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Community Choice Aggregation Feasibility Analysis Alameda County <br /> Power Supply Cost Assumptions <br /> As discussed above,the CCA would procure a portfolio of resources to meet its customers' <br /> needs, which would consist of a mix of renewable and non-renewable (i.e., wholesale market) <br /> resources. As shown in Figure 10, the products to be purchased by the CCA consist generally of <br /> energy, capacity and renewable attributes (which for counting purposes take the form of <br /> renewable energy credits, or RECs).23 <br /> Figure 10. Power Supply Cost Elements <br /> Power Supply <br /> Costs <br /> 1 <br /> 1 1 <br /> Non- <br /> Renewable <br /> Power Renewable <br /> Power <br /> 1 I 1 <br /> Energy Capacity RECs Energy Capacity <br /> I 1 <br /> Greenhouse <br /> Excess Supply Natural Gas Gas <br /> Allowances <br /> The CCA will be procuring supplies from the same competitive market for resources as PG&E. <br /> As a result,we assume that the costs for renewable and non-renewable energy and for resource <br /> adequacy capacity are the same for the CCA as for new purchases made by PG&E (as used in <br /> our forecast of PG&E rates discussed below). Wholesale market prices for electricity in <br /> California are largely driven by the cost of operating natural gas fueled power plants, since these <br /> plants typically have the highest operating costs and are the marginal units. As a result, market <br /> prices are a function of the efficiency of the marginal generators, the price of natural gas and the <br /> cost of GHG allowances. MRW developed forecasts of these elements to derive a power price <br /> forecast for use in determining costs for the CCA and PG&E. Capacity prices are based on prices <br /> for resource adequacy contracts reported by the CPUC. <br /> MRW developed a forecast of renewable generation prices starting from an assessment of the <br /> current market price for renewable power. For the current market price, MRW relied on wind <br /> and solar contract prices reported by California municipal utilities and CCAs in 2015 and early <br /> 2016, finding an average price of$49/MWh for the solar contracts, $55/MWh for wind power <br /> 23 RECs are typically bundled with energy deliveries from renewable energy projects,with each REC representing 1 <br /> MWh of renewable energy.A limited number of unbundled RECs may be used to meet RPS requirements.For the <br /> purpose of this study we have not considered unbundled RECs and have rather estimated costs based on renewable <br /> energy contracts where the RECs are bundled. <br /> July,2016 9 MRW&Associates,LLC <br />