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ORDER NO. PSC -2018 -0085 -PAA -EQ <br />DOCKET NO. 20170226 -EQ <br />PAGE 36 <br />r r. I"Ll'A w a n os a.n.nt a.i�ivtr vtv r <br />(Continued from Sheet No. 10.308) <br />CALCULATION OF FIXED VALUE OF DEFERRAL PAYMENTS - EARLY CAPACITY-OMON B <br />ansa lea. AV-3uv <br />Normally, payments for firm capacity shall not cornmence until the inservice date of t e Company's Avoided Unit(s). At the option of the QS, hrnvever <br />the Company may begin ma{.ing payments for early capacity Consisting of the capital coat component of the value of a ye—w by -year defend of the <br />Company's Avoided Unit starting as etdy as the in-service slate of the QS facility, When such inyments for early capacity are elected, the avoided calrihal <br />cost component of capacity payments shall be paid monthly comm=4 no earlier than the Capacity Delivery Date of the QS, and shall In calculated ae <br />fo tow&: <br />Where: <br />(I + ip )tm 'I (I+ io f -!) <br />AM=Ar +Ae for in= ]rot <br />Il 12 <br />Where: <br />Am = monthly payment to be made to the QS for each month of the contract year n, <br />in dollars per kilewatt per month in which QS delivers capacity pursuant to <br />die early capacity olaim; <br />it = annual escalation rate associated with the plant cost of the Company's <br />Avoided Unit(sX <br />i, = annual escalation we associated with the operation and maintenance exlensv <br />of the Company+s Avoided Unit(sk <br />in - yen for which the fixed value of dcfiard payments under the early capacity <br />option are made to a QS, &tatting in year one and ending in the year t. <br />t = the tam, in yeses, oftlrc Standard Ofler Contract; <br />A, = F /(l-RYO -R')I <br />F = the cumulative present value, in the year that laic contractual payment will begin, of the avoided <br />capital cost component of capacity payments which would have been made had capacity <br />payment commenced with the anticipated in -sanies date of the Company's Avoided Unit(s7 <br />R = (1+ip)/(1+r) <br />r annual discount t rate, defined n the Compariy s incremental alter -tax ct: t of ca)ntnl; and <br />Ab = G ! (1- R)/(1 - R ')I <br />Where: <br />G = The cumulative presetd value, in the year that (lie contractual payment will begin, of ale avoided <br />faxed operation and maintenance expense component of capacity payvnems nVeli would have been <br />made bad capacity payment commenced with the anticipated unser ice date of One Company's <br />Avoided Uml(s). <br />R - (I+io)I(]+r) <br />Tike currently approved parameters applicable to the fommlas above are farad in Appendix It. <br />(Continued on Sheet No. 10.310) <br />Issued by: S. F Romig, Director, Rates and Tariffs <br />Effective: May 22, 2007 <br />I ?� <br />