Topic:"Rate Design" in M13042

of Credit Exhibit ["E"](#page-94-0) - Form of Guarantee Exhibit ["F"](#page-100-0) – Not Used Exhibit ["G"](#page-101-0) – Not Used Exhibit ["H"](#page-102-0) - Calculation of Adjusted Energy Rate Capitalized terms used herein but not othe...

AI summary The document includes exhibits related to credit, a form of guarantee, and a calculation of the adjusted energy rate. It references capitalized terms defined in the General Terms and Conditions and includes a signature page.

(b) The Seller shall: - (i) For each day of the Interim Period and the Term, provide to NSPI by 8:30 am Atlantic Prevailing Time of the previous day, an hourly forecast of (i) the number of generators at the Facility that will be available...

AI summary The Seller is required to provide NSPI with hourly forecasts of generator availability and deratings, update forecasts promptly in case of changes, and provide real-time data access. Failure to comply results in a 75% reduction in the applicable rate for Net Output.

16.9 Adjustment for Post-Proposal Applicable Tariffs - a) If any Post-Proposal Applicable Tariffs are introduced, the Seller shall use Commercially Reasonable Efforts to avoid or mitigate the cost of any such Post-Proposal Applicable Tarif...

AI summary This section outlines the procedures for adjusting energy rates due to Post-Proposal Applicable Tariffs. The Seller must use commercially reasonable efforts to avoid or mitigate these tariffs. If the capital cost increases by more than 7.5%, the Seller may submit a notice to NSPI with supporting details and a proposed revised energy rate.

16.9 Adjustment for Post-Proposal Applicable Tariffs - a) If any Post-Proposal Applicable Tariffs are introduced, the Seller shall use Commercially Reasonable Efforts to avoid or mitigate the cost of any such Post-Proposal Applicable Tarif...

AI summary Section 16.9 outlines procedures for adjusting energy rates in response to Post-Proposal Applicable Tariffs. The Seller must use commercially reasonable efforts to avoid such tariffs, and if they increase capital costs by more than 7.5%, a notice must be submitted to NSPI with supporting details and a proposed revised energy rate.

Exhibit ["A"](#page-82-0) - Project Description Exhibit ["B"](#page-83-0) - Form of Confidentiality Undertaking Exhibit ["C"](#page-84-0) - Form of Project Lender Agreement Exhibit ["D"](#page-92-0) - Form of Letter of Credit Exhibit ["E"]...

AI summary The document outlines various exhibits related to a project, including confidentiality undertakings, lender agreements, letters of credit, guarantees, reimbursement agreements, zone maps, and energy rate calculations. It also references the General Terms and Conditions for capitalized terms.

where: - 1. "ER" is the indexed and adjusted Energy Rate; - 2. "ERED" is the initial Energy Rate as specified in item [4](#page-3-8) of the Commercial Terms; - 3. ERCOD is the escalated Energy Rate at COD. - 4. "CPIy" is the CPI for the mo...

AI summary The document defines key terms related to energy rates and their adjustment mechanisms, including indexed and adjusted Energy Rate (ER), initial Energy Rate (ERED), and escalated Energy Rate at COD (ERCOD). It also establishes that the Energy Rate cannot fall below the initial Energy Rate after the Effective Date.

APPENDIX D - SUMMARIZED STAKEHOLDER FEEDBACK ON PPA DRAFT #1 PPA Section Question Comment Response impact of changes to federal laws be incorporated. This could come in the way of pricing relief / pricing adjustments for such changes as ne...

AI summary Stakeholders recommend incorporating contractual mechanisms in the PPA to address risks from changes in federal laws, such as adjustments to ITCs and tariffs, which impact construction costs and material pricing. They also highlight the need for open-book price adjustment mechanisms to manage these risks fairly.

Section 5.1 – Energy Payment We appreciate the inclusion of the Early Completion Incentive and the reason for doing so. However, we would like to highlight that the incentive created in Section 5.1 (iv) also includes the obligation to comm...

AI summary The text discusses concerns regarding the Early Completion Incentive in Section 5.1 (iv), highlighting the impracticality of meeting the December 31, 2029, Scheduled Commercial Operation Date due to long interconnection timelines. It proposes modifying the incentive to be tied to an earlier Commencement Date instead.

New Section 16.9 – Adjustment for Post-Proposal Applicable Tariffs In the new Section 16.9 g) (iii) (E) (1) - Adjustment for Post-Proposal Applicable Tariffs, Seller and NSPI shall bear equally the costs of the Independent Expert "if the I...

AI summary Section 16.9 introduces a cost-sharing mechanism for the Independent Expert's determination of Energy Rates between NSPI and the Seller. Costs are split equally if the determination falls between the two parties' positions, but split proportionally based on the difference between each party's claim and the expert's decision.

Exhibit H – Calculation of Adjusted Energy Rate In the most current PPA draft submitted to the NSEB, the CPI adjustment in Exhibit H starts on the Effective Date (= time of execution). A target PPA Execution Date has not been communicated...

AI summary The document discusses the calculation of the adjusted energy rate and the need to adjust the CPIED definition to account for delays in PPA execution. It highlights past procurement delays and the impact on Proponents and ratepayers, suggesting a change to the CPIED definition to mitigate risk.

Tariff pass-through mechanism (new Sections 16.9 and 16.10) If tariffs or similar duties imposed after the Proposal Submission Deadline increase Capital Cost by more than 7.5%, the Seller can trigger a process to increase the Energy Rate,...

AI summary The new Sections 16.9 and 16.10 of the PPA introduce a tariff pass-through mechanism that allows the Seller to increase the Energy Rate if tariffs or duties increase Capital Cost by more than 7.5%, with the Independent Expert's decision being final and non-appealable, potentially leading to ratepayers absorbing these costs without input.

S UMMARY OF RECOMMENDATIONS For the reasons set out above, the IG recommends that the Board direct the PA to provide, or that the PA otherwise provide in its reply, the following before the GCP PPA is approved: - An analysis of the expecte...

AI summary The IG recommends that the Board require the PA to provide analyses on ratepayer costs related to CPI indexation, early completion incentives, curtailment compensation, and jurisdictional security data before approving the GCP PPA. These analyses are intended to ensure cost-effectiveness and protect ratepayers.

8. Adjustment for the Reduction of Tariffs (s. 16.10) Recommendation: Remove Section 16.10 (Adjustment for the Reduction of Tariffs) in its entirety, as it creates a punitive and asymmetric risk allocation for proponents and is inconsisten...

AI summary The recommendation is to remove Section 16.10 of the PPA, which allows NSPI to reduce the Energy Rate if tariffs or customs duties are reduced, as it creates an unfair risk allocation for proponents. Proponents face significant cost increases from external factors not covered by the PPA, leading to financial instability under the Green Choice Program.

9. Tariff Reduction Events (s. 16.10) Recommendation:Amend Section 16.10 so that any Tariff Reduction Event may only occur prior to the Proponent's financial close, and not at any time thereafter. This ensures that the Energy Rate cannot b...

AI summary The recommendation seeks to amend Section 16.10 to restrict Tariff Reduction Events to before financial close, ensuring Energy Rate stability post-financial close and improving project financeability. Current provisions risk post-close price volatility, which could lead to project restructuring, increased financing costs, and higher bid prices for NSPI and ratepayers.

1 The previous Green Choice PPA had a Pre-COD Amount of $125,000/MW and post-COD Amount of $20,000/MW (Board order for M11455, dated June 6, 2024) Summary Stakeholder Comments Procurement Administrator Response Commercial Operation We do n...

AI summary The document discusses stakeholder comments and responses regarding a Power Purchase Agreement (PPA) under the Green Choice program, focusing on issues such as deemed acceptance, the Minimum Threshold for triggering a Tariff Adjustment Notice, and the proration of Independent Expert costs. NSPI and SWEB express differing opinions on these provisions.

11 https://www.novascotia.ca/sites/default/files/documents/1-3582/nova-scotia-clean-power-plan-presentation-en.pdf 22. Early Completion Incentive An economic analysis is needed to quantify the ratepayer cost of the Early Completion Incenti...

AI summary The text discusses the Early Completion Incentive, which aims to meet renewable energy targets while ensuring it is net-positive for ratepayers. It also addresses curtailment compensation, outlining monthly payment processes, and touches on performance security reductions, referencing comparative data from other jurisdictions.

16.9 Adjustment for Post-Proposal Applicable Tariffs - a) If any Post-Proposal Applicable Tariffs are introduced, the Seller shall use Commercially Reasonable Efforts to avoid or mitigate the cost of any such Post-Proposal Applicable Tarif...

AI summary This section outlines the process for adjusting energy rates due to Post-Proposal Applicable Tariffs. If such tariffs increase the Seller's capital cost by more than 7.5%, the Seller must notify NSPI and propose a revised energy rate to address the impact.

where: - 1. "ER" is the indexed and adjusted Energy Rate; - 2. "ERED" is the initial Energy Rate as specified in item [4](#page-2-6) of the Commercial Terms; - 3. ERCOD is the escalated Energy Rate at COD. - 4. "CPIy-1" is the CPI for the...

AI summary The document defines terms related to energy rates and their adjustments, including the indexed and adjusted Energy Rate (ER), initial Energy Rate (ERED), and escalated Energy Rate at Commercial Operation Date (ERCOD). It also specifies CPI indices and ensures that the Energy Rate never falls below the initial rate after the Effective Date.

(b) The Seller shall: - (i) For each day of the Interim Period and the Term, provide to NSPI by 8:30 am Atlantic Prevailing Time of the previous day, an hourly forecast of (i) the number of generators at the Facility that will be available...

AI summary The Seller is required to provide NSPI with detailed forecasts and real-time data regarding generator availability, deratings, and facility operations. Failure to comply results in a 75% reduction in the applicable rate for Net Output. This information is intended for use in dispatch and operating the System in accordance with Good Utility Practice.

5.4 Metering All Facility revenue class metering equipment shall be routinely tested by NSPI. At any time, either Party may request a test of the accuracy of the metering equipment at its own expense. The results of meter calibrations or t...

AI summary The section outlines procedures for testing and maintaining revenue class metering equipment by NSPI. It specifies that either party may request tests, and outlines the process for handling inaccuracies, including financial adjustments if meter accuracy exceeds a 2% variance.

ndependent Expert's determination is equal to or greater than Seller's claimed amount; or (3) borne by Seller if the Independent Expert's determination is equal to or less than NSPI's proposed amount. - (F) The Independent Expert shall act...

AI summary This section outlines the process for determining adjustments to energy rates through an Independent Expert, who acts as an expert and not an arbitrator. The determination is final and binding, with specific procedures for implementation and payment.