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Every utility needs reserves to provide service for its firm 

 loads when a power plant malfunctions or a transmission line goes 

 down. Typically, a utility provides this reserve by acquiring 

 standby generation. 



The other way to achieve a similar level of protection is by 

 shedding load, and that is what Bonneville's contract with the 

 DSIs allows it to do. 



The most valuable reserve is "forced outage," which covers plant 

 malfunctions, but Bonneville has also contracted for and pays for 

 plant delay and system stability reserves. It pays for these 

 services by giving the DSIs a discount on their power bill. 



It is important to note that only two of the DSI quartiles 

 provide forced outage reserves: the second and third quartiles. 



The first (top) quartile provides no forced outage reserves (or 

 any other reserves, for that matter) because it is not firm. The 

 fourth (bottom) quartile provides no forced outage reserve 

 because Bonneville can only restrict it for 15 minutes or less — 

 too short a time period to be of value. 



In other words, it is the middle quartiles that can be restricted 

 for sufficient lengths to qualify as forced outage reserves; 

 Bonneville can shed those quartiles if a plant has a sudden 

 malfunction. 



If this arrangement were executed correctly, it could indeed be 

 very efficient for Bonneville's ratepayers. 



I do not question the underlying notion that the DSIs can provide 

 reserves in certain circumstances, and that Bonneville should pay 

 a fair market price for these services. 



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