364 



Principles for Tiered Rates 



1. Implementation of tiered rates must be accomplished within 

 the structure of existing statutes. 



2. Tiered rates require new BPA Power Sales and Residential 

 Exchange Contracts. 



As a general principle, SUB believes that exchamge benefits 

 should not be greater as a result of implementation of tiered 

 rates. Furthermore, the lOUs should only be entitled to 

 exchange for FES resources only. Since there are no 

 replacements to the FBS (see principle 19.), the Average 

 System Cost is capped at its current level and only current 

 lOU resources are entitled to exchange. 



3. All existing FBS and contracted resources are subject to 

 public preference, including those that yield unbundled 

 projects and services and those used to make sales to the 

 DSIs and nonfirm energy. 



4. New preference customers shall be able, with reasonable 

 notice, to request and receive an allocation of BPA 

 resources, including the FBS, subject to public preference. 



SUB proposes that new preference customers should receive an 

 allocation of the FBS Tier 1 allocation exactly equal to the 

 resources the new customer brings to the pool . These 

 resources will be rendered at average system cost under the 

 following two conditions: 



a. At the time of entering new tiered rate power 

 sales contracts, a new preference customer's ASC 

 must be equal to or below the region's average 

 ASC. 



b. In the future, a new preference customer's ASC 

 must be at or below the marginal rate, (i.e. the 

 price of the last tier) . 



5. Regional preference shall be retained. 



6. Customers shall be free to ma)ce their own resource decisions, 

 subject to applicable laws and regulations. SUB asserts that 

 utilities will have all rights and responsibilities of 

 resource ownership and planning. 



7. Regional customers must have the option to have BPA meet 

 their loads and load growth in the second tier. 



8. Customer rights to displace purchases from BPA should be 

 SPRINGFIELD UTILITY BOARD PAGE 3 SEPT. 25, 1993 



