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Docket No. 170077 -EQ <br />Date: June 29, 2017 <br />POWER & LIGHT COMPANY Original Sheet Na 10.3071 <br />APPENDIX 1 <br />TO RATE scREDULE QS -2 <br />CALCUUTION OF VALVE OF DEFERRAL PAYMENTS <br />APPLICABILITY <br />Appendix 1 provides a detailed description of the medwdalogy used by the Company to calculate the monthly values of dekning of avoiding the <br />Company's Avoided Unit identified in Schedule QS -2. VA= used in cor*cfKm with the intron FPS4appeoved 0051 pammdws associated with circ <br />Company's Avoided Unit contained in Appendix U. a QS may determine the applicable value of deferral capacity payment rate associated with the <br />timing and operation of its particular faality should the QS enter into Standard Offer Contact with the Company. <br />CALCUTAI.10N ON VALUE OF DEKPJIAL 0PT10N A <br />FPSC Ruh: 25-17,0832(5) specifics that avoided capacity casts, in dollars per blowan per month, associated. with capacity sold to a utility by a QS <br />pursuant to the Company'sSrandardOfferContraashallbedefinedasthe year-byyearvalue, ofdefermlcrow Compen3esAvoided Unit. Theyar-by- <br />yoar value of deferral shell be the diffa+enoc in revenue requirzmets associated with deferring the Cmnpatys Avoided Unit one year, and shell be <br />calculated m follows: <br />Attachment A <br />Page 30 of 42 <br />Where, for a one year defemah. <br />VAC. - <br />ulilityambnthlyvahrc6favaidedcepa6lyand6&M, <br />in dotlem per Wawa per moth, for each month of <br />year a; <br />K = <br />present value of carry!" charges for one dollar of <br />investment e'er L years with carrying eberges <br />computed using average annual two base and assumed <br />to be paid at the middle of each year and present valued <br />to the middle of the fins year. <br />R <br />(I�ip)/(1-r)5- <br />to = <br />total direct and indirect cost. in mid -year dollars per . <br />idlowatt including AFUDC but eating CWIP, of the <br />Company's Avoided Unit with an in-service date of year <br />rk including all identifiable and quantifiable costs <br />relating to the construction of the Company's Avoided <br />Unit %finch would have been paid had the flail bora <br />ansmraea; <br />O <br />total fixed operation and maintenance expense for the <br />year n, in mid -year dollars per blowan per year of the <br />Company's Awided Unit <br />b <br />annual escalation rase associated with da plant oast of <br />the Company's Avoided Unit(ak <br />ie <br />annual escalation rase associated with the operation mrd maintenance expensed the Company's <br />Avoided Unit(sk <br />r — <br />annual discount rate, defined as the utility's incremental after -rex cost efeapital; <br />L <br />expecledlife oftheCompany's AvaidedUnit(s);and <br />n <br />year for which the ComparVs Avoided Wit(s) is (am) dermad starting with its (their) original <br />anticipated b -service dat (s) and coding with the temdtwdm of the Company's Standard Offer <br />Contract <br />(Continued on Shod No. 10.309) <br />Ilsslfed by. & E. Romig, Director, Rates and Tariff's <br />Effective: May 22, 2007 <br />-35- <br />