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ORDER NO. PSC-2018-0028-FOF-EI
<br />DOCKET NO. 20180001 -El
<br />PAGE 12
<br />avoided capital that would be required for the Greenfield 3x1 Combined Cycle Unit. For the
<br />reasons discussed above, we find that FPL's CPVRR assumptions are reasonable.
<br />FIPUG questions the validity of CO2 emission cost forecasts. However, FPL performed
<br />CO2 emission and natural gas price sensitivities analyses, including zero carbon tax scenarios, to
<br />support its petition. Results of such sensitivity analyses show that the 2017 and 2018 solar
<br />projects are cost-effective in seven out of nine fuel and CO2 sensitivity scenarios, including
<br />scenarios that assume zero CO2 cost. The CPVRR and construction cost analyses were
<br />performed in a consistent manner and no party presented substantial evidence disputing either
<br />the input assumptions or the analyses.
<br />Based on the evidence contained in the record, we find that FPL's proposed 2017 and
<br />2018 solar projects are projected to produce savings under multiple scenarios. FPL has also met
<br />the terms of 2016 Agreement in regards to keeping construction cost under the $1,750 per kW,,,
<br />cost cap. Therefore, we find that the terms and conditions of the 2016 Agreement have been met
<br />and that the 2017 and 2018 solar projects are cost effective.
<br />E. 2017 SoBRA Revenue Requirement
<br />Witness Fuentes testified that the annualized jurisdictional revenue requirement for the
<br />first 12 months of operations related to the 2017 SoBRA projects is $60,523,000. Witness
<br />Fuentes further stated that the $60,523,000 revenue requirement was calculated by following the
<br />methodologies approved by the Commission for FPL's generation base rate adjustments (GBRA)
<br />for Turkey Point Unit 5 and West County Energy Center Units 1 and 2 in Order No. PSC -05-
<br />0902 -S -EI,$ West County Energy Center Unit 3 in Order No. PSC-11-0089-S-EI,9 and the
<br />modernization projects at Canaveral, Riviera Beach, and Port Everglades in Order No. PSC-13-
<br />0023-S-EI.10 Witness Fuentes also testified that the same methodology was used with the
<br />recently approved 2019 Okeechobee, Limited Scope Adjustment (Okeechobee LSA). The
<br />jurisdictional annualized revenue requirement calculation for the 2017 SoBRA projects used
<br />several inputs, including the most current estimated capital expenditures presented by FPL
<br />witness Brannen.
<br />FIPUG did not sponsor a witness to address this issue, and waived cross-examination of
<br />FPL witness Fuentes. In its brief, FIPUG only presented arguments about FPL's reserve margin,
<br />the overall cost effectiveness of the 2017 SoBRA projects, and the appropriate cost recovery
<br />mechanism for these projects, but did not specifically address this issue.
<br />Having reviewed the testimony, exhibits, and calculations used by FPL witness Fuentes
<br />for determining the amount of revenue requirement associated with the 2017 SoBRA projects,
<br />we find them to be reasonable and set the jurisdictional annualized revenue requirements
<br />associated with the 2017 SoBRA projects at $60,523,000.
<br />$Order No. PSC -05 -0902 -S -EI, issued September 14, 2005, in Docket No. 20050045 -EI, In re: Petition for rate
<br />increase by Florida Power & Light Company, and in Docket No. 20050188 -EI, In re: 2005 comprehensive
<br />depreciation study by Florida Power & Light Company.
<br />90rder No. PSC- 11 -0089 -S -EI, issued February 1, 2011, in Docket No. 20080677 -EI, In re: Petition for increase in
<br />rates by Florida Power & Light Company, and in Docket No. 20090130-E1, In re: 2009 depreciation and
<br />dismantlement study by Florida Power & Light Company.
<br />100rder No. PSC -13 -0023 -S -EI, issued January 14, 2013, in Docket No. 20120015 -EI, In re: Petition for increase in
<br />rates by Florida Power & Light Company.
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