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Community Choice Aggregation Feasibility Analysis Alameda County Chapter 4: Sensitivity of Results to Key Inputs In addition to the base case forecast described above, MRW has assessed alternative cases to evaluate the sensitivity of the results to possible conditions that would have an impact on Alameda County CCA's feasibility study. The metric considered to compare the alternative sensitivity cases to the base case is the differential between the annual average generation rates for PG&E bundled customers and for Alameda County CCA customers.35 The base-case analysis(Chapter 3—Scenario 1) was developed as a reasonable and conservative assessment of the Alameda County CCA. In addition to the base case analysis, MRW analyzed alternative cases to address six risks: (1) the relicensing of the Diablo Canyon nuclear units, (2) higher renewable supply costs, (3)higher PCIA charges, (4)higher natural gas prices, (5) lower PG&E portfolio costs, and(6) a combination of the last four of these five risks (stress scenario). Diablo Canyon Relicensing Sensitivity In the base case the Diablo Canyon nuclear units are retired at the end of their current operating licenses(Unit 1 in 2024 and Unit 2 in 2025).36 At this time, nuclear retirement appears to be the lower-cost option for PG&E ratepayers given, on the one hand, low market prices for replacement power(both gas-fired and renewable) and, on the other hand,the significant costs PG&E would likely incur to undertake a cooling system modification and potentially other upgrades that would be required to relicense the plant and continue operations.37 Under the relicensing scenario, PG&E's generation rate would therefore increase, providing a competitive benefit to the Alameda County CCA.38 As shown in Table 8, MRW anticipates that the average rate differential over the 2017-2030 period would increase by 1.350/kWh under the Diablo Canyon relicensing scenario. 35The Alameda County CCA rate includes the PG&E exit fees(PCIA charges)that will be charged to CCA customers but does not include the rate adjustment for the reserve fund. 36 This assumption is consistent with the CPUC's proposed assumptions for long-term transmission planning. "Administrative Law Judge's Ruling Seeking Comment on Assumptions and Scenarios for use in the California Independent System Operator's 2016-17 Transmission Planning Process and Future Commission Proceedings," CPUC proceeding R.13-12-010,February 8,2016,page 41. 37 The new cooling system,which would be required per state regulations implementing the Federal Clean Water Act, Section 316(b),would have an estimated cost of$4.5 billion. Subcommittee Comments on Bechtel's Assessment of Alternatives to Once-Through-Cooling for Diablo Canyon Power Plant.November 18,2014,page 10. 38 An increase in PG&E's rates results in an increase to the CCA customers'exit fees(which pay for the above- market costs of PG&E's rates).However,this exit fee increase is much smaller than the PG&E rate increase,and the relicensing scenario provides an overall benefit to the CCA. July,2016 26 MRW&Associates,LLC