Financing Orders and Securitized Bonds Regulations

“ancillary agreement” means an insurance policy, letter of credit, reserve account, surety bond, interest rate lock or swap arrangement, hedging arrangement, liquidity or credit support arrangement or other financial arrangement entered into in connection with securitized bonds for the benefit of bondholders;

“approved financing costs” means the financing costs approved under a financing order by the Energy Board;

“assignee” means a person to which the electric utility assigns, sells, or transfers, other than as security, all or a portion of its interest in or right to securitized property, and includes a corporation, other body corporate, limited liability company, general or limited partnership, public authority, trust and financing entity to which an assignee assigns, sells or transfers, other than as security, its interest in or right to securitized property;

“bondholder” means a person who holds a securitized bond;

“electrical services” includes transmission, distribution or other services provided by an electrical supplier;

“electric utility” means Nova Scotia Power Incorporated and its successors;

“financing costs” means all of the following:

(i) interest and acquisition, defeasances or redemption premiums payable on securitized bonds,

(ii) payments required under an ancillary agreement and amounts required to fund or replenish a reserve account or other accounts established under the terms of any indenture, ancillary agreement or other financing document pertaining to securitized bonds,

(iii) all of the following fees and costs related to issuing, supporting, repaying or refunding securitized bonds or servicing securitized property:

(A) servicing fees, accounting and auditing fees, trustee fees, consulting fees, structuring adviser fees, financial advisor fees, legal fees, administrative fees, placement and underwriting fees, independent director and manager fees, rating agency fees, stock exchange listing and compliance fees, security registration fees and filing fees,

(B) capitalized interest and information technology programming costs,

(C) costs necessary to otherwise ensure the timely payment of securitized bonds or amounts or charges payable in connection with the securitized bonds, including costs related to obtaining a financing order,

(iv) taxes and licence fees or other fees imposed on the revenues generated from the collection of securitized surcharges or otherwise resulting from the collection of securitized surcharges, whether paid, payable or accrued,

(v) provincial or local taxes, franchise taxes, gross receipts and other taxes or similar charges, including Energy Board assessment fees, whether paid, payable or accrued,

(vi) costs associated with the performance of the Energy Board’s responsibilities under these regulations in connection with any of the following:

(A) approving, approving subject to conditions or rejecting an application for a financing order,

(B) retaining counsel, 1 or more financial advisors or other consultants, as considered appropriate by the Energy Board and paid in accordance with these regulations;

“financing order” means an order issued by the Energy Board that authorizes any or all of the following:

(i) issuing securitized bonds,

(ii) imposing, collection and periodic adjustment of a securitized surcharge,

(iii) creation of securitized property,

(iv) sale, assignment or transfer of securitized property to an assignee;

“financing party” means bondholders and trustees, collateral agents, any party under an ancillary agreement or any other person acting for the benefit of bondholders;

“formula-based true-up mechanism” means a reconciliation or true-up process that is used to identify over-collection or under-collection of the securitized surcharge;

“non-bypassable”, in relation to an amount authorized by the Energy Board to repay, finance or refinance approved securitized costs and approved financing costs, means not avoidable by any existing or future customer;

“pledgee” means a financing party to which the electric utility or an assignee mortgages, negotiates, pledges or creates a security interest or lien on all or any portion of its interest in, or right to, securitized property;

“Personal Property Security Act” means the Personal Property Security Act and its regulations;

“regulatory asset” means expenses that are authorized by the Energy Board to be capitalized for consideration of recovery in future rates, tolls and charges that would otherwise be treated as an expense in a current accounting period;

“retired generation costs” means pretax costs with respect to retired or abandoned electricity generating facilities including, but not limited to, any of the following, and reduced by insurance, scrap and salvage proceeds, applicable unamortized regulatory liabilities for excess deferred income taxes and the present value of return on all accumulated deferred income taxes related to pretax costs with respect to a retired or abandoned facility and related facilities, including those due to bonus and accelerated tax depreciation and abandonment losses:

(i) the undepreciated investment in the retired or abandoned electricity generating facility and in any facilities ancillary to it or used in conjunction with it,

(ii) costs of decommissioning and restoring the site of the electricity generating facility,

(iii) other applicable capital and operating costs,

(iv) accrued carrying charges, including capitalized financing costs;

“securitized bonds” means bonds, debentures, notes, certificates of participation, certificates of beneficial interest, certificates of ownership, or other evidences of indebtedness or ownership that have a maturity date that is determined as reasonable by the Energy Board, but not later than 30 years from the issue date, that are issued by the electric utility or an assignee under a financing order, the proceeds of which are used directly or indirectly to recover, finance or refinance approved securitized costs and approved financing costs and that are secured by or payable from securitized property;

“securitized costs” means retired generation costs, unretired generation costs, unrecovered fuel costs, unrecovered regulatory assets and the costs of the electric utility to retain counsel, 1 or more financial advisors or other consultants as the electric utility considers appropriate, but does not include ongoing electric utility investments or operating costs;

“securitized property” is property created, or that will be created, in favour of the electric utility or an assignee by a financing order and used to pay or secure securitized bonds and approved financing costs, and includes all of the following:

(i) all rights and interests of the electric utility or an assignee under a financing order, including the right to impose, bill, charge, collect and receive securitized surcharges authorized under the financing order and to obtain periodic adjustments to those charges authorized under these regulations and as provided in the financing order,

(ii) all revenues, collections, claims, rights to payments, payments, moneys, proceeds or rights of any other kind arising from the rights and interests specified in the financing order, regardless of whether those revenues, collections, claims, rights to payment, payments, moneys or proceeds are imposed, billed, received, collected or maintained together with or commingled with other revenues, collections, rights to payment, payments, moneys or proceeds;

“securitized surcharge” means an amount authorized by the Energy Board to repay, finance or refinance approved securitized costs and approved financing costs that are, except as otherwise provided for in these regulations,

(i) non-bypassable and imposed on all customers as part of their bills,

(ii) collected, in full and separate from the electric utility’s rates, tolls, charges or other mechanisms by the electric utility or by its collection agents,

(iii) paid by all existing or future customers while receiving electrical services from the electric utility under Energy Board-approved schedules of rates, tolls or charges, which payment obligation continues to apply to a customer in relation to their remaining electrical service received from the electric utility even if they subsequently elect to purchase electricity from an alternative electrical supplier;

“unrecovered fuel costs” means the under-collected amounts for the total cost of fuel and purchased power incurred by the electric utility that has accumulated as a balance owing by customers to the electric utility and pre-paid costs of fuel and purchased power to be incurred by the electric utility;

“unrecovered regulatory assets” means regulatory assets of the electric utility that have not yet been recovered through rates, tolls or charges;

“unretired generation costs” means pretax costs with respect to unretired used and useful electricity generating facilities and includes, but is not limited to, all of the following:

(i) the undepreciated investment in the unretired used and useful electricity generating facility and in any facilities ancillary to it or used in conjunction with it,

(ii) other applicable capital and operating costs,

(iii) accrued carrying charges, including capitalized financing costs.

(2) Terms used in these regulations and defined in the Personal Property Security Act have the meanings given to those terms in the Personal Property Security Act.

Application for financing order

3 (1) The electric utility may, in its sole discretion, apply to the Energy Board for a financing order.

(2) Subject to the issuance of a subsequent financing order under Section 8, the electric utility is only entitled to 1 financing order outstanding at any time.

(3) An application for a financing order must include all of the following:

(a) a description of the costs the electric utility is seeking to securitize and the reasons for undertaking the activities;

(b) the dollar amount of the costs, broken out by category, that form the basis of the securitized costs;

(d) an estimate of the securitized surcharges necessary to recover the securitized costs and financing costs and the period for recovery of the costs, including a proposal as to how securitized surcharges will be allocated among customer classes;

(e) a comparison between the net present value of the costs to ratepayers that are estimated to result from the issuance of securitized bonds and the cost that would result from an alternative means of providing for the full recovery of and return on those securitized costs from customers, using the electric utility’s current or expected weighted average cost of capital, demonstrating that the issuance of securitized bonds and the imposition of securitized surcharges are expected to provide quantifiable net present value benefits to customers;

(f) a proposed formula-based true-up mechanism for making all of the following adjustments:

(i) at least annually, expeditious periodic adjustments in the securitized surcharges that customers are required to pay under the financing order,

(ii) any adjustments necessary to correct for an over-collection or under-collection of the securitized surcharges and to ensure the timely payment of securitized bonds and approved financing costs and other required amounts payable under the securitized bonds, or to address an over-collection of the securitized surcharges remaining after all securitized costs and financing costs have been repaid,

(iii) any future reconciliations to account for any of the following:

(A) differences between estimated financing costs financed by securitized bonds and the final financing costs incurred by the electric utility or an assignee,

(B) securitized surcharges that have been collected before the electric utility abandoned the issuance of securitized bonds after the issuance of a financing order,

(C) securitized surcharges that have been collected following the issuance of the financing order but before the issuance of the securitized bonds;

(g) a statement regarding the degree of flexibility that is to be afforded to the electric utility in establishing the terms and conditions of the securitized bonds, including but not limited to repayment schedules, expected interest rates and other financing costs, including flexibility in consideration of any future changes in market conditions;

(h) a proposed method of allocating funds collected as securitized surcharges or other proceeds of securitized property compared to other amounts billed to a customer.

Application for financing order proceedings

4 (1) Proceedings on an application for a financing order begin with the filing of an application by the electric utility and must be disposed of in accordance with this Section and the Energy Board’s rules and administrative regulations, except as follows:

(a) the Energy Board must establish a procedural schedule requiring all of the following to be done not later than 60 days after an application is filed that substantively complies with the requirements of subsection 3(3):

(i) a decision approving the application, approving the application subject to conditions or denying the application is issued,

(ii) if the application is approved, approving the implementation of the securitized surcharge by the electric utility as of the date specified in the application, which approval may be granted on an interim basis with respect to the proposed manner of allocating securitized surcharges between customer classes, pending final approval by the Energy Board of the allocation,

(iii) a financing order is issued if the application is approved and any conditions imposed have been met;

(b) the Energy Board may approve the application, with or without conditions, if the Energy Board finds that all of following conditions are met:

(i) the application is in the best interests of the electric utility’s customers,

(ii) the resulting estimated securitized surcharge and other rates are just and reasonable.

(2) The Energy Board has no authority to direct how the electric utility places the securitized bonds to market.

(3) If the electric utility’s application for a financing order is denied or withdrawn, or for any reason securitized bonds are not issued, any costs of retaining financial advisors, consultants and counsel on behalf of the Energy Board must be

(a) paid by the electric utility;

(b) recorded on the books of the electric utility using appropriate deferral accounting as a regulatory asset; and

Conditions on securitized property

5 A financing order must include all of the following:

(a) the amount and a breakdown by category of securitized costs to be financed using securitized bonds and a finding that recovery of those costs is just and reasonable and in the best interests of the electric utility’s customers;

(b) a description and estimate of the amount and categories of financing costs that may be recovered through securitized surcharges and the period over which the approved securitized costs and approved financing costs may be recovered;

(c) a finding that the proposed issuance of securitized bonds and the imposition and collection of a securitized surcharge are just and reasonable, in the best interests of the electric utility’s customers and expected to provide quantifiable net present value benefits to customers as compared to recovery of the components of securitized costs that would have been incurred absent the issuance of securitized bonds;

(d) a requirement that, for so long as the securitized bonds are outstanding and until all approved financing costs have been paid in full, the imposition and collection of securitized surcharges authorized under the financing order are non-bypassable and paid by all existing and future customers while receiving electrical service from the electric utility under Energy Board-approved schedules of rates, tolls or charges, which payment obligation continues to apply to a customer in relation to their remaining electrical service received from the electric utility even if they subsequently elect to purchase electricity from an alternative electrical supplier;

(e) a formula-based true-up mechanism for making all of the following adjustments in the securitized surcharges:

(i) at least annually, expeditious periodic adjustments in the securitized surcharges that customers are required to pay under the financing order,

(ii) adjustments that are necessary to correct for over-collection or under-collection of the securitized surcharges and to ensure the timely payment of securitized bonds and approved financing costs and other required amounts payable under the securitized bonds, or to address over-collection of the securitized surcharges remaining after all securitized costs and financing costs have been repaid,

(iii) any future reconciliations to account for

(A) differences between estimated financing costs financed by securitized bonds and the final financing costs incurred by the electric utility or an assignee,

(B) securitized surcharges that have been collected before the electric utility abandoned the issuance of securitized bonds after the issuance of the financing order,

(C) securitized surcharges that have been collected following the issuance of the financing order and before the issuance of the securitized bonds;

(f) a statement regarding the degree of flexibility that is to be afforded to the electric utility in establishing the terms and conditions of the securitized bonds, including but not limited to repayment schedules, expected interest rates and other financing costs, including flexibility in consideration of any future changes in market conditions;

(g) a requirement as to how securitized surcharges will be allocated among customer classes;

(h) a requirement that, after the final terms of a proposed issuance of securitized bonds has been established but before the issuance of the securitized bonds, the electric utility must determine the initial securitized surcharge in the manner required by and consistent with the financing order, which initial securitized surcharge is, subject to receiving final approval from the Energy Board of the allocation of securitized surcharges between customer classes if an interim approval for allocation was granted, final and effective upon the issuance of the securitized bonds, with the securitized surcharge to be reflected on a schedule of rates, tolls or charges bearing the securitized surcharge and its calculation;

(i) a method of allocating funds collected as securitized surcharges or other proceeds of securitized property compared to other amounts billed to a customer and authorization to change the method of allocating funds from time to time in accordance with the financing documents;

(j) if the Energy Board granted an interim approval of the allocation of securitized surcharges between customer classes, the ability for the Energy Board to provide a final approval setting forth a different allocation that must be implemented by the electric utility in respect of securitized surcharges in accordance with the terms of the final approval;

(k) any additional conditions not otherwise inconsistent with this Section that the Energy Board determines are appropriate.

Annual update to securitized charges by electrical utility

6 (1) The electric utility must file an annual update to its securitized surcharge, based on estimates of consumption for each rate base and other mathematical factors, including application of the formula-based true-up mechanism, to collect the appropriate amount of approved securitized costs and approved financing costs.

(2) A review by the Energy Board of an annual securitized surcharge update under this Section is limited to the following:

(a) determining whether there are any mathematical or clerical errors in the application of the formula-based true-up mechanism in relation to any over-collection or under-collection of a securitized surcharge;

(b) the amount of an adjustment.

(3) An adjustment must ensure for the recovery of the following only:

(a) revenues sufficient to provide for the payment of principal of the securitized bonds and interest and acquisition, defeasances or redemption premiums payable on the securitized bonds and other approved financing costs;

(b) over-collection of the securitized surcharges remaining after all securitized costs and financing costs have been repaid;

(4) No later than 30 days after receiving the electric utility’s annual securitized surcharge update under this Section, the Energy Board must do 1 of the following:

(a) inform the electric utility that the Energy Board’s review is complete;

(b) inform the electric utility of any mathematical or clerical errors in the electric utility’s calculation, including with respect to the amount of an adjustment.

(5) The electric utility must correct any errors that it is informed of under subsection (4) and refile its annual securitized surcharge update.

(6) The time frames required by subsection (4) also apply to a refiled update under subsection (5).

Financing order irrevocable

7 (1) A financing order is irrevocable at the earlier of the following times:

(a) the time of any transfer of securitized property to an assignee;

(b) the time of the issuance of securitized bonds authorized by the transfer.

(2) Once a financing order is irrevocable, other than changes made using a formula-based true-up mechanism in accordance with these regulations, the Energy Board may not do any of the following:

(a) amend, modify or terminate the financing order by any subsequent action;

(b) reduce, impair, postpone, terminate or otherwise adjust securitized surcharges approved in the financing order.

(3) After a financing order is issued, the electric utility retains sole discretion regarding whether to do any of the following:

(a) assign, sell or otherwise transfer securitized property to an assignee;

(b) cause securitized bonds to be issued, including the right to defer or postpone the assignment, sale, transfer or issuance of securitized bonds.

(4) After the issuance of a financing order, the electric utility retains sole discretion regarding the issuance of the securitized bonds, including the right to defer or postpone the sale, assignment, transfer or issuance of the bonds and nothing s prohibits the electric utility from abandoning the issuance of securitized bonds under the financing order by filing a statement of abandonment with the Energy Board together with the reasons for the abandonment.

(5) Any changes to the terms and conditions for the securitized bonds must be in conformance with the financing order.

Subsequent financing order for refinancing, retiring or refunding securitized bonds

8 At the request of the electric utility, the Energy Board may open a proceeding and issue a subsequent financing order that provides for refinancing, retiring or refunding securitized bonds issued under the original financing order if the Energy Board finds that the subsequent financing order satisfies all the criteria specified for a financing order in these regulations.

Financing order in effect

9 A financing order remains in effect and securitized property under the financing order continues to exist until all of the following conditions are met:

(a) securitized bonds issued under the financing order have been paid in full or defeased;

(b) the approved financing costs of each securitized bond and any other fees, costs and charges with respect to each securitized bond approved under the financing order have been paid in full.

No obligation to apply for financing order

10 (1) The electric utility is not required to apply for a financing order.

(2) If not applying for or under a financing order, the electrical utility is not otherwise required to apply any provision of these regulations.

(3) The electric utility’s decision not to apply for a financing order, including any associated investment decision by the electric utility, is not admissible and may not be used or relied on by the Energy Board in any Energy Board proceeding respecting the electric utility’s rates, tolls or charges or its accounting.

Energy Board not authorized

11 The Energy Board may not directly, or indirectly, do any of the following:

(a) order or require the electric utility to use securitized bonds to recover costs for a regulatory asset;

(b) consider the regulatory assets that are approved securitized costs and the debt reflected by the securitized bonds in establishing the electric utility’s capital structure used to determine any regulatory matter, including the electric utility’s revenue requirement used to set its rates, tolls or charges.

Securitized property to assignee

12 (1) Any portion of securitized property may be transferred, sold, conveyed or assigned by the electric utility to an assignee that is wholly-owned, directly or indirectly, by the electric utility and created for the limited purpose of acquiring, owning or administering securitized property or issuing securitized bonds under a financing order.

(2) Any portion of securitized property may be pledged to secure any of the following:

(a) securitized bonds issued under a financing order;

(b) amounts payable to financing parties and to counterparties under any ancillary agreements;

(3) To the extent previously authorized in a financing order, a transfer, sale, conveyance, assignment, grant of a security interest in or pledge of securitized property by the electric utility or an affiliate of the electric utility to an assignee or other transferee, purchaser, acquirer or pledgee in securitized property does not require the prior consent or approval of the Energy Board.

Court order for sequestration and payment of revenues from securitized property

13 If the electric utility defaults on any required remittance of securitized surcharges arising from securitized property, a court, upon application by an interested party and without limiting any other remedies available to the applying party, may order the sequestration and payment of the revenues arising from the securitized property to the assignee or other transferee, purchaser, acquirer or pledgee in securitized property.

Interests not subject to setoff, counterclaim, surcharge or defence

14 The interest of an assignee or other transferee, purchaser, acquirer or pledgee in securitized property, and in the revenue and collections arising from that property, are not subject to setoff, counterclaim, surcharge or defence by the electric utility or any other person, regardless of the circumstances.

Securitized bonds nonrecourse to credit or assets of electric utility

15 The terms of any securitized bonds issued under a financing order must provide that the bonds are nonrecourse to the credit or any assets of the electric utility other than the following:

(a) the securitized property;

(b) any rights under an ancillary agreement;

Sale, assignment or transfer of securitized property

16 A sale, assignment or other transfer of an interest in securitized property is permitted only when all the following actions have occurred:

(a) the financing order creating the securitized property has become effective;

(b) the documents evidencing the transfer of securitized property have been executed by the assignor and delivered to the assignee;

Absolute transfer

17 (1) If the documents governing a sale, assignment or other transfer of securitized property expressly state that the transaction is a sale or other absolute transfer, the transaction is an absolute transfer of, and not a pledge of or secured transaction relating to, the electric utility’s right, title and interest in, to and under the securitized property.

(2) The characterization of a sale, assignment or other transfer as an absolute transfer and the corresponding characterization of the property interest of the purchaser is not affected or impaired by the occurrence of any of the following:

(a) commingling of securitized surcharges with other amounts;

(b) the electric utility retaining any of the following:

(i) a partial or residual interest, including an equity interest, in the securitized property, whether direct or indirect or whether subordinate or otherwise,

(ii) the right to recover costs associated with taxes, franchise fees or licence fees imposed on the collection of securitized surcharges;

(d) any indemnification rights, obligations or repurchase rights made or provided by the electric utility;

(e) the electric utility’s obligation to collect securitized surcharges on behalf of an assignee;

(f) the transferor acting as the servicer of the securitized surcharges, or the existence of any contract that authorizes or requires the electric utility, to the extent that any interest in securitized property is sold or assigned, to contract with the assignee or any financing party that it will do the following:

(i) continue to operate its system to provide service to its customers,

(ii) collect amounts in respect of the securitized surcharges for the benefit and account of the assignee or financing party, and

(iii) account for and remit required amounts to, or for the account of, the assignee or financing party;

(g) the treatment of the sale, conveyance, assignment or other transfer for tax, financial reporting or other purposes;

(h) the electric utility or its affiliates granting or providing to bondholders a preferred right to the securitized property or a credit enhancement with respect to the securitized bonds;

(i) any application of the formula-based true-up mechanism under these regulations.

Assignee or financing party not electric utility or provider of electric service

18 By virtue of engaging in the transactions described in these regulations, an assignee or financing party is not deemed to be the electric utility or person providing electrical services.

Conflicts and paramountcy

19 (1) These regulations supplement, and are not intended to conflict with, the Personal Property Security Act and other applicable laws.

(2) To the extent that a provision of these regulations addresses a matter not addressed by other applicable law, the provision of these regulations apply [applies].

(3) To the extent that a provision of these regulations is inconsistent with the Personal Property Security Act or other applicable law, the Personal Property Security Act or other applicable law prevails.

Actions in accordance with regulations remain valid

20 If any provision of these regulations is held invalid or is invalidated, superseded, replaced, repealed, or expires for any reason,

(a) the occurrence does not affect the validity of any action authorized under these regulations that is taken by the electric utility, an assignee, a financing party, a collection agent or a party to an ancillary agreement; and

(b) all actions remain in full force and effect with respect to all securitized bonds issued before the date that the provision is held invalid or is invalidated, superseded, replaced, repealed or expires for any reason.

Binding and final order of Energy Board

21 A determination of the Energy Board made in connection with a financing order and any financing order of the Energy Board issued under these regulations is a binding and final order of the Energy Board.

Limitation on actions affecting value of securitized bonds

22 The Energy Board may not

(a) take or permit any action that impairs or would impair the value of securitized property or the security for the securitized bonds or revises the approved securitized costs for which recovery is authorized;

(b) impair the rights and remedies of bondholders, any other financing parties or an assignee;

(c) other than changes authorized by these regulations that are made under the formula-based true-up mechanism or in accordance with a subsequent financing order issued under Section 8, reduce, alter or impair securitized surcharges that are to be imposed, billed, charged, collected and remitted for the benefit of bondholders, any other financing parties or an assignee until any and all principal on the securitized bonds, all approved financing costs, any other fees, costs and charges with respect to securitized bonds and any amounts payable under ancillary agreements have been paid and performed in full, unless full compensation is made by law for the full protection of the securitized surcharges collected under a financing order and of the bondholders, an assignee or a financing party entering into a contract with the electric utility.

Contracts of indemnity or guarantee

23 For greater certainty, the Province may enter into contracts of indemnity or guarantee in relation to any aspect of a financing order.

Language used in securitized bonds and related documents

24 A person or entity that issues securitized bonds may include the language specified in Sections 18 to 23 in the securitized bonds and related documentation.

N.S. Regulation	In force date*	How in force	Royal Gazette Part II Issue
250/2026	Oct 8, 2026	date specified	Oct 30, 2026

N.S. Regulation	In force date*	How in force	Royal Gazette Part II Issue

ad. = added am. = amended	fc. = fee change ra. = reassigned		rep. = repealed rs. = repealed and substituted
Provision affected		How affected
..........................................................

N.S. Regulation	Title	In force date	Repealed date

Financing Orders and Securitized Bonds Regulations	N.S. Reg. 250/2026
Public Utilities Act
Note: The information in these tables does not form part of the regulations and is compiled by the Office of the Registrar of Regulations for reference only.

	Note	Effective date
1	Original text does not include any other subsections in Section 5. Subsection 5(1) redesignated as Section 5 for the purposes of this consolidation.