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ORDER NO. PSC -2021 -0252 -PAA -EQ DOCKET NO. 20210067 -EQ PAGE 2 renewable generating facilities, (RF) and small qualifying facilities (QF) with design capacities of 100 kilowatts (kW) or less. Pursuant to Rules 25-17.250(1) and (3), F.A.C., the standard offer contract must provide a term of at least 10 years, and the payment terms must be based on the utility's next avoidable fossil -fueled generating unit identified in its most recent TYSP, or if no avoided unit is identified, its next avoidable planned purchase. Similar to last year's standard offer contract, FPL submitted a joint TYSP with Gulf Power Company (Gulf) for 2021, with the companies planning to merge into a single remaining entity by 2022. While the joint 2021 TYSP does not feature an avoidable fossil -fueled generating unit or planned purchases that could be deferred during the planning period, FPL has identified a 1,991 megawatt (MW) natural gas-fired combined cycle unit (CC) as the next planned generating unit. The projected in-service date of the unit is June 1, 2031. We have previously approved using a unit outside of the TYSP planning period as the avoided unit for standard offer contract purposes.' Under FPL's standard offer contract, the RF/QF operator commits to certain minimum performance requirements based on the identified avoided unit, such as being operational and delivering an agreed upon amount of capacity by the in-service date of the avoided unit, and thereby becomes eligible for capacity payments in addition to payments received for energy. The standard offer contract may also serve as a starting point for negotiation of contract terms by providing payment information to an RF/QF operator, in a situation where one or both parties desire particular contract terms other than those established in the standard offer In order to promote renewable generation, we require the IOU to offer multiple options for capacity payments, including the options to receive early or levelized payments. If the RF/QF operator elects to receive capacity payments under the normal or levelized contract options, it will receive as -available energy payments only until the in-service date of the avoided unit (in this case June 1, 2031), and thereafter, begin receiving capacity payments in addition to the energy payments. If either the early or early levelized option is selected, then the operator will begin receiving capacity payments earlier than the in-service date of the avoided unit. However, payments made under the early capacity payment options tend to be lower in the later years of the contract term because the net present value (NPV) of the total payments must remain equal for all contract payment options. The table below contains FPL's estimates of the annual payments for each payment option available under the revised standard offer contract to an operator with a 50 MW facility operating at a capacity factor of 94 percent, which is the minimum capacity factor required under the contract to qualify for full capacity payments. Normal and levelized capacity payments begin 'See Order No. PSC -2018 -0316 -PAA -EQ, issued June 20, 2018, in Docket No. 20180083 -EQ, In re: Petition for approval of renewable energy tariff and standard offer contract, by Florida Power & Light Company; Order No. PSC -2020 -0212 -PAA -EQ, issued June 26, 2020, in Docket No. 20200114 -EQ, In re: Florida Power & Light Company's Petition for Approval of a Renewable Energy Tariff and Standard Offer Contract; and Order No. PSC - 2020 -0213 -PAA -EQ, issued June 26, 2020, in Docket No. 20200115 -EQ, In re: Petition for approval of new standard offer for purchase of firm capacity and energy from renewable energy facilities or small qualifying facilities and rate schedule QS -2, by Gulf Power Company. 1-4