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Community Choice Aggregation Feasibility Analysis Alameda County CCA and PG&E customers, or$3.5 million if these programs serve only CCA customers, assuming a 15% opt-out rate. This latter case was modeled. Administrative and General Cost Inputs Administrative and general costs cover the everyday operations of the CCA, including costs for billing, data management, customer service, employee salaries, contractor payments, and fees paid to PG&E. MRW conducted a survey of the financial reports of existing CCAs to develop estimates of the costs that would be faced by an Alameda County CCA. Administrative and general costs are phased in from 2017 to 2019, as the CCA operations expand to cover the entire territory of the county; after that, costs are escalated by 2% each year to account for the effects of inflation. Administrative and general costs are unchanged under the three renewable level scenarios, but do vary based on how many cities join the CCA and the number of participating customer accounts. As previously mentioned, a 15%opt-out rate has been assumed for customer participation. Cost of Service Analysis and Reserve Fund To determine annual CCA costs and the rates that would need to be charged to CCA customers to cover these costs, MRW summed the three categories of CCA costs (i.e., supply portfolio costs, net energy efficiency costs, and administrative and general costs) and added in debt financing to cover start-up costs and initial working capital. Financing was assumed to be for a five-year period at an interest rate of 5%. These costs were divided by projected CCA loads to develop the average rate the CCA would need to charge customers to cover its costs("minimum CCA rate"). To establish the Alameda County CCA rate, MRW adjusted the minimum CCA rate, if needed, based on the competitive position of the CCA. In particular,when the total CCA customer rate (i.e., the minimum CCA rate plus the PG&E exit fee) was below the projected PG&E generation rate,31 MRW increased the minimum CCA rate up to the amount needed to meet the reserve refund targets while still maintaining a discount. MRW used the surplus CCA revenue from these rate increases ("Reserve Fund") in order to maintain Alameda County CCA competitiveness with PG&E rates in years in which total CCA customer rates would otherwise be higher than PG&E generation rates.32 31 For this analysis,MRW used the average of the projected PG&E generation rates across all rate classes,weighted by the projected Alameda County CCA load in each rate class. 32 MRW applied a Reserve Fund cap of 15%of the annual operating cost.After this cap was reached,no further rate increases were applied for the purpose of Reserve Fund contributions. July,2016 17 MRW&Associates,LLC