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Community Choice Aggregation Feasibility Analysis Alameda County <br />June, 2016 11 MRW & Associates, LLC <br />Locally-Sited and Developed Renewables <br />As discussed above, the CCA may choose to contract with or develop renewable projects in the <br />local area to promote economic development or other benefits. For the purpose of this study, we <br />assume that incremental local development resulting from the CCA would be largely solar. Since <br />the solar resource in Alameda County is not as strong as in the desert and inland areas where new utility-scale projects are typically developed (and upon which the above solar price forecast was developed), solar generation costs in Alameda County are expected to be somewhat higher than <br />our price forecast. Based on renewable energy supply curves developed for the CPUC, we <br />assume a 15% premium for projects located in Alameda County.23 <br />Given the limited open space for very large solar projects in the County, we expect a portion of the local projects included in a hypothetical CCA portfolio to be smaller in size (e.g., < 3 MW). Smaller solar projects tend to have higher generation costs since they don’t have the same <br />economies of scale as the larger projects upon which our estimates of market prices are based. <br />We have assumed a 55% generation cost premium for smaller projects, based on the same supply <br />curve study referenced above. Future price changes and economies of scale might lower this value. <br />In developing the hypothetical portfolios depicted in Figure 7 through Figure 9, we made <br />conservative assumptions about how much local solar development may occur as a result of the <br />CCA. The supply curve study performed for the CPUC estimated roughly 300 MW of solar <br />supply in Alameda County, based on an assessment that five percent of the estimated 6,000 MW of technical potential could be developed, largely as a result of land use conflicts or slope issues that would make solar development infeasible in certain areas. We assume that over the forecast <br />period through 2030, about 1/3 of the estimated 300 MW large solar supply potential in Alameda <br />County is developed as a result of commitments by the CCA. <br />A discussion of the impacts and implications of greater local renewables can be found in Chapter 7. <br />Other CCA Supply Costs <br />The CCA is expected to incur additional costs associated with its procurement function. For <br />example, if the CCA relies on a third-party energy marketing company to manage its portfolio it <br />will likely incur broker fees or other expenses equal to roughly 5% of the forecasted contract costs. The CCA would also incur costs charged by the California Independent System Operator <br />(CAISO) for ancillary services (activities required to ensure reliability) and other expenses. <br />MRW added 5.5% to the CCA’s power supply cost to cover these CAISO costs. Finally, we <br />added an expense associated with managing the CCA’s renewable supply portfolio. Based on an <br />analysis of the expected CCA load shape and the typical generation profile of California solar and wind resources, we observed that there will be hours in which the expected deliveries from <br />renewable contracts will be greater than the CCAs load in that hour. This results from the <br />amount of renewable capacity that must be contracted to meet annual RPS targets and the <br />variability in renewable generation that leads to higher deliveries in some hours and lower <br /> <br />23 CPUC RPS calculator (RETI 2.0)