreement. The Department of Energy requested an independent savings review under the Public Utilities Act, but the Board decided against it at this time due to affordability concerns and other considerations.
3.3.2 Executive Compensation [108] The Public Utilities Act prohibits NS Power from recovering bonuses and incentives paid to an executive employee. Other remuneration may only be recovered as prescribed by regulation: - 64B (8) Nova Scoti...
AI summary The Public Utilities Act prohibits NS Power from recovering executive bonuses and incentives, while other remuneration may be recovered if prescribed by regulation. The Nova Scotia Power Incorporated Regulations (NS Reg 231/2012) outline permissible recovery of executive compensation.
Salary and compensation recoverable from rates, charges or fees 3 For the purpose of subsection 64B(8) of the Act, Nova Scotia Power Incorporated may recover the following remuneration from its rates, charges or fees approved by the Board:...
AI summary Nova Scotia Power Inc. (NSP) may recover executive compensation from rates, charges, or fees under subsection 64B(8) of the Act. The regulations reference a revised Senior Officials Pay Plan (Order in Council 2023-138), which replaced the previous plan (Order in Council 2007-85). NSP calculates CEO compensation as 10% above the new plan's maximum, while other executives are capped at 100% compa-ratio plus 13% benefits.
[121] As it relates to regulation of depreciation, s. 38 of the PUA states:
AI summary Section 38 of the Public Utilities Act (PUA) addresses the regulation of depreciation, though specific details of its provisions are not elaborated in the provided text.
Further, Sections 40 and 41 of the PUA state:
AI summary The text references Sections 40 and 41 of the Public Utilities Act (PUA), which are relevant to the regulatory proceeding. These sections likely outline legal frameworks or obligations for utilities or regulatory processes in Nova Scotia.
Rates of utility to include allowance for depreciation 41 In fixing rates, tolls and charges to be paid to a public utility for any service, the Board shall include proper allowances for depreciation. [122] NS Power owns significant assets...
AI summary The Nova Scotia Utility and Review Board (NSUARB) mandates that depreciation allowances be included in utility rates. NS Power uses asset pools to track depreciation over estimated useful lifespans, recovering original costs and salvage expenses via customer rates, as permitted by the Public Utilities Act (PUA).
to be maintained indefinitely. Therefore, for the purposes of the current GRA, the Board finds that it is appropriate to exclude Wreck Cove decommissioning costs from the proposed depreciation rates. [162] The Mersey Hydro System has a cap...
AI summary The Nova Scotia Utility and Review Board excludes Wreck Cove, Mersey, and Tusket Hydro System decommissioning costs from proposed depreciation rates. Mersey's redevelopment is deemed more economical than decommissioning based on IRP analyses, with final decisions pending the 2025/2026 IRP. The Board emphasizes temporary exclusion, allowing reconsideration if future IRP findings favor decommissioning.
dit rating agencies lower NS Power's credit rating to "junk" status. As noted in Morrison Park's evidence, this would have serious long-term cost consequences resulting in higher costs for ratepayers. [187] Further, at this point there rem...
AI summary Uncertainty around decommissioning costs for NS Power's hydro assets and the Board's acceptance of adjusted net salvage rates in the GRA. The Board acknowledges the proposed changes despite ongoing policy gaps regarding decommissioning frameworks.
3.4.6 Depreciation – Summary [268] For the purposes of the current GRA, the Board finds it appropriate to exclude decommissioning costs for the Wreck Cove, Mersey, and Tusket hydro systems from proposed depreciation rates for the 2026 and...
AI summary The Board excludes decommissioning costs for Wreck Cove, Mersey, and Tusket hydro systems from 2026/2027 depreciation rates but allows partial inclusion for other hydro assets. It mandates NS Power to reconcile salvage costs since 2009 and initiate stakeholder engagement on decommissioning policies. The Board approves most proposed net salvage rates in the settlement agreement.
rvenor comments. The Board directed a meaningful investigation of the potential use of securitization with a report due no later than April 30, 2025. [MEUs Closing Submission, January 30, 2026, p. 4] [289] As is the case in other jurisdict...
AI summary The Nova Scotia Clean Electricity Solutions Task Force recommended legislative changes to enable securitization for managing coal facility retirement costs. The Province amended the Public Utilities Act in 2024, but Section 35G remains unproclaimed, delaying implementation. The Board directed an investigation into securitization, emphasizing legislative authorization as a prerequisite.
abilities was imminent. In fact, there has never been any firm commitment from the Province that it will change regulations to permit securitization. [Department of Energy Closing Submissions, p. 15] [309] However, in their closing submiss...
AI summary The Department of Energy notes no firm commitment from the Province to change regulations for securitization. NS Power and customer representatives support securitization, citing ratepayer savings. The Province's Deputy Minister of Energy, Karen Gatien, affirmed engagement to enable securitization via s. 35G of the Public Utilities Act , aiming for a financing order by year-end.
322] As noted above, the approval of the potential securitization is not before the Board in this application. Whether securitization ultimately proceeds is a policy matter for the Province to decide. [323] NS Power requested the deferral...
AI summary The NS Power requested a deferral account for potential securitization of coal plant assets, but the Province is not currently supporting securitization. The Board approves the deferral account, finding that depreciation and financing costs should be deferred as they relate to assets used in test years. The Province's hesitation stems from concerns about asset valuation.
prohibition against retroactive ratemaking, it is beneficial for the Board to have some flexibility to address extraordinary or novel situations by relaxing the rule against retroactive ratemaking so that the interests of both the utility...
AI summary The document discusses the Nova Scotia Utility and Review Board's consideration of retroactive ratemaking flexibility, referencing the Hurricane Fiona Decision's criteria for extraordinary expenses. It concludes that current GRA-related expenses do not meet exceptions for retroactive adjustments, as they were foreseeable and not significant. The Board emphasizes balancing utility and ratepayer interests without enabling frequent rate changes.
3.5.1.6 Payment of Interest on Deferral Accounts [362] The payment of interest to NS Power on its deferral accounts is subject to s. 64AB of the Public Utilities Act . In its 2023-2024 GRA Decision, the Board concluded that it was appropri...
AI summary The Nova Scotia Utility and Review Board (NSUARB) determines interest rates on NS Power's deferral accounts using its Weighted Average Cost of Capital (WACC) under s. 64AB of the Public Utilities Act. This follows the 2023-2024 GRA Decision and a 2024 DCR Rider decision (M11912), with the Board planning a generic proceeding to further address s. 64AB issues. London Economics International LLC is engaged to prepare a report.
rtment also submitted that NS Power's 2020 Integrated Resource Plan referenced 2040 as the target for phasing out coal plants, which the Department said was inconsistent with this federal legislation. [381] The Department said that NS Powe...
AI summary The Department argues that NS Power's 2020 Integrated Resource Plan conflicts with federal coal phase-out legislation, as NS Power continues investing in thermal generation over renewables, increasing fuel costs and exposing ratepayers to stranded asset risks. The Department claims NS Power inflated its rate base to boost returns, leading to higher customer rates, and cites legal precedents like Smyth v Ames and Alberta UAD cases to support the Board's authority to adjust depreciation and valuation practices under the Public Utilities Act.
Duty of utility to furnish information - 33 (1) Every public utility shall furnish to the Board from time to time, and as the Board may require, maps, profiles, contracts, reports of engineers and other documents, records and papers, or co...
AI summary The section outlines the duty of public utilities to provide information to the Board for valuation purposes, including maps, contracts, and reports, and to report changes in their property. The Board must keep informed of changes and revise valuations accordingly.
[397] In essence: A public utility is obligated to provide services that are reasonably safe and adequate and is entitled to compensation therefor by the charging of rates that are not unjustly discriminatory and will provide the public ut...
AI summary Public utilities must provide safe and adequate services, compensated through non-discriminatory rates ensuring revenue for operating expenses, depreciation, taxes, and capital needs. The Supreme Court of Canada emphasized fair returns on capital investment to attract investment and maintain credit ratings, with low returns risking higher borrowing costs and market exclusion.
3.6.3.1.1 The Value of the Rate Base [399] The "value" of NS Power's rate base, as framed in the Department's submissions, is based on an historic concept that has been displaced by the widely accepted prudent original cost method for valu...
AI summary The document argues that the prudent original cost method, as outlined in the Public Utilities Act, is the correct approach for valuing NS Power's rate base, displacing the Department's historic concept. Expert witnesses supported this method, and the Department failed to provide evidence or cross-examine them. The Public Utilities Act (s. 30(2)) explicitly endorses this approach since 1943.
definite and immediately determinable. The accounting objectives of verifiability and neutrality are also satisfied. [Emphasis added] [ Depreciation Expense: A Primer for Utility Regulators , p. 12] [408] In 2022, the Public Utilities Act...
AI summary In 2022, the Public Utilities Act was amended to direct the Board to assess NS Power's asset values. The NSUARB initiated a 2023 proceeding, hiring EA Technology and Doane Grant Thornton to evaluate asset management and accounting policies. The Department's request to review assets under s. 30(2) would duplicate the ongoing s. 30(5) proceeding.
[410] The NSUARB's decision in M11067 (2024 NSUARB 59) outlined how NS Power's property is valued under the Public Utilities Act : - [8] Subsection 30(2) of the Act contemplates that the value of NS Power's property and assets is determine...
AI summary The NSUARB's decision in M11067 outlines that NS Power's property is valued under the Public Utilities Act using net book value (prudent original cost minus depreciation) with straight-line depreciation per s. 30(3). Annual reports in regulated financial statements (e.g., M11090) detail accounting policies for property, plant, and equipment.
test years. Depending on the extent of the decline, this could put significant upward pressure on the depreciation expense in the test years, and therefore the revenue requirement and proposed rates. [417] The complexity and uncertainty as...
AI summary The text discusses concerns that depreciation expense increases in test years could raise revenue requirements and rates. It argues that alternative valuation methods face regulatory rejection due to impracticality, favoring the Public Utilities Act's default approach. The Board emphasizes adherence to established regulatory practices over alternative methods.
within the discretion of the Commission, to be exercised consistently with the words of the Electric Utilities Act , having regard to all relevant considerations, while disregarding irrelevant ones. - [61] In conclusion, the decision under...
AI summary The text discusses legal challenges to rate-setting decisions, emphasizing the Commission's discretion under the Electric Utilities Act and the incorrect application of Stores Block in treating destroyed assets. The Alberta Court of Appeal and NSUARB rulings highlight flexibility in asset valuation and rate-base treatment, including recovering net book value of destroyed assets (Decision 28320-D01-2023).
3.6.3.1.3 The Requirement for Prudence [429] Prudence is, of course, always a consideration. The language used in s. 30(2) of the Public Utilities Act is not simply "original cost" but "prudent original cost". A utility is entitled to the...
AI summary The requirement for prudence in utility cost recovery under the Public Utilities Act emphasizes that costs must be 'prudent original cost,' not merely original cost. The Nova Scotia Utility and Review Board (NSURB) references prior decisions, including principles from the Industrial Group, which outline a presumption of prudence for utilities like NS Power. Disagreements arose over applying these principles in FAM audits, particularly regarding rebutting the presumption and defining imprudence.
[431] The Board went on to find: [42] In summary, the Board finds that the threshold for rebutting the presumption of prudence is contextual. It requires a reasonable question – something that is more than a bald statement or speculation –...
AI summary The Board clarifies that the presumption of prudence can be rebutted with reasonable questions, not just speculation, in FAM Audits. The Department of Natural Resources and Renewables (NRR) argues NS Power's prudence may be flawed due to low depreciation rates on retiring coal assets and unnecessary investments ahead of retirements.
3.7.1 The Fair Return Requirement [442] NS Power operates as a natural monopoly in Nova Scotia, where the absence of meaningful competition means the competitive forces of the market do not apply. Section 45 of the Public Utilities Act ent...
AI summary NS Power operates as a natural monopoly in Nova Scotia, requiring a fair return to ensure financial stability and attract investment. The Board must set parameters to ensure a just return, as insufficient returns could lead to higher borrowing costs and loss of investor confidence, ultimately affecting customers.
sked the NSUARB to conduct an independent review of the utility's state of preparedness before the storm. Many questioned why a rate increase should be considered in the circumstances. The Board said: - [14] Just prior to November 15, 2004...
AI summary The NSUARB was requested to review NSPI's preparedness for a 2004 storm that caused power outages. Public concerns arose about a rate increase amid the outages. The Board delayed a hearing due to the storm's impact and received a Premier's request for an independent review under the Public Utilities Act.
Cleary and D. D'Ascendis. - 168. Dr. Cleary's recommended risk premium of 2.50 per cent is subjective, not supported by any analysis and does not take into the account the changing market environment. [548] In this case, the Board finds th...
AI summary The Board rejects Concentric's and Dr. Cleary's return on equity recommendations, finding them too high and too low, respectively. It adopts the settlement agreement's proposal of 9% with an 8.75%-9.25% earnings band, citing insufficient evidence for alternative rates. Earnings above 9.25% would be returned to customers under the Public Utilities Act, while below 8.75% would not qualify for recovery.
3.8 Cost of Service Study [561] Under the PUA , a utility is afforded the opportunity to recover its "reasonable and prudent" costs of providing service and a "just and reasonable" return on its rate base. The total amount of these costs a...
AI summary The Cost of Service Study outlines how utilities recover 'reasonable and prudent' costs under the PUA, setting rates to meet revenue requirements. Rate classes must be based on service conditions, not customer ability to pay, as per Dalhousie Legal Aid Service v Nova Scotia Power Inc. (2006 NSCA 74). Discrimination in rates is judged by factors like load factor and time of use.
e only outstanding issue that would be addressed in the future proceeding noted in the agreement was the use of the minimum system method beyond the test years in the current general rate application: - Q. So N-37, page 20 in the PDF, line...
AI summary The discussion centers on the future consideration of the 'Minimum System' method in cost-of-service studies beyond the current test period. Nova Scotia Power (NSP) acknowledges the Settlement Agreement's provision to address this in a standalone 2026 proceeding, but emphasizes that parties are not bound by prior positions. NSP expects future cost-of-service issues to be evaluated in subsequent General Rate Applications (GRA) without rehashing prior processes.
3.9 Rate Design [644] In its application, NS Power did not propose to introduce new concepts or materially change the design of any of its rates. The parties to the settlement agreement accepted the changes to tariff language and the updat...
AI summary NS Power did not propose new rate concepts or significant changes to rate design in its application. The settlement agreement parties accepted proposed tariff language updates and charge adjustments. Other parties did not raise concerns about these changes in evidence or submissions. The Board accepts these items as filed unless otherwise directed.
tter alignment with other jurisdictions and allow for simplification of the COS treatment of these costs. This is also described in more detail within the Elenchus Report. [M12521, Exhibit N-1, p. 5] [690] The proposed BA methodology will...
AI summary The document outlines the proposed Balance Adjustment (BA) methodology for the Demand Side Management Cost Recovery Rider (DCRR), including BA1 (Annual Volume Variance Adjustment) and BA2 (End of Approved DSM Term Adjustment). BA1 reconciles revenue variances with a two-year lag, while BA2 adjusts discrepancies between approved and actual DSM spending over four years. The framework is detailed in the Elenchus Report and NS Power's response to Board IR-143.
4.5 Rate Setting – Alternative Form of Regulation [723] In its closing submissions the Nova Scotia Liberal Caucus urged the Board to exercise its statutory authority to move Nova Scotia toward a five-year rate plan that delivers stability,...
AI summary The Nova Scotia Liberal Caucus advocates for a five-year rate plan under the amended Public Utilities Act, enabling the Energy Board to use alternative regulation methods. The 2024 amendment allows rate-setting based on techniques deemed appropriate by the Energy Board, aligning with definitions in the Energy and Regulatory Boards Act.
ce captured under the FAM; - The EIFEL deferral, allowing NS Power to defer incremental tax expense of about $7 million if an exemption is not enacted by the Government of Canada as it has announced; - The inclusion of four Maritime Link t...
AI summary The Nova Scotia Utility and Review Board (NSURB) approved adjustments to Nova Scotia Power's (NS Power) rate base, including Maritime Link projects, revised Storm Cost Recovery Rider terms, and OATT rate updates. The Board also amended the General Rate Application (GRA) to reduce revenue requirements and reallocate costs among customer classes.