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e <br />factors, escalation of annual costs, and the volatility of the power market as experienced during <br />the summer of 2000. The cost estimates were based on average annual generation without <br />consideration given to the peaking capabilities at Morrow Point and Blue Mesa Power Plants <br />where the generation can be adjusted frequently to meet power system demands. The value of <br />the power is greater when produced during peak demand periods. Also, during periods of <br />spilling at Crystal Dam it is necessary to curtail peaking operations at Morrow Point Power Plant <br />so as to avoid large fluctuations below Crystal Dam. Power system economic impacts should be <br />evaluated using power system models so that a more accurate representation of system operations <br />is portrayed. These economic impacts would then be incorporated into Western Area Power <br />Administration's repayment study to determine the need for a rate increase to its customers. <br />Reclamation staff did not have this capability in-house nor the time available to work with <br />Western to perform power system modeling and an assessment of economic impacts and the <br />associated potential rate increase to power and project use customers. <br />As a consequence of National and regional electric reliability requirements, Reclamation and <br />Western are required to maintain adequate reserves to assist in providing power system <br />regulation and emergency response capability. Morrow Point and Blue Mesa Power plants are <br />important assets in meeting these requirements. However, during the proposed operational <br />scenarios, Morrow Point and Blue Mesa Power plants would not be able to provide regulation or <br />respond to power system emergencies as has been the historical practice. Additionally, other <br />CRSP generating facilities such as Flaming Gorge and Glen Canyon outside the Aspinall area <br />may not have the capability to provide regulation or to respond to the emergency or may be <br />limited in their response by transmission constraints. <br />The proposed scenarios create other power system operational difficulties with associated <br />economic impacts. During power system interruptions, Morrow Point is the only hydroelectric <br />power plant of sufficient size that can provide "black start" capability to the large coal-fired <br />thermal plants in the western Colorado area. Also, under the modeled scenarios, voltage and <br />frequency control for the power system is eliminated from the Aspinall Unit and would need to <br />be purchased from other resources. <br />6