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~r. Ai Gabiola, Area Manager Page Two . 2. Renewal of Existing Allocations The existing allocations and marketing of CRSP is derived from a March 9, 1962, and 1978, Modification of Federal Marketing criteria. In the circumstances of 1962, preference customers like Thatcher had alternative energy sources other than CRSP. One of those alternatives was a lesser cost alternative of coal fired generation. It cannot seriouSly be doubted that the United States in marketing 7% of the CRSP winter capability and 20% of the CRSP summer capability to the Southern Oivision and the balance to the Northern Division intended anything other than to convince the customers they were buying a long term embedded cost resource like a coal plant. Many customers would undoubtedly have chosen a coal fired resource if there were any suggestion at all by the United States that the resource might be stripped from them at the end of the term under the guise of a reallocation, Therefore, Town of Thatcher is firmly in support of the original allocations and believes that the original allocations should be retained as originally intended in 1962; and further Town of Thatcher believes that the existing embedded costs of those resources should be recognized by the United States. The Town of Thatcher believes CRSP contracts to existing customers should be re-executed as originally agreed to by the United States in both kilowatts and kilowatt hours in the post 1989 period. 3. Marketing Area The Town of Thatcher believes the traditional marketing area should not be changed. 4. CRSP Load Factor The Town of Thatcher members believe that West~rn should recognize that some customers may require higher load factors for certain conditions and situations and Western should seek .to accommodate those entities. CRSP power should be marketed at not less than a seasonal load factor of 58.2% and Western should give an option for delivery up to a 70% load factor of energy after a suitable evaluation. 57