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through 2020. When the utilities start ramping their procurement back up to meet the 50%-by-2030 RPS requirement, the supply-demand balance in the market may shift, resulting in higher-than-expected prices unless an increase in suppliers and development opportunities matches the increase in demand. Given the potential upward price pressures from tax credits that are currently expected to expire and from higher demand for renewable power to meet the 50%-by-2030 requirement and the potential downward price pressures from falling renewable development costs, the possibility for lower cost procurement through the use of RECs, and the possibility that the expiry of the tax credits will be further delayed, it is unclear whether renewable prices will continue to fall (as NREL, LBNL, and others are predicting) or will start to stabilize and rise. MRW has addressed this uncertainty by considering two scenarios. In the base renewable cost forecast, MRW used the$52 per MWh average price of recent municipal utility and CCA wind and solar contracts as the price through 2022 (in nominal dollars), increasing the price with inflation in subsequent years. This results in a price of$59 per MWh in 2030. In the high renewable cost scenario, MRW increased the base case renewable prices to account for the expected expiration of the tax credits, resulting in a price of$77 per MWh in 2030. These scenarios provide a reasonable window of renewable price projections based on current market conditions and analysts' expectations. MRW used these same renewable prices to calculate PG&E's renewable power costs. However, as described in Appendix B in the PG&E forecast, these renewable energy prices are used only for incremental power that is needed above PG&E's existing RPS contracts. For Alameda CCA, these prices are used as the basis for its entire RPS-eligible portfolio. MRW additionally included a premium for the portion of Alameda CCA's RPS portfolio assumed in each scenario to be located in Alameda County. While solar energy is anticipated to provide the largest share of incremental supply located in-county, the solar resource in Alameda is not as strong as in the areas being developed to supply the contracts discussed above. As a result,the cost of solar generation in Alameda is expected to be higher than the contract prices we have assumed for non-Alameda supplies. Additionally, there are economies of scale in solar power development that mean small, local solar projects will cost more than the utility-scale projects upon which the average contract prices were derived. Based on information provided in the CPUC's current RPS calculator, which provides cost estimates for renewable energy projects located around California, large solar projects in Alameda are expected to have a 15%premium over projects in areas with the best solar resource. Generation from smaller projects (<3 MW) in Alameda are assumed to cost 55%more than the base contract price assumed in our forecast. Given the high levels of renewable energy assumed in each of the scenarios, and the variable patterns of renewable energy production, there are likely to be periods during which the renewable energy projects with which the Alameda CCA has contracted are producing more than its customers require. i0 This excess supply must be managed by the Alameda CCA and will likely add to its overall supply costs. For the purpose of this assessment, MRW assumed that the excess renewable supply would be sold at 10% of the cost of additional renewable purchases 10 The annual oversupply is equal to the sum of positive hourly differences between RPS generation and load. July,2016 B-3 MRW&Associates,LLC