Nova Scotia Power says EfficiencyOne funding shouldn't hike rates

Nova Scotia's Utility and Review Board has ruled that Nova Scotia Power must spend $102 million over three years to fund energyconservation programs but the utility says it's not likely to cause a rate increase.

The decision, released thismorning, will seeEfficiencyOne,the non-profit agency that providesprograms, receive $33.2 million in 2016, $34 million in 2017 and $34.9 million in 2018.

What remains to be seen is how the ruling will affect Nova Scotia Power customers. The utility has argued thatany costs over $22 million per year will result in rate hikes for its customers.

NovaScotia Power spokespersonDavid Rodenhiser said Wednesday the decision puts them in the range.

"It takes that number down toaround the range we were talking about in our applicationso for the next year, a $1.7 million difference on its own should not trigger a rate increase," he said.

But in its decision theUARBfound, withEfficiencyOne's$8.4 million surplusand $1 million in amortization,the actual revenue shortfall for NSPin 2016 would only be about $2 million.

"Given a totalNSPIrevenue requirement of $1.3 billion, the board does not believe a revenue shortfall of approximately $2 million will drive a rate increase as it believesNSPIshould be able to find offsetting savings to achieve that," the regulator said.

"If that were not possible, and the $2 million difference would cause a rate increase, the board would hear evidence with respect to deferral. In the circumstances, therefore, the board believes the program is affordable."

EfficiencyOnehad requested funding of$113.5 over three years about $38 million a year.

The board has reduced spending on energy conservation programs by 10 per centfrom whatEfficiencyOnerequested after striking a deal with the consumer advocates and the Ecology Action Center and Affordable Energy Coalition.

'History of underspending'

NSPdid not support that agreement.

In its written decision, theUARBsaid in choosing to reduce spending by 10 per cent,it "considered the history ofunderspendingon DSM programming, the history of overachieving savings and demand targets, and as an inducement to bring greater rigor to the calculation of incentives."

The board considers that the target energy and demand savings includedin theEfficiencyOneplan can be achieved within the approved spending; however, if theagency feels that revisions are necessary, they can be requested later from the board.

The regulator also directedEfficiencyOneto come up with a "more rigorous program of determining incentives" that must be filed with the board by March 31, 2016.

To avoid a lengthy series of hearings and filings for the next funding period, following 2018, the board also directed NSP andEfficiencyOneto submitstandardized applicationsthat include:

• Lifetime energy and demand savings;
• Annual participation and participation rates by program;
• Cost-effectiveness testing analysis results by program;
• Levelizedcost of saved energy for each program;
• Detailed description of the rate and bill impact analysis;
• Such other items as agreed to in the DSM Advisory Group.