Topic:"Revenue Requirement" in M03413

ARTICLE 4 VALUATION - 4.1 Valuation. The Company and the Purchaser have made a bonafide effort to detennine the fair market value of the Eligible Assets and their detennination of such fair market value shall be as set out in each of the C...

AI summary The article outlines the valuation of Eligible Assets between the Company and Purchaser, referencing their income tax returns and Form T2057. Adjustments under Section 85 of the Income Tax Act (Canada) may occur if discrepancies in fair market value are identified, involving retroactive revisions to shares or note valuations.

3. UNPAID BALANCES 3.1 The balance of any amount which becomes due hereunder and remains unpaid including all or part of the Principal Amount or accrued and unpaid interest shall bear interest, payable on demand, until paid at the Rate .

AI summary Section 3.1 outlines that any unpaid balance, including principal or accrued interest, will incur interest at a specified rate until settled. This provision establishes financial obligations for parties failing to meet payment terms under the agreement.

5.1 Energy Payment Subject to~ and in accordance with~ the terms and conditions of the PPA: - (a) for Net Output during the Interim Period~ for Excess Energy during the Term and for Net Output during any period where the Seller is in breac...

AI summary NSPI's payment obligations to the Seller under the PPA, including different rates for Net Output during the Interim Period and the Term, with monthly billing as per section 5.2.

8. PREPAYMENT 8.1 This Note may be prepaid in whole, or from time to time in pati, at any time without notice, bonus, penalty or premium. Any such prepayment shall be applied to accrued and unpaid interest and then to the Principal Amount.

AI summary The note allows for full or partial prepayment at any time without notice, bonus, penalty, or premium. Prepaid amounts are first applied to accrued interest, then to the principal. This structure provides flexibility in repayment without additional costs.

9.6.3 Payment for Reactive Power Transmission Provider is required to pay Interconnection Customer for reactive power that Interconnection Customer provides or absorbs from the Generating Facility only in those instances where the Transmis...

AI summary The Transmission Provider must pay the Interconnection Customer for reactive power provided or absorbed outside the range specified in Article 9.6.1. If the Transmission Provider pays its own or affiliated generators for reactive power within the specified range, it must also compensate the Interconnection Customer. Payments are governed by Article 11.6 or mutually agreed terms.

NON-CONFIDENTIAL 1 Request IR-9: 2 3 For each labour category in Appendix 2, please explain whether the labour is by NSPI 4 employees, EUS employees, or someone else. 5 6 (a) If the labour is by NSPI employees, is it removed from NSPI's co...

AI summary NSPI confirms that labor categories in Appendix 2 are performed exclusively by NSPI employees, and these labor costs are included in project costs for the Levelized Cost Model and Economic Analysis Model, forming part of the revenue requirement calculation.

Medium Congestion Zone Column I Column II Column III Column IV Column V Column VI Column VII Column VIII Column IX Column X Column XI 25 the basis for the estimate including the specific years used for this 26 expenditure. 1 Request IR-16:...

AI summary The text contains a series of requests for detailed explanations and justifications related to financial and accounting calculations, including taxes, discount rates, capital charges, and the IRR computation. These requests are part of a regulatory proceeding involving Nova Scotia Power and Nova Scotia Power Inc.

REDACTED 1 Response IR-17: (cont'd) 2 3 (b) The Electric Revenue requirement is calculated based on a Return on Equity of 9.35 4 percent, and a capital structure of 37.5 percent equity. The Electric Revenue requirement 5 for 2010 is negati...

AI summary The response outlines the calculation of the Electric Revenue requirement based on a Return on Equity of 9.35% and a capital structure of 37.5% equity. It also explains that the 2010 Electric Revenue requirement is negative due to the construction period and credits in expenses. The levelized cost per MWH is calculated using net present value methodologies.

.5 Instrument Transformers - .1 Three (3) protection class 69 (39.8 kV) kV potential transformers, two (2) protection class 34.5 kV potential transformers and six (6) protection class 34.5 (19.92) kV potential transformers, suitable for ou...

AI summary The document outlines specifications for the installation of instrument transformers and revenue meters, including the number, voltage class, and installation requirements for potential transformers and metering units within a substation.

- .1 stantial completion of the work. - .2 (6) months following delivery to the Place of the Installation. - .2 Owner, through the Engineer, shall promptly give the Vendor notice in writing of observed defects and deficiencies that occur d...

AI summary The text outlines warranty obligations and factory test requirements for electrical equipment, including procedures for reporting defects, correcting issues, and assigning warranties. It also specifies testing standards for circuit breakers, current transformers, and bushings.

- .2 CSA Standards - .1 C156.1, Ceramic and Glass Station Post Insulators - .2 G164, Hot Dipped Galvanized or Irregularly Shaped Articles - .3 W59, Welded Steel Construction (metal-ark welding) - .3 NEMA Standards - .1 Std. SG-6, Power Swi...

AI summary This document outlines the standards and submittal requirements for electrical components, including CSA, NEMA, ANSI/IEEE, and ISO standards, as well as specifications for operation and maintenance data and manufacturer drawings for disconnect switches.

2.1 The overall assembly enclosure(s) shall provide protection from ingress of rodents, insects, and moisture; and the possibility of arcing faults within the enclosure. - 1.12.2 The material for all external sides of the enclosure and int...

AI summary The document outlines technical specifications for the assembly enclosures, including protection against environmental factors, material requirements, grounding provisions, environmental control, and fire suppression capabilities.

9 IN-PLANT INSPECTION AND TESTING - 9.1 The Owner, Purchaser, Engineer, and/or their authorized agents shall have the privilege of inspecting and witnessing all testing at all times during the manufacture of the equipment or materials orde...

AI summary This section outlines the requirements for in-plant inspection and testing during equipment manufacturing, including the right to inspect, advance notice requirements, and the submission of test results to the Engineer.

- .8 Formwork: - .1 Forms: to CSA-A23.1, plywood and lumber, clean and free of loose knots, splits or metal. - .2 Form Ties: to CSA-A23.1, removable or snap-off metal ties, fixed or adjustable length. Form ties, tie wire, spacers or other...

AI summary The text outlines specifications for formwork and concrete mix, referencing various Canadian standards and testing methods. It details requirements for materials such as form ties, release agents, and curing compounds, as well as specifications for concrete mix proportions and air content.

[62] The CA questioned the contract price paid to EUS: We can only speculate as to how the original price was obtained for the contract. It is not probable that EUS and Emera did any negotiating. It certainly was not the situation of two u...

AI summary The CA questioned the contract price paid to EUS, suggesting it was based on an engineering analysis rather than competitive bidding. The CA argued that the EUS contract did not meet the Code's requirement for being the best available option for NSPI customers. Additionally, the timing of the bonus payment to EUS was also questioned.

[90] Avon questioned the evidence put forward by NSPI, stating: Even looking at the pricing comparators offered by NSPI ex post-facto, the evidence is slim that this is the "best option" for customers. To justify the value of the EUS contr...

AI summary Avon questioned the evidence provided by NSPI regarding the EUS contract, arguing that the pricing comparators were insufficient to prove it was the best option for customers. Avon highlighted that the bids did not account for certain cost reductions and that the affiliate had an advantage not available to other bidders. Quetta Inc. supported the project and the contract awarded to EUS.

his is lower than the 2008 PPA between NSPI and Skypower. [Exhibit N-1, p. 25] [125] NSPI summarized the advantages which, in its view, would result in benefits to ratepayers if the DWP is approved: NSPI's investment in the Project will co...

AI summary NSPI argues that approving the DWP project will add 30 MW of wind generation, contribute to RES compliance, and provide cost savings to customers. The project's costs are lower than the original PPA, and revised NPV and levelized energy costs further support its economic benefits.

Submissions - Intervenors [133] Avon commented on the embedded costs in the overall cost of the DWP and their affect on NPV and levelized energy cost: Since the time of the filing, NSPI entered into an Operation Support Agreement with GE,...

AI summary Avon discusses the impact of updated costs and production forecasts on the Net Present Value (NPV) of the DWP project. While lower operation and construction costs improved NPV, using the PPA's energy output instead of the P50 forecast reversed the economic advantage, favoring the original PPA. The Board acknowledges the traditional use of P50 for equity and P90 for debt sizing but does not take a stance on future applications.

[134] Avon suggested that: .... it may be appropriate to reduce the percentage contingency allowance used in the CBCL engineering estimate to the comparable level allocated to the bids, noting that none of the bids had an allowance which a...

AI summary Avon suggests reducing the contingency allowance in the CBCL engineering estimate, citing that the Digby Wind Project came in under budget. Avon also recommends the Board request NSPI to report actual wind output compared to assumed output for economic analysis. NSPI disagrees, arguing that the Garrad Hassan report provides the best evidence for long-term wind production.

NON-CONFIDENTIAL 1 Request IR-9: 2 3 4 For each labour category in Appendix 2, please explain whether the labour is by NSPI employees, EUS employees, or someone else. 5 6 a. If the labour is by NSPI employees, is it removed from NSPI's cos...

AI summary The document contains several requests related to cost breakdowns and labour categories from Appendix 2. These requests include explanations on whether labour is performed by NSPI employees, a breakdown of materials exceeding $1 million, a breakdown of power production contracts exceeding $1 million, and a breakdown of consulting services with contractors and service types.

ECONOMIC ANALYSIS If NSPI's economic analysis is accepted, the levelized cost of energy for the next 20 years compares favourably to the SkyPower PPA. However, prudence requires careful scrutiny of the embedded costs. NSPI asserts that acc...

AI summary NSPI's economic analysis shows a favorable NPV of $4.9 million for a capital project compared to the SkyPower PPA, but this changes when using a comparable output level. The use of P50 versus P90 assumptions in energy production forecasts is discussed, with the Board expressing hesitation to make a general ruling on the matter.

Submissions - Intervenors [133] Avon commented on the embedded costs in the overall cost of the DWP and their affect on NPV and levelized energy cost: Since the time of the filing, NSPI entered into an Operation Support Agreement with GE,...

AI summary Avon Group comments on the DWP project's embedded costs and their impact on NPV and levelized energy cost. NSPI has updated its costs, but Avon argues that using the PPA's output level results in the original PPA being more economically favorable. The Board acknowledges the use of P50 estimates but does not take a position on whether P50 or P90 should be used for future applications.

Findings [137] The Board has reviewed all the information provided and finds that NSPI customers will benefit by including the Project in the rate base. However, the amount to be included in the rate base requires reduction. The Board unde...

AI summary The Board has reviewed the DWP project and found that including it in the rate base benefits NSPI customers, though the amount requires reduction. The Project is deemed favorable compared to the PPA when considering revised construction costs, O&M savings, and higher energy output. The Board also notes that the economic analysis does not account for infrastructure benefits beyond a 20-year horizon.