Electricity

Introduction

Pursuant to the Public Utilities Act, the Nova Scotia Utility and Review Board ("NSUARB" or "Board") exercises general supervision over all electric utilities operating as public utilities within the Province. This jurisdiction includes setting rates, tolls and charges; regulations for provision of service; approval of capital expenditures in excess of $250,000 and any other matter the Board feels is necessary to properly exercise its mandate.

Nova Scotia Power Inc. ("NSPI"), an investor owned utility, is the largest public utility regulated by the NSUARB. NSPI is a fully-integrated public utility incorporated under the Nova Scotia Companies Act. It is the successor to the Nova Scotia Power Corporation ("NSPC"), a crown corporation owned by the Province of Nova Scotia. On January 9, 1992 the government of Nova Scotia announced its intention to sell a controlling interest in NSPC to private investors and thereby privatize the Corporation. The Nova Scotia Power Privatization Act provided for the reorganization of NSPC and NSPI and for the transfer of the assets of NSPC, except the sinking fund assets in respect of the public debt of NSPC, to NSPI as a going concern. The privatization process was completed on August 12, 1992.

As of January 1, 1999 NSPI became the principal subsidiary of a holding company, N.S. Power Holdings Incorporated, which is now known as Emera Incorporated.

NSPI generates, transmits and distributes electricity through a province-wide system, serving approximately 450,000 customers, including six municipal electric distribution utilities. As at December 31, 2002 the nameplate capacity of its generation plant was approximately 2200 megawatts. Its electric revenues for the year 2002 were $869.1 million and its total assets as at December 31, 2002 were $2.9 billion (as per Emera 2002 Annual Report, pp. 15, 17, 41).

Summary Information - Electricity Decisions - 2016

Each year the Board receives a large number of applications relating to electricity matters. Most applications are routine matters that do not require a hearing. A few are of greater significance to customers and require hearings. The Board has prepared summary information on the Decisions arising from hearings. That summary information can be found here.

Complaint and Investigation Procedure

The NSUARB's regulatory role includes investigating customer complaints concerning NSPI or other electric utilities which have not been settled to the satisfaction of the customer. Such matters may involve issues relating to power service or billings. NSPI has an internal complaints procedure for handling such complaints, which are reviewed by a Dispute Resolution Officer: [Phone: 428-6202; Toll free: 1 (877) 428 - 6202]. Prior to referring the matter to the NSUARB, a customer is required to complete the dispute resolution procedure within NSPI with the Dispute Resolution Officer. The customer has 12 days from notification of the Dispute Resolution Officer's decision to appeal, in writing, to the Board.

It is important to understand the role of the Board in considering customer complaints. Investigations into complaints are focused on determining whether NSPI has followed Board approved Regulations in its dealings with the customer. The Board's role is not to act as a mediator. Furthermore, the Board does not order restitution by either the customer or NSPI. Such issues are left to the legal avenues that the proponents wish to pursue.

The Public Utilities Act, the Nova Scotia Power Privatization Act, together with Rules and Regulations relating to practice and procedure before the NSUARB can be accessed through the Rules, Regulations and Statutes page.

Past decisions of the Board can be accessed through the Decision Archive.

The remaining section summarizes several matters dealt with by the NSUARB in recent years.

Renewable to Retail

Amendments to the Electricity Act in 2013 provided for the development of a Renewable to Retail market where potential Electricity Retailers may apply to the Board for approval of a licence to sell renewable low-impact electricity to customers.  The Board has approved tariffs, procedures and standards of conduct for such licensed Retailers, effective January 1, 2017.

Customers may continue to purchase electricity from NSPI or decide to purchase from a licensed Electricity Retailer.  In order to take service from a licensed Electricity Retailer, a customer must sign a contract with the Retailer.

For information on how to apply for a retail licence, or for customers wishing further information on the purchase of renewable low-impact electricity from such licensed Electricity Retailers, please click here. 

General Rate Applications

An application for adjustments to rates charged by NSPI or any of the municipal electric utilities is commenced by an application. The application itself, and supporting pre-filed evidence, typically contain a summary of the utility's request for rate changes and amendments requested to the utility’s regulations, which govern the conduct of the utility and the collection of rates from its customers. In a general rate proceeding involving NSPI, the time between the filing of the application and the start of the actual hearing is usually about four months.

During this intervening period, the Board's staff and various formal intervenors (including the Consumer Advocate and the Small Business Advocate) will ask written information requests of the utility which are responded to in writing. These information requests generally deal with the issues the Board has outlined in its Issues List respecting the application. The utility may also ask information requests of witnesses who have then offered pre-filed evidence on behalf of formal intervenors and Board Counsel. By the time the hearing date arrives, much of the case is already in the record, including the direct testimony of each of the parties and the Board Counsel’s consultants, including several hundred information requests and responses.

The control of the overall level of rates is governed by the Public Utilities Act. The rate base of a utility is established by the Board under s. 42(1) by determining the value of the physical assets of the utility which are “used and useful” in furnishing a particular service to the public. A utility is entitled to earn, annually, such return as the Board deems just and reasonable on the rate base set by the Board.  The “return” might roughly be equated to profit or net income in a nonregulated company. While several factors are involved in setting a just and reasonable return, generally speaking the Board sets a rate of return equal to the return investors could expect to receive on an investment of comparable risk elsewhere in the economy. Finally, the last step in the Board’s rate setting process is to ensure that the rates are reasonable as between the various classes of customers.

The Decision for the most recent general rate application can be accessed here. Note that general rate Decisions can be in force for several years. Rate adjustments for the Fuel Adjustment Mechanism are separate from general rate adjustments.

Fuel Adjustment Mechanism (FAM)

Following extensive stakeholder involvement, the Board approved a FAM for implementation in 2009. Its main purpose is to address fuel pricing volatility and to ensure that only the actual cost of fuel that has been prudently incurred by NSPI is recovered from electricity rate payers. The FAM includes a comprehensive Plan of Administration (“POA”) which describes fuel procurement and forecasting processes. In accordance with the POA, NSPI can apply to the Board to reset the base cost of fuel every second year, or during a general rate proceeding. Also, every year a reconciliation process is followed to determine if NSPI has over-recovered or under-recovered its fuel costs. Both of these processes are subject to a public hearing to establish the appropriate rate components for the following year. The POA also requires that a detailed FAM audit be conducted every two years.

Annual Capital Expenditure (ACE) Plan

Under the Public Utilities Act, any Utility’s Capital expenditures exceeding $250,000 requires approval from the Board. NSPI submits its ACE Plan to the Board in the autumn, which the Board reviews with input from formal interveners and the public at large. After a disclosure process and an oral hearing, the Board issues its decision on NSPI’s ACE Plan for the upcoming year. The Board’s Decision for NSPI’s most recent 2015 ACE Plan can now be accessed.

Energy Efficiency

The phrase “Demand Side Management” or “DSM” is commonly used to refer to programs which promote and manage efficient use and conservation of electricity. Proposed programs are generally subject to a public hearing, in which programs for various customer classes are assessed along with cost allocation for recovery through NSPI.

Prior to 2010, DSM initiatives within Nova Scotia were developed and implemented by NSPI. Pursuant to the Efficiency Nova Scotia Corporation Act, the Efficiency Nova Scotia Corporation (“ENSC”) was established to manage electricity DSM programs in the place of NSPI. The Board was given powers of general supervision over ENSC.

In 2014, the Electricity Efficiency and Conservation Restructuring (2014) Act provided for significant changes to DSM programming by amending the Public Utilities Act and repealing the ENSC Act. This change requires DSM to be provided by a franchise holder who has the exclusive right to supply NSPI with reasonably available, cost-effective efficiency and conservation activities for a nine-year term. The franchise is deemed to be a public utility regulated by the Board. NSPI is required to undertake Board-approved DSM activities by virtue of a Board approved agreement between NSPI and the franchise holder, now known as EfficiencyOne. Customers of NSPI will no longer see DSM charges on their respective bills as a separate item; rather, it will be included in the NSPI rates.

During 2015, a public hearing was held regarding EfficiencyOne’s application for DSM programs and spending over the upcoming three-year term of 2016-2018. The latest Board Decision in that matter M06733 can be accessed here.

Renewable Energy Community Based Feed-in Tariffs

The Electricity Act and the Renewable Electricity Regulations allow a variety of community organizations (including municipalities, universities, Mi'kmaw band councils, cooperatives and others) to connect different classes of renewable low-impact electricity generation facilities to a public utility's electrical grid and to be paid for the electricity in accordance with the associated tariff set by the Board. These Renewable Energy Community Based Feed-in Tariffs ("COMFITs") are set by the Board for each class or type of renewable low-impact electricity generation facility permitted under the Renewable Electricity Regulations, namely: wind power with a capacity greater than 50 kW; wind power with a capacity of 50 kW or less; biomass (provided the electricity is produced from a combined heat and power plant); small-scale in-stream tidal arrays; developmental tidal arrays; and run-of-the-river hydroelectricity.

The Renewable Electricity Regulations also set out size limits for several types of the electricity generation facilities. While there is no overall limit expressed in the Regulations, the Province indicated in its Renewable Electricity Plan that it expects about 100 MW of distribution grid capacity will be used by COMFIT projects. Except for developmental tidal arrays, all other COMFIT tariffs were set by the Board in a decision released in July 2011. The FIT tariffs for developmental tidal arrays, which must interconnect with the electrical grid through the transmission system (voltages of 69 kV or more), were set by the Board in a decision released in November 2013.

While the Board sets the COMFIT tariffs, the Regulations provide that it is the Minister who approves the applications by electricity generation facilities to participate in the COMFIT or Tidal Energy FIT programs.

On August 6, 2015, the Minister of Energy closed the COMFIT Program to new applications. This decision came after a program review, which began in January 2015. From this date, no new COMFIT applications will be considered. According to the Minister’s statement, projects already underway will continue. All unapproved projects, extensions and lapsed-permit renewals will be considered by the Department on a case-by-case basis and processed within 60 days. More information is available on the Department of Energy website at: http://energy.novascotia.ca/renewables/programs-and-projects/comfit.

Residential Time of Day Rates

NSPI currently offers a time-of-day rate to qualifying residential customers in order to reduce the peak demand on the electrical system by shifting heating load from the peak hours to the off-peak period.  This rate is only available to customers with electric-based heating systems which utilize Electric Thermal Storage (“ETS”) equipment, or electric in-floor radiant heating systems utilizing thermal storage and appropriate timing and controls approved by NSPI. The rate is applicable to electric energy used in a private residence for the customer’s own domestic or household use. Under this tariff, the actual energy charges vary by the time of day during which energy is consumed. The highest rate applies during the hours of peak demand on the electrical grid while the lowest rate applies during the hours of lowest demand. A third rate applies during the “shoulder” periods.

Cost of Service

NSPI determines customer rates based on its cost to provide service to each customer class, such as residential, commercial, industrial, etc. This cost is determined by preparing a Cost of Service Study (“COSS”), which includes capital and operating costs, the amount of electricity consumption and the level of demand expected for each customer class, etc. The COSS is updated periodically when the assumptions and inputs are no longer valid. The Board approves the COSS after a public process. The last COSS was approved by the Board in 1996. The Board has directed NSPI to file a new COSS, with the hearing taking place in December 2013.

Integrated Resource Plan (IRP)

NSPI uses various forms of supply-side generation resources to supply the increasing electrical requirements of its customers. Traditionally the generation fleet consisted of coal-fired plants, oil-fired plants, natural gas-fired plants, and hydro plants. More recently, greater emphasis has been placed on renewable sources of generation such as biomass-fired plants, wind farms, and tidal generation. As electrical loads increase, rather than building new generating facilities to supply that growth, steps have been taken to reduce demand and energy requirements through demand-side options involving conservation and efficiency measures. In order to effectively integrate the supply-side options with demand-side options, while also ensuring that environmental emissions restrictions are satisfied, a focused effort is needed to develop a long-term IRP. In 2007, with input from Board staff, consultants, and interested stakeholders, NSPI prepared an IRP. This IRP was later updated in 2009 to ensure that changing conditions were appropriately addressed. A further update will be undertaken during 2014.

Load Retention Tariff

In certain circumstances, the Board may receive an application for approval of a load retention tariff that would apply to a large customer. Customers taking service under a load retention tariff will form a distinct class which will have characteristics that set it apart from other customer rate classes. The general purpose of such a tariff is to retain customer load that would otherwise leave the system (whether it is to avoid the switching of load in the instance of cogeneration by the customer, or to help prevent the closure or relocation of an extra large industrial customer due to economic distress) and detrimentally affect the remaining customers. Other customers will benefit if the customer receiving the discounted tariff would cease purchasing power in the absence of a discount and the discounted tariff fully recovers the marginal cost of supplying power to the customer, in addition to making a contribution to the fixed and common costs of a utility's electricity system.

Load retention tariffs are considered to be in the public interest where making the tariff available to the customer is necessary and sufficient for retaining the load; and the total revenue received from the customer exceeds the total incremental cost of serving that customer.

The most recent example of a load retention tariff approved by the Board involved an application by Pacific West Commercial Corporation respecting its mill at Point Tupper, Nova Scotia.

Frequently Asked Questions

Other Information

The following information has been provided by other organizations for the convenience of electricity customers. Questions on content, and suggestions for changes or corrections, should be sent to the organization providing the material.

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