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Community Choice Aggregation Feasibility Analysis Alameda County Total GHG costs were calculated by multiplying the allowance price by the amount of carbon emitted per megawatt-hour for each assumed resource. For"system" purchases, MRW assumed that the GHG emissions corresponded to a natural gas generator operating at the market heat rate. This worked out to be, on average, approximately$5 per megawatt delivered. Other CCA Supply Costs The CCA is expected to incur additional costs associated with its procurement function. For example, if the CCA relies on a third-party energy marketing company to manage its portfolio it will likely incur broker fees or other expenses equal to roughly 5% of the forecasted contract costs. The CCA would also incur costs charged by the California Independent System Operator (CAISO) for ancillary services (activities required to ensure reliability) and other expenses. MRW added 5.5%to the CCA's power supply cost to cover these CAISO costs. Finally, we added an expense associated with managing the CCA's renewable supply portfolio. Based on an analysis of the expected CCA load shape and the typical generation profile of California solar and wind resources, we observed that there will be hours in which the expected deliveries from renewable contracts will be greater than the CCAs load in that hour. This results from the amount of renewable capacity that must be contracted to meet annual RPS targets and the variability in renewable generation that leads to higher deliveries in some hours and lower deliveries in other hours. When high renewable energy deliveries coincide with low loads, the CCA will need to sell the excess, likely at a loss, or curtail deliveries, and potentially have to make up those renewable energy purchases during higher load hours to comply with the RPS. The result is that the procurement costs will be somewhat higher than simply contracting with sufficient capacity to meet the annual RPS. PG&E Rate and Exit Fee Forecasts MRW developed a forecast of PG&E's bundled generation rates and CCA exit fees in order to compare the projected rates that customers would pay as Alameda County CCA customers to the projected rates and fees they would pay as bundled PG&E customers. PG&E Bundled Generation Rates To ensure a consistent and reliable financial analysis, MRW developed a 30-year forecast of PG&E's bundled generation rates using market prices for renewable energy purchases,market power purchases, greenhouse gas allowances, and capacity that are consistent with those used in the forecast of Alameda County CCA's supply costs. MRW additionally forecast the cost of PG&E's existing resource portfolio, adding in market purchases only when necessary to meet projected demand. MRW assumed that near-term changes to PG&E's generation portfolio would be driven primarily by increases to the Renewable Portfolio Standard requirement in the years leading up to 2030 and by the retirement of the Diablo Canyon nuclear units at the end of their current license periods in 2024 and 2025. More information about this forecast is provided in Appendix B. MRW forecasts that, on average, PG&E's generation rates will increase just slightly faster than inflation through 2030, with 2030 rates 3%higher than today's rates when considered on a constant dollar basis (i.e., assuming zero inflation). Underlying this result are three distinct rate periods: July,2016 12 MRW&Associates,LLC