261 



Bonneville's reluctance to do anything about the way that DSI 

 reserves are priced is all the more troubling because Section 

 7(c) (3) of the Northwest Power Act requires the Administrator to 

 "adjust" DSI rates to take "into account the value of power 

 system reserves made available to the Administrator through his 

 rights to interrupt or curtail service" to the DSIs. 



More information on DSI reserves is contained in our supplemental 

 testimony at pages 17-24, and in Attachment A. 



2. POWER SALES CONTRACT RENEGOTIATIONS 



The new power sales contracts must address the fact that the DSIs 

 are not preference customers of Bonneville and that they are not 

 entitled to as much firm power as they wish. Bonneville's 

 primary legal obligation is to the preference customers, for whom 

 the federal system was built. 



That basic fact is often overlooked in the posturing and 

 negotiating over new power sales contracts. 



The simple truth is that there is no mandate in the Northwest 

 Power Act for Bonneville to sign new, firm power agreements with 

 the DSIs after the initial contracts expire in 2001. 



We are not suggesting that Bonneville cut off the DSIs when the 

 existing agreements end. 



