The California Public Utilities Commission (CPUC) has approved loan guarantees of up to $250 million to fund development of computer hardware and software to help the electric industry establish the independent system operator (ISO) and the Power Exchange (PX), both key components of the CPUC's proposed restructuring plan.

Pacific Gas & Electric Co. and Southern California Edison Co. each had asked for $112.5 million in loan guarantees; San Diego Gas & Electric Co. had asked for $25 million.

To what extent should the independent system operator (ISO) and the spot market (Power Exchange) remain separate? Thinking about how the ISO must operate leads to certain conclusions.

Of necessity, the ISO will operate a noncontract market. That is, the ISO will match some supply and some demand that are not covered by generator-customer contracts.

Labor Day found me trudging around in one of those "big box" discount stores, looking for a sale on a new refrigerator. Out West, California lawmakers spent the holiday putting together their own discount plan (em this one promising rate cuts for the state's residential electric consumers, funded by "rate reduction bonds" backed by a state-owned bank for economic development.

Either way you cut it, the holiday proved worthy of its name.

Nine of the 10 electric utility members (excluding PECO Energy Co.) of the Pennsylvania-New Jersey-Maryland (PJM) Interconnection have filed agreements and transmission tariffs at the FERC, seeking to replace the pool with a competitive power pool that would set a next-hour spot wholesale power price (to vary by location), but also allow bilateral trading.

The majority proposal would set up an independent system operator (ISO). The tariff would support poolwide open access and comparable transmission service.

Seven electric utilities in the Northwest have formed an independent system operator (ISO), called "IndeGo," to coordinate their electric transmission. IndeGo will operate as a single control area, responsible for the operation of transmission-grid facilities carrying 230 kilovolts or more that are owned or directly controlled by the member utilities.

On January 1, 1998, California will "deregulate" the state's electric utilities. The Western Power Exchange (WEPEX) and the independent system operator (ISO) will start up, creating an open market for wholesale power.

Elizabeth A.

The old shibboleth to some extent is literally true. The electric industry appears different from the natural gas industry in that demand must be matched immediately with production. No viable location comes to mind to put away some of that extra power until it is needed. But literal truth is not necessarily the whole story.

Six weeks ago I wrote a column ("$70,000 an Hour," July 15, 1996, p. 4) about nuclear waste, the Department of Energy (DOE), and the billions of dollars paid in by electric utilities that lie stranded in the federal nuclear waste fund.

On July 23 a federal appeals court ruled that DOE must establish a repository and begin accepting high-level nuclear waste for storage, beginning January 31, 1998. (See, Indiana-Michigan Power Co. v. DOE, D.C. Cir.

A special report

on transmission,

power pools, ISOs,

and the fallout from FERC Order 888."WHAT IS NEW IN THE INDUSTRY IS

not the conclusion that coordination in operations is needed to avoid chaos.