Federal Agencies

NOX EMISSIONS. Generating heavy criticism from industry, on September 24 the Environmental Protection Agency released its long-awaited final rules on nitrogen oxide emissions, outlining a plan to reduce NOx by 28 percent by year 2007 in some 22 states and the District of Columbia, with state implementation plans due by September 1999 and controls in place by 2003, to be carried out through a "cap and trade" program to buy and sell NOx emissions credits.

In its analysis of cost-effectiveness, the EPA identified NOx control costs for fossil-fired steam electric generating units producing power for sale using several different control levels, settling on a level of 0.15 lb/MMbtu, yielding an average cost of $1,503 per ton, well under the threshold of $2,000 that it deemed cost effective. The rules set up a separate control category for boilers and turbines that generate electricity for private internal use. Download the rule at http://www.epa.bov/ttn/oarpg, pending publication in Federal Register.

NUCLEAR PLANT DECOMMISSIONING. Rejecting a framework proposed by the Nuclear Energy Institute, which appeared more lenient, the Nuclear Regulatory Commission issued final rules to reconcile the safety of funds for nuclear plant decommissioning, with the prospect that nuclear plants may face shutdown or a failure to recover costs under industry restructuring and competition.

The rules restrict use of a sinking fund method for "electric utilities," defined as those licensees who can still recover decommissioning costs through regulated rates or other mandatory charges even after competition. The rules force nonqualifying licensees to offer prepayment or up-front assurance to guarantee funding, But the NRC acknowledged "there are likely to be limits on the availability of surety mechanisms" (e.g., letters of credit, lines of credit, surety bonds, etc.). By contrast, the NEI framework would have allowed "nonutility" licensees to qualify for the sinking fund method on satisfying a set of financial criteria, but the NRC said that proposal would carry "greater risk." Other issues in the rule:

• Accelerated Methods. Rejects idea of accelerated funding for all plants over a defined period (to cover the possibility of premature shutdown at some plants), calling plan too arbitrary and prone to wide variations in impacts on licensees.

• Power Sales Contracts. Rejects use of power sales contracts for financial assurance, noting that contracts, plagued by contingencies and litigation, are not equivalent to a government-mandated revenue stream.

• Insurance Pool. Rejects concept of captive, government-managed insurance pool to pay unfunded decommissioning costs, noting that pool members would compete and could shift costs to competitors through pool administration. "An insurance pool would offer no incentive to licensees to reduce the magnitude of their potential claims on the pool."

• Site-specific Issues. Defers decision on using site-specific cost estimates until NRC can collect more data.

• Securitization Ideas. NRC appears to reject proposal to use securitization of a licensee's interest in the payment stream of non-bypassable regulatory surcharges as a vehicle for funding assurance. It says that the proposal to use securitization implies somehow that non-securitized transition surcharges will prove insufficient: "This ¼ seems at odds with the plain meaning of the definition of nonbypassable surcharges."

• Regulatory Certification. Rules dismiss possibility of using certification by the Federal Energy Regulatory Commission or a state PUC to establish sufficiency of funds.

• TVA, Federal PMAs. Rules define term "federal licensee," but do not affect current financial assurance of Tennessee Valley Authority, the only current federal licensee for a nuclear power reactor. NRC says it "will review" TVA's funding.

• Responsible Party. Rules impose duty on both owners and plant operators to guarantee sufficiency of funding. NRC says rule won't likely affect industry reliance on operating service companies, since they can negotiate funding assurance with reactor owners.

• Accounting. Rules decline to use the unfinished exposure draft issued by the Financial Accounting Standards Board on closure and removal of long-lived assets as an accounting or reporting standard, noting that ultimate FASB action could not be predicted and appeared "delayed for a considerable time," warranting a search for an alternative standard.

For self- or parent-company guarantees, the NRC adopted a framework for funding assurance based largely on a financial test developed 15 years ago by the Environmental Protection Agency. It refused to refine that test, explaining that "deregulation is still in its earliest phases [so] it is not yet possible to identify or define the financial characteristics of entities that may ultimately be responsible for reactor decommissioning." 63 Fed.Reg. 50465, Sept. 22, 1998.

NUCLEAR LICENSE TRANSFERS. The Nuclear Regulatory Commission also has proposed rules to streamline hearings for approval of transfers of reactor or materials licenses. It noted a large recent increase in transfers due to mergers, and concluded that the only real issue in such cases is whether the license amendment accurately reflects the transfer, and does not involve operating methods or a "significant hazards consideration." 63 Fed.Reg. 48644, Sept. 11, 1998.

Electric Reliability

PACIFIC NORTHWEST. With a study from Bonneville Power Administration warning that the Pacific Northwest could experience winter power shortages of over 6,000 MW if water flows on the Columbia River should drop to historic lows, the Northwest Power Planning Council on September 1 launched an investigation of strategies to ensure reliable power supplies.

BP predicts that potential power deficits could exceed import capabilities, made up primarily of high-voltage power lines that connect the Northwest with the Southwest. According to NPPC member Tom Karier, "With restructuring of the electric industry, it is less clear who will have the incentive or the responsibility to address those shortages." The NPPC will consider a range of remedies, including investments in new power plants, energy conservation measures, and development of new power pricing policies.

Studies & Reports

MARKETER PERFORMANCE. The international consulting firm Frost & Sullivan has issued a new report, North American Wholesale Energy Marketers, examining the performance in 1997 of the top 20 North American companies in natural gas and power marketing. For more information contact Kathleen Cooney at (650) 237-4358.

ELECTRIC GENERATION. The Gas Research Institute released Electric Generation Sector Summary, predicting that average real electric prices will fall by more than 25 percent by 2015. The study (GRI-98/0009) marks one of a series from GRI's Baseline/Gas Resource and Analytical Center, and examines state and federal regulations for both electric and gas utilities, plus environmental laws and technology issues. Address questions or GRI's Chicago office at fax (630) 406-5995, or to Val Megginson (703) 526-7832; fax (703) 526-7808; or e-mail: vmeggins@gri.org.

GENERATING FUELS. According to a new report by the DOE's Energy Information Administration, Challenges of Electric Power Industry Restructuring for Fuel Suppliers, electric utility restructuring could force cost cutting and consolidation in the coal industry, which now fuels 56 percent of utility power generation, representing 87 percent of all domestic coal consumption. The EIA adds that the share of nuclear-fired capacity (21 percent of domestic generation) will likely decline, along with the share for renewables (other than hydropower), making way for more gas-fired capacity, putting pressure on gas prices. See the EIA's Internet site at: http://www.eia.doe.gov.

CONSUMER AWARENESS. Branko Terzic, just before stepping down as chairman, president, and CEO of Yankee Energy Systems, Inc. on September 10 released the results of the third annual survey of consumers perceptions on deregulation, commissioned by Yankee Energy System through its subsidiary, Yankee Gas Services Co., and carried out by ICR Survey Research Group.

The number of U.S. citizens aware of deregulation has increased from 22.9 percent in 1996 to 38.1 percent at present. But as Terzic pointed out, "more surprising to us on the policy level is that six out of ten Americans are not aware." Respondents were almost evenly split over whether electric and gas deregulation would benefit them. A majority of respondents (60.6 percent) either did not know of any benefits (30.8 percent) or thought there would be none (29.8 percent). But more Americans felt this year that electric deregulation would lead to lower rates (46 percent) than they did two years ago (37.8 percent).

Significant regional differences surfaced in consumer awareness (highest in the West, lowest in the South), reflecting restructuring activities in those areas. According to Terzic, consumer awareness is directly related to publicized activity within the state.

Courts

INDUSTRIAL ELECTRIC RATES. A North Carolina appeals court, affirming a state commission ruling, has denied a request by a ratepayer advocacy group to investigate whether Carolina Power and Light Co. was earning returns above authorized levels since the utility's last rate case, decided in 1998, which set return on equity at 12.75 percent. It ruled that passage of time after a utility's rate case, standing alone, does not require a rate review. It added that uncertainty over electric restructuring "will tend to drive up the return expectations of investors," and also noted a warning from the commission staff that new rate investigation could backfire, leading to unintended rate increases or rate realignments detrimental to non-industrial customers. N.C. Utils. Comm'n v. Carolina Industrial Group for Fair Utility Rates, No. COA97-498, 1998 WL 548961, Sept. 1, 1998 (N.C.App.).

DSM COSTS. Reversing a circuit court order, the South Carolina Supreme Court has overturned a decision by the state public service commission that had allowed Piedmont Natural Gas Co. in 1995 rate case to annualize and recover expenses for demand-side management that were incurred after the test year without submitting a cost-benefit analysis, as had been required under a stipulation in a 1995 approving company's integrated resource plan. The stipulation had said that a failure to achieve projected benefits should not require disallowance for costs for any one specific DSM program, but the court ruled that the cost-benefit analysis was a threshold requirement for any cost recovery. Porter v. S.C.P.S.C., No. 24833, 1998 WL 567831, Aug. 31, 1998 (S.C.).

State PUCs

GAS TRANSPORTATION TARIFFS. The New York Public Service Commission has asked for comments on a staff proposal to impose a new basic tariff structure for the transportation of natural gas used for electric generation to reduce the inherent disadvantage of competitive power producers against combined electric and gas utilities, which may transfer some of their gas transportation earnings to their generating operations under share-the-savings programs. The tariff would include three components: (1) a uniform statewide fixed-cost charge of 10 cents per dekatherm; (2) a utility-specific marginal cost charge of between 7-15 cents per Dth; and (3) a value-based adder, initially set at zero, designed to measure real-time changes in spark spreads, or the relationship between the market price of electricity and the cost of gas for generation. Case 98-G-0122, Sept. 24, 1998 (N.Y.P.S.C.).

GAS CAPACITY RELEASE. In a combined electric and natural gas rate case, the Wisconsin Public Service Commission has decided when Northern States Power Co. of Wisconsin can use a gas cost recovery mechanism to keep for its stockholders a 25-percent share of revenues earned above target levels for seven different types of transactions that release excess gas system capacity. The PSC refused to distinguish between swaps, loans, or buy-sell agreements. Instead, it said it would extend GCRM sharing only to "opportunity sales," defined as the sale or release of the utility's unused or underutilized capacity entitlements that become available periodically because of variable daily and seasonal needs.

It also told NSP-W to remove certain gas supply costs from distribution rates, including personnel costs, carrying costs for storage, and the portion of gross receipts taxes based on gas sales revenues. No. 4220-UR-110, Sept. 16, 1998 (Wisc.P.S.C.).

ILLINOIS ELECTRIC RESTRUCTURING. The Illinois Commerce Commission has submitted final proposed rules to the state legislature on electric utility reliability and marketing affiliates, while the commission staff has also issued draft rules for comment on certification of ARES (alternative retail electric suppliers) and functional separation of delivery services from generation:

• Reliability. Utilities must file annual reliability reports comparing frequency and duration of service interruptions for their own customers versus those of other utilities or ARES. Also must design administrative procedure to resolve and pay claims for actual damages or economic replacement value in case of interruptions. Nos. 98-0013, 98-0035, Sept. 10, 1998 (Ill.C.C.).

• Utility Affiliates. Strict, broad-reaching rules cover utility affiliates that compete against ARES, as well as utility affiliates operating within the utility's service territory engaged in brokering, wholesale marketing, or offering consulting services (as an energy service company). Rules bar joint marketing, but utility affiliates can use parent's corporate name or logo in competing against an ARES, and may share so-called "corporate support services" with affiliates without sanction, though the rules define that term too narrowly, according to some Illinois utilities who intervened in the case. Nos. 98-0013, 98-0035, Sept. 14, 1998 (Ill.C.C.).

• Retailer Certification. Draft rules issued by staff set separate requirements, depending on whether an ARES serves nonresidential load of one megawatt or more, versus residential and small commercial load less than one MW. Rules set tougher requirements for residential service, with special tests barring discrimination on account of geography, gender or race. An ARES that generates, transmits or distributes power must meet technical and managerial qualifications. Sept. 18, 1998 (Ill.C.C.).

• Generation Divestiture. Draft rules don't force transmission and distribution utilities to divest generation, but bar utility employees working in generation or in a "bundled retail power merchant function" from gaining physical access to a utility delivery services system control center (or associated communications and computer systems) or receiving communications or information from such facilities to a degree greater than allowed for an ARES, except in emergencies. Nos. 98-0147, 98-0148, Aug. 28, 1988 (Ill.C.C.).

MULTI-STATE MERGERS. The Wisconsin Public Service Commission has ruled it has no jurisdiction to review two pending electric utility mergers because Wisconsin companies would acquire utilities operating outside the state.

The first deal involved Wisconsin Energy Corp., which won approval from the FERC in April for its merger with ESELCO, the parent company of Edison Sault Electric Co., a Michigan utility. The second concerned WPS Resources Corp., parent of Wisconsin Public Service, which would acquire UPEN, parent company of Upper Peninsula Power Co., another Michigan utility (the FERC ok'd the merger in May). No. 3270-DR-102, Sept. 2, 1998 (Wisc.P.S.C.).

UTILITY MARKETING AFFILIATES. The California Public Utilities Commission has modified rules adopted last year on relationships between energy utilities and their marketing affiliates, permitting temporary assignments of utility marketing employees to an affiliate not engaged in marketing activities in California, such as those operating outside the state or the U.S., along with other changes.

First, affiliates need not pay a minimum 15-percent fee when employees transfer from the utility to the affiliate if the utility would have eliminated the position anyway because of restructuring. Second, utilities may now offer new retail products and services on a nontariffed basis if they do not increase ratepayer risk or divert management control (such as by funding new products with new capital investment or assumption of business risk by utility stockholders). Third, the PUC will now allow new nontariffed products offered to one percent or more of the utility's customer base, provided the utility issues an advice letter addressing possible market impacts. Decision 98-08-035, R. 97-04-011, I. 97-04-012, 97, Aug. 6, 1998 (Cal.P.U.C.).

N.Y. ELECTRIC REFORM. The New York Public Service Commission has issued rulings on generation divestiture, net metering for self-generation, transaction fees charged by utilities to energy retailers, and how to use the proceeds from system benefits charges:

• Generation Divestiture. Sets rebuttable presumption that ownership of generation by affiliate of transmission and distribution utility creates unacceptable vertical market power. Proof of substantial ratepayer benefits, plus mitigation measures, can overcome presumption. Case 96- E-0900 et al., July 17, 1998 (N.Y.P.S.C.).

• Net Metering. Allows competitive energy retailers to offer net metering to customers using photovoltaic systems for self-generation. Case 97-E-1951 et al., July 28, 1998 (N.Y.P.S.C.).

• Transaction Fees. PSC strikes down charges assessed by New York State Electric and Gas Corp. to energy retailers for services such as meter reading, billing changes, load balancing and settlements (over $170 per month), as discouraging entry by competitors. Case 96-E-0891, July 7, 1998 (N.Y.P.S.C.).

• Public Benefits. Approves six-year plan for New York State Research and Development Authority to administer $243.3 million in systems benefits charges for public purposes (other than stranded-cost recovery or transmission and distribution). Plan includes $143 million for energy efficiency, $22.10 million for R&D, and $9.40 million for low-income assistance. Reserves $59.8 million for use by utilities to fund their own programs. Case 94-E- 0952, July 2, 1998 (N.Y.P.S.C.).

GAS PROCUREMENT COSTS. The California Public Utilities Commission has authorized San Diego Gas and Electric Co. to start a new performance-based ratemaking plan for natural gas procurement. Any gas cost savings (measured against a market benchmark) will be shared equally between ratepayers and shareholders with ratepayers paying only 75 percent of the costs exceeding the benchmark. Decision 98-08-038, A. 97-09-049, Aug. 6, 1998 (Cal.P.U.C.).

LEGAL COSTS. The New Hampshire Public Utilities Commission has barred New Hampshire Electric Co-op. from upping its power cost adjustment rate to include legal costs incurred in a dispute over its obligation to purchase power from the Maine Yankee nuclear plant. Order No. 22,991, DR 98-093, Aug. 3, 1998 (N.H.P.U.C.).

ELECTRIC COST REPORTING. Finding no reason to collect detailed information for its own sake, the Idaho Public Utilities Commission has closed its electric unbundling investigation and will no longer require investor-owned utilities and co-ops to submit separate cost analyses for generation, transmission, distribution, metering, meter reading, billing and other customer services, plus reports for public purpose programs such as demand-side management, fish mitigation, alternative energy, and low-income assistance. Instead, it will require a single annual report and then decide whether to ask for more detail. Order No. 27678, Case No. UPL-E-98-1 (Utah P&L Co.), Order No. 27679, Case No. WWP-E-98-1 (Wash. Water Pwr.), Order No. 27676, Case No. IPC-E-98-2 (Idaho Pwr.) , Aug. 24, 1998 (Idaho P.U.C.).

Transmission and ISOs

SYSTEM ENHANCEMENTS. On September 1 the Wisconsin Public Service Commission issued a report to the state legislature on the state's electric transmission system, identifying preferred options for system enhancements to mitigate constraints and to provide a simultaneous power transfer capability into Wisconsin of 3,000 megawatts - an approximate doubling of the state's current transfer capability - saying the increase was needed to achieve the reliability standard historically used in Wisconsin, a loss-of-load probability of no more than one day in 10 years.

The report was required by a 1997 law (Act 204) instructing the PSC to identify "any constraint on an intrastate or interstate electric transmission system that adversely affects the reliability of transmission service" provided to Wisconsin electric customers. The PSC warned, however, that any environmental and social issues and impacts associated with the identified system enhancements were likely to be significant. Download at PSC internet site at http://www.psc.state.wi.us.

MAPP REGION. Members of the Mid-Continent Area Power Pool were to return their ballots on Nov. 4 in a vote on whether to create an independent system operator - a nonprofit corporation separate from MAPP to administer the a regional transmission tariff and operate a security center to oversee the grid. The measure would make ISO membership mandatory, but let MAPP members choose whether to transfer control of transmission facilities to the ISO.

EAST-WEST TIES. New Century Energies is planning to build a $110-million, 300- mile, 345-kv transmission line to connect Public Service Co. of Colorado and Southwestern Public Service Co. for the first time and allowing for asynchronous power flows between the Eastern and Western interconnections. Out of several alternatives, it chose a route north from Amarillo, then through the Oklahoma Panhandle to Kansas, then west to a substation near Lamar, Colorado, noting it was technically feasible, offered customer benefits, and satisfied reliability guidelines of the Western States Coordinating Council and the Southwest Power Pool.

Business Wire

THE U.S. Department of Energy chose Johnson Controls Inc., as one of seven energy service companies to help federal agencies in twenty states with a $1.5-billion upgrade of government facilities. The action allows federal agencies to negotiate services through Super Energy Savings Performance Contracts (ESPCs) with designated energy service companies.

DTE Coal Services Inc., a subsidiary of DTE Energy, recently acquired Fieldston Transportation Services LLC (FTS) from the Fieldston Co. and Focus Transportation LLC. FTS was renamed as DTE Transportation Services Inc.

Carolina Power & Light has agreed to distribute to its commercial and industrial customers American Superconductor Corp.'s line of industrial power quality solutions on superconducting magnetic energy storage technology. American Superconductor will provide sales and customer service training and technical support for CP&L personnel.

Central Maine Power Co. has selected Intergraph Corp. to provide AM/FM/GIS software and services under the product name ActiveFRAMME. Central Maine Power faces the startup of the retail electric competition in Maine on March 1, 2000.

Schlumberger Resource Management Services won a $12.2-million contract from South Australian Water Corp. to upgrade water metering throughout the state of South Australia. They will install a total of 440,000 new meters over six years beginning in October. The new meters will give the company an advanced metering infrastructure to precisely monitor and manage its distribution network.

PP&L Resources Inc. acquired Penn Fuel Gas Inc. Penn Fuel Gas distributes and stores natural gas and sells propane. According to the merger agreement, Penn Fuel Gas shareholders will receive 6.968 common shares of PP&L Resources for each common share of Penn Fuel Gas that they own. PP&L Resources issued about $133 million of common stock to close the merger.

CILICORP Inc. completed the sale of the common equity of its fiber optic-based telecommunications subsidiary, QST Communications Inc. to McLeodUSA Telecommunications Services Inc. for $20 million in cash and stock options valued at $5.5 million. CILICORP Inc. will recognize a third-quarter after-tax gain of approximately $7.8 million or $.57 per share on the transaction.

Madison Gas & Electric Co. and Wisconsin Public Service Corp. agreed to build an 83-megawatt gas-fired power plant on a site owned by WPS. Construction would begin in June 1999.

Washington Water Power Co. announced on Aug. 17 that it would slash its common stock dividend by 61 percent, from $1.24 to 48 cents (yield equaling 2.3 percent), effective with the dividend paid Dec. 15, 1998, to use the capital to fund growth. In a separate move, the board of directors approved Avista Corp. as the company's new name effective Jan. 1, 1999.

Congress

NUCLEAR WASTE DISPOSAL. The U.S. Senate on September 2 by a 78-15 vote approved the Texas-Maine-Vermont Radioactive Waste Compact Bill (H.R. 629) allowing those states to form the nation's tenth low-level radioactive waste disposal compact. It would lead to the construction of a nuclear waste disposal facility in Texas, allowing Maine and Vermont to send their nuclear waste there.

H.R. 629 was passed by the U.S. House of Representatives on July 30. President Clinton expected to sign the bill into law. Passage was lauded by the Nuclear Energy Institute (NEI), the nuclear electric industry's trade association, but opposition remained, as opponents from Texas held a press conference after the Senate vote, pointing out that a small, Hispanic town, Sierra Blanca, was the likely candidate for the disposal site. "If this isn't a classic case of environmental racism, I don't know what is," declared Bill Addington, a Sierra Blanca grocer who had gone on a hunger strike to protest the compact and the dump.

Generating Plants

MERCHANT PLANT CERTIFICATION. In a 3-2 decision in a case of first impression, the California Energy Commission has ruled that because plant output will be sold to the California Power Exchange, the 1048-megawatt, gas-fired, combined-cycle La Paloma Generating Project under development by U.S. Generating Co. qualifies for an exemption not to file a Notice of Intent to seek siting certification with the commission - an exemption otherwise available only for gas-fired plants which "are the result of competitive solicitations or negotiations."

According to the commission, the PX should be viewed "as a continuing series of solicitations or negotiations" conducted in real time: "It would be unrealistic to require executed contracts or agreements in the context of the presently developing market created by AB 1890, since a power producer will no longer necessarily sell to a discrete consumer or utility."

Dissenting commissioner Michal C. Moore argued that the NOI process should still serve a valid purpose, since it requires advance submission of alternative sites: "Merchant plants would benefit from the NOI process and its ability to establish the eligibility of sites for future development of power plants and related facilities." Docket No. 98-SIT-1, Aug. 12, 1998 (Cal.EnergyComm'n).

NUCLEAR OPERATIONS. Four Midwest utilities - Wisconsin Energy Corp, WPS Resources Corp., Alliant Corp., and Northern States Power Co. - have joined to combine planning and supply purchases for seven nuclear reactors totaling 3,650-MW at five sites in Wisconsin and Iowa. The utilities expect no layoffs, and say the move does not necessarily indicate an eventual merger of nuclear operations into one company.

NUCLEAR WASTE DISPOSAL. In a letter written to DOE Secretary Bill Richardson, 68 state utility regulators from 24 states have called for deferral of $6.5 billion in payments made by nuclear-owning utilities into the Nuclear Waste Fund until the Department of Energy provides disposal services. Specifically, the regulators said that DOE should limit annual payments to uses appropriated by Congress. Payment of the unappropriated portion of the fee - 84 cents on the dollar - would be deferred until DOE fulfills its obligation to remove nuclear waste from power plants. Earnings on accumulated deferred payments exceeding the U.S. Treasury rate would be retained to benefit electric consumers at the direction of individual states.

"By keeping these payments out of the U.S. Treasury, we stop Congress from spending the unappropriated portion on other things," said Minnesota commissioner Kris Sanda. "This would preserve the equivalent of $90 million of waste disposal funding for each of the 73 power plants from which nuclear waste must be removed."

Power Markets

MIDWEST SPIKES, TAKE ONE. Testifying on Sept. 24 before the Senate Committee on Energy and Natural Resources, and seeing no reason for alarm or a drastic shift in policy, Federal Energy Regulatory Commission chairman James Hoecker delivered a staff report on the power price spikes seen in the Midwest last June, attributing much of the cause to simple inexperience. Said Hoecker: "The team did not find evidence that firm service was compromised anywhere in the Midwest during the period of pricing abnormalities." Even so, he warned that Midwest summer peak demand had grown substantially and that "additions of new generating capacity have not kept pace."

MIDWEST SPIKES, TAKE TWO. The California Power Exchange Corp. has released a white paper, Defaults and Counterparty Risk in Electricity Wholesale Markets, prepared with Arni Petersson of Economic Insight, Inc., arguing that California was largely spared during last summer's Midwest price spikes because the PX minimizes counterparty risk inherent in bilateral trading. For copies contact Edward Freudenburg, at (626)537-3155, ecfreudenburg@calpx.com, or download at the PX internet site at http://www.calpx.com ("About the PX").

News Digest is compiled by Lori A. Burkhart and Phillip S. Cross contributing legal editors, and by Beth Lewis, editorial assistant.

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