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ORDER NO. PSC -2022 -0203 -PAA -EQ DOCKET NO. 20220072 -EQ PAGE 2 energy from 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. While FPL's 2022 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) combined cycle with a projected in-service date of June 1, 2032 as the next avoidable planned generating unit. FPL submitted two planning scenarios for its 2022 TYSP; and, the avoided unit is identical in both scenarios.' We have previously approved using a unit outside of the TYSP planning period as the avoided unit for standard offer contract purposes.2 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, 2032), and thereafter, begin receiving capacity payments in addition to firm 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. Table 1 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 TPL's 2022 TYSP contains two scenarios, the Recommended scenario and the Business as Usual (BAU) scenario. The Recommended scenario uses a novel methodology for forecasting winter peak demand based on potential extreme winter weather events. The BAU scenario uses the same methodology as FPL's prior TYSPs for forecasting winter peak demand. FPL also submitted alternative versions of each of these scenarios assuming the passage of new federal tax credits for batteries and solar for informational purposes only. '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. M11