Exhibit 99.408

         FTR Simplifications

         Needed for 1/1/99 Implementation

         USE FIXED PERCENTAGE OF USAGE CHARGE REFUNDS TO FTR HOLDERS:

         Under the current FTR proposal, whenever the Total Transfer Capability
         (TTC) of an interzonal interface is de-rated, the FTR usage charge
         entitlement (in MW) do not change (unless the interface capability is
         lower then the total number of FTRs issued). This results in a dynamic
         percentage for allocation of congestion revenues which could change on
         an hourly basis.

         Presently, the ISO Settlements system can accommodate daily changes in
         percentage ownership of branch groups when refunding congestion rents
         to TOs, but relative percentages remain fixed throughout the day
         regardless of changes in interface capabilities. In order to reduce the
         number of code changes by January 1, 1999, this simplification requires
         a fixed percentage for congestion revenue allocations. Therefore, if a
         path is derated, the percent ownership of the FTR will stay the same.


         ISO TO SCHEDULE AND SETTLE WITH PRIMARY FTR HOLDER ONLY

         ISO will refund the usage charge revenues to the primary FTR Holders
         (and TOs) and they in turn will refund the FTR holders in the secondary
         market. Tracking trades in the secondary market is very difficult
         because of potential hourly changes in ownership of the inter-zonal
         interfaces.

         Presently, TOs receive the usage charge refunds based on:

                  a)       Entitlement percentage on the branch group

                  b)       DA ATC for DA market; (HA ATC - DA ATC) for HA market

                  c)       DA or HA Shadow Price (for DA or HA market
                           respectively)


         This simplification allows the use of the existing settlements and
         billing system infrastructure.


         NO ECONOMIC ADJUSTMENT BIDS ON FTR.


         DESCRIPTION:

         In order to utilize current functionality and limit the amount of
         software changes needed to support FTRs, FTRs would need to be
         scheduled in a similar manner as Existing Transmission Contracts are
         scheduled today. A new protective adjustment bid level would need to be
         established. In order for this to work FTRs would need to be scheduled
         by having the SCs define the sources (generation or imports) on one
         side of the path and sinks (loads or exports) in zone in the opposite
         end of the path that are protected by FTR usage.


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         ISSUES:

         The approach will have the same problems that ETC scheduling has today.
         These problems include the need to complex validation rules that do to
         not currently exist. Without additional validation there will be room
         for gaming and mistakes that can cause congestion or provide FTR users
         with priorities on paths they do not have priority on.


         ALLOW FOR FTR DEBITS AS THERE ARE TO DEBITS TODAY:


         DESCRIPTION:

         Delaying resolving the TO Debit issue until after FTR startup.


         ISSUES:

         If it is determined that FTR can proceed without fixing the TO Debit
         problem then the FTR holders will be exposed to a debit charge when
         hour ahead congestion is caused by a derate on a path or when an
         existing contract holder retracts a counter schedule. This is due to
         the fact that FTR holders would look like partial owners of the path.
         With the present software when a derate occurs that results in
         day-ahead schedules getting cut the Transmission Owners would end up
         refunding the SCs for the cut schedules at the HA congestion price.
         This also occurs when congestion in the HA market is caused be an ETC
         contract holder retracting a counter schedule it had in the DA market.
         As a result of the FTR being effectively a partial Transmission Owner,
         FTR holders would also be partially responsible for refunding the SCs
         for the cut DA schedules in the HA market at the HA congestion price.


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