Topic:"Rate Design" in M12887

Short Run Marginal Cost (SRMC) Test to Rates NS Power 2025 Report May 29, 2026 NON-CONFIDENTIAL

AI summary The document outlines NS Power's 2025 report on the Short Run Marginal Cost (SRMC) Test to Rates, dated May 29, 2026. It focuses on regulatory proceedings related to rate design and cost considerations, emphasizing the application of SRMC principles in determining electricity rates.

(Multeese) in its SRMC memorandum dated August 27, 2010. The changes were to include the revenue adjustment mechanisms of the Demand Side Management (DSM) Cost Recovery Rider (DCRR) and the Fuel Adjustment Mechanism (FAM) Actual Adjustment...

AI summary The document outlines a series of regulatory actions and recommendations related to the Short Run Marginal Cost (SRMC) test, including the inclusion of revenue adjustment mechanisms like the DSM Cost Recovery Rider (DCRR) and Fuel Adjustment Mechanism (FAM). The NSEB has directed NS Power to review and adjust the SRMC test approach, excluding certain rates and incorporating graphical representations of unit revenues.

Figure 1: Price Elasticities Under the Domestic TOU and CPP Rate Classes from TVP Pilot

AI summary Figure 1 presents price elasticities for domestic Time-Varying Pricing (TVP) Pilot participants under TOU (Time-of-Use) and CPP (Critical Peak Pricing) rate classes, analyzing how demand responds to price changes during peak and off-peak periods.

EM&V Reports 2023 2024 % Variance TOU (Domestic) Daily Price Elasticity -0.458 -1.607 251% Inter-Period Substitution Price Elasticity -0.186 -0.105 -44% CPP (Domestic) Daily Price Elasticity -0.084 -0.017 -80% Inter-Period Substitution Pri...

AI summary The text presents a table showing price elasticity values for TOU and CPP domestic rates in 2023 and 2024, highlighting significant variance percentages. The discussion focuses on inter-period substitution price elasticities, which indicate customers' ability to shift load.

1 Figure 2: Inefficient Usage Estimates by Rate Class Caused by One Percent Differential

AI summary Figure 2 illustrates estimated inefficiencies in energy usage across rate classes resulting from a 1% pricing differential. The visual representation highlights disparities in consumption patterns influenced by rate structures, a key consideration in regulatory proceedings related to utility pricing and efficiency.

2 Between Unit Revenue and Marginal Cost Current Approch based on Long term Load Forecast Alternate Approach based on Daily Price Elasticities Annual Sales (MWh) Long-term Elasticity Inefficient Usage (MWh) Percent of Annual Sales Annual S...

AI summary The document compares two approaches to calculating unit revenue and marginal cost, focusing on residential time-of-use and critical peak pricing. It presents data on annual sales, elasticity, inefficient usage, and elasticity ratios for different periods and pricing structures.

3.0 RELATIONSHIP BETWEEN AVERAGE COST BASED RATES AND ACTUAL SHORT RUN MAGINAL COSTS SRMC test results are determined by comparing appropriately modified average unit revenues for each rate class to actual marginal costs, adjusted for clas...

AI summary The text discusses the SRMC test, comparing average unit revenues to actual marginal costs, influenced by timing differences and rate smoothing. Multi-year rate plans decouple test year revenues from cost fluctuations, while capping non-fuel rates in 2023-2024 GRA led to rates set below prospective costs.

Figure 3: SRMC Test Results Year Classes Above-the-Line Rate Below-the-Line Rate Classes No. of classes No. that failed No. of classes No. that failed 2016 10 0 2 0 2017 10 0 2 1 2018 10 0 2 0 2019 10 0 2 0 2020 10 0 1 0 DATE FILED: May 29...

AI summary Figure 3 presents SRMC test results from 2016 to 2025, showing the number of rate classes and failures for both above-the-line and below-the-line rates. The Shore Power rate class could not be tested in 2020 and 2021 due to no service uptake.

Note 2: There were six TVP Tariffs, which came into effect in June 22, 2021 (M09777) and one additional TVP Tariff (MURB Tariff) which came into effect on November 1, 2024 (M11822). The SRMC test did not include the six TVP Tariffs in the...

AI summary The text discusses the implementation of six TVP Tariffs in 2021 and an additional MURB Tariff in 2024, and explains why these were not included in the SRMC test until 2025 due to incomplete data. It also references SRMC test results based on unit revenue with FAM adjustments and highlights volatility in the differential between average unit revenues and marginal costs.

6 Broken Down by Fuel and Non-Fuel Components 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 Year Average Average MC adj for Line losses ($/MWh) Year over Year % Changes $45.35 -7% $55.95 23% $66.43 19% $56.11 -16% $45.97 -18% $59.31...

AI summary The table presents average marginal cost adjustments for line losses and unit revenues, including FAM-related costs and fixed costs, from 2016 to 2025. It highlights year-over-year changes and variance from the average marginal cost adjusted for line losses, showing fluctuations in costs and revenue over time.

11 4.2 SRMC Test for the Above-the-Line Classes 12 13 The actual 2025 revenues of the ATL rate classes reflect the base cost rates approved for use in 14 2024 and the 2025 DCRR and 2025 Storm Cost Recovery Riders (SCRR). Consistent with th...

AI summary The 2025 revenues for Above-the-Line (ATL) rate classes incorporate 2024 base rates and 2025 DCRR/SCRR adjustments. Modifications to unit revenues for Domestic, Small General, LIIR, and Unmetered classes aim to align with SRMC standards. All ATL classes passed the SRMC test in 2025.

4.3 Residential Time-of-Day Most of the energy usage in this class is consumed during the off-peak period, and the rate is designed to encourage this behaviour. Comparing the average annual unit revenue to the average annual marginal cost...

AI summary The text discusses Residential Time-of-Day (TOD) rates and Time-Varying Pricing (TVP) programs. TOD rates encourage off-peak energy use and passed the SRMC test. TVP includes CPP and TOU tariffs, approved as a pilot in 2021, with MURB TOU approved in 2024. SRMC tests were first conducted in 2022 and 2025 reports. Comparing unit revenues to annual marginal costs is deemed inappropriate for specific time periods.

Excerpt from Evidence of Dr. John Stutz in the Generic Rate Design Hearing 2003

AI summary Excerpt from Dr. John Stutz's evidence in the 2003 Generic Rate Design Hearing, discussing rate design and regulatory proceedings involving Nova Scotia utility boards and energy mechanisms.

Q. How can one check if rates are set below short-run marginal cost? A. In checking that rates are set above short-run marginal costs, a useful rule of thumb is that the average revenue per kWh, exclusive of revenue from customer charges,...

AI summary To check if rates are below short-run marginal cost, the average revenue per kWh (excluding customer charges) should not be less than the average marginal energy cost. The Short-Run Marginal Cost (SRMC) Test is a rule of thumb for this assessment, with considerations varying by rate type.

Q. Please explain the basis for the SRMC test? A. As I noted earlier, the marginal energy cost is simply the cost of supplying the "last kWh consumed," in a particular hour using available resources (i.e., existing generating equipment or...

AI summary The SRMC test ensures rates generate revenue to cover the marginal cost of the 'last kWh consumed' in a given hour. If rates fail to meet this, they are set below short-run marginal cost, potentially undermining system reliability and cost recovery.

Q. How should the SRMC test be used? - A. In using the test, it is important to note that there may be good reasons why a rate will fail the test: - If gas and oil prices are very high and coal prices very low, a cost-based rate (i.e., a r...

AI summary The SRMC test may fail due to extreme fuel price fluctuations or non-cost-based rates from due discrimination. However, such failures may have justifications. If unjustified, rates should be adjusted to pass the test, ensuring alignment with reliability and cost considerations.

Figure 1.2 2025 Base Cost Rate Revenues with DSM, SCRR and 2025 FAM Amounts (Based on 2025 average annual marginal cost of 9.048 cents/kWh) Short Run Marginal Cost Test Inefficient Usage Estimate Sales Price Elasticity-of- Inefficient Usag...

AI summary Figure 1.2 presents 2025 base cost rate revenues with DSM, SCRR, and FAM amounts. It includes data on residential and small general usage, time-of-day pricing, and critical peak pricing, showing variations in costs and sales across different usage periods.

Table 1 Estimates of Electricity Price Elasticities Elasticity Estimates Short-run Long-run Residential -0.06 to -0.49 -0.45 to -1.89 Commercial -0.17 to -0.25 -1.00 to -1.60 Industrial -0.04 to -0.22 -0.51 to -{82 ) '- ,/ Most analysts ei...

AI summary The table presents estimates of electricity price elasticities for residential, commercial, and industrial consumers in the short-run and long-run. The text explains that residential consumers differ from commercial and industrial users in their response to price changes due to differing motivations and rate structures, and that consumers are expected to be more responsive to price changes over longer periods.

CHANGES IN DEMAND ELASTICITIES DUE TO RESTRUCTURING As restructuring proceeds, more and more customers will purchase unbundled services. These will include differentiated products such as different levels of service quality and ancillary s...

AI summary Restructuring in the electricity industry will influence demand and supply price elasticities through unbundled services, new rate structures, and market competition. Consumers may become more price-sensitive over time due to increased substitutes and information, though short-term effects may be limited. Existing competitive elements, like time-of-use pricing and surplus power markets, suggest elasticity changes may be moderated.

Bilateral Contracting The behavior of buyers relying on bilateral contracts is likely to differ from consumers purchasing power from Western Power Exchange (WEPEX). Intuition suggests that buyers in bilateral contracts are probably more se...

AI summary The text discusses how bilateral contracts influence buyer behavior, making them more price-sensitive and reducing price risk. It also notes that increased bilateral contracts may increase demand elasticity, though the market share of such contracts is uncertain.

Unbundling of Electricity Unbundling electricity into distinct commodities such as energy, reliability or spinning reserve, quality, such as voltage control delivery to customers, could have some interesting effects with respect to the pri...

AI summary Unbundling electricity into distinct commodities like energy, reliability, and quality may alter price elasticity of demand. Ancillary services (e.g., reliability) may have smaller fees, leading to inelastic demand, while increased substitutes from unbundling could enhance elasticity. Industrial/commercial users may face higher costs for these services, and unbundling may create conflicting effects on demand elasticity.

Time of Use Rates Time-of-use (TOU) rates, where t e kilowatt hour ·charge depends on whether the customer's load is at 3 am or 3 pm, permit prices to be aligned more closely with the marginal cost of supplying electricity. Increased use o...

AI summary Time-of-use (TOU) rates align electricity prices with marginal costs, enhancing efficiency and cost alignment. Despite benefits, adoption is limited due to high transaction costs and technological barriers. California mandates TOU for large customers, while residential implementation faces challenges. Future tech like programmable microchips may reduce costs and improve demand responsiveness.

Restructuring Experience in Other Countries Studies of other countries that have deregulated electricity provide information on demand elasticity after restructuring. In Wolfram's (1995) study of market power in the British electricity spo...

AI summary Studies on UK electricity market restructuring reveal inelastic demand post-restructuring, with short-run price elasticities ranging from -0.13 to -1.14 and long-run from -1.12 to -1.89. Wolfram (1995) found British generators charged prices above marginal costs but didn't exploit full demand inelasticity, while Lo et al. (1990) modeled time-of-day tariffs based on varying elasticity estimates.

Short Run Marginal Cost (SRMC) Test to Rates NS Power 2025 Report June 5, 2026 NON-CONFIDENTIAL

AI summary This document is titled 'Short Run Marginal Cost (SRMC) Test to Rates' and is part of NS Power's 2025 Report, dated June 5, 2026. It is marked as non-confidential and appears to be related to regulatory proceedings involving rate-setting and cost analysis.

(Multeese) in its SRMC memorandum dated August 27, 2010. The changes were to include the revenue adjustment mechanisms of the Demand Side Management (DSM) Cost Recovery Rider (DCRR) and the Fuel Adjustment Mechanism (FAM) Actual Adjustment...

AI summary The document outlines a series of actions taken by the Nova Scotia Energy Board regarding the Short Run Marginal Cost (SRMC) test, including the suspension of SRMC comparisons with certain tariffs, the exclusion of specific rates from the SRMC test, and the review of variance between average unit revenues and marginal costs. NS Power has provided ongoing analysis and support for the recommended approach.

The SRMC test involves the following steps: 1. Determine the average annual system marginal cost (over 8760 hours in 2025) at the transmission delivery level. In calculating this marginal cost, the effects of exports and load served under...

AI summary The SRMC test calculates the system marginal cost at the transmission level and compares it to the unit revenue of each rate class. The test involves adjusting for the effects of exports and the ELIADC Tariff, and determining whether rate classes fail based on their revenue relative to marginal costs.

Figure 1: Price Elasticities Under the Domestic TOU and CPP Rate Classes from TVP Pilot

AI summary The text refers to Figure 1, which illustrates price elasticities under the Domestic TOU and CPP rate classes from the TVP Pilot. The figure is likely used to analyze how changes in pricing affect demand under different rate structures.

EM&V Reports 2023 2024 % Variance TOU (Domestic) Daily Price Elasticity -0.458 -1.607 251% Inter-Period Substitution Price Elasticity -0.186 -0.105 -44% CPP (Domestic) Daily Price Elasticity -0.084 -0.017 -80% Inter-Period Substitution Pri...

AI summary The text presents a table showing price elasticity metrics for TOU (Domestic) and CPP (Domestic) programs in 2023 and 2024, highlighting significant variance percentages. It discusses inter-period substitution price elasticities, which indicate customers' ability to shift load from one period to another.

2 Between Unit Revenue and Marginal Cost Current Approch based on Long term Load Forecast Alternate Approach based on Daily Price Elasticities from TVP Pilot Annual Sales (MWh) Long-term Elasticity Inefficient Usage (MWh) Percent of Annual...

AI summary The document compares two approaches for determining unit revenue and marginal cost: the current approach based on long-term load forecasts and an alternate approach using daily price elasticities from a TVP pilot. The alternate approach shows significantly higher inefficiencies, particularly during on-peak and off-peak winter hours, suggesting a potential impact on demand-side management strategies.

3.0 RELATIONSHIP BETWEEN AVERAGE COST BASED RATES AND ACTUAL SHORT RUN MAGINAL COSTS SRMC test results are determined by comparing appropriately modified average unit revenues for each rate class to actual marginal costs, adjusted for clas...

AI summary This section discusses the relationship between average cost-based rates and actual short-run marginal costs (SRMC). It explains how SRMC test results are determined by comparing modified average unit revenues to actual marginal costs, and highlights the impact of timing differences between regulatory ratemaking and changes in average annual cost of service.

Note 2: There were six TVP Tariffs, which came into effect in June 22, 2021 (M09777) and one additional TVP Tariff (MURB Tariff) which came into effect on November 1, 2024 (M11822). The SRMC test did not include the six TVP Tariffs in the...

AI summary The document discusses the implementation of six TVP Tariffs in 2021 and an additional MURB Tariff in 2024, noting that the SRMC test excluded these tariffs due to incomplete data. It also references the SRMC test results, which are based on unit revenue with FAM adjustments and highlights volatility between average unit revenues and marginal costs.

3.1 Analysis of Variance between Average Unit Revenue and Average Marginal Cost As discussed above, there are reasons why marginal generation unit costs are more volatile than unit revenues. 11 10 7 8 1

AI summary This section discusses the variance between average unit revenue and average marginal cost, noting that marginal generation unit costs are more volatile than unit revenues.

Figure 5: Long-Term Trend in System Unit Revenues and Marginal Costs Net of LRT/

AI summary The document presents Figure 5, which illustrates the long-term trend in system unit revenues and marginal costs, net of LRT. This figure is likely used to analyze the financial and operational dynamics of the energy system over time.

6 Broken Down by Fuel and Non-Fuel Components 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 10 Year Average Average MC adj for Line losses ($/MWh) $45.35 $55.95 $66.43 $56.11 $45.97 $59.31 $128.55 $73.02 $84.05 $94.49 $70.92 Year over...

AI summary The table presents data on average MC adj for line losses, FAM-related costs, and fixed costs from 2016 to 2025, showing fluctuations in values and year-over-year percentage changes. It also includes variance percentages from the average MC adj for line losses, indicating variations in cost components over time.

As shown in Figure 6 , the unit average marginal costs, aside from following a different annual trend pattern with a higher overall volatility, are also significantly lower than unit revenues in each DATE FILED: June 5, 2026

AI summary The text references Figure 6, which compares unit average marginal costs to unit revenues, noting that costs are significantly lower and follow a different annual trend pattern with higher volatility. The document was filed on June 5, 2026.

11 4.2 SRMC Test for the Above-the-Line Classes 12 13 The actual 2025 revenues of the ATL rate classes reflect the base cost rates approved for use in 14 2024 and the 2025 DCRR and 2025 Storm Cost Recovery Riders (SCRR). Consistent with th...

AI summary The 2025 revenues for the above-the-line (ATL) rate classes have been adjusted based on the 2024 base cost rates, 2025 DCRR, and 2025 Storm Cost Recovery Riders (SCRR). Modifications include removing customer charge-related revenues and adding back supply interruptible credit to LIIR revenues. All ATL rate classes pass the SRMC test in 2025.

4.3 Residential Time-of-Day Most of the energy usage in this class is consumed during the off-peak period, and the rate is designed to encourage this behaviour. Comparing the average annual unit revenue to the average annual marginal cost...

AI summary The document discusses residential Time-of-Day (TOD) and Time-Varying Pricing (TVP) rate structures, emphasizing their design to encourage off-peak energy consumption and reduce peak load. It explains that comparing average annual unit revenue to average marginal cost is not meaningful for specific time periods, and instead, individual TOD rates are compared to average marginal costs calculated for the hours in which the rates are in effect. The TVP Pilot Program includes CPP and TOU tariffs, and the MURB TOU was approved in 2024.

Excerpt from Evidence of Dr. John Stutz in the Generic Rate Design Hearing 2003

AI summary Dr. John Stutz provided evidence in the 2003 Generic Rate Design Hearing, discussing rate design principles and their implications for utility regulation and consumer behavior.

Q. How can one check if rates are set below short-run marginal cost? A. In checking that rates are set above short-run marginal costs, a useful rule of thumb is that the average revenue per kWh, exclusive of revenue from customer charges,...

AI summary To check if rates are set below short-run marginal cost, the average revenue per kWh (excluding customer charges) should not be less than the average marginal energy cost. This is known as the Short-Run Marginal Cost (SRMC) Test, and further considerations depend on the specific rate being evaluated.

Q. Please explain the basis for the SRMC test? A. As I noted earlier, the marginal energy cost is simply the cost of supplying the "last kWh consumed," in a particular hour using available resources (i.e., existing generating equipment or...

AI summary The SRMC test ensures that rates, excluding fixed monthly charges, generate enough revenue to cover the cost of the last kWh consumed in a given hour. This is based on the marginal energy cost, which is the cost of supplying the last unit of energy using available resources.

Q. How should the SRMC test be used? - A. In using the test, it is important to note that there may be good reasons why a rate will fail the test: - If gas and oil prices are very high and coal prices very low, a cost-based rate (i.e., a r...

AI summary The SRMC test is a tool to evaluate rates, and a rate may fail it under certain conditions such as extreme price fluctuations or due discrimination. If a rate fails the test without acceptable justification, it should be adjusted to pass the test.

Figure 1.2 2025 Base Cost Rate Revenues with DSM, SCRR and 2025 FAM Amounts Short Run Marginal Cost Test Inefficient Usage Estimate Sales Price Elasticity-of- Inefficient Usage Distribution Line Losses as a % of Total Ave. Line Unit Revenu...

AI summary Figure 1.2 presents 2025 base cost rate revenues with considerations for DSM, SCRR, and FAM. It includes data on distribution line losses, sales price elasticity, and inefficient usage estimates for various residential classes and time-of-use pricing structures.

The Concept of Price Elasticity Estimates of the price elasticity of electricity demand can provide the answer to the following question: if the price of electricity falls, will consumers purchase a lot more or a little more electricity? T...

AI summary This section discusses the concept of price elasticity in electricity demand and supply, explaining how changes in price affect consumer and producer behavior. It notes that elasticity measures the percentage change in quantity demanded or supplied in response to a 1 percent change in price, and emphasizes that elasticity estimates are context-specific and may vary with price changes or shifts in demand and supply.

CHANGES IN DEMAND ELASTICITIES DUE TO RESTRUCTURING As restructuring proceeds, more and more customers will purchase unbundled services. These will include differentiated products such as different levels of service quality and ancillary s...

AI summary As restructuring in the electricity industry progresses, more customers will purchase unbundled services, potentially affecting price elasticity of demand and supply. In the short run, consumer behavior may not change significantly, but long-term restructuring could lead to a more competitive market with informed consumers and greater price sensitivity.

Unbundling of Electricity Unbundling electricity into distinct commodities such as energy, reliability or spinning reserve, quality, such as voltage control delivery to customers, could have some interesting effects with respect to the pri...

AI summary Unbundling electricity into distinct commodities like energy, reliability, and quality may affect price elasticity of demand. Ancillary services may have lower fees and fewer suppliers, leading to inelastic demand. However, unbundling could increase price elasticity by offering more substitutes, though new goods may also be introduced.

Time of Use Rates Time-of-use (TOU) rates, where t e kilowatt hour ·charge depends on whether the customer's load is at 3 am or 3 pm, permit prices to be aligned more closely with the marginal cost of supplying electricity. Increased use o...

AI summary Time-of-use (TOU) rates align electricity prices with the marginal cost of supply, promoting efficiency and better cost alignment for customers. While TOU rates are used for large customers in California, residential adoption faces technological and economic barriers. Widespread implementation could increase demand elasticity and allow for technological innovations in energy management.

ELECTRICITY SUPPLY ELASTICITIES

AI summary The section discusses electricity supply elasticities, which refer to the responsiveness of electricity supply to changes in price or demand. This is a key consideration in energy planning and regulation, as it affects how the grid can adapt to fluctuations in consumption and generation.

CONCLUSION During the transition to the competitive market, changes in the price elasticity of demand and supply are likely to be small. In the longer term, competition may increase the price elasticity of both demand and supply. Existing...

AI summary The transition to a competitive electricity market is expected to increase price elasticity of demand and supply over time, similar to other deregulated industries. New markets and goods may emerge, but generation supply from new resources will remain inelastic due to long lead times and investment risks.

May 29, 2026 Crystal Henwood Clerk of the Board Nova Scotia Energy Board 1601 Lower Water Street, 3rd Floor Halifax, NS B3J 3S3 Re: Application of Short Run Marginal Cost (SRMC) Test to Rates Report for 2025 Dear Ms. Henwood: In its Order...

AI summary NS Power submitted its 2025 SRMC Test to Rates Report, noting rates have consistently met the SRMC test except for isolated exceptions tied to temporary events like the 2022 Ukraine war. The report's complexity has increased due to time-varying rates and fuel cost deferrals, though the SRMC Test has not influenced rate-setting since 2009.

oceedings since the 2009 GRA. [1](#page-1-0) Further, as far as the time-varying rates are concerned, their applicability and performance are subject of a separate TVP oversight process and reporting. In light of the above and in the spiri...

AI summary NS Power questions the continued value of the SRMC Report in light of the 2009 GRA and time-varying rates under a separate oversight process. The 2009 GRA uniquely applied SRMC Test results to a rate class, affecting the Time of Day Tariff's off-peak charge.

June 3, 2026 [[email protected]](mailto:[email protected]) Michael Willett Senior Director, Regulatory Nova Scotia Power PO Box 910 Halifax, NS B3J 2W5 Dear Mr. Willett: M12887 - Nova Scotia Power Inc., Application of Sho...

AI summary The Board requests clarification from Nova Scotia Power Inc. regarding the 2025 Short Run Marginal Cost (SRMC) Report, specifically Figure 4's Average versus Marginal Fuel Costs and percentage changes. Revisions to the report are required if necessary, with a deadline of June 17, 2026.

June 5, 2026 Crystal Henwood Clerk of the Board Nova Scotia Energy Board 1601 Lower Water Street, 3rd Floor Halifax, NS B3J 3S3 Re: M12887 – Nova Scotia Power Inc. – Application of Short Run Marginal Cost (SRMC) Test to Rates Report for 20...

AI summary Nova Scotia Power Inc. (NS Power) refiles its 2025 Short Run Marginal Cost (SRMC) Report, correcting errors in reported fuel costs and percentage changes. The Nova Scotia Energy Board requested clarification on discrepancies in Figure 4, which NS Power addresses by revising Average System Fuel Costs for 2024 and 2025 and correcting the FAM-adjusted unmetered unit revenue.

June 23, 2026 [[email protected]](mailto:[email protected]) Michael Willett Senior Director, Regulatory Nova Scotia Power Inc. 1223 Lower Water Street PO Box 910 Halifax NS B3J 3S8 Dear Mr. Willett: M12887 – Nova Scotia P...

AI summary Nova Scotia Power Inc. filed its 2025 Short Run Marginal Cost (SRMC) Test to Rates Report, which was reviewed by Richard J. Melanson. The report explains that the SRMC test checks if average revenue per kWh is greater than or equal to average marginal energy cost, and all rate classes passed both tests. The analysis considered marginal generation costs, excluding fixed costs, and adjustments for future revenue.

ts. NS Power adjusted the 2025 class revenues in the 2026 FAM AA and BA amounts, associated with the cost imbalances incurred as of September 2025. All the tested rate classes passed both SRMC tests. The calculated average annual marginal...

AI summary NS Power adjusted 2025 class revenues in the 2026 FAM AA and BA amounts due to cost imbalances as of September 2025. The average annual marginal cost for 2025 increased by 11.4% to 9.048 cents per kWh, driven by changes in generation, commodity prices, and load growth. NS Power conducted a review of price elasticity for the 2025 SRMC Report, finding notable variations in elasticity for certain rate classes.

comparison produced ratios of the elasticities (TVP pilot elasticities/current elasticity) for the TVP residential classes during the winter months and critical peak periods ranging from 10.7 to 0.1. NS Power committed to monitoring these...

AI summary The document discusses the elasticity ratios from the TVP pilot program for residential classes during winter and critical peak periods, ranging from 10.7 to 0.1. NS Power will continue monitoring and evaluating price elasticity for future reports. The Board accepts the 2025 SRMC Test to Rates Report.