New York State ISO Board of Directors.

ALBANY, N.Y.--(BUSINESS WIRE)--Oct. 29, 1998--A selection committee today announced the appointment of a nine member Board of Directors for the proposed Independent System Operator (ISO) for the New York State electric transmission system and energy markets.

The ISO is being formed as part of the overall restructuring of the electric industry in the State. The new entity will maintain the reliable, safe and efficient operation of the New York power grid, facilitate and administer the State's competitive wholesale electric markets and manage the State's open access transmission tariff. The reliable operation of the grid is presently performed by the New York Power Pool, which consists of the six investor-owned utilities, and the two Power Authorities. -0-

The Board members are:

Karen Antion, Chief Technology Officer, The Port Authority of New York
and New Jersey;

Alfred Boschulte, President of AFB Consulting, Inc., and former
Chairman, NYNEX Mobile Communications;

John Boston, former Vice Chairman, Wisconsin Electric Power Company;

Richard Grossi, Chairman, United Illuminating Company;

Erland Kailbourne, Chairman, Fleet Bank (New York);

Bill Paxon, Member, U.S. House of Representatives;

Thomas Ryan, President, American Stock Exchange;

Harold Scherer, former President, Commonwealth Electric Company, and;

Richard Schuler, Director, Cornell Institute for Public Affairs.

     In announcing the appointment of the Board, Maureen O. Helmer,
Chairman of the New York State Public Service Commission, stated,
"This is an important step in the creation of a fully competitive
electricity market while continuing the highly reliable operation of
the electric transmission system in the State. The Selection Committee
has done an excellent job of choosing a diverse and exceptionally well
qualified group of individuals for the ISO Board."
     The Selection Committee was authorized by the Federal Energy
Regulatory Commission (FERC) to select the Board for the New York ISO.
The Committee was comprised of representatives of the New York Power
Pool; independent electric generators; power marketers; energy service
companies; municipal utilities; industrial, commercial and residential
customers; environmental and public interest groups; and staff of the
New York State Department of Public Service. Korn/Ferry International,
a leading executive search firm, guided the Selection Committee in its
search.
     The ISO Board is expected to convene in November, at which time
it will begin its search for an Executive Director. Preparations for
the implementation of the New York ISO and the wholesale and retail
electric markets in New York State are underway. The New York Power
Pool will continue to operate the New York State electric power grid
until it transfers operational control to the New York ISO.


                  ISO BOARD SELECTION PRESS RELEASE
                        BACKGROUND INFORMATION

     The New York Power Pool (NYPP), headquartered in Guilderland, New
York, was established on July 21, 1966. It is currently an association
of the six major investor-owned electric utilities in New York State
and two power authorities. These NYPP Member Systems serve over 99
percent of the State's electric power requirements. The basic purpose
of NYPP has been to coordinate the development and operation of the
Member Systems' electric production and transmission facilities in
order to ensure the reliability of the State's transmission system and
maximize the efficiency of operation of the interconnected Members'
Systems. In dispatching the State's energy resources, NYPP provides a
central dispatch service based on the incremental costs of energy
production subject to established reliability criteria.
     The Member Systems of NYPP are: Central Hudson Gas & Electric
Corporation Consolidated Edison Company of New York, Inc. Long Island
Power Authority New York State Electric & Gas Corporation New York
Power Authority Niagara Mohawk Power Corporation Orange and Rockland
Utilities, Inc. Rochester Gas and Electric Corporation.
     In 1993, the New York State Public Service Commission (NYPSC)
initiated a collaborative Competitive Opportunities Proceeding (COP)
to identify and address issues related to the introduction of
competition in the regulated electric energy markets in New York
State. In 1994, the NYPSC issued an opinion and order on flexible
rates and initiated an investigation into the appropriate market
structure and regulatory regime for establishing competitive
electricity markets. In 1995, the NYPSC instituted COP Phase II to
identify regulatory and rate making practices that would assist in the
transition to a more competitive electric industry. The proceeding's
goal was to increase efficiency in the provision of electricity while
maintaining safety, environmental, affordability, and service quality
goals. In an opinion issued in 1996, the NYPSC established the
following goals for the electric utility industry:

- Lowering rates for consumers;

- Increasing customer choice;

- Continuing reliability of service;

- Continuing environmental and public policy programs;

- Allaying concerns about market power; and

- Continuing customer protection and the utility's obligation to
serve.

     In 1997, this initiative led to NYPSC rate/restructuring
decisions that addressed settlement agreements involving the
investor-owned utilities, which included provisions for customer
choice of energy suppliers. In order to ensure a competitive energy
market, there was also agreement to divest most utility-owned
fossil-fueled generating units.
     Concurrent with the restructuring activity in New York State, the
Federal Energy Regulatory Commission (FERC) issued its Orders 888 and
889 and subsequent orders addressing open access to the nation's
electric transmission system. Individual investor-owned transmission
providers filed their Open Access Transmission Tariffs with FERC in
1996. Power pools, such as the NYPP, were also ordered to file with
FERC their proposals for ensuring open access to their transmission
system. While FERC favored the formation of Independent System
Operators (ISO) to manage the transmission systems, it did not order
the creation of ISO's. It did, however, define principles that ISO's
would need to meet should an entity wish to form an ISO.
     On January 31, 1997, the NYPP Member Systems filed a
Comprehensive Proposal to Restructure the New York Wholesale Electric
Market, which conceptually defined a competitive energy market based
on competitive bids for the production of electric energy. The filing
further provided for the formation of an ISO and New York State
Reliability Council (NYSRC), that would define the rules governing the
reliable operation of the State's power system. The Member Systems
would turn over operational control of most of the State's
transmission system and the ISO would be responsible for the day to
day short term reliability of operation of the power system. The
filing included the agreements and tariffs that would govern the ISO
and the operation of the Member Systems' transmission system.
     The Member Systems prepared and submitted to FERC a number of
other filings in 1997. On May 2, 1997, a supplemental filing was made
to better define the role of the NYSRC and to identify the reliability
rules under the jurisdiction of the NYSRC. On August 15, 1997, six of
the Member Systems filed with FERC for market based rate authority.
This filing also included a proposed market power monitoring program.
On December 19, 1997, they submitted a Supplemental Filing to FERC
that proposed a revised ISO governance structure and added details as
to how the proposed competitive market would function. The filing also
refined the various previously filed ISO and NYSRC Agreements and
other Agreements and their interactions with the Transmission
Providers. These Agreements include:

1.  The Independent System Operator Agreement

 The ISO Agreement establishes the scope of the ISO's duties.
Under the Agreement, the ISO will, among other things, exercise
operational control over most of the State's transmission facilities
to maintain short term reliability, administer the ISO Transmission
Tariff and implement and operate New York's Open Access Same-Time
Information System (OASIS), as required in FERC Order No.889. The
governance structure of the ISO Board and the committees of the ISO
were defined along with a dispute resolution process.

2. ISO and Transmission Providers (TP) Agreement

     The ISO/TP Agreement defines the conditions under which the
Member Systems will provide the ISO with the authority to control the
day-to-day operation of certain transmission assets and administer the
ISO Tariff.

3. New York State Reliability Council (NYSRC) Agreement

     The NYSRC Agreement establishes the NYSRC, which is the entity
responsible for promulgating reliability standards for the operation
of the New York State Bulk Power System. The NYSRC Agreement provides
that the ISO is empowered with full responsibility for the day-to-day
operation of the system and for developing operating procedures based
on established reliability rules.

4. ISO/NYSRC Agreement The ISO/NYSRC

     Agreement defines the relationship and duties of the ISO and the
NYSRC. A dispute resolution process is included in the agreement.

5. ISO Tariff

     The ISO Tariff delineates, in detail, the terms and conditions of
service, as well as the rights and obligations of the market
participants and the ISO.

     After each filing, interested parties filed supporting comments
or protests with FERC for consideration.
     In an Order issued on June 30, 1998, FERC approved the NYSRC and
clarified the authority of the NYSRC and the role of the NYPSC.
Additionally, FERC conditionally approved the independent governance
structure of the ISO Board, the process for selecting Board members,
and the existence of the ISO committees. In its Order, FERC stated
that the Member Systems' proposal to form the ISO meets FERC's eleven
ISO principles. FERC, however, did direct the Member Systems and other
interested parties to submit to FERC modifications to the voting
structure of the ISO committees. The Member Systems and the other
interested parties await FERC's subsequent order on the balance of the
Member Systems' filings.
     Through a collaborative process guided by the NYPSC, the Member
Systems and other interested parties negotiated revised governance and
voting structure for the ISO committees. This Governance Settlement
Agreement has the support of most of the interested parties and was
filed with FERC on October 23, 1998.
     Included in FERC's June approval in the formation of the ISO was
its approval of a multi-stakeholder committee to select the first nine
board members. The Selection Committee was then established with
representatives from:

-        Central Hudson Gas & Electric Corporation
-        Consolidated Edison Company of New York, Inc.
-        Long Island Power Authority
-        New York State Electric & Gas Corporation
-        New York Power Authority
-        Niagara Mohawk Power Corporation
-        Orange and Rockland Utilities, Inc.
-        Rochester Gas and Electric Corporation.
-        New York Public Service Commission
-        Municipal Electric Utilities Association of New York State
-        New York State Consumer Protection Board
-        Multiple Intervenors
-        Enron
-        US Generating Company
-        Mercer Companies, Inc.
-        Pace Energy Project, Center for Environmental Legal Studies,
          Pace University Law School
-        The E Cubed Company, L.L.C.

This Selection Committee was aided by Korn/Ferry International in the selection of this Board of Directors.