Exhibit 99.312



PORTFOLIO BIDDING OF ENERGY SCHEDULES

Motivation: (i) allow SCs who do not want to schedule bus-specific generating
resources to submit Adjustment Bids for inter-zonal access; (ii) allow SCs with
traditionally-managed portfolios (such as the municipal entities) to retain the
flexibility that they currently have to manage those portfolios; and (iii) allow
the ISO to perform security analyses and, ultimately, intra-zonal congestion
management.

Proposal:
- --------

    1.  Allow SCs to submit their desired schedules to the ISO (at the start of
        each of the two day-ahead congestion management iterations, and at the
        start of the hour-ahead congestion management process) either through
        the use of zonal opseudo-generatorso (one per SC in each congestion
        zone) or through the use of a Metered Subsystem (MSS) which schedules
        under an existing operating agreement.

    2.  Convert the pseudo-generators into unit-specific schedules, and/or SC-SC
        trades, in time for the ISO to perform security analyses. The SCs will
        append any voluntarily-submitted Adjustment Bids (for the purposes of
        intra-zonal congestion management and Supplemental Energy) to these
        unit-specific schedules. This requirement should not effect any MSS
        which operates under an existing operating agreement.

    3.  As to timing of step 2, the conversion does not need to be done until
        after 1300 in the day-ahead process; and until 30 minutes before the
        operating hour in the hour-ahead process. During 1998, we will work
        together on the time requirements for the portfolio-to-specific resource
        conversion.

    4.  Implementation of items 1 through 3, above, as soon as practicable
        either on or after 1/1/98.

    PORTFOLIO BIDDING FOR ANCILLARY SERVICES AND SUPPLEMENTAL ENERGY

    Motivation: Implement an A/S and SE portfolio-bid model on a sub-zonal basis
        for operational reasons, and to motivate MSS both to provide for
        self-provision as well as to bid into the ISO procurement process.

    Proposal:
    --------

    1.  Allow SCs to submit their desired A/S and SE bids to the ISO (at the
        start of each of the two day-ahead congestion management iterations, and
        at the start of the hour-ahead congestion management process) as zonal
        portfolio bids, either through the use of opseudo-generatorso (one per
        SC per AS in each zone) or through the use of a Metered Subsystem (MSS)
        which schedules under an existing operating agreement.

    2.  After the ISO has concluded its Ancillary Services auctions, the SCs who
        have made use of portfolio bids will convert them into demand
        zone-specific portfolios (or individual


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        resources, if they choose to do so), by 30 minutes prior to the start of
        the operating hour.

    3.  For DSM that is used for non-spinning reserve and supplemental reserves,
        the SCs would, prior to the operating hour, give the ISO demand
        zone-specific information about the DSM portfolios that had won the A/S
        auctions or were used as self-provided A/S.

    4.  The ISO agrees that it will deviate from the simple zonal lists of A/S
        and SE (which are only distinguished by price, and not by location
        within a zone) only if the ISO believes that it cannot use the next
        resources on the lists because of some locational inadequacy (such as
        creation of inter-zonal congestion).


IMPLEMENTATION OF THE ZONAL MODEL FOR INTER-ZONAL ACCESS

Motivation: the day-ahead and hour-ahead inter-zonal congestion management is a
commercial/pricing issue. As such, a simplified o10-buso model for inter-zonal
access allocation will provide many tangible benefits, including commercial
simplicity, less gaming, consistency with the settlements model, consistency
with counterflow payments, consistency with the tradable rights models under
consideration in the RTGs, etc. We agree with the ISOAEs use of a 3000-bus model
for security analysis, intra-zonal congestion management, and analysis of
whether additional zones should be created.

    Proposal:
    --------

    1.  Implement the reduced 10-bus model as soon as practicable, either on or
        after 1/1/98.

Over Generation Management

Proposal: remove all references to over-generation in the ISO Tariff, and
require all SCs to maintain balanced schedules at all times.


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