The Commodity Futures Trading Commission (CFTC) is expected toapprove Tuesday a proposed Chicago Board of Trade (CBOT) PJMwestern hub electricity futures contract, based on physicaldelivery into the PJM western hub electricity cash market ofPennsylvania, New Jersey and Maryland. The contract is to be tradedalong with the CBOT’s TVA and ComEd contracts, creating a powercomplex to provide risk management to the southeastern, midwesternand northeastern United States. The CBOT announced the proposed PJMcontract in November.

Wednesday, the CFTC approved a New York Mercantile Exchange (NYMEX)PJM contract application to trade electricity futures and options atthe Pennsylvania-New Jersey-Maryland western hub (see Daily GPI Jan. 14, 1999).

The NYMEX board agreed to apply for permission to offer the setof contracts last November to complement its other two sets ofeastern electricity futures and options – one based on deliveryinto the Cinergy transmission system and the other based ondelivery into the Entergy transmission system – which have beenaveraging a combined volume of close to 1,000 contracts a day.

Terms of the NYMEX and CBOT contracts are nearly identicalexcept CBOT’s trading unit is more than double NYMEX’s at 1,680 MWhper contract.

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