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ORDER NO. PSC -2018 -0367 -TRF -EI DOCKET NO. 20180084 -El PAGE 3 The estimated capital cost of approximately $1.514 billion is the same as in the need determination. DEF stated that while this is a reasonable and accurate projection, there are a variety of events that can impact the schedule and cost of the overall project. These may include skilled labor and supply availability, severe weather events, and other force majeure events.4 Paragraph 14(d) of DEF's 2017 Settlement addresses the circumstance in which DEF's actual capital cost is lower than the projected cost used to develop the initial 2018 GBRA factor. Under this circumstance, the lower actual cost will be the basis for the full revenue requirements and a one-time credit is required to be made through the Capacity Cost Recovery Clause. In addition, Paragraph 14(e) addresses the situation in which DEF's actual capital cost is higher than the projected cost used to develop the initial 2018 GBRA factor. Under this circumstance, DEF may, at its option, initiate a limited proceeding to seek to increase the 2018 GBRA factor by the corresponding incremental revenue requirement. We find that these measures protect customers against unwarranted cost increases over the cost used in the need determination case. Revenue Requirement Calculation Based on the estimated cost of the project and the commercial in-service dates for the two phases as described above, DEF calculated a revenue requirement of $200,488,588 for the entire GBRA. DEF estimated the revenue requirement for Phase 1 to be $123,180,439 and $77,308,149 for Phase 2. In accordance with Paragraph 14(c) of the 2017 Settlement, DEF utilized its projected 13 -month average capital structure for the first 12 months of operation, and a 10.50 percent return on equity to calculate the revenue requirement. The revenue requirement calculation also included the recovery of O&M expenses, depreciation expense, property insurance, property tax, and income tax. We verified the revenue requirement of $200,488,588 based on the capital structure provided by DEF, which reflected a projected 13 -month average capital structure for the first 12 months of operation. We find that $200,488,588 is the appropriate revenue requirement based on the 2017 Settlement. Conclusion Consistent with the 2017 Settlement, DEF's 2018 GBRA for the Citrus Combined Cycle Project reflects the costs pursuant to which the need determination was granted. Therefore, we approve DEF's petition. Approval of proposed tariffs and associated charges needed to implement the two phases of the Citrus Combined Cycle Project 4Document No. 03532-2018 — DEF's response to Commission staff's first data request, No. 4. 0-J