N-12025 Annual Financial Statements - Redacted
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Responsibilities of management and those charged with governance for the consolidated financial statements Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with USGA...
AI summary Management is responsible for preparing consolidated financial statements in accordance with USGAAP, ensuring internal controls to prevent material misstatements, and assessing the company's going concern status. Those charged with governance oversee the financial reporting process.
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.
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 22 of 30 REDACTED (CONFIDENTIAL INFORMATION REMOVED) Cyberattacks or unauthorized access may cause lost revenues, costs, losses, regulatory penalties and third-party damages all, or some o...
AI summary The document outlines cybersecurity risks to the Company, including financial losses, regulatory penalties, and third-party damages, which may not be recoverable. It highlights the Company's mitigation strategies, such as adhering to cybersecurity standards, conducting assessments, and hiring experts, while noting compliance with NSEB-approved regulations and quarterly reporting to the Board of Directors.
2025 Annual Financial Statements Attachment 3 Page 24 of 30 REDACTED (CONFIDENTIAL INFORMATION REMOVED)
AI summary This redacted section of the 2025 Annual Financial Statements for Nova Scotia Power Inc. (NSPI) is part of Attachment 3, Page 24 of 30. Confidential information has been removed, and the document is related to a regulatory proceeding involving financial disclosures and compliance with Nova Scotia energy regulations.
DISCLOSURE AND INTERNAL CONTROLS In accordance with National Instrument 52-109, Certification of Disclosure in Issuers' Annual and Interim Filings, the Chief Executive Officer and Chief Financial Officer of the Company will file a Venture...
AI summary The Company must file a Venture Issuer Basic Certificate under National Instrument 52-109, excluding representations on DC&P and ICFR. Certifying officers ensure processes are in place, but limitations may affect filing quality.
Compliance and Permits In addition to imposing continuing compliance obligations, there are laws, regulations and permits authorizing the imposition of penalties for non-compliance, including fines, injunctive relief and other sanctions. T...
AI summary The document highlights NSPI's compliance with environmental and regulatory obligations, noting that non-compliance risks material adverse effects. Audits found no significant issues, but recent environmental developments and legislative changes pose challenges. NSPI is engaging stakeholders to meet targets while addressing affordability concerns.
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.
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 continued use of USGAAP for financial reporting. The relief terminates on specific conditions, including IASB's new standard developments. NSPI will monitor the IASB's proposed accounting model for rate-regulated entities.
2025 Annual Financial Statements Attachment 5 Page 18 of 26 REDACTED (CONFIDENTIAL INFORMATION REMOVED) the aggregate, voting shares of NSPI to which are attached more than 15 per cent of the votes that may ordinarily be cast to elect dire...
AI summary NSPI's share ownership constraints limit voting rights for residents (15%) and non-residents (25%), with enforcement via its articles of association. Emera is exempt due to the Nova Scotia Power Reorganization (1998) Act . Mechanisms include voting suspensions, dividend forfeiture, and share redemption.
CERTAIN PROCEEDINGS To the knowledge of the Company, none of the Directors or Officers of the Company: - 1. are, as at the date of this AIF, or have been, within ten years before the date of this AIF, a director, chief executive officer or...
AI summary The company asserts that none of its directors or officers have been involved in bankruptcy, insolvency, or penalties related to securities legislation within the past ten years, nor have they been subject to orders or other legal issues that would disqualify them from their roles.
2025 Annual Financial Statements Attachment 5 Page 23 of 26 REDACTED (CONFIDENTIAL INFORMATION REMOVED) agreement with a securities regulatory authority, or are subject to any penalties or sanctions imposed by a court or regulatory body th...
AI summary The text discusses compliance with securities regulations, emphasizing the importance of disclosing agreements with regulatory authorities and potential penalties that could affect investor decisions. Due to redaction, specific details are omitted.
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.
Environmental Legislation and Regulations NSPI is subject to environmental laws and regulations set by both the Government of Canada and the Province of Nova Scotia (the "Province"). NSPI continues to work with both levels of government to...
AI summary NSPI must comply with federal and provincial environmental regulations, aiming to balance emission control efficiency with customer cost minimization. It anticipates recovering prudently incurred compliance costs through its regulatory framework but faces risks from non-compliance affecting operations and financial performance. Further details are in the 'Enterprise Risk and Risk Management' section.
Financial Highlights
AI summary The document provides an overview of key financial highlights, including management's discussion and analysis, capital expenditures, and various regulatory and compliance considerations relevant to Nova Scotia Power Incorporated.
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.
Transition Risk: As government policy related to the environment, renewable energy, and decarbonization continues to shift in various operating jurisdictions, the Company is exposed to increased uncertainty and risk arising from policy, le...
AI summary The Company faces transition risks due to evolving environmental policies, renewable energy mandates, and decarbonization efforts, which may cause material adverse effects. These risks include regulatory uncertainty, capital investment needs, insurance challenges, and potential litigation. The energy transition requires balancing reliability, affordability, and stakeholder expectations while adapting infrastructure and managing insurance and regulatory exposure.
Disclosure and Internal Controls Management is responsible for establishing and maintaining adequate disclosure controls and procedures ("DC&P") and internal control over financial reporting ("ICFR"), as defined in National Instrument 52-1...
AI summary Management is responsible for establishing disclosure controls and internal financial reporting controls, evaluated under NI 52-109 and the COSO framework. The Company's controls aim to ensure reliable USGAAP-compliant financial reporting, though inherent limitations may exist. Evaluation was conducted as of December 31, 2025, by the CEO and CFO.
Accumulated Reserve – Cost of Removal TEC, PGS, NMGC and NSPI recognize non-ARO costs of removal ("COR") as regulatory liabilities. The non-ARO COR represents estimated funds received from customers through depreciation rates to cover futu...
AI summary TEC, PGS, NMGC, and NSPI recognize non-ARO costs of removal (COR) as regulatory liabilities, accrued over asset lifetimes using regulator-approved depreciation studies. The 2025 accumulated reserve balance for COR was $729 million, reflecting estimated future costs to retire PP&E.
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.
Basis of Presentation These consolidated financial statements are prepared and presented in accordance with United States Generally Accepted Accounting Principles ("USGAAP") and, in the opinion of management, include all adjustments that a...
AI summary Emera's consolidated financial statements adhere to USGAAP, incorporating necessary adjustments to fairly represent its financial position. All figures are presented in Canadian dollars (CAD), as noted in the document's basis of presentation.
Income Taxes and Investment and Production Tax Credits Emera recognizes deferred income tax assets and liabilities for the future tax consequences of events that have been included in financial statements or income tax returns. Deferred in...
AI summary Emera accounts for deferred income tax assets and liabilities based on enacted tax rates, with adjustments for regulatory requirements. Investment and production tax credits are deferred and amortized per regulatory practices. Entities like NSPI and NSPML handle income taxes differently from GBPC, which is not subject to income taxes. Interest and penalties are classified separately.
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.
N-2Refiled Statements - NSPI - Redacted
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Other information Management is responsible for the other information. The other information comprises Management's Discussion and Analysis. Our opinion on the consolidated financial statements does not cover the other information and we d...
AI summary The auditor clarifies their responsibility to review 'other information' in financial statements, ensuring it is not materially inconsistent or misstated. Management is responsible for this information, and the auditor found no material misstatements to report.
2025 Annual Financial Statements Attachment 2 Page 5 of 48 REDACTED (CONFIDENTIAL INFORMATION REMOVED) • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities o...
AI summary The document outlines the responsibilities of Ernst & Young LLP in conducting a group audit for the Company's financial statements, including communication with governance and compliance with ethical requirements. The audit ensures sufficient evidence for consolidated financial statements and addresses internal control deficiencies.
C. Environment NSPI's activities are subject to a broad range of federal, provincial, regional and local laws and environmental regulations, designed to protect, restore and enhance the quality of the environment including air, water and s...
AI summary NSPI faces environmental regulations requiring capital investment for renewable energy integration, with estimated costs of $81M in 2026 and $111M from 2027-2030. Compliance is material, and failure could harm the company. No significant compliance issues were found in audits as of December 31, 2025.
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.
FORWARD-LOOKING INFORMATION This MD&A contains forward-looking information and statements which reflect the current view with respect to the Company's expectations regarding future growth, results of operations, performance, earnings, capi...
AI summary The document outlines forward-looking information and statements regarding the Company's expectations, including impacts of the Cybersecurity Incident on financial position, IT systems restoration, insurance recoveries, and compliance with Canadian securities laws. These statements are subject to risks and uncertainties and should not be interpreted as guarantees of future performance.
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 complies with federal and provincial environmental regulations, aiming to minimize customer costs while ensuring compliance. It anticipates recovering prudently incurred compliance costs through its regulatory framework. Risks include non-compliance impacts on operations and financial performance, with further details in the 'Enterprise Risk and Risk Management' section.
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 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.
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.
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 NSPI faces risks from potential changes in laws, regulations, and policies, including deregulation or energy industry restructuring, which could increase competition, costs, or lead to Material Adverse Effects. NSPI cannot predict or effectively respond to such changes, which may impact operations and compliance.
Per- and polyfluoroalkyl substances ("PFAS"): PFAS are man-made chemicals that are widely used in consumer products and can persist and bioaccumulate in the environment. The Company does not manufacture PFAS but because these contaminants...
AI summary PFAS, man-made chemicals persistent in the environment, may impact NSPI's operations due to potential regulatory changes. New environmental laws could impose investigation, cleanup costs, and alter land acquisition strategies, risking Material Adverse Effects.
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.
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 allowing flexibility in SO2 emissions timing from 2025 to 2034. Environmental regulations could lead to higher compliance costs, delays in infrastructure, and stranded assets. Non-compliance risks legal penalties and Material Adverse Effects.
DISCLOSURE AND INTERNAL CONTROLS In accordance with National Instrument 52-109, Certification of Disclosure in Issuers' Annual and Interim Filings, the Chief Executive Officer and Chief Financial Officer of the Company will file a Venture...
AI summary The Company's annual filings under National Instrument 52-109 exclude representations on DC&P and ICFR, potentially increasing risks to the quality and reliability of financial reporting. Certifying officers ensure processes are in place, but limitations may affect disclosure accuracy.
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.
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 companies in Nova Scotia, prohibiting individuals with histories of cease trade orders, bankruptcies, or penalties under securities legislation from being elected as directors. These provisions aim to ensure corporate governance integrity and protect stakeholder interests.
System Operations and Generation NSPI's Control Center Operations co-ordinates and controls the electric generation, transmission and distribution facilities with the goal of providing safe, reliable and efficient electricity supply while...
AI summary NSPI's Control Center manages electric generation, transmission, and distribution through SCADA systems, ensuring safe and reliable power supply. NSPI is interconnected with NB Power and NLH, enhancing system reliability and reserve capacity. NSPI adheres to NPCC and NERC standards for system reliability, as enforced by the NSEB.
Share Ownership Restrictions Pursuant to the Nova Scotia Power Privatization Act (Nova Scotia), the articles of association of NSPI provide that no person, together with associates thereof, may subscribe for, have transferred to that perso...
AI summary The text discusses share ownership restrictions under the Nova Scotia Power Privatization Act, which governs the articles of association of Nova Scotia Power Inc. (NSPI), limiting the ownership and control of shares by any person or their associates.
Environmental Legislation and Regulations NSPI is subject to environmental laws and regulations set by both the Government of Canada and the Province of Nova Scotia (the "Province"). NSPI continues to work with both levels of government to...
AI summary NSPI is subject to environmental laws and regulations from the Government of Canada and Nova Scotia. It works with both levels of government to ensure compliance and minimize customer costs. NSPI expects to recover prudently incurred compliance costs and faces risks related to non-compliance with climate and environmental legislation.
Income Tax Risk The computation of the Company's provision for income taxes is impacted by changes in tax legislation in Canada, the US and the Caribbean and any such changes could have a Material Adverse Effect. The value of Emera's exist...
AI summary The computation of the Company's income tax provision is influenced by changes in tax legislation across Canada, the US, and the Caribbean, which could lead to a Material Adverse Effect. Existing deferred income tax assets and liabilities are based on current tax laws and may be adversely affected by legislative changes.
Uninsured Risk Emera and its subsidiaries maintain insurance to cover accidental loss suffered to its facilities and to provide indemnity in the event of liability to third parties. A significant portion of Emera's electric utilities' tran...
AI summary Emera and its subsidiaries maintain insurance for accidental loss and third-party liability, but a significant portion of their transmission and distribution assets are not insured due to high costs. They also accept deductibles and self-insured retentions, which could lead to material adverse effects if claims exceed coverage limits or are not recoverable through regulation.
Income Taxes and Investment and Production Tax Credits Emera recognizes deferred income tax assets and liabilities for the future tax consequences of events that have been included in financial statements or income tax returns. Deferred in...
AI summary Emera accounts for deferred income tax assets and liabilities based on differences between financial statement values and tax bases, using enacted tax rates. Investment and production tax credits are recorded as reductions to income tax expense when realization is probable. Regulated entities like TEC, PGS, and NMGC defer and amortize investment tax credits as per regulatory practices. Income taxes are collected from customers based on current and deferred taxes, with some entities recognizing regulatory assets or liabilities for future recovery or return.
Excessive Interest and Financing Expenses Limitation ("EIFEL") Regime: On June 20, 2024, Bill C-59, an Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023, and certain provisions of...
AI summary Bill C-59, enacted on June 20, 2024, introduced the EIFEL regime, effective January 1, 2024, which limits a company's net interest and financing expense deduction to 30% of earnings before interest, income taxes, depreciation, and amortization. Denied expenses can be carried forward indefinitely.
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.