Topic:"Rate Design" in M03632

1 escalating COMFIT rates. We found that operating costs (not including fuel costs for 2 biomass) as a percentage of total costs are approximately 10% for the types of projects 3 considered here. If an escalating approach were to be used f...

AI summary The document discusses the proposed COMFIT tariff rates, including a fixed and escalating component for biomass CHP projects. It suggests a levelized tariff structure for simplicity and outlines various considerations related to interconnection, cost assumptions, and steam demand impacts.

7 Q. PLEASE DESCRIBE THE PROJECT TEAM'S OVERALL APPROACH TO THE 8 BALANCING OF COSTS AND POLICY OBJECTIVES? 9 A. The regulations governing the development of the COMFIT rates clearly call for them to 10 be cost-based. However, the developm...

AI summary The Project Team emphasizes balancing COMFIT rate development between cost-based regulations and fostering project growth. They propose the lowest rates achievable while maintaining reasonable development activity per resource class, acknowledging the need for judgment in rate-setting.

1 and other experts; where information is available we have compared our tariffs to the 2 cost of similar existing projects; and we have compared them to FIT prices adopted in 3 other jurisdictions and have considered the market responses...

AI summary The process for developing COMFIT tariffs involved stakeholder input following the Board's Order of October 22, 2010, including technical sessions, written submissions, and iterative revisions. Tariff rates were determined using a discounted cash flow model that incorporated assumptions about project costs and targeted returns on equity.

1 Q. WHAT HAVE YOU ASSUMED ABOUT PROJECT OWNERSHIP IN THE MODEL? 2 A. We have not made specific assumptions about project ownership in developing 3 proposed tariff rates. However, we have considered the extent to which project 4 ownership...

AI summary The model does not assume specific project ownership but considers how ownership affects costs via capital and tax treatment. Taxable projects typically have early tax benefits and later liabilities, with net impacts varying by resource type (e.g., -13% for tidal projects). Proposed COMFIT rates average taxable and non-taxable scenarios for most projects, except biomass CHP.

sks above those faced by a "mature utility." Heritage argued that these risks justified an ROE of 14%. The Board allowed 13%.4 26 The Board maintained this ROE for Heritage in a 2009 decision.5 27 28 Nova Scotia Utility and Review Board (N...

AI summary Heritage argued for a 14% ROE due to risks, but the Board allowed 13%, maintaining it in 2009. COMFIT projects face higher risks than NSPI projects due to smaller scale, lack of diversification, no rate-petitioning ability, and inexperience. NSURB decisions from 2003 and 2009 are cited.

1 Q. WHAT OTHER ASSUMPTIONS HAVE GONE INTO THE MODEL? 2 A. We have also made assumptions about the cost of acquiring equity and the cost of 3 insurance and land lease payments. We have estimated the cost of acquiring equity at 4 4% of the...

AI summary The model assumes 4% equity acquisition costs, insurance rates ranging from 0.3% (large wind) to 2% (tidal), 2.5% land lease payments for wind, and lower payments for hydro/tidal. Biomass CHP requires no additional land costs. Seaforth Engineering informed hydro/tidal lease estimates.

20 Q. WHAT HAVE YOU ASSUMED ABOUT OPERATING COSTS FOR SMALL WIND? 21 A. We have assumed operating costs of $1,642 in year one, including periodic major 22 maintenance. This is calculated as ¢1.63 per kWh, based primarily on information 23...

AI summary The respondent assumes operating costs for small wind at $1,642 in year one (¢1.63/kWh), based on CANWEA data, with inflation-based escalation.

1 Q. HOW DOES YOUR PROPOSED RATE COMPARE WITH OTHER BENCHMARKS? 2 A. In Vermont, the FIT rate for wind projects 100 kW or under starts at $208 per MWh and 3 escalates to $230 per MWh over the contract period. As of February 26, 2011, there...

AI summary The respondent compares the COMFIT rate for small wind projects to Vermont's FIT, noting Vermont's rate applies to larger projects (up to 100 kW) and includes 30% grants/ITCs. COMFIT's smaller 50 kW limit and lack of such incentives justify a higher rate. Ontario lacks a small wind FIT, with rates set above 50 kW projects. Vermont's FIT had limited adoption, suggesting insufficient robustness.

29 Q. WHAT HAVE YOU ASSUMED ABOUT OPERATING COSTS FOR LARGE WIND? 30 A. We have assumed operating costs of $55,000 per year, including periodic major 31 maintenance. This is based on information provided by developers and manufacturers. 32...

AI summary Operating costs for large wind projects are assumed at $55,000 annually, including maintenance and $1,000 in administrative expenses, both adjusted for inflation. These figures are based on developer and manufacturer data.

The Effect of Steam Demand on the CHP Rate ($2012) S Ca i Fa te ty to am p ac c r 2 0 % 3 0 % 4 0 % 5 0 % 6 0 % Operating Inputs Notes. Net Generator Capacity (MW) 0.05 Energy Production: 0.03 Net Capacity Factor 220/ Net of plant availabi...

AI summary The table presents financial and operational inputs and outputs for a Combined Heat and Power (CHP) project, including net generator capacity, energy production, operating expenses, and revenue assumptions. It includes metrics such as the net capacity factor, annual fuel cost, and return metrics like the 20-year equity IRR and debt service coverage ratio.

COMFIT$$2$MW$$Wind$Project$$Scenario

AI summary The document outlines a scenario for a 2 MW wind project under the COMFIT mechanism, which is designed to support community energy development initiatives in Nova Scotia.

Income: 5431$MWH$year$$(31%$capacity) @$$142.10$Mwh$$$$$$$$$$$$$$$$$775,000/yr. Conclusion:$$CEDIF$model$doesn't$work. The"return"is"zero"or"below"to"CEDIF. !If"there"are"any"cost"overruns","the"return"to"the"CEDIF investor"will"be"way"bel...

AI summary The CEDIF model is deemed non-viable as it results in zero or negative returns for investors. Any cost or O&M overruns would further reduce returns, potentially leading to higher risks and returns for other equity parties.

Other$Issues:$ - + 51%"of"project"must"be"owned"by"CEDIF"by"way"of"Common"Shares,"which"gives" rise"to"Preferred"shares"classes"and"preferential"first"take"of""dividends,""and"even" guaranteed"profits"to"this"other"equity"shareholder(s). -...

AI summary The text discusses concerns related to the Community Energy Development Investment Fund (CEDIF), including the requirement that 51% of a project must be owned by CEDIF through common shares, leading to preferred dividends and guaranteed profits for shareholders. It also raises issues about the questionable costs of construction finance and the lack of an exit strategy for CEDIF shareholders.

100.0% Total annual revenue - amount in A/R at end of year 50 8.3% Revenue Electrical energy production Rate 0.2130 0.2168 0.2207 0.2247 0.2288 0.2329 0.2371 0.2413 0.2457 0.2501 0.2546 0.2592 0.2638 52,553,868 52,553,868 52,553,868 52,553...

AI summary The document presents a table showing the total annual revenue and rate percentages over a period. The data includes figures for electrical energy production and rate details, with consistent values across multiple years.

- 2 Q: Mr. Chernick, please state your name, occupation, and business address. - 3 A: I am Paul L. Chernick. I am the president of Resource Insight, Inc., 5 Water St, - 4 Arlington, Massachusetts. - 5 Q: Summarize your professional educati...

AI summary Paul L. Chernick, president of Resource Insight, Inc., provides his professional background, including education and experience in utility regulation, rate design, load forecasting, and evaluation of power supply options. He has worked as a consultant in utility regulation and planning since 1981.

11 II. Introduction - 12 Q: On whose behalf are you testifying? - 13 A: My testimony is sponsored by the Nova Scotia Consumer Advocate. - 14 Q: What is the purpose of your testimony? - 15 A: I review the basis for the draft tariffs for Com...

AI summary The testimony, sponsored by the Nova Scotia Consumer Advocate, reviews the draft tariffs for Community Feed-In Tariffs (COMFITs) developed by Synapse Energy Economics. It questions how the concept of 'community' was incorporated into cost estimates and compares COMFIT wind project costs with market-based wind projects. The testimony also computes the rate effects of the proposed tariffs under different levels of COMFIT development.

3 Q: Please summarize your review of the Synapse proposal. 4 A: I have two major complaints about the Synapse report, and a few minor points. 5 The first major point is that Synapse did not interpret its charge from the Board 6 to include...

AI summary The reviewer has two major complaints about the Synapse proposal: it failed to consider the impact of capacity development on rates and misinterpreted the concept of 'community' by excluding community support. The reviewer also highlights technical competence but notes several errors and assumptions that require attention.

2 Q: How does the Synapse team view the effect of community involvement in 3 development of COMFIT projects? - 4 A: Synapse assumes that community involvement adds to the costs of project 5 development, and ignores almost all the benefits...

AI summary The Synapse team argues that community involvement in COMFIT projects increases costs and risks, leading to higher required returns and rates. They assume community investors behave like traditional capital market investors, ignoring the unique aspects of community ownership and its potential benefits. Synapse also contrasts COMFIT projects with purely profit-driven initiatives like Heritage Gas.

5 Q: How would the financing of a community project differ from financing of a 6 purely commercial enterprise? 7 A: A truly community-based project would expect financial support from the 8 community. That may be in the form of donations o...

AI summary The financing of community projects differs from purely commercial enterprises as community projects may rely on donations, low-cost financing from local governments, and support from citizens and institutions. Synapse assumes high returns for community projects, but municipalities can secure lower debt rates, and universities often use donations for capital projects. Community support can justify lower returns than market rates.

4 Q: What NSPI RFP results can be used in testing the reasonableness of the - 5 Synapse-proposed COMFIT rates? - 6 A: Eleven recent wind projects are under contract to NSPI, most from the 2008 RFP - 7 for distribution-connected renewables.

AI summary The question asks about the use of NSPI RFP results in testing the reasonableness of Synapse-proposed COMFIT rates. The response mentions that eleven recent wind projects under contract to NSPI, mostly from the 2008 RFP, are distribution-connected renewables.

6 VIII.Potential Rate Effects of COMFIT - 7 Q: Please describe your analysis of the rate impacts from implementation of 8 the COMFIT program. - 9 A: I estimated the impact on the Company's system-average rate from the purchase 10 of power...

AI summary The analysis estimates the impact on the Company's system-average rate from implementing the COMFIT program, considering both increased costs from COMFIT payments and reduced power-supply costs from purchases of renewable energy.

18 Q: How did you derive the current system-average rate? 19 A: I calculated the current system-average rate as total system revenues divided by 20 total system sales. For both total system revenues and sales, I used the 21 Company's forec...

AI summary The system-average rate was calculated by dividing total system revenues by total system sales, using the Company's 2011 forecasts for 'Above the Line' rate classes and Synapse's proposed tariff as filed in Case No. P-887(2). The derived rate is $111.73/MWh.

3 Q: How did you estimate the change to the current system-average rate due to 4 COMFIT projects? 5 A: I derived the rate impact from COMFIT purchases by estimating both the annual 6 payments at COMFIT rates and the annual power-supply cos...

AI summary The response explains how the rate impact of COMFIT projects was estimated by comparing annual payments at COMFIT rates with avoided power-supply costs. The analysis considers different cases, including limitations on capacity due to distribution constraints and assumptions about renewable resource utilization.

1 Table 5: First-year COMFIT Rate Effects Case Number and Description 1 2 3 4 5 Small Wind Mostly Wind Balanced High Tidal High Penetration Thousands of Dollars per Year If Avoiding Base Fuel $4,089 $32,465 $49,124 $91,913 $151,058 RFP Ren...

AI summary Table 5 presents the first-year rate effects of the COMFIT program under different scenarios, showing the impact on base fuel and RFP renewables. The table indicates varying levels of rate increases depending on the type and penetration of renewable energy sources.

SUMMARY OF PROFESSIONAL EXPERIENCE 1986– Present President, Resource Insight, Inc. Consults and testifies in utility and insurance economics. Reviews utility supply-planning processes and outcomes: assesses prudence of prior power planning...

AI summary The document summarizes the professional experience of an individual with extensive expertise in utility and insurance economics, including consulting, testifying, and advising on utility regulation, rate design, conservation programs, and power planning. The individual has worked with regulatory commissions and consulted on various aspects of energy and insurance policy.

- "Demand-Side Bidding: A Viable Least-Cost Resource Strategy" (with John Plunkett and Jonathan Wallach), in Proceedings from the NARUC Biennial Regulatory Information Conference , September 1990. - "Incorporating Environmental Externaliti...

AI summary The document text lists various academic publications and conference proceedings related to energy efficiency, utility planning, and environmental externalities, authored by individuals and organizations in the energy sector. These works explore topics such as demand-side management, least-cost planning, and the economic evaluation of energy resources.

g Consumer Interests" (with Jonathan Wallach, Susan Geller, John Plunkett, Roger Colton, Peter Bradford, Bruce Biewald, and David Wise). 1997. Baltimore, Maryland: Maryland Office of People's Counsel. "Comments of the New Hampshire Office...

AI summary This section lists various reports and analyses authored or co-authored by Jonathan Wallach and colleagues, focusing on energy regulation, demand-side management, and utility restructuring, including work for the Maryland Office of People's Counsel, New Hampshire Office of Consumer Advocate, and Ontario Hydro.

PRESENTATIONS - "Adding Transmission into New York City: Needs, Benefits, and Obstacles." Presentation to FERC and the New York ISO on behalf of the City of New York. October 2004. - "Plugging Into a Municipal Light Plant," With Peter Enri...

AI summary The text lists various presentations on energy and utility topics, including transmission needs, distributed utility planning, integrated resource planning, and cost recovery for utilities, delivered by individuals and organizations in different regions and years.

ADVISORY ASSIGNMENTS TO REGULATORY COMMISSIONS District of Columbia Public Service Commission, Docket No. 834, Phase II; Least-cost planning procedures and goals; August 1987 to March 1988. Connecticut Department of Public Utility Control,...

AI summary The text lists two regulatory commission advisory assignments: one involving the District of Columbia Public Service Commission's Least-cost planning procedures and goals from 1987 to 1988, and another involving the Connecticut Department of Public Utility Control's Rate design and cost allocations from 1988 to 1989.

; cost-effectiveness of oil displacement; nuclear economics. Joint testimony with S.C. Geller. 7. MDPU 19845; Boston Edison Time-of-Use Rate Case; Massachusetts Attorney General; December 4 1979. Critique of utility marginal cost study and...

AI summary The text outlines various regulatory proceedings and expert testimonies related to energy policy, including rate cases, nuclear power cost reviews, and demand-side management. Key topics include rate design, cost-effectiveness, and energy forecasting, with involvement from the Massachusetts Attorney General and other entities.

price that the UARB should consider for the relatively small (6 MW) COMFIT projects. The UARB should consider that the size of COMFIT projects, limited to 6 MW and with an average of 1.5 MW, won't permit the same economy of scale as commun...

AI summary CanWEA argues that the proposed FIT price for 6 MW COMFIT projects in Nova Scotia is too low, considering the lack of economies of scale compared to larger projects in other provinces. They also highlight issues with Synapse's model, particularly regarding maintenance and equipment costs, and stress the need for a more accurate FIT price to address financing challenges.

- g. The necessity for Mi'kmaq renewable project integration is paramount given the current state of on reserve utility usage rates as a result of sub-standard housing and over population issues. - 2.0 Comparative analysis on the different...

AI summary The KMKNO argues that Mi'kmaq communities face significant challenges in developing renewable energy projects due to legal constraints under the Indian Act, particularly Section 89, which limits their ability to secure financing. They emphasize that non-Mi'kmaq communities have greater access to capital and financial tools, making it harder for Mi'kmaq communities to participate in programs like COMFIT.

1.1.1 Options for Mi'kmaq communities Financing can be obtained for renewable energy projects with sound business plans and some track record of successful business management in Nova Scotia. Involvement of a lending institution is almost...

AI summary Mi'kmaq communities in Nova Scotia face challenges in securing down payments for renewable energy projects, with 40% of required financing needed upfront. Provincial programs similar to Ontario’s could help match contributions, reducing the required down payment. Partners like NSPI or municipalities are essential for the remaining capital.

Introduction Scotian WindFields Inc is pleased to submit information towards the setting of Community Feed In Tariff rates. Scotian WindFields Inc (SWFI) is a community based developer of renewable energy projects. The focus of this submis...

AI summary Scotian WindFields Inc (SWFI) submits information for setting Community Feed In Tariff rates, highlighting its experience in wind energy projects and collaboration with multiple organizations, including the Canadian Wind Energy Association and Nova Scotia Sustainable Electricity Alliance.

General Comments Scotian WindFields Inc (SWFI) is very supportive of the process undertaken by the UARB and its consultants to determine the Community Feed In Tariff rates. The process has been transparent and open and the discussions rega...

AI summary Scotian WindFields Inc (SWFI) supports the UARB's process for determining Community Feed In Tariff rates, noting transparency and objective discussions. SWFI is confident that CEDIFs will successfully participate in the COMFIT program.

Q. What should be assumed regarding the existing facilities remaining boiler life? - A. The existing facility boiler life should not be considered as part of the Tariff rate. Although Synapse was not successful in soliciting actual data on...

AI summary The existing facilities' boiler life should not be factored into the Tariff rate. Experts testified that solid fuel boilers have a long lifespan, potentially over 40 years, and existing steam hosts are unlikely to retire their assets for CHP plants unless incentives are provided.

Introduction The Alliance of Nova Scotia Sawmillers (ANSS) is a group of forest industry companies that have unified to pursue the common goal of ensuring that there is a COMFIT available for biomass CHP and that the rate set for the COMFI...

AI summary The Alliance of Nova Scotia Sawmillers (ANSS) supports the NSUARB and Synapse's transparent process for determining COMFIT rates for biomass CHP. ANSS seeks to contribute to ensuring fair rates that reflect accurate generation costs and provide a fair return to project proponents.

Evaluation of Criteria for FIT Rate Model In determining how the model should be developed to calculate the COMFIT rate for the various technologies, we believe the model should be developed with a reasonable level of detail to ensure that...

AI summary The document discusses the development of a FIT rate model for COMFIT technologies, emphasizing the need for detailed models that reflect actual costs and considering project size limitations. It argues for separate models for different technologies due to varying risks and financial considerations.

4. IRs from the Alliance of Nova Scotia Sawmillers (ANSS) ANSS IR 1. Reference Draft COMFIT Tariffs: Initial Calculations and Discussions, p. 7, Table 1, (a) Why has Synapse assumed 100% corporate ownership of biomass CHP projects? Answer:...

AI summary The Alliance of Nova Scotia Sawmillers (ANSS) raises questions about Synapse's assumption of 100% corporate ownership of biomass CHP projects and the mechanisms available to account for fuel risk in ROE calculations for biomass CHP projects.

ANSS IR 8. Reference p. 4, Risk premium - (a) Please explain qualitatively and quantitatively how Synapse derived the risk premiums assigned to wind farms and hydro projects versus biomass CHP. - Answer: Our assumptions on the cost of both...

AI summary The document discusses Synapse's approach to determining risk premiums for different energy projects, including wind farms, hydro projects, and biomass CHP. It notes that no quantitative analysis was conducted, and that discussions with lenders are ongoing to gather more detailed information on risks and project specifics.

ANSS IR 11. Reference p.11, (cell B44 and Tax Depreciation Worksheet) - (a) Why is it assumed that biomass CHP plants benefit from accelerated depreciation while other technologies do not? - Answer: The biomass CHP rate was calculated assu...

AI summary The document addresses depreciation assumptions for biomass CHP projects under COMFIT, insurance cost assumptions for COMFIT projects, and the allocation of steam-related costs between host facilities and electric ratepayers. Answers clarify that accelerated depreciation applies to taxable corporations, insurance costs are based on preliminary data, and some steam benefits may be shared with ratepayers.

Community Feed in Tariffs Large Wind COMFIT rate calculation review We are writing with the purpose of giving our opinion on the revised tariff financial model worksheet 1 that has been disclosed to the participants concerning "Large Wind"...

AI summary Grupo Guascor provides feedback on the revised COMFIT financial model worksheet for the 'Large Wind' category under the Renewable Electricity Regulations, emphasizing modeling assumptions and calculation mechanics. The comments are based on their experience in renewable energy and are focused on rate setting, not policy aspects.

7.2. After introducing the aforementioned considerations to the worksheet3 we would obtain the following tariff values for "Large Wind": After Tax Return (year 20) Pre-Tax Return (year 20) Feed in Tariff (year 1) Escalation as of General I...

AI summary The text discusses the calculation of tariff values for 'Large Wind' projects, including considerations such as after-tax and pre-tax returns, feed-in tariffs, escalation based on inflation, and the levelized cost of energy. It also includes details on assessed value, property tax rates, and debt service coverage ratios.

Wood Product Manufacturers Association of Nova Scotia PO Box 1303, Truro, Nova Scotia B2N 5N2 Cassie Turple, BPR Jamie Lewis Wade Turner Kim Fuller, BBA CA Richard Freeman Ledwidge Lumber Lewis Mouldings J.A. Turner & Sons Ltd. Ledwidge Lu...

AI summary The Wood Product Manufacturers Association of Nova Scotia (WPMANS) supports the Alliance of Nova Scotia Sawmillers in presenting evidence regarding the Community Feed-in Tariff (COMFIT) process. WPMANS represents independent forestry-related businesses in Nova Scotia with a long history in the province.

hat discussion, pointing out a few areas where both the rates, and their design, might be improved. It is hoped that this can contribute constructively to the rate-setting hearings currently underway.

AI summary The text discusses potential improvements to rates and their design, aiming to contribute constructively to the ongoing rate-setting hearings.

2. Capacity limits [38] The amended Electricity Act states that the net metering program will permit any customer to generate electricity for the customer's own use and to sell any excess electricity to the utility. It also states that the...

AI summary The amended Electricity Act allows net metering up to 1 MW per customer with no system-wide limit. NSPI proposed a 20 MW total limit with two classes but the Board does not support firm limits, citing the Act's intent to encourage renewable energy. The Board supports classifying generators but suggests ongoing monitoring and annual reporting.

OPENING STATEMENT OF THE SYNAPSE CONSULTING TEAM Good morning Mr. Chairman, members ofthe Panel, other parties. We appear before you today to propose Community Feed-In Tariffs (COMFIT's). Our prefiled evidence presents our specific proposa...

AI summary Synapse Consulting proposes Community Feed-In Tariffs (COMFITs) with specific rates for wind, biomass CHP, hydro, and in-stream tidal projects. They developed the rates using a three-step utility ratemaking process, considering capital costs, operating expenses, and required revenues, and aligned their approach with relevant legislation and the Renewable Electricity Plan.

Return and the Meaning of Community Perhaps the most important issue in this proceeding is the nature of the financing for Community FIT projects. For the wind and hydro projects: - Synapse assumed that returns would need to attract third-...

AI summary The proceeding discusses the financing of Community FIT projects, with differing assumptions about return rates and community involvement. Synapse assumes higher returns and minimal community support, while others argue for lower rates and active community participation. The Board is urged to set real COMFIT rates to encourage community involvement and achieve renewable energy goals.

Mr. Livingston's Exhibit Mr. Livingston assumes that COMFIT hydro and wind projects can only be financed through a CEDIF, and performs some computations for a project half owned by a CEDIF and half owned by some market investor who demands...

AI summary The exhibit discusses Mr. Livingston's assumptions about financing COMFIT hydro and wind projects through a CEDIF, and critiques his calculations regarding reserve fund costs and debt service periods. Corrections to his model reduce the reserve fund cost and suggest a 4% return to the CEDIF, with tax credits increasing it to 9.5%. The exhibit also notes that Mr. Livingston's Black River Wind has signed contracts with NSPI at prices relevant to Synapse's proposed rates.

Community Projects: Fixed Price To encourage a range of projects widely dispersed throughout the province, this plan establishes a community-based feed-in tariff (COMFIT) for an expected 100 megawatts of renewable electricity projects conn...

AI summary This plan introduces a community-based feed-in tariff (COMFIT) to support 100 megawatts of renewable electricity projects connected at the distribution level, along with programs to assist community groups with technical, financial, and regulatory aspects of project development.

Individuals: Enhanced Net Metering To give individuals and small businesses the opportunity to participate in green energy projects, the plan expands and enhances the current net metering program available to consumers through NSPI. Projec...

AI summary The plan enhances net metering for individuals and small businesses, allowing projects up to one megawatt with multiple meters in a single distribution zone to use two-way meters and receive retail rate payments for excess power produced annually.

2. Community-Based Feed-In Tariff Small-scale producers typically cannot compete successfully against much larger developers in a competitive bidding process. More than 45 jurisdictions around the world, including Spain, Germany, Ontario,...

AI summary The Community-Based Feed-In Tariff (COMFIT) is introduced to support small-scale and community-owned renewable energy projects, allowing municipalities, First Nations, co-operatives, and non-profit groups to participate. Projects are connected at the distribution level, typically under 2 MW, with technical studies required. Large-scale projects continue to be procured through competitive bidding, while COMFIT will be reviewed in 2012 to meet a 100 MW target.

3. Enhanced Net Metering Net metering is a program that lets a consumer connect a small renewable electricity source to the grid through a special meter that measures electricity flows in two directions. For any electricity fed into the gr...

AI summary The document outlines an enhanced net metering program by NSPI, increasing power limits from 100 kW to 1 MW, allowing multiple meters under one account, and providing payment for surplus electricity at retail rates. This aims to support renewable energy adoption by homeowners and businesses.

• A Tidal Feed-In Tariff: Tidal devices are still in the demonstration phase. The electricity they produce costs more than electricity from mature renewable sources. To support tidal development, the province will set a communitybased feed...

AI summary Nova Scotia plans to introduce a community-based feed-in tariff (COMFIT) for tidal projects and a special FIT for transmission-level tidal arrays to support the development of tidal energy, which is still in the demonstration phase and more expensive than other renewables.

Utility and Review Board (UARB) The UARB already has responsibility for approving cost recovery for renewable energy projects through the setting of electricity rates. Under the Renewable Electricity Plan, it will take on responsibility fo...

AI summary The UARB is responsible for approving cost recovery for renewable energy projects through electricity rates and will also set and periodically review FIT rates under the Renewable Electricity Plan based on government-established criteria.

Facilitation We expect the Community-Based Feed-in Tariff (COMFIT) to attract participants who need support developing renewable energy projects.A sustainable energy planning group will be established by government to help develop communit...

AI summary The Community-Based Feed-in Tariff (COMFIT) is expected to attract participants requiring support for renewable energy projects. A government-established planning group will coordinate efforts across various departments, authorities, and organizations to assist with project development, regulatory approvals, and financing.

Community Projects: Fixed Price To encourage a range of projects widely dispersed throughout the province, this plan establishes a community-based feed-in tariff (COMFIT) for an expected 100 megawatts of renewable electricity projects conn...

AI summary This plan introduces a community-based feed-in tariff (COMFIT) to support 100 megawatts of renewable electricity projects at the distribution level, along with programs to help community groups with technical, financial, and regulatory aspects of project development.

2. Community-Based Feed-In Tariff Small-scale producers typically cannot compete successfully against much larger developers in a competitive bidding process. More than 45 jurisdictions around the world, including Spain, Germany, Ontario,...

AI summary The Community-Based Feed-In Tariff (COMFIT) program is introduced to support small-scale and community-owned renewable energy projects. It aims to encourage participation by municipalities, First Nations, co-operatives, and non-profit groups, with projects typically under 2 MW connected at the distribution level. Large-scale projects will continue to be procured through competitive bidding, and the program will be reviewed in 2012.

Opening Statement from E3 Analytics, on behalf of the EAC and NovaSEA. Good afternoon Mr. Chairman, members ofthe panel, and participants in attendance. I have submitted comments to the Board, which you should now have before you. I will m...

AI summary E3 Analytics highlights that the proposed tariffs for renewable energy projects are generally financially viable, but notes challenges for community-based projects in securing initial capital. They also point out a significant disparity between tariffs for projects under and over 50kW, which could lead to regulatory arbitrage and clustering around the 50kW threshold, resulting in inefficiencies and increased land use.

Evaluation of Incremental FIT Payment Adjustments The rapid pace of renewable technology advancement, combined with changes in the costs of different renewable energy technologies, can make adjustments to FIT payments necessary to ensure t...

AI summary The document discusses the need for adjustments to Feed-in Tariff (FIT) payments to ensure cost efficiency as renewable technology advances and costs change. It outlines two types of adjustments: automatic and administrative, each with its advantages and potential drawbacks. The text emphasizes the importance of balancing policy stability and flexibility to maintain investor confidence and support renewable energy development.

Nova Scotia Utility and Review Board In the Matter of: The Electricity Act and a hearing to determine Renewable Energy community based Feed -in Tariffs Opening Statement of Daniel Roscoe On behalf of Scotian Wind Fields Inc April t h or 8t...

AI summary Scotian Wind Fields Inc. presents an opening statement to the Nova Scotia Utility and Review Board, addressing concerns regarding the accuracy of assumptions in Synapse's Exhibit I, particularly regarding interconnection costs, O&M costs, and debt financing rates for community-based renewable energy projects. They argue that the 8% interest rate proposed by Synapse is too low and request a 10% rate, citing the lack of prior debt financing experience in Atlantic Canada for such projects.

- [19] While there is no overall limit expressed in the Regulations, the Province indicated in its Renewable Electricity Plan that it expects about 100 MW of distribution grid capacity will be used by COMFIT projects. - [20] It is noted th...

AI summary The text outlines the Renewable Electricity Regulations, particularly focusing on the COMFIT program. It mentions the expected use of 100 MW of grid capacity by COMFIT projects and clarifies that developmental tidal arrays are not considered here. Section 19 defines 'community feed-in tariff' and outlines factors the Board must consider when setting tariffs, such as depreciation, labor costs, and return on investment.

bt financing (i.e., universities), or the likelihood that some members of the community may be satisfied with a lower return on equity in return for the provision of renewable energy in the community. [48] In developing proposed tariffs un...

AI summary The text discusses the development of COMFIT tariffs, emphasizing that Synapse developed one tariff per resource class without specific assumptions about project ownership. It also highlights that the Board considers just and reasonable rates for COMFIT projects, aligning with the Electricity Act and Public Utilities Act. The goal is to encourage reasonable development activity for COMFIT projects.

5.4 Whether all potential projects should be economically feasible [57] The Board refers again to the general approach adopted by Synapse in developing COMFIT tariffs for the respective classes of electricity generation facilities. Synapse...

AI summary The Board acknowledges Synapse's approach to setting COMFIT tariffs, which balances cost-based rates with fostering project development. It emphasizes that not all projects will be economically feasible under the approved tariffs, as setting higher rates to ensure feasibility would contradict legislative goals of just and reasonable rates and reasonable development activity.

5.5 Consideration of tariffs in other jurisdictions - [61] In assessing whether the proposed COMFIT tariffs are reasonable, Synapse, in addition to considering stakeholder feedback, compared the proposed tariffs "...to FIT prices adopted i...

AI summary The document discusses the comparison of Nova Scotia's proposed COMFIT tariffs with those in other jurisdictions such as Vermont and Ontario. Key differences include eligibility for tax credits, ownership requirements, and project size, which influence tariff levels. The Province supports benchmarking as a necessary approach, despite uncertainties in project cost estimates.

6.2.1 Submissions [71] In developing proposed tariff rates under the COMFIT models, Synapse did not make any specific assumptions about the project ownership. As noted earlier in this Decision, the approach that was adopted was to determin...

AI summary Synapse developed COMFIT tariff rates using a 'typical cost' approach to ensure low tariffs while encouraging development. They considered the impact of ownership structures, particularly cost of capital and income tax treatment, but found the net impact on most resource classes to be small. For certain projects, rates were averaged between taxable and non-taxable assumptions.

tenance reserve, debt service reserve and a working capital account. ... [Synapse Report, Exhibit B-1, p. 13] [80] financing: Finally, Synapse assumed that all capital projects would require interim ... We estimate interest during construc...

AI summary The document discusses Synapse's assumptions regarding financing for capital projects, including interest during construction and loan periods for various energy projects. It also highlights challenges to the cost of debt and return on equity, with Mr. Chernick arguing that Synapse overestimated financing costs for community projects and recommending adjusted COMFIT rates based on lower capital costs and returns for certain projects.

the wind developers suggestion and the data assumption used by Hatch. [Synapse Report, Exhibit B-1, p. 23] [97] In terms of benchmarking its proposed tariff, Synapse considered Vermont and Ontario: We have proposed a flat rate of $139 per...

AI summary The document discusses proposed feed-in tariff (FIT) rates for wind energy in Nova Scotia, comparing them to rates in Vermont and Ontario. Synapse recommends a rate of $139 per MWh, citing Ontario's FIT rate of $135 per MWh and the need to account for COMFIT requirements. The Consumer Advocate, Mr. Chernick, recommends a lower rate of $102 per MWh based on a 37% capacity factor assumption and a 6% debt financing rate, challenging Synapse's interpretation of the Hatch Report.

8.3 Tariff Overlap Between Small and Large Wind Projects [134] The Board considers it should specifically address one point raised by Mr. Couture on behalf of the Ecology Action Centre. [135] Mr. Couture submitted that the significant disp...

AI summary The Board is considering concerns raised by Mr. Couture regarding the potential for developers to exploit the disparity between small and large wind project tariffs under COMFIT, leading to regulatory arbitrage and inefficiencies in the policy framework.

9.4.1 Findings on Financing [183] The Board accepts the wide experience of Mr. Bodington in financing various electric generation projects, of which some are biomass. However, the Board finds it difficult to conclude a Nova Scotia sawmille...

AI summary The Board acknowledges Mr. Bodington's experience in financing electric generation projects but questions the feasibility of a Nova Scotia sawmiller financing a biomass CHP project solely through third-party equity. It concludes that a mix of debt and equity is more likely. The Board also accepts the use of a fuel escalator mechanism and Synapse's rate determination for a biomass CHP project.

[213] Synapse also reviewed all of ANSS's costs and said: ... And when we plugged all of these assumptions into our model we came out with a rate of $330 per megawatt hour compared to the rate that we had proposed of 156. And when we looke...

AI summary Synapse evaluated ANSS's costs and found a proposed feed-in tariff rate of $330 per megawatt hour to be significantly higher than market rates in Ontario and Vermont. Synapse recommended a more conservative approach to setting the rate, balancing the risk of no project development against the risk of long-term overpayment.

10.1 Submissions [235] Synapse proposed a tariff of $652 per megawatt hour for in-stream tidal projects. They based this tariff on a 500 kilowatt installation employing one or more instream tidal generators. Synapse assumed total project c...

AI summary Synapse proposed a $652 per megawatt hour tariff for in-stream tidal projects, based on estimated costs and a 37% capacity factor. The Consumer Advocate recommended a lower rate of $398 per megawatt hour, while Mr. Couture supported the higher rate but suggested tariff degression. The Province responded by indicating that tariff degression could be considered in future reviews.

11.1 Submissions [245] For run-of-the-river hydroelectricity Synapse proposed a tariff of $140 per megawatt hour. They based this tariff on a one megawatt project of either penstock or in-river type. At a penstock plant, water is diverted...

AI summary Synapse proposed a $140 per MWh tariff for run-of-the-river hydroelectricity, based on a 1 MW project and considering residual value and O&M costs. They compared it to Vermont and Ontario FIT rates. Mr. Chernick recommended a lower rate of $114 per MWh, adjusting for debt, equity, and tax relief, while noting varying rates in other jurisdictions.

14.0 SUMMARY [277] The Board held a hearing to determine Renewable Energy Community Based Feed-in Tariffs ("COMFIT"), pursuant to recent changes to the Electricity Act and the Renewable Electricity Regulations. [278] While there is no over...

AI summary The Nova Scotia Utility and Review Board held a hearing to determine COMFIT tariffs under the Electricity Act and Renewable Electricity Regulations. The Province expects about 100 MW of distribution grid capacity from COMFIT projects. The Board used a consultative process with Synapse to develop tariffs based on input cost assumptions and a discounted cash flow model.

Nova Scotia COMFIT Model Depreciation Worksheet: Bottom Synapse Compliance Large Wind, Taxable Owner Ope ratin Yea g r 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 % of Levelized Rate Escalating @ Infl. 0.0% Other Revenues (increas...

AI summary This document presents a depreciation worksheet for a large wind project under the Nova Scotia COMFIT model, including rate escalation, return metrics, and revenue projections over a 20-year period.

FUEL ADJUSTMENT The fuel portion ofthe rate will be adjusted automatically on January 1 of each year based on a percentage ofthe change in the Consumer Price Index for Nova Scotia (all items excluding energy) and the full change in the pri...

AI summary The fuel adjustment mechanism for the rate is automatically updated annually on January 1, based on changes in the Consumer Price Index (CPI) and diesel fuel prices. The adjustment formula combines 75% of the CPI change and 25% of the diesel fuel price change over the previous 12 months.

2.0 Purpose The NSUARB has hired Synapse Energy Economics, Inc., a consulting company from Massachusetts, to derive the prices for the various COMFITs. The consulting group will be evaluating a number of factors in the determination of the...

AI summary The NSUARB has engaged Synapse Energy Economics, Inc. to determine COMFIT prices for biomass CHP. The study will be transparent, allowing direct comparison of data with the consultant's model. If discrepancies arise, the information will be challenged at a rate hearing. ESI Inc. may be called to testify on the study's details.

6.1 Allocating the Cost of Steam Production ANSS recommends allocating half the cost of steam production to electricity ratepayers. We have analyzed the impact of this change in the Excel file "Synapse U-6 Steam Cost Allocation." In the st...

AI summary ANSS suggests allocating half the cost of steam production to electricity ratepayers, with a detailed analysis provided in an Excel file. This allocation changes various cost components and results in a total 2012 tariff rate of $217 per MWh.

6.2 Capital Structure and Cost ANSS recommends assuming 100% equity financing and a return on equity of 17.5%. We have analyzed the impact of this change in the Excel file "Synapse U-6 Capital Structure." To examine this, we removed debt f...

AI summary ANSS recommends 100% equity financing with a 17.5% return on equity, which impacts the fixed portion of the rate. Changes to assumptions such as debt service reserve account and interest during construction were made in the 'Synapse U-6 Capital Structure' Excel file, resulting in a fixed rate of $128 per MWh.

6.5 Capacity Factor ANSS recommends a capacity factor of 90% for the CHP scenario. We have analyzed the impact of this change in the Excel file "Synapse U-6 Capacity Factor." Here we have changed the capacity factor of the turbine in conde...

AI summary ANSS recommends a 90% capacity factor for the CHP scenario, which increases fuel costs and affects the levelized rate calculation. The change is reflected in an Excel model, with a resulting fixed rate of $89 per MWh after adjusting for fuel costs and solving for an after-tax IRR of 13%.

Nova Scotia Community Feed-in Tariffs 2010 NSUARB-BRD-E-R-10 Undertaking: U-7

AI summary The document outlines an undertaking related to the Nova Scotia Community Feed-in Tariffs 2010, identified as NSUARB-BRD-E-R-10. It references Undertaking U-7, which may pertain to commitments or actions related to the feed-in tariff program.

Nova Scotia Community Feed-in Tariffs 2010 NSUARB-BRD-E-R-10 Undertaking: U-8

AI summary The document outlines an undertaking titled 'U-8' related to the Nova Scotia Community Feed-in Tariffs 2010, identified by the reference NSUARB-BRD-E-R-10. Specific details of the undertaking are not provided in the text.

Produce a Synapse model using Neal Livingston's assumptions – Pynn letter and payback in 10 years In the excel file titled, "Synapse U-8," and the attached hard copies of that model run, we have made the four changes to the input assumptio...

AI summary The text describes modifications made to the Synapse U-8 model based on Mr. Pynn's letter, including a 10-year loan amortization, 20% interest rate during construction, 25% return on equity, and total project costs of $4.2 million. The resulting COMFIT rate is $252 per MWh, which is $113 per MWh higher than the original Synapse proposal.

April 14, 2011 Nova Scotia Utility and Review Board 3 rd Floor 1601 Lower Water Street Halifax, Nova Scotia B3J 3P6 Attention : Nancy McNeil Regulatory Affairs Officer/Clerk Dear Ms McNeil: RE: Renewable Energy Community Feed-in Tariffs –...

AI summary CBCL provided a Synapse model analysis to determine the COMFIT rate required to meet a 13% rate of return for a biomass-fired heating plant and an 8 MW CHP plant. CBCL argues that the Synapse model's cost allocation method is flawed and proposes a fuel consumption-based allocation instead, resulting in a higher COMFIT rate.

AGENDA 1 - Introduction, Process and Timetable, Objectives 2 - Synapse Presentation Tariff Design Parameters 3 - Synapse Presentation Cost Models Break 4 - Participant Questions and Comments Document Number: 183800

AI summary The agenda outlines the structure of the proceeding, including an introduction to the process and timetable, presentations on tariff design parameters and cost models, a break, and a session for participant questions and comments. Document Number: 183800.

The Model Developed in Vermont - • The model is a Microsoft Excel workbook with three main worksheets: worksheets: - Assumptions - Cash Flow - Tax Depreciation - • Main steps in using the model - Set target rate of return - Enter data abou...

AI summary The model developed in Vermont is a Microsoft Excel workbook with three worksheets: Assumptions, Cash Flow, and Tax Depreciation. It is used to set a target rate of return, input project data, and adjust revenue per kWh to achieve the desired Internal Rate of Return (IRR).

Cross-cutting p In uts - •Target rate of return for projects - • Rate of inflation assumed for the period of the contracts (e.g., for use in inflating O&M costs) - • If some portion of the FIT rate escalates, is the escalation rate fixed o...

AI summary The text outlines key considerations for determining the target rate of return for projects, the assumed rate of inflation for contract periods, and whether escalation rates for FIT (Feed-in Tariff) rates are fixed or indexed.

The Presentation Outline - A. Feed-in tariffs around the world - B. Rate Setting Process and Methodology - C. A Potential Starting Point

AI summary The presentation outline includes sections on feed-in tariffs globally, the rate-setting process and methodology, and a potential starting point for discussion. The content is introductory and sets the stage for a deeper analysis of energy policies and regulatory frameworks.

The Presentation Outline - A. Feed-in tariffs around the world - B. Rate Setting Process and Methodology - C. A Potential Starting Point

AI summary The presentation outline includes sections on global feed-in tariffs, the rate-setting process and methodology, and a potential starting point for the discussion. It sets the stage for a detailed analysis of regulatory and policy considerations.

Building a feed-in tariff rate calculator • Goal is to reach an appropriate rate that is high enough to spur renewable energy development while at the same time not so high as to provide windfall profits to project owners.

AI summary The goal is to establish a feed-in tariff rate that encourages renewable energy development without granting excessive profits to project owners.

- •Calculates the net present value and rate of return of an investment based on the projected revenues and expenses - •Pros: - •Can take into account time-sensitive events such as major equipment repairs or replacements - •Easily structur...

AI summary The text describes a method for calculating the net present value and rate of return of an investment, highlighting its ability to consider time-sensitive events and tax benefits, as well as its transparency.

Vermont FIT Rate Framework as a Starting Point? - Readily available and easily altered - Vetted through transparent stakeholder process - Represents consensus between utility, industry, and regulatory staff - Online record of stakeholder c...

AI summary The Vermont FIT Rate Framework is highlighted as a useful model due to its flexibility, transparency, and consensus-based development. It allows for easy adaptation to different ownership structures, technologies, and financing options, and reflects up-to-date thinking on rate setting.

s in a very comprehensive and exhaustive manner, considering the difficult task of trying to arrive at average Tariffs that could satisfy a variety of sizes, technologies and applications. - 8 Synapse presented its report to the Board, con...

AI summary The document discusses the UARB's process of determining fair tariffs, noting the difficulty in satisfying all stakeholders. Synapse's proposed tariffs are deemed fair and effective, and the submitter urges the UARB to adopt them without delay.

Community Projects: Fixed Price To encourage a range of projects widely dispersed throughout the province, this plan establishes a community-based feed-in tariff (COMFIT) for an expected 100 megawatts of renewable electricity projects conn...

AI summary The Community Projects: Fixed Price plan introduces a community-based feed-in tariff (COMFIT) to support 100 megawatts of renewable electricity projects across Nova Scotia. It also includes programs to help community groups with technical, financial, and regulatory aspects of project development.

2. Community-Based Feed-In Tariff ... This plan introduces a Community-Based Feed-In Tariff (COMFIT) to encourage the development of local renewable energy projects by municipalities, First Nations, co-operatives, and non-profit groups.......

AI summary Nova Scotia introduces a Community-Based Feed-In Tariff (COMFIT) to support local renewable energy projects by municipalities, First Nations, co-operatives, and non-profits. Projects will be connected at the distribution level, with eligibility limited to ensure community-rooted investments. The program will be reviewed in 2012 to ensure it meets its goal of supporting 100 MW of community-scale renewable energy.

a generation facility in a class to which a community feed-in tariff applies in accordance with subsection 19(1); - (b) if it uses biomass, it must be a combined heat and power generation facility;

AI summary The text outlines conditions for a generation facility to qualify under a community feed-in tariff, specifying that it must be in a class eligible for such a tariff and, if using biomass, must be a combined heat and power facility.

THE CURRENT PROCEEDING - 12. As noted above, sections 18 and 19 of the Regulations require the Board to establish a COMFIT for designated classes of electricity generation facilities. To fulfill this mandate, the Board established a public...

AI summary The current proceeding involves the establishment of a COMFIT for designated electricity generation facilities under sections 18 and 19 of the Regulations. The Board initiated a public hearing process and retained Synapse Energy Economics, Inc. to develop proposed tariff rates, with assistance from Meister Consultants Group and an independent consultant.

sistent with as a result the cents per kilowatt hour result with tariffs adopted elsewhere and projects costs that we've seen in the province and elsewhere. (Transcript, April 4, 2011, pp.29-32) - 17. NSDOE and NSE respectfully submit that...

AI summary NSDOE and NSE support Synapse's approach to setting COMFIT rates, emphasizing the importance of benchmarking and caution in deviating from established rates. They acknowledge uncertainties in project costs and plan to review the COMFIT program in 2012 to ensure it meets its 100 MW target.

t's why we believe if we went back at this again and looked at it, we wouldn't come out with a rate that's dramatically different, because we feel like we really need to be respecting the market data. - 24. As noted earlier, NSDOE urges a...

AI summary NSDOE supports a conservative approach to COMFIT rates, aligning with Synapse's proposal rather than the Alliance's. They emphasize that the tariff should apply only to electricity from combined heat and power plants, and caution against setting rates that might encourage scrapping useful equipment.

- 48. The interpretation offered by NSDOE in these submissions is also consistent with the January 27, 2011 letter from Deputy Minister of Energy to Synapse clarifying the "policy intent of the government with regard to the draft community...

AI summary NSDOE argues that the term 'a tariff' in section 18(2) of the Regulations refers to 'a rate', and that a tariff containing multiple rates would not be permissible. This interpretation aligns with a 2011 letter clarifying the government's policy intent regarding the 50 kilowatt wind turbine feed-in tariff.

Merrick Jamieson Sterns Washington & Mahody BARRISTERS John Merrick, Q.C. Direct Line: (902)429-3178 [email protected] April 29, 2011 VIA EMAIL 25475 Ms. Nancy McNeil Regulatory Affairs Officer/Clerk Nova Scotia Utility and Review Board 1...

AI summary The Consumer Advocate submits that setting tariffs for renewable energy generation in Nova Scotia presents a challenge, as the Board must balance reasonable inducements for generators with fair rates for ratepayers. The submission highlights concerns about selecting a tariff within a range of reasonableness and the potential risks of overcompensation or discouraging participation.

JURISDICTION OF THE BOARD The jurisdiction and obligation of the Board in setting tariffs is to ensure that the tariffs are just. The Board may make from time to time such orders as it deems just in respect to the tolls, rates and charges...

AI summary The document discusses the Nova Scotia Utility and Review Board's (NSUARB) responsibility to ensure that tariffs are just and reasonable. It references a court decision emphasizing that all rates must be fair and not discriminatory. The amendments to the Electricity Act are noted, but the requirement for just rates remains unchanged.

IT IS A COMFIT, NOT A FIT The Nova Scotia legislation limits access to four of the proposed tariffs to defined owner generators ("community organizations"). Those tariffs are to be designed to permit community organizations to take advanta...

AI summary The Nova Scotia legislation restricts access to four proposed tariffs to community organizations, emphasizing a design that supports community generators rather than commercial entities. This approach is unique, and Synapse witnesses lacked experience with COMFIT.

THE ADVANTAGES OF COMMUNITY ORGANIZATIONS The Consumer Advocate acknowledges that depending on the identity of the potential owner, community organizations may have disadvantages or greater challenges than commercial developers. They may,...

AI summary The Consumer Advocate notes that while community organizations may face challenges such as lack of experience and difficulty in securing financing, they also have advantages like not needing debt financing, as seen with St. Francis Xavier University and potentially municipalities. The Board should consider these factors when setting tariffs.

MR. COADY: ...And the Synapse consultants at one of the earlier technical sessions indicated that to the best of their knowledge there were no universities interest in combined heat and power in Nova Scotia. I knew that was not the case. A...

AI summary Mr. Coady discusses his efforts to inform universities in Nova Scotia about combined heat and power (CHP) opportunities, citing past work and proposals. He also mentions that the university sector was initially unaware of the importance of CHP. Mr. Merrick asks whether a 13% return on equity is a requirement for universities considering CHP projects under COMFIT, to which Mr. Coady agrees.

TARIFFS ARE NOT TO BE SIMPLY BASED ON RECOVERY OF ALL COSTS The potential generators who took part in the hearing essentially compiled a list of what they anticipate their costs to be and translated that into the rate that would be necessa...

AI summary The document argues that tariffs should not solely be based on full cost recovery, as this can lead to inefficiency and unfairness to ratepayers. It suggests that the Board should set lower tariffs to encourage economic project structuring and efficient generation, citing examples of existing hydro and wind generators operating at lower rates.

IMPACT ON RATES Other than the filed evidence of Mr. Chernick there was no attempt made to assess the impact of the proposed tariff structure on rates. But in order to achieve the mandate of fair and reasonable rates to the ratepayer, that...

AI summary The document discusses the impact of the proposed tariff structure on rates, highlighting that the COMFIT program could be costly for ratepayers if not constrained. It emphasizes the need to balance fair and reasonable rates by opting for lower tariff levels and capacity caps to protect consumers.

MR. CHERNICK: But I'm assuming that the equity ultimately comes from the manufacturer who'd be using the COMFIT structure as a way of testing and demonstrating the technology and being able to say we've installed these projects in cooperat...

AI summary Mr. Chernick discusses how the COMFIT structure allows manufacturers to test and demonstrate technology with community partners, potentially leading to commercial contracts and cost reductions. He notes that if costs remain high, the projects may not be commercially viable compared to other renewables.

[Transcript, pp. 926-927] Synapse assumes that community tidal projects would be financed entirely by tidal-technology developer equity, and that those developers should be allowed to earn a very high 15% return, due to the immaturity of t...

AI summary Synapse assumes tidal-technology developers can earn a 15% return on equity, but this is criticized as inconsistent with market realities. Mr. Chernick proposes a $381/MWh rate, which would be the highest globally, and suggests a 3.5 MW cap on tidal capacity under COMFIT to moderate rate impacts.

2. Large Wind Generators As discussed in Mr. Chernick's evidence, wind projects in the size range covered by the large wind category of COMFIT have recently sought and obtained contracts with NSPI at prices considerably below those recomme...

AI summary The text discusses the pricing of large wind generators under the COMFIT program, noting that recent contracts with NSPI are significantly lower than Synapse's recommendations. It suggests that the Board should not set COMFIT prices higher than the average from Exhibit PLC-2, Table 2, and that adjusting Synapse's estimates could lower prices further, reducing the impact on retail rates.

3. Biomass Generation It is acknowledged that fuel risk is a major consideration in setting a biomass tariff but the proposed tariff by Synapse compensates for that fuel risk by providing an escalation mechanism. That by itself should acco...

AI summary The document discusses the proposed COMFIT biomass tariff by Synapse, which includes an escalation mechanism to address fuel risk. The Consumer Advocate argues the proposed $156/MWh price is overcompensation, while ANSS requests a much higher rate. The Board is advised to cap biomass capacity if approving a higher rate to mitigate retail rate impacts.

4. Small Wind Tariff Small wind should be the easiest of the all the technology categories to site and develop by municipalities, universities, COMFITs and other community entities. It is also the technology most amenable to community assi...

AI summary The document discusses the Small Wind Tariff, noting that small wind is easy to site and develop with community assistance. A lower cost of capital could reduce Synapse's estimated cost from $452/MWh to $400/MWh, potentially increasing adoption. However, the proposed rates are higher than those achieved by NSPI in recent RFP processes.

5. Hydro Synapse's recommended $140/MWh price for hydro is lower than all other categories except small wind, and opportunities for hydro development are likely to be limited. COMFIT hydro's effect on rates is thus likely to be modest. Non...

AI summary Synapse recommends a $140/MWh price for hydro, lower than most categories except small wind. The Board is advised to lower this price to $125/MWh to reflect more reasonable financing and property-tax relief for community-developed projects.

BETTER TO BE LOW THAN HIGH Setting a tariff that is higher than required locks in the overpayment for the 20 year duration of the tariff. There is no practical ability to adjust. Ratepayers are committed to pay an excessive tariff because...

AI summary The text discusses the risks of setting tariffs too high, locking in overpayment for 20 years, versus underestimating needs, which allows for upward adjustments. It also highlights concerns about the COMFIT program, emphasizing that it should serve communities rather than benefit commercial investors.

[Transcript, p. 948] This is a particularly relevant consideration in the difficult circumstances in which the Board has to carry out its instructions. Because of the wide range of potential tariffs, the wide range of requirements of power...

AI summary The Board is advised to take a conservative approach when setting initial COMFIT tariffs due to uncertainties in the market and potential risks of incorrect tariff levels. If initial rates are too low, adjustments can be made later, but overly high rates could lead to long-term consumer harm from excessive costs.

CONCLUSION For each class of electricity generation facility for which the Board has been instructed to set a tariff there is a wide range of reasonable presumptions or criteria which the tariff should accommodate. While Synapse has recomm...

AI summary The Board is instructed to set COMFIT tariffs for electricity generation facilities, considering the need for just and reasonable rates while providing incentives to generators. The Board should set tariffs at the lower end of the reasonable range due to the lack of precedent and potential negative consequences of setting them too high.

2) Small Wind: There appears to be a full head-on charge by Government, to push the small wind category, even in advance of this hearing, and without understanding the implications on small investors and energy production related to greenh...

AI summary The text criticizes the government's push for small wind energy projects, arguing that the policy lacks analysis of reliability and long-term outcomes compared to solar power. Concerns are raised about the short lifespan and low power output of small wind turbines, which could lead to higher costs and risks for ratepayers and investors.

5) Are CEDIFs the right community finance structure for locally owned renewable energy projects? There was significant evidence put forward by Black River Wind and others at the hearing, regarding the matter of whether or not CEDIFs have b...

AI summary The document discusses the effectiveness of CEDIFs as a community finance structure for renewable energy projects in Nova Scotia. Evidence presented shows that CEDIFs have not been successful for shareholders and investors, leading to concerns about the risk of government policy relying on this model without sufficient evidence.

iders appropriate. - 7. The Act provides that in order to qualify as a generator, it must be a Band Council, a Municipality, a not-for-profit entity, a community economic-development corporation, a cooperative or any other entity permitted...

AI summary The document outlines the requirements for qualifying as a generator under the Act and discusses the proposed COMFIT rates for Biomass CHP. The ANSS opposes the proposed rate of $156/MWh, arguing it is not cost-based and does not reflect the risk of Biomass CHP, and instead recommends adopting a rate of $320/MWh with biennial fuel cost readjustments.

DEBT EQUITY RATIO - 57. Synapse suggests that financing of 60% debt and 40% equity at a cost of debt of 9.5% and internal rate of return at 13% is appropriate. - 58. The ANSS submits that the evidence of Jeff Bodington ought to be preferre...

AI summary Synapse recommends a 60% debt and 40% equity financing model for biomass CHP projects, but ANSS argues that this is not feasible due to fuel cost volatility and lack of precedent for such financing. ANSS supports 100% equity financing, citing the expert testimony of Jeff Bodington, who has extensive experience in power project financing.

CONCLUSION - 100. The reality is the government has made a policy decision to encourage small renewable generation. Electricity ratepayers will be paying for those costs. Other jurisdictions have offered tax breaks, grants, or incentives b...

AI summary The conclusion highlights the government's policy decision to support small renewable generation, with ratepayers covering associated costs. Tax incentives are unavailable in Nova Scotia, and the Board must follow existing regulations. Mr. Hayes asserts the accuracy of provided costs and recommends adopting the rate and fuel cost reset mechanism from Undertaking U-10 and U-11.

IN THE MATTER OF : RENEWABLE ENERGY COMMUNITY FEED-IN TARRIFFS. NSUARB-BRD. Closing comments from JOHN H. REYNOLDS P.Eng. FOR QUETTA INC. April 29th. 2011. The Board will recall from the hearing how difficult it seems to 'nail-down' the ap...

AI summary John H. Reynolds from Quetta Inc. requests the Board to include a call for standardized reporting on wind farm results in their order to support meaningful reviews of renewable energy rates, acknowledging that some developers may not want to disclose data publicly.

Introduction The Ecology Action Centre has acted on behalf of the Nova Scotian environment and population on a wide range of issues for over 40 years. Brennan Vogel (Bachelors Environmental Studies, University of Waterloo; Masters of Arts...

AI summary The Ecology Action Centre (EAC) supports the Community Feed-In Tariff (COMFIT) program but expresses concerns about its potential underperformance and risks. EAC argues that FITs are a better pathway for renewable electricity development and recommends policy clarification. The submission highlights issues with COMFIT and suggests considerations for the Board when setting rates.

Distribution Grid Availability and Capacity - 1. EAC advocates for creating publicly accessible information about the NSPI-SO distribution grid availability and capacity as a means of facilitating and supporting collaborative COMFIT projec...

AI summary The EAC emphasizes the importance of publicly accessible information about NSPI-SO's distribution grid capacity and availability to support COMFIT project developments. The discussion highlights concerns about NSPI-SO's ability to accommodate connection requests and the impact of transparency on investor confidence in COMFIT projects.

Recommendations: 1. Based on the Board"s own consideration of distribution zone constraints in the Net Metering decision earlier this year (EAC Exhibit A), The Board should consider distribution zone availability and capacity issues as unr...

AI summary The EAC recommends that the Board address unresolved distribution zone capacity issues by requiring NSPI to provide a grid assessment and introduce an access guarantee for COMFIT projects. They also suggest implementing a transparent grid information tool to support investor confidence and financial mechanisms for COMFIT development.

Issues with Stakeholder Eligibility, Variability in COMFIT Stakeholders Abilities to Access to Debt Financing from Private Lenders and Raise Equity for Capital - 1. EAC questions the abilities of all COMFIT stakeholders to equitably access...

AI summary The EAC raises concerns about the unequal ability of COMFIT stakeholders to access debt financing and raise equity, due to eligibility restrictions and financial disparities. This may hinder participation, particularly for First Nations and municipalities, and could lead to unintended consequences in project development.

Recommendations: - 1. Given that there appears to be unreasonable inequity between eligible stakeholders in access to debt and abilities to raise capital through equity mechanisms such as CEDIFs, and this is partially based on inequitable...

AI summary The recommendations address inequities in access to capital for COMFIT stakeholders, highlighting issues with CEDIFs, municipal and Mi'kmaq participation, and the need for supportive mechanisms like loan guarantees and forgivable loans to enable COMFIT project development.

p.1090 Mr. Couture: I guess what I would dispute is that that [potential community contributions such as land leases and community support] is a material impact on the levelized cost of energy production from community based projects. I do...

AI summary Mr. Couture disputes the claim that community contributions such as land leases and community support have a material impact on the levelized cost of energy production from community-based projects, arguing that the impact is not substantive.

the consultants have taken a reasonable view of the required return expectations to finance those projects because the risks are materially higher. Mr.Keith and Mr.Livingston: p.264, April 4, 2011 Mr. Livingston: So I guess in four or five...

AI summary The discussion revolves around the risks and implications of the CEDIF's 51% ownership requirement in projects and how rate setting affects investor viability. Concerns are raised about the analytical approach to understanding these risks and their impact on different shareholders.

A CONSERVATIVEApPROACH The Nova Scotia Department of Energy and the Nova Scotia Depaliment of Environment make the following points at paras. 17 and 20 oftheir submission. - 17. ...NSDOE and NSE further submit that while the approach taken...

AI summary The Nova Scotia Department of Energy and the Department of Environment emphasize uncertainty in COMFIT project costs and advocate for a conservative approach to setting rates. The Consumer Advocate supports this, suggesting that rates and capacity caps should be set at the lower end of the reasonable range.

ANSSSTEAM-ONLYARGUMENT In its submission at paragraphs 47 - 52, ANSS disputes Synapse's inclusion in the biomass rate of only the additional costs of a cogeneration system, above the cost of a steam-only system to meet the sawmill's heat r...

AI summary ANSS disputes Synapse's biomass rate model, arguing that it incorrectly allocates steam generation costs. ANSS claims that Synapse only allocates 55% of steam costs to the steam host, not 100% as misrepresented. ANSS also argues that the proposed biomass COMFIT rate is based on an inconsistent hypothetical scenario that violates COMFIT regulations.

Therefore, given the lack of substantive participation on the part of the Government, and, the powers granted to the Board within the Public Utilities Act, the Ecology Action Centre suggests that it is well within the scope and mandate of...

AI summary The Ecology Action Centre argues that the Board has the authority to set multiple wind tariffs using linear interpolation and to interpret COMFIT ratesetting in the public interest, despite outstanding issues with COMFIT. They also suggest that higher-level policy changes are needed to support electricity market restructuring and achieve sustainable prosperity goals.

Brian Giroux 33 Chestnut St. Yarmouth, Nova Scotia B5A 2N7 May 6, 2011 Nancy McNeil Regulatory Affairs NS DARB Box 1692, Halifax NS B3J 3S3 Dear Ms. McNeil: RE: Renewable Energy Community Feed In Tariffs I must admit I was not going to sub...

AI summary Brian Giroux criticizes the energy and environment departments for a flawed approach to the Renewable Energy Community Feed In Tariffs process, noting a lack of evidence, selective memory, and a policy favoring specific windmill suppliers. He advocates for a linear interpolation model to set rates for all technologies.

m that will 9 trigger a review of the cost implications of the net metering service on the 10 utility and non-participating customers when service uptake approaches 11 the established enrolment limit. 12 13 The selection of 20 MW is motiva...

AI summary The text discusses the allocation of net metering service limits for two customer classes, citing the 20 MW limit as aligned with government intentions and supported by Nova Scotia Power. It also addresses the process of providing information to COMFIT developers and rejects the EAC's recommendation due to lack of evidence of issues.

RATE FOR "LARGE WIND" The rate developed by Synapse for Wind (greater than 50kW) was $139/MWh and this formed the basis of the COMFIT proceeding. Having regard for the intent of Government " to encourage a range of projects widely disperse...

AI summary The rate for 'Large Wind' proposed by Synapse at $139/MWh is based on a cost-recovery approach, aligning with the COMFIT proceeding. The Consumer Advocate's assertion that rates should not be cost-based is refuted, as Synapse's method balances cost and policy objectives to encourage renewable development.

Community feed-in tariff qualifications - 20(1) For the purposes of clause 4A(8)(f) of the Act, in addition to the entities listed in clauses 4A(8)(a) to (e) of the Act, each of the following entities qualifies as a generator that may part...

AI summary The document outlines the qualifications for entities to participate in the community feed-in tariff program, including ownership requirements and eligibility criteria. It also notes that the Board sets the COMFIT tariffs, while the Minister approves applications. NSPI and other utilities recover costs through the fuel adjustment mechanism.

5.1 Overview [37] While much of the evidence during the hearing focused on a review of several numerical inputs to be used in the FIT model to calculate COMFIT tariffs for the various classes of generation facilities, there was also eviden...

AI summary The hearing focused on numerical inputs for the FIT model to calculate COMFIT tariffs and principles guiding the Board in applying the FIT model for tariff setting.

5.2 Affordability provisions in the Renewable Electricity Plan [38] The Renewable Electricity Regulations direct the manner in which the COMFIT tariffs are calculated based on estimated cost. It is important to remember, however, that the...

AI summary The Renewable Electricity Plan in Nova Scotia includes affordability provisions that outline potential short-term increases in electricity bills due to the implementation of renewable energy initiatives, such as the COMFIT program. The plan acknowledges a 1-2% annual increase in electricity bills and estimates additional costs for single-family homes, especially those using electricity for heating. The Board emphasizes the importance of considering these cost implications when determining electricity rates.

al" project. This includes making assumptions about project size and capacity factor, the specific equipment used, the project owner and the way it is financed ... [Synapse Report, Exhibit B-1, p. 7] [45] Synapse added that a number of the...

AI summary The text discusses the COMFIT tariff and the requirements for qualifying generation facilities, including ownership structures and potential barriers faced by community-based groups. It highlights concerns such as lack of expertise and financing challenges, as well as potential advantages for certain entities like universities.

5.4 Whether all potential projects should be economically feasible [57] The Board refers again to the general approach adopted by Synapse in developing COMFIT tariffs for the respective classes of electricity generation facilities. Synapse...

AI summary The Board adopts Synapse's approach to setting COMFIT tariffs, balancing cost-based rates with fostering project development. It acknowledges that not all projects will be economically feasible under the proposed tariffs, as setting rates high enough to ensure feasibility would lead to higher rates for ratepayers, conflicting with legislative goals.

5.5 Consideration of tariffs in other jurisdictions - [61] In assessing whether the proposed COMFIT tariffs are reasonable, Synapse, in addition to considering stakeholder feedback, compared the proposed tariffs "...to FIT prices adopted i...

AI summary The document discusses the evaluation of the proposed COMFIT tariffs in Nova Scotia by comparing them to FIT rates in other jurisdictions like Vermont and Ontario. Key differences include tax credits in the U.S., ownership requirements in Vermont, and project size eligibility. The Province supports Synapse's benchmarking approach, emphasizing the importance of considering these differences when assessing tariff reasonableness.

6.2.1 Submissions [71] In developing proposed tariff rates under the COMFIT models, Synapse did not make any specific assumptions about the project ownership. As noted earlier in this Decision, the approach that was adopted was to determin...

AI summary Synapse developed COMFIT tariff rates using a 'typical cost' approach, assuming no specific project ownership. The Board approved this method, but Synapse also considered the impact of different ownership structures on cost of capital and income tax treatment. Taxable and non-taxable project statuses significantly affect COMFIT rates, with larger impacts observed for tidal projects.

owing adjustments and considerations: - lower-cost capital for wind and hydro due to community support, - lower expected return for demonstration tidal projects. [Chernick Report, Exhibit B-4, p. 6] [83] Mr. Chernick is concerned about a c...

AI summary Mr. Chernick discusses the importance of community financing for renewable energy projects, arguing against allowing commercial investors to benefit from 'Wall Street' returns. He suggests that if projects are largely funded by municipal, university, and community sources, a lower return may be reasonable.

7.1 Submissions - [92] Synapse proposes a tariff of $139 per MWh for wind projects greater than 50 kW. - [93] This proposed tariff is based on a single turbine 1.5 MW in size. Synapse assumed total project costs of $3.8 Million or $2,520 p...

AI summary Synapse proposes a $139 per MWh tariff for wind projects over 50 kW, based on a 1.5 MW turbine with total costs of $3.8 million. The model assumes a 31% capacity factor, which is contested, and includes O&M costs, financing assumptions, and benchmarking against Vermont and Ontario.

ed groups. In Ontario, there is no FIT specifically for small wind, and the wind rate has clearly been set at the estimated cost of wind projects well over 50 kW. [Synapse Report, Exhibit B-1, p. 22] - [120] Mr. Chernick, on behalf of the...

AI summary The document discusses differing views on the appropriate capacity factor for small wind systems in Nova Scotia's COMFIT program. The Consumer Advocate and others suggest a 23% capacity factor, while CanWEA argues for 20%, citing practical limitations. Seaforth supports CanWEA's 20% figure but acknowledges that a 23% capacity factor could encourage better projects in good wind sites.

8.3 Tariff Overlap Between Small and Large Wind Projects [134] The Board considers it should specifically address one point raised by Mr. Couture on behalf of the Ecology Action Centre. [135] Mr. Couture submitted that the significant disp...

AI summary The Board is considering concerns raised by Mr. Couture about potential 'regulatory arbitrage' in the COMFIT wind tariff structure, where developers may exploit the disparity between small and large wind tariffs by installing multiple small turbines instead of a single larger project, leading to inefficiencies and higher costs for ratepayers.

9.3.1 Findings on Capital Costs [170] The opinion of Mr. Hayes, together with the analysis of costs per MW to construct a full CHP, is indicative that the capital costs for equipment and installation used by Synapse might be too low. Synap...

AI summary The Board found that Synapse's capital cost estimates for a biomass CHP project may be too low, but accepted Synapse's base cost for setting a COMFIT tariff. The Board emphasized the need for more detailed cost comparisons and opted for a conservative approach to avoid burdening ratepayers.

[213] Synapse also reviewed all of ANSS's costs and said: ... And when we plugged all of these assumptions into our model we came out with a rate of $330 per megawatt hour compared to the rate that we had proposed of 156. And when we looke...

AI summary Synapse reviewed ANSS's costs and found that a proposed feed-in tariff rate of $330 per megawatt hour was significantly higher than market rates in Ontario and Vermont. Synapse recommended a more conservative approach, balancing the risk of low project uptake against the risk of long-term overpayments if rates were set too high.

[215] The CA commented upon ANSS's rate calculation as follows: Since ANSS's proposed biomass COMFIT rate is based on a facility inconsistent with the regulations, the Board should not rely on ANSS's proposal. [CA Reply Submission, p. 3]

AI summary The Consumer Advocate (CA) argues that ANSS's proposed biomass COMFIT rate is based on a facility that does not comply with regulations, and therefore the Board should not consider ANSS's proposal.

10.1 Submissions [235] Synapse proposed a tariff of $652 per megawatt hour for in-stream tidal projects. They based this tariff on a 500 kilowatt installation employing one or more instream tidal generators. Synapse assumed total project c...

AI summary Synapse proposed a $652/MWh tariff for in-stream tidal projects, citing high costs and technology immaturity. The Consumer Advocate suggested a lower rate of $398/MWh. Mr. Couture supported the higher rate but raised concerns about uncertainties in tidal power. The Province suggested tariff degression and deferred detailed consideration to future reviews.

11.1 Submissions [245] For run-of-the-river hydroelectricity Synapse proposed a tariff of $140 per megawatt hour. They based this tariff on a one megawatt project of either penstock or in-river type. At a penstock plant, water is diverted...

AI summary Synapse proposed a $140 per MWh tariff for run-of-the-river hydroelectricity, based on a one-megawatt project. They compared this to Vermont and Ontario FIT rates, noting that Ontario's community-based rate in 2012 was $140 per MWh. Mr. Chernick recommended a lower rate of $114 per MWh, adjusting for debt, equity, and land donation factors.

14.0 SUMMARY [277] The Board held a hearing to determine Renewable Energy Community Based Feed-in Tariffs ("COMFIT"), pursuant to recent changes to the Electricity Act and the Renewable Electricity Regulations. [278] While there is no over...

AI summary The Board conducted a hearing to determine COMFIT tariffs under the Electricity Act and Renewable Electricity Regulations. The Province expects COMFIT projects to use about 100 MW of grid capacity. Synapse used a FIT model to calculate tariffs that provide a reasonable return on equity for project owners, and the methodology was generally well-received by intervenors.

IN THE MATTER OF THE ELECTRICITY ACT - and - IN THE MATTER OF a hearing to determine Renewable Energy Community Based Feed-in Tariffs Compliance Filing by Synapse Energy Economics Corrected version, submitted August 4, 2011 This version of...

AI summary Synapse Energy Economics submitted a corrected compliance filing in response to the Board's July 4, 2011 Decision, adjusting proposed COMFIT tariff rates for wind and biomass CHP projects. Adjustments included revised capacity factors, interconnection costs, and operational assumptions, while in-stream tidal and small hydro rates remained unchanged.

RENEWABLE ENERGY COMMUNITY-BASED FEED-IN TARIFF - BIOMASS COMBINED HEAT AND POWER PROJECTS

AI summary This document discusses the Renewable Energy Community-Based Feed-In Tariff for Biomass Combined Heat and Power Projects. It outlines the framework for supporting biomass CHP projects through a community-based feed-in tariff mechanism.

FUEL ADJUSTMENT The fuel portion ofthe rate will be adjusted automatically on January 1 of each year based QJ-La percentage ofthe change in the Consumer Price Index for Nova Scotia (all items excluding energy) and the full change in the pr...

AI summary The fuel portion of the rate is adjusted annually on January 1 based on a percentage of the change in the Consumer Price Index for Nova Scotia (excluding energy) and the full change in diesel fuel prices over the previous 12 months. The adjustment is calculated using a specific formula that combines these factors.

August 17, 2011 VIA EMAIL Nancy McNeil Regulatory Affairs Officer/Clerk Nova Scotia Utility and Review Board 3 rd Floor 1601 Lower Water Street Halifax Nova Scotia B3J 3S3 Dear Ms. McNeil: Re: Renewable Energy Community Feed-In Tariffs – B...

AI summary Minas Basin Pulp and Power submits comments on the COMFIT compliance filing, suggesting revisions to the diesel indexing methodology and the availability condition for biomass projects to align with government policy and ensure generated electricity remains on the distribution system.

RENEWABLE ENERGY COMMUNITY-BASED FEED-IN TARIFF - WIND POWER PROJECTS GREATER THAN 50 KW

AI summary This document outlines the Renewable Energy Community-Based Feed-In Tariff for wind power projects greater than 50 kW, focusing on the COMFIT program managed by NSP.

FUEL ADJUSTMENT The fuel portion ofthe rate will be adjusted automatically on January 1 of each year based a percentage of the change in the Consumer Price Index for Nova Scotia (all items excluding energy) and the full change in the price...

AI summary The fuel adjustment mechanism automatically adjusts the fuel component of the biomass rate annually based on changes in the Consumer Price Index for Nova Scotia (excluding energy) and diesel fuel prices. The adjustment formula combines 75% of CPI changes and 25% of diesel fuel price changes.

VIA EMAIL Nancy McNeil Utility and Review Board, NS 3rd Floor - 1601 Lower Water Street Summit Place Halifax, NS B3J 3P6 Dear Ms. McNeil: Re: Community Feed-in-TariffHearing 2010 - BRD-E-R-IO/Matter No.: M03632 The Nova Scotia Department o...

AI summary The Nova Scotia Department of Energy supports revisions to the COMFIT terms and conditions, including a revised diesel indexation methodology and adjustments to the biomass tariff's eligibility criteria. They propose a review mechanism to ensure that electricity generated by backpressure turbines remains on the distribution system throughout the contract period.

FUEL ADJUSTMENT The fuel portion ofthe rate will be adjusted automatically on January 1 of each year based a percentage of the change in the Consumer Price Index for Nova Scotia (all items excluding energy) and the full change in the price...

AI summary The fuel adjustment mechanism for the rate will be automatically updated annually on January 1, based on changes in the Consumer Price Index (excluding energy) and diesel fuel prices. The adjustment uses a formula that combines 75% of the CPI change and 25% of the diesel fuel price change.

aps, Yahoo Maps) and will run within the user's webbrowser (such as, Internet Explorer, Firefox, Safari). The interactive map will be maintained by Nova Scotia Power and hosted on its public website. Board staff reviewed NSPI's submission...

AI summary Nova Scotia Power Inc. (NSPI) has developed an interactive map to display COMFIT generation capacity across distribution zones. The map provides details such as geographic area names, distribution zone names, voltage levels, and available generation capacity. The Board requested additional information on the methodology for calculating and updating capacity levels, which NSPI has provided.

- THE CHAIR : Thank you. Page 6 NSUARB-BRD-E-R.10 22 MR. RICKERSON: My name is Wilson DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS 1 Page 16 NSUARB-BRD-E-R.10 Rickerson, I am currently CEO of Maestro Consultants 2 Group, an international...

AI summary Mr. Wilson Rickerson, CEO of Maestro Consultants, is being qualified as an expert to provide opinion evidence on the design of feed-in tariffs and the development of the cost of production in the proceeding. He has experience in renewable energy policy design and rate setting in various jurisdictions.

DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS THE CHAIR: I think we'll mark the 1 NSUARB-BRD-E-R.10 Page 27 Opening Statement as Exhibit B-16. 19 input into that analysis on the part of the panel as to 20 what constitutes a reasonable leve...

AI summary The discussion revolves around the determination of a reasonable level of activity in a program, the development of tariffs, and the challenges in identifying a range of possible situations for different technologies and project sizes.

- Many of those but once you're - talking about magnitudes, many of those wouldn't matter. - You know, you could pick a number within a range and it - would affect the result in some trivial way if you - selected a different number. - For...

AI summary The discussion revolves around the use of reasonable input numbers in assessments, with a focus on judgment and experience. The conversation also touches on the lack of prior experience with community feed-in tariffs and COMFIT among panel members.

- Community Feed-in Tariff? Page 36 NSUARB-BRD-E-R.10 1 MR. RICKERSON: Not with the exact 2 characteristics, no. 3 MR. MERRICK: Do you know of any 4 COMFIT errors? 5 MR. RICKERSON: Again, I think it 6 depends on how you define COMFIT. 7 Co...

AI summary The discussion revolves around the Community Feed-in Tariff and whether there are existing examples of tariffs that limit ownership to specific groups. The conversation highlights that while some legislative proposals have been made, none have been passed into law. The term COMFIT is also referenced in the context of defining errors.

limitations to that and, you know, you'll get a chance to 1 examine such people later in the week, right? 8 to earn on the project?" how did you adjust for the bias 9 that might have been in that answer? 10 MR. KEITH: Well, a number of the...

AI summary The discussion highlights the discrepancy between project developers' requested returns (up to 50%) and lenders' more conservative estimates (13%), as well as the balancing act between encouraging project development and ensuring accessibility for community organizations through tariff design.

- The idea is to select you know, - pick a reasonably attractive project development - opportunity or opportunities as the prototype, if you - will, and then cost that out. - So there are judgments, as we - discussed earlier, in picking th...

AI summary The discussion focuses on selecting prototype projects for development, balancing project viability with consumer cost considerations. The speaker acknowledges awareness of overall impacts on consumers and mentions rough cost calculations and tariff-based projections.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS the quantities of each type of resource and multiplying 1 and adding it up. 7 some of Mr. Chernick's, I guess I'd call them optimistic 8 scenarios from the perspective on ratepayers, are in t...

AI summary The discussion revolves around the timing of cost calculations for a program, with Mr. Biewald explaining that preliminary calculations were done before Mr. Chernick's testimony and finalized after evidence was filed. The focus was on evaluating the cost to consumers and prioritizing tariff development.

- all you can think of? Page 64 NSUARB-BRD-E-R.10 11 philosophical question and if it's too general please tell 12 me. 13 But to what extent should ratepayers 14 be expected to pay the cost of enticing entities to decide 15 to engage in en...

AI summary The discussion revolves around the fairness of ratepayers subsidizing energy projects to encourage municipal participation, with emphasis on long-term rate stability and economic benefits. The speaker references the renewable electricity plan and the importance of financial viability and reasonable returns on investment in tariff design.

now in boilers. So there's infrastructure there. We don't know we know very little about how old it is, you know, and so when you're you're essentially having to determine the sawmill's avoided cost. If they don't do a CHP program, what's...

AI summary The discussion centers around the avoided cost of maintaining a boiler at a sawmill, which influences rate-setting decisions. The range of avoided costs is identified as 147 to 156, with a recommendation to use the higher end of the range. An escalator for fuel costs is included in the high-end scenario.

- MR. KEITH: That's right. Page 90 NSUARB-BRD-E-R.10 1 MR. MERRICK: And that's identified as 2 a risk factor that has to be accommodated, and that's why 3 you build in the escalator clause, to minimize the risk to 4 the operator, correct?...

AI summary The discussion revolves around risk management in a biomass project, focusing on the use of an escalator clause to share risk between customers and the project. The escalator clause is based on the Port Hawkesbury biomass project's indexing methodology, which partially indexes fuel costs to inflation and diesel fuel. However, some risk remains, as biomass fuel prices can fluctuate. The approach is considered reasonable by the speaker, as it allows the project to be financially viable.

based organization? 1 MR. BIEWALD: Well, I think we 2 3 4 subsidies and so on. That's indeed different from 5 Heritage Gas. 6 7 8 9 commercially viable, but is subject to all sorts of 10 11 12 that it's completely apples and apples. 13 MR....

AI summary The discussion centers on the riskiness of investments in Heritage Gas and its use as a benchmark for setting returns on other projects. The speaker mentions that Heritage Gas is considered a larger, more commercially viable entity and that the tariff design allows projects to earn reasonable financial returns.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS or $210 per megawatt hour, and Cape Breton Explorations NSUARB-BRD-E-R.10 Page 121 - has said that our proposed rate of 156 is perfectly

AI summary The document references a proposed rate of 156, which has been discussed in the context of a regulatory proceeding, likely involving cost considerations and rate design. The mention of 'NSUARB-BRD-E-R.10' suggests a formal regulatory process is underway.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MS. RUBIN: Right. Because that risk Page 126 NSUARB-BRD-E-R.10 22 said three of them are in the queue, none of them have DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS 1 Page 130 NSUARB-BRD-E-...

AI summary The discussion revolves around the uncertainty of capital costs for renewable energy projects, with one party expressing concern over the lack of consideration for these costs in rate-setting processes. The other party acknowledges uncertainty but argues it is not extreme, noting that capital costs vary based on project risk.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MS. SHAW: No, I think I'm saying NSUARB-BRD-E-R.10 Page 155 1 electricity or energy that the plant consumes to produce 2 its product. So for example in this boiler system there 3 would be a f...

AI summary The discussion revolves around the inclusion of parasitic power costs in the tariff calculation for a CHP plant. The witness acknowledges that parasitic power should have been included but is unsure why it was omitted. The impact of including parasitic power on the tariff is questioned, and some sensitivities were analyzed, but not specifically related to parasitic power.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MR. KEITH: That's correct. 1 NSUARB-BRD-E-R.10 Page 161 MS. RUBIN: changed the one 1 for stakeholder discussion. 2 And they range from cases like Germany 3 that have a very, very granular but...

AI summary The discussion focuses on the balance between granularity and transparency in modeling capital and O&M costs, referencing models from Germany, the Netherlands, Ontario, and Vermont. The Vermont model with six aggregated capital cost inputs and four or five O&M cost cells is considered appropriate for stakeholder engagement.

process would be working as well. 1 Page 172 NSUARB-BRD-E-R.10 maybe you can help me out then. The only way I can assess 11 Would you agree with that? 12 MR. RICKERSON: I think there's a 13 trade-off between granularity and precision. Ther...

AI summary The discussion revolves around the balance between granularity and precision in rate setting and project development. The participant suggests that while detailed data is important for individual projects, broader figures may be sufficient for rate setting. The conversation also touches on the accuracy of capital cost estimates for CHP plants.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS reasons for doing so; what are the other policy factors to Page 188 NSUARB-BRD-E-R.10 9 allocation we have an end result, which is at this point, 10 we're recommending a rate that's higher th...

AI summary The discussion revolves around the allocation of steam generation costs to CHP plants and the potential impact of rate increases on biomass projects in Nova Scotia. Concerns are raised about the success of CHP plants under similar tariffs in other jurisdictions and the possibility of future challenges if rates are increased.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MS. RUBIN: A revenue allocation. NSUARB-BRD-E-R.10 Page 195 1 MS. SHAW: M'hm. 2 MS. RUBIN: Can you elaborate on that? 3 MS. SHAW: So there is a revenue 4 stream that is driven by the electric...

AI summary The discussion revolves around revenue allocation between electricity generation and heat/steam sales, as well as the team effort involved in determining the debt/equity split and cost of equity, particularly for biomass CHP. Experts discuss their qualifications and experience in utility finance and risk assessment.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS fact to inquire about? When size of the project is a risk 1 NSUARB-BRD-E-R.10 Page 201 factor, would you not inquire about the size of the 13 the fuel costs escalate excessively, NewPage can...

AI summary The discussion revolves around a fixed-price mechanism with an escalator for fuel costs over 20 years, and the possibility of revisiting the agreement in a few years to adjust based on CPI and fuel prices. The speaker also mentions the potential for government intervention if the COMFIT rate fails to attract projects.

probably produce projects, or we could bump the rates up 1 NSUARB-BRD-E-R.10 Page 239 much higher in an effort to be certain that we produce a 2 robust activity in the first year or two of the program. 3 You know, if we took the former 4 a...

AI summary The discussion revolves around the risk of setting rates too low or too high for a program, with the concern that low rates may not produce projects, while high rates could lock in overpayments for 20 years. The speaker suggests that the proposed rates are reasonable and have a good chance of producing projects, though not guaranteed.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS it. SDIFs are great." They've been holding, you know, 1 public information sessions before this hearing, but 8 groups that are eligible are saying, "We're special case, 9 the cost of capital...

AI summary The discussion revolves around setting a community tariff rate for Aboriginal groups, considering their potentially higher cost of capital. The conversation highlights whether the rate should be set based on the typical project cost or adjusted to reflect the higher cost for Aboriginal groups, with the government addressing discrepancies later through its Renewable Energy Plan.

it's a matter of concern to the Board or to this panel. Page 256 NSUARB-BRD-E-R.10 1 policy has said quite clearly that 51 percent of a project 2 has to be owned by SDIF and that would and ownership 3 would mean common shares. 4 MR. OUTHOU...

AI summary The discussion highlights concerns regarding SDIF ownership requirements and the feasibility of small hydro projects in Nova Scotia. It notes that commercial-sized hydro projects have not been developed in recent decades due to environmental and regulatory factors, and questions the appropriateness of modeling larger hydro installations.

- the reality of what's possible to do here? - MR. KEITH : I guess I would say that - rather than simply establishing a higher tariff rate based - on a smaller project that the government should do one of - two things: Either test the mark...

AI summary The discussion revolves around the approach to setting feed-in tariff rates for renewable energy projects, with a focus on testing the market with a lower tariff rate or conducting a comprehensive resource assessment before setting rates based on smaller projects to avoid accusations of windfall profits.

we're actually not clear what government's ultimate plan Page 262 NSUARB-BRD-E-R.10 15 B-4, on page 20, the tariff rates in Ontario, B.C. and 16 Vermont are fairly consistent within several percentage 17 points among biomass, hydro, and la...

AI summary The discussion highlights concerns about the higher proposed rate for biomass electricity in Nova Scotia compared to other provinces. The speaker explains that the difference is due to the scale of projects in Nova Scotia, which are smaller than those in Ontario and Vermont, and the inclusion of grants or incentives in other provinces.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS However, that biomass project would be 1 significantly less expensive than a 50-kilowatt wind 16 a real viable commercially acceptable use of steam. 17 Which is to say that, you know, 18 simi...

AI summary The text references a biomass project being significantly less expensive than a 50-kilowatt wind project and mentions the Ontario tariff, which is acceptable for electricity-only projects and sufficiently high to incentivize combined heat and power (CHP) projects.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MS. SHAW: I would say that that was 1 NSUARB-BRD-E-R.10 Page 273 outside of what we were asked to do, which was to come up 2 with a rate for CHP projects and not a qualification 3 procedure f...

AI summary The discussion revolves around the definition and operational criteria for Combined Heat and Power (CHP) plants and how their efficiency standards impact rate calculations. The parties debate whether a formal efficiency standard is necessary to ensure accurate rate determination and the challenges associated with enforcing such a standard.

- some cases for periods of years and then back up and back - down. - So assuming that there's going to be a - risk with this commodity of it increasing beyond the rate - of inflation, I don't think it really bears out in the - historical...

AI summary The discussion revolves around the risk of biomass costs increasing beyond inflation and the inclusion of risk assumptions in the tariff that raise it above wind energy prices. The participants question the validity of these assumptions based on historical trends.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS You know, I'm a fisherman. You want 1 NSUARB-BRD-E-R.10 Page 301 to find good bait, you want to cast it out there and get 2 people to nibble on it and then that sort of thing. 3 And I guess d...

AI summary The discussion revolves around the lack of analysis regarding available capacity in the distribution system and its potential impact on setting a COMFIT, which is likened to a capacity factor. The speaker suggests that this could be a limiting factor in the process.

have to be addressed some elsewhere in terms of - provincial policy. - MR. CHRISTMAS: Okay, and I'll get - back to that point after. So I can infer from to your - answer then that rather than doing a lot of, sort of, pre- - workshop homewo...

AI summary The discussion focuses on the approach taken by Synapse in gathering information for setting rates, emphasizing listening to stakeholders rather than extensive pre-workshop preparation. The conversation highlights the challenges of working within a tight timeframe and engaging with multiple entities.

Page 334 NSUARB-BRD-E-R.10 1 NSUARB-BRD-E-R.10 Page 329 specifically include those costs in the model, I think 2 this does get back to the issue we need to find a broad 3 representative rate, so similarly, there may have been 4 specific tr...

AI summary The discussion addresses the challenges of incorporating specific transaction costs into a model for setting representative rates, noting that certain costs, such as those related to forming cooperatives or SDIFs, were not specifically accounted for. The response highlights the government's plan to establish a planning group and develop financing tools to support community-based renewable energy projects.

Development Corporation? 1 Page 336 NSUARB-BRD-E-R.10 Minas Basin Pulp & Power? 12 think, and I think the we thought about the 13 implications even before we realized the sort of clarity 14 of the regulations and the task that we were hire...

AI summary The text discusses a regulatory proceeding involving the Nova Scotia Utility and Review Board (NSUARB) and the development of rates for different resource classes. It highlights concerns and discussions around the implications of setting multiple rates and the clarity of regulations provided by the government.

their size. 1 Page 346 NSUARB-BRD-E-R.10 MR. RICKERSON: Well, I think Halifax 22 MR. RICKERSON: We are familiar with DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS 1 literature that states that it is more cost it is 2 lowers financial risk,...

AI summary The text includes a portion of a regulatory proceeding where stakeholders discuss the cost of capital, interest rates, and the design of wind tariffs. The discussion involves Mr. Rickerson, Mr. Keith, and Ms. Ashworth, and references the construction of a wind tariff in accordance with regulations.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS individual shareholder is there some projection of how 1 NSUARB-BRD-E-R.10 Page 353 much that might result in for that individual? 6 the rate in Vermont was lower than otherwise would have 7...

AI summary The text discusses a discussion between individuals regarding tax credits affecting generator rates in Vermont and the impact of a 30 percent subsidy on capital costs in the U.S. It also references the Ontario Energy Board and the Ontario Power Authority's FIT rates.

- was the 1.5 percent as well? Page 388 NSUARB-BRD-E-R.10 10 could slide one or two directions and in fact they did 11 slide to allow for increase in rates around debt to equity 12 ratio, we moved from 60/40 down to 50/50. 13 MR. ROSCOE: M...

AI summary The discussion revolves around adjustments to the debt-to-equity ratio and debt terms in the context of feed-in tariff regimes, with considerations about the balance between setting rates too low or too high, and the impact on projects and ratepayers.

- grossed up to current value and then depreciated. Page 444 NSUARB-BRD-E-R.10 1 And so that depending on the cost in 2 that year of replacing that equipment based on the cost of 3 steel, the cost of labour, you know however things are 4 g...

AI summary The discussion revolves around the assessment of plant value, considering replacement costs and depreciation over time. It notes that the net effect of these factors results in a 1 percent decline in the assessed value of equipment over the long term, with clarification that machinery and equipment are not subject to property taxes in certain tariffs.

- cost project cost. - MR. DOEHLER: Mr. Chernick takes - exception to your inflation factor in his evidence. I - believe he's, in his evidence, talking about 3.6 percent - and your inflation factor is around 1.75. Any comment - about that?...

AI summary The discussion revolves around a disagreement over inflation factors, with Mr. Doehler questioning Mr. Keith's use of a 1.92% rate based on Nova Scotia Power's 2009 IRP update, contrasting it with Mr. Chernick's 3.6% figure.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS So if someone has a field of four 12 1 NSUARB-BRD-E-R.10 Page 449 and a half kilowatts is that or let's say a field of 2 four 15 kilowatts is that a 50 kilowatt project or a 60- 3 kilowatt pr...

AI summary The discussion revolves around the rate-setting for COMFIT projects, specifically whether a 50-kilowatt project refers to a standalone turbine or an aggregation of smaller turbines. There is uncertainty about how the government intends to apply the rate and whether it can account for project aggregation in the rate structure.

which is not quite the way you did it. 1 Page 464 NSUARB-BRD-E-R.10 well as a separate calculation 18 that we're now setting that could be around for 20 years 19 or whatever the number is, they're based on capital costs 20 that would be pr...

AI summary The discussion revolves around the long-term capital cost considerations for energy projects, the need for adjustments in rate calculations to account for changing market conditions, and the uncertainty surrounding future cost reductions for emerging technologies like tidal energy.

- that's what you're trying to aim at? - MR. KEITH : Yes. - MR. DOEHLER : The nod isn't picked up - well on the microphones. - MR. KEITH : Sorry. And that's the - challenge here in being directed to set one rate. And - that's the reason th...

AI summary The discussion revolves around the challenge of setting a single rate for different projects within a resource class, emphasizing the need for tariff differentiation based on a supply curve derived from stakeholder input, lender perspectives, and jurisdictional analysis.

money into these projects. We need a few. 1 of the questions that went to you know, this particular 7 that's all the electricity should bear," versus an 8 accounting allocation which may be some other basis. 9 Is this what the difference m...

AI summary The discussion focuses on the economic rationality of project decisions, emphasizing the use of incremental cost analysis over accounting-based allocations. The speaker argues that for investment decisions, considering the incremental cost relative to alternative scenarios is the correct approach, rather than relying on accounting methods.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS it's costing everybody to be here, including you guys. 1 NSUARB-BRD-E-R.10 Page 481 MR. BIEWALD: Understood. And there's 2 also the cost, I think, in terms of market certainty that 3 it's if...

AI summary The discussion focuses on the need for periodic reviews of rate-setting to reduce uncertainty in the market and ensure that the province is not overpaying or underpaying for energy projects. A review within one to two years is suggested as a way to provide reassurance and avoid windfall profits.

- administrative burden. Page 486 NSUARB-BRD-E-R.10 1 MR. DEVEAU: Okay. Now, going back to 2 (b) for a minute: 3 "whether a tariff is to be 4 adjusted periodically and where 5 it is to be adjusted, the basis 6 for the adjustment." 7 We've...

AI summary The discussion revolves around periodic tariff adjustments, including potential triggers such as reviews or automatic adjustments based on schedules, time intervals, capacity thresholds, or technology experience curves. The example of Germany's feed-in tariff for solar is cited as a reference.

- tariff. Page 490 NSUARB-BRD-E-R.10 20 MR. DEVEAU: You're talking steam only 21 here. 22 MS. SHAW: Yes. 1 NSUARB-BRD-E-R.10 Page 497 MR. DEVEAU: Right. 2 MS. SHAW: And in that case, if you 3 are successful and you get periodic supervision...

AI summary The discussion centers on whether the labor costs associated with a CHP plant are incremental costs specific to the CHP model or costs that would be incurred regardless. The parties acknowledge that the costs are not due to the CHP model itself but rather due to the pressure and volume requirements of the plant.

Page 510 NSUARB-BRD-E-R.10 reasonably expect to get land donations or charitable donations. And we thought that it well, it didn't get us to the 100 megawatts of potential capacity. Otherwise, if there were that level of altruism, 100 mega...

AI summary The discussion addresses the challenges of securing land and charitable donations for renewable energy projects, noting that altruism alone may not reach the 100 megawatts of potential capacity. It also highlights a chicken-and-egg problem where developers approved for COMFIT rates may struggle to secure donations due to questions about tax waivers.

B-15. Page 530 NSUARB-BRD-E-R.10 1 Do you adopt that evidence as true and 2 correct? 3 MR. TRAVIS: I do. 4 MS. RUBIN: Mr. Chair, Mr. Travis has 5 an opening statement for the panel. And I do have copies; 6 I've provided them to Ms. Bonang....

AI summary The Alliance of Nova Scotia Sawmillers (ANSS) provides an opening statement regarding the development of biomass combined heat and power projects, emphasizing the need for a rate set during the hearing that encourages reasonable development activity. They reference the COMFIT rate-setting process and question whether the proposed rate by UARB consultants will allow project construction.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS set by the Board; is that possible the way you see it? 1 NSUARB-BRD-E-R.10 Page 549 MR. TRAVIS: Well, no. I mean, we 4 your view, do you feel that the support for the forest 5 products indust...

AI summary The discussion revolves around the setting of tariff rates for biomass electricity in Nova Scotia, with a focus on whether the support for the forest products industry should influence these rates. The respondent, Mr. Travis, argues that tariff rates should be based on cost and a reasonable return, rather than industry-specific considerations.

- years or four years to 1996. - Effectively, the price has escalated - incredibly over that period of time and it is unlikely - that a CPID escalator would have covered that risk off in - that period of time and you'd be sustaining severe...

AI summary The text discusses concerns about price escalation over time and the need for adjustment mechanisms to manage financial risks and profitability in projects, particularly in the context of setting tariff rates and managing market fluctuations.

id our - DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS comparison, we didn't have we didn't do a capital cost Page 598 NSUARB-BRD-E-R.10 we weren't able to do there was a lot of missing - information on that side of the equation. - When yo...

AI summary The discussion revolves around the challenges in accurately estimating capital costs and their impact on rate calculations. The speaker notes that missing information and errors in analysis could significantly affect the final rate, but an exact figure is not yet determined.

- And so those have to be worked in and accounted for to - come up with the rate. - And we didn't do a we unfortunately - didn't do a capital cost assessment on the boiler-only - scenario with ESI, so we don't have our information, we - we...

AI summary The discussion revolves around the challenges of accurately assessing capital costs for a boiler-only scenario, with concerns raised about the reliability of existing data from a combined heat and power plant. The conversation highlights the urgency of the hearing and the need for precise information to make a decision.

- table at the moment. 1 Page 600 NSUARB-BRD-E-R.10 MR. TRAVIS: The number we provided is 2 we believe that it has it could be if given a bit 3 more time we could refine it and make it improve the 4 accuracy of it, I guess is what I'm sayi...

AI summary The discussion revolves around the accuracy of capital cost estimates for a boiler-only scenario, with concerns that they may be understated. Mr. Travis acknowledges that a more detailed analysis by Mr. Hayes' firm would improve accuracy but notes it would take time. The Chair emphasizes the need to finalize a rate after the hearing.

- of budget towards that and determine, okay yes, we assumed - piping was going to be okay but now they know that 15 PSI - piping certainly does not work for 600 pound pressure. - They're going to have to replace the piping, they're going...

AI summary The discussion revolves around the need for a delta analysis to estimate the impact of replacing piping and conducting construction due to pressure issues. Counsel suggests that such an analysis could help approximate a recommended rate adjustment. The Chair proposes leaving the matter to counsel for further discussion.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS They basically walked away from their 1 NSUARB-BRD-E-R.10 Page 663 original PPA, which they did sign with OPA, or they agreed 2 to with OPA. 3 THE CHAIR: But what you're telling me 4 is these...

AI summary The discussion revolves around the challenges of building power plants, with the argument that governments in certain jurisdictions are incentivizing projects outside of ratepayer cost considerations. A specific example is given of a 70-megawatt CHP plant in British Columbia with an adjustment mechanism to ensure ratepayers pay a flat rate.

- basically set a rate which would be tracked and would be - paid for the benefit of having renewable energy. - And that project was moving forward. - I think everyone was excited about that one until the - sawmills closed down because the...

AI summary The discussion references a past renewable energy project impacted by the 2008 economic downturn and current biomass plants with power purchase agreements tied to adjustable fuel mechanisms. The speaker notes that smaller facilities face higher rates due to scale, as regulated by existing policies.

need? 1 NSUARB-BRD-E-R.10 Page 681 minutes. 5 little odd, and we certainly don't use it that way. We 6 use it, I think, in a careful way where I would not want 7 to compare the enterprise ratio of, let's say, a forest 8 products company to...

AI summary The discussion revolves around the use of enterprise ratios for comparing power companies, with the speaker emphasizing the importance of comparing similar industries and cautioning against comparing companies across different countries or sectors, such as power and lumber.

around somewhere in the 14 cent range. 1 Page 698 NSUARB-BRD-E-R.10 export? 2 And this was your first submission, as 3 I understand it to 4 MR. TRAVIS: Synapse, page 3? 5 MR. OUTHOUSE: Page 3. 6 MR. TRAVIS: Okay. 7 MR. OUTHOUSE: And there'...

AI summary The text discusses a regulatory proceeding involving a submission related to data granularity in a model for cost representation, referencing the Vermont model and an Excel spreadsheet used by Synapse. The conversation involves Mr. Travis and Mr. Outhouse discussing the details of the submission and its implications.

1 Page 730 NSUARB-BRD-E-R.10 If the reopener includes material 2 discretion on the part of some party such as the Board, 3 that will not be an effective transfer of risk. It will 4 not be effective, therefore, in reducing the cost of 5 cap...

AI summary The text discusses the ineffectiveness of a reopener mechanism in transferring risk effectively, as it allows discretion by the decision maker, potentially leading to higher costs for investors. It also references incentives to control fuel costs and mentions a 13% cost of equity calculation that includes risk transfer.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS the wood fibre. NewPage, as an example, is going to 1 NSUARB-BRD-E-R.10 Page 735 construct a 60-megawatt power plant, and they're going to 20 cheaper power. 21 MR. DOEHLER: Thank you. 22 QUES...

AI summary The text includes a discussion about the cost reopener or adjustment mechanism in Nova Scotia, with a question posed about the range of markets in the region. The response suggests dividing Nova Scotia into three main market areas based on geographic and industrial factors.

- to determine. That's one of the difficult things to do, Page 748 NSUARB-BRD-E-R.10 1 so 2 THE CHAIR: Now, under the Public 3 Utilities Act if we want to know something from Nova 4 Scotia Power, we just ask them. And they're a regulated 5...

AI summary The discussion centers on mechanisms to ensure transparency and compliance in providing information for rate adjustments, with a focus on the Public Utilities Act and the need for a formula-based approach to adjust the CPI diesel escalator periodically to align with market trends.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS lay of the land was that Antigonish District Heating 1 Limited owned and operated that facility and St. F.X. 16 MR. MERRICK: I take it you're not 17 able to tell the Board whether the univers...

AI summary The text discusses a question posed by Mr. Merrick regarding the feasibility of a project by the university, specifically whether it would proceed if it could not achieve certain financial returns, such as a return on debt or equity at specified rates.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS that got that changed into a feed-in tariff which removed 1 NSUARB-BRD-E-R.10 Page 779 the CEDIF restrictions. I just wondered if you or the 2 university played any role in asking for that ch...

AI summary The discussion involves a change from CEDIF restrictions to a feed-in tariff, with Mr. Coady indicating he was involved in the change in a different capacity, not associated with the university. The conversation also explores modeling approaches for rate calculations, with Mr. Coady clarifying that his work focused on demonstrating rates based on Synapse's assumptions.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS energy problems, which most of them had. And St. F.X. has 1 Page 798 NSUARB-BRD-E-R.10 we've looked at that. We are going to move the plant out 12 the allocation of joint products such as ste...

AI summary The text discusses a regulatory proceeding involving rate structure, feed-in tariffs, and electrical project costs. It includes testimony from Mr. Chernick, who has experience in Nova Scotia and has been qualified as an expert before regulatory tribunals.

Page 812 NSUARB-BRD-E-R.10 NSUARB-BRD-E-R.10 Page 813 10 I how can you justify that not in a rich economy kind 11 of thing? 12 MR. CHERNICK: Well, when you talk 13 about a lower return, if we're talking about getting a 6 14 percent return...

AI summary The discussion centers on the justification for a lower return on investment in a community renewable project, particularly for those without financial means or skills. It highlights the importance of community support and the challenges of engaging communities with limited resources in renewable energy initiatives.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS So the province is a large way towards 1 that objective if the objective is just what is written 2 down there already, and with net metering and other 3 programs, including continued RFPs, mo...

AI summary The speaker argues that the province is making progress toward its energy goals through existing programs and net metering. They also suggest that requiring a COMFIT to produce 100 megawatts is overly restrictive and express hope for community-led projects. The discussion also addresses the issue of regulatory arbitrage, noting that it is not a concern in Nova Scotia due to limitations on small wind projects.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS that to my knowledge, at least, all the previous wind 1 NSUARB-BRD-E-R.10 Page 861 project CEDIFs haven't returned haven't made dividends 22 different in their emotional makeup that they woul...

AI summary The text discusses a regulatory proceeding involving CEDIF (Community Energy and Distributed Infrastructure Facility), with a focus on its structure and ownership. There is a discussion about whether CEDIF's community-related aspects are relevant to the rate-setting process.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS is, if I were to tell you that I agreed with Mr. Pynn's 1 NSUARB-BRD-E-R.10 Page 883 comment that outside equity is looking for in the range of 12 you want to direct me to something? 13 MR. V...

AI summary The discussion revolves around the Nova Scotia Utility and Review Board's consideration of changes to wind and tidal energy tariffs. The conversation questions whether the proposed rate design, which would pay more for smaller turbines, is cost-effective and whether the evidence supports such changes.

- megawatt. Or whether until you get over a megawatt there - are very few economies and the curve actually is quite - flat and then drops suddenly. - So without knowing that, I don't think - the Board really is in a position to draw the ki...

AI summary The speaker discusses the challenges of determining rate design based on project size and capacity factor, noting that without sufficient data, the Board cannot accurately set rates. They also highlight concerns about the proposed tariff structure, which would create different rates for each project size, and suggest an alternative approach based on megawatt hours.

- accept what you're saying, but I understand what you're - saying about the record. But conceptually, when you talk - about the stumbling block that Synapse had, I mean, is - there any difference between, conceptually, a multi-block - rat...

AI summary The discussion revolves around the conceptual differences between multi-block rates and declining rates in tariff design, with a focus on whether multi-block rates could address regulatory concerns. The conversation touches on legal interpretation of tariff regulations and the role of the Nova Scotia Utility and Review Board in defining rate structures.

- difference between saying this is the tariff, if you - generate this many megawatt hours you get this price and - if you generate this many in the next month you get this - price. That's a fairly straightforward rate design that - you se...

AI summary The text discusses rate design options for electricity customers, including tiered pricing structures and the proposal to set rates based on project size. It contrasts a straightforward rate design with a more complex tariff structure and highlights the benefits of capturing capacity factors for ratepayers.

- And I think it would just be easier to administer. 1 Page 890 NSUARB-BRD-E-R.10 THE CHAIR: So I'm not sure I 2 completely understood it, so just run it by me again. 3 MR. CHERNICK: Well, as in any block 4 rate where you're normally charg...

AI summary The discussion revolves around the administration of rate structures, specifically block rates, and their potential application in Nova Scotia. The speaker references past rate designs by Nova Scotia Power and suggests an alternative rate structure that accounts for low output months, which could help with cash flow issues.

So you're not going to have the system running amuck. 1 Page 892 NSUARB-BRD-E-R.10 either using the kind of approach I laid out or the one 2 that E3 Analytics laid out and you're wrong about the 3 shape, then you could wind up giving devel...

AI summary The discussion highlights concerns about the design of a capacity and energy rate structure, emphasizing the need to avoid incentives that could lead to inefficient project sizes. The speaker suggests careful consideration in tariff design to ensure smaller projects remain viable and avoid disparities in pricing across different sizes.

April 7, 2011 U-14 To provide the success rate of the RFP Projects (NSPI); also to indicate which Mr. Chernick understands failed and to identify which projects were completed by NSPI 975 8 MR. MORIN: Okay. My understanding is 9 at the com...

AI summary The discussion revolves around the success rate of RFP Projects by NSPI and the online application process for COMFIT. Mr. Morin mentions the government's plan for an online application process, while Mr. Chernick expresses uncertainty about the handling of applications and mentions familiarity with COMFIT requirements.

Nova Scotia Power. Page 930 NSUARB-BRD-E-R.10 1 Most of the projects which are to come 2 have either recently or are to come online with Nova 3 Scotia Power are in areas of the province which are noted 4 for their high capacity factor. 5 I...

AI summary The discussion centers on the capacity factors of wind energy projects in Nova Scotia, with concerns raised about whether projects in high-capacity areas may distort evidence and affect the relevance of proposed adjustments. The Hatch Report is referenced, noting that no regions have lower capacity factors than estimated by Synapse. A trade-off between resource distribution and efficiency is highlighted, and the use of COMFIT for certain projects is mentioned.

to be overpaying for the wind projects in the very best 1 Page 938 NSUARB-BRD-E-R.10 MR. TOWSE: I would agree that that's 2 not the purpose of the COMFIT, and I would also agree that 3 a capacity factor of 31 percent doesn't allow you to b...

AI summary The discussion revolves around the Community Feed-in Tariff (COMFIT) program and concerns about whether proposed adjustments to capital rates for wind projects are reasonable, particularly in relation to capacity factors and debt availability. The speaker disagrees with the argument that a low debt rate of 6% is reasonable for these projects.

- that kind at that kind of level. 1 Page 942 NSUARB-BRD-E-R.10 When something outside of their core 2 interests pops up that's an opportunity to save energy, 3 improve the environment, do something that their 4 constituents want to have h...

AI summary The discussion highlights that municipalities may become involved in COMFIT projects in the future, but their current non-involvement does not preclude future participation. The conversation also addresses the challenge of determining appropriate rates for COMFIT projects, emphasizing the need to avoid unfair disadvantages to other participants.

- Sorry. Page 974 NSUARB-BRD-E-R.10 1 Can you explain any experience you've 2 had in feed-in tariff design and rate setting previously? 3 MR. CHERNICK: Well, as I mentioned in 4 my opening my introduction, I guess, going back to the 5 earl...

AI summary The text discusses a regulatory proceeding involving feed-in tariff design and rate setting. Mr. Chernick mentions his experience with setting rates for renewable energy facilities in the U.S. and is questioned about the cost-effectiveness of feed-in tariffs compared to RFP processes. He admits he is not familiar with the relevant international literature.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS difference, but there may be some, depending upon how you 2 MR. PYNN: Okay, that's all I have. 21 MR. CHERNICK: I'd have to check the 22 capital structure for each of the technologies. I don'...

AI summary The discussion involves the capital structure assumptions for various energy technologies, including tidal and large wind projects, with a focus on equity returns and financing arrangements. Mr. Chernick explains his assumptions for equity returns and financing models used in the Synapse model.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS don't really care whether you go to page 31 or 35. But I NSUARB-BRD-E-R.10 Page 1027 1 want you to step me through your rate impact table. It's 2 one of them. Maybe using your "Balanced," whi...

AI summary The discussion revolves around a rate impact table and the calculation of costs associated with COMFIT projects. The speaker explains that they multiplied the tariff rate by the capacity factor and number of megawatts to determine total bills, then subtracted either the base fuel cost or an estimated cost for new renewable projects.

- comment on those, no. Page 1062 NSUARB-BRD-E-R.10 21 My question was about the indexed at 100 percent. 22 MR. LEVY: Yes. DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS 1 NSUARB-BRD-E-R.10 Page 1065 MR. OUTHOUSE: And were you 2 recommendin...

AI summary The discussion focuses on the indexing of tariffs at 100 percent of CPI, with Mr. Levy confirming that the entire tariff was recommended for indexing, not just O&M. He mentions Quebec and Ontario as examples of jurisdictions with similar mechanisms, though Ontario uses a 20 percent escalator on feed-in tariff rates.

I guess what I would dispute is that that is a material impact on the levelized cost of energy production from community based projects. I don't think the impact is substantive enough and there are or that it's even substantive at all. Pag...

AI summary The speaker disputes the claim that there is a material impact on the levelized cost of energy production from community-based projects. They reference Ontario's feed-in tariff policy, which includes an adder for community-based projects, and highlight the disparity in tariffs between small (under 50 kW) and larger projects in Nova Scotia.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS Now, as the market matures, the risk 1 NSUARB-BRD-E-R.10 Page 1099 of developing projects goes down because you get more 8 MR. COUTURE: risk adjusted rate 9 of return on all of their investme...

AI summary The discussion focuses on the risk-adjusted rate of return for renewable energy projects and the feasibility of assuming lower returns for policy development. The participants question the soundness of such assumptions and mention the need for sufficient capital to support renewable electricity generation targets.

Page 1108 NSUARB-BRD-E-R.10 - another incentive, yes, offered. - MS. RUBIN : Yeah. Insofar as you are - aware, there is no such incentives, tax breaks or property - tax exemptions available to biomass CHP producers here in - Nova Scotia? -...

AI summary The discussion centers on the lack of tax incentives or property tax exemptions for biomass CHP producers in Nova Scotia, contrasting with the U.S. and highlighting the challenges in using U.S. tariff comparisons for rate design in Nova Scotia.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS Now, I stand to be corrected on that, 1 NSUARB-BRD-E-R.10 Page 1109 but the tariff design did not assume the full capture of 2 reflective or not is debatable. 3 And there have been cost-based...

AI summary The discussion highlights the adoption of cost-based rates for solar photovoltaics in some U.S. states, such as Florida and Texas, and notes that this approach is relatively new within the context of feed-in tariff-like policies in the U.S. The shift is attributed to changes in electricity restructuring and recent FERC rulings.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MR. COUTURE : Yes. 1 NSUARB-BRD-E-R.10 Page 1119 (SHORT PAUSE) 14 that aren't dependent on a fuel." 15 MR. COUTURE: Yes. 16 MS. RUBIN: "This can be done by 17 automatic adjustments based on a...

AI summary The discussion revolves around mechanisms for adjusting rates, including automatic formula-based adjustments and administrative revisions, with examples provided on how market fluctuations can affect these mechanisms and the need for regulatory oversight.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MR. LIVINGSTON: With small wind, for 1 instance I'm interested from other jurisdictions what 5 MR. LIVINGSTON: M'hm. 6 MR. DEVEAU: And get them to explain 7 you know explain the difference in...

AI summary The discussion revolves around the treatment of small wind turbines in rate-setting processes. Mr. Deveau argues that differences in other jurisdictions are irrelevant, while Mr. Couture highlights the higher risk and variability in the small wind market compared to larger units.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS So there's significantly higher risk, 1 and that risk means that the investors that are investing 7 I think it's a question MR. COUTURE: 8 of the mechanism the cost efficiency of the mechanis...

AI summary The discussion centers on the potential risks and cost efficiency of feed-in tariff mechanisms, particularly in relation to the inclusion of various technologies and their impact on rates. There is a debate about whether these mechanisms are burdensome to ratepayers and how they affect the overall cost structure.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS Allen study, given the assumption I think you raise a 1 NSUARB-BRD-E-R.10 Page 1181 good point, that based on the assumption that they were escalator, I think maybe some people assume it's au...

AI summary The discussion revolves around the biomass tariff in Vermont, which escalates at a predetermined rate over 20 years, with a proxy for fuel escalation. The assumption of a fixed annual increase is questioned as overly bold, given the difficulty of predicting energy prices accurately.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS MR. COUTURE: My understanding is that 1 NSUARB-BRD-E-R.10 Page 1195 as it's currently structured the policy will be reviewed 2 every 18 months. 3 THE CHAIR: No, but how often the 4 adjustment...

AI summary The discussion revolves around the frequency of reviewing a policy, with suggestions of quarterly or annual reviews. Environmental concerns regarding excessive extraction of forest biomass for electricity generation are also raised, suggesting potential adjustments to the policy to prevent inefficient allocation of resources.

- with the wood locally. - So if there are any trade-offs there - that come in a more governmental level. In terms of the - policy itself, I think that the adjustment mechanism, as - it stands now, should be sufficient in the near term to...

AI summary The discussion centers on the biomass cap regulation in Nova Scotia, with Mr. Couture acknowledging the 500,000 dry tonnes limit and noting that it may influence the availability of biomass. He suggests the need for periodic review of adjustment mechanisms and their inputs.

- to get the data point, then. 1 Page 1200 NSUARB-BRD-E-R.10 MR. COUTURE: And have them then 2 submit that tariff number and then you could use that as 3 an intermediary point. But the idea of interpolating 4 between the two points is gene...

AI summary The discussion revolves around the method of interpolating between two points on a logarithmic scale to capture economies of scale in tariff design. The use of a straight line is considered transparent and mathematically derived, but concerns are raised about potential clustering effects around higher margins.

- I guess is my question? - Do you think there should be a - difference or - MR. LIVINGSTON: I'm sure if you're - familiar with my example from my evidence, but I was - suggesting that in my example, that there's a very high - risk that th...

AI summary The speaker discusses the financial challenges of the CEDIF, noting that it relies on a 5% dividend from an investment in Black River Hydro to cover its annual costs. There is concern about the risk of CEDIF shareholders not receiving a return and the low tax payments made to the provincial government.

- DICTUM DIGITAL INC. CERTIFIED COURT REPORTERS you think about needing another 5 percent in your budget, 1 is that extra 5 percent in your budget, is that extra 5 2 percent in your budget also gets the fees attached to it. 3 So we found i...

AI summary The discussion highlights the importance of accounting for additional fees when estimating project budgets, specifically mentioning that CEDIF administration can add 5 to 6 percent to costs. It also clarifies that CEDIF fees should not be conflated with the costs of running the CEDIF itself.

- make a profit that's reasonable, or a profit at all. - So I disagree profoundly with Mr. - Chernick's analysis, which I don't think he understands - the reality of small projects and the cost of doing them - and the capital raise. - Also...

AI summary The speaker strongly disagrees with Mr. Chernick's analysis, arguing that it does not account for the realities of small projects and their capital costs. They also mention that CEDIF shareholders did not receive additional tax breaks, contrary to some information suggesting otherwise.

April 7, 2011 U-14 To provide the success rate of the RFP Projects (NSPI); also to indicate which Mr. Chernick understands failed and to identify which projects were completed by NSPI 975 U-15 To confirm from data on Capacity Factor from N...

AI summary The document contains a transcript of a regulatory proceeding in Halifax, Nova Scotia, on April 7, 2011, with references to RFP projects, capacity factors, and a Spanish biomass fuel price adjustment clause. It includes discussions about project success rates and a brief exchange between the chair and Mr. Christmas.