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ORDER NO. PSC -2024 -0223 -PAA -EI DOCKET NO. 20240057 -EI PAGE 2 (3) The applicable AFUDC rate will be determined as follows: (a) The most recent 13 -month average embedded cost of capital, except as noted below, will be derived using all sources of capital and adjusted using adjustments consistent with those used by the Commission in the utility's last rate case. (b) The cost rates for the components in the capital structure will be the midpoint of the last allowed return on common equity, the most recent 13 -month average cost of short- term debt and customer deposits, and a zero cost rate for deferred taxes and all investment tax credits. The cost of long-term debt and preferred stock will be based on end of period cost. The annual percentage rate must be calculated to two decimal places. In support of its requested AFUDC rate of 6.76 percent, FPL provided its calculations and capital structure in Schedules A and B attached to its request. We have reviewed the schedules and determined that the proposed rate was calculated in accordance with Rule 25- 6.0141(3), F.A.C. The requested increase in the AFUDC rate is due to an increase of 28 basis points in the weighted cost of long-term debt, an increase of 6 basis points in the weighted cost of short-term debt, and an increase of 4 basis points in the weighted cost of common equity. The cost rate for short-term debt increased from 1.93 percent in 2022 to 4.94 percent in 2023. The cost rate for long-term debt increased from 3.63 percent in 2022 to 4.46 percent in 2023. In its calculation, the Company appropriately used the mid -point return on equity of 10.8 percent, which was approved by Order No. PSC-2022-0358-FOF-EI.2 Based on our review, we find that the requested increase in the AFUDC rate from 6.37 percent to 6.76 percent is appropriate and is consistent with Rule 25-6.0141, F.A.C. Based on these facts, an AFUDC rate of 6.76 percent is hereby approved. Monthly compounding rate FPL has further requested a monthly compounding rate of 0.005466 to achieve an annual AFUDC rate of 6.76 percent. In support of the requested monthly compounding rate of 0.005466, the Company provided its calculations in Schedule C attached to its request. Rule 25- 6.0141(4)(a), F.A.C., provides the following formula for discounting the annual AFUDC rate to reflect monthly compounding. M=[((1+A/100)1/12)-1] x 100 Where: M = Discounted monthly AFUDC rate. A = Annual AFUDC rate. The rule also requires that the monthly compounding rate be calculated to six decimal places. We have reviewed the Company's calculation and determined it . was derived in accordance with Rule 25-6.0141(4), F.A.C., as presented in Attachment 2. Based on these facts, we hereby approve a monthly compounding AFUDC rate of 0.005466. 20rder No. PSC-2022-0358-FOF-EI, issued October 21, 2022, in Docket No. 20210015 -EI, In re: Petition for rate increase by Florida Power & Light Company. 1 3 - Z.