N-1Fee Recovery Mechanism Application
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15 Figure 4 – Market Participants Source: FTI Analysis. Note: OATT = Open Access Transmission Tariff. Therefore, the Proposed Mechanism applies its fees to NSPI and the MEUs[8](#page-14-0) as the applicable market participants in Nova Scot...
AI summary Figure 4 outlines the market participants subject to the Proposed Mechanism in Nova Scotia, including NSPI and various municipal electric commissions. The Proposed Mechanism uses direct charges rather than incorporating costs into existing tariffs to recover inseparable costs from transmission system users.
Lunenberg takes fully bundled service from NSPI, are not registered as accredited market participants, and are therefore not directly subject to the Proposed Mechanism. 1 As noted, at present IESO Nova Scotia's services include system plan...
AI summary Lunenberg receives fully bundled service from NSPI and is not registered as an accredited market participant, thus not directly subject to the Proposed Mechanism. The IESO Nova Scotia is considering billing determinants for fee recovery, with options including peak load, energy consumption, and fixed charges. Energy consumption is highlighted as a common method for cost allocation.
Figure 7 – Options Evaluation 3 Source: FTI Analysis. IESO Nova Scotia has not yet transitioned to 'Phase 2' operation functions, meaning that it does not yet have operational control of the grid nor ownership of the OATT until certain sec...
AI summary IESO Nova Scotia has not transitioned to 'Phase 2' operations and therefore cannot implement certain methodologies independent of the OATT or NSPI. It will reassess its fee recovery mechanism once it reaches Phase 2 steady state operations.
The Proposed Mechanism allows for minimal set-up costs because it allows for an initial filing for a relatively straightforward application using straightforward allocation methods (annual load) and 1 clearly defined market participants (L...
AI summary The Proposed Mechanism offers minimal setup costs and revenue stability for IESO Nova Scotia through a fixed monthly charge and load allocation adjustment mechanisms. It contrasts with Options 1a and 1b, which rely on OATT and introduce dependencies and risks related to revenue recovery.
IESO Nova Scotia respectfully requests that the Board approve: - 1. The Proposed Mechanism, including the applicable market participants and the billing - determinants, as the fee recovery mechanism to be used by IESO Nova Scotia in collec...
AI summary IESO Nova Scotia is requesting the Board's approval for a new fee recovery mechanism, including a fixed monthly charge to Load Serving Entities (LSEs) based on their proportion of actual load served, with an annual revenue true up and load allocation adjustment. Specific monthly fee amounts are proposed for various entities, including NSPI and several smaller electric commissions.
N-1-(i)Appendix 1 - ISO Enduring Fee Cost Recovery Jurisdictional Scan
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The remainder of the report is structured as follows: - In Section 2, we summarise our findings; - In Section 3, we describe the process of how ISO costs are recovered by each benchmarked ISO in the jurisdictional scan; - In Appendix 1, we...
AI summary The report outlines its structure, detailing sections that summarize findings, describe ISO cost recovery processes, and provide appendices with additional information on ISO tariffs and benchmarked ISOs.
Process Figure 2: Summary of typical process for setting tariffs and recovering costs The process for setting ISO tariffs to recover Core Costs typically involves four steps: - 1) Determining the revenue requirement : Typically, the revenu...
AI summary The process for setting ISO tariffs to recover Core Costs involves four steps: determining revenue requirements, allocating costs to market participants, setting tariff rates, and collecting tariffs with periodic true-ups. The methodology varies by jurisdiction and includes energy-based, demand-based, and hybrid approaches.
Step 3: Set ISO tariff rates Tariff rates are generally not set by the ISO directly. For all the ISOs benchmarked, the tariff methodology and the tariff rates for each period are calculated and proposed by the ISO, but require approval fro...
AI summary Tariff rates are not set directly by the ISO. Instead, the ISO calculates and proposes the methodology and rates, which require regulatory approval.
Step 4: Collection and true-up Billing frequency varies by jurisdiction and may be daily, weekly or monthly. Since both costs and billing volumes are forecasts, most ISO tariff frameworks include true-up mechanisms to reconcile over- or un...
AI summary Billing frequency varies by jurisdiction, and true-up mechanisms are included in most ISO tariff frameworks to reconcile forecasted and actual costs and billing volumes in subsequent periods.
Table 3: Summary of true-up process, assessment frequency and billing frequency by ISO ISO Billing Frequency True-up process General Daily, weekly or monthly Most ISO tariff frameworks include true-up mechanisms ISO-NE Monthly in arrears I...
AI summary The table summarizes the true-up process and billing frequency across various ISOs, highlighting differences in how revenue requirements are adjusted and billed. This information is relevant to understanding ratepayer recovery mechanisms and tariff frameworks.
N-1-(ii)Appendix 2 - ISO Enduring Fee Cost Recovery Recommendation
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1.Introduction Nova Scotia Independent Energy System Operator ("IESO NS" or the "IESO") was recently established as the independent system operator ("ISO") of Nova Scotia, taking over the system planning and procurement functions of the in...
AI summary The IESO NS, newly established as Nova Scotia's independent system operator, needs an enduring mechanism to recover its Core Costs. FTI Consulting has been engaged to recommend a long-term solution, considering cross-jurisdictional benchmarks and existing arrangements in Nova Scotia. Four potential mechanisms are proposed, including introducing a new schedule in the OATT, embedding costs in the transmission revenue requirement, introducing a Direct Charge, or a direct fee to NSP.
1.a. New schedule in OATT MPs: A charge levied via the OATT would most likely charge the same MPs as the current Nova Scotia Power System Operator ("NSPSO") [21](#page-14-1) OATT, which are domestic (network 21 NSPSO is a department within...
AI summary The document discusses the introduction of a new schedule in the Open Access Transmission Tariff (OATT), outlining potential changes in how Market Participants (MPs) are charged, including the possibility of volumetric, peak, or fixed charges. It also describes a true-up mechanism for adjusting future rates based on forecast and actual revenue differences, drawing from practices used by other ISOs and NSP's DSM rider.
2.a. Custom Direct Charge to each MP MPs: A charge outside of the OATT, invoiced directly from the IESO to MPs, would allow the IESO to tailor the fee charging mechanism. While there are no restrictions with regards to what MPs to select u...
AI summary This section discusses a custom direct charge to Market Participants (MPs) outside the Open Access Transmission Tariff (OATT), proposed to be invoiced directly by the IESO. It suggests targeting Load Serving Entities (LSEs) serving Nova Scotia and highlights billing determinants such as volumetric charges, non-coincident peak charges, and fixed charges, with a preference for a hybrid approach.
N-10Evidence - LEI
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Review of IESO Nova Scotia's fee recovery mechanism application prepared for the Nova Scotia Energy Board by London Economics International LLC October 13th, 2026 London Economics International LLC ("LEI") was engaged by the Nova Scotia En...
AI summary The document reviews IESO Nova Scotia's fee recovery mechanism and finds it reasonable as an interim measure. However, it recommends a more detailed cost allocation and a shift to a usage-based fee post-Phase 2 transition, considering the operator's evolving role.
ase 1 mandate. Once Phase 2 is implemented, the NSEB may wish to direct IESO Nova Scotia to undertake a more granular, function-level cost allocation exercise, including explicit treatment of exports. - iii. Flat monthly fee (as opposed to...
AI summary The text discusses interim measures for fee recovery during Phase 2 implementation, suggesting a flat monthly fee based on load served as a temporary solution. It also recommends re-evaluating the fee recovery mechanism, including potential changes to the Open Access Transmission Tariff (OATT), after Phase 2 steady-state operation.
LEI assessment Principles applied Key observations Interim mechanism (Sections 5.2-5.4) Accept the flat monthly fee, allocated Administrative simplicity and transparency Fixed monthly charges recover IESO Nova Scotia's largely fixed costs...
AI summary The document discusses the interim mechanism for cost recovery, including a flat monthly fee allocated to LSEs, granular cost allocation for Phase 2, billing determinants based on MW/MWh, and the recovery mechanism through OATT schedules. It also addresses true-up and fee calculation methodology.
4.3 Potential evolution under Phase 2 The MAEA fixes no date for proclaiming the Phase 2 provisions, which come into force only upon proclamation by the Governor in Council. It does, however, require that any ministerial orders transferrin...
AI summary Phase 2 of the More Access to Energy Act (MAEA) will transfer NS Power's operations to IESO Nova Scotia by May 1, 2028, impacting fee recovery and licensing requirements. IESO Nova Scotia will manage the OATT and seek new tariffs from the NSEB, while expanding market participation. The fee recovery mechanism will be re-evaluated once Phase 2 is fully implemented.
ponses to Industrial Group (IG) Information Requests. IR-1, Attachment 1. September 22nd, 2026; Nova Scotia Energy Board. Matter M13007. Appendix 3 – Fee calculation model . July 31st, 2026. As such, a MW or MWh based fee is a more economi...
AI summary The text discusses the recommendation of a MW or MWh based fee for recovering revenue requirements, emphasizing economic efficiency and alignment with cost causation principles. It also suggests that the OATT may be a suitable avenue for revenue recovery as IESO Nova Scotia takes on Phase 2 responsibilities.
5.4 Is the proposed recovery mechanism (direct invoicing vis-à-vis other options) appropriate? For recovering its costs, IESO Nova Scotia (based on FTI recommendations) proposed four potential mechanisms, grouped into two OATT-based proces...
AI summary The document evaluates the appropriateness of the proposed cost recovery mechanism, specifically direct invoicing, compared to other options. IESO Nova Scotia has proposed four mechanisms, including introducing a new schedule in the OATT and embedding costs in the transmission revenue requirement. A usage-based fee is suggested to align customer payments with long-term system costs.