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<br /> <br />Section 2 <br /> <br />Background <br /> <br />next two and a half years, and are set at 941 MW fQr the winter season and 928 MW for <br />the summer season. <br /> <br />A long term SHP has also been set for each se~on using a 10% risk level and the <br />anticipated hydrological conditions through the end 6f the contracts. The long-term SHP <br />level.is 915 MW in the winter and 853 MW in the summer. <br /> <br />2.3.3.2 CONTRACT COMMITMENT <br /> <br />The contract rate of delivery is the maximum amount of capacity (with finn transmission) <br />that can be scheduled by the SLCNIP customer each season through the contract period, <br />as set forth in the contract. The post-1989commitm~t levels (1449 MW of capacity and <br />6,156,000 MWh of energy) was selected by Western /.s th~ SLCNIP preferred alternative, <br />following an extensive public process in the Electric Power Marketing EIS. The Contract <br />Amendment discussed above will add the concepts of SHP. and available hydropower <br />("AHP"). AHP represents the amount of hydropower that will be made available to each <br />customer for an upcoming season. . AHP will vll1'y based on hydrological conditions <br />between SHP (which would be the contractuaI floor: for AHP) and CROD (which is the <br />contractual ceiling). The amount of replacement pQwer required will vary by season, <br />depending on the level of AHP available to the customer in any given season. <br /> <br />2.3.3.3 REPLACEMENT POWER <br /> <br />Western expects to acquire replacement power (WRP) on behalf of SLCNIP customers. <br />The offer to acquire power for any upcoming 6-moniQ season will be made twice per year <br />in advance of each season. Periodically, but at least ~very three years, Western expects to <br />also offer to purchase WRP on a long-term basis (i.e., imore than one season). Based on the <br />price ofWRP, customers can authorize Western to make the purchase, or decline the offer. <br /> <br />Customers that do not contract for WRP may procure :their own replacement power (CDP) <br />up to their CROD. CDP can either be provided from.a customer's internal resources or, if <br />acquired from an entity directly or indirectly inte,connected with Western, may be <br />transmitted by Western to the customer's system. : Delivery of CDP to customers is <br />expected to be subject to available transmission capacity. <br /> <br />The critical issue which arises is the importance of W~stern obtaining a least-cost resource.. <br />Customers are expected to decide to request WRP, :or to obtain their own replacement <br />power (CDP), primarily on the basis of the WRP's cost competitiveness. Therefore, it will <br />be of paramount importance to Western and its customers to obtain resources. at the lowest <br />possible cost consistent with system-reliability and other constraints. <br /> <br />2.4 TRANSMISSION ACCESS AND ~RICING <br /> <br />Western historically has had an open access policy for I its transmission system. Western is <br />not a federally-regulated utility under Section 206 of the Federal Power Act, but its power <br /> <br />.2-12 Western Area Power Administration <br /> <br />March 1998 <br />