Topic:"Rate Base" in M03097

ion measures. Prudence allows for a range of reasonable and appropriate actions to acceptably manage risk, and requires neither perfect accuracy or guaranteed elimination of all risk. [emphasis added] In this case, NSPI's approved capital...

AI summary The document discusses NSPI's overspending of its 2008 contingency fund by $8.7 million, questioning whether the costs were prudently incurred. It highlights the lack of a general contingency cushion and NSPI's claim that risk was incorporated into individual budget components. The analysis raises concerns about the prudence of capital expenditures and their impact on the rate base.

Conclusion The evidence available to the Board in this application demonstrates that the steps taken by NSPI during planning and construction of this Project were reasonable, prudent and led to significant preservation of value for NSPI cu...

AI summary The evidence shows that NSPI's actions during the planning and construction of the Project were reasonable and prudent, benefiting customers. The ATO application for TUC6 is deemed the best economic option, with cost increases due to unforeseen factors. NSPI requests approval of the ATO for CI 28098.

IV SUBMISSIONS [38] Avon, NPB, and the NSDOE provided written submissions prior to NSPI's request for a hearing. All three submissions referred to the same comments from the Board's approval letter of September 16, 2008 (set out in paragra...

AI summary Avon, NPB, and the NSDOE submitted written comments prior to NSPI's request for a hearing, referencing the Board's 2008 approval letter and the reduction of contingency in the ATO application. NPB highlighted the loss of benefits to ratepayers due to delays in the Project's commercial operation and revenue reduction projections. Avon emphasized the depletion of NSPI's contingency cushion.

[41] Avon stated: The issue for the Board in considering this ATO is whether the Project continues to be economically justified and in the best interest of ratepayers and, in addition, whether NSPI has managed the Project to the lowest rea...

AI summary Avon questions the economic justification and cost management of the Tufts Cove 6 Waste Heat Recovery Project, arguing that costs were not prudently incurred and suggesting shareholders should bear some increased costs. NSDOE does not find evidence of imprudence, while MEUNSC emphasizes the responsibility of the company to manage project costs and protect ratepayers from financial risk.

IV SUBMISSIONS [38] Avon, NPB, and the NSDOE provided written submissions prior to NSPI's request for a hearing. All three submissions referred to the same comments from the Board's approval letter of September 16, 2008 (set out in paragra...

AI summary Avon, NPB, and the NSDOE submitted written comments prior to NSPI's request for a hearing, referencing the Board's 2008 approval letter and the reduction of contingency to zero in the ATO application. NPB highlighted losses to ratepayers due to delays in the Project's commercial operation and reduced revenue requirements, while Avon emphasized the depletion of NSPI's contingency cushion.