Topic:"Regulatory Approval Processes" in M12835

2025 Annual Financial Statements Attachment 2 Page 12 of 48 REDACTED (CONFIDENTIAL INFORMATION REMOVED) The cost of PP&E represents the original cost of materials, contracted services, direct labour, AFUDC for regulated property or interes...

AI summary The document outlines the accounting treatment for PP&E costs, including AFUDC, ARO, and overhead allocation. It explains depreciation methods (straight-line) and regulatory approval processes for depreciation studies by the NSEB. Intangible assets are amortized using similar methods, requiring regulatory approval for service life estimates.

Nova Scotia Energy Reform Act: On October 15, 2025, the Nova Scotia Independent Energy System Operator ("IESO Nova Scotia") announced that the organization will be phased in over two phases during an 18-month period. On December 1, 2025, t...

AI summary The Nova Scotia Independent Energy System Operator (IESO Nova Scotia) will be phased in over 18 months, with the first phase completed in December 2025 and the second by 2027. This follows Bill 404 - Energy Reform (2024) Act, which established the Nova Scotia Energy Board (NSEB) and transitioned to IESO Nova Scotia.

General Rate Application ("GRA"): On September 18, 2025, NSPI filed a consensus General Rate Application ("GRA") with the NSEB, reflecting a settlement agreement reached with customer representatives. The GRA proposes average annual rate i...

AI summary NSPI filed a consensus General Rate Application (GRA) with NSEB on September 18, 2025, proposing 1.8% and 2.4% annual rate increases in 2026 and 2027, respectively. The application reflects a settlement with customer representatives and anticipates $62M and $108M in annual revenue increases. The hearing concluded in January 2026.

Regulatory and Political Risk NSPI is subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key factors such as rates and cost structures, revenue requirements,...

AI summary NSPI operates under a cost-of-service regulatory model requiring approvals for rate changes and capital investments. Regulatory delays, cost recovery challenges, and political shifts could cause material adverse effects, including valuation impairments and service reliability risks. Regulatory frameworks influence rates, ROE, capital structures, and cost recovery mechanisms.

Environmental Legislation and Climate Change NSPI is subject to environmental laws and regulations as set by both the Government of Canada and the Nova Scotia Provincial Government (the "Province"). NSPI continues to work with both levels...

AI summary NSPI must comply with federal and provincial environmental laws, facing risks from non-compliance that could impact operations and finances. The company expects prudently incurred compliance costs to be recoverable under its regulatory framework. Risks and regulations are further detailed in the Enterprise Risk section.

General Rate Application ("GRA"): On September 18, 2025, NSPI filed a consensus GRA with the NSEB, reflecting a settlement agreement reached with customer representatives. The GRA proposes average annual rate increases of 1.8 per cent in 2...

AI summary NSPI filed a consensus GRA with NSEB on September 18, 2025, proposing 1.8% and 2.4% annual rate increases for 2026 and 2027, respectively, generating $62M and $108M in annual revenue. The hearing concluded in January 2026, with a decision expected by early Q2 2026.

Regulatory and Political Risk NSPI is subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key factors such as rates and cost structures, revenue requirements,...

AI summary NSPI faces regulatory risks from frameworks governing rates, cost recovery, ROE, and capital investments. Regulatory delays or disallowed costs could lead to material adverse effects. Uncertainty around IESO Nova Scotia and environmental legislation changes adds further risk. Regulatory processes require approvals and public hearings, with uncertain outcomes.

Renewable Energy Regulations: The Province has established targets with respect to the percentage of renewable energy in NSPI's generation mix. Under the RER, the Company currently has a provincially mandated target of achieving at least 4...

AI summary Nova Scotia has set renewable energy targets for NSPI, requiring 40% renewable energy sales from 2020-2029 and 80% by 2030. A $10M penalty was imposed on NSPI for 2022 non-compliance, prompting an appeal to NSEB. The Province aims to phase out coal by 2030 under the Environmental Goals and Climate Change Reduction Act.

NSPI received a Certificate of Variance from NSECC on March 25, 2025, which provides flexibility on the timing of SO2 emissions over the 2025 through 2034 period, including compensating for the excess 14,410 tonnes of SO2 emissions in 2022...

AI summary NSPI received a Certificate of Variance from NSECC allowing flexibility in SO2 emissions timing from 2025 to 2034. Environmental regulations may lead to increased compliance costs, delays in projects, and stranded costs. Non-compliance risks penalties and legal consequences, potentially causing a Material Adverse Effect.

2025 Annual Financial Statements Attachment 3 Page 21 of 30 REDACTED (CONFIDENTIAL INFORMATION REMOVED) The Company will be required to manage the impacts of these ongoing changes on customer demand and rates, while maintaining and integra...

AI summary The company faces challenges in managing energy transition impacts, capital investments, and external factors affecting the pace of emissions reductions. Insurance risks for carbon-emitting assets, potential legal actions, and climate change risks could affect service delivery, reputation, and access to capital.

Project Development and Land Use Rights Risk The Company's capital plan includes significant investment in generation, infrastructure modernization and customer-focused technologies. Any projects planned or currently in construction, parti...

AI summary NSPI's capital projects face risks including cost overruns, regulatory approval delays, and land use challenges with Indigenous communities. Projects may require federal, provincial, and municipal permits, and failure to secure land rights could lead to significant costs. Compliance with environmental and operational requirements is critical to avoid material adverse effects.

Corporate Cease Trade Orders or Bankruptcies No nominee for election as Director of the Company is, as at the date of this Circular, or was within 10 years before the date of this Circular, a Director, Chief Executive Officer (CEO) or Chie...

AI summary The text outlines restrictions on director nominations for a company, prohibiting individuals with past affiliations to companies under cease trade orders, bankruptcies, or sanctions. Nominees must not have been directors, CEOs, or CFOs of companies subject to such orders or insolvency proceedings within the past decade, nor have faced penalties under securities legislation.

APPROVAL OF THIS CIRCULAR The Board of Directors has approved the contents of this Circular and has authorized it to be sent to the shareholders of the Company. 1 "Routine indebtedness" includes: (i) loans made on terms no more favourable...

AI summary The Board of Directors has approved the circular and authorized its distribution to shareholders. The text defines 'routine indebtedness' as specific types of loans, including those to employees and for travel expenses, with repayment terms aligned with commercial practices.

General NSPI is a vertically integrated regulated electric utility. It is the primary electricity supplier in the Province. NSPI has $8.1 billion of assets and provides electricity generation, transmission and distribution services to appr...

AI summary NSPI, a vertically integrated regulated electric utility with $8.1 billion in assets, serves 565,000 customers in Nova Scotia. Regulated under the Public Utilities Act by the NSEB, NSPI's rates are set to recover prudently incurred costs with a reasonable investor return. The Province has a population of 1.09 million, representing 2.6% of Canada's population.

Renewable Electricity Regulations Under the provincially legislated RER, starting in 2020, 40 per cent of electric sales must be generated from renewable sources. NSPI met this target in 2023 and 2024, and in 2025 met this target with more...

AI summary Under Nova Scotia's Renewable Electricity Regulations (RER), NSPI met 40% renewable energy targets in 2023-2025 but faced a $10M penalty for 2022 non-compliance. NSPI appealed the penalty through the NSEB, with the hearing concluding in 2025 and a decision pending.

Maritime Link NSPI has a contractual obligation to pay NSPML, a related party, for the use of the Maritime Link over approximately 38 years from its January 15, 2018, in-service date. On September 25, 2024, NSPI and NSPML filed application...

AI summary NSPI has a 38-year contractual obligation to pay NSPML for the Maritime Link. In 2024, NSPI and NSPML filed applications regarding a federal loan guarantee, with NSPML receiving NSEB approval to collect up to $201 million from NSPI for cost recovery, including a monthly holdback mechanism. Funds from NSPML's debt issuance were applied to the FAM regulatory asset balance.

2025 Annual Financial Statements Attachment 5 Page 12 of 26 REDACTED (CONFIDENTIAL INFORMATION REMOVED) assessment and a supplemental assessment of $43 million as part of the repayment of the federal loan guarantee. On December 23, 2025, N...

AI summary NSPML received an interim order from NSEB to collect $199 million from NSPI for Maritime Link costs in 2026, with a $4 million monthly holdback. A $43 million supplemental assessment was also made for federal loan guarantee repayment.

Electricity Reform Act The Electricity Reform Act was approved by the Province in December 2013. The legislation permits licensed retail suppliers to sell renewable, low impact electricity generated within the Province directly to retail c...

AI summary The Electricity Reform Act, approved in December 2013, allows licensed retail suppliers to sell renewable electricity directly to customers in Nova Scotia. NSPI developed 'renewable to retail' tariffs approved by NSEB in 2016. As of December 2025, one license has been issued, with sales expected to commence in 2026.

Other Legislation In November 2023, the Province enacted amendments to the Electricity Act which permit the Governor in Council to approve energy storage projects proposed by a public utility and owned wholly or in majority by the public u...

AI summary In 2023, Nova Scotia amended the Electricity Act and Public Utilities Act to expand energy storage project approvals, increase penalties for NSPI noncompliance, and enable RFPs for energy storage. Amendments also empower the Province to mandate power purchase agreements for renewable generation, with NSPI managing transmission and sales. The Governor in Council directed NSPI to install grid-scale batteries.

2025 Highlights Emera's momentum throughout 2025 came from consistent execution and commitment to operational excellence. Across our operations we advanced major capital projects, and in turn, hit key milestones. We translated our capital...

AI summary Emera's 2025 achievements include advancing capital projects, operational milestones, and strategic initiatives. Key highlights include Nova Scotia's grid-scale battery installations, Tampa Electric's solar expansion, the Maritime Link's performance, and progress on selling New Mexico Gas Company. These efforts support renewable integration, system resilience, and long-term business positioning.

2025 Annual Financial Statements Attachment 6 Page 8 of 138 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Strategic Overview Management's Discussion and Analysis Consolidated Financial Statements Emera Leadership and Board Shareholder inform...

AI summary Emera discusses strategic initiatives, including Nova Scotia Power's 2026-2027 General Rate Application (GRA) with stakeholder collaboration, a pending Nova Scotia Energy Board decision, and Emera's NYSE listing. Peoples Gas in Florida achieved a constructive rate case outcome through stakeholder engagement.

FLI is based on reasonable assumptions and is subject to risks, uncertainties and other factors that could cause actual results to differ materially from historical results or results anticipated by the FLI. Factors that could cause result...

AI summary Forward-Looking Information (FLI) is subject to risks including regulatory changes, economic conditions, commodity price fluctuations, cybersecurity threats, and climate impacts. These factors could cause actual results to diverge from expectations, affecting dividend growth, capital investments, and operational stability for entities like Emera and NSPI.

Charges Related to the Pending Sale of NMGC

AI summary The document outlines charges related to the pending sale of NMGC, a regulatory proceeding in Nova Scotia. Specific details about the charges, involved parties, or legal arguments are not provided in the given text.

Florida Electric Utility The Florida Electric Utility segment consists of TEC, a vertically integrated regulated electric utility engaged in the generation, transmission and distribution of electricity, serving customers in West Central Fl...

AI summary TEC, a Florida utility with $14.5B USD assets and 866,000 customers, owns 6,771 MW of generating capacity (78% natural gas, 21% solar, 1% storage). It seeks a $88M USD rate increase approved by FPSC, with new rates effective January 1, 2026, and expects to meet its 9.5%-11.5% ROE range in 2026.

2025 Annual Financial Statements Attachment 6 Page 22 of 138 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Strategic Overview Management's Discussion and Analysis Consolidated Financial Statements Emera Leadership and Board Shareholder infor...

AI summary The FPSC approved Emera's 2024 rate case decision in 2025, denied a motion for reconsideration, and authorized $466 million USD in hurricane-related cost recovery. Capital investments in Florida's electric utility segment are projected at $1.8 billion USD in 2026, including storm hardening and grid modernization. Intervening parties appealed the rate case decision to the Florida Supreme Court.

Nova Scotia Energy Reform Act : On October 15, 2025, the Nova Scotia Independent Energy System Operator ("IESO Nova Scotia") announced that the organization will be phased in over two phases during an 18-month period. On December 1, 2025,...

AI summary The Nova Scotia Independent Energy System Operator (IESO Nova Scotia) will be phased in over 18 months, with the first phase completed in December 2025 and the second phase expected by 2027. This follows Bill 404 - Energy Reform (2024) Act, which established the Nova Scotia Energy Board (NSEB) and initiated the transition to IESO Nova Scotia.

PGS With $3.3 billion USD of assets and approximately 523,000 customers, the PGS system includes approximately 25,600 kilometres of natural gas mains and 14,800 kilometres of service lines. Natural gas throughput (the amount of gas deliver...

AI summary PGS, with $3.3 billion USD in assets and 523,000 customers, anticipates 2026 earnings within its allowed ROE range (9.30%-11.30%) due to new base rates and customer growth. A $67 million USD rate increase was approved by FPSC, including adjustments for cast iron replacement and future years. Capital investment is projected at $445 million USD in 2026.

BLPC With $547 million USD of assets and approximately 137,000 customers, BLPC owns 243 MW of generating capacity, of which 96 per cent is oil-fired and 4 per cent is solar. BLPC owns approximately 200 kilometres of transmission facilities...

AI summary BLPC, with $547 million USD in assets and 137,000 customers, submitted a general rate review application to the FTC in 2021. The FTC granted interim rate relief in 2022, later issuing a decision in February 2023 that BLPC challenged. The FTC dismissed BLPC's Motion for Review in November 2023, with interim rates remaining in effect pending a final decision.

2025 Annual Financial Statements Attachment 6 Page 25 of 138 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Strategic Overview Management's Discussion and Analysis Consolidated Financial Statements Emera Leadership and Board Shareholder infor...

AI summary BLPC appealed FTC rate decisions to the Supreme Court of Barbados, seeking a stay granted in December 2023. BLPC argues FTC erred in law and jurisdiction, with a 2026 decision expected. New non-exclusive T&D and G&S licenses (valid until 2047 and 2028) were agreed upon in 2025, pending repeal of the existing license.

Regulatory Environment TEC is regulated by the FPSC and is also subject to regulation by the FERC. The FPSC sets rates at a level that allows utilities such as TEC to collect total revenues or revenue requirements equal to their cost of pr...

AI summary TEC is regulated by the FPSC and FERC. FPSC sets rates to ensure TEC's revenue equals service costs plus return on capital, with base rates determined in hearings initiated by TEC, FPSC, or others. Refer to note 7 in financial statements for more details.

Regulatory Environment – NSPI NSPI is a public utility as defined in the Public Utilities Act of Nova Scotia ("Public Utilities Act") and is subject to regulation by the NSEB. The Public Utilities Act gives the NSEB supervisory powers over...

AI summary NSPI operates as a regulated public utility under Nova Scotia's Public Utilities Act, overseen by the NSEB. It follows a cost-of-service model for rate-setting, ensuring cost recovery and investor returns without annual rate reviews, relying instead on ad hoc hearings. Regulatory details are referenced in financial statement note 7.

Gas Utilities and Infrastructure On August 5, 2024, Emera announced an agreement to sell NMGC. As a result of the pending sale, NMGC's assets and liabilities were classified as held for sale beginning in Q3 2024. The public hearing was hel...

AI summary Emera announced a pending sale of NMGC in August 2024, with assets classified as held for sale from Q3 2024. A public hearing occurred in November 2025, and the transaction is expected to close in H1 2026 pending regulatory approval by the NMPRC.

Regulatory and Political Risk The Company's rate-regulated utilities and certain investments are subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key facto...

AI summary Emera's rate-regulated utilities face risks from complex regulatory frameworks affecting cost recovery, ROE, and capital investments. Failure to recover costs or obtain approvals could cause Material Adverse Effects, including valuation impairments. Regulatory lag between cost incurrence and rate approval further heightens these risks.

2025 Annual Financial Statements Attachment 6 Page 48 of 138 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Strategic Overview Management's Discussion and Analysis Consolidated Financial Statements Emera Leadership and Board Shareholder infor...

AI summary The text highlights risks associated with regulatory approvals for energy infrastructure, noting that failure to obtain or maintain such approvals could lead to a Material Adverse Effect. It also warns that changes in government, policy, or regulatory decisions may undermine regulatory stability and independence, potentially causing adverse impacts.

Change in Law Risk The Company is also exposed to changes in the political environment and leadership, changes in law or regulations, changes to governmental policies, trade disputes, and the imposition of tariffs, any of which may impact...

AI summary The Company faces risks from political, legal, and regulatory changes, including deregulation, policy shifts affecting natural gas use, and data center laws. These may cause Material Adverse Effects, increased competition, and compliance challenges. Emera cannot predict future changes, making timely responses difficult.

Project Development and Land Use Rights Risk The Company's capital plan includes significant investment in generation, infrastructure modernization, and customer-focused technologies. Any projects planned or currently in construction, part...

AI summary The Company's capital plan faces risks including schedule delays, cost overruns, regulatory approval challenges, and land-use rights issues with Indigenous Peoples. Projects may require federal/provincial permits, and failure to secure land rights could lead to significant costs or project unviability.

Rate Regulation The rate-regulated accounting policies of Emera's rate-regulated subsidiaries and regulated equity investments are subject to examination and approval by their respective regulators and may differ from the accounting polici...

AI summary Emera's rate-regulated subsidiaries have accounting policies differing from non-rate-regulated entities due to regulatory decisions, impacting cost recovery and financial reporting. Regulatory assumptions influence asset/liability recognition, with $3,198M in regulatory assets and $1,669M in liabilities as of December 31, 2025.

Opinion on the Consolidated Financial Statements We have audited the accompanying Consolidated Balance Sheets of Emera Incorporated (the "Company") as of December 31, 2025 and 2024, the related Consolidated Statements of Income, Consolidat...

AI summary The auditor opines that Emera's consolidated financial statements for 2025 and 2024 are fairly presented in accordance with US GAAP, affirming their compliance and accuracy.

Accounting for the effects of rate regulation Description of the Matter As disclosed in note 7 of the consolidated financial statements, the Company has $3.2 billion in regulatory assets and $1.7 billion in regulatory liabilities. The Comp...

AI summary The Company holds $3.2 billion in regulatory assets and $1.7 billion in liabilities, with rate regulation impacting financial statements through PP&E, revenues, and taxes. Auditing these impacts involves assessing recovery probabilities, reviewing regulatory orders, and evaluating disclosures. Risks include partial cost disallowance or refunds if regulators do not fully approve cost recovery.

PP&E PP&E is recorded at original cost, including AFUDC or capitalized interest, net of contributions received in aid of construction. The cost of additions, including betterments and replacements of units, are included in "PP&E" on the Co...

AI summary PP&E is recorded at original cost, including AFUDC or capitalized interest, with specific rules for depreciation, amortization, and handling of regulated vs. non-regulated assets. Depreciation uses straight-line or group remaining life methods, requiring regulatory approval for service lives. Intangible assets are amortized similarly, with regulatory oversight for rate-regulated subsidiaries.

TEC and PGS Storm Reserve: The storm reserve is for hurricanes and other named storms that cause significant damage to TEC and PGS systems. As allowed by the FPSC, if charges to the storm reserve exceed the storm reserve liability, the exc...

AI summary The storm reserve covers hurricane and named storm damage to TEC and PGS systems. Excess charges beyond liability are treated as regulatory assets, and TEC/PGS can petition FPSC for cost recovery over 12+ months via FPSC.

Florida Electric Utility TEC is regulated by the FPSC and is also subject to regulation by the Federal Energy Regulatory Commission. The FPSC sets rates at a level that allows utilities such as TEC to collect total revenues or revenue requ...

AI summary Florida Electric Utility (TEC) is regulated by the Florida Public Service Commission (FPSC) and the Federal Energy Regulatory Commission (FERC). FPSC sets rates to ensure TEC recovers costs and earns an appropriate return on equity. TEC's 2025 approved ROE range is 9.50%-11.50% (equity structure 54%), with 10.50% used for investment calculations.

Base Rates: On April 2, 2024, TEC filed a rate case with the FPSC for new base rates. On December 3, 2024, the FPSC rendered a decision which included annual base rate increases of $185 million USD in 2025 and adjustments of $87 million US...

AI summary TEC filed a rate case with the FPSC in 2024, leading to base rate increases of $185 million USD in 2025 and adjustments in 2026-2027. The FPSC approved the decision in February 2025, but an intervening party appealed to the Florida Supreme Court. In 2025, TEC petitioned for an additional $88 million USD adjustment, which the FPSC approved. The appeal process remains unresolved.

NSPML Equity earnings from the Maritime Link are dependent on the approved ROE and operational performance of NSPML. NSPML's approved regulated ROE range is 8.75 per cent to 9.25 per cent, based on an actual five-quarter average regulated...

AI summary NSPML's equity earnings depend on its approved ROE (8.75-9.25%) and operational performance. Key events include NSEB's 2025 interim order to collect $199M from NSPI for Maritime Link costs, NSPML's 2026 holdback termination application, and a $500M FLG debt agreement with Canada. NSPI approved $197M in 2025, including $158M for Maritime Link costs, with monthly holdbacks.

Base Rates: On March 31, 2025, PGS filed a rate case with the FPSC for new rates to become effective January 1, 2026. On August 13, 2025, PGS and the intervening parties filed a settlement agreement with the FPSC for a $67 million USD incr...

AI summary PGS filed a rate case with FPSC, leading to a $67 million USD base rate increase approved in October 2025, including specific riders and future adjustments, with a 10.30% ROE and 54.7% equity thickness.

GBPC GBPC is regulated by the GBPA. The GBPA has granted GBPC a licensed, regulated and exclusive franchise to produce, transmit and distribute electricity on the island until 2054. Rates are set to recover prudently incurred costs of prov...

AI summary GBPC operates under a 2054 franchise granted by GBPA, with rates set to recover prudently incurred costs plus an 8.52% return on rate base. The regulatory framework ensures cost recovery and appropriate returns for electricity service provision.

Regulatory and Political Risk The Company's rate-regulated utilities and certain investments are subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key facto...

AI summary Emera's rate-regulated utilities face risks from complex regulatory frameworks affecting cost recovery, ROE, and capital investments. Delays in regulatory approvals, inability to recover costs, or policy changes could cause Material Adverse Effects, including valuation impairments and service reliability issues. Regulatory stability is also threatened by government interference or shifts in public policy.

Nova Scotia Energy Reform Act: On October 15, 2025, the Nova Scotia Independent Energy System Operator ("IESO Nova Scotia") announced that the organization will be phased in over two phases during an 18-month period. On December 1, 2025, t...

AI summary The Nova Scotia Independent Energy System Operator (IESO Nova Scotia) is being phased in over 18 months, with the first phase completed in December 2025 and the second in 2027. This follows Bill 404 - Energy Reform (2024) Act, which established the Nova Scotia Energy Board (NSEB) and the transition to IESO.

General Rate Application ("GRA"): On September 18, 2025, NSPI filed a consensus General Rate Application ("GRA") with the NSEB, reflecting a settlement agreement reached with customer representatives. The GRA proposes average annual rate i...

AI summary NSPI filed a consensus General Rate Application (GRA) with the NSEB on September 18, 2025, proposing 1.8% and 2.4% annual rate increases for 2026 and 2027, respectively, with revenue increases of $62M and $108M. The hearing concluded in January 2026.

Wasoqonatl Transmission Line: On March 5, 2025, NSPI, the Canada Infrastructure Bank ("CIB") and the Wskijinu'k Mtmo'taqnuow Agency ("WMA") announced the Wasoqonatl transmission line project to create a reliability intertie between Nova Sc...

AI summary The Wasoqonatl transmission line project, a reliability intertie between Nova Scotia and New Brunswick, is led by NSPI, CIB, and WMA through WTI. NSPI holds 50% indirect voting interest in WTI, with NSEB approving a $685 million capital investment, including AFUDC, for the project.

Deferrals Related to Derivative Instruments: NSPI defers changes in fair value of derivatives that are documented as economic hedges or that do not qualify for NPNS exception, as a regulatory asset or liability as approved by the NSEB. The...

AI summary NSPI defers changes in fair value of derivatives as regulatory assets/liabilities per NSEB approval, recognizing realized gains/losses in accounts like 'Fuel for generation' or 'PP&E' when hedged items settle.

Regulatory and Political Risk NSPI is subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key factors such as rates and cost structures, revenue requirements,...

AI summary NSPI operates under complex regulatory frameworks affecting rates, cost recovery, and return on equity. Regulatory delays and decisions may hinder cost recovery, impact service reliability, and lead to material adverse effects. Government policy shifts and regulatory instability further amplify risks to NSPI's operations and investments.

2025 Annual Financial Statements Attachment 3 Page 1 of 30 REDACTED (CONFIDENTIAL INFORMATION REMOVED)

AI summary The document is a redacted page from the 2025 Annual Financial Statements Attachment 3, likely containing confidential information related to Nova Scotia Power Inc.'s financial reporting and regulatory compliance.

Wasoqonatl Transmission Line: On March 5, 2025, NSPI, the Canada Infrastructure Bank ("CIB") and the Wskijinu'k Mtmo'taqnuow Agency ("WMA") announced the Wasoqonatl transmission line project which will create a reliability intertie between...

AI summary The Wasoqonatl Transmission Line project, a reliability intertie between Nova Scotia and New Brunswick, was announced by NSPI, CIB, and WMA. The project is owned by WTI, a regulated utility under a limited partnership. NSPI holds a 50% indirect voting interest, and NSEB approved a $685 million capital investment, including AFUDC, for the intertie.

Regulatory and Political Risk NSPI is subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key factors such as rates and cost structures, revenue requirements,...

AI summary NSPI operates under a cost-of-service regulatory model requiring approvals for rate changes and capital investments. Regulatory delays, cost recovery risks, and government policy shifts could cause material adverse effects, including valuation impairments and service reliability issues. The IESO Nova Scotia's operational uncertainties and environmental legislation changes further complicate regulatory stability.

Renewable Energy Regulations: The Province has established targets with respect to the percentage of renewable energy in NSPI's generation mix. Under the RER, the Company currently has a provincially mandated target of achieving at least 4...

AI summary Nova Scotia has mandated NSPI to achieve 40% renewable energy sales by 2029 and 80% by 2030 under the RER. A $10M penalty was imposed on NSPI for 2022 non-compliance, which NSPI appealed to the NSEB in 2023. The appeal hearing concluded in 2025, with a decision pending.

Nova Scotia Energy Reform Act: On April 5, 2024, the Province enacted Bill 404 - Energy Reform (2024) Act. This legislation implements certain recommendations made by the Clean Electricity Solutions Task Force, which was established by the...

AI summary Nova Scotia enacted Bill 404 - Energy Reform (2024) Act, establishing the Nova Scotia Energy Board (NSEB) and transitioning to the Independent Energy System Operator (IESO) Nova Scotia. The IESO will be phased in over 18 months, with the first phase completed by December 2025. NSPI collaborates with the Province on these initiatives.

2025 Annual Financial Statements Attachment 3 Page 21 of 30 REDACTED (CONFIDENTIAL INFORMATION REMOVED) The Company will be required to manage the impacts of these ongoing changes on customer demand and rates, while maintaining and integra...

AI summary The company faces challenges in managing energy transition impacts, capital investment needs, and external factors affecting resiliency, renewable integration, and regulatory responses. Risks include insurance limitations for carbon assets, litigation from environmental harms, and climate change impacts on operations, reputation, and capital access.

Project Development and Land Use Rights Risk The Company's capital plan includes significant investment in generation, infrastructure modernization and customer-focused technologies. Any projects planned or currently in construction, parti...

AI summary The Company's capital plan involves significant investments in generation and infrastructure, facing risks like cost overruns, regulatory approvals, and land use rights with Indigenous Peoples. Projects may require federal, provincial, or municipal permits, and failure to secure land rights could lead to material costs or project infeasibility.

Name Number of Common Shares Percentage Emera Incorporated Halifax, Nova Scotia 183,517,299 100% Common Shares are the only voting shares at this time. All voting shares of the Company are beneficially owned by Emera Incorporated (Emera)....

AI summary Emera Incorporated owns 100% of Nova Scotia Power Inc.'s common shares, which are the only voting shares. Nova Scotia legislation restricts ownership of voting shares by non-Emera shareholders to 15% and non-Canadian shareholders to 25%. Compliance with these restrictions may involve limiting voting, dividend, and transfer rights, and shareholders may need to provide a statutory declaration to verify share ownership and residency.

Annual Compensation Risk Assessment In 2025, the MRCC conducted its annual compensation risk review of its executive compensation programs and policies. To assist in the review, Mercer was engaged by Emera management to evaluate their prev...

AI summary In 2025, the MRCC conducted an annual compensation risk review of its executive compensation programs and policies. Mercer was engaged to evaluate the previous year's risk assessment and confirmed that the Company's risk mitigation policies align with market best practices and no material risks were identified.

COMPENSATION DISCUSSION AND ANALYSIS For the purposes of compensation disclosure, the individuals disclosed in this Compensation Discussion and Analysis are the President and CEO, the CFO, and the next most highly compensated executive off...

AI summary This section outlines the Named Executive Officers (NEOs) of Nova Scotia Power Inc. (NSPI) and Emera for the 2025 fiscal year, including their roles and tenure. Greg Blunden stepped down as CFO on December 1, 2025, and Jared Green assumed the role. R. Michael Roberts is identified as the next most highly compensated executive officer.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION This AIF, including the documents incorporated herein by reference, contains "forward-looking information" and "forward-looking statements" within the meaning of applicable securities l...

AI summary This document contains forward-looking information about NSPI's financial performance, operations, and regulatory compliance. It includes projections and assumptions regarding revenue, capital investments, regulatory decisions, environmental initiatives, and potential challenges such as cyber incidents and global economic conditions.

Nova Scotia Energy Reform Act On April 5, 2024, the Province enacted Bill 404 - Energy Reform (2024) Act. This legislation implements certain recommendations made by the Clean Electricity Solutions Task Force, which was established by the...

AI summary Bill 404 - Energy Reform (2024) Act was enacted on April 5, 2024, implementing recommendations from the Clean Electricity Solutions Task Force. It established the NSEB and the IESO Nova Scotia, which will be phased in over 18 months, with the first phase completed on December 1, 2025.

Other Legislation In November 2023, the Province enacted amendments to the Electricity Act which permit the Governor in Council to approve energy storage projects proposed by a public utility and owned wholly or in majority by the public u...

AI summary In 2023, Nova Scotia amended the Electricity Act and Public Utilities Act to enhance energy storage and regulatory oversight. Amendments allow the Province to approve energy storage projects, issue requests for proposals, and increase penalties for noncompliance by NSPI. These changes aim to support renewable energy integration and customer cost reduction.

USGAAP – Exemptive Relief and Companies Act Relief NSPI was granted Exemptive Relief on September 13, 2022 and Companies Act Relief on October 12, 2022, each allowing NSPI to continue to report its financial results in accordance with USGA...

AI summary NSPI received Exemptive Relief and Companies Act Relief in 2022, allowing it to continue using USGAAP for financial reporting. These reliefs will expire in 2027 or earlier if NSPI no longer has rate-regulated activities. The IASB's Exposure Draft on Regulatory Assets and Liabilities may affect the future of these reliefs.

2025 Annual Financial Statements Attachment 5 Page 25 of 26 REDACTED (CONFIDENTIAL INFORMATION REMOVED) - "GGPPA" means the Greenhouse Gas Pollution Pricing Act; - "Government" means the Government of Canada; - "GRA" means a General Rate A...

AI summary This document defines key terms and abbreviations used in the 2025 Annual Financial Statements of Nova Scotia Power Inc. (NSPI), including regulatory and technical terminology related to energy, finance, and legal frameworks.

NSPI With $8.1 billion of assets and approximately 565,000 customers at December 31, 2025, NSPI owns 2,422 MW of generating capacity, of which 44 per cent is coal and/or oil-fired; 28 per cent is natural gas and/or oil; 19 per cent is hydr...

AI summary NSPI, with $8.1 billion in assets and 565,000 customers, owns a mix of generating capacity including coal, natural gas, and renewables. It has initiated grid-scale battery projects and has agreements with NLH for energy delivery. NSPI filed a GRA with the NSEB, proposing rate increases in 2026 and 2027. A new transmission project between Nova Scotia and New Brunswick, owned by WTI, was announced with NSPI holding a 50% indirect voting interest.

Nova Scotia Energy Reform Act : On October 15, 2025, the Nova Scotia Independent Energy System Operator ("IESO Nova Scotia") announced that the organization will be phased in over two phases during an 18-month period. On December 1, 2025,...

AI summary The Nova Scotia Independent Energy System Operator (IESO Nova Scotia) is being phased in over an 18-month period, with the first phase completed in December 2025 and the second phase expected to be completed in 2027. This follows the enactment of Bill 404 - Energy Reform (2024) Act, which established the Nova Scotia Energy Board (NSEB) and initiated the transition to IESO Nova Scotia.

NSPML Equity earnings from the Maritime Link are dependent on the approved ROE and operational performance of NSPML. NSPML's approved regulated ROE range is 8.75 per cent to 9.25 per cent, based on an actual five-quarter average regulated...

AI summary NSPML's equity earnings depend on its approved ROE and operational performance. The Maritime Link, operational since 2018, enables energy transmission between Newfoundland and Nova Scotia. In 2026, NSPML requested the termination of a $4 million monthly holdback on cost recovery, with a final decision pending. Capital investment is projected to be around $40 million in 2026.

BLPC With $547 million USD of assets and approximately 137,000 customers, BLPC owns 243 MW of generating capacity, of which 96 per cent is oil-fired and 4 per cent is solar. BLPC owns approximately 200 kilometres of transmission facilities...

AI summary BLPC, a Barbados utility with $547 million USD in assets and 137,000 customers, submitted a general rate review application in 2021. The FTC granted interim rate relief in 2022 and issued a decision in February 2023, which BLPC challenged. The FTC dismissed the challenge in November 2023, and interim rates remain in effect until a final decision is issued.

2025 Annual Financial Statements Attachment 6 Page 25 of 138 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Strategic Overview Management's Discussion and Analysis Consolidated Financial Statements Emera Leadership and Board Shareholder infor...

AI summary BLPC appealed the FTC's decisions to the Supreme Court of Barbados, seeking a stay which was granted. The appeal is ongoing and expected to conclude in 2026. BLPC operates under an integrated licence until 2028 but has agreed to new T&D and G&S licences valid until 2047 and 2028, respectively, pending the repeal of the current licence.

GBPC With $378 million USD of assets and approximately 20,000 customers, GBPC owns 98 MW of oil-fired generation, approximately 100 kilometres of transmission facilities and 1,000 kilometres of distribution facilities. GBPC's approved regu...

AI summary GBPC, with $378 million USD in assets and 20,000 customers, filed a rate plan proposal on August 1, 2024. The Electricity Act, 2024, removed GBPA's jurisdiction over GBPC, transferring it to URCA. URCA filed a claim to prevent GBPA from approving rate adjustments, but management does not expect this to significantly impact Emera.

Regulatory Environment TEC is regulated by the FPSC and is also subject to regulation by the FERC. The FPSC sets rates at a level that allows utilities such as TEC to collect total revenues or revenue requirements equal to their cost of pr...

AI summary TEC is regulated by the FPSC and FERC, with base rates determined through rate setting hearings. These hearings can be initiated by TEC, the FPSC, or other interested parties, and the FPSC sets rates to ensure utilities can recover their costs and earn an appropriate return on invested capital.

PGS is regulated by the FPSC. The FPSC sets rates at a level that allows utilities such as PGS to collect total revenues or revenue requirements equal to their cost of providing service, plus an appropriate return on invested capital. NMGC...

AI summary PGS and NMGC are regulated by the FPSC and NMPRC respectively, ensuring they collect revenues equal to their service costs plus a return on invested capital. Further details are provided in note 7 of the consolidated financial statements.

Regulatory and Political Risk The Company's rate-regulated utilities and certain investments are subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key facto...

AI summary Emera's rate-regulated utilities face regulatory and political risks due to complex legislative and regulatory frameworks. These frameworks affect rates, cost recovery, capital investments, and service reliability. Delays in regulatory approvals or disallowance of cost recovery could lead to material adverse effects.

2025 Annual Financial Statements Attachment 6 Page 48 of 138 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Strategic Overview Management's Discussion and Analysis Consolidated Financial Statements Emera Leadership and Board Shareholder infor...

AI summary The text discusses the regulatory challenges and risks associated with the acquisition, operation, and decommissioning of energy infrastructure, highlighting the potential for Material Adverse Effects due to changes in government, policy, or regulatory decisions.

Project Development and Land Use Rights Risk The Company's capital plan includes significant investment in generation, infrastructure modernization, and customer-focused technologies. Any projects planned or currently in construction, part...

AI summary The Company's capital plan involves significant investments in generation, infrastructure, and customer technologies, which are subject to risks such as schedule delays, cost overruns, and regulatory approval uncertainties. Projects may also face challenges related to land use rights, especially on lands owned by third parties or Indigenous Peoples, potentially leading to material costs or project infeasibility.

Accounting for the effects of rate regulation Description of the Matter As disclosed in note 7 of the consolidated financial statements, the Company has $3.2 billion in regulatory assets and $1.7 billion in regulatory liabilities. The Comp...

AI summary The document discusses the accounting challenges related to rate regulation for the Company, which has significant regulatory assets and liabilities. Auditing these impacts is complex due to the uncertainty of future regulatory decisions and the need to assess the probability of cost recovery. The audit process involved reviewing regulatory orders, filings, and legal correspondence to evaluate the Company's financial disclosures.

Base Rates: In 2021, BLPC submitted a general rate review application to the FTC. In September 2022, the FTC granted BLPC interim rate relief, allowing an increase in base rates of approximately $1 million USD per month. On February 15, 20...

AI summary BLPC submitted a rate review application in 2021, leading to interim rate increases and a decision by the FTC in February 2023. BLPC appealed the decision, and the Supreme Court of Barbados granted a stay. The appeal was heard in late 2025 and will continue into 2026. BLPC claims the FTC made errors of law and jurisdiction.

Regulatory and Political Risk The Company's rate-regulated utilities and certain investments are subject to complex legislative and regulatory frameworks that cover material aspects of their businesses. These frameworks influence key facto...

AI summary Emera's rate-regulated utilities face regulatory and political risks due to complex legislative frameworks influencing rates, cost recovery, and capital investments. Failure to obtain regulatory approvals or changes in government policy could result in material adverse effects, including valuation impairments and service reliability issues.

Key Credit Rating Considerations The credit ratings of NSPI are based on its integrated electricity operations regulated by the Nova Scotia Energy Board (NSEB). The Stable trends reflect our expectations that the Company's key credit metri...

AI summary NSPI's credit ratings remain stable due to regulatory developments, including the sale of FAM assets and debt financing from NSPML. The establishment of NSIESO has streamlined NSPI's responsibilities. A GRA filing is expected to result in moderate rate increases, with securitization of thermal assets to meet environmental policies. However, legislative actions affecting NSEB's independence could lead to negative credit rating impacts.

Environmental Regulation - In October 2017, the Province passed amendments to the Environment Act for the development of a capand-trade program for carbon emissions, which became effective on January 1, 2019. - In July 2021, the Province a...

AI summary Nova Scotia implemented various environmental regulations, including a cap-and-trade program and renewable energy mandates. The Province amended the RER to require 80% renewable electricity sales by 2030 and phased out coal-fired generation by 2030. An Equivalency Agreement with Canada allowed NSPI to comply with federal GHG regulations until 2029. NSPI faced a $10 million penalty for noncompliance with the RER in 2022 and appealed it. The Province also enacted Bill 404, establishing the NSIESO to manage the electricity grid starting in late 2025.

Criteria Score Analysis 1. Deemed Equity Excellent Good Satisfactory Below Average Poor NSPI's target-regulated ROE is based on an actual five-quarter average-regulated common equity component of up to 40.0%. 2. Allowed ROE Excellent Good...

AI summary The document evaluates NSPI's regulatory criteria, including deemed equity, allowed ROE, energy cost recovery, and rate freeze. It highlights the impact of Bill 212 on NSPI's regulatory environment, the use of the FAM for fuel cost recovery, and the cap on rate increases for the 2022 to 2024 GRA.

1. NS Power Annual Financial Statement Filings In the Nova Scotia Energy Board's (NSEB, Board) letter dated August 6, 2014, regarding NS Power's 2013 Annual Financial Statement filings, the Board directed that the following items are to be...

AI summary The Nova Scotia Energy Board (NSEB) directed NS Power to submit specific financial filings, including audited statements and management reports, while modifying reporting formats for deferred tax and rate base continuity. The Board also approved changes to non-fuel cost reporting and accepted revised attachment formats for future filings. NS Power's return on equity figures for 2025 were highlighted.

3. Revised Chart of Accounts, Summary of Accounts and Balances As noted above, NS Power has attached the Summary of Changes to the Chart of Accounts (Attachment 7) to December 31, 2025, as well as the updated Chart of Accounts as at Decemb...

AI summary NS Power submitted revised Chart of Accounts and Summary of Accounts and Balances for Board approval, including attachments 7, 8, and 9.

5. NS Power Unrecognized Tax Benefits (M09168) In the Board's letter dated February 7, 2020 regarding M09168 NS Power's 2018 Annual Financial Statements, the Board directed as follows: The Board would like a better understanding of the adj...

AI summary The Nova Scotia Energy Board (NSEB) requested Nova Scotia Power (NSP) to disclose tax benefits and their financial impacts, including prepaid amounts and potential ratepayer costs. NSP disputes with CRA over tax treatment of expenditures from 2006–2016, with $55M prepaid as of 2025. The Board mandated annual reporting on tax savings, net income, and earnings exceeding approved returns until the dispute resolves.

requesting confidential treatment for certain portions of the information contained in Attachment 1. Such information has been redacted from the publicly available copy on the basis of the following: - Partial confidentiality was applied t...

AI summary NS Power has requested confidential treatment for certain information in Attachment 1, including vendor billing rates and employee salaries, citing the need to protect customer value, maintain business relations, and preserve confidentiality. The request is made under Rule 12 of the Board's Regulatory Rules.

NOVA SCOTIA ENERGY BOARD IN THE MATTER OF: THE PUBLIC UTILITIES ACT - and - IN THE MATTER OF: AN APPLICATION by NOVA SCOTIA POWER INCORPORATED for approval of Annual and Regulated Financial Statements - 2025 INFORMATION REQUESTS To: Annie...

AI summary The Nova Scotia Energy Board has issued an information request to Nova Scotia Power Incorporated regarding the approval of their 2025 Annual and Regulated Financial Statements. Responses are due by August 4, 2026, and the request is part of the regulatory process under the Public Utilities Act.

August 4, 2026 Crystal Henwood Clerk of the Board Nova Scotia Energy Board 1601 Lower Water Street, 3rd Floor Halifax, NS B3J 3S3 Re: M12835 Annual and Regulated Financial Statements 2025 – IR Responses Dear Ms. Henwood: Please accept Nova...

AI summary Nova Scotia Power Inc. (NS Power) has submitted responses to the Nova Scotia Energy Board's (NSEB) information requests regarding its 2025 Annual Financial Statements. Certain portions of the responses are requested to be kept confidential, including compensation details, commercially sensitive cost information, and matters currently in dispute with the Canada Revenue Agency (CRA).

R-12 contains information relating to matters currently in dispute with the CRA. Public disclosure of this information could have an adverse impact on the Company's interest in the ongoing litigation. NS Power respectfully requests confide...

AI summary NS Power is requesting confidential treatment for information in R-12 related to ongoing disputes with the CRA, arguing that public disclosure could negatively impact its interests in the litigation.

- 1. NS Power will provide Designated Confidential Information, as defined herein, to the Designated Recipient as defined in the undertaking to which this schedule is attached. - 2. Designated Confidential Information shall consist of mate...

AI summary NS Power will provide designated confidential information to a recipient, including financial statements and responses to information requests, which have been filed with the Nova Scotia Energy Board in confidence and are subject to confirmation by the Board.

Board will avoid the reproduction in its decision of any Designated Confidential Information, unless it has otherwise ruled that the Designated Confidential Information is not to remain confidential. - 7. Where an Intervenor files any test...

AI summary The document outlines procedures for handling Designated Confidential Information in regulatory proceedings, including requirements for filing, confidentiality, and post-decision actions such as returning or destroying confidential information and providing affidavits of compliance.

ll provide an affidavit of compliance to NS Power respecting same. - (b) Notwithstanding paragraph 9(a), all members in good standing of the Nova Scotia Barrister's Society ("Counsel") who sign this Undertaking will be relieved from the re...

AI summary The text outlines an affidavit of compliance to NS Power, with specific provisions for members of the Nova Scotia Barrister's Society regarding the handling of Designated Confidential Information in regulatory proceedings involving NS Power.

NOVA SCOTIA ENERGY BOARD IN THE MATTER OF: THE PUBLIC UTILITIES ACT - and - IN THE MATTER OF: AN APPLICATION by NOVA SCOTIA POWER INCORPORATED for approval of Annual and Regulated Financial Statements - 2025 INFORMATION REQUESTS – Second S...

AI summary The Nova Scotia Energy Board has issued a second set of information requests to Annie Beth Sampson of Nova Scotia Power Inc. regarding the approval of Annual and Regulated Financial Statements for 2025. Responses are due by September 3, 2026, and the request was issued on August 13, 2026.