Power consumption related to cache hit rate
I don't think you use that formula.  

Just figure out the power savings from including the L0.  

You have some situations (L0 hit - no L1 access; L0 miss - L1 access) compared to original (L1 access).  

Since L0 is not free from a power standpoint, you have to have some balance point where adding the L0 in gives you a benefit.  As an extreme example if L0 missed 100% of the time, it would offer no additional power savings benefit and would actually increase the power by (X+Y)/Y %-age (as well as make the timing worse)