10A Action Items 2016 1121 - Laserfiche WebLink

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The Technical Study also considered the size of the electricity load that would be required to achieve economies of scale sufficient to make the program cost effective. The study concludes that a CCA in Alameda County could successfully start-up at about 6.5 – 7 percent of the total load, and be comfortably viable with JPA signatories representing about 10-15 percent of all customer load, or about 1,000,000 MWh per year. The unincorporated County, as the initial member of the JPA, represents approximately 6 percent of the total countywide load. The consultant also identified a number of risks to consider, from unfavorable regulatory changes to financial and market risk. The CCA model has successfully operated in various jurisdictions for more than six years, and several new programs have recently launched. Many of the early-phase risks, generally associated with uncertainties of how CCAs would operate in California, (e.g., concerns about financial risk to member jurisdictions) have proven to be mitigable through the work and experience of the existing CCAs. Given the years of operational experience of municipal utilities, CCAs and other load-serving entities, there is no shortage of expertise to help mitigate procurement and market risks. Finally, the consultant conducted multiple sensitivity analyses of the key assumptions that went into the conclusions about the CCA's price competitiveness. For example, the consultant modeled what would happen to CCA electricity rates if renewable energy prices and utility exit fees suddenly rose and if PG&E prices declined. In 17 of the 18 cases examined, the CCA program was able to maintain lower rates than PG&E. (Even in the one case where it was negative—low PG&E rates plus high renewable content, the CCA rate was less than $0.001/kWh more than PG&E.) The model indicated it would take a very unlikely combination of variables (the "stress scenario") for CCA rates to consistently rise higher than PG&E.