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City of Pleasanton GHG Analysis of Natural Gas Replacement with RNG projections, benefits and costs (i.e., climate change impacts on agriculture, energy use, cost of adapting to sea level rise, etc.), and a discount rate (e.g., the rate at which society is willing to trade present benefits for future ones). While the cost to curb GHG emissions today may have immediate economic implications, if GHG emissions are not curbed, society will bear the cost later. Since both routes have economic risk and implications, federal agencies use the social cost of carbon for conducting benefit- cost analyses of policies that affect GHG emissions and determining if the cost and benefits of a proposed policy or action are justified.The current social cost of carbon set by the Environmental Protection Agency(EPA) is$51 per MT CO2 However,the EPA has proposed a price increase to $190 per MT CO2 which incorporates recent scientific advances that are more accurate. In anticipation of the price increase,the cost to procure RNG in place of natural gas has been evaluated using the anticipated social cost of carbon.The social cost of CH4 and N20 are not included in this cost assessment as the same quantity of CH4 and N20 will be emitted with the use of pipeline natural gas or pipeline RNG so there is no difference in social cost of CH4 and N20 between the two gas sources. Table 3 demonstrates procurement cost for natural gas and RNG based on the percent of RNG replacement.The table also includes the social cost of avoided non-biogenic emissions from natural gas combustion.The cost for GHG reduction with this action, or GHG savings, is calculated as the difference in cost between natural gas and RNG procurement with the social cost of carbon included, divided by the emissions avoided. As shown, with the current cost of natural gas, RNG, and social cost of carbon, it costs approximately$133 per MT CO2 avoided. Table 3 Cost Analysis of GHG Reductions Percent RNG Natural Gas RNG CoSt2 Social Cost Total • •r Cost Cost • Replacement Cost' of Avoided gas Difference' GHG Emissions' procurement4 Savings (MTCO2)6 100% $0 $425,845 $122,679 $303,166 $86,048 $133.27 75% $54,279 $319,384 $92,009 $281,654 $64,536 50% $108,559 $212,923 $61,340 $260,142 $43,024 25% $162,838 $106,461 $30,670 $238,630 $21,512 Notes:MT CO2e=metric tons carbon dioxide equivalaents 1. Cost of natural gas is determined by multiplying the quantify of procured natural gas in Table 2 by the cost for natural gas,$1.78 per therm. 2. Cost of RNG is determined by multiplying the quantify of procured RNG in Table 2 by the cost for RNG,$3.50 per therm. 3. The social cost of avoided non-biogenic emissions from natural gas are calculated by multiplying the avoided natural gas CO2 emissions by the EPA revised social cost of carbon for emissions year 2020,$190 per MT CO2- 4. Total cost for gas procurement is calculated by adding the cost for natural gas and RNG procurement minus the social cost of carbon. 5. The cost difference is calculated by subtracting the current cost for 121,665 therms of natural gas($217,118)from the calculated total cost for procurement of different amounts of RNG to replace the natural gas. Page 4