Topic:"Regulatory Oversight" in M11990

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.

2. Political intervention in the ratemaking process In November 2022, the Province passed Bill 212, which amended the Public Utilities Act to cap the baserate increase for NSPI's most recent GRA at 1.8% during the 2022 to 2024 period, excl...

AI summary In November 2022, the Province passed Bill 212, amending the Public Utilities Act to cap NSPI's GRA baserate increase at 1.8% (excluding DSM and fuel costs) and limit ROE and deemed equity. The text argues political interference in ratemaking introduces instability and undermines regulator independence, negatively impacting credit.

Appendix 2—Regulation - NSPI operates under the NSUARB's regulatory environment using a COS methodology that allows the Company to recover all prudently estimated operating expenses and earn a reasonable return on approved capital investme...

AI summary NSPI operates under NSUARB regulation with a target ROE range of 8.75-9.25%. Bill 212 capped base-rate increases at 1.8% (2022-2024) and limited ROE to 9.25%. A 2023 rate settlement approved a 6.9% average increase, including DSM and fuel adjustments. NSUARB also approved a Storm Rider in 2024. NSPI's FAM allows fuel cost recovery, with a 2024 asset sale to the Province. NSPML's 2024 debt issuance reduced FAM liabilities.

Outlook

AI summary The document's 'Outlook' section outlines considerations for a Nova Scotia regulatory proceeding involving Nova Scotia Power Inc. (NSP) and related entities, with references to credit rating agencies and regulatory bodies.

Liquidity We assess Emera's liquidity as adequate because we believe its sources will cover its uses by about 1.2x over the next 12 months and meet cash outflows even if EBITDA declines 10%. We believe the company's generally predictable r...

AI summary Emera's liquidity is assessed as adequate, with 1.2x coverage of cash outflows over 12 months, resilience to EBITDA declines, and manageable debt maturities. The company's predictable regulatory framework, access to C$3.8 billion in credit facilities, and prudent risk management support this assessment.

Nova Scotia Utility and Review Board IN THE MATTER OF The Public Utilities Act, R.S.N.S. 1989, c.380, as amended.

AI summary The Nova Scotia Utility and Review Board is conducting a proceeding under the Public Utilities Act, which governs utility regulation in Nova Scotia. The Act, amended and in effect since 1989, provides the legal framework for utility oversight and regulatory decisions.

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.

CDOR vs CORRA Refinitiv Benchmark Services Limited stopped publishing the Canadian Dollar Offer Rate (CDOR) at the end of June 2024. The CDOR was used by NS Power as part of its short-term interest rate methodology. NS Power has adopted th...

AI summary NS Power transitioned from CDOR to Term CORRA for interest rate calculations. The Consumer Advocate (CA) argues this method conflicts with the 2016 Decision M07215, citing discrepancies in rate calculations. The Industrial Group (IG) supports the transition but requests more transparency. NS Power explains Term CORRA's use aligns with industry standards and the 2016 method.

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.

NOVA SCOTIA UTILITY AND REVIEW BOARD IN THE MATTER OF: The Public Utilities Act , R.S.N.S. 1989, c.380 as amended - and - IN THE MATTER OF: NS Power's Application for 2025 WACC and AFUDC

AI summary The Nova Scotia Utility and Review Board is conducting a proceeding under the Public Utilities Act, addressing NS Power's application for 2025 WACC (Weighted Average Cost of Capital) and AFUDC (Allowance for Funds Used During Construction) calculations.

NOTICE OF INTERVENTION OF: K + S Windsor Salt Ltd. CKF Inc. Crown Fibre Tube Inc. Irving Shipbuilding Inc. Maritime Paper Products Ltd. Michelin North America (Canada) Inc. Oxford Frozen Foods Limited Compass Minerals Canada Corp. Farnell...

AI summary The Industrial Group, comprising multiple large and medium industrial companies, seeks intervention in a Nova Scotia regulatory proceeding. Their costs are affected by the outcome, and they aim to address issues established by the NSUARB or arising from evidence review.

Request IR-5: - In reference to Figure 1 on page 8: - a) In 2022 and 2023, the actual short-term interest rate was significantly higher than both the Bloomberg and T-Bill forecasts. Is there any insight into why the forecasts were so far o...

AI summary Request IR-5 questions discrepancies between actual and forecasted short-term interest rates (2022-2023), requests data sources for bank forecasts, demands figure revision with bank-specific data, seeks utilities using Bloomberg for WACC/AFUDC, and inquires if Bloomberg incorporates specific bank forecasts.

February 12, 2025 VIA EMAIL Ms. Crystal Henwood Regulatory Affairs Officer/Clerk Nova Scotia Utility and Review Board 1601 Lower Water Street, 3rd Floor Halifax NS B3J 3S3 Dear Ms. Henwood: Re: M11990 - Nova Scotia Power Inc. (NSPI) - 2025...

AI summary The Small Business Advocate (SBA) reviewed Nova Scotia Power Inc.'s (NSPI) 2025 WACC and AFUDC rate application, noting the rate decrease from 6.72% to 6.66% but expressing concern about potential reversals of favorable factors. NSPI explained a 2023 credit rating downgrade from DBRS and S&P Global, leading to elevated credit spreads and reliance on Commercial Paper (CP) for funding. Maintaining credit metrics is critical to sustain CP market access.

CORRA The rationale and changes implemented with respect to the transition to Term CORRA from the Canadian Dollar Offered Rate ( CDOR ), is less clear. NSPI states that this is a replacement recommended by the Canadian Alternative Referenc...

AI summary The text discusses NSPI's transition from CDOR to Term CORRA as recommended by the CARR Working Group. It notes CDOR's discontinuation by Refinitiv in June 2024 and highlights that Term CORRA is one of several options for implementing the CARR-recommended rate, not the only available benchmark.

3. Use of WACC/AFUDC Rate for Non-Capital Deferrals The Application indicates that NS Power intends to continue to apply the WACC/AFUDC to its noncapital deferrals. The issue of whether the WACC is the proper interest rate for non-capital...

AI summary NS Power seeks to continue using WACC/AFUDC for non-capital deferrals. The Board previously addressed this in proceeding M11912, with a plan to establish a generic proceeding under s. 64AB of the Public Utilities Act. The Consumer Advocate will participate in future proceedings and submit further comments.

CDOR vs CORRA Refinitiv Benchmark Services Limited stopped publishing the Canadian Dollar Offer Rate (CDOR) at the end of June 2024. The CDOR was used by NS Power as part of its short-term interest rate methodology. NS Power has adopted th...

AI summary NS Power transitioned from CDOR to Term CORRA for interest rate forecasting, but the Consumer Advocate (CA) argues this deviates from the 2016 Decision M07215 due to methodology discrepancies and higher calculated rates. The Industrial Group (IG) supports the CORRA transition but requests more transparency. NS Power defends its approach, citing industry alignment and the Canadian Alternative Reference Rate Working Group's recommendation.