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ORDER NO. PSC -2018 -0313 -PCO -EI DOCKET NO. 20180001 -EI PAGE 2 Mid -course corrections are considered preliminary procedural decisions, and any over - recoveries or under -recoveries caused by or resulting from the Commission -approved adjusted fuel or capacity factors may be included in the following year's fuel or capacity factors. Our jurisdiction to consider fuel clause proceedings derives from our authority to set fair, just and reasonable rates, found in Section 366.05, Florida Statutes. The Tax Cut and Jobs Act of 2017 was signed into law on December 22, 2017, about 4 months after FPL filed its projection testimony and cost recovery schedules for 2018. FPL's Mid -Course Petition is the second similar filing made in this docket in 2018, the first occurring when the impact of the St. Johns River Power Park Transaction was addressed in the First Mid - Course Order.3 As noted in the instant petition, this proposed correction is primarily applicable to capacity and environmental cost recovery factors, and only minimally applicable to the Conservation Cost Recovery Clause.4 In addition to filing its Mid -Course Petition in Docket No. 20180001 -EI (the Fuel and Capacity Cost Recovery Clause docket), FPL filed it in Docket Nos. 20180007 -EI (the Environmental Cost Recovery Clause), and in 20180046 -EI (Consideration of the tax impacts associated with Tax Cuts and Jobs Act of 2017 for Florida Power & Light Company). Midcourse Adjustment for Capacity Cost Recovery (CCR) Factors FPL's currently authorized 2018 fuel and capacity amounts and factors are codified in the First Mid -Course Order, which projected total capacity costs of $282,109,414 for 2018. Because this projection of total capacity -related costs was developed before the Tax Cuts and Jobs Act of 2017 lowered the federal income tax rate for corporations from 35 percent to 21 percent, many of the costs embedded in that total are now overstated. Federal income tax rate amounts are included in the calculation of the capacity costs that have a capital component, such as the Cedar Bay, Indiantown, and St. John River Power Park Transactions, or the capital -related costs for Incremental Power Plant Security, as shown in Schedule E12A/B of FPL's Mid -Course Petition. When the lower federal income tax amount is incorporated into the projected costs, the revised total capacity costs for 2018 are $261,614,030. When the true -up provision amounts are applied and final calculations are performed, the total end -of -period balance reflects that FPL would over -recover its capacity costs for 2018 by $12,071,089, or 4.61 percent. If FPL's Mid -Course Petition is granted, this amount would be recovered through reduced capacity cost recovery factors for July—December 2018. For a residential customer using 1,000 kilowatt hours (kWh) of electricity, the capacity portion of their bill will be reduced by $0.23. The revised capacity cost recovery factors are reflected on Attachment A. The FPL Mid -Course Petition also seeks to reduce the respective 2018 environmental cost recovery factors, as addressed in a recommendation filed in Docket No. 20180007 -EI. A typical bill comparison for a residential customer using 1,000 kWh of electricity is presented in 3Order No. PSC -2018 -0105 -PCO -EI, issued February 26, 2018, in Docket No. 20180001 -EI, In re: Fuel and Purchased Power Cost Recovery Clause with Generating Performance Incentive Factor. 4 I its Mid -Course Petition, FPL stated that the Conservation Cost Recovery Clause adjustment attributable to the Tax Cut and Jobs Act of 2017 was too small to warrant a mid -course correction; instead, the Company believes the adjustment can be recovered in the ordinary true -up process for that clause.