The section summarizes several types of matters dealt with by the Board.
General Rate Applications
An application is needed for changes to rates charged by NS Power or any of the municipal electric utilities. The application itself, and supporting pre-filed evidence, contains a summary of the utility's request for rate changes and amendments to the utility’s regulations, which govern the conduct of the utility and the collection of rates from its customers.
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 rate base of a utility is established by the Board by determining the value of the physical assets of the utility which are “used and useful” in providing the service to the public. The “return” is similar to profit or net income in a non-regulated 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 (e.g., residential, commercial, industrial).
The Board’s general rate decisions can be in force for several years if the utility does not apply for a change. General rate adjustments are separate from Base Cost of Fuel or Fuel Adjustment Mechanism (FAM) adjustments.
Base Cost of Fuel/Fuel Adjustment Mechanism (FAM)
The Board has approved a FAM for NS Power to ensure that only the actual cost of fuel prudently incurred by NS Power is recovered from electricity ratepayers. The FAM includes a comprehensive Plan of Administration (POA) which describes fuel procurement and forecasting processes. In accordance with the POA, NS Power 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 NS Power has over-recovered or under-recovered its fuel costs. The POA also requires that a detailed FAM audit be conducted every two years, which is also reviewed in a Board hearing.
Annual Capital Expenditure (ACE) Plan
NS Power’s capital expenditures over $1 million require approval from the Board. NS Power submits its ACE Plan to the Board each autumn, which the Board reviews during a public hearing. The Board issues its decision on the ACE Plan for the upcoming year. For municipal electric utilities, capital expenditures over $250,000 must be approved.
The phrase “Demand Side Management” or “DSM” is 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 NS Power.
In Nova Scotia, DSM is provided by EfficiencyOne, which has the exclusive right to supply NS Power with reasonably available, cost-effective efficiency and conservation activities for a nine-year term. EfficiencyOne is a separate public utility regulated by the Board. NS Power is required to carry out DSM activities under a Board approved agreement between NS Power and EfficiencyOne. Customers of NS Power do not see DSM charges as a separate item on their bills; instead, they are included in NS Power’s overall rates.
Typically, public hearings are held on EfficiencyOne’s applications for DSM programs and spending for three-year terms.
The Board has established performance standards for NS Power. There are three types of standards:
- electricity service reliability
- response to adverse weather conditions
- customer service
Each year, the Board reviews NS Power’s performance on these standards. If NS Power fails to achieve a target on any of the standards, the Board may order that NS Power develop an action plan to bring itself in compliance, or it may direct that NS Power pay an administrative penalty up to $1 million, or both. The targets on each standard are adjusted each year by the Board, and the standards themselves are reviewed every five years. For NS Power’s performance in the latest three month period, please click on the following
Residential Time of Day Rates
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.
NS Power 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 NS Power. The rate is applicable to electric energy used in a private residence for the customer’s own domestic or household use. The recent Board approval of smart meters will lead to their implementation in the next few years. As a result, other customers may also be able to benefit from time-of-day rates.
Cost of Service
NS Power 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, which includes capital and operating costs, the amount of electricity consumption and the level of demand expected for each customer class. The Cost of Service Study is updated periodically in a public hearing process, when the assumptions and inputs need to be updated.
Integrated Resource Plan (IRP)
NS Power 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 through DSM. In order to effectively integrate the supply-side options with demand-side options, while also ensuring that environmental emissions restrictions are satisfied, NS Power develops a long-term IRP through a Board approved process every five years or so.
Renewable Energy Community Based Feed-in Tariffs
A variety of community organizations (including municipalities, universities, Mi'kmaq band councils and cooperatives) are allowed to connect different classes of renewable electricity generation facilities to a public utility's electrical grid and to be paid for the electricity based on a rate set by the Board. There are Renewable Energy Community Based Feed-in Tariffs (COMFITs) for each type of renewable electricity generation facility, namely:
- wind power greater than 50 kW;
- wind power 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.
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, it was the Minister of Energy who approved the applications 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. The Tidal Energy FIT program is still open
Load Retention Tariff
The Board may receive an application from a large customer for approval of a load retention tariff. The general purpose of such a tariff is to retain customer load that would otherwise leave the system (either to avoid the switching of load in the case of co-generation by the customer, or to help prevent the closure or relocation of a large industrial customer due to economic distress) and negatively affect the remaining customers. The remaining customers benefit because the customer receiving the discounted tariff would cease purchasing power in the absence of a discount and the discounted tariff fully recovers the marginal (incremental) cost of supplying power to the large customer, in addition to making a contribution to the fixed and common costs of the utility's electricity system.
Renewable to Retail
Potential Electricity Retailers can apply to the Board for approval of a licence to sell renewable low-impact electricity to customers, creating a Renewable to Retail market. The Board approved tariffs, procedures and standards of conduct for such licensed Retailers, effective January 1, 2017.
Customers may continue to purchase electricity from NS Power 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.
To date, no Retailers have applied for a license.