Topic:"Regulatory Compliance" in M11990

WACC and AFUDC Rate Application CONFIDENTIAL (ATTACHMENT ONLY) - 1 The proposed WACC/AFUDC rate is supported by the information contained in Appendix A . - 2 Appendix A provides the forecast cost of capital for NS Power in 2025, including...

AI summary NS Power proposes a 6.66% WACC/AFUDC rate for 2025, supported by Appendix A and the Board's 2018 methodology. They reference M08416 and M08876, aligning debt and interest rates with FOR-10 and FOR-11.

1 2.0 FINANCING OUTLOOK & METHODOLOGY 2 - 3 NS Power is an asset intensive business that owns and operates many large facilities and systems. - 4 As a result, the Company's financing costs are significant. To minimize these costs, it is es...

AI summary NS Power requires diverse financing to manage costs and ensure cost-effective service. They request a 6.66% WACC/AFUDC rate for 2025, using past methodologies and a 40% equity ratio as per Board Order M10431.

WACC and AFUDC Rate Application CONFIDENTIAL (ATTACHMENT ONLY) 1 3.0 DEBT, INTEREST AND EQUITY 2 3 NS Power's funding requirements are financed through shareholder equity, preferred shares, 4 internally generated cash flows, short-term cre...

AI summary NS Power uses a mix of debt and equity, relying on Commercial Paper for low-cost financing. Their current credit rating (R-2) is below the required R-1, but they received exemptive relief in 2023. They aim to maintain access to Commercial Paper and use CORRA as the new benchmark after CDOR's discontinuation.

5 3.1.1 Short-term Interest Rate Forecast Methodology 6 - 7 As part of its decision in Matter M11563 NS Power Inc WACC and AFUDC Rates Application - 8 for 2024, the Board directed NS Power to file a Compliance Filing, comparing the rate th...

AI summary The Nova Scotia Utility and Review Board (NSUARB) evaluated NS Power's Compliance Filing comparing Bloomberg and T-Bill methodologies for short-term interest rate forecasts. The Board found negligible differences but required NS Power to demonstrate which method is more accurate over time, with alternatives if Bloomberg data is unavailable.

1 4.0 CONCLUSION 2 - 3 NS Power respectfully requests approval of a single WACC/AFUDC rate of 6.66 percent for both - 4 capital and non‐capital matters to be effective the latter of January 1, 2025 or the first day of the - 5 month in whic...

AI summary NS Power requests approval for a 6.66% WACC/AFUDC rate for capital and non-capital matters, effective January 1, 2025, or upon Board approval. They also seek approval to use Bloomberg's forecast methodology for short-term debt rate forecasting, supported by Appendix A.

NON-CONFIDENTIAL Request IR-1: Refer to Exhibit N-1, NS Power's Application in M11990, p. 6, lines 18-21, and p. 8 at line 22, both quoted below and answer the questions that follow: "The predominant rating used by Commercial Paper investo...

AI summary NS Power's credit ratings (R-2 by DBRS, BBB by S&P) are below the Commercial Paper market's required R-1 threshold. The company obtained exemptive relief in 2023. The proceeding requests recent credit reports from DBRS and S&P, with NS Power referring to attachments for updated outlooks.

1. Low-risk regulated electricity business The Company's current regulatory framework is based on a cost-of-service (COS) methodology, under which NSPI can recover all prudently estimated operating expenses and earn a reasonable return on...

AI summary The Company's regulatory framework uses a cost-of-service (COS) methodology allowing NSPI to recover operating expenses and earn a reasonable return. The 8.75%-9.25% ROE range is deemed reasonable. A Fuel Adjustment Mechanism (FAM) mitigates fuel price risks by deferring cost differences. However, recent provincial intervention in the GRA process has increased regulatory risk and instability.

Social There were no social factors that had a relevant or significant effect on the credit analysis. As a regulated utility, NSPI provides an essential service to its customers. Any disruptions in its operations could result in reputation...

AI summary The analysis found no significant social factors impacting credit. NSPI, a regulated utility, provides essential services with outage metrics below 2024 targets. The company prioritizes safety for employees and customers.

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

AI summary Nova Scotia implemented a cap-and-trade program for carbon emissions in 2019 and mandated 80% renewable electricity sales by 2030. The province also phased out coal-fired generation by 2030 and entered into an Equivalency Agreement with the federal government. NSPI faced a $10 million penalty for noncompliance with the RER and appealed it. The province also introduced the 2030 Clean Power Plan and enacted the Energy Reform (2024) Act, which includes the establishment of the NSIESO.

Page 12 of 13 Assessment of Regulatory Framework Page 12 of 13 Criteria Score Analysis Page 12 of 13 1. Deemed Equity Page 12 of 13 Page 12 of 13 Excellent Good Satisfactory Below Average Poor NSPI's target-regulated ROE is based on an act...

AI summary The document evaluates the regulatory framework for NSPI, highlighting aspects such as deemed equity, allowed ROE, fuel cost recovery, and political interference. Bill 212 is noted for capping equity and ROE, introducing volatility, and limiting rate increases. The NSUARB's role in auditing fuel costs and disallowing some recovery is also discussed.

thermore, the government support also decreases the rate impact on customers by spreading out the recovery over a longer period (10 years for the provincial funding and 28 years for the federal loan). We project Emera's financial measures...

AI summary Emera's financial risk profile is assessed as aggressive but improving, with FFO-to-debt ratios projected to remain above 10% through 2026. Capital spending of C$20 billion (2025-2029) focuses on Florida grid reliability and renewables, funded by internal cash flow, equity, and debt. Dividend growth moderation balances capital plans, while regulatory risk benchmarks reflect lower volatility compared to corporate issuers.

Covenants Emera is required to maintain a debt to capital ratio of less than or equal to 70%. As on Sept 30,2024, Emera was in compliance with this covenant. The company has sufficient headroom in the next two years.

AI summary Emera must maintain a debt-to-capital ratio of ≤70%. As of Sept 30, 2024, it was compliant, with sufficient headroom projected for the next two years.

17 NS Power Response: 18 - 19 The Company must prepare the application using the best available information at a point in time. - 20 Given the frequent fluctuations in the forecasted interest rate, the Company must establish a cut- - 21 of...

AI summary NS Power uses its annual Budget (prepared in September with August interest rate forecasts) to calculate WACC and AFUDC, aligning with NSUARB's directive (M11563) requiring forecasts within four months of application submission. NS Power asserts that more recent data would have a negligible impact (2 basis points) on these rates.

1 3.0 SMALL BUSINESS ADVOCATE 2 3 Credit Rating 4 - 5 The SBA expresses that it is pleased to see NS Power's proposed 2025 WACC rate is lower than - 6 the approved rate for 2024, however raises concern that there is some risk that based on...

AI summary The Small Business Advocate (SBA) acknowledges NS Power's lower 2025 WACC rate but warns that credit rating factors may reverse, risking NSPI's operations. The SBA urges quarterly reporting on metrics and immediate disclosure of failures to protect ratepayers and NSPI's access to capital.

REDACTED (CONFIDENTIAL INFORMATION REMOVED) PO Box 910 ● Halifax, Nova Scotia ● Canada ● B3J 2W5 March 28, 2025 Crystal Henwood Regulatory Affairs Officer/Clerk Nova Scotia Utility and Review Board 1601 Lower Water Street, 3rd Floor P.O. B...

AI summary Nova Scotia Power Inc. (NS Power) submitted a 2025 WACC and AFUDC rates application to the Nova Scotia Utility and Review Board (NSUARB). The Board directed NS Power to file a compliance filing using a 4.86% short-term interest rate, reserving decision on Bloomberg forecast adoption. NS Power responded to stakeholder inquiries and submitted reply evidence ahead of the March 28 compliance deadline.

REDACTED WACC and AFUDC Rates Application 2025 Compliance Filing Attachment 1 Page 1 of 6 REDACTED (CONFIDENTIAL INFORMATION REMOVED)

AI summary This document is an attachment from a 2025 compliance filing related to NS Power's application for WACC and AFUDC rates. It is part of a regulatory proceeding before the NSUARB, involving entities such as the Consumer Advocate, Small Business Advocate, and Industrial Group. The content is heavily redacted, with confidential information removed.

REDACTED WACC and AFUDC Rates Application 2025 Compliance Filing Attachment 1 Page 2 of 6 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Nova Scotia Power Inc. CS-1-3 Capital Structure and Ratios Year Ended December 31st Millions of Dollars

AI summary Nova Scotia Power Inc. (NS Power) submitted a 2025 compliance filing related to its Weighted Average Cost of Capital (WACC) and Allowance for Funds Used During Construction (AFUDC) rates. The document is part of a regulatory proceeding before the Nova Scotia Utility and Review Board (NSUARB), with confidential information redacted.

REDACTED WACC and AFUDC Rates Application 2025 Compliance Filing Attachment 1 Page 3 of 6 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Nova Scotia Power Inc. FOR-11 Details of Interest and Other Expenses Year Ended December 31st Millions of...

AI summary Nova Scotia Power Inc. (NS Power) submitted a compliance filing for 2025 WACC and AFUDC rates, including Attachment 1 detailing interest and other expenses for the year ended December 31. The filing is part of a regulatory proceeding under the Nova Scotia Utility and Review Board (NSUARB).

REDACTED WACC and AFUDC Rates Application 2025 Compliance Filing Attachment 1 Page 4 of 6 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Nova Scotia Power Inc. Details of Long-Term Debt Interest Calculation Year Ended December 31st Millions o...

AI summary Nova Scotia Power Inc. (NS Power) submitted a 2025 compliance filing for WACC and AFUDC rates, including a table detailing long-term debt interest calculations for the year ended December 31. The document is redacted, with confidential information removed.

REDACTED WACC and AFUDC Rates Application 2025 Compliance Filing Attachment 1 Page 6 of 6 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Nova Scotia Power Inc. Details of CIB Debt Interest Calculation Year Ended December 31st Thousands of Dol...

AI summary Nova Scotia Power Inc. (NSPI) submitted a compliance filing for 2025 Weighted Average Cost of Capital (WACC) and Allowance for Funds Used During Construction (AFUDC) rates. The document includes a redacted table detailing CIB debt interest calculations for the year ended December 31, with confidential information removed. The filing is subject to review by the Nova Scotia Utility and Review Board (NSUARB).

IN THE MATTER OF THE PUBLIC UTILITIES ACT - and – IN THE MATTER OF AN APPLICATION by NOVA SCOTIA POWER INCORPORATED (NS Power) for approval of Weighted Average Cost of Capital and Allowance for Funds Used During Constructions Rates for 202...

AI summary Nova Scotia Power Inc. (NS Power) seeks approval for 2025 Weighted Average Cost of Capital and Allowance for Funds Used During Construction Rates under the Public Utilities Act. The proceeding is before Bruce H. Fisher, a regulatory board member.

Other Submissions The Small Business Advocate (SBA) raised concerns about risk from credit rating agency reports provided by NS Power and the possible limited access to Commercial Paper which could affect NS Power's ability to carry out it...

AI summary The Small Business Advocate (SBA) raised concerns about NS Power's credit rating risks and limited access to Commercial Paper, urging regular reporting. NS Power rebutted, stating quarterly SEDAR filings and compliance with debt ratios are sufficient, referencing Board matter M11563.

Findings The Board previously noted in matter M11563 that the difference between using the Bloomberg forecast and the approved forecasting method for short-term interest rates was negligible. Using external data could increase efficiency a...

AI summary The Board evaluates NS Power's use of Bloomberg forecasts for short-term interest rates, finding no significant accuracy advantage over other methods. It directs NS Power to use a 4.86% rate for WACC/AFUDC calculations and mandates a methodology review by 2026. The Board also requires compliance filings and ongoing updates on credit rating changes affecting borrowing costs.

IN THE MATTER OF THE PUBLIC UTILITIES ACT - and - IN THE MATTER OF AN APPLICATION by NOVA SCOTIA POWER INCORPORATED for approval of its 2025 pre-tax WACC/AFUDC Rate for both capital and non-capital matters BEFORE: Bruce H. Fisher, MPA, CPA...

AI summary Nova Scotia Power Incorporated seeks approval for its 2025 pre-tax WACC/AFUDC rate under the Public Utilities Act. The proceeding is before Bruce H. Fisher, a regulatory member, addressing capital and non-capital matters.

ORDER On November 28, 2025, Nova Scotia Power Inc. (NS Power) filed an application requesting approval of its Weighted Average Cost of Capital (WACC) and Allowance for Funds Used During Construction (AFUDC) rates for 2025 rate of 6.66% for...

AI summary Nova Scotia Power Inc. (NS Power) applied for approval of its 2025 WACC/AFUDC rates at 6.66% (initial) and 6.65% (revised). The Board approved the 6.65% rate effective April 1, 2025, and imposed requirements for annual filings, interest rate sourcing, methodology reviews, and credit rating notifications.

IN THE MATTER OF THE PUBLIC UTILITIES ACT - and – IN THE MATTER OF AN APPLICATION by NOVA SCOTIA POWER INCORPORATED (NS Power) for approval of Weighted Average Cost of Capital and Allowance for Funds Used During Constructions Rates for 202...

AI summary Nova Scotia Power Inc. (NS Power) seeks approval for Weighted Average Cost of Capital and Allowance for Funds Used During Constructions Rates for 2025 under the Public Utilities Act. The proceeding is before Bruce H. Fisher, a regulatory board member.

Request IR-3: - How has the transition from Canadian Dollar Offered Rate (CDOR) to Canadian Overnight Repo - Rate Average (CORRA) affected NS Power's financial position and forecasting processes, - specifically in terms of: - a) The impact...

AI summary Request IR-3 seeks information on how NS Power's transition from CDOR to CORRA has impacted its financial position, forecasting processes, risk management, and compliance with regulatory requirements.

Change in Methodology NSPI stated that the methodology employed to calculate WACC/AFUDC is consistent with that used in prior GRAs and WACC Applications.[1](#page-0-0) At the same time, NSPI acknowledged that it "updated" its short-term in...

AI summary NSPI updated its methodology for calculating WACC/AFUDC by switching from T-Bill data from five Canadian banks to Bloomberg rates and adopting CORRA as the benchmark. NSPI argues this doesn't alter the core methodology, but the Board previously confirmed a methodology change in M11563. The Board now considers these updates for approval.

Bloomberg At the Board's request, NSPI has now provided the requisite information to determine whether the Bloomberg Outlook rate should be used to calculate the short-term interest rate forecasts going forward. NSPI provides three rationa...

AI summary NSPI proposes using Bloomberg data for short-term interest rate forecasts, citing improved accuracy, administrative efficiency, and industry alignment. The Industrial Group supports this, noting minimal impact on WACC and reduced error risks. Monitoring is suggested to ensure continued minimal impact.

RA being risk free, compared to the previous CDOR, it appears that this is a required new step in the calculation to use a credit spread adjustment and is undoubtedly a change in the methodology used. While this change to the Term CORRA ap...

AI summary The transition from CDOR to Term CORRA involves a credit spread adjustment, raising methodological changes. The Industrial Group disputes NSPI's claim that this transition was outside its decision-making authority. The Application notes NSPI's reporting lacks clarity on the rate change's impact, recommending more detailed justification for the Term CORRA approach and its effects on borrowing costs.

2. Timing of Debt Rate Forecasts NS Power's debt rate forecasts were prepared in late August, 2024[.](#page-2-0) 7 Since that time there have been three reductions to the Bank of Canada's overnight policy rate totalling 1.5%, including the...

AI summary NS Power submitted debt rate forecasts in August 2024, but the Bank of Canada reduced its overnight policy rate by 1.5% since then. NS Power complied with NSUARB's directive (M11563) requiring data collection within four months of application submission. Using updated January 2025 rates would lower WACC to 6.64%. The Consumer Advocate acknowledges compliance but suggests using recent data may be prudent.

Bloomberg's Short-term Interest Rate In matter M11563, NS Power requested to apply Bloomberg's Outlook 3-month interest rate to estimate short term debt rates in future debt rates in place of the approved methodology that uses forecasts of...

AI summary NSP requested using Bloomberg's short-term interest rate forecasts instead of the current method involving 3-month T-Bill forecasts. The Board directed NSP to prove Bloomberg's method's accuracy. NSP provided data showing neither method was accurate, but argued Bloomberg's approach is better due to larger sample size and minimal WACC impact. The CA criticized outdated data, while the IG noted minimal differences between forecast methods.

Findings The Board previously noted in matter M11563 that the difference between using the Bloomberg forecast and the approved forecasting method for short-term interest rates was negligible. Using external data could increase efficiency a...

AI summary The Board acknowledges the negligible difference between Bloomberg and approved forecasting methods for short-term interest rates but directs NSP to use 4.86% for WACC/AFUDC calculations. NSP must continue submitting forecasts via the Board-approved method and file a compliance filing by March 2025. A broader methodology review is required for the 2026 application, with potential discussions on forecasting alternatives and calculation approaches.

IN THE MATTER OF THE PUBLIC UTILITIES ACT - and - IN THE MATTER OF AN APPLICATION by NOVA SCOTIA POWER INCORPORATED for approval of its 2025 pre-tax WACC/AFUDC Rate for both capital and non-capital matters BEFORE: Bruce H. Fisher, MPA, CPA...

AI summary Nova Scotia Power Incorporated seeks approval for its 2025 pre-tax WACC/AFUDC Rate under the Public Utilities Act. The proceeding is before Bruce H. Fisher, a regulatory board member, who will assess the application for both capital and non-capital matters.

ORDER On November 28, 2025, Nova Scotia Power Inc. (NS Power) filed an application requesting approval of its Weighted Average Cost of Capital (WACC) and Allowance for Funds Used During Construction (AFUDC) rates for 2025 rate of 6.66% for...

AI summary Nova Scotia Power Inc. (NS Power) applied for approval of its 2025 WACC/AFUDC rates at 6.66%, later revised to 6.65% using average three-month T-Bill forecasts. The Board approved the 6.65% rate, effective April 1, 2025, and mandated ongoing compliance filings, specific interest rate methodologies, and a review of WACC/AFUDC calculation alternatives by 2026.