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ORDER NO. PSC -2023 -0180 -PAA -EQ <br />DOCKET NO. 20230046 -EQ <br />PAGE 35 <br />APPENDIX t <br />TQRATE SCHEDULE QS -2, <br />CA14t T16140 "1A UX9 F DEFER RAUSOSM <br />Attachment A <br />Page 30 of 42 <br />Appendix I provides a detailed description ofthe methodology used by file Caftedy'to,calculate dre`Ifid fly values of defettgig orp awiifing the <br />Company's Avoided Unit identified in Schedule QS -2: When used in corgunclion with the current PPSC-approved cost parameters associated with die <br />Companys:Avoided Unit oonwined in Appendix R, a QS may determine the applicable value of deferral capacity payment rate.awo die <br />timing and opetatienof rpsi icular facility should the QS enterinto a Staudard.Okfer Cmrtactwith the Company. <br />CALCULATION QF VALUE OF DEFERRAL OPTION A <br />FF5C'RuIe 25-17:0832(5) specifies that avoided capacity costa, in dollars per kilowatt per month, associated with capacity sold'to a utility ii}"'a QS <br />pursuant to the Company's Standard Offer Contract shall be defined as the year -by -year value of deferral of the Company's Avoided Unit Theyear-by- <br />year value of deferral shall be the difference in revenue requirements associated with deferring the Company's Avoided Unit ona,yearr and shall be <br />calculated aefollows. <br />Where, for a one yeardefenal: <br />VAC. = <br />utility s monthly value of avoided capacity and O &K <br />in dollars per kilowatt per morah, for each month of <br />year n; <br />K = <br />present value of carrying charges for one dollar of <br />investment over L years with carrying chargee <br />computed using average amnral rate base and assruned' <br />to be paid at the middle of each year and, present value4. <br />to:themiddle ofthe fiistyear <br />R _.'t"0 <br />"ITS+ <br />;L' = <br />total direct and indirect cost, in mid year dollars per <br />kilowatt including AFUDC but occluding CWIP, of the <br />Company's Avoided Unit with an in-service date of year <br />N including all identifiable and quantifiable cost <br />relating to the construction of the Company's Avoided <br />Unit which would have been paid had the Unit been <br />constructed, <br />0. <br />total fixed operation and maintenance expense for the <br />yearn, in mid -year dollars per kilowatt per year, of die <br />Company's Avoided Unit; <br />.yo = <br />annual escalation rate associated with the plant cost of <br />the Company's AvoidedUmt(sk <br />io - <br />antral escalation rate associated with the operation and maintenance expense of the Company's <br />AvoidedUrat(v} <br />a. _ <br />amoral discount rate, defined as the utility's moremerdal atter-tax cast of capital; <br />7 ; = <br />expected life of the Company o Avoided Unit(sl and <br />it = <br />year for which the Companys Avoided Unit(s) is (are) deferred staling with its (their); original <br />anticipated in-service date(e) and ending with the temnination of the Company's Standard Offer <br />Contract. <br />(Conlirmdon Sheet No. 10,309) <br />Issued by: & X Romig, Director, Rates and Tariffs <br />i�PY�itves. ikia�•17 <br />];,:7 -?;-p <br />