Topic:"Utility Governance" in M03413

B. Compliance with Code of Conduct and EUS Construction Contract [25] There is no disagreement among the parties that the transaction between 324 NSL and NSPI is subject to the Code. However, there is a difference of opinion between NSPI a...

AI summary The Board is examining whether the EUS construction contract between 324 NSL and EUS complies with the Code of Conduct. NSPI acquired the Digby project from 324 NSL, and the Board is considering the implications of this transaction, particularly regarding the assignment of the EUS contract and the Code's applicability.

Submissions - Intervenors [35] The CA initially took the position that there was no disagreement on the application of the Code to the EUS contract.? In response to NSPl's submissions, the CA indicated in his Reply Submission that he disag...

AI summary The CA initially agreed that the Code applied to the EUS contract but later disagreed, arguing that affiliate transactions must meet Code criteria even if transferred to NSPI. Exempting the 324 NSL and EUS construction contract from the Code would undermine its purpose. NSPI's attempts to distance itself from the EUS contract during the hearing were noted by the CA and Avon.

[73] Section 7.9 provides: 7.9 In the event that solicitation of third-party offers is not used for a Large Transaction, NSPI shall prepare a description of: (a) the justification for failing to use such solicitations, (b) a description of...

AI summary Section 7.9 of the Code requires NSPI to justify not using third-party solicitations for Large Transactions and to describe alternate means used. The Board found that NSPI did not meet the requirements of Section 7.6(e) for emergency circumstances, despite claims of a tight development schedule. The Board also questioned whether the EUS contract, which includes a bonus, may be subsidizing an affiliate and violating the fair dealing objective of the Code.

1. NSPI acted in the best interest of customers in taking assignment of the EUS contract. As part of its due diligence in considering an assignment of the EPC contract in April of 2010, NSPI requested that 324 NSL engage CBCL to prepare a...

AI summary NSPI argues that taking assignment of the EUS contract was in the best interest of customers, as the EUS price was lower than competitive tenders and met fair market value criteria. The EUS contract was reassessed after the project scope was updated, and NSPI asserts that the price was reasonable and compliant with the Code of Conduct.

understanding that we needed that project in one form or another to comply with renewable energy standards. Mr. Rubin: And when was that? Mr. Bennett: That was early fall of2009. 10 NSPI participated in the purchase of SkyPower's assets un...

AI summary NSPI participated in the purchase of SkyPower's assets under the CCA process, commissioned a report for a wind project, but later stepped away from the project. Concerns are raised about the EUS lump sum price and whether it was the best option for customers, with allegations of preferential treatment.

1 2.0 SUMMARY AND REQUEST FOR PROJECT APPROVAL 2 3 By this Application, Nova Scotia Power Inc. seeks approval from the Utility and Review 4 Board for four capital work orders: 5 6 1. CI 39323, Digby Wind Project, in the amount of $70.8 mil...

AI summary Nova Scotia Power Inc. (NSPI) seeks approval from the Utility and Review Board for four capital work orders totaling $82.8 million for the Digby Wind Project. The project is economically justified, providing lower costs and positive NPV compared to original proposals. NSPI asserts that affiliate transactions comply with the Code of Conduct and have preserved benefits for customers.

ApPLICABILITY OF CODE OF CONDUCT TO THE EUS CONSTRUCTION CONTRACT At p. 16 ofthe NSPI closing submission, the contention is made that "The Code ofConduct has no application to this contract". The reference is to the Construction Contract b...

AI summary The Consumer Advocate disputes the claim that the Code of Conduct does not apply to the EUS construction contract. The argument is that even if the contract is later transferred to NSPI, it must still meet Code criteria to prevent avoidance of its requirements. Exempting the contract would undermine the Code's purpose.

22 4.0 CONCLUSION 23 24 NSPI has brought forward a low cost renewable project which is required for 2013 RES 25 compliance. NSPI's evidence confirms that its actions and those of its affiliates have 26 preserved the value in an otherwise f...

AI summary NSPI has completed a low-cost renewable energy project ahead of schedule and under budget, benefiting customers. The affiliate transactions associated with the project align with the Code of Conduct, which emphasizes demonstrable benefits to customers. NSPI requests approval for a $82.8 million capital expenditure and confirmation of compliance with the Code of Conduct.

A. Transactions Between NSPI and its Affiliates [17] The issue of transactions between NSPI and its affiliated companies under the umbrella of Emera Inc. has been, for some time, a major area of concern to the Board. In the Board's view, a...

AI summary The document discusses concerns raised by the Board regarding transactions between NSPI and its affiliates under Emera Inc., highlighting several questionable transactions and the development and revision of a Code of Conduct to protect ratepayers. The Code has been updated over time, with the current version approved in 2009.

B. Compliance with Code of Conduct and EUS Construction Contract [25] There is no disagreement among the parties that the transaction between 324 NSL and NSPI is subject to the Code. However, there is a difference of opinion between NSPI a...

AI summary The NSPI/324 NSL transaction is subject to the Code of Conduct. The Board asserts its jurisdiction to examine the EUS construction contract for compliance with the Code. NSPI acquired the Digby project from 324 NSL and did not disclose the major construction contract with EUS, an affiliate, during the process.

Submissions - Intervenors [35] The CA initially took the position that there was no disagreement on the application of the Code to the EUS contract.? In response to NSPl's submissions, the CA indicated in his Reply Submission that he disag...

AI summary The CA initially agreed with the application of the Code to the EUS contract but later disagreed, arguing that affiliate transactions must meet Code criteria even if transferred to NSPI. He emphasized that exempting the EUS contract from the Code would undermine its purpose. Both the CA and Avon were concerned with NSPI's attempt to distance itself from the EUS contract during the hearing.

[73] Section 7.9 provides: 7.9 In the event that solicitation of third-party offers is not used for a Large Transaction, NSPI shall prepare a description of: (a) the justification for failing to use such solicitations, (b) a description of...

AI summary Section 7.9 of the Code requires NSPI to justify not using third-party solicitations for Large Transactions and to detail the process for choosing affiliates. The Board questions whether NSPI's payment of a bonus to EUS subsidizes affiliate activities, violating fair dealing principles. The Board also notes that the bonus was not for early completion but for on-time completion, and finds that the EUS contract does not comply with the Code, though it may consider approving the capital expenditure.

1. NSPI acted in the best interest of customers in taking assignment of the EUS contract. As part of its due diligence in considering an assignment of the EPC contract in April of 2010, NSPI requested that 324 NSL engage CBCL to prepare a...

AI summary NSPI argues that the EUS contract was in the best interest of customers, as it was priced below competitive tenders and met fair market value criteria. The EUS contract was re-evaluated after the project scope was updated, and NSPI asserts that the price was reasonable and compliant with the Code of Conduct.