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Community Choice Aggregation Feasibility Analysis Alameda County <br />June, 2016 27 MRW & Associates, LLC <br /> <br />Higher Exit Fee (PCIA) Sensitivity <br />PG&E’s PCIA exit fees are subject to considerable uncertainty. Under the current methodology, <br />PCIA rates can swing dramatically from one year to the next, and this methodology is currently <br />under review and may be adjusted in the coming years. MRW therefore evaluated a stress case in <br />which PCIA rates don’t fall after 2018, as anticipated in the base case, but instead remain at 2018 <br />levels through 2030. This increases the 2030 PCIA to 250% of its base case value. The impact of this stress case is to reduce the 2017-2030 average rate differential by 0.7¢/kWh relative to the <br />base case. <br /> <br />Table 11. Higher PCIA Exit Fee Sensitivity Results, 2017-2030 <br />  <br />Average PCIA Rate  <br />(¢/kWh)  <br />Average Rate  <br />Differential  <br />(¢/kWh)  <br />Base Case 1.4 2.1  <br />Higher Exit Fees (PCIA) 2.1 1.4  <br /> <br /> <br />Higher Natural Gas Prices Sensitivity <br />Natural gas prices have been low and relatively steady over the last few years, but they have historically been quite volatile and subject to significant swings from local supply disruptions <br />(e.g., Hurricanes Katrina and Rita in 2005). MRW analyzed a gas price sensitivity case using the <br />U.S. Energy Information Administration’s High Scenario natural gas prices forecast,38 which is <br />up to 60% higher than MRW’s base case forecast in some years. Natural gas price increases affect power supply costs for both Alameda CCA and PG&E; however, the nuclear and hydroelectric capacity in PG&E’s resource mix makes PG&E less sensitive than Alameda CCA <br />to changes in natural gas prices. The net effect of higher natural gas prices is therefore to <br />increase CCA rates relative to PG&E rates39 (i.e., reduce the average rate differential). Under the <br />sensitivity conditions considered, the 2017-2030 average rate differential decreases relative to the base case by 0.9¢/kWh. <br /> <br /> <br />38 U.S. Energy Information Administration. “2015 Annual Energy Outlook,” Table 13 <br />39 For the Scenario 3 the high gas natural prices case is favorable (i.e., the rate differential is higher than the rate differential for the Base Case).