February 20, 1998

The Honorable David P. Boergers
Acting Secretary
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, D.C. 20426

Re:  	Pacific Gas & Electric Company, et al., Docket Nos. EC96-19-003 and ER96-1663-003:  Status of Negotiations for Interconnnected Control Area Operating Agreements

Dear Secretary Boergers:

	On behalf of the California Independent System Operator Corporation ("ISO"), we wish to report on the status of the Interconnected Control Area Operating Agreements that are currently being negotiated with the ISO's neighboring control area operators.

	In its March 31, 1997 Phase II filing, the ISO informed the Commission that it would enter into appropriate agreements with other control area operators in order to satisfy WSCC and NERC operating guidelines and reliability criteria.  By order dated December 17, 1997, the Commission rejected the ISO's plan to file such agreements for informational purposes and ordered the ISO to file such agreements for Federal Power Act Section 205 approval. 

	To date the ISO has filed such agreements with the following control area operators:

•	Sierra Pacific Power Company (Docket No. ER98-1029-000, filed December 10, 1997)

•	PacifiCorp (Docket No. ER98-1032-000, filed December 10, 1997)

•	Salt River Project Agricultural Improvement and Power District  (Docket No. ER98-1030-000, filed December 10, 1997)

•	Arizona Public Service Company (Docket No. ER98-1028-000, filed December 10, 1997)

	The ISO continues to negotiate Interconnected Control Area Operating Agreements with all other connected control areas.  It will file such agreements with the Commission as soon as they are executed.  If, despite the ISO’s best efforts, such agreements are not completed by the ISO Operations Date, the ISO plans to coordinate operations with those control areas in accordance with NERC and WSCC requirements so as to fulfill its obligations under Article 5 of the Amended Transmission Control Agreement and the ISO Tariff and Operating Agreement (including Protocols).

	If you have any questions, please contact Mr. William Hayes at the ISO at 916-351-2342 or the undersigned.  Thank you for your consideration.

							Very truly yours,

							Fiona Woolf
							Linda C. Ray
							Counsel for the California 
							Independent System Operator 								Corporation	

CERTIFICATE OF SERVICE

	I hereby certify that I have this day served the foregoing letter upon each person designated on the Official Service List compiled by the Secretary in Docket Nos. EC96-19-003 and ER96-1663-003, in accordance with the requirements of Rule 2010 of the Commission’s Rules of Practice and Procedure, 18 C.F.R. § 385.2010.
	Dated at Washington, D.C., this 20th day of February, 1998.

							_______________________
							Harry Dupre