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ORDER NO. PSC -2018 -0105 -PCO -EI DOCKET NO. 20180001 -EI PAGE 3 correction is limited to only the impact of the SJRPP Transaction. The accounting treatment approved in the SJRPP Order authorizes FPL to recover fuel -related costs associated with the SJRPP Transaction through the fuel cost recovery (FCR) clause. The SJRPP Transaction closed and the plant was retired on January 5, 2018. As a result, purchased power payments and coal inventory balances will reflect decreases. FPL states in its mid -course correction filing that "these decreases are partially offset by an increase in natural gas consumption." (FPL Petition, page 4, paragraph 9) The accounting changes result in a total variance from the original 2018 projection filing of $22,933,601, or 0.799 percent. If FPL's Petition is granted, this amount would be recovered through reduced fuel and capacity cost recovery factors for March—December 2018. The March - December 2018 FCR factor decreased from 2.630 cents per kWh to 2.606 cents per kWh, and results in a reduction of $0.24 for a residential customer using 1,000 kWh of electricity. The revised fuel cost recovery factors are reflected on Attachment A. Midcourse Adjustment for Capacity Cost Recovery (CCR) Factors Pursuant to the SJRPP Order, the SJRPP Transaction settlement authorized FPL to recover certain costs associated with the SJRPP shutdown through the Capacity Cost Recovery (CCR) clause. As stated in the SJRPP Order, FPL will create a Shutdown Payment Regulatory Asset in the amount of $90.4 million as FPL's payment to JEA. As such, FPL is allowed to recover: 1) amortization of the regulatory asset over the remaining Power Purchase Agreement (PPA) it has with JEA, through its term (October 2021); and 2) a return on the unamortized balance calculated at FPL's weighted cost of capital used for adjustment clause proceedings. The SJRPP Order also authorized FPL to eliminate the annual capacity payment that would be due under the SJRPP PPA, and refund through the CCR clause the costs incurred for suspension liability and a return on the unamortized balance, which is calculated as above using FPL's weighted cost of capital used for adjustment clause proceedings. As such, FPL will refund the costs incurred for deferred interest liability and dismantlement accrual, none of which FPL will be required to pay upon termination of the PPA. This CCR mid -course correction reflects the SJRPP-related adjustments and also credits to customers the carrying charges associated with Nuclear Cost Recovery Clause 2015 and 2016 Final True -ups, approved by this Commission as the over -recovery for those periods. As a result, the total capacity cost over -recovery is approximately $20,410,866 or 7.2 percent. This amount reduces the CCR factors for each rate group for the period March -December 2018. The revised capacity cost recovery factors are reflected on Attachment B. Revision of the GPIF Targets and Ranges for 2018 Consistent with the discussion on the revised fuel cost projection, appropriate adjustments to FPL's GPIF targets/ranges for heat rate are needed due to the effects of the SJRPP transaction. The revised GPIF targets and ranges for the 12 GPIF units provided in Appendix 4 of FPL's petition show a slightly lower average heat rate value, reflecting a higher performance 7 I FPL's petition, it stated the SJRPP Transaction was projected to close on January 5, 2018. FPL's January 16, 2018, response to Commission staff's First Data Request, Question No. 7, the Company confirmed that the plant closure occurred as projected. The SJRPP was retired on January 5, 2018. qqi C3