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Community Choice Aggregation Feasibility Analysis Alameda County <br />June, 2016 17 MRW & Associates, LLC <br />Chapter 3: Cost and Benefit Analysis <br />As described in the prior chapter, as part of the pro forma analysis, MRW calculated Alameda CCA rates that would, where feasible, cover CCA costs and maintain long-term competitiveness <br />with PG&E. This chapter uses those rates to compare the costs and benefits of the Alameda CCA <br />across three scenarios: (1) Renewable Compliance, (2) Accelerated RPS and (3) 80% RPS by <br />2021. Costs and benefits are evaluated by comparing total CCA customer rates (including PG&E <br />exit fees) to PG&E generation rates to assess the net bill savings (costs) for customers that join the CCA. <br />Scenario 1 (Renewable Compliance) <br />Under Scenario 1, the Alameda CCA meets all RPS requirements (including Senate Bill 350 <br />requirements) and does not obtain incremental renewable power or low-carbon power in excess <br />of these requirements. <br />Rate Differentials <br />Figure 14 summarizes the results of this scenario in the form of the total Alameda CCA customer <br />rate (vertical bars) and the comparable PG&E generation rate (line).29 Of the CCA cost elements, <br />the greatest cost is for non-renewable generation followed by the cost for the renewable <br />generation, which increases over the years according to the RPS standards. Another important <br />CCA customer cost is the PCIA exit fee, which is expected to decrease in most years beginning in 2019 and to become less important over time. <br />Under Scenario 1, the differential between PG&E generation rates and Alameda CCA customer <br />rates is positive in each year (i.e., CCA rates are lower than PG&E rates). As a result, Alameda <br />CCA customers’ average generation rate (including contributions to the reserve fund) can be set <br />at a level that is lower than PG&E’s average customer generation rate in each year. The annual differential between the PG&E rate and the total CCA customer rate is expected to vary <br />significantly over the course of this period (Figure 14). During the initial period from 2017-2023, <br />the differential between the two rates increases (i.e., the CCA becomes more cost-competitive) <br />due to an expected decrease in the exit fees charged to Alameda CCA customers. Beginning in <br />2024, the rate differential narrows due to a decrease in PG&E generation rates stemming from the closure of the Diablo Canyon nuclear plant. After 2026, the difference between the two rates <br />is expected to increase at a modest rate as PG&E’s generation rates stabilize and exit fees <br />decline. <br /> <br />29 All rates are in nominal dollars