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ORDER NO. PSC -2017 -0278 -PAA -EQ • DOCKET NO. 20170077 -EQ PAGE DECISION Rule 25-17.250, F.A.C., requires that FPL, an IOU, continuously make available a standard offer contract for the purchase of firm capacity and energy from renewable generating facilities (RF) and small qualifying facilities (QF) with a design capacity of 100 kilowatt (kW) or less. Pursuant to Rule 25-17.250(1) and (3), F.A.C., the standard offer contract must provide a term of at least 10 years, and the payment terms must be based on the utility's next avoidable fossil -fueled generating unit identified in its most recent Ten -Year Site Plan or, if no avoided unit is identified, its next avoidable planned purchase. FPL has identified a 1,163 megawatt (MW) natural gas-fired combined cycle (CC) as its next fossil -fueled generating unit in its 2017 Ten -Year Site Plan. The projected in-service date of this unit is June 1, 2022. FPL's revised renewable energy tariff and standard offer contract, in type -and -strike format, are included as Attachment A to this Order. Revisions include updates to the avoided unit, dates, and payment information which reflect the current economic and financial assumptions for the avoided unit costs. A RF/QF operator may elect to make no commitment as to the quantity or timing of its deliveries to FPL, and to have a committed capacity of zero (0) MW. Under such a scenario, the energy is delivered on an as -available basis and the operator receives only an energy payment. Alternatively, the RF/QF operator may elect to commit to certain minimum performance • requirements based on the identified avoided unit, such as being operational and delivering an agreed upon amount of capacity by the in-service date of the avoided unit, and thereby becomes eligible for capacity payments in addition to payments received for energy. The standard offer contract may also serve as a starting point for negotiation of contract terms by providing payment information to the RF/QF operator, in a situation where one or both parties desire particular contract terms other than those established in the standard offer. In order to promote renewable generation, we require the IOUs, such as FPL, to offer multiple options for capacity payments, including the options to receive early or levelized payments. If the RF/QF operator elects to receive capacity payments under the normal or levelized contract options, it would receive as -available energy payments only until the in- service date of the avoided unit (in this case June 1, 2022), and, thereafter, would begin to receive capacity payments in addition to the energy payments. If either the early or early levelized option is selected, then the RF/QF operator would begin to receive capacity payments earlier than the in-service date of the avoided unit. Payments made under the early capacity payment options, however, tend to be lower in the later years of the contract term because the net present value (NPV) of the total payments must remain equal for all contract payment options. The Table below estimates the annual payments for each payment option available under FPL's revised standard offer contract to a RF/QF operator with a 50 MW facility and an in- service date of June 1, 2022, and operating at a 94 percent capacity factor, which is the minimum capacity factor required under the contract to qualify for full capacity payments. Normal and levelized capacity payments begin in 2022, reflecting the projected in-service date of the avoided natural gas-fired CC unit (June 1, 2022). r� U