Topic:"Rate Smoothing Adjustment" in M07151

October 30, 2015 1 TABLE OF CONTENTS 2 3 1.0 INTR RODUCTION 3 4 2.0 BAC KGROUND 5 5 3.0 NS P POWER'S POSITION 6 6 4.0 COS T ALLOCATION PROPOSAL 8 7 4.1 DSM net contract price 2016-2018 8 8 4.2 Balance Adjustments 2010 & 2014 9 9 4.3 Cost a...

AI summary This document outlines Nova Scotia Power Inc.'s position on the cost allocation methodology for Demand Side Management (DSM) as agreed upon in the Consensus Agreement dated June 16, 2015. The proposal includes DSM cost allocation for 2015, 2016-2018, and the 2014 rate-smoothing adjustment, with input from the DSM Advisory Group.

2 For example, the DSM Advisory Group has not reached a consensus on the cost allocation of enabling strategies. 1 2.0 BACKGROUND 2 3 Prior to the recent amendments to the Public Utilities Act (Act), the cost of DSM was 4 recovered through...

AI summary The text discusses the transition of DSM cost recovery from a rider to a new methodology approved by the Board in 2010, which allocates 25% system cost and 75% participant cost. It also notes that the DSM Advisory Group has not reached a consensus on cost allocation for enabling strategies.

1 In Q2 of each year (after E1 has the final financial results for the prior year), the 2 adjustment amount can be determined and will be applied in the following 3 January 1 recovery requirement (plus any newly created balances as reporte...

AI summary In Q2 of each year, following E1's final financial results for the prior year, an adjustment amount is determined and applied in January of the following year, along with any newly created balances reported by E1 by November 30.

DATE FILED: October 30, 2015 Page 11 of 12 1 4.5 Rate Smoothing Adjustment 2 3 NS Power proposes that the inter-class DSM loans incurred in 2014 be repaid over a 4 three year period. The Company will propose an appropriate approach for rec...

AI summary NS Power proposes repaying inter-class DSM loans from 2014 over three years and plans to submit a cost recovery filing on November 30, 2015. The proposal aligns with the Consensus Agreement and input from the DSM Advisory Group, requesting the Board's approval for the DSM cost allocation.

Table 1 (PCR) (2016) Unnamed: 0 Unnamed: 1 Unnamed: 2 Unnamed: 3 Unnamed: 4 Unnamed: 5 Unnamed: 6 Unnamed: 7 Unnamed: 8 Unnamed: 9 Unnamed: 10 1 NaN NaN NaN NaN NaN NaN NaN NaN 2 NaN COLUMN A B C D E F 3 NaN NaN NaN NaN NaN NaN NaN NaN 4 N...

AI summary This table presents data related to the 2016 PCR (probably a regulatory proceeding), including DCRR values, revenue figures, and rate smoothing adjustments for various rate classes in Nova Scotia. The data includes changes in DCRR from 2013 to 2014 and the impact on power bills.

Repayment of RSA Unnamed: 0 Unnamed: 1 Unnamed: 2 Unnamed: 3 Unnamed: 4 Unnamed: 5 Unnamed: 6 NaN NaN NaN NaN NaN NaN NaN 1.0 Column A B C D E 2.0 Rate Classes DSM Smoothing Adjustment from 2014 Outstanding Amount at the end of 2015 Repaym...

AI summary The text presents a table detailing the repayment of the RSA (Rate Smoothing Adjustment) for various rate classes from 2016 to 2018, showing outstanding amounts and repayment through the FAM (Fuel Adjustment Mechanism). It includes data for residential, industrial, and other classes, along with assumptions about interest rates.

NON-CONFIDENTIAL 1 Request IR-7: 2 3 The attached spreadsheet of showing coding to rate classes of Enabling Strategies 4 expenditures was provided to G. Foote upon request by Matthew Davidson of Efficiency (e 5 mail also attached). This sp...

AI summary The document discusses a request regarding the coding of Enabling Strategies expenditures to rate classes, noting that the Bright Business Conference was incorrectly coded to all rate classes, leading to residential ratepayers being charged nearly 50% of the cost. The response indicates that NSPI did not review historical averages for correct coding prior to submitting its proposal.

DSM Cost Allocation and Recovery (NSUARB M07151) NSPI Responses to Industrial Group Information Requests 1 Request IR-7: 2 3 Reference: 2016-2018 DSM Program Costs 4 5 Reference: NSPI proposes to defer a determination on whether it can abs...

AI summary NSPI is responding to information requests regarding DSM cost allocation and recovery, deferring a determination on absorbing DSM costs beyond 2016 until June 30, 2016, and addressing the 2014 Rate Smoothing Adjustment. NSPI cites the need for additional information and the timing of the rate stability period.

DSM Cost Allocation and Recovery (NSUARB M07151) NSPI Responses to Multeese Information Requests 1 Request IR-2: 3 Regarding the 2014 Rate Smoothing Adjustment, NSPI presents three possible options for 4 settling the inter-class imbalance....

AI summary The document discusses NSPI's responses to information requests regarding the 2014 Rate Smoothing Adjustment (RSA), including options for resolving inter-class imbalances, the impact on customer rates, and repayment of loans associated with the RSA. NSPI outlines how Option 1 would not change customer rates but would shift the E1 program mix to repay the RSA.

NON-CONFIDENTIAL 1 Request IR-6: 2 3 Re the statement under the heading "DCRR Amounts currently in rates" on page 4 of the 4 December 18 submission, please elaborate on how this is addressed in the comments re: 5 2016-2018 Program Costs. 6...

AI summary NS Power explains that its non-fuel rates do not currently include DSM funds. While previous GRA revenue was not explicitly allocated for DSM programming, NS Power considered 2016 DSM costs in its expense forecasting and will make similar decisions for future GRA applications under the Electricity Plan Implementation (2015) Act.

2015 DCRR Annual Amount Amortization by Rate Class (2016 ‐ 2024) Rate Class 2015 DCRR Amount Accumulated Interest 2016 2017 2018 2019 2020 2021 2022 2023 Total 34 Oct‐17 $18,444,035 $0 $46,110 ($270,002) $0 $18,220,143 $1,466,584 $46,110 $...

AI summary The table presents the 2015 DCRR Annual Amount Amortization by Rate Class from 2016 to 2024, showing the distribution of amounts across different rate classes, accumulated interest, and annual amortization figures over time.

Original Amount $22,647,491 Annual Payback ‐$3,240,023 Annual Interest 3.00% Total Interest $3,272,694 59 Nov‐19 $12,675,557 $0 $31,689 ($270,002) $0 $12,437,244 $2,448,154 $31,689 $2,479,843 60 Dec‐19 $12,437,244 $0 $31,093 ($270,002) $0...

AI summary This table outlines the interest and payback calculations for an amount of $22,647,491 over several months, showing decreasing principal amounts and consistent interest charges, with a total interest of $3,272,694 and an annual payback of -$3,240,023.

Amortization Schedule: General Demand Original Amount $4,480,926 Annual Payback ‐$641,056 Annual Interest 3.00% Total Interest $647,520 Years 8 Payments Per Year 12 Total Payback $5,128,446 Start Year 2015 Monthly Payment ‐$53,421 $4,554,4...

AI summary The document presents an amortization schedule for General Demand, showing an original amount of $4,480,926 with an annual payback of -$641,056, an interest rate of 3.00%, and a total interest of $647,520 over 8 years. Payments are made monthly, starting in 2015, with a monthly payment of -$53,421.

Original Amount $4,480,926 Annual Payback ‐$641,056 Annual Interest 3.00% Total Interest $647,520 47 Nov‐18 $3,064,656 $0 $7,662 ($53,421) $0 $3,018,896 $400,054 $7,662 $407,716 48 Dec‐18 $3,018,896 $0 $7,547 ($53,421) $0 $2,973,022 $407,7...

AI summary The text presents a financial table showing the original amount of $4,480,926 and an annual payback of -$641,056. The table details monthly interest calculations, including amounts, interest rates, and cumulative totals from November 2018 to December 2019.

Original Amount $2,521,616 Annual Payback ‐$360,751 Annual Interest 3.00% Total Interest $364,388 47 Nov‐18 $1,724,618 $0 $4,312 ($30,063) $0 $1,698,867 $225,128 $4,312 $229,440 48 Dec‐18 $1,698,867 $0 $4,247 ($30,063) $0 $1,673,051 $229,4...

AI summary The document presents a financial table detailing the original amount of $2,521,616 and an annual payback of -$360,751. The table includes monthly interest calculations and cumulative totals over a period from November 2018 to December 2019.

Original Amount $1,459,597 Annual Payback ‐$208,815 Annual Interest 3.00% Total Interest $210,920 62 Feb‐20 $770,729 $0 $1,927 ($17,401) $0 $755,254 $163,792 $1,927 $165,718 63 Mar‐20 $755,254 $0 $1,888 ($17,401) $0 $739,741 $165,718 $1,88...

AI summary The document presents a financial table showing the original amount of $1,459,597 with an annual payback of -$208,815. It includes monthly interest calculations and cumulative interest over time at a rate of 3.00% over a period of 8 years.

Amortization Schedule: Municipal Original Amount $407,863 Annual Payback ‐$58,350 Annual Interest 3.00% Total Interest $58,939 Years 8 Payments Per Year 12 Total Payback $466,802 Start Year 2015 Monthly Payment ‐$4,863 $414,551.91 Period D...

AI summary This document presents an amortization schedule for a municipal loan with an original amount of $407,863, an annual interest rate of 3.00%, and a repayment period of 8 years. The schedule outlines the monthly payments, interest, and principal amounts over time, starting in 2015.

NON-CONFIDENTIAL 1 Request IR-1: 2 3 In a letter to the UARB dated December 18, 2015, NSPI provided, pursuant to the Board's 4 letter dated December 3, 2015, additional detail regarding NSPI's specific cost recovery or 5 accounting treatme...

AI summary The document outlines a request to the UARB regarding NSPI's cost recovery and accounting treatment for specific DSM components, including the approval of a $102.2 million DSM quantum and the interpretation of Section 79 M (5) of the Public Utilities Act. The request also seeks clarification on how NSPI interprets Section 45 of the Act in relation to DSM cost recovery.

lass Benefit Costs and are directly assigned to participating classes. The Elenchus approach would also eliminate the cost of tracking Enabling Strategies invoices on the basis of rate class benefit. In its submission, E1 stated that based...

AI summary The document discusses allocation methods for Enabling Strategies investments, with E1 citing 2012 and 2014 Elenchus recommendations. Parties debate Rate Smoothing Adjustment recovery via GRA or BCF, Fuel Stability Plan adjustments in M07348, and true-up mechanisms for DSM costs. SBA, Industrial Group, and E1 propose differing timelines for true-ups.

expenditures, it chose not to do so regarding the 2017, 2018, and 2019 DSM expenditures and requested approval to defer determination until "the earlier of the Company filing a GRA or June 30, 2016". The EPIA requires NSPI to file an appli...

AI summary NSPI decided not to file a GRA for 2017-2019, absorbing DSM costs within existing rates. The EPIA restricts rate changes until 2020. The Board approves using the FSP to recover Rate Smoothing Adjustment loans, pending FSP/BCF proceeding (M07348) outcomes. DSM costs are deferred until GRA filing or June 30, 2016.

Nova Scotia Power Inc. DSM Cost Allocation and Recovery (M07151/E-R-15) The DSM Consensus Agreement signed by parties to Matter M06733, and approved by the Board in its Decision dated August 12, 2015, included the following: The Parties ag...

AI summary Nova Scotia Power Inc. (NSPI) is required to file detailed cost allocation and recovery models for its DSM programs, including 2015 and 2016-2018 periods, as well as related adjustments. The Board is concerned about NSPI's non-compliance with previous orders and has directed it to submit complete details by specific deadlines. NSPI also requested an extension for filing its proposals for the 2017-2019 period.

December 18, 2015 Doreen Friis Regulatory Affairs Officer/Clerk Nova Scotia Utility and Review Board 1601 Lower Water Street, 3rd Floor P.O. Box 1692, Unit "M" Halifax, NS B3J 3S3 Re: Nova Scotia Power Inc. – DSM Cost Recovery – M07151/E-R...

AI summary Nova Scotia Power Inc. (NS Power) submitted its 2016 DSM cost recovery proposal to the Utility and Review Board (UARB), citing legislative changes from the provincial electricity plan. The UARB requested additional details on specific DSM components, including rate-smoothing adjustments and balance adjustments, and noted no consensus among parties. NS Power argues the approved DSM quantum of $102.2 million should be fully recovered as a flow-through expense under the Public Utilities Act.

Request IR-4: - 26 On page 3 of the December 18 submission, NSPI proposes to defer a determination regarding - 27 DSM cost recovery for the 2017 through 2019 period until the earlier of NS Power filing a General - 28 Rate Application or Ju...

AI summary NSPI proposes deferring DSM cost recovery for 2017-2019 until a GRA filing or June 30, 2016, despite legislation requiring a GRA by April 30, 2016. The request asks if NSPI's non-filing would imply absorbing 2017-2018 costs like 2016 and full recovery by 2018. Additional requests address rate smoothing adjustments, DORR amounts, and 2013-2014 balance adjustments.

that it would not otherwise have by April 30th ? - (c) Does NSPI agree that the known 2016-2018 DSM Program Costs would not constitute "exceptional circumstances" as referenced in the Electricity Plan Implementation (2015) Act. (d) If NSPI...

AI summary The text contains questions about Nova Scotia Power Incorporated's (NSPI) position on DSM program costs, rate smoothing adjustments, and inter-class balance options. It also asks about the impact of rate stability periods and inter-generational equity, as well as the alignment of proposed options with existing proposals.

Date Filed: January 11, 2016 l Request IR-4: 2 NSPI also identifies its decision to not seek a general rate increase for 2016 as a contributing factor that 3 "hampers" its ability to rebalance through the 2016 to 2018 DSM plan. Please desc...

AI summary The document contains several requests for information related to NSPI's decision not to seek a general rate increase in 2016, its impact on rebalancing through the 2016 to 2018 DSM plan, and the implications of various cost recovery models and allocation mechanisms.

VlAEMAIL February 16, 2016 Ms. Doreen Friis Regulatory Affairs Officer/Clerk Nova Scotia Utility and Review Board 1601 Lower Water Street, 3rd Floor Halifax, NS B3J 3S3 Dear Ms. Friis: Re: Nova Scotia Power Inc. - DSM Cost Allocation and R...

AI summary Nova Scotia Power Inc. (NSP) submitted DSM cost recovery proposals to the Utility and Review Board, following legislative changes from 'Our Electricity Future' plan. The Board requested additional details on cost allocation, leading to the Nova Scotia Small Business Advocate (SBA) commenting on NSP's methodology, advocating for a revised 75% class cost/25% system cost allocation beyond 2016 and clarifying impacts of proposed methods.

5. The FAM incentive will continue to be suspended in 2015. ( ( 6. Excepting with respect to the S. 21 deferral account amounts in 2015, it is agreed that any ratepayer group shall be entitled to apply to the UARB for a determination of th...

AI summary The FAM incentive is suspended in 2015. Ratepayer groups can apply to the UARB for determination on the treatment of fully amortized NS Power deferral accounts, with consultation required from NS Power before filing such applications.

fter the decision to file or not to file for a GRA. & lt;sup>3 NSPI (Multeese) IR-14. & lt;sup>4 NSPI (IG) IR-7. & lt;sup>5 NSPI (Multeese) IR-4. & lt;sup>6 Board Order of October 7, 2015 in M06733 approving DSM for 2016-2016 at $102.150 M...

AI summary The Industrial Group is concerned about the legislative amendments that prohibit rate changes during the three-year rate stability period. If NSPI does not file for a GRA but needs to recover DSM costs, it may have to defer and amortize these costs after the rate stability period, earning a return of 7.78% on the deferred asset.

Rate Smoothing Adjustment Repayment and Application of the 2013 and 2014 Balance Adjustments With respect to the repayment of the Rate Smoothing Adjustment (RSA) and the application of the 2013 and 2014 Balance Adjustments by rate class, N...

AI summary NS Power proposes modifying DSM program access to recover RSA and balance adjustments, but EfficiencyOne opposes this, arguing it risks failure and harms program effectiveness. EfficiencyOne prefers financial recovery through GRA or Base Cost of Fuel hearings, citing the Consensus Agreement and concerns over program costs, savings targets, and customer satisfaction.

Intervenor Alignment NS Power has identified the following areas where alignment in the Intervenor positions may be possible: - Customer representatives prefer that cost allocation for the 2015 through 2018 period reflect the traditional D...

AI summary NS Power and intervenors align on DSM cost allocation methods for 2015-2018, rate smoothing adjustments, true ups, and enabling strategies. Disagreement remains on post-2016 DSM cost recovery. NS Power classifies 2016 DSM as an operating expense.

Rate Smoothing Adjustment In its submission dated December 18, 2015, NS Power proposed three separate options for the rebalancing of the 2014 Rate Smoothing Adjustment (RSA) or Inter‐class Loan. The Company noted that the RSA could be reba...

AI summary NS Power proposed three options to rebalance the 2014 Rate Smoothing Adjustment (RSA) via DSM programming, the next GRA, or the 2017-2019 Fuel Stability Plan under the Electricity Plan Implementation (2015) Act . The Industrial Group (IG) opposed using DSM for rebalancing, advocating instead for three-year rate recovery of the true-up, with interest, via GRA or BCF. No party supported NS Power's alternate proposals, leading NS Power to suggest incorporating the RSA into the Fuel Stability Plan proceeding.

lass Benefit Costs and are directly assigned to participating classes. The Elenchus approach would also eliminate the cost of tracking Enabling Strategies invoices on the basis of rate class benefit. In its submission, E1 stated that based...

AI summary The document discusses allocation methods for Enabling Strategies investments, recovery mechanisms for inter-class RSA loans via GRA/BCF, and true-up approaches for DSM costs. E1 advocates rate-class-based allocation, while the Industrial Group supports BCF recovery. SBA and NSPI propose true-up mechanisms tied to actual costs or contract periods. NSPI adjusted inter-class RSA loans in M07348.

NSPI's Reply Submission dated Feb 23, 2016 In response to participant submissions, NSPI noted the following: - a) Program costs should be allocated in alignment with E1 's budgets, then compared against actual DSM expenditures on an annual...

AI summary NSPI proposes aligning DSM program costs with E1 budgets and adjusting via GRA. RSA should be resolved through rate changes, not DSM reallocations. Enabling Strategies methodology prioritizes direct cost allocation. NSPI requests treating 2016 DSM costs as operating expenses and deferring 2017-2018 DSM cost decisions until GRA filing or June 30, 2016.