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QUESTION 5 (Second Part): The Value of Reserves Analysis 



As part of Question 5, you also asked about Bonneville's Value of 

 Reserve (VOR) analysis. 



The VOR does not apply to the first quartile, as explained below. 

 The second quartile, however, provides both forced outage and 

 plant delay reserves. Forced outage reserves are clearly the 

 most important of the two types. 



It is difficult to break out the precise value of the second 

 quartile. But we can state that the plant delay reserve section 

 in the existing DSI power sales contract is so cumbersome that 

 Bonneville believes it has little value. 



This area is complex and involves some recent rate history. Let 

 me begin with some background information. 



The DSI load is separated into quarters (quartiles). The top 

 (first) quartile is nonfirm, and Bonneville can interrupt service 

 at any time and for any reason. 



The top quartile does not provide reserves for Bonneville because 

 it can be interrupted. Put another way, only firm DSI load 

 provides reserves. 



The remaining three quartiles of DSI load are considered firm. 

 But unlike typical utility firm load, the DSI firm load can be 

 restricted by Bonneville under certain conditions. 



These restriction rights allow Bonneville to curtail service to 

 the DSIs, to shed load. It is the creation of these rights which 

 allows Bonneville to treat portions of the DSI load as 

 "reserves . " 



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