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Dear CRSP Transmission Customers:

On July 17, 1998, the Federal Energy Regulatory Commission (FERC) approved the firm and nonfirm transmission rates for service on the Colorado River Storage Project (CRSP) transmission system.

Rate Schedule SP-PTP5 for firm point-to-point transmission provides for a yearly recalculation of the rate. This recalculation is accomplished by updating (1) the rate denominator (reserved capacity) based upon current contracted reservations, and (2) the net annual transmission credits also based upon FY 1998 data. This update derives revised 5-year averages that are the basis for the 1999-2003 projections. Revision of the firm point-to-point transmission rate formula under Rate Schedule SP-PTP5 results in a rate of $2.18/kW-month, effective April 1, 1999, through March 31, 2000, which is a decrease of $0.05/kW-month.

Rate Schedules SP-NW1 for network transmission service and SP-NFT4 for nonfirm transmission service are based upon SP-PTP5. As stated in SP-NFT4, the nonfirm point-to-point rate shall not be higher than the firm point-to-point rate. Therefore, this revised firm point-to-point rate results in a maximum nonfirm transmission rate of 2.9 mills/kWh for the same period.

Enclosed is a table which compares the 5-year average components of the current rate with the revised rate. There are two primary reasons for the change in the rate: (1) increases in most revenues credits were more than offset by lower than expected revenues from phase shifters, and (2) the reserved capacity increased due to extended firm transmission contracts and an increase in the reservation requirement for firm project use customers.

The firm point-to-point transmission rate is applicable to existing transmission contracts and future transmission service agreements. Please consider this letter as official notification of the change in the transmission rates for all applicable transmission agreements.

If there are any questions regarding the recalculated rate schedules, please telephone me at (801) 524-6380.

Rates Manager


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