Evaluation of NSPI Load Retention Rate

Client:

The Nova Scotia Utility and Review Board retained Synapse to review the operation of Nova Scotia Power Inc.'s (NSPI) load retention rate (LRT) to ensure that NSPI is recovering its incremental production costs plus a contribution to fixed costs. Synapse reviewed the generation planning and scheduling assumptions and algorithms NSPI used to develop the week-ahead, day -ahead and hour-ahead forecasts of cost quantity (CQ) pairs it offers under this rate. The Synapse February 2014 audit concluded that the CQ-pair methodology originally used by NSPI did not produce a sufficiently accurate estimate of the incremental energy costs to bill PHP, and proposed that NSPI use a “differential method” instead.

After reviewing the Synapse February 2014 audit report and the comments on that report filed by interested parties, the Board issued a Decision Letter dated May 23, 2014 directing that Synapse be engaged to proceed with a supplementary audit of the newly implemented differential method of calculating costs of supplying PHP under the LRT. Synapse worked with NSPI to refine the differential method and released a supplementary report in September 2014.