N-52024-2025 Bates White FAM Audit Report - Redacted
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es for the period. Residual BA at the end of a year is applied to the following year and is used in the determination of future BA rates. In this way, only actual costs are recovered from customers.16 Again, in a typical FAM rate cycle, th...
AI summary The Fuel Adjustment Mechanism (FAM) involves setting Base Cost of Fuel (BCF) rates for multi-year periods and using Annual Adjustment (AA) and Balancing Adjustment (BA) mechanisms to ensure recovery of actual fuel costs. The Electricity Plan Implementation (2015) Act required NSPI to file a Fuel Stability Plan for 2017-2019, with rates approved in 2016. In 2019, NSPI filed for new BCF rates for 2020-2022, based on forecasted fuel and purchased power costs.
ide $0.8 million in savings. NSPI's subject matter experts noted strong track record of performance in providing these services as the incumbent. NSPI therefore reasonably selected for these services. The total value of the contract was es...
AI summary The document discusses NSPI's selection of a contractor for ash haulage services, highlighting the incumbent's strong track record and the removal of contract minimum volumes in the new agreement. It also mentions the estimated value of the contract and the RFP process, including the receipt of three bids.
Figure V-12: Lingan Inventory Adjustments Adjustments LSH LSL MS Petcoke Domestic LT LSH LT MS LT Dom Q1 2024 (metric tonnes) Q1 2024 ($) Q2 2024 (metric tonnes) -11,510 -3,525 1,987 Q2 2024 ($) -$2,681,564 -$724,162 $416,128 Q3 2024 (metr...
AI summary The document presents inventory adjustments for various categories (LSH, LSL, MS, Petcoke, Domestic LT LSH, LT MS, LT Dom) across different quarters from 2024 to 2025, with both metric tonnes and dollar values provided. The data highlights fluctuations in inventory levels and corresponding financial impacts.
Minimum Revenue IT Service At the conclusion of the prior audit period, NSPI renewed the MNITMR contract for 2024 through 2025 at a minimum revenue requirement of CAD $ million over the two-year term.316 The rates remained at 150 percent o...
AI summary NSPI renewed the MNITMR contract for 2024–2025 at a minimum revenue requirement. ERM evaluated various service types on the M&NE-CA pipeline and recommended not renewing the MNITMR contract for 2026–2027, suggesting instead to contract for FT transport in 2026 and defer a decision for 2027.
NSPI's Position Regarding FT Pipeline Capacity In response to a data request, NSPI described their perspective on when it was appropriate to contract for FT pipeline capacity. To summarize, NSPI's view is that any new FT capacity "should b...
AI summary NSPI outlines its position that new FT pipeline capacity should be justified by economic benefits, specifically reducing the cost of natural gas delivered to NS Power's facilities. It cautions against relying on speculative remarketing benefits. This is not a formal NSPI policy but an ERM position. Bates White comments on the uncertainty surrounding NSPI's role due to the new NS IESO's potential role in gas procurement.
Other IT Contracts IT contracts with pipelines do not create any firm obligations for NSPI. There are no fixed costs under IT tariffs; there are only variable costs, which can change from time to time. This transportation is available to N...
AI summary The document states that IT contracts with pipelines do not impose fixed costs on NSPI and are subject to variable costs and pipeline capacity availability, leading to the conclusion that these contracts were not reviewed.
rily disallows a complete quantification of the characteristics described in the recommendation. We therefore consider this recommendation unaddressed, and we reiterate our prior audit recommendation. Our second recommendation stated: Reco...
AI summary Bates White's recommendations regarding NSPI's participation in upstream pipeline tariff negotiations and periodic review of gas supply assumptions were partially addressed. NSPI accepted the recommendations and committed to ongoing engagement, but some aspects remain unaddressed.
333 NS Power Natural Gas Reports - November 1, 2023, to October 31, 2024, and November 1, 2024, to October 31, 2025, Sections 7.1 in each report. Effective Date is the earlier of NSPI or NSPEMI execution. 334 NSPEMI (Nova Scotia Power Ener...
AI summary The document discusses NS Power Natural Gas Reports covering two fiscal years, highlighting the effective date tied to NSPI or NSPEMI execution. NSPEMI, a U.S.-based subsidiary of NSPI, buys and sells natural gas and electricity in the U.S. on behalf of NSPI, with gas purchases varying by month and supplier during the audit period.
Prices Paid by NSPI to Emera for Spot Natural Gas This section covers spot gas transactions with Emera Energy. NSPI's term gas purchases from Emera Energy are discussed in section VIII.B.2.b. We reviewed the spot transactions between NSPI...
AI summary This section evaluates the prices NSPI paid to Emera Energy for spot natural gas transactions, comparing them to the highest prices paid to other counterparties. Bates White identified 68 transactions where Emera Energy's prices were the highest, but overall, average prices paid to Emera were lower than those paid to other counterparties.
oted before, we observed the inclusion of the requested tracking and information in NSPI's gas trader blotters. As such, we consider this recommendation fully addressed. Our third recommendation was: Recommendation VIII-3: As part of its r...
AI summary Bates White's recommendations regarding NSPEMI and NSPI's gas resource management have been largely addressed. NSPI accepted Recommendation VIII-3 and tied it to Recommendation VIII-5, while also improving documentation for significant gas management decisions as per Recommendation VIII-4.
VIII.E. Conclusions Conclusion VIII-1: NSPI managed its natural gas purchases in a reasonable manner, worked to negotiate the lowest prices in a market where they were often a price taker, and documented term transactions. Conclusion VIII-...
AI summary The conclusions highlight that NSPI managed natural gas purchases reasonably, with no bias observed in transactions with Emera Energy. NSPEMI continued exporting gas to Canada and selling in various locations. NSPI has addressed most audit recommendations, though one remains outstanding.
Figure VIII-14: Late Day Trades delivered to Baileyville Price Less Emera NG Price $0.05 $0.05 $0.00 $0.00 $0.30 $0.00 $0.25 $0.00 $0.00 $0.00 $0.00 $0.00 $0.05 $0.05 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $1.00 $1.50 $0.00 $2.00 $0.00...
AI summary This figure illustrates late day trades delivered to Baileyville, showing various prices and associated entities. The data includes price differences between Emera NG and other parties, with Emera Energy L.P. listed as the counterparty for multiple transactions.
382 2025 Annual FAM Report A-2.
AI summary The text references the 2025 Annual FAM Report A-2, indicating a regulatory proceeding related to annual filings and reports.
Findings We provide our findings below, separated into four areas. We begin with purchased power, which includes long-term purchases, term RFPs, and short-term purchases (i.e., day-ahead and real-time transactions). We next discuss power e...
AI summary The findings are divided into four areas: purchased power, power export sales, affiliate transactions, and previous audit recommendations. The purchased power section covers long-term purchases, term RFPs, and short-term transactions. Power export sales are all short-term. Affiliate transactions include those with several entities. Previous audit recommendations are also discussed.
f ("Acceleration Agreement"). 654 Acceleration Agreement, section 1. 655 Acceleration Agreement, section 3. 656 Acceleration Agreement, section 4. 657 2020-2021 Bates White Audit Report, page 307. 658 See Matter M10206. 659 NSUARB, "Decisi...
AI summary The text references sections of an 'Acceleration Agreement' and audit reports related to NS Block Deliveries under the Electricity Act (ECA). It also cites a regulatory decision (M10206) from the Nova Scotia Utility and Review Board (NSUARB).
Figure XII-17: Actual Flows vs. Accepted Volumes (Surplus Energy, 2025 EAA RFP) Month On-Peak EAA Offer (GWh) On-peak Deliveries (GWh) % Delivered Off-Peak EAA Offer (GWh) Off-peak Deliveries (GWh) % Delivered Total EAA Offer (GWh) Total D...
AI summary Figure XII-17 compares actual energy flows with accepted volumes under the 2025 EAA RFP. The table is empty, and a reference to Schedule 1, section 3.2 (a) of EAA is provided, though no details are included in the chunk.
ee to an arbitration procedure or litigation. In our view, NSPI has reasonably pursued this issue and we include a recommendation that NSPI update the Board upon resolution. (Recommendation XII-1) Conclusion XII-15: NSPI worked constructiv...
AI summary NSPI has worked with Bates White to determine the value of undelivered and makeup energy volumes related to NS Block. While they agree on the makeup energy value, they differ on the undelivered volumes' value, leading to conflicting net benefit and cost calculations for FAM customers. NSPI's decision to receive makeup energy in non-winter months was supported as reasonable.
XIII.B.1.c.xi. Portfolio VaR The second portfolio-level assessment we did of NSPI's hedging activities during the Audit Period was to consider NSPI's entire hedge portfolio's impact on NSPI's VaR. VaR is an industry standard risk measureme...
AI summary The document discusses NSPI's use of Value at Risk (VaR) as a risk measurement tool for its fuel hedging portfolio. It explains that NSPI's hedging strategy significantly reduced VaR from $7.7 million to $2.5 million in Q1 2024, lowering risk by 66%. The analysis is based on historical volatility and correlations of fuel prices over the past 90 days, using the Allegro software, which was affected by a cyber event in 2025.
Figure XIII-8: Portfolio VaR Impact of NSPI's Hedging 792 Quarter Portfolio Effectiveness VaR Q1 2024 -66% Q2 2024 -46% Q3 2024 -46% Q4 2024 -53% Q1 2025 Not available due to Cyber Incident Q2 2025 -50% Q3 2025 -53% Q4 2025 -42% To help ve...
AI summary Figure XIII-8 shows the Portfolio Value at Risk (VaR) impact of NSPI's hedging over several quarters. The data reveals significant reductions in VaR, with some quarters showing negative percentages. However, Q1 2025 data is not available due to a cyber incident. NSPI provided data for Q4 2025, which matches the reported VaR calculation.
XV.A. Background Port Hawkesbury Paper ("PHP") has been taking service under the Extra Large Industrial Active Demand Control Tariff ("ELIADC") since January 1, 2020. The Tariff was approved for an initial term of three years, 2020-2023.80...
AI summary Port Hawkesbury Paper (PHP) has been under the ELIADC tariff since 2020, with extensions approved in 2023 and 2025. The tariff aims to improve efficiency in serving PHP's load and benefit other NSPI customers. However, the recorded benefits to FAM customers have been lower than anticipated, primarily due to mandatory fixed cost contributions.
Figure XV-1: CBL Energy Charge, $/MWh819 Tariff Period CBL Energy Charge 2020 $59.99 2021 $53.02 2022 $57.99 ELIADC January 1 2023 - February 29 2024 $57.99 March 1 2024 - January 31 2025 $101.65 February 1 2025 - December 31 2025 $96.00 O...
AI summary Figure XV-1 shows the CBL Energy Charge over several years, with a notable increase in 2024. On July 5, 2023, the Board approved a change in the method to calculate the actual total incremental cost to serve, shifting from forecast replacement costs to historical weighted average fuel costs. This change did not impact the CBL Energy Charge, which is based on future incremental costs to serve PHP.
VCC NSPI forecasts the Variable Capital Charge annually by comparing NSPI's generation fleet dispatch with and without PHP on the system, and determining the change in required sustaining capital. The comparison and calculations are done p...
AI summary NSPI calculates the Variable Capital Charge (VCC) annually by comparing its generation fleet's dispatch with and without PHP on the system, using a utilization factor. The VCC for 2020 through 2025 is presented in Figure XV-2, with the 2023 VCC increased to $3.00/MWh on June 7, 2023.
XV.B.4.d. The Magnitude of PHP Deviations from Schedule In prior audit reports, we reported the magnitude of deviations.845 We determined the magnitude by calculating the difference between the final intra-day (aka real-time) schedule (MW)...
AI summary The document discusses the discrepancy in measuring the magnitude of PHP deviations from schedule, noting that NSPI's method does not account for ramping delays and measurement inaccuracies. The audit calculated deviations based on differences between real-time schedules and actual loads, highlighting the need for a more accurate method.