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ORDER NO. PSC -2024 -0231 -PAA -EQ DOCKET NO. 20240055 -EQ PAGE 2 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 2024 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 unit with a projected in-service date of June 1, 2034, as the next avoidable planned generating unit based on its current planning process. In order to comply with the Rule, we have previously approved using a unit outside of the TYSP planning period as the avoided unit for standard offer contract purposes.' 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. In this way, the RF/QF 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, this Commission requires each 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, 2034). Thereafter, they 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 below 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 the contract to qualify for full capacity payments. Normal and levelized capacity payments begin with the projected in-service date of the avoided unit (June 1, 2034) and continue for 10 years, while early and early levelized capacity payments begin four (4) years prior to the in-service date, or 2030 in this case. ' E.g., In re: Petition for approval of renewable energy tariff & standard offer contract, by Fla. Power & Light Co., Docket No. 20180083 -EQ, Order No. PSC -2018 -0316 -PAA -EQ (Fla. PSC June 20, 2018); see also In re: Petition for approval of revised standard offer contract & a revised accompanying rate schedule QS: 2, by Fla. Power & Light Co., Docket No. 20220072 -EQ, Order No. PSC -2022 -0203 -PAA -EQ (Fla. PSC June 9, 2022); In re: Petition for approval of renewable energy tariff & standard offer contract, by Fla. Power & Light Co., Docket No. 20200114 -EQ, Order No. PSC -2020 -0212 -PAA -EQ (Fla. PSC June 26, 2020); In re: Petition for approval of new standard quer for purchase of firm capacity & energy from renewable energyfacilities or small qualifyingfacilities & rate schedule QS -2, by Gulf Power Co., Docket No. 20200115 -EQ, Order No. PSC -2020 -0213 -PAA -EQ (Fla. PSC June 26, 2020).