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ORDER NO. PSC -2018 -0314 -PAA -EQ <br />DOCKET NO. 20180073 -EQ <br />PAGE 69 <br />Attachment A <br />Page 64 of 71 <br />DUKE SECTION No. IX <br />FIRST REVISED SHEET NO. 9.463 <br />fe*) <br />ENERGY, CANCELS ORIGINAL SHEET NO. 9,463 <br />O„ <br />= total fixed operation and maintenance expense for the <br />year n, in mid -year dollars per kilowatt per year, of the <br />Avoided Unit; <br />ip <br />= annual escalation rate associated with the plant cost of <br />the Avoided Unit; <br />io <br />= annual escalation Tate associated with the operation and <br />maintenance expense of the Avoided Unit; <br />r <br />= annual discount rate, defined as the utility's incremental <br />after-tax cost of capital; <br />L <br />= expected life of the Avoided Unit; and <br />n <br />= year for which the Avoided Unit is deferred starting with <br />the Avoided Unit In -Service Date and ending with the <br />Termination Date. <br />CALCULATION OF FIXED VALUE OF DEFERRAL PAYMENTS - EARLY <br />CAPACITY -OPTION B <br />Under the fixed value of deferral Option A, payments for firm capacity shall not <br />commence until the in-service date of the Avoided unit(s). At the option of the RF/QF, <br />however, DEF may begin making payments for capacity consisting of the capital cost <br />component of the value of a year -by -year deferral of the Avoided Unit prior to the <br />anticipated in-service date of the Avoidcd Unit. When such payments for capacity are <br />elected, the avoided capital cost component of Capacity Payments shall be paid monthly <br />commencing no earlier than the Capacity Delivery Date of the RF/QF, and shall be <br />calculated as follows: <br />Ash = [AC (1 + i,)'m-" + Ao (1 + io) (m`1)] / 12 for in = 1 to t <br />Where: <br />Atli = monthly payments to be made to the RF/QF for each <br />month of the contract year n, in dollars per kilowatt per <br />month in which RF/QF delivers capacity pursuant to the <br />early capacity option; <br />ip = annual escalation rate associated with the plant cost of <br />the Avoided Unit; <br />is = annual escalation rate associated with the operation and <br />maintenance expense of the Avoided Unit; <br />ISSUED BY: Javier Portuondo, Director, Rates & Regulatory Strategy • FL <br />EFFECTIVE: April 29, 2013 <br />