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ORDER NO. PSC -2023 -0180 -PAA -EQ <br />DOCKET NO. 20230046 -EQ <br />PAGE 36 <br />(Continued from Sheet No. 1103* <br />CALCULATION OFFIXEDVALUE OF DEFERRAL PAYMENTS—EARLYCAPACITY—OPTION <br />Attachment A <br />Page 31 of 42 <br />Normally, payments for firm capacity shall not commence until the in-service date of the Company's Avoided Units). At option ofthe % However <br />the Company may begin malting payments for early capacity consisting of the capital cost component of the value of a year -by -year defisial of Ills:. <br />Company's Avoided Unit starting as early as the in-service date ofthe QS facility. «lien such payments for early capacity are elected, -die avoided capit + <br />coat component of capacity payments shall be paid monthly coratnencing no earlier than the Capacity Delivery ]late ofthe QS, and shall be calculated as, <br />A. `fie A ,*, - i&t+ I'. <br />follows <br />Where: <br />A = <br />morithlypaymenis to be made to the QS for each month of theooatiaat <br />in dollars per Wowatt per month in which QS delivers capacity putacdlrt to <br />dwearlycapacityophon; <br />ip = <br />ammal escalation rate associated with the plant coat ofthe Company's <br />Avoided Urnt(sk <br />in <br />annual escalation lute associated with the openaion and maintenance expense <br />ofthe Company's AvoidedtJAt(sk <br />In - <br />year for which the fixed value of deferral payments under the early capacity <br />optionare made to a QS,shnting inyear one and ending in the year k <br />f' <br />the term, in years, of the Standard OIBerConbact <br />A< _ <br />FI,(I-i-;X)j <br />Where: <br />F = the cwnalative present value, in the year thatthe contractual payments will begin, ofthe avoided <br />capital cost component of capacity payments which would have been made had capacity <br />payments commenced with the anticipated in-service date ofthe Comparry's:Avoided Unit(sk <br />A ,~ (i +4'+$ <br />r = annual discoamt rate, 44WIirthe Company a incremental atter-bur cost ofcapital; and <br />VAMM <br />The cumulative present value, in the year that the contractual payments will begin, ofthe avdQ. <br />fixed operation and maintenance expense component of capacity payments which would have beet; <br />made had capacity Payments commenced with the anticipated in-service date of the Compimft <br />Avoided Unit(s), <br />R 0+W0+10, <br />The currently approved parameters applicable to the formulas above are found in Appendixh, <br />(Confirmed on Sheet No. Tiles <br />S, E Romig, Director, Rates and Tariffs <br />I 3 -:37 <br />