N-23M12835 Exhibit N-2 Att 3 2025 Managements Discussion AnalysisHIGHLIGHTED
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nmental laws and regulations, and risks around achieving climate-related and environmental legislative requirements refer to the "Outlook - Environmental Legislation and Climate Change" section below. NSPI is a wholly-owned subsidiary of E...
AI summary NSPI is a wholly-owned subsidiary of Emera Incorporated and operates as a public utility under the Public Utilities Act (Nova Scotia), regulated by the NSEB. NSPI holds investments in NSPEMI and WTI, and its electricity rates are subject to NSEB approval. NSPI is regulated under a cost-of-service model with an approved return on equity range of 8.75% to 9.25%.
Operations NSPl's earnings are most directly impacted by the range of ROE and capital structure approved by the NSEB, the prudent management and approved recovery of operating costs, electric sales volumes, weather, the approved recovery o...
AI summary NSPI's earnings are influenced by factors such as the ROE range approved by the NSEB, operating costs, electric sales volumes, and capital investment. NSPI expects to earn at the lower end of its allowed ROE range in 2026, with higher earnings compared to 2025. Capital investment for 2026 is projected to be around $720 million, primarily for power system reliability.
As at December 31, 2025, contractual commitments for each of the next five years and in aggregate thereafter consisted of the following: millions of dollars 2026 2027 2028 2029 2030 Thereafter Total Purchased ~ower(1} $ 344 $ 360 $ 347 $ 3...
AI summary The document outlines contractual commitments as of December 31, 2025, including purchased power, long-term debt, interest payments, asset retirement obligations, transportation costs, and other financial commitments over the next five years and beyond.
Defeasance Upon privatization of the former provincially owned Nova Scotia Power Corporation ("NSPC"} in 1992, NSPI was appointed to manage and administer a portfolio of defeasance securities. The securities provide principal and interest...
AI summary This section discusses the defeasance securities managed by NSPI following the privatization of NSPC in 1992. The securities, held in trust for NSPFC, provide principal and interest to match defeased debt totaling $200 million as of December 31, 2025. NSPI administers these cash flows under a Management and Administration Agreement, with NSPFC bank accounts integrated into NSPI's pool under a mirror netting agreement.
Interest Rate Risk: NSPI utilizes a combination of fixed and floating rate debt financing for operations and capital expenditures, resulting in an exposure to interest rate risk. The allowed range of ROE will generally follow the direction...
AI summary NSPI uses a mix of fixed and floating rate debt, exposing it to interest rate risk. The allowed ROE range follows interest rate trends with a lag. 75% of NSPI's debt is fixed rate with an average maturity of 17 years. Inflation may increase operating costs and fuel expenses beyond customer rate revenues.