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Question 5 : Should the variable rate for the Direa Service Industries (DSI) be 



eliminated or modified? Please provide an estimate of the cost and/or 

 benefit to regional ratepayers of continuing to provide this variable rate. 



What is the current value of reserve (VOR) of the first quartile of the DSI 

 allocation? What is the current VOR of the second quartile? 



Answer: The last VI rate review was completed in January 1 991 . The rate was 



extended until June 30, 1996. BPA has not re-examined the cost and/or 

 benefit to regional ratepayers of extending the Vl-rate beyond that period. 

 Prior to any extension, BPA will conduct such an examination of a cost 

 and/or benefit analysis before any decision to extend or terminate the VI 

 rate. 



Since BPA does not plan or acquire resources to serve the first quartile 

 under the terms of the power sales contract, the first quartile offers only 

 operating and stability reserves. The interruptibility of the DSI first 

 quartile is recognized in the character of service adjustment, which gives 

 the DSIs a discount for lower quality of service which they have elected to 

 take. Therefore, no reserve value is assigned for the first quartile. 



The second, third, and fourth quartiles provide capacity for both stability 

 and forced outage reserves. This means that these quartiles can be 

 interrupted for system irregularities so that BPA can continue to serve 

 other loads. The second quartile provides all of the plant delay reserves, 

 half of the forced outage reserves, and stability reserves. The third quartile 

 provides half of the forced outage reserves and stability reserves. The 

 fourth quartile provides stability reserves. 



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