Progress in the following three areas is reported: engineering analysis and design; hydrogen production and auxiliaries; and hydrogen storage development. Process designs for the 26-MW electric storage facility were completed. Work to determine the allowed break-even capital cost of ''black box'' electric storage devices is completed. Studies of the performance and temperature dependence of power consumption versus current density were completed for the Solid Polymer Electrolyte and KOH small multi-cell modules. Test Bed A-1, for long-term attrition studies, was operated for 1200 hydride-dehydride cycles. About 60 percent of the starting FeTi alloy suffered a factor of ten size reduction, but the ability to absorb hydrogen showed no decrease. (LK)