Electricity

List of Utilities | Preparing A Rate Case

Picture of Transmission Wires 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 $25,000 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).

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 focussed 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 “Statutes” and “Rules and Regulations” buttons located on the left hand side of the screen.

Past decisions of the Board can be accessed through the “Decisions” button located on the left hand side of this screen. The remaining section summarizes the more important NSPI applications dealt with by the NSUARB in recent years.

General Rate Application (2002)

The most recent General Rate Application (for the approval of certain revisions to its rates, charges and regulations) was filed by NSPI in 2002. Earlier similar applications were considered by the NSUARB in 1993 and 1996. In its decision dated October 23, 2002, the NSUARB, among other findings, reduced the average rate increase across all classes from NSPI’s proposed 8.9% to 3.3%, denied NSPI’s request to increase the common equity component of its capital structure from 35% to 40%, and fixed the rate of return on common equity at 10.15%.

Generic Rate Design Hearing

One of the NSUARB directives flowing from the Board’s decision following the General Rate Application (2002) was to hold a separate generic rate design hearing, relating to rate design and the methodology used by NSPI to calculate rates for electric service. The issues canvassed in the Board’s decision dated August 1, 2003 include cost-based rates, marginal costs, interruptibility, customer charges, price signals, and the boundary between small general rates and general rates.

Extra Large Industrial Interruptible Rate

In its decision dated January 28, 2003, the NSUARB determined that it was in the public interest to approve the structure and conditions of a new rate known as the Extra Large Industrial Interruptible Rate, subject to certain conditions. The actual levels of the tariff, along with other issues, are to be addressed in a hearing beginning October 27, 2003.

Load Retention Rate

The NSUARB approved an application by NSPI to add a Load Retention Rate to its Tariff in a decision dated May 24, 2000. The arrival of natural gas in Nova Scotia is making it more attractive for large electricity users to consider leaving NSPI’s system and generate their own electricity. With an appropriately discounted rate it is possible to retain such customers yet leave other customers better off than they would be if the large customers left the power grid. The rate is available to customers who are considering an alternate supply of at least 2,000 kVA or 1,800 kW. As of the end of 2000, no customers had applied to take service under the rate.

Time-of-Use, Real Time Price Rate

In a decision dated June 23, 2000, the NSUARB approved an application by NSPI for approval of a set of real time pricing rates to be offered on an optional basis to customers having loads of 2,000 kVA or 1,800 kW. or greater. NSPI submitted that qualifying customers will benefit by being able to control the timing of their loads and thus their costs, while NSPI will benefit from peak reduction and load shifting. NSPI anticipates that the rate will encourage the better utilization of its fixed assets thereby lowering costs to all customers.

Power Outage Report

The NSUARB directed its staff to carry out an independent review of power outages suffered by a large number of customers as a result a severe winter storm in November, 1997. The Board published its findings in a report dated February 9, 1998. The Board issued a number of directives concerning such matters as staffing levels, inspections and maintenance practices, distribution system reliability and power outage logistics.

Depreciation Rates

In a hearing set to commence October 27, 2003, the Board will address NSPI’s application to revise its depreciation rates. In addition, the Board will also hear evidence pertaining to the Extra Large Industrial Interruptible Rate, the Real Time Rate and the Annuallly Approved Rates. By Order dated January 26, 1996, following the filing of a depreciation study of NSPI’s plant in service as of December 31, 1994, the Board approved a table of annual depreciation rates effective January 1,1996. The resulting composite depreciation rate was 2.76% compared to the previous composite rate of 2.93% based on plant in service at March 31, 1992.

Cost of Service and Rate Design Hearing

In a decision dated September 22, 1995 the Board determined that NSPI should use a “3 Coincident Peak” method for allocating the demand portion of the fixed costs of generation and transmission plant to the customer classes; that generation costs associated with environmental compliance and fuel conversion be classified as energy related; that the annual system load factor be calculated on the basis of gross energy generation and annual coincident peak including interruptible load; that the remaining costs of generation be classified as demand related; that the portion of transmission fixed costs classified as energy related be determined by the annual system load factor; that NSPI provide at future rate hearings the long run marginal cost of demand and energy at the point of generation and at various voltage levels in the system and that future cost of service studies contain complete details of the methods used to determine class load factors, intraclass coincidence factors, interclass coincidence factors, system loss factors and details of supporting load surveys.

Industrial Expansion Rate

In support of its application, NSPI submitted that it currently had surplus generating capacity because demand had not developed as anticipated. The proposed interruptible type rate was designed to promote increased usage thereby reducing the surplus capacity and spreading fixed costs over more units of sales.

The Board issued its decision on December 22, 1995. The Board agreed that a properly designed expansion rate of the type proposed could be advantageous to all of NSPI’s customers. It lowered the threshold to qualify for the rate to 5 MVA to make the rate available to a larger number of customers and it fixed the term of the rate to 10 years.

Demand-Side Management (DSM) Hearing

The Board’s principal finding in its decision issued on April 8, 1993 was that a comprehensive approach to integrated resource planning best ensures the appropriate least cost mix of supply and demand-side options. The Board directed NSPI to continue to pursue programs that would target DSM opportunities that might otherwise be lost, examples being the promotion of energy efficient home construction, the “Power Smart” program and the promotion of energy efficient household appliances.