Topic:"Rate Smoothing Adjustment" in M12350

3.0 RELATIONSHIP BETWEEN AVERAGE COST BASED RATES AND ACTUAL SHORT RUN MARGINAL COSTS 2 1 SRMC test results are determined by comparing appropriately modified average unit revenues for each rate class to actual marginal costs, adjusted for...

AI summary This section discusses the relationship between average cost-based rates and actual short-run marginal costs, highlighting differences caused by timing discrepancies in regulatory ratemaking and fluctuations in fuel costs. Rate changes are often based on forecasts rather than actual costs, and multi-year rate plans help smooth rate changes over time, leading to variations between customer payments and actual service costs.

1 Year Above-the-Lin e Rate Classes Below-the-Lin e Rate Classes No. of classes No. that failed No. of classes No. that failed 2014 10 0 4 1 2015 10 0 2 0 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 2021 10 0 1 0...

AI summary The table presents the number of rate classes and the number of classes that failed the SRMC test from 2014 to 2024. In 2020 and 2021, the Shore Power rate class did not see any service uptake, preventing the SRMC test from being conducted on this class during those years.

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

AI summary This section discusses the relationship between average cost-based rates and actual short-run marginal costs (SRMC). It explains that SRMC test results are determined by comparing average unit revenues to marginal costs, adjusted for line losses. Rate setting is influenced by forecasted rather than actual costs, leading to variations between revenues and actual costs.

M10431, P 899- Nova Scotia Power inc. Exhibit N-160, Appendix B - 2023-2024 Proof of Revenue, 2022-2024 GRA Compliance Filing.

AI summary This document is related to Nova Scotia Power's 2023-2024 Proof of Revenue and 2022-2024 GRA Compliance Filing, submitted as part of a regulatory proceeding.