It was suggested that due to the pressures for the staff during the next 2 weeks, our next meeting be held the week of March 24.

The statements that Idaho Power Co. presented are as follows:

1. Summer energy for filling and holding Brownlee Reservoir and Oxbow

During May, June, and July, BPA will furnish Idaho Power Co. energy for load-carrying purposes, during the Brownlee Reservoir refill period, up to 320 million kilowatt-hours, as scheduled by Idaho Power Co., at 1 mill per kilowatthour. This energy is to be supplied subject to the "5-year drawback provisions" and have a priority next to present "industrial interruptible contract" load requirements on the BPA system. BPA will furnish additional energy also for load-carrying purposes, to enable Idaho Power Co. to carry its load corresponding to its firm load-carrying capability during the Brownlee Reservoir holding period (May, June, and July) at 2.5 mills per kilowatt-hour and subject to the same withdrawal and priority limitations as the above reservoir filling energy.

2. Energy exchange during period August 1 through April 30

During the period August 1 through April 30, operating energy will be exchanged between the BPA and Idaho Power Co. systems on a 1-for-1 basis. BPA will furnish to Idaho Power Co. sufficient energy to carry its load corresponding to its firm load-carrying capability as determined during the critical period of the Northwest Power Pool area (which at the present time is generally considered to be a period approximately September 15 through April 15 during the years 1936-37). When generation capability on the Idaho Power Co. system exceeds its load-carrying requirement, energy will be supplied to BPA system and storage releases shall be regulated so as to produce the maximum firm power and usable energy first for firm load and commitments of Idaho Power Co. and second for the Northwest Power Pool area. Each year at the end of the period (August through April), Idaho Power Co. will pay BPA 2.5 mills per kilowatt-hour for all kilowatt-hours received from BPA in excess of the number of kilowatt-hours furnished to BPA during the period. In the event Idaho Power Co. has furnished BPA an excess of energy during any period, the excess energy may be carried forward to the next year.

3. Purchase of steam or other energy

In the event BPA could not supply the energy required, Idaho Power Co. would be free to either (1) purchase steam or other energy and receive credit in the exchange account equal to the remainder of the ratio of the cost of the energy in mills divided by 2.5 mills minus 1, or (2) draft Brownlee Reservoir.

LETTER

OF ADMINISTRATOR WILLIAM A. PEARL, OF BONNEVILLE POWER ADMINISTRATION, TO IDAHO POWER CO., DATED APRIL 1, 1958

APRIL 1, 1958.

Mr. JOHN T. KIMBALL,

Vice President and General Manager, Idaho Power Co.,

Boise, Idaho.

DEAR MR. KIMBALL: At our last meeting on March 5, 1958, we informed you that we would discuss within the Department of the Interior, during our trip to Washington, D. C., the coordination of Idaho Power Co.'s system with the Columbia River power system.

While in Washington, we discussed the various means of coordination that we have previously discussed with you. Two alternatives were considered acceptable to the Department of the Interior; those

are:

(1) Equal exchange of energy with BPA so that your summertime needs as described below for reservoir filling and load carrying would be assured, or

(2) Equal exchange of energy with BPA from August 1 through April 30 and purchase by your company during May, June, and July of energy you need for reservoir filling and to carry your load. If such purchases are made from BPA, these would be at our existing H rate (21⁄2 mills per kilowatt-hour).

Over the past couple of months, we have discussed with you a possible new rate for reservoir filling. We are not prepared to file such a rate at the present time. Our studies, however, will continue and if such a rate is filed and approved in the future, it will be available to any utility meeting the requirements ultimately established in the rate.

The foregoing alternatives are based on the subsequently described determination of the company's loads and resources for the year in which streamflow conditions would be critical for the Columbia River power system.

Alternative 1 (equal exchange of energy on annual basis)

The company would be assured as a firm entitlement of annual kilowatt-hours, equal to its energy resources for the critical streamflow year for the Columbia River power system. The firm entitlement would be distributed by months so as to provide the company in the early years of the contract a surplus over its own loads which would be the same in average kilowatts in all months, or in accordance with a mutually acceptable shaped surplus. The firm entitlement would therefore be established by an exchange of energy on a 1-for-1 ratio in the critical year.

Alternative 2 (May, June, July purchase and equal exchange of energy August 1 through April 30)

The company would be assured a firm entitlement of kilowatthours, over the season August 1 through April 30 equal to its energy

resources for the same period during the critical streamflow year for the Columbia River power system. The firm entitlement would be distributed by months so as to provide the company, in the early years of the contract, a surplus over its own loads which would be the same in average kilowatts in all months of the season, or in accordance with a mutually acceptable shaped surplus. Over the period May 1 through July 31 the company would have the privilege of purchasing from BPA, when available, any energy necessary to bring its energy resources up to the firm entitlement. Over the remainder of the critical streamflow year, therefore, energy would be exchanged between BPA and the company on a 1-for-1 ratio.

Under either alternative, BPA would provide the company with sufficient energy to bring its energy resource up to its firm entitlement at any time when the company's energy resource is below that level. The company would be obligated to return all such energy to BPA on a 1-for-1 ratio from its first energy resource in excess of firm entitleEnergy received during the season May 1 through July 31 under alternative 2 would be purchased by the company rather than returned. If, over any year ending June 30, the company has generated insufficient energy above its firm entitlement to return the energy provided by BPA under the agreement, except for summer energy purchased under alternative 2, then the company shall settle its obligation to return such energy by paying BPA for such energy at the BPA H rate.

In addition to energy exchanges to maintain the company's firm entitlement, the company and BPA would exchange energy, to the extent permitted by the loads and resources of each, for the purpose of increasing the usability of the secondary energy resources of each. This additional exchange would be recorded in the same account as energy exchanged for maintenance of the firm entitlement. The account would be settled as of June 30 each year by payment by the company if the balance is in favor of BPA or by carryover if the balance is in favor of the company.

Each year prior to April 1, BPA and the company would establish rules for coordinated operation of Brownlee Reservoir through the subsequent storage refill and release seasons. These rules would be made subject to any requirements imposed by the FPC license for Brownlee Reservoir.

Initially and thereafter, prior to April 1 of each year, the company would compute and submit to BPA a summary of its forecasted monthly energy loads and resources for the year of critical streamflow conditions for the Columbia River power system. The resources in this summary would be exclusive of capability of the Brownlee plant and all other plants of the company downstream, and the loads would be exclusive of the requirements of any other utility which the company may be obligated to supply. Upon receipt of this summary, BPA would submit to the company monthly energy capability under critical streamflow conditions of the company's plants at Brownlee and downstream therefrom under operation in coordination with the Columbia River power system. These loads and resources would then be tabulated to determine the company's firm entitlement for the following operating year of July 1 through June 30.

We will be very happy to discuss with you either of these alternatives and contract terms at your convenience.

Sincerely yours,

WM. A. PEARL, Administrator.

STUDY OF BENEFITS OF INTEGRATION BY BONNEVILLE POWER ADMINISTRATION AND BUREAU OF RECLAMATION

OFFICE MEMORANDUM

UNITED STATES GOVERNMENT, BONNEVILLE POWER ADMINISTRATION, January 23, 1958.

To: Director, Division of Operations and Maintenance.
From: Hydraulic Operations Officer.
Subject: Integration with the Bureau of Reclamation Power System
in Idaho.

Pursuant to our discussions with the Administrator on December 6 we met with Mr. Curtis Brown of the region 1 office of the Bureau of Reclamation on December 10, 1957, to exchange information pertinent to the integration of our two respective power systems. From the data furnished by Mr. Brown then and subsequently, we have reached the tentative conclusion that the integration would permit the Bureau to sell an additional 13,000 kilowatts of firm energy.

Because of the relative sizes of the two systems integration is defined by examination of first the Bureau's system, which is the smaller. This determines the need for power exchanges the availability of which can be verified by examination of our system. This process is shown in part on table 1 attached. The firm load which is shown represents requirements for pumping power on the Bureau projects plus contractual commitments to existing customers. Additional secondary loads, represented by contracts with the two private utilities in Idaho, were also studied but were assumed on table 1 not to interfere with firm integration benefits. The 1936-37 Bureau generation is the average capability under 1936-37 streamflows of the Boise, Minidoka, and Palisades projects. This capability compared with the total load results in average surplus of 20,000 kilowatts for the year and 13,000 kilowatts for the season September 16 through April 15, which is our critical storage release season.

The 13,000-kilowatt surplus is not presently salable as firm power for three reasons: (1) Some other years, particularly 1934-35, have a lesser surplus; (2) the surplus is poorly distributed through the year, being too large in some months and too small in others; (3) the energy surplus is accompanied by a severe peak deficiency. In fact under critical local streamflows, the Bureau must purchase peaking power to meet their present commitments.

Integration with the Bonneville Power Administration would remove all three deterrents to the sale of the surplus. Availability of our secondary energy will firm up the supply in years of lesser surplus than 1936-37, such as 1934-35. Our storage is available to reshape the monthly surplus to load, and we will have a peak surplus to meet the Bureau's deficiency in peaking. This reshaping is shown by the column on table 1 where in the last half of September (1936-37) a

maximum of 26,000 average kilowatts flow from the Bureau to BPA. The net interchange for the storage release season however is zero, as shown. Excess of generation over firm resource in the storage refill season is not shown as interchange under the assumption that this excess will supply the existing secondary load of the Bureau. The possibility remains to be explored of increasing these secondary sales through integration of the two systems.

The other two functions of integration are not shown on table 1 but they have been studied. The maximum monthly interchange of average energy from BPA to the Bureau was found to be 41,000 kilowatts in September of 1934. This is an amount which we could easily supply from our seasonal resources. The maximum interchange of peaking power from BPA to the Bureau for firm load was found to be about 84,000 kilowatts in August 1931 and August 1933. It also is an amount which we could easily supply. This energy component of the peak exchange will be liquidated within the month. This exchange is on the assumption that Palisades powerplant will not be permitted to operate at less than 70 percent plant factor. Operation was also studied at 50 percent plant factor and also with unlimited peaking. Consideration of the fishery resource will influence the actual selection of a plant factor.

In summary, benefits to the Federal Government from integration of the two systems would be as follows:

1. The Bureau could supply an additional 13,000 kilowatts of firm energy load.

2. Increased sales by BPA could be made from the existing secondary energy supply to the Bureau during years other than

1936-37.

3. A liability which has been incurred by the Bureau for purchase of peaking power in critical hydro periods would be removed. 4. Certain energy resources of the Bureau which are presently unusable in load would be made salable through reshaping the surplus and providing peak as required.

HENDERSON M. MCINTYRE,

Hydraulic Operations Officer.

TABLE 1.-Integration with Bureau of Reclamation

[Bureau of Reclamation loads and resources: 1936-37 streamflows-megawatts]

Excess of generation not shown as interchange as it will supply existing secondary loads of the Burean.