The New York Mercantile Exchange (Nymex) reported a fairlyactive first day of trading for the eastern electricity futurescontracts on Friday, with a total volume of 939 contracts traded.This, however, was 282 fewer contracts than the number tradedduring the first day of the western electricity contracts in 1996,a Nymex official said.

The volume of contracts traded for delivery into the CinergyCorp. system was 573, while the number of contracts for deliveryinto the Entergy Corp.-based system was slightly lower at 366,noted Nymex spokeswoman Maria Gonzalez. Both figures were estimatesand will be finalized today. The price for the Cinergy- andEntergy-based contracts settled at $58 and $62.50, respectively,she said. The contracts are for delivery in September.

The launch of the two eastern electricity futures contractscomes a little more than two years after the successful kick-off ofthe western power contracts at the California/Oregon border and atPalo Verde, AZ, which together now trade an average of 2,500contracts daily “There’s no real basis for an expectation” that oneof the new futures contracts will be more widely used than theother, said Neal Wolkoff, executive vice president at Nymex. “Ithink that both areas have become important pricing points on theirown, independent of each other.

The Cinergy system includes about 7,000 miles of transmissionlines that serve portions of Ohio, Indiana and Kentucky; it hasmajor interconnections with companies in the East Central AreaReliability Coordination Agreement (ECAR) region. New Orleans,LA-based Entergy owns 15,500 miles of transmission lines servingcustomers in Louisiana, Arkansas, Mississippi and Texas; itinterfaces with utilities in the Southwest Power Pool, theMid-America Interconnected Network and the Tennessee ValleyAuthority (TVA).

The terms and conditions of the Entergy- and Cinergy-basedfutures contracts are standardized. Each contract unit is 736 MWhsof firm electric energy; delivery will occur during a 16-hourperiod between 7 a.m. and 11 p.m. eastern time on each business dayof the delivery month; delivery will occur at the rate of 2 MWhseach hour during the delivery period; and trading will end on thefourth business day prior to the first day of the delivery month.Prices will be based on delivery requirements. The minimum dailyprice fluctuation for the monthly futures contract will be onecent/MWh, while the maximum price fluctuation will be $6/MWh ineither direction – except for the first two months – and could beincreased to $12/MWh in the event the preceding day’s pricesettles at the $6 limit. For the first two contract months, themaximum daily price fluctuation will be $15/Mwh above or below theprevious day’s settlement price.

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