Topic:"Rate Smoothing Adjustment" in M03154

GENERAL - 01 The Company accrues a liability for severance programs at the date management commits to a staff reduction plan and a reasonable estimate can be made of the amounts involved. - 02 Generally accepted accounting principles presc...

AI summary The Company accrues liabilities for severance programs when management commits to staff reduction plans. Costs are expensed in the year of commitment if they are below 0.25% of annual revenue requirement, otherwise they are deferred and amortized over three years to align with future cost savings from restructuring.

POLICY - Rate-regulated enterprises such as Nova Scotia Power Inc. ("NSPI") have to consider the impact of accounting decisions on revenue requirements and rate stability. If a regulatory authority approves the recovery of certain costs in...

AI summary Nova Scotia Power Inc. (NSPI) must consider how accounting decisions impact revenue requirements and rate stability. The Nova Scotia Utility and Review Board (UARB) may approve the deferral and amortization of certain large operating expenditures. A Fuel Adjustment Mechanism (FAM) was implemented in 2009 to help smooth rate fluctuations for consumers.

POLICY - O5 Assets that are not both used and useful should be classified in one of the following categories: - a. Not used and not useful; - b. Not used but useful for standby purposes; or - c. Not used but useful for future service. Dele...

AI summary The document outlines policies for classifying and depreciating assets not in use, emphasizing rate stability and regulatory approval for amortization of write-offs. It also discusses the treatment of the Glace Bay plant, including deferring operating costs and charging cost of capital during periods of non-service.