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ORDER NO. PSC -2019 -0265 -PAA -EQ <br />DOCKET NO. 20190082 -EQ <br />PAGE 36 <br />FLORIDA POWF,R & LIG <br />COMPANY <br />Attachment A <br />Original Sheet No. 10309 <br />(Contitnued from Sheet No, 1Q308) <br />CALCULATION OF F1XI1) VALUE OF DEFERRAL PAYMENTS —EARLY CAPACITY—OVPION 13 <br />Normally, payments for firm rapacity shall not commence until the in-service date of the Cortgzuiy's Avoided Unit(s). Ai the option of the QS, however, <br />the Company may begin malting payments f r early capacity consisting of the capital cost component of the value of a year -by -year deferral of the <br />Company's Avoided Unit starting as early ns the in-service dine of the QS facility. When such Inyrnents for early c istcily are elected, the avoided chiliad <br />cost component of capacity payments shall be paid monthly corrunencing no earlier than the Capacity Delivery Date 'of the; QS, and shall be calculated as <br />follows: <br />Where: <br />A";=A,12 12 for m=1tot <br />Where: <br />_ <br />monthly payments to be made to the QS for each month of the contract year n, <br />in dollars per kilowatt per month in which QS dcivcrs capacity pursuant to <br />the early capiicity Option; <br />annual escalation rate .associated with the plant cost of the Company's <br />Avoided Unit(sk <br />= uhmud escalation rate =mimed with the operation and maintenance expense <br />of the Company's Avoided Units) <br />- year for which the fixed value of deferral payments under the Cady capacity <br />option are made to a QS, starting in year one and ending in the year t; <br />= the term, in years, of the Standard Offer Contract <br />A, = F 1(1 -Rya - R n)J <br />F = the cumulative present value, in the year that the contractual payments will begin, of the avoided <br />capital cost ccimponcnt of capacity payments which would have been made had capacity <br />payments commenced with'tte anticipated in-service date of the Company's Avoided Unit(s); <br />R (I+ip)I(I+r) <br />r = annual discount rate, defined as the Company's incremental atter-tat cost of capital; and <br />Ae.= G l(1—R)/(1—R +)J <br />Where: <br />O = The cumulative present value, in the year that the contractual payments will begin, of the avoided <br />fixed operation and maintenance expeo*e component of capacity paymreas which wcnild have been <br />made had capacity payments commenced with the anticipated in-service date of the Company's <br />Avoided Unit(s). <br />It (I+io)((1•tr) <br />The currently approved parameters apptieabte to the formulas above nre found tit Appendix 11. <br />(Continued on Sheet No. 10.310) <br />Issued by: S. F Romig, Director, Rales and Tariffs <br />Effective: May 22, 2007 <br />