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Question 4: What was the upward impact of those wheeling purchases on the price of 

 power on the spot market? How much did that increased spot market price 

 increase the cos: for spot purchased for acquisition of the other three quartiles 

 of smelter load? 



Is BPA obligated to make such wheeling purchases, and if so, what obligates 

 them to do this'' 



What was the actual average price paid to BPA of all power purchased by the 

 aluminum smelters, both wheeling and firm, in the first two quarters of fiscal 

 1993? 



We understand the question to ask how the transmission charges impacted the 

 price of spot market energy The rate charged for wheeling is based on 

 providing a service The rate charged for energy in the spot market is a 

 fijnction of the cost of the resource used to produce the energy and the type of 

 market (buyer's or seller's), not on the cost of transmission. As such, the cost 

 of transmission did not impact the spot market price of energy. There was a 

 period of time this past winter when there was a transmission bottleneck in 

 California that didn't allow as much nonfirm energy from the Southwest to 

 flow to the Northwest This situation produced more of a seller's market and 

 possibly contributed to higher prices, however this situation was based on a 

 transmission limitation not on the rate charged for transmission Steps have 

 been taken to fix the bottleneck and energy deliveries are no longer reduced. 

 The other three quartiles of smelter load is firm and is served by BPA through 

 its firm resources 



BPA is not obligated to make the wheeling purchases. The purchases are 

 made on the behalf of the Direct Service Industries to provide them with a 

 greater reliability of importing their industrial replacement energy. 



