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depreciated over a 20-year period. MRW did not include costs for the CPUC-required cost- effectiveness study or for the investments that, based on the finding of the study, may be required to shore up the safety and reliability of the plant and its spent fuel management program because these costs are not well defined at this point. Fuel and Purchased Power Costs for Non-Renewable Generation Each spring, PG&E files a forecast with the CPUC of its fuel and purchased power costs for the upcoming year in its "ERRA" filing, which PG&E updates and finalizes in November. MRW relied on PG&E's November 2015 ERRA testimony,34 adjusted to remove renewable generation costs, as the starting point for the forecast of fuel and purchased power costs for PG&E's non- renewable generation. To escalate these costs through the forecast period, MRW forecasted changes to natural gas prices and greenhouse gas cap-and-trade program compliance costs, which are the major drivers of change to these costs. The natural gas price forecast is based on current NYMEX market futures prices for natural gas, forecasted natural gas prices in the U.S. EIA's 2015 Annual Energy Outlook, and PG&E's tariffed natural gas transportation rates. This forecast is the same forecast used in the forecast of Alameda CCA's wholesale power costs(see 0). Cap-and-trade program compliance costs are estimated based on(1) PG&E's forecast of carbon dioxide emissions in 2016;35 (2) a forecast of PG&E's fossil generation supply, developed by subtracting expected renewable, hydroelectric, and nuclear generation from PG&E's projected wholesale power requirement; and(3) a forecast of greenhouse gas allowance prices. The greenhouse gas allowance price forecast is the same as used in the forecast of Alameda CCA wholesale power costs and is based on the results of the California Air Resources Board's (ARB's) most recent allowance auctions, increased annually in proportion to the auction floor price increases stipulated by the ARB's cap-and-trade regulation(see 0). The MRW rate model calculates total fuel and purchased power costs by escalating natural gas prices based on the natural gas price forecast described above, escalating nuclear fuel prices based on the EIA forecast of fuel costs for nuclear plants, escalating water costs for hydroelectric projects and the capacity costs of power purchase contracts with inflation, and pricing market power at the same market power price used for Alameda CCA's purchases. The model then sums the cost for each of these resources and adds in projected cap-and-trade compliance costs to this total cost. 34 PG&E Update To Prepared 2016 Energy Resource Recovery Account and Generation Non-Bypassable Charges Forecast and Greenhouse Gas Forecast Revenue and Reconciliation,filed with the CPUC in proceeding A.15-06- 001 on Nov 5,2015,pages 14 and 24. 35 PG&E Update To Prepared 2016 Energy Resource Recovery Account and Generation Non-Bypassable Charges Forecast and Greenhouse Gas Forecast Revenue and Reconciliation,filed with the CPUC in proceeding A.15-06- 001 on Nov 5,2015,Table 11-2. C-4