202 



It is clear that the amount and interruptibility cf power, as weil as 

 other terms and conditions of service are left open for negotiation. And 

 again, "best efforts" must be defined. It is MCAC's strong opinion that 

 "best efforts" is limited to obtaining power at a cost at or belcv; the 

 revenue received from the DSIs (adjusted, of course for the value of 

 reserves nade available). There must be no cross-subsidization by other 

 customers. 



Applying the "Pegional Goals" alternative to the DSIs generates the 



following principle: The DSIs, being neither preference customers nor 



priority firm customers, should be served only under such terms and 



conditions as to provide benefit to the regional power system with the 



least environmental inpact, subject to the restraints in the Act and their 



current ccMitracts. In particular: 



1 ) Insofar as the industrial consumers of preference customers may face 

 tiered rates (directly or indirectly through their utilities), the DGIs 

 should also face marginal rates reflecting the cost of Kew Resources 

 dedicated to this class of service, thus providing an incentive for efficiency. 



2a) The maxiiTiUm size of the DSI 's tier 1 allocation .-should be the amount of 

 FBS or Exchange resource not needed for Priority Firm customers. As 

 preference load grows or the FBS shrinks, for exanple, the DSI contract 

 demand could be reduced accordingly. The rate for this allocation would be 

 set by 7(c)(1)(B). 



2b) A variation of this which should be examined is that any FBS or 

 Exchange resource net needed for Priority Firm customers (beyond the 

 minimum set in (3) below) would be offered for sale to anyone on the optr; 

 natket, including, of course, the DSIs. 



3) The miniirum size of the DSI 's tier 1 allocation should be the level 

 needed by RPA for reserves which cannot be obtained at a lesser cost 

 through other means. 



4) To encourage the most efficient use of energy, the DSIs should be 

 allowed to buy and sell airong themselves. In this v«y the least-efficient 

 plants could sell their contract demand to the nost efficient. As the 

 overall DSI allocation of the FES and Exchange resources shrunk due to 

 failure of friPFSS 112, derating of the canes for fisti needs, and/or growth or 

 creation of new public utilities, this reselling airong themselves would 

 provide for the rriost efficient weeding out of the worst plants and the 

 means and incentive for technoloc;ical innovation for the best. 



