274 



We do, however, believe that Bonneville has considerable 

 discretion about setting the terms and conditions of new 

 agreements, and that it ought to sell firm power to the DSIs only 

 after careful consideration of different alternatives, including 

 the following options: 



1. Making one or more additional quartiles interruptible 

 (at present, only one quartile is interruptible). 



2. Providing firm power to the DSIs only in summer. 



3. Offering a menu of options to the DSIs, including 

 shorter term contracts for those companies that intend 

 to close part or all of their operations in the next 5 

 or 10 years. 



4. Linking rates to more energy efficient production practices. 



In sum, the new contracts should take into consideration the 

 fickle nature of the aluminum industry. 



The new agreements should discourage the DSIs from signing up for 

 new 20-year contracts, unless they agree to remain in the region 

 for the entire contract period (and pay a penalty if they leave 

 early); and if they agree to pay rates comparable to the 

 industrial customers of existing public utilities, as 

 contemplated by the Northwest Power Act, 



If the DSIs sign 20-year contracts but leave after the 5th year, 

 the region may be stuck with new power plants — perhaps as much 

 as several thousand megawatts — and no industrial customers to 

 buy power. Bonneville can, of course, sell this power on the 

 surplus market, but it will likely lose money doing so, and the 

 preference customers will pay more to make up the revenue 

 shortfall. 



