Topic:"Revenue Requirement" in M03097

Project Economic Analysis NSPI has updated the project economic analysis to incorporate the increased capital cost. The results are summarized in the table below and compared to the project benefits forecast in the original capital filing....

AI summary NSPI has updated the project economic analysis to reflect increased capital costs and a revised in-service date of December 2010. The analysis includes the NPV of the duct-firing option, incorporating benefits from a 2008 study by Hatch Ltd.

Incremental NPV Benefit of TUC 6 Duct Fired - Operating Cost Benefits from Hatch Analysis Revised April/2010 - In-service • its from flaten Analysi Capital Cost = $93M Capital Cost = $78M Operating Operating Capital Costs Capital Costs Cap...

AI summary The document presents a table analyzing the incremental net present value (NPV) benefit of the TUC 6 Duct Fired project, focusing on operating cost benefits from Hatch Analysis. It compares capital costs and cumulative benefits over time, showing a net benefit in the early years but a decline in later years.

Why do this project now? This project will provide savings to NSPI customers over the planning period of approximately $75.4 million. Approval to proceed in June will allow this project to be in service for the winter of 2010/2011 peak sea...

AI summary This project will provide $75.4 million in savings to NSPI customers over the planning period and is expected to be in service for the 2010/2011 winter peak season. Regulatory approval is required due to the Tufts Cove Environmental Permit, which mandates conversion to combined cycle mode once the unit's annual capacity factor exceeds 20%, which occurred in 2005.

of both components of this project is strictly based on the revised cost of $84,296,764, and its clear understanding that this project can successfully be completed at or below this approved amount. NSPI has confirmed, in response to NPB I...

AI summary NSPI seeks an Authority to Overspend (ATO) of $8.7M above a previously approved contingency amount for the Tufts Cove 6 project, citing increased capital costs and a delayed in-service date. The application claims the project's benefits to ratepayers will be delayed, impacting projected cost savings. McInnes Cooper advises the Board to consider these issues.

nditure; the reasonableness and transparency of the costs involved; and the resulting benefit to customers of NSPI as a result of the proposed project." [Board Letter to NSPI, December 21,2007, p. 1] - [4] The amount approved by the Board...

AI summary The Board approved a capital expenditure of $55.5 million for the combined cycle component of the Tufts Cove 6 Waste Heat Recovery Project in 2007. In 2008, NSPI requested approval for a revised cost of $84.3 million, which the Board approved after public comment, emphasizing that the project must be completed at or below the approved cost.

nal project funding". What the Board would really like you to do is to assume that there is going to be or there will be a further increase and then tell us what process you would follow in that case. Mr. Janega: Madam Chair, we are close...

AI summary The document discusses the economic analysis of a project, including the net present value (NPV) and the impact of factors such as fuel price, load assumptions, and wind generation on the project's viability. NSPI argues that the base plan understates benefits due to potential additional value from reduced loading on Tufts Cove Units and increased opportunities for wind development.

specially those that are new to the Utility. [61] NSPl's economic analyses for the May 2008 application and the 2010 update all used the same assumptions as those in the 2007 Integrated Resource Plan ("IRP"), with the exception of the Proj...

AI summary The Board evaluates the economic analyses of the Tufts Cove 6 Waste Heat Recovery Project, noting that NSPI's original NPV analysis supported the project even with a reduced benefit. However, an updated analysis using 2009 IRP assumptions shows a negative NPV, raising questions about the project's economic viability. The Board cautions against using hindsight in assessing the project's economics.

By email: [email protected] Mr. Rene Gallant General Manager, Regulatory Affairs Nova Scotia Power Inc. 10th Floor, Barrington Tower P.O. Box 91 0, Scotia Square Halifax, NS B3J 2W5 Dear Mr. Gallant: Nova Scotia Power Inc. - CI#28098...

AI summary Nova Scotia Power Inc. (NSPI) is requested to provide oral submissions on the TUC6 Waste Heat Recovery Project, addressing specific concerns regarding fish ladder costs, Mitsubishi Power Systems options, discrepancies in net present value calculations, and contingency planning for potential capital cost increases.

IN THE MATTER OF THE PUBLIC UTILITIES ACT - and- I"'~ THE MATTER OF A"'~ APPLICATION by Nova Scotia Power Incorporated for Authority to Overspend (ATO) - TUC6 Waste Heat Recovery Project - CI#28098 BEFORE: Roberta J. Clarke, a.c., Member C...

AI summary Nova Scotia Power Incorporated applied for authority to overspend on the TUC6 Waste Heat Recovery Project. The application was approved by the board on November 22, 2010, following a hearing on October 22, 2010.

nditure; the reasonableness and transparency of the costs involved; and the resulting benefit to customers of NSPI as a result of the proposed project." [Board Letter to NSPI, December 21,2007, p. 1] - [4] The amount approved by the Board...

AI summary NSPI requested approval for a revised capital expenditure of $84.3 million for a project, following initial approval of $55.5 million. The Board approved the revised cost after considering intervenor submissions and emphasized that the project must be completed at or below the approved amount. The Board acknowledged the economic benefits of the project, including significant fuel cost reductions.

t noted: f-g) This is the first plant of this type NSPI has built and there were no similar designs or plants in North America available for comparison when preparing the budget. [Exhibit N-3, p. 3] [34] Board IR-20e addressed the continge...

AI summary The document discusses the first plant of its kind built by NSPI, highlighting the lack of comparable designs during budgeting. NSPI acknowledges the use of a contingency amount and explains that the need for general contingency has been mitigated. The Board questions the process for obtaining additional funding if costs increase further.

IV SUBMISSIONS [38] Avon, NPB, and the NSDOE provided written submissions prior to NSPI's request for a hearing. All three submissions referred to the same comments from the Board's approval letter of September 16, 2008 (set out in paragra...

AI summary Avon, NPB, and the NSDOE submitted written comments prior to NSPI's request for a hearing, referencing the Board's 2008 approval letter and the reduction of contingency to zero in the ATO application. NPB highlighted losses to ratepayers due to delays in the Project's commercial operation and reduced revenue requirements, while Avon emphasized the depletion of NSPI's contingency cushion.

specially those that are new to the Utility. [61] NSPl's economic analyses for the May 2008 application and the 2010 update all used the same assumptions as those in the 2007 Integrated Resource Plan ("IRP"), with the exception of the Proj...

AI summary NSPI's economic analyses for the May 2008 application and 2010 update used assumptions from the 2007 Integrated Resource Plan, except for the Project's capital cost and in-service date. The Board concludes it would have approved the higher cost Project with a reduced NPV benefit. However, the NPV analysis from the 2009 IRP assumptions shows a negative NPV for the base case, raising questions about the Project's economic viability.