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Jclly27,1982 Page 3 Mr. Al Gabiola, Area Manager Western Area Power Administration Department of Energy P. 0, Box 11606 Salt Lake City, Utah 84147 Re: Post 1989 CRSP Marketing Criteria Firming Energy It is our thinking that firming energy required in an emergency to meet contract commitments might be ,priced at the contract rate. How- ever, if the hydro facility rate o~ delivery is contracted to where the energy demand consistently can~ot be met, it seems only reasonable that the average procurement cost should be passed to the customer. It is our further thinking that where WAPA can purchase off peak energy at reasonable rates, the process should b.e continued to the fullest degree possible that the hydro facility can accommodate. Energy so attained should be priced at the average procurement cost. It would appear by so doing everyone would attain the maximum use of their generating facilities and tha preference customer would obtain the best unit cost for the resulting energy besides the fact that more energy could be made available. . Proiect Generated Surplus Surplus energy from the hydro project should be continued to be sold at the CRSP firm energy rate. Basis for Marketable. Power The most logical approach to market~ng the hydro resource would be to adjust energy sales to the resource that is actually produced. This could be supplemented by agreement with each contractor, if they so chose, to purchase off peak energy at favorable prices when avail- able as noted above. Capacity and Energy obligations - Factors to consider If the energy was delivered on the basis of that which is actually produced, there should be no surplus above that which is scheduled. The question of whose reserve the remainder was would tend to disappear. Capacity and Energy Obligation - Maximum Rate of Delivery We agree with the current method of 'scheduling the maximum rate 0: delivery. 62