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ORDER NO. PSC -2020 -0212 -PAA -EQ <br />DOCKET NO. 20200114 -EQ <br />PAGE 36 <br />;TI.ORmA PowER & i1GUT COMPANY <br />Attachment A <br />Original Sitcet No.,:10308 <br />APPENDIX <br />TO RATE SCHEDULE Q$-2 <br />CALCULATION OF VALUE OF DEFERRAL PAYMENTS <br />APPLICABILITY <br />Appendix I provides a detailed description of the methodology used by the Company tocalciilate themontbly valuesof deferring or avoiding lite <br />Company's Avoided Unit identified inScheduleQS-2. \Nhen,iised in conjunction With the ciirtent FPSC-approved cost;partunetets associated with the <br />Company's Avoided Unit contained iii Appendix 1i, a QS may determine theapplicable value of deferral capacity payment rate associated milli the <br />timing and operation of it particular facility should the QS enter into a Standard Offer Contract with the Company. <br />CALCULATION OFV �.LIiE,. OF. DEFERRAi, OPTION A <br />FPSC Rile 25-17.002(5) specifies that avoided capacity costs, in dollars:perd.ilotpatt per month, associated with capacity Sold to a utility by a QS <br />pursuant to the Company's Standard Oiler Contract shall be defined as die year -by -year value ofdefensil of the Corriont''s Avoided Unit. 'lite year -by - <br />year value of deferral shall be the differemoe in revenue requirements associated with defemng the Congmiy's Avoided Unit, one year, Mal Biedl be <br />calculated as follows: <br />Where, for a one year deferral; <br />VAC„ utility's monthly value of avoided capacityand <br />ire dollars purr kilowatt per Months, for eadli month of <br />yi ar n <br />present value of dairying charges for olio dollar of <br />investment o■cr 'L ycars with canying charges <br />computed tieing average annual rale base and assumed <br />to be paid at the middle of each year and present valued <br />to the middle of the fust year, <br />R CI+ip)r(1+r) <br />i, total .ciirect.and indirect cosi, in tmd-}'ear dollars per <br />kilowatt including AFIJDC inns excluding t WIP, of the <br />Canipany's Avoided LJnit tiitli an in-service date of year <br />including all identifiable and quantifiable .costs <br />relating to the ametr fiction of the Company's Avoided <br />Unit which wild have been 'mid haul tie Unit been <br />constructed; <br />O� total fired operation and maintenance_ expense for the <br />year n, in mid year dollars per kilowatt per year,' oft e <br />Company's Avoided Unit; <br />annual escalation rate associated w, itn the plant ccr±t of <br />rho Company's Avoided Unit(s); <br />annual escalation rate associated with the operation :rid maintenance expense of the Company's <br />Avoided Unit(n) <br />r -t animal discinmi rate, defined ns tJhe utility's him -emeriti! after -tut cast of capital; <br />L= expected life ofthe Company's Avoided Unit(s); and <br />0 <br />year for which the Company's Avoided Unit(s) is (are) deferred skirting with its (their) original <br />anticipated in-service date(s) and ending with the termination of the Comgmmy's Standard Offer <br />Contract <br />(Continued on Sheet No. 10.309) <br />issued by: S. E. Romig, Director, Rates and Tariffs <br />Effective: May 22, 2007 <br />