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ORDER NO. PSC -2022 -0433 -TRF -EI DOCKET NO. 20220165 -El PAGE 3 FPL has selected the option to receive PTCs instead of ITCs as allowed by the IRA. The application of PTCs to FPL's ten solar facilities results in a tax savings of $82,432,142, which is offset by a reduction to the ITC amortization balance of $12,688,682, for a net tax savings of $69,743,460. The incremental change in 2023 jurisdictional adjusted base revenue requirement is a reduction of $33,995,604, in addition to the 2022 net tax savings of $35,747,856, for a total reduction in base revenue requirement of $69,743,460.5 FPL will not finalize its 2023 Forecast Earnings Surveillance Report until early 2023, and consequently, did not take into account the impacts to the capital structure. FPL did not include the 2023 state income tax impact which may also slightly decrease the tax savings similar to its effect on the 2022 calculation. The effects of the IRA on the Company's capital structure and overall weighted average cost of capital should be taken into account. We find that FPL shall be required to file updated information within 90 days of when the 2023 Forecast Earning Surveillance Report is filed with this Commission. Any necessary adjustments will be addressed in a future proceeding. The projected change in FPL's base revenue requirements is comprised of a $82.4 million reduction due to lower operating income tax expense resulting from the inclusion of PTCs associated with the Company's base rate solar plants, offset by a $12.7 million increase due to the removal of ITC amortization associated with the 2022 and 2023 solar plants. FPL's calculations are summarized in Table 2. We have reviewed FPL's calculations in its amended petition filed on November 14, 2022, and find them to be reasonable and appropriate. Therefore, we approve FPL's calculations of net tax savings of $69,743,460 for 2023 resulting from the Company's election to use PTCs instead of ITCs as allowed by the IRA. TABLE 2 CALCULATION OF PTC IMPACT ON 2023 REVENUE REQUIREMENT Production Tax Credits $82,432,142 ITC Amortization Removal (12,688,682 Net Reduction in 2023 Revenue Requirement 69,743,460 Decrease in 2022 Revenue Requirement (35,747,856Q Incremental Reduction in 2023 Revenue Requirement $33,995,604 Source: DN 11040-2022. The Company's election to utilize PTCs instead of ITCs under the IRA has resulted in a projected net tax savings of approximately $69.7 million. Under the provisions of Paragraph 13 of its 2021 Settlement, the Company is required to quantify the impacts of federal or state tax reform on its jurisdictional base revenue requirement as projected in its Forecast Earnings Surveillance Report and adjust its jurisdictional base revenue requirement through a uniform percentage decrease or increase to customer, demand, and energy base rates for all retail customer classes. We have reviewed the Company's revised calculation of the projected net tax savings associated with the IRA and the proposed method to flow back those tax savings to customers and find that the proposed permanent reduction in jurisdictional base rates is consistent with the terms of FPL's 2021 Settlement and are approved. 'Document No. 11040-2022, Exhibit A-6, page I of 1, Line 3. q - )q