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way, the individual capacity and energy price components will 

 be melded (on a regional basis) so to include the services. 



BPA should assign costs of services associated with Tier 1 

 demand and energy rates after un-bundling, so that costs of 

 surplus services are not associated with the first tier. 



The customers must be assured an adequate allocation of 

 services to deliver the allocated power. If there remains an 

 excess of services in Tier 1, revenues from sales of those 

 services, should flow back to Tier 1. 



It is suggested that surplus services could be allocated to 

 later Tiers, and that revenue would then be fixed to those 



Tiers. 



BPA will then deliver power to each utility at a melded rate 

 for energy and a melded rate for capacity. The costs to 

 deliver power are included in the melded rates and are based 

 on a cost accounting of all services needed to deliver the 

 Tier 1 power. BPA' s remaining costs are then charged to the 

 remaining tiers and/or charged on a "fee-for-service" basis 

 to anyone using separate services, (i.e. transmission). 



It should be noted that tiers may need to be established for 

 the unbundled services, when surpluses are exhausted, and the 

 marginal cost is faced. 



16. Access to Federal transmission must be available at cost, 

 concurrent with implementation of tiered rates, subject to 

 public preference. Priority access for conservation 

 transactions is suggested. 



17. Service to the DSIs should determined after the preference 

 allocation is made. The initial service level for the DSIs 

 should either be based on the most current operating year or 

 the most recent year of load/resource balance. As the 

 allocation for publics decreases through time, the DSI 

 allocation should decrease proportionately. 



The DSIs must give a firm commitment to load in return for 

 any initial service from Tier 1 power. The DSIs must agree 

 to a take or pay obligation for the first three quartiles, 

 with the top quartile served on a completely interruptible 

 basis. The top quartile would be priced to reflect its 

 interruptible character. These changes would put the DSIs on 

 a more equivalent basis regarding the allocation and rate for 

 FBS power. 



The allocation to publics is fixed and should not grow at the 

 expense of the DSIs. On the other hand, if the FBS dwindles, 

 then the top quartile of DSI contract could be used to 



SPRINGFIELD UTILITY BOARD PAGE 5 SEPT. 25, 1993 



