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NYMEX To Launch Financially Settled Monthly, Weekly, And Daily PJM Electricity Futures Contracts

Date 17/12/2002

The board of directors of the New York Mercantile Exchange, Inc., last week approved plans to introduce three financially settled Pennsylvania/New Jersey/ Maryland (PJM) electricity futures contracts in the first part of 2003 - one based on a daily floating price for each peak day of the month; one based on a daily floating price for each peak day of the week; and one based on the daily floating price for the next peak day.

The daily floating prices will be the arithmetic average of the PJM western hub locational marginal pricing for peak hours, provided by the PJM Interconnection, LLC. Peak hours will be from 7 AM to 11 PM prevailing local time. Peak days are Monday through Friday, excluding North American Electric Reliability Council holidays.

These contracts will be traded through open outcry during the day and on the NYMEX ACCESS® electronic trading system after hours.

The daily unit size for each contract will be 40 megawatt hours (Mwh). In the case of the monthly and weekly futures contracts, transaction sizes will be limited to whole number multiples of the number of peak days remaining in the contract period.

For the monthly and weekly contracts, trading will end two business days prior to the last peak day of the period. For the daily contract, trading will cease on the business day prior to the peak day.

Exchange President J. Robert Collins, Jr., said, "The Exchange has worked closely with the electricity industry to develop a set of contracts that will combine the flexibility they seek with the liquidity and security those markets are currently lacking. Events over the last few years have clearly demonstrated the severe need that the electricity industry has for risk management tools and price transparency similar to those available and used by every other major energy market."