2022 NSUARB 137  
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Supply Agreement for Electricity Efficiency and Conservation Activities between E1 and  
Nova Scotia Power Inc. (NS Power), the establishment of a final agreement between the  
parties, and approval of a 2023-2025 Demand Side Management (DSM) Resource Plan  
Stephen T. McGrath, LL.B. Chair  
Roberta J. Clarke, Q.C., Member  
Steven M. Murphy, MBA, P.Eng., Member  
James R. Gogan, Counsel  
Christine E. Murray, Counsel  
Judith Ferguson, Counsel  
Brian Curry, Counsel  
William L. Mahody, Q.C.  
Emily J. Mason, Counsel  
E.A. Nelson Blackburn, Q.C.  
Melissa MacAdam, Counsel  
Peter Duke, Counsel  
Brian Gifford  
Kimberley Fry  
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Michael Johnston  
Nancy G. Rubin, Q.C.  
Peter Polley  
Twila Gaudet, Counsel  
Janice Maloney, Counsel  
Jennifer Deleskie  
James MacDuff, Counsel  
Melanie Gillis, Counsel  
Peter Craig  
S. Bruce Outhouse, Q.C.  
FINAL SUBMISSIONS: July 11, 2022  
September 6, 2022  
Subject to the adjustments and directives in paragraph  
[197] of this decision, the Board finds that E1’s  
Settlement Plan is in the best interests of NS Power  
customers and the 2023-2025 DSM Resource Plan is  
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INTRODUCTION.................................................................................................. 4  
BACKGROUND.................................................................................................... 7  
Settlement DSM Plan................................................................................. 7  
Alternate Scenario ................................................................................... 10  
Intervenor Consensus for Settlement Plan .............................................. 11  
Evaluation and Verification Reports.................................................................... 12  
ISSUES .............................................................................................................. 14  
Proposed Levels of DSM Spending for 2023-2025.................................. 14  
4.1.1 Research and Development.......................................................... 17  
Proposed Performance Targets............................................................... 19  
Avoided Costs.......................................................................................... 22  
Cost-effectiveness Testing....................................................................... 23  
4.4.1 Findings ........................................................................................ 25  
Allocation of Program Costs .................................................................... 26  
4.5.1 Allocation to Low-income Program Components .......................... 30 Findings .......................................................................... 36  
4.5.2 Reallocation of Investment in Measures Failing the Total Resource  
Cost Test....................................................................................... 42 Findings .......................................................................... 45  
4.5.3 Incentives...................................................................................... 47 Findings .......................................................................... 49  
Demand Response.................................................................................. 51  
Residential Behaviour.............................................................................. 52  
New Home Construction Program ........................................................... 55  
Municipal Electric Utilities ........................................................................ 57  
4.10 DSM Advisory Group ............................................................................... 60  
APPROVAL OF SUPPLY AGREEMENT ........................................................... 62  
STANDARDIZED FILING FRAMEWORK .......................................................... 63  
SUMMARY OF BOARD FINDINGS ................................................................... 64  
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EfficiencyOne (E1) was granted a franchise under the Public Utilities Act,  
R.S.N.S. 1989, c. 380 (Act) to provide “electricity efficiency and conservation activities”  
to Nova Scotia Power Incorporated (NS Power). In addition to the efficient use and  
conservation of electricity, the activities, programs and plans may include changing  
demand patterns for consumption of electricity. The efficient use of electricity, including  
how and when it is used, as well as the need to conserve or use less electricity, are widely  
acknowledged to result in financial and environmental benefits. Programs which promote  
these activities are known as demand-side management (DSM).  
Under the Act, NS Power must undertake cost-effective electricity efficiency  
and conservation activities that are reasonably available to reduce costs for its customers.  
In doing so, NS Power must enter agreements with the franchise holder to supply these  
activities. If the franchise holder and NS Power are unable to agree on the terms of a  
supply agreement, either or both may apply to the Nova Scotia Utility and Review Board  
to establish a final agreement.  
Any supply agreement between E1 and NS Power must be approved by the  
Board. Each supply agreement is for a three-year term and must describe the electricity  
efficiency and conservation activities that the franchise holder will provide and the cost.  
On March 11, 2022, E1 applied to the Board for approval of a supply  
agreement with NS Power for a three-year term for the calendar years 2023, 2024 and  
2025 (Supply Agreement). E1’s application described the proposed electricity efficiency  
and conservation activities to be provided under the Supply Agreement (2023-2025 DSM  
Resource Plan). The proposed plan is called the “Settlement Plan” in E1’s application.  
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E1 said the Settlement Plan will deliver approximately 412.7 GWh of  
affordable, incremental net energy savings and 96.7 MW (78.8 MW from energy efficiency  
and 17.9 MW from demand response) of cumulative system-peak demand savings to  
Nova Scotians. E1 said the Settlement Plan would generate lifetime benefits for Nova  
Scotia ratepayers of $543 million. The proposed cost of the Settlement Plan is $173  
million over the three-year term ($53.1 million (2023), $57.5 million (2024) and $62.5  
million (2025)).  
Upon receipt of the application, the Board issued a Notice of Paper Hearing  
and Hearing Order. Although the Hearing Order contemplated a paper process for the  
proceeding, it provided that any party could request an oral hearing at any time up to the  
filing of rebuttal evidence. Ultimately, the Board did not receive any request for an oral  
Notices of Intervention were received from several parties. These included:  
the Consumer Advocate (CA); the Small Business Advocate (SBA); several of NS  
Power’s large and medium industrial customers (collectively known as the “Industrial  
Group”); the Nova Scotia Department of Natural Resources and Renewables (NRR); the  
Assembly of Nova Scotia Mi’kmaw Chiefs (ANSMC) and the Kwilmu’kw Maw-klusuaqn  
Negotiation Office (KMKNO); Membertou First Nation; Heritage Gas Limited; the  
Investment Property Owners Association of Nova Scotia; the Ecology Action Centre  
(EAC); the Affordable Energy Coalition (AEC); and the Berwick Electric Commission, the  
Riverport Electric Light Commission, the Town of Mahone Bay, and the Town of  
Antigonish (collectively known as the “Municipal Electric Utilities” (MEUs)). Board  
Counsel participated in the proceeding with the filing of evidence by Synapse Energy  
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Economics, Inc. (Synapse). NS Power also participated in the proceeding and, under the  
Act, is deemed to be an applicant.  
One of the Settlement Plan’s notable features is a proposed increase in  
investment in DSM programming for low-income, Mi’kmaw and diverse communities. E1  
said this increase followed the guiding principle that programs and initiatives must be  
accessible on an equitable and non-discriminatory basis to all ratepayers.  
The Settlement Plan and its proposed investment level received general  
support from NS Power and most intervenors. Some concerns were raised about aspects  
of some programs included or excluded from the proposed DSM portfolio, targets for the  
increased investment in low-income and underserved community programs, the  
calculation of avoided costs and the application of cost-effectiveness tests.  
Significantly, the Industrial Group and the SBA raised concerns about the  
allocation of DSM investment and spending on incentives and measures below cost-  
effectiveness thresholds. They questioned whether the plan is achieving “the most  
savings for the least amount of ratepayers’ money” (SBA) and whether electricity  
efficiency and conservation activities are being acquired by NS Power under its Supply  
Agreement with E1 at the “lowest cost available” (Industrial Group).  
For the purposes of the present proceeding, the Board is satisfied with the  
balance achieved by E1 in its proposed Settlement Plan and finds it reasonable and in  
the best interests of NS Power’s customers. The proposed increase in investment for  
DSM programming for low-income, Mi’kmaw and diverse communities, supported by  
most of the parties in this proceeding, recognizes past under-service and attempts to  
address barriers to participation in DSM programs.  
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Subject to the adjustments and directives in this decision, the Board finds  
that E1’s Settlement Plan is in the best interests of NS Power customers and the 2023-  
2025 DSM Resource Plan is approved.  
E1’s 2023-2025 DSM Resource Plan application uses the Standardized  
Filing Framework (Framework), developed in consultation among E1, NS Power, and  
stakeholders, and filed with the Board in a Consensus Agreement on July 22, 2016. The  
Framework helps to ensure consistent content in DSM Plan filings, including standard  
DSM information items, and requires E1 to develop and file one or more alternate  
scenarios of DSM savings and budgets when submitting a DSM application for Board  
approval. It also includes standards for overall DSM planning and evaluation processes  
and identifies objectives for pursuing DSM activities. The Framework provides that  
proposed DSM plans will balance multiple aspects of DSM for the benefit of customers  
and identifies a “balanced plan approach” to guide the development of DSM plans.  
The Framework also directs that the Reference Plan identified in NS  
Power’s Integrated Resource Plan (IRP) will serve to inform the development of a  
preferred DSM resource plan by E1. In its application, E1 stated that its proposed 2023-  
2025 DSM Resource Plan achieves this directive.  
Settlement DSM Plan  
E1 developed its Settlement Plan over the course of a stakeholder  
engagement process. This helped to ensure that all ratepayer classes were given the  
opportunity to participate and provide meaningful input into various plan scenarios.  
Planning began in March 2021 with initial stakeholder meetings and continued through to  
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the filing of this application. Stakeholders were provided with initial model results and  
assumptions, technical tables, and rate and bill impact analysis results, and given the  
opportunity to ask questions of and provide comments to E1. The result of this  
stakeholder engagement is the Settlement Plan, which E1 believes will deliver cost-  
effective energy savings that are in the best interest of ratepayers and is reflective of  
stakeholders’ feedback.  
The Settlement Plan incorporates the accumulated market knowledge and  
intelligence gained by E1 over the years of operating the franchise. It represents a suite  
of DSM programs and service offerings that will deliver approximately 412.7 GWh of  
incremental net energy savings and 96.7 MW (78.8 MW from energy efficiency and 17.9  
MW from demand response) of cumulative system-peak demand savings to ratepayers.  
These energy savings reflect approximately 1.2% of NS Power’s generator load. The  
Settlement Plan features 356 measures and 14 energy efficiency and 2 demand response  
program components. The Settlement Plan has an average first year unit cost of  
$0.39/kWh and a weighted average measure life of 11.3 years, resulting in a lifetime unit  
cost of $0.035/kWh. The details of the Settlement Plan are summarized as follows:  
Measure Demand  
Cost Test  
Cost Test  
($ million)  
($ million)  
carbon carbon carbon carbon  
[Exhibit E-1, p. 11]  
With a DSM investment of approximately $58 million per year, E1 expects the Settlement  
Plan to generate lifetime benefits for ratepayers of $543 million.  
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NS Power’s 2020 IRP is the key planning document upon which E1 relies  
in its DSM planning. However, much has changed in Nova Scotia’s electricity landscape  
since the development of the 2020 IRP. The need to meet more aggressive  
environmental goals and emissions reductions than anticipated by the IRP, including  
earlier retirement of Nova Scotia’s coal fired generating plants, means that E1 needs to  
aggressively pursue alignment with the IRP to avoid falling behind and being unable to  
achieve future requirements. As such, the Settlement Plan closely aligns with NS Power’s  
2020 IRP Reference Plan’s aggregate DSM spending level, which calls for a $188.0  
million investment in DSM between 2023 and 2025. The Settlement Plan proposes an  
investment of $173.0 million across the three-year period. When examined over the five-  
year period ending in 2025, the Settlement Plan’s DSM investment aligns with that of the  
IRP and results in an estimated incremental net energy savings of 649 GWh. The  
Settlement Plan therefore offers ratepayers the opportunity to capture DSM energy  
savings at the level established by the IRP. E1 also expects that the Settlement Plan will  
generate lifetime CO2e savings of 1,742 kilotonnes (kt), valued at approximately $170  
The Settlement Plan builds upon E1’s existing programs and services,  
enhances service offerings, and establishes new initiatives aimed at pursuing increased  
energy saving solutions and reaching diverse and underserved markets. Consistent with  
the direction of the Framework, E1’s proposed Settlement Plan follows a balanced  
portfolio design.  
The Settlement Plan invests in both energy and demand reduction  
initiatives. For the first time, targeted demand response offerings will be included in E1’s  
DSM Plan. A pilot initiative will focus on reducing system coincident peak demand during  
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times when its impact is most beneficial to the grid. The Settlement Plan will re-introduce  
residential behaviour and whole home low-income program components, diversifying  
beyond lighting measures through expansion of more complex retrofit projects, and will  
develop a residential new construction market transformation program through its  
Enabling Strategies component.  
E1 has stated that the proposed Settlement Plan will result in average rate  
impacts between -0.1% and 1.0% by NS Power rate class, averaged over the lifetime of  
DSM measures. These figures are calculated relative to a scenario with no DSM as  
opposed to 2022 DSM levels. Further, E1 expects that with implementation of the  
Settlement Plan, average participants would see their power bills reduced between 1.2%  
and 7.9%.  
Alternate Scenario  
In Matter M06733, the Board ordered that future DSM Plan applications by  
E1 must include alternate DSM scenarios, in addition to E1’s proposed plan. E1 complied  
with that order in this application, filing a fully costed DSM alternative scenario, in  
compliance with the Framework requirements.  
Through the stakeholder engagement process, E1 modelled several  
alternate DSM scenarios with both higher and lower investment levels than the proposed  
Settlement Plan. E1 stated that stakeholders generally signaled a need to develop an  
alternate scenario with higher DSM spending. This need was based on the results of NS  
Power’s 2020 IRP and the subsequent legislative amendments which introduced more  
aggressive scheduling of fossil fuel electricity production shutdowns. However, the  
alternate plan presented by E1 in the current application involves a lower DSM investment  
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plan than the proposed Settlement Plan. In Synapse IR-1, E1 was asked why it did not  
propose a DSM alternative with investment levels as high as those assumed in NS  
Power’s 2020 IRP. E1 responded:  
(a) EfficiencyOne’s (E1) Settlement Plan proposes an investment of $173 million that  
includes both energy efficiency and demand response. The investment in energy  
efficiency of $163 million slightly exceeds the Base DSM scenario that was selected  
as the IRP Reference Plan of $159 million. The balance of the difference is driven by  
the level of Demand Response (DR) in the Settlement Plan of $10 million as compared  
to the Base DR scenario selected in the 2020 IRP of $29 million (excluding the critical  
peak pricing rate option, which will be administered by NS Power) for a difference of  
$19 million. For the first time, E1 is proposing targeted DR activities in a DSM Plan and  
although E1 and NS Power have been working collaboratively on the launch of DR  
pilots, the Base DR investment and demand savings appear to be too aggressive and  
it would be challenging for E1 to ramp up to that level by 2025.  
(b) E1 used the 2020 IRP as the most recent IRP to inform the 2023-2025 DSM Plan.  
Although it is reasonable to assume that higher levels of DSM may be optimal because  
of the recent legislative change, a more appropriate IRP scenario and the associated  
level of DSM has not been identified. E1 is expecting this to occur with NS Power’s  
2020 IRP update.  
[Exhibit E-14, IR-1]  
The alternate scenario represents a total investment in energy efficiency  
and demand reduction of $160.1 million from 2023-2025. The scenario projects 4,469  
GWh of lifetime energy savings utilizing a portfolio with an average measure life of 12.6  
years. This represents first year energy savings of 377.3 GWh or 1.1% energy savings  
against NS Power’s load and approximately 12% less energy savings than accruing under  
the Settlement Plan. This scenario was developed with an average first year unit cost of  
Intervenor Consensus for Settlement Plan  
The Settlement Plan and its proposed investment level received general  
support from most intervenors. The CA also urged E1 to continue to identify and develop  
additional low-income housing and apartment building programs and update reporting  
low-income savings accordingly. Synapse and the CA further recommended that E1  
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develop and adopt a performance metric specifically for low-income customers. In  
addition, the CA supports the exploration, through the DSM Advisory Group (DSMAG), of  
cost-effectiveness testing methodologies.  
However, some concerns were raised. The SBA recommended that the  
Board direct E1 to re-allocate investment from DSM measures that failed a Total  
Resource Cost (TRC) test to those that pass the cost-effectiveness test (except for  
measures aimed at low-income programs). The SBA also urged the Board to require E1  
to direct more of the incremental DSM investment from 2022 to 2023 from less cost-  
effective residential programs to more cost-effective programs in the business, non-profit,  
and institutional (BNI) sectors.  
The Industrial Group made several requests about the proposed Settlement  
Plan, including that the Board direct E1 to:  
provide payback information in its measure level tables and where a payback  
period is three years or less, to adjust incentives and/or justify the inclusion of the  
measure on some other basis;  
justify on an individual basis measures which fail the TRC test; and  
incorporate the most current Statistics Canada data into its investment levels as  
part of E1’s compliance filing.  
Evaluation and Verification Reports  
As in previous years, E1 engaged the services of Econoler as an  
independent third-party reviewer. In addition, Econoler was asked to conduct research  
to inform E1’s current and future event-based demand response activities, as well as  
potential strategies about market transformation and codes and standards.  
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Econoler evaluated the results of E1’s 2021 DSM program portfolio. This  
portfolio included three residential programs and three BNI programs. Each program had  
one or more program components.  
There are three broad evaluation categories: impact evaluations  
(comprehensive or condensed), process evaluations, and market evaluations. Impact  
evaluations were conducted for all program components and at least one comprehensive  
impact evaluation is conducted every three years for all program components.  
The evaluation showed that overall savings in 2021 were below target  
levels, but E1 achieved 109.418 GWh in net electrical energy savings and 27.484 MW in  
net peak demand savings at the generator in 2021. These savings represent 63,911  
tonnes of CO2e in terms of annually avoided GHG emissions. Econoler did not make any  
cross-cutting recommendations in 2021 but did provide several recommendations on  
individual program components.  
Separate from the evaluation process, the Board engaged the services of  
H. Gil Peach & Associates, LLC to conduct a savings verification review. That review  
focuses on verification of electricity energy savings and demand reduction as measured,  
modeled, and estimated by Econoler. Energy savings are estimated for first year and  
demand reduction is modeled.  
The examination undertaken by Peach & Associates is based on a careful  
review of Econoler’s evaluation for each program component or initiative in the DSM  
portfolio, including a review of each evaluation’s explicit or implicit design, and  
consideration of evaluation methods, standards, or evaluation protocols used in each  
evaluation. Calculation methods are also reviewed. The evaluation results are verified,  
and if appropriate, adjustments to the savings data and estimates are recommended.  
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Normally, the examination would include selected “due diligence” site visits to check  
installation counts and quality of work, and discussion of program experience with  
customers. However, due to the continuing COVID restrictions in 2021, there were no  
on-site savings verification visits.  
The Board notes that none of the participants in this proceeding raised any  
concerns with respect to the Econoler Evaluation Report or the Peach Verification Report  
regarding the 2021 DSM portfolio. In the circumstances, the Board accepts those reports  
as filed.  
Proposed Levels of DSM Spending for 2023-2025  
As noted earlier in this decision, E1 is seeking Board approval of its  
Settlement Plan, which includes spending $173.0 million over the three-year period from  
2023 to 2025. DSM programs which will be implemented over that period are projected  
to produce a targeted energy savings of 412.7 GWh and targeted demand savings of 96.7  
MW, which includes 17.9 MW attributed to demand response initiatives. Annual spending  
is projected to progressively increase from $53.1 million in 2023, to $57.5 million in 2024,  
and to $62.5 million in 2025.  
E1 stated that the 2023 spending level of $53.1 million is about 3.5% of NS  
Power’s annual revenue, assuming a revenue total of $1.5 billion. This is a significant  
increase from the 2.3% experienced in 2021. The Board notes that the AEC  
recommended that the spending level should increase to 3% as soon as possible, but the  
proposed Settlement Plan already exceeds that recommendation.  
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The Settlement Plan includes 14 energy efficiency programs, and two  
demand response programs, which incorporate 356 measures. The spending allocation  
directs 55% towards residential programs and 45% towards the BNI sectors. With a focus  
on reducing barriers to reaching a wide, diverse range of customers, E1 will be allocating  
$35.8 million toward DSM programs for underserved markets and diverse communities.  
This represents 21% of the total funding level and provides a focused support for low  
income and Mi’kmaw communities. The DSM portfolio includes dedicated investment of  
$7 million toward Mi’kmaw Community programming. For comparison, the approved  
spending for the 2020 to 2022 period was $110 million, with $12.9 million allocated to  
underserved markets and diverse communities.  
In addition, $10.0 million will be directed toward demand response pilot  
programming, with annual spending of $1.5 million, $3.5 million, and $5.0 million in  
succession between 2023 and 2025.  
The Settlement Plan proposes spending at levels that are significantly  
higher (by 57%) than the current levels. E1 emphasized that increased investment in  
energy efficiency is necessary to support the achievement of emissions reductions targets  
by the year 2030 at the lowest cost to ratepayers. E1 also noted that the Settlement Plan  
incorporates ratepayer benefits from energy efficiency related to the avoided costs of  
Regarding the Settlement Plan’s alignment with the 2020 IRP and recently  
legislated climate change reduction goals, E1 stated the following:  
The Settlement Plan will enhance DSM deliverables and effectiveness by increasing DSM  
spending to a level that ensures unity with Nova Scotia’s current and future energy  
landscape, while remaining aligned with, and rooted in, the 2020 IRP. It is important to  
recognize that the Settlement Plan remains founded upon the 2020 IRP’s lowest net  
revenue option and deliberately employs an investment trajectory that promises DSM  
alignment with the 2020 IRP by 2025. The cumulative Settlement Plan investment level  
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over the period of the Plan aligns generally, in aggregate, with the Reference Plan  
investment level ($173M v. $188M).  
[Exhibit E-1, p. 41]  
The Board notes that no party in this proceeding opposed the spending level  
proposed in the Settlement Plan, although the Industrial Group’s consultant  
recommended that the $10 million budget for demand response should be reduced,  
except for the direct cost of equipment.  
The Board also notes NS Power’s support for the Settlement Plan. In its  
rebuttal evidence, NS Power stated:  
NS Power would like to reiterate its support of E1’s Settlement Plan.  
E1’s proposed plan represents an increase in DSM spending in the province, and the  
largest portion of that will help support programs for low-income Nova Scotians and First  
Nations in the province. These sectors have traditionally been under-served and, as such,  
NS Power remains pleased with the increase in this area set out in the Settlement  
DSM contributes to reduction of greenhouse gas (GHG) emissions. E1’s Settlement Plan  
will not only provide substantial electricity efficiency benefits, but will also assist with GHG  
reduction goals. Working together with E1 and other stakeholders is critical to achieving  
the government’s 2030 energy targets in a way that supports a just energy transition.  
[Exhibit E-28, p. 2]  
In past decisions, the Board has indicated its views on consensus and  
settlement agreements. The Board focuses on whether such agreements are in the  
public interest. In this proceeding, there is broad support for the Settlement Plan.  
As set out in s. 79L (8) and (9) of the Act, to approve a DSM supply  
agreement, the Board must be satisfied that the proposed plan is in the best interests of  
NS Power customers, taking into account affordability, as well as any other matters the  
Board considers appropriate. The Board is satisfied that the budgeted spending and  
savings targets are in the best interests of NS Power’s customers and are affordable. The  
Board agrees that increased spending on programs that focus on low income and  
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Mi’kmaw communities is an important step in providing underserved communities with  
access to DSM programs. Further, the Board finds that, given the history of E1’s targets,  
the plan is achievable. Therefore, the Board approves the spending levels contained in  
the Settlement Plan.  
4.1.1 Research and Development  
In its application, E1 proposed increased investment in development and  
research which specifically targets innovation, pilots, and emerging technologies. Future  
areas of focus are expected to include electrification, deep retrofits, virtual audits, and  
market transformation. This investment is budgeted at $4.5 million, consisting of $1.5  
million for each year of the plan.  
In its response to NSUARB IR-7, E1 indicated that it did not have a plan for  
specific initiatives or estimates for associated energy, demand, or carbon savings.  
Synapse highlighted this as a concern, since E1 provided no indication of how decisions  
will be made for that funding. Synapse stated that a framework for considering and  
approving development and research initiatives, projects, and pilots should be addressed  
in more detail. Specifically, Synapse stated that the framework should lay out the  
process, including delineation of roles and responsibilities, for considering and approving  
development and research activities. In addition, study design elements should include:  
What has already been learned from previous research, and how these past and  
potentially ongoing learnings will relate to the currently proposed research.  
What the gaps are in understanding that the current proposed research proposes to  
What alternative approaches could be used to fill in these knowledge gaps, and why  
the proposed approach is better than alternatives.  
How the metrics and data collected will enable E1 to decide whether to recommend  
rolling out to a full-scale program.  
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The logic for the pilot study design.  
Whether there are opportunities for learning on other, related issues.  
[Exhibit E-25, p. 32]  
To address its concern, Synapse recommended that the Board require E1  
to develop a framework, as described above, as a condition of approving the proposed  
budget for development and research.  
In its rebuttal evidence, E1 noted that an innovation process, significantly  
encompassing Synapse’s recommendations, was initiated in 2021 and continues to be  
developed. The general purpose of that initiative is to develop, test, and evaluate the  
success of new ideas with the objective of achieving E1’s long-term organizational goals.  
E1 noted that it expects the innovation process to continue evolving and to incorporate  
best practices and lessons learned from completed projects. In addition, E1 listed the  
following seven principles upon which its innovation process is based:  
1) Balance Short-Term and Long-Term Objectives.  
2) Establish Corporate Innovation Objectives.  
3) Establish Innovation Governance Committee.  
4) Apply Consistent Screening Criteria.  
5) Adopt an Iterative Approach to Project Roll-Out.  
6) Develop a Corporate Innovation Plan.  
7) Measure Innovation Success Corporately.  
The Board considers that a rigorous process must be in place to ensure  
prudent use of ratepayer funds. Although E1 provided some insight into its innovation  
process, the listed principles and brief definitions appear to be general guidance  
statements which do not address key study design elements, such as those highlighted  
by Synapse. It is also noteworthy that E1 stated its innovation process continues to be  
developed and is expected to continue evolving. The Board acknowledges the  
importance of the concerns raised by Synapse and directs E1 to prepare detailed plans  
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and processes for each of its research initiatives prior to proceeding with significant  
expenditures. Those plans and processes must be documented and fully discussed with  
members of the DSM Advisory Group in advance of implementation.  
Proposed Performance Targets  
The Settlement Plan sets a target for cumulative annual energy savings of  
412.7 GWh and cumulative annual peak demand savings of 78.8 MW. E1 stated in its  
E1’s success in implementing an approved DSM Plan is evaluated through Performance  
Targets. The Standardized Filing Framework sets out the performance targets and  
thresholds which must be met through the execution of the DSM Plan. The Board-  
Approved Performance Targets are:  
• Cumulative annual energy savings; and  
• Cumulative annual peak demand savings.  
Where a minimum of 90% achievement is reached with respect to each of the cumulative  
annual energy savings and cumulative annual peak savings, E1 is deemed to be in  
substantial compliance with the Performance Targets. The Performance Targets apply,  
and are evaluated, to the period of the Board-Approved Supply Agreement, rather than  
Evaluation of E1’s compliance and success in implementing the approved DSM Plan will  
be monitored through Quarterly Reports and Annual Progress Reports.  
[Exhibit E-1, p. 60]  
The Supply Agreement defines Performance Indicators as management  
tools that provide information to allow an organization to take action to help it deliver on  
performance targets.  
Both the CA and Synapse raised concerns about the increased level of  
spending on low-income programs and recommended that performance targets be  
Under the Settlement Plan, E1 will allocate $35.8 million toward DSM  
programs for underserved markets and diverse communities. This increase is nearly  
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three times the 2020-2022 investment level of $12.9 million and represents 21% of the  
total Settlement Plan investment, which is much greater than the 8% average investment  
during the 2015 to 2020 timeframe. In addition, increased support for Mi’kmaw  
communities is also provided under the Settlement Plan with the investment levels  
increasing to $7.0 million, largely within the new Affordable Single-family Home program  
The CA’s consultant, Theodore Love, Green Energy Economics Group,  
Inc., noted that spending and energy savings for low-income programs has lagged. The  
significant increase in the proposed investment for these programs under the Settlement  
Plan prompted him to recommend establishing a specific performance target to “…make  
sure that investment in energy efficiency in underserved communities will not fall behind  
and be covered up by savings from other residential or BNI programs.” Mr. Love  
proposed that E1 be required to meet at least 90% of the cumulative first-year low-income  
energy savings target of 39.4 GWh.  
Synapse also recommended that the Board adopt a performance metric for  
savings for the low-income segment “…to ensure that funds are effectively spent and that  
this population experiences benefits of energy efficiency.” Synapse noted that reducing  
energy burdens for this population produces benefits for these customers in energy cost  
savings, and for all ratepayers through, for example, a reduction in arrears and collection  
In its rebuttal evidence, E1 acknowledged that it had difficulty meeting  
savings targets for diverse and underserved communities in 2020 and 2021 due to the  
COVID-19 pandemic, but said it was confident in its ability to achieve the Settlement  
Plan’s energy savings targets for the programs in these communities. Given the  
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significant increased focus on these programs in the Settlement Plan, E1 agreed that  
setting performance targets is appropriate. However, E1 noted that the savings target  
proposed by Mr. Love included incidental savings, which were secondary to other  
programs not specifically proposed for these sectors.  
E1 proposed that the 15.8 GWh savings anticipated under these sector-  
specific programs be set as the performance target. E1 also proposed that the target  
should be considered satisfied if it achieves at least 90% of the cumulative aggregate  
annual energy savings applicable to the Affordable Single-family Homes, Affordable Multi-  
family Housing and Mi’kmaw Home Energy Efficiency Project programs. Regarding the  
other 23.6 GWh of secondary incidental energy savings, E1 proposed this savings be  
designated as a performance indicator. In his closing submission, the CA said that  
counter-proposal was reasonable.  
Considering the increased investment in programs for low-income and  
underserved communities, the Board finds that it is appropriate to establish a separate  
performance target for these programs. The Board accepts the performance target of  
15.8 GWh for the programs specifically aimed at these sectors. The Board accepts E1’s  
suggestion that the target will be met if it achieves at least 90% of the cumulative  
aggregate annual energy savings applicable to the Affordable Single-family Homes,  
Affordable Multi-family Housing and Mi’kmaw Home Energy Efficiency Project programs.  
The Board also accepts that the 23.6 GWh secondary incidental savings attributable to  
low-income in other sectors be established as a performance indicator.  
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Avoided Costs  
In determining the cost effectiveness of its DSM portfolio, E1’s calculations  
incorporated the avoided costs of energy, capacity, transmission, distribution and carbon.  
The avoided costs of capacity and energy were calculated by NS Power, based on  
Reference Plan 2.0C in the 2020 IRP. The avoided costs of transmission and distribution  
were provided by NS Power in a separate filing using a methodology based on historical  
transmission and distribution investments. E1 calculated the avoided costs of carbon by  
applying the federal trajectory pricing to an emissions intensity for Base DSM savings  
from the 2020 IRP Reference Plan 2.0C results.  
E1 stated that the 2020 IRP Reference Scenario 3.1C was more suitable  
for assessing the affordability of the Settlement Plan, given its alignment with recent  
environmental legislation and directives. However, when E1 filed its application, NS  
Power had not yet updated the avoided costs of energy and capacity to account for the  
recently legislated climate change reduction goals. E1 noted that forecasts using the  
IRP’s current avoided costs will be conservative and will understate the expected DSM  
economic benefits.  
Various parties expressed similar concerns in their evidence and  
submissions. The CA recommended recalculating the avoided costs to align with current  
legislation and IRP assumptions, with the goal of providing updated cost-effectiveness  
results in the next annual report.  
The MEUs noted that electricity system differences related to their  
participation in the wholesale market result in different factors for avoided costs than  
those incurred through NS Power. As such, they recommended that the Board direct E1  
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to consider and provide supplementary information on the cost and benefits of programs  
targeted at the MEUs wholesale market participants in all future DSM Plans.  
Synapse noted that E1’s inclusion of avoided water and other fuel costs in  
the cost-benefit analysis appears to contradict the Board’s finding in Matter M08888 that  
non-energy impacts should not be considered. This issue is more fully addressed later  
in this decision.  
In its rebuttal evidence, NS Power responded to the CA’s suggestion by  
noting that avoided cost data will not be required again until 2025, when it will be needed  
to prepare the 2026-2028 DSM Resource Plan. In the meantime, ongoing evergreening”  
of the IRP will result in more current updated scenarios from which to base updated  
avoided costs, if necessary, prior to the 2026-2028 DSM Plan development. NS Power  
confirmed in its closing submission that it will work with E1 and the DSM Advisory Group  
to discuss potential updates to the avoided costs in advance of the 2026-2028 DSM  
Resource Plan.  
The Board understands that recently legislated climate change reduction  
goals are not addressed in IRP Reference Plan 2.0C, nor are they fully addressed in  
Reference Plan 3.1C. The Board agrees that these factors need to be incorporated in  
updated avoided costs; however, there is no immediate urgency and directs that this issue  
be tasked to the DSMAG to be resolved in time for use during preparation of the 2026-  
2028 DSM Plan.  
Cost-effectiveness Testing  
Cost-effectiveness testing assesses the relative value of the Settlement  
Plan through a comparison of benefits and costs expressed as both the dollar value of  
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the net benefit (or cost) and as a ratio of benefits to costs. As the Board ordered in Matter  
M03669, cost-effectiveness testing for E1’s proposed Settlement Plan uses the TRC test  
at the program level. This test compares the costs incurred to design and deliver  
programs and customers’ costs with avoided energy and other supply-side resource  
costs, including capacity, transmission, distribution and carbon. Each program in the  
Settlement Plan must achieve a benefit-to-cost ratio of at least 1 to pass the TRC test.  
The TRC test considers cost effectiveness from the combined perspective  
of the utility and the program participants. The PAC test assesses the cost effectiveness  
of DSM programs from the perspective of the utility. Both tests make use of NS Power’s  
Weighted Average Cost of Capital as the discount rate. E1 has provided the results of  
the PAC tests for each Settlement Plan program for information purposes.  
For the first time in its proposed DSM plan, E1 included avoided costs of  
carbon in both the TRC and PAC tests. For informational purposes only, E1 also provided  
TRC and PAC test results without avoided costs of carbon.  
Moreover, E1 noted that DSM measures produce both non-electric and non-  
energy benefits and costs. Non-electric benefits impact customer fuel consumption from  
sources other than grid-supplied electricity. Non-energy benefits impact customer non-  
fuel costs that are affected by the installed measures (e.g., reduced maintenance). As  
such, within the Settlement Plan modelling, E1 has included the additional customer cost  
of biomass for some measures that switch from electricity to biomass (e.g., wood stoves),  
as well as the customer cost savings from reduced water consumption for some  
measures (e.g., commercial dishwashers). These additional non-electric fuel costs and  
reduced water costs are, therefore, considered in the TRC and PAC calculations.  
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In its evidence, Synapse noted that inclusion of non-electric fuel costs and  
reduced water costs in TRC and PAC calculations appears to contradict the Board’s  
finding in Matter M08888 that non-energy benefits should not be considered. Synapse  
further stated:  
Since these avoided costs do not have an impact on electric system costs, they should not  
be included in the PAC in any case. While including these avoided costs in a TRC is  
consistent with how the TRC is generally defined, these avoided costs should not be  
included in the BCA for the TRC test in keeping with the Board Decision in M08888.  
However, removing these costs from the TRC will result in a test that is skewed. A TRC  
that includes participant costs but does not include participant benefits is inherently  
[Exhibit E-25, p. 17]  
To address this concern, Synapse recommended that E1’s cost-  
effectiveness testing methodology be modified. Specifically, Synapse recommended that  
since the PAC test should not account for participant costs and participant benefits, and  
is therefore more balanced, the Board should put more emphasis on the PAC test for  
future DSM applications. Alternatively, Synapse recommended the Board launch a  
process to develop a jurisdiction-specific cost-effectiveness test that reflects the  
Province’s policy priorities.  
4.4.1 Findings  
In Matter M08888, the Board found that it does not have the jurisdiction to  
consider non-energy impacts in DSM cost-effectiveness testing. In the current  
proceeding, E1’s inclusion of non-energy benefits (such as avoided water and other fuel  
costs) in its TRC calculations ignores this finding. As noted by Synapse in its evidence,  
the impact of removing these avoided costs would not be material and the proposed  
Settlement Plan would still be cost-effective using the TRC test. Nevertheless, the Board  
finds that inclusion of such non-energy benefits in E1’s 2023-2025 Settlement Plan TRC  
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calculations is not consistent with the Board’s finding in Matter M08888. Therefore, E1 is  
directed to remove these non-energy benefits from its TRC and PAC calculations and file  
a Settlement Plan compliance filing with the Board in this proceeding.  
In response to Synapse’s recommendation related to modification of E1’s  
DSM plan cost-effectiveness testing methodology, E1 stated:  
E1 submits that a broad review of cost-effectiveness testing methodologies may be  
appropriate at the present time given recent legislative changes, as well as advancement  
in demand response and electrification initiatives. A thorough assessment of the relative  
merits of both the PAC test and a jurisdiction-specific test is required to determine the  
optimal cost-effectiveness testing methodology for Nova Scotia. E1 proposes that this  
matter be explored further through the DSM Advisory Group in advance of the 2026-2028  
DSM Plan.  
[Exhibit E-29, p. 13]  
The Board finds that E1’s suggested approach is reasonable. The Board,  
therefore, directs E1 to work with the DSMAG before the 2026-2028 DSM Plan application  
to assess and develop an optimal DSM cost-effectiveness testing methodology.  
Allocation of Program Costs  
E1 said it applied the following “guiding principles” in developing its 2023-  
2025 DSM Resource Plan:  
Transparency E1 will provide stakeholders and customers with information and insight  
into the analyses supporting plan development and results and demonstrate how received  
comments were considered.  
Accessibility & Equity E1 services are accessible on an equitable and non-discriminatory  
basis and, where necessary, E1 targets hard to reach or potentially underserved market  
Affordability – E1’s portfolio aims to maximize value to electricity ratepayers, using the  
Integrated Resource Plan, the Rate and Bill Impact Analysis, and cost effectiveness testing  
as a framework to consider both short- and long-term affordability.  
[Exhibit E-1, Appendix A, p. 19]  
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E1 also said its resource plan portfolio aligned with the “Balanced Plan  
Approach” in the Framework, as set out in s. 4.3.1 of the Consensus Agreement filed with  
the Board on July 22, 2016:  
EfficiencyOne will produce DSM Resource Plans that balance multiple aspects of  
DSM for the benefit of customers, including:  
• Short-term and long-term energy and capacity avoidance;  
• Program delivery costs;  
• Avoided energy and capacity investments;  
• Non-electric and non-energy benefits;  
• Diversity of program delivery;  
• Business relationships and maintenance of market presence;  
• Access to programs by all market sectors and rate classes by addressing  
barriers to participation; and  
• Rate impacts.  
[M07543, Exhibit E-3, Appendix 1, p. 10]  
To achieve a balanced portfolio for the proposed Settlement Plan in this  
application, E1 applied the following design objectives:  
Low-income investment is 17-22% of the total energy efficiency investment. This aligns  
with 2016 Census data for low-income prevalence in Nova Scotia.  
50/50% Residential-to-Business, Non-Profit & Institutional (“BNI”) investment split.  
40/60% Residential-BNI energy savings split (informed by NS Power’s 2021 Load  
Forecast and E1’s 2019 DSM Potential Study).  
Increased investment in development and research specifically targeting innovation.  
Expansion of education and outreach for diverse and underserved communities.  
Increased diversity of energy and demand savings to further help customers achieve  
cost effective energy solutions.  
Expanded accessibility for a wider variety of market sectors and customer segments.  
[Exhibit E-1, p. 13]  
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One of the Settlement Plan’s notable features is a proposed increase in  
investment for DSM programming for low-income, Mi’kmaw and diverse communities. E1  
said this increase followed the guiding principle that programs and initiatives must be  
accessible on an equitable and non-discriminatory basis to all ratepayers. In its  
application, E1 states:  
The Settlement Plan will feature program enhancements aimed at increasing overall  
accessibility of DSM programs and the removal of barriers that inhibit community  
participation. Building upon past successes and lessons learned, the Settlement Plan  
leverages the effectiveness of existing barrier mitigation strategies and extends successful  
programs, while continuing to develop and implement new initiatives designed to further  
reduce the impact of DSM barriers and enhance overall accessibility for customers. The  
Settlement Plan will also include a significant expansion in education and outreach  
initiatives for Nova Scotia’s diverse communities under E1’s Enabling Strategies.  
Under the Settlement Plan, E1 will be allocating $35.8 million toward DSM programs for  
underserved markets and diverse communities, amounting to a 177% growth in funding.  
This increase in DSM investment intended for low-income and diverse markets is  
intentionally close to three times the 2020-2022 investment level of $12.9 million and  
reflective of E1’s commitment to equitable and non-discriminatory program delivery. With  
this in mind, E1 will now allocate 21% of the total Settlement Plan investment toward low-  
income programming a substantial increase from the average of 8% seen during the  
2015 to 2020 timeframe. Further, increased support for Mi’kmaw communities is also  
provided for under the Settlement Plan with the investment levels increasing to $7.0 million.  
Notably, the new Affordable Single-family Home program component constitutes a  
considerable portion of this growth in investment and will offer significant savings for the  
families who need it most with an investment level of $24.7 million.  
[Exhibit E-1, pp. 55-56]  
E1’s proposed DSM programs for low-income ratepayers and in Mi’kmaw  
communities were supported by the ANSMC/KMKNO, Membertou, the AEC, the EAC  
and NS Power. Increased investment in programs for low-income customers was also  
supported by the CA and by Synapse but, as discussed already in this decision, these  
parties urged the Board to set specific performance targets for these programs.  
The ANSMC/KMKNO noted that Mi’kmaw households tend to experience  
higher than average energy bills and are among the hardest hit by rising energy costs  
and the least able to respond to new opportunities in energy efficiency and conservation.  
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The evidence filed by Membertou noted that it remains underserved and  
underrepresented in terms of energy program opportunities, like many communities in  
Mi’kmaki. The ANSMC/KMKNO viewed the expanded programming in E1’s current plan  
dedicated to Mi’kmaw communities as aligned with the United Nations Declaration on the  
Rights of Indigenous Peoples (Article 29) and the Truth and Reconciliation Commission  
of Canada’s Call to Action #92.  
The AEC’s evidence discussed the prevalence of energy poverty in Nova  
Scotia and noted Nova Scotia has one of the highest energy poverty rates in the country.  
Pending further research, the AEC estimated that 26% of Nova Scotians (or  
approximately 105,000 households) lived in energy poverty (defined as a household that  
pays more than 6% of household income on home energy). The AEC noted that low-  
income households and many moderate-income households simply cannot afford to  
invest in energy efficiency.  
The EAC said that targeting energy-poor and hard to reach households is  
a common gap in energy programs that needs to be addressed. It said an increased level  
of investment in low-income households allows Nova Scotia to address key barriers to  
energy efficiency goals and ensures that low-income populations can participate in a just  
transition and fuel switching programs that will allow the province to meet its climate  
NS Power, in its rebuttal evidence, said:  
E1’s proposed plan represents an increase in DSM spending in the province, and the  
largest portion of that will help support programs for low-income Nova Scotians and First  
Nations in the province. These sectors have traditionally been under-served and, as such,  
NS Power remains pleased with the increase in this area set out in the Settlement  
[Exhibit E-28, p. 2]  
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Mr. Love recommended that the Board adopt the Settlement Plan, and he  
said the following about spending aimed at low-income customers:  
The Settlement Plan provides a significant increase in investment and savings for Nova  
Scotia’s low-income residents. As discussed earlier in this testimony, savings and  
investment have dragged even more for this sector than for the residential sector in  
general. The low-income population faces the highest energy burden and has been the  
most impacted by the COVID-19 pandemic. The projected spending level of $35.8 million,  
21% of total investment, for low-income customers is much higher than the previous  
average of 8% for the 2015 to 2020. This increased goal is a very important step in making  
the plan more equitable and helping address broader issues in Nova Scotia.  
[Exhibit E-20, p. 7]  
Although NS Power and most of the intervenors in this proceeding  
supported E1’s proposed significant increase in investment in DSM programming for low-  
income, Mi’kmaw and diverse communities, the SBA and the Industrial Group raised  
concerns about the allocation of DSM spending. They questioned whether the plan is  
achieving “the most savings for the least amount of ratepayers’ money” (SBA) and  
whether electricity efficiency and conservation activities are being acquired by NS Power  
under its Supply Agreement with E1 at the “lowest cost available” (Industrial Group).  
4.5.1 Allocation to Low-income Program Components  
The cost effectiveness test results for the Settlement Plan are shown as  
Total Resource Cost  
(TRC) Test  
Program Administrator Cost  
(PAC) Test  
2023-2025 Settlement Plan  
Residential Energy Efficiency (EE) Programs  
Efficient Product Rebates  
Existing Residential  
New Residential  
Residential Low-Income  
Residential Sector Total  
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Business, Non-Profit & Institutional (BNI) Energy Efficiency (EE) Programs  
Efficient Product Rebates  
Custom Incentives  
Direct Installation  
BNI Low-Income  
BNI Sector Total  
EE Portfolio Total  
(includes Enabling Strategies and EE  
Demand Response (DR) Program  
DR Program Total  
Settlement Plan Total (EE + DR + ES)  
[Exhibit E-1, pp. 19-20]  
The Settlement Plan has an overall TRC test value of 2.0 (2.0 for energy  
efficiency programs and 1.1 for demand response). All programs have a TRC test value  
greater than 1 and thus pass at the Board approved level. However, two components of  
the Existing Residential Program do not pass the TRC test. These include the Affordable  
Single-family Homes and Mi’kmaw Home Energy Efficiency Project program  
components. As stated by E1, these are dedicated low-income and diverse or  
underserved communities program components, which are expected to lower TRC  
values, when compared to market-rate DSM programs.  
John G. Athas, of Daymark Energy Advisors, Inc., the SBA’s consultant,  
recommended that the bulk of the increase in DSM spending between 2022 and 2023  
should be allocated to more cost-effective measures aimed at the BNI sectors. Although  
he acknowledged that E1 targets equal investment in the residential and BNI sectors to  
achieve a balanced portfolio, Mr. Athas recommended that 80% of the increase in  
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investment from 2022 to 2023 should be targeted to the most effective measures and  
program components.  
Mr. Athas estimated that shifting approximately 80% of E1’s proposed  
funding for its Affordable Single-family Homes and Residential Behavior program  
components to more cost-effective BNI programs would produce lifetime MWh savings at  
less than half the cost of achieving them under the residential sector portfolio. Expressed  
differently, he said that shifting this investment from the residential to the BNI portfolio  
would produce almost 13% more lifetime GWh savings under the plan without increasing  
expenditures for the year 2023.  
Mark Drazen, of Drazen Consulting Group, Inc., the Industrial Group’s  
consultant, said the Board should review the proposed DSM plan in the same way as a  
supply contract and ask itself whether the supply is being acquired at the lowest cost  
available. Mr. Drazen concluded E1 is not minimizing the cost of its suite of DSM  
measures because of a “policy decision to subsidize low-income and underserved  
communities” and by subsidizing DSM measures through incentives that are greater than  
necessary (discussed later in this decision).  
The Industrial Group noted that E1 acknowledged that certain low-income  
program components do not pass the TRC test and negatively affect the overall cost-  
effectiveness of the resource plan. To minimize the impact of this, the Industrial Group  
submitted that funding for low-income investment under the proposed Settlement Plan be  
based on more recent Statistics Canada data for the number of low-income households  
in Nova Scotia. The Industrial Group submitted this data showed that the prevalence of  
low-income households has been declining since the period represented in the 2016  
Statistics Canada census data selected as the base for E1’s funding levels for 2023-2025.  
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The Industrial Group submitted that use of historic and high data on the prevalence of  
low-income households in Nova Scotia caused E1 to overshoot its goal to achieve equity  
and “presented a stretch Plan which is not grounded in the data, nor as efficient or cost-  
effective as it could and should be.”  
In its rebuttal evidence, E1 noted that following Mr. Athas’ recommendation  
would significantly defund or eliminate programs targeted at low-income and underserved  
markets. E1 emphasized the equitable nature of these programs was of equal importance  
to program delivery costs:  
The Standardized Filing Framework was developed through a collaborative approach  
recognizing key design principles that stakeholders had agreed must be taken into  
consideration in the development of future DSM plans. Among the eight (8) design  
principles was program delivery costs. However, the design requirements also included  
seven (7) other articulated design principles of equal importance and which included:  
diversity of program delivery and access to programs by all market sectors and rate classes  
by addressing barriers to participation. The diverse and underserved communities  
programs, included in the Settlement Plan, specifically targets this equity and access issue.  
A targeted focus on “maximization of measures and programs that have the highest cost-  
effectiveness ratios” with lessor [sic] regard to the other key DSM plan design principles  
would be a departure from the Standardized Filing Framework and inconsistent with the  
consensus nature of the agreement itself. (emphasis in original)  
[Exhibit E-29, p. 2]  
E1 said that when developing its DSM plan, it transparently applied its  
guiding principles and pursued a plan that balanced multiple aspects of DSM for the  
benefit of customers. This included a targeted equal splitting of DSM investment between  
the residential and BNI sectors. E1 said no concerns were raised about this by  
stakeholders during the development of the plan.  
In its closing submission, the SBA agreed with E1 that the Guiding  
Principles and the Framework were important considerations when drafting DSM plans  
but submitted these were not binding guidelines driving program design. The SBA  
submitted the Principles and Framework were a starting point, but funds may need to be  
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shifted to other programs and rate classes to ensure the plan is achieving “the most  
savings for the least amount of ratepayers’ money.”  
While generally supportive of E1’s proposed plan, the SBA encouraged the  
Board to adopt the recommendations contained in Mr. Athas’ evidence. However, the  
SBA also submitted that TRC requirements should be applied differently for low-income  
The SBA and Mr. Athas recognize that some of the measures that fall below the TRC ratio  
of 1.0 are designated for low-income programs, and low-income programs are not exempt  
from the requirement of passing the TRC test in Nova Scotia. This ultimately negatively  
impacts the overall TRC test results in the filing. We want to underscore that the SBA  
supports the overall investment for low-income programs, and do not believe that the TRC  
requirement of 1.0 should be applied to these programs in the same way we submit that it  
should be applied to other sectors. We point to testimony filed by Synapse on May 20,  
2022 in response to concerns about a focus on investment:  
The focus on investment may do little to ensure low-income populations  
experience the benefits of energy efficiency. Energy efficiency targeting  
low-income populations offer these customers a way to manage their bills.  
Low-income customers generally spend a large portion of household  
income on energy bills; that is, they have high energy burdens. In general,  
reducing energy burdens for this population produces proportionally large  
benefits, both for these customers and for ratepayers as a whole (e.g.,  
through reductions in arrearages and collection expenses.)  
The SBA agrees with this response and reinforces that developing and adopting a  
performance metric specifically for low-income customers outside of the other measures  
could ensure funds are effectively spent and that actual benefits of energy efficiency can  
be realized by low-income sectors - without negatively impacting the TRC test and funds  
spent in other sectors.  
[SBA Closing Submission, June 30, 2022 (footnote omitted)]  
Similarly, the Industrial Group acknowledged the benefits of supports for  
low-income ratepayers but said the acquisition of electricity efficiency and conservation  
activities under its supply agreement with E1 should be considered based on whether it  
is at the lowest cost available. Although the Industrial Group said it was not taking a  
position in this proceeding on the Board’s jurisdiction to approve E1’s “policy decision to  
subsidize low-income and underserved communities,” it submitted this is an issue  
warranting consideration given provisions in the Act addressing the non-discriminatory  
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delivery of electricity and the cost-effectiveness of electricity efficiency and conservation  
activities. The Industrial Group also referenced the Nova Scotia Court of Appeal decision  
in Dalhousie Legal Aid Service v. Nova Scotia Power Inc., 2006 NSCA 74, in respect of  
the Board’s inability to approve a rate assistance program for low-income ratepayers.  
In its rebuttal evidence, E1 argued it was statutorily empowered to make the  
“policy decision” questioned by the Industrial Group. It said its efforts under the 2023-  
2025 DSM Plan to overcome systemic barriers to program delivery and savings to some  
groups was “aligned with its statutory ability as the franchise holder to provide reasonably  
available, cost-effective electricity efficiency and conservation activities to all NS Power  
customers.” It also submitted the need to invest in underserved markets is a policy  
decision upon which most stakeholders in this proceeding are aligned and that “the  
manner in which this is accomplished remains the function of the DSM Administrator.”  
In addressing the Industrial Group’s recommendation that the level of  
investment in low-income programs should be based on updated Statistics Canada data  
(the 2021 Census of Population), E1 emphasized that the level of investment was not  
determined on a pure mathematical calculation based on statistical data and its use of  
the 2016 census data was only a starting point. E1 said that taking a strict formulaic  
approach to investment in low-income and underserved communities restricted its role  
“as an experienced DSM administrator and franchise holder that is statutorily empowered  
to provide reasonably available DSM programs within this province.” In determining the  
amount of this investment, E1 said it:  
has listened to stakeholders and advocacy groups for low-income and underserved  
communities and…developed a DSM Plan that prioritizes the removal of systemic  
participation barriers and features the continuation of successful programs, the  
development and implementation of new initiatives, and the expansion of related education  
and outreach opportunities. The need to invest in underserved markets is a policy decision  
upon which the majority of stakeholders are aligned. E1 respectfully submits that much like  
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the measure selection and incentivization processes discussed above, the manner in which  
this is accomplished remains the function of the DSM Administrator.  
[E1 Reply Submission, p. 4]  
Although the Industrial Group suggested that the Board’s jurisdiction to  
approve E1’s “policy decision to subsidize low-income and underserved communities”  
warranted consideration, none of the parties in this proceeding including the Industrial  
Group took a position on this issue. Indeed, the Industrial Group was the only one to  
suggest that it was an issue. All the other parties in the proceeding supported E1’s  
proposed programs in these areas or, in the SBA’s case, submitted the cost-effectiveness  
test should be applied differently to such programs. In the circumstances, where none of  
the parties (many of whom are represented by experienced counsel before the Board)  
are actively pursuing the issue in the proceeding, and the Board does not have the benefit  
of a full record of submissions on the point, the Board declines to make a specific finding  
on this issue. This matter may be pursued by the parties in a future proceeding if they  
choose to do so. That said, given that the Board is a statutory body that must operate  
within the bounds of its jurisdiction, the Board considered whether there was an obvious  
lack of jurisdiction that would preclude it from approving E1’s application and finds that  
not to be the case.  
While it is clear from Dalhousie Legal Aid Service that s. 67(1) of the Act  
precludes the Board from approving a different rate for a low-income customer for service  
that is the same as that received by a more affluent customer, the Board is not exercising  
any authority under s. 67(1) in this proceeding. The Board is approving a supply  
agreement between E1 and NS Power for the provision of electricity efficiency and  
conservation activities under s. 79L. The approval of such an agreement is not the  
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approval of a toll, rate, or charge, nor is the provision of electricity efficiency and  
conservation activities by E1 to NS Power a “service” as that term is defined in s. 2(f) of  
the Act.  
Under s. 79H of the Act, the Board is required to determine the cost-  
effective electricity efficiency and conservation activities that must be undertaken for the  
purpose of the Act. Cost-effectiveness is a fundamental consideration for the approval of  
electricity efficiency and conservation activities, but there are other considerations.  
Subsections 79L(8) and (9) identify further criteria:  
(8) The Board shall approve an agreement pursuant to this Section if, in addition to any  
other matters considered appropriate by the Board, it is satisfied that the agreement,  
including the proposed electricity efficiency and conservation activities that are the subject  
of the agreement, is in the best interests of Nova Scotia Power Incorporated’s customers  
and satisfies the requirements of Section 79J.  
(9) The Board’s assessment of the proposed electricity efficiency and conservation  
activities for the purpose of the approval must take into account their affordability to Nova  
Scotia Power Incorporated’s customers, along with any other matters considered  
appropriate by the Board or as may be prescribed.  
The Board has previously noted that “affordability” is not defined in the Act.  
In Re EfficiencyOne, 2015 NSUARB 204, the Board discussed the concept of affordability  
in s. 78L(9) of the Act in the context of balancing short-term rate impacts and long-term  
[77] Traditionally in determining a capital expenditure or a program such as DSM the Board  
has applied the test of lowest long term cost. This is a principle that is examined in the IRP  
and in every capital work order application the Board reviews. Issues of affordability,  
although not explicitly stated in the PUA until 2014, were always relevant to discussions  
under such topics as rate shock and affordability generally. Indeed, for example,  
affordability has been on the Issues List in recent Annual Capital Expenditure Plans and in  
several hearings for Halifax Water which also is regulated under the PUA.  
[82] The Board finds that the inclusion of Section 79L(9) of the PUA directs the Board to  
take into account an increased focus on short term rate impacts. Having said that, the  
Board notes that there will be a review of the DSM program every three years. There will  
always be rate pressures to be taken into account in both determining rates and in  
determining the DSM program. A focus exclusively on short term affordability means that  
the Board would never get to consider long term costs. That would be to the detriment of  
ratepayers. The Board does not believe that ratepayers are well served, or that it is in their  
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best interests to focus only on short term costs and thereby deny customers the real long  
term cost savings that are possible from a balanced and properly implemented DSM  
program. Accordingly, while the Board finds that there has been a change in focus  
mandated by the Legislature, and an increased emphasis on short term rate impacts, the  
overarching consideration continues to be “the best interests of Nova Scotia Power  
Incorporated’s customers” as stated in Section 79L(8) of the PUA.  
In this proceeding, Mr. Love raised another possible lens through which  
affordability might be viewed. After discussing the Board’s balancing of short-term and  
long-term perspectives on affordability, Mr. Love addressed affordability in the context of  
barriers to participating in energy efficiency programs:  
Yes. One of the most important aspects of affordability is the effect of DSM  
investments on classes of customers who are most acutely affected by changes in energy  
costs. This includes low-income customers and those groups of customers who may have  
additional barriers to participation in energy efficiency programs, such as tenants and First  
Nations customers.  
[Exhibit E-20, p. 9]  
It is also clear that ss. 79L(8) and (9) vest the Board with some degree of  
discretion when considering an application to approve a supply agreement. In addition  
to the somewhat subjective assessment of the “best interests of Nova Scotia Power  
Incorporated’s customers” and “affordability,” the legislation contemplates the decision  
may take into account “any other matters considered appropriate by the Board.” In fact,  
this phrase is repeated in both subsections.  
One other matter that may be appropriate to consider is that participants in  
DSM programs generally see greater bill reductions, while non-participants may see  
higher bills. For example, Figure 5 in the Rate and Bill Impact Analysis filed with E1’s  
application (reproduced below) shows that average bill impacts from the proposed  
Settlement Plan for participants are better than for non-participants:  
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[Exhibit E-1, Appendix B, p. 28]  
Given this inherent feature of DSM programming, it may be appropriate to  
consider the design of a DSM portfolio and what groups of customers are most likely to  
be able to participate in the proposed DSM programs. It may also be relevant to consider  
whether there are barriers to participation that should be addressed to ensure that all  
customers can equitably benefit from electricity service under a balanced DSM program  
at the lowest long-term cost.  
DSM programs in this jurisdiction have not generally been developed or  
approved by identifying the range of reasonably available measures and programs and  
selecting or approving only those with the very best cost-effectiveness ratios. Because  
of the nature of DSM programs, other factors have also tended to be considered.  
The “Balanced Plan Approach” included in the July 2016 Consensus  
Agreement discussed earlier identifies a range of factors that stakeholders considered  
may be relevant considerations. The Consensus Agreement had broad support amongst  
stakeholders, and was signed by E1, NS Power, the CA, the SBA, the MEUs, the AEC  
and the EAC.  
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A balancing of factors has also been evident in past Board decisions. For  
example, in Re EfficiencyOne, 2019 NSUARB 105, the Board approved a compromise  
arrangement resulting in a DSM plan including elements of a higher budget plan preferred  
by E1 in its application and a lower budget alternative scenario. In that case, it was  
proposed that funding for First Nations and low-income programs would remain at the  
higher levels contemplated in the preferred plan, while the budgets for all other programs  
would be adjusted to lower amounts based on the alternate scenario. In its decision, the  
Board said:  
The Board agrees that maintaining the First Nations and Low-Income Programs, which  
would not have been included in the Alternate Scenario at the same levels, is an important  
step in providing access to DSM for under-served communities.  
[2019 NSUARB 105, para. 31]  
Although the Board finds it has the discretion to consider other matters,  
cost-effectiveness remains a fundamental concern. When a supply agreement for  
electricity efficiency and conservation activities is presented to the Board for approval, it  
is open to question whether there has been an appropriate balancing of factors. Whether  
the “multiple aspects of DSM” identified in the Balanced Plan Approach are of “equal  
importance,” as was stated by E1 in its rebuttal evidence, or whether they continue to be  
relevant or appropriate, are matters that may be considered.  
In the present proceeding, the SBA submits that 80% of E1’s proposed  
funding for its Affordable Single-family Homes and Residential Behavior program  
components should be shifted to more cost-effective programs. The Industrial Group  
submits that the level of investment in low-income programs should be based on updated  
Statistics Canada data (the 2021 Census of Population).  
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For the purposes of the present proceeding, the Board is satisfied with the  
balance achieved by E1 in its proposed Settlement Plan and finds it reasonable and in  
the best interests of NS Power’s customers. The proposed increase in investment for  
DSM programming for low-income, Mi’kmaw and diverse communities was supported by  
most of the parties in this proceeding, recognizes past under-service in these areas and  
attempts to address barriers to participation in DSM programs.  
The Board finds the SBA’s recommendation would result in an unbalanced  
plan that would shift investment away from the residential class (which is NS Power’s  
largest customer class in terms of number of customers and load), and away from low-  
income and underserved programs. The Board also accepts E1’s submission that the  
amount of low-income investment was not directly determined from its use of the 2016  
Statistics Canada data and declines to adopt the Industrial Group’s recommendation to  
update the investment level based on the 2021 Census.  
While the Board finds the allocation of investment in the proposed 2023-  
2025 DSM Resource Plan balanced and appropriate in this case, the Board is concerned  
with E1’s apparent suggestion that challenges to the choices it makes in the development  
of DSM resource plans restrict its flexibility and encroach upon its statutory  
responsibilities and jurisdiction. In carrying out its role as the franchise holder under the  
Act, E1 is a public utility under the general supervision of the Board. While E1 has the  
exclusive right to supply NS Power with reasonably available, cost-effective electricity  
efficiency and conservation activities as the franchise holder under the Act, it may only  
do so under the terms of a supply agreement approved by the Board. Under s. 79H of  
the Act, the Board must determine the cost-effective electricity efficiency and  
conservation activities to be undertaken for the purposes of the Act.  
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In response to questions about the balancing of its portfolio, such as those  
raised by the SBA and the Industrial Group in this proceeding, the Board expects E1 to  
demonstrate how its proposed resource plan is justified and complies with statutory  
requirements. In future proceedings, responding to such concerns with objections that  
such questions encroach upon E1’s statutory responsibilities may warrant little weight in  
the absence of a cogent explanation for the choices E1 made in developing its proposed  
resource plan.  
4.5.2 Reallocation of Investment in Measures Failing the Total  
Resource Cost Test  
E1 only conducts cost effectiveness testing for the Settlement Plan at the  
program level. Nonetheless, it has also provided measure-level TRC and PAC ratios as  
part of Attachment 4 of Appendix A of its application. There are 78 measures listed in  
that Appendix as being administered in 2023 that have a TRC ratio below 1.0.  
Mr. Athas determined that measures failing the TRC test account for 25.4  
GWh of first year energy savings out of a total of 120.7 GWh saved by the plan in 2023  
(approximately 21% of the proposed energy savings). He argued that if these measures  
fail the TRC test, there is a more cost-effective means to address the related energy  
savings issue and noted this is a significant portion of energy that could be addressed  
more effectively. He proposed that a threshold should be set for TRC test results and  
measures below a 0.9 ratio should not be included in E1 programs. He further  
recommended that investment in measures that do not pass the TRC test be reallocated  
to measures that are cost-effective.  
Mr. Athas said that energy efficiency programs in the BNI sector were  
generally more cost-effective than the proposed residential energy efficiency programs;  
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therefore, investment in measures failing the TRC test could be redirected to more cost-  
effective programs in the BNI sector. Mr. Athas said that additional investment in the BNI  
sector would not necessarily put residential class customers at a disadvantage because  
the shift in investment to the more cost-effective programs would produce increased  
system cost savings relative to those measures that fail the TRC test.  
In its rebuttal evidence, E1 submitted that DSM program level screening  
represents industry best practice. E1 also noted that in Matter M03669, the Board  
determined that cost-effectiveness screening at the program level, rather than the  
measure level, is appropriate and provide E1 the flexibility needed to develop a balanced  
DSM plan. E1 stated:  
In accordance with Board directive and industry best practices, E1 maintains that the  
flexibility afforded it through screening at the program level is necessary for the  
development of a balanced plan, including the ability to incorporate measures in its DSM  
plans which achieve TRC test results less than 1.0. Adoption of the Small Business  
Advocate’s proposal would result in the exclusion of measures beneficial to the low-income  
and small business sectors.  
[Exhibit E-29, p. 12]  
In its closing submissions, the Industrial Group submitted there had been a  
“creeping departure” from the principles originally used to guide the approval of cost-  
effective DSM measures and programs. The Industrial Group noted that measures with  
a TRC ratio less than 1.0 were initially allowed only if the elimination of those measures  
jeopardized the program. In 2011, after the responsibility for DSM shifted from NS Power  
to Efficiency Nova Scotia Corporation (ENSC), the Board approved the application of the  
TRC test at the program level at the request of ENSC who noted that measures that fail  
the TRC test may provide strategic or long-term benefits, such as stimulating demand for  
newer technologies to achieve economies of scale.  
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The Industrial Group argued that the 2023-2025 DSM Resource Plan has  
strayed from these original concepts. The Industrial Group submitted that when E1 was  
asked to justify the inclusion of measures which do not pass the TRC test, it “…offered  
general rationales, without reference to specific measures and programs…” making it  
“…impossible to know why or on what basis any particular non-cost-effective measure  
should be permitted.”  
The E1 response referenced by the Industrial Group stated:  
There are several reasons why a measure might be included despite having a TRC ratio  
less than one. Given that many of the reasons are global across all measures, E1 has  
provided rationale below:  
• Avoided costs used to calculate TRC ratios are likely understated, resulting in artificially  
low TRC ratios, as described in E1’s submitted 2023-2025 DSM Resource Plan Evidence.  
• TRC ratios use incremental costs as a key input. Incremental costs are dependent on  
retail pricing at a particular point in time and are challenging to obtain. In this way, TRC  
ratios can only be reflective of particular market conditions.  
• Non-energy impacts (with the exception of gas, water, and biomass impacts) are not  
included in the TRC ratio calculation, resulting in artificially low TRC ratios. These non-  
energy impacts motivate customer participation in many cases (i.e. comfort benefits of  
ductless heat pump installation).  
• The TRC costs at the measure level include some program administration costs, which  
is not best-practice if TRC is used to screen individual measures, as suggested in the  
Evidence of Scott Robinson.  
• Many measures with TRC ratios less than one are offered exclusively for low-income  
Nova Scotians.  
• Some measures in Instant Savings allow E1 to have a year-round presence in retail  
stores, outside of the spring and fall campaigns.  
• Some measures allow E1 to maintain market presence and business relationships at very  
low total incentive costs, since measure uptake is very low for some measures with low  
TRC ratios.  
• For measures with low uptake, or brand-new measures, it is often difficult for E1 to  
characterize the measure with high accuracy since it often relies on a relatively small  
sample of projects to extract information from. By offering incentives to early adopters of  
new measures, E1 encourages market transformation, which may help bring costs down  
over time.  
• Some measures with TRC ratios less than one are typically bundled with measures that  
have higher TRC ratios. For example, several measures in Efficient Product Installation  
(EPI) have a TRC less than one and are installed 1 when E1 is already in the home,  
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acquiring the savings immediately while preventing the need for E1 or the customer to  
revisit the measure at a later date, perhaps at a higher acquisition cost. In EPI, it also  
produces a better customer experience for E1 to upgrade all lighting, instead of only  
upgrading lighting that fits into measure characterizations that were shown to have a TRC  
greater than one.  
• Some measures with a TRC value of less than one provides utility benefits in excess of  
utility costs these measures possess PAC ratios equal to or above 1.0.  
[Exhibit E-9, E1(IG) IR-7(b)]  
The Industrial Group recommended that E1 be directed to justify, on an  
individual basis, measures which fail the TRC test.  
In its reply submission, E1 repeated its position that cost-effectiveness  
screening is performed at the program level, following the current Board-approved  
methodology and best practices. It also submitted:  
In addition to the above, E1 as an experienced DSM administrator requires the ability to  
identify and select measures for inclusion within an overall cost effective DSM  
program/portfolio mix. Doing so allows E1 to consider customer experience and delivery  
efficiencies by bundling measures in more comprehensive packages, maintaining market  
presence and business relationships, and avoiding revisits and lost opportunities,  
particularly in whole home programs where some measures may represent a one-time  
chance to achieve energy savings.  
[E1 Reply Submission, pp. 2-3]  
As discussed already in this decision, the Board is satisfied with the balance  
achieved by E1 in its proposed Settlement Plan and finds it reasonable and in the best  
interests of NS Powers customers.  
In Matter M03669, the Board established that the TRC test be applied at the  
program level when evaluating the cost-effectiveness of E1’s proposed DSM plans. The  
Board finds that TRC testing at the program level, as opposed to the measure level,  
remains appropriate for the current application. The Board agrees with E1 that screening  
at the measure level is a restrictive application of the cost-effectiveness test.  
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Applying the TRC test at the measure level could prevent E1 from  
proactively considering potential or future market development and may reduce the  
overall net economic benefits of efficiency investments. In many cases, measures which  
fail the TRC individually may be combined into programs which, cumulatively, are cost-  
effective. Furthermore, focusing on measure cost-effectiveness could deny E1 the  
opportunity to deliver a portfolio of DSM services that are accessible on an equitable and  
non-discriminatory basis and responsive to the current market. The Board agrees with  
E1 that measures which fail the TRC test can provide strategic or long-term benefits, such  
as stimulating demand for newer technologies to achieve economies of scale or  
increasing access to income-eligible customers.  
That said, the Board also agrees with the Industrial Group that the inclusion  
of measures that fail the TRC test should be justified on some other basis, such as  
demonstrating that the proposed program would be jeopardized without the inclusion of  
such measures or by showing that the measures provide strategic or long-term benefits.  
Although broadly stated, the Board finds that some of the factors outlined in  
E1’s response to E1(IG) IR-7(b) provide this justification for the inclusion of the  
questioned measures in this proceeding. The Board has placed little weight on the factors  
E1 identified in its IR response that relate to perceived limitations of the TRC test and the  
inclusion of non-energy impacts. In the Board’s view, these amount to little more than a  
statement that the measures might have passed if a different cost-effectiveness test was  
used. To the extent that there are ongoing concerns about the cost-effectiveness test,  
the Board notes these concerns are better addressed in the stakeholder process to  
consider the test already discussed in this decision. In future applications, E1 is directed  
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to provide specific justification, on an individual basis, for each measure that fails cost-  
effectiveness testing.  
4.5.3 Incentives  
Mr. Drazen considered whether incentives were needed for all the  
measures where E1 proposed to use them and whether the proposed incentive levels  
were higher than necessary. He said that, in some cases, a customer’s reduction in bills  
was high enough for the customer to install a measure without any incentive payment  
from E1.  
Mr. Drazen said he had identified over 50 measures that have a payback  
period of 36 months or less. Mr. Drazen calculated that if these incentives were  
eliminated, the total cost of incentives would be reduced by about $9 million over the  
three-year period covered by the proposed DSM Supply Agreement. Mr. Drazen also  
said that proposed incentives for measures with payback periods longer than three years  
may also have incentives that are higher than necessary.  
Mr. Drazen noted that applying a payback test to an incentive was not a  
new issue. It was considered by the Board in the past and was identified as an important  
metric in the CLEAResult report, which was produced following the Board’s direction (in  
Matter M06733) to undertake research about the determination of incentives and filed  
with the Board in Matter M07544. Mr. Drazen recommended that E1 should provide full  
information on how incentives were determined for all programs and that it should add  
payback information in its Schedule of Measures leaving it up to the Board to decide  
whether and how to modify proposed incentives.  
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In its rebuttal evidence, E1 said its incentive methodology was a matter  
settled by the Board. E1 said its Board approved methodology was developed following  
an extensive process directed by the Board in matter M07544. E1 commented:  
E1’s latitude and autonomy to adjust and/or revisit incentives provides necessary flexibility  
during plan implementation. This flexibility is critical to allow E1 to mitigate incentive-based  
risks and continuously adapt incentive programming over the course of the Plan period.  
The methodology established through the work previously undertaken by E1 (M07544) has  
been accepted by the NSUARB and represents “best practices” in the area of  
[Exhibit E-29, p. 15]  
Regarding the elimination of incentives in cases where the payback period  
for the measure was less than three years, E1 considered this was beyond the  
recommendations in the CLEAResult report and the Board approved incentive  
methodology. E1 said that a payback analysis was one factor to consider when setting  
incentives; however, a comprehensive incentive methodology must also consider non-  
financial barriers. In its reply submission, E1 noted other considerations such as the level  
of disruption to a household or business during renovation, the amount of time and effort  
required to find and secure contractors, or uncertainty due to lack of knowledge about  
technologies and their performance.  
E1 also noted that it is not credited with any energy savings if its third-party  
evaluator determines that a customer would have implemented the measure without the  
incentive. As such, E1 said it is focused on limiting incentives to the lowest amount  
The Industrial Group’s closing submission reiterated Mr. Drazen’s evidence  
that incentives should be no higher than necessary and should account for bill reductions  
received by customers using a payback analysis. The Industrial Group also considered  
the procedural history relating to the development of E1’s incentive methodology,  
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correctly noting that the report and plan including the methodology were accepted as filed  
by the Board, but not specifically approved.  
The Industrial Group argued that E1 had the tools to evaluate payback  
periods for individual measures and providing this information would better inform the  
appropriate level of incentives. The Industrial Group recommended that the Board direct  
E1 to provide this information in its measure level tables and to adjust incentives or  
provide additional justification if a payback period is three years or less.  
E1 argued in its reply submission that the removal of a measure based on  
its payback period alone overlooks the context and numerous elements of a fully  
developed DSM plan. It further submitted:  
Measures are selected for inclusion within DSM programs by considering E1’s Guiding  
Principles, the overall objectives of the DSM Plan, and E1’s duty as Nova Scotia’s DSM  
Administrator. The selection of measures is within the expertise of E1, and to restrict its  
flexibility in this regard encroaches upon E1’s statutory responsibilities and jurisdiction in  
relation to DSM Plan design and implementation in this province.  
[E1 Reply Submission, p. 2]  
As discussed already in this decision, the Board does not consider that  
requiring E1 to justify and explain the choices it has made and to demonstrate how they  
comply with the statutory requirements encroaches upon E1’s role as a Board regulated  
franchise holder. The Board understands that E1 follows an incentive setting  
methodology developed through a consultative process. For purposes of this proceeding,  
the Board accepts the way E1 has applied this methodology and finds that the incentives  
for measures in the proposed DSM Resource Plan are reasonable and appropriate. In  
doing so, the Board accepts E1’s submission that there are factors beyond payback  
periods that may, where appropriate, be considered to set proposed incentives.  
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However, the Board agrees with the Industrial Group that E1 can evaluate  
payback levels and incentives for individual measures and that providing this additional  
information, on a measure level, will provide the Board and stakeholders with a better  
basis to consider the level of incentives that E1 proposes for certain measures. The  
Board, therefore, directs E1 to include payback information in its measure level tables in  
future applications for the approval of resource plans. For measures where the payback  
period is three years or less, E1 is further directed to provide additional information about  
the other factors that E1 has considered in concluding that the proposed incentive level  
for the measure is appropriate.  
To be clear, the Board makes no finding that a measure with a payback  
period of three years or less is presumed to be unreasonable or inappropriate, and its  
direction is only that E1 should be more explicit about the other factors considered in  
setting the incentive for the measure. The Board also notes that this direction is not  
intended to restrict E1’s current ability to adjust or revisit incentives during plan  
implementation to mitigate incentive-based risks and adapt incentive programming over  
the course of the plan period. The Board finds that the potential for net savings  
adjustments by E1’s third-party evaluator, which are also subject to verification, provides  
an appropriate disincentive for E1 to proceed with overly generous adjustments to the  
measure incentives in its approved resource plan. However, in its quarterly reports for  
this and future resource plans, E1 is directed to identify any instances where it has  
adjusted the per unit incentive amount for a measure by more than 10% from the amount  
included in its resource plan and provide an explanation for the variance.  
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Demand Response  
In its application, E1 stated:  
For the first time, E1 is proposing targeted Demand Response activities under its  
Settlement Plan. These DR activities are intended to facilitate direct electricity customer  
response on a real-time basis to better align demand with existing NS Power system  
capacity. E1 proposes to work collaboratively with NS Power in the implementation of these  
measures. Given their intended introduction to DSM activities for the first time in the  
Settlement Plan, E1 proposes that the targeted reduction of 17.9 MW over the 3-year Plan  
be established as a Performance Indicator defined within the Supply Agreement.  
[Exhibit E-1, p. 60]  
Although E1 stated this is the first time that such targeted demand response  
savings were proposed under the Settlement Plan, the Board notes that it is not the first  
time demand response initiatives were undertaken by E1. Of note is the Kentville  
(Klondike) Locational DSM Pilot which operated from December 2019 to March 31, 2021.  
Econoler’s Existing Residential Program evaluation report states that the Klondike pilot  
generated gross savings of 0.071 GWh and 0.042 MW.  
In addressing demand response, Mr. Drazen noted that developing more  
control of demand load is worthwhile since it will increase NS Power’s ability to reduce  
system peak demand. However, he viewed demand response as essentially a rate  
design matter which can and should be handled mostly by NS Power, with E1’s  
involvement being limited as a supplier of equipment.  
In its rebuttal evidence, NS Power stated:  
NS Power has no objection to the amount proposed for DR programs in the Settlement  
Plan. The Company has successfully collaborated with E1 on DR programs such as the  
ongoing pilot to assess the DR potential of residential electric water heater controllers and  
inform the viability of a future large-scale program. While NS Power agrees that rate design  
is a matter to be handled by the Company as the public electric utility, there is a role for E1  
in implementation of DR programs as the DSM franchise holder in Nova Scotia.  
[Exhibit E-28, p. 5]  
E1 proposed that the targeted demand response reduction of 17.9 MW over  
the three-year plan be established as a performance indicator. The Board considers that  
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investing $10 million in yet-to-be-developed demand response projects requires more  
focused attention than might be associated with a performance indicator. The Board  
directs that the targeted 17.9 MW demand response reduction be established as a  
performance target. In addition, in its quarterly reports, E1 is directed to file details  
describing its proposed demand response projects, as well as its progress, including  
spending to date, towards achieving the targeted 17.9 MW load reduction. If any rate  
design issues are identified in relation to the proposed demand response initiatives, the  
Board expects NS Power to present those to the Board in a separate proceeding.  
Residential Behaviour  
As noted in its application, E1 intends to re-introduce a residential  
behavioural response program with similar features to those in the previously offered  
Home Energy Report. Section of Appendix A provides the following description:  
This is a new program component being re-introduced under the Existing Residential  
Program in the Settlement Plan (previously offered as Home Energy Report). The  
Residential Behaviour program component plans to provide tools and insights that will  
encourage Nova Scotians to adopt more energy conscious behaviours and activities,  
leading to electricity savings and reduced utility bills. Through personalized and timely  
energy-use feedback, residential customers are empowered to make informed choices  
about their energy consumption behaviours and the E1 programs and services that can  
help support them along the way.  
In the Settlement Plan, E1 will establish a home energy reporting initiative that builds on  
the foundation of E1’s 2015 program and leverages advancements in energy reporting  
tools enabled through advanced metering infrastructure (AMI) data. AMI data provides near  
real-time energy consumption information and, when coupled with analytical tools and  
software, can provide meaningful insights that encourage Nova Scotians to shift  
[Exhibit E-1, Appendix A, p. 78]  
The Residential Behaviour program component is expected to launch with the delivery of  
an opt-out home energy reporting service provided by paper, electronic mail, and/or online  
application. E1 is anticipating leveraging a third-party delivery model for this program  
component. As described in Section, Residential Behaviour may evolve over the  
2023-2025 Plan period to include other feedback-based initiatives such as gamification  
through energy reduction challenges, and alerts and notifications providing at-a-glance  
energy saving recommendations and tips for residential customers.  
[Exhibit E-1, Appendix A, p. 81]  
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Table 30 in Appendix A, partially reproduced below, listed the proposed  
spending levels and anticipated energy savings.  
In their evidence, the CA’s consultant and Synapse both expressed some  
concerns with this proposed program.  
Based on the information available at the time, Mr. Love questioned whether  
there was any coordination between E1’s proposed behaviour response program and NS  
Power’s Customer Energy Management (CEM) system. Without such coordination, he  
cautioned that savings might be double-counted and potential cost reductions could be  
In its rebuttal evidence, E1 stated that collaboration with NS Power in CEM  
would be in the best interests of ratepayers through enhancement of efficiencies between  
the two behavioural programs and entities. E1 also noted that, although no formal  
agreement has been reached on E1’s specific role in the operation of the CEM, past  
discussions with NS Power were supportive of engaging with E1. In addition, to ensure  
stakeholders are kept apprised of the ongoing collaboration between E1 and NS Power,  
E1 proposes to provide updates to the Board in E1’s quarterly reports leading up to the  
establishment and operation of the E1 behavioural programs and CEM.  
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In his closing submission, the CA stated:  
The Consumer advocate supports the continued collaboration between E1 and NSP,  
especially as it leads to reducing costs for ratepayers. The Consumer Advocate welcomes  
E1’s offer to provide quarterly updates leading up to the establishment of its behavioral  
[CA Closing Submission, p. 2]  
The concern raised by Synapse was that there is great uncertainty about  
the ability of the behavioural demand response program to produce winter peak load  
In its rebuttal evidence, E1 agreed that there is some uncertainty, but noted  
that the behavioural demand response option is intended to be an add-on to the Energy  
Efficiency behavioural program component as opposed to a stand-alone offering. E1 also  
The uncertainty surrounding E1’s behavioural Demand Response pathway is further  
mitigated by the fact that E1 will evaluate and revisit its Behavioural Demand Response  
results in both the first and second years and make adjustments accordingly under its  
phased implementation. As examples and based on findings within the three-year Plan  
period, this could lead to the introduction of new incentives to compensate customers for  
reducing their load during peak times or adjustments to the participation/unit impacts of  
Demand Response pathways.  
[Exhibit E-29, p. 6]  
The Board acknowledges the concerns expressed by the CA and Synapse  
and notes that the CA’s concerns appear to have been allayed with E1’s offer to provide  
quarterly updates. E1 is directed to provide such updates in its quarterly reports.  
Regarding the concern raised by Synapse, the Board notes E1’s agreement  
about the uncertainty that the behavioural demand response program will be able to  
produce tangible winter peak load reductions. However, the Board is concerned with E1’s  
suggestion that new incentives may be needed to compensate customers for reducing  
their load. This appears to resemble a time-varying pricing (TVP) or a critical peak pricing  
(CPP) scenario which was recently approved as pilot tariffs for NS Power. Before any  
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such incentives are implemented, E1 is directed to liaise with NS Power and stakeholders,  
and then seek Board approval of that proposal.  
New Home Construction Program  
The New Home Construction (NHC) program was adopted in 2011. The  
program has provided “support, education, and incentives to the building industry” in the  
province. While E1 states in its application that the program has been successful, it  
proposed to wind it up and replace it with “a new market transformation program within  
Enabling Strategies”.  
E1 said:  
…In Econoler’s 2020 evaluation, it became evident that, with the increased popularity of  
heat pump installations in the residential new construction market, future savings  
adjustments were estimated to be reduced by at least 70% for the New Home Construction  
program component. The cost of delivering the existing program would therefore become  
too expensive to offer within a limited DSM budget.  
[Exhibit E-1, Appendix A, p. 85]  
Figure 6 of the application shows that the wind-up of the NHC program  
would result in a two million dollar decrease from the 2022 investment level to the 2023-  
2025 Settlement Plan. E1 explained that new registrations for the program will end in  
July 2022, and the final year of the completions will be the first year of the Settlement  
Plan. Table 34 of Appendix A shows a spending of less than $1 million in 2023 for the  
NHC program and none thereafter.  
In its discussion of Enabling Strategies, E1 commented on the market  
transformation program which it claims will assist the new residential market:  
With the increased popularity in heat pump adoption, E1 has an opportunity to expand  
influence further into the new construction industry. In an effort to help meet the provincial  
climate goals of net zero by 2050, broadening and taking a more holistic approach is  
required to facilitate change in the new construction market. In 2022, E1 will be re-  
designing a market transformation program and that will be launched in 2023, overlapping  
the wind up of the New Home construction program component.  
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In the 2023-2025 Plan years, E1 will place increased emphasis on activities that help to  
redefine the market for energy efficiency through market transformation and customer  
education. Market transformation is a high-level framework of programs to create market  
change by creating accelerated adoption of energy efficient products, services, and  
practices. These efforts often support increasing the stringency and compliance of building  
codes. In 2023-2025, E1 is transitioning from a traditional resources acquisition approach  
to a market transformation approach for the new residential market. Activities within this  
area of focus may include:  
Conducting baseline studies and market research to determine current market  
state, building code and efficiency literacy levels, and best practices established in  
other jurisdictions;  
Providing training, education, and supporting industry capacity development for  
market actors such as building designers, contractors, builders, and enforcement  
Developing case studies, supporting code awareness and enfor4cement, and  
promotional activities to build awareness and compliance; and  
Leveraging online tools to engage and inform, increase consumer demand for  
energy efficient buildings, and improve access to market actors engaging in high  
efficiency construction standards.  
[Exhibit E-1, Appendix A, pp. 130-131]  
The only intervenor who specifically commented on the proposal to wind up  
the NHC program was the CA. Mr. Love said that he considered it a “mistake” to phase  
out the program completely “particularly for building shell measures,” although he  
supports the Settlement Plan generally. He went on to say:  
…The insulation, windows and doors will remain for many decades and will be much more  
expensive to come back later to upgrade. Contractors building new homes will not be the  
ones paying the electric bill, so may choose to cut costs on the building shell such as  
insulation, windows and doors. Providing incentives can encourage builders to make the  
upgrades at the time of initial construction if at least some of the incremental costs are  
offset. Returning later to make those upgrades would be far more expensive than the  
incremental costs of the upgrades at the time of the new home construction. Having a  
better insulated house also allows for easier adoption of heat pumps and permits  
downsizing of the HVAC equipment. I hope that a future portfolio will see a return to  
supporting further improvements in building shells for new home construction, and that a  
reexamination of avoided costs may help make such an effort worthwhile.  
[Exhibit E-20, p.14]  
In response to Mr. Love’s comments, E1 said in its rebuttal evidence:  
The residential new home construction program component as originally constructed was  
not sustainable at this time and was therefore not included in the Settlement Plan. With the  
removal of heat pump savings, overall savings for this program component dropped by 70-  
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80% and the unit cost increased significantly. The program component was not considered  
an appropriate and affordable program component within a limited DSM investment level.  
The new home construction market is transforming and E1 is required to adapt its offerings  
to support this changing environment. E1 will continue to support this market through  
Enabling Strategies, and by continuing to explore and adapt offerings that meet the energy  
efficiency needs of this market.  
[Exhibit E-29, pp. 18-19]  
The Board observes that the 2021 Econoler Evaluation Report confirms that  
participation levels in the NHC program were lower in 2021 than in 2020 by 8%, leading  
to 3% lower net energy savings and 5% lower peak demand savings. Econoler suggests  
that the NHC program should be a target for market transformation but made no other  
recommendations about the program. The Verification Report indicates that the program  
is one of the top three lifetime net energy savings program components.  
The most recent Econoler Evaluation Report supports E1’s statement that  
there would likely be a continued reduction in the NHC program as currently structured.  
The Board understands that E1 has attempted to balance DSM investment to address  
the greatest needs or spend where most benefits will be derived. While the Board  
observes that the NHC program may no longer be appropriate or affordable, as E1  
suggests, the Board considers that there is some merit to Mr. Love’s views.  
The CA said in his closing submission that he “intends to closely follow  
developments in this sector” and will wait to see what the Enabling Strategies will bring.  
The Board intends to do the same.  
Municipal Electric Utilities  
According to E1’s application, the MEUs in the province are the only  
customers in NS Power’s Municipal rate class. The MEUs participate in the DSMAG.  
Each MEU is considered a participant by E1 “when any customer within their distribution  
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system participates in a program.” E1 confirmed that each year, there has been  
participation in its programs from all MEUs. However, individual customers of each MEU  
are not modelled in DSM plans or programs.  
The Board notes that in the assumptions used by E1 in its Rate and Bill  
Impact Analysis for the proposed plan, E1 does not use the number of accounts for the  
Municipal rate class but instead uses the number of customers. E1 went on to state that  
“NS Power is forecasting that as of 2023 there will be only one Municipal Electric Utility”  
which will make results based thereafter on only one customer.  
In part, IRs from the MEUs to E1 questioned:  
whether E1 would be prepared to allow the MEUs which participate in the  
Wholesale Market to pay their DSM costs directly to E1 rather than to NS  
whether E1 would engage directly with those MEUs regarding spending  
levels and mid-course adjustments; and  
whether E1 would forecast and track individual MEU customers  
participation in DSM programs.  
In each case, while expressing no objection in principle, E1 said that  
approval by the Board might be required, and that it is open to discussion on these and  
other issues of interest to the MEUs.  
The four MEUs which participate in the Wholesale Market filed evidence  
describing how they are different from NS Power’s “bundled service customers.” Since  
they have different factors for avoided costs, they said they need a “separate and unique  
evaluation of E1’s proposed spending in MEU jurisdictions.”  
In addition, the MEUs believe that there are opportunities for participation  
in demand response programs which should be explored, even though the current  
assumption is that there will be no participation from the MEUs.  
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their evidence:  
The Board should direct E1 to consider and provide supplementary  
The Board summarizes the three recommendations made by the MEUs in  
information regarding programs targeted to MEU Wholesale Market  
participants in all future DSM Plans.  
The Board should explicitly give E1 the flexibility to “research, pilot, and  
adjust program delivery targets” for the MEUs within the funding of the  
proposed plan.  
The Board should conclude that the MEU Wholesale Market participants  
may pay their allocated DSM costs directly to E1 “subject to the specific  
allocations, payment requirements, and any further direction” from the NS  
Power general rate application (GRA).  
NS Power said in its rebuttal evidence that the MEUs want to have a  
separate regime for DSM. While not opposing any administrative efficiencies that may  
be permissible, NS Power does not support any changes suggested by the MEUs for the  
2023-2025 Plan for two reasons: the first being that the current legislative scheme of the  
Act only relates to the relationship between NS Power and E1 as the franchise holder;  
and secondly, any such changes would need to be fully considered in a separate  
proceeding before the Board.  
E1 echoed NS Power’s views regarding the statutory regime and the need  
for a proper proceeding to consider the changes sought by the MEUs. In its rebuttal  
evidence, E1 said it is receptive to working with the MEUs where possible.  
The MEUs noted, in their closing submission, their appreciation for E1’s  
apparent willingness to collaborate with them and committed to working with E1 regarding  
the first two of the MEU recommendations. The MEUs accepted that the third  
recommendation is not within the scope of this application and intend to raise it during the  
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