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2. Economic Potential Analysis. Using the results of the technical potential analysis, the economic potential is calculated as the total energy efficiency potential available when limited to only cost-effective measures. All components of economic potential are a subset of technical potential. Economic potential is less than technical potential because it considers the influence of financial payback on customer selection, along with regulatory requirements that exclude certain energy efficiency activates based on cost effectiveness criteria. Economic potential is also a notional metric which adjusts technical potential to account for various regulatory and market economic constraints. 3. Market Potential Analysis.The final output of most potential studies is a market potential analysis which is defined as the energy efficiency savings that could be expected to occur in response to specific levels of program funding and customer participation based on assumptions regarding market influences and barriers. All components of market potential are a subset of economic potential. Some studies also refer to this as the"Maximum Achievable Potential." Defining market potential requires an estimate of how much market activity occurs each year where there is an opportunity to install efficient equipment. The opportunity is often related to natural stock turnover(i.e., old equipment burns out and needs to be replaced) or the favorable economic conditions such that residents and businesses invest in energy efficiency, or the influence of codes and standards. Market potential generally does not exceed 1% of total electricity consumption in any given year,but is influenced by the level of spending and the development of new and innovative market interventions. The assessment of energy efficiency potential in Alameda County completed for this feasibility study used outputs from the 201347 and 201548 Energy Efficiency Potential and Goals studies developed by the CPUC. These CPUC studies define the technical and economic potential for energy efficiency in PG&E's service territory, and also determine the market potential used to set energy efficiency production goals and budgets for PG&E's energy efficiency programs. Because of its size, varied economy, diverse demographics, and range of climates it is likely that both energy use characteristics and the potential for energy efficiency in Alameda County is consistent with the potential for energy efficiency in PG&E's overall service territory, with some exceptions such as a reduced presence of agricultural and oil extraction loads found elsewhere in the state. For example, a review of Alameda County electric usage data provided to the MRW team for this analysis indicates that the residential sector accounted for 29% of sales to the County by PG&E in 2013 and 2104, with non-residential sales accounting for the remaining 71%. Similarly, the CEC electric demand forecast for the overall PG&E service territory49 indicates that the residential sector accounted for 31% of total system-wide sales for those same years, with nonresidential sales accounting for 69% of sales, consistent with the distribution of sales in Alameda County. Based on these consistencies in markets and energy usage, this analysis concludes that energy efficiency potential for electricity in PG&E's overall service 47 2013 California Energy Efficiency Potential and Goals Study,Final Report.Prepared for the California Public Utilities Commission by Navigant Consulting,Inc.February 14,2014 48 Energy Efficiency Potential and Goals Study for 2015 and Beyond, Stage 1 Final Report.Prepared for the California Public Utilities Commission by Navigant Consulting,Inc.Reference No.: 174655,September 25,2015 49 Form 1.1—STATEWIDE California Energy Demand 2015 Revised-Mid Demand Case,Electricity Consumption by Sector(GWh) F-19