We discuss the probable detection of broad Ne VIII lambda 774 emission
from the z(e) = 0.978 quasar PG 1148 + 549, and we use spectral synth
esis calculations to study the physical conditions in the line-forming
gas. The theoretical predictions and the measured line wavelength bot
h support Ne VIII lambda 774 as the most likely identification. Our ca
lculations show that Ne VIII lambda 774 forms in hotter and more highl
y ionized gas than previously recognized in the broad emission line re
gion. If the gas is photoionized by a standard active galactic nucleus
continuum, the observed Ne VIII equivalent width, the Ne VIII/O VI fl
ux ratio, and the assumption of cloud stability imply ionization param
eters 5 less than or similar to U less than or similar to 30 and tempe
ratures 5 x 10(4) K less than or similar to T-e less than or similar t
o 2 x 10(5) K. The large Ne VIII equivalent width also suggests that t
he emitting clouds cover greater than or similar to 1/3 of the continu
um source and have a total hydrogen column density N-H greater than or
similar to 10(22) cm(-2). If the gas is instead collisionally ionized
, Ne VIII could reside in stable clouds with equilibrium temperatures
near 8 x 10(5) K. In either case, the Ne VIII-emitting clouds will app
ear as X-ray ''warm absorbers'' if they lie along our line of sight to
the X-ray continuum source.Line thermalization can greatly lower some
of the line fluxes and alter the line ratios. For example, C IV lambd
a 1549 can be thermalized easily, with doublet emission ratios lambda
1548/lambda 1550 near unity. However, our calculations indicate that N
e VIII lambda 774 is not thermalized and that its doublet emission rat
io should be lambda 770/lambda 780 x 2. Future observations of the wid
ely separated Ne VIII doublet would test this prediction and constrain
the space and column densities in the Ne VIII emitting region. Finall
y, temperatures in the Ne VIII gas may be in the range needed for opti
cally thin models of the UV continuum, i.e., the ''big blue bump.'' Ho
wever, the diffuse thermal continuum flux from the Ne VIII-emitting re
gion falls well short of the observed continua unless the measured lin
es are severely suppressed by thermalization at densities greater than
or similar to 5 x 10(12) cm(-3). This result supports Kriss's claim t
hat the optically thin blue-bump models have the serious problem of ov
erpredicting the UV metal line fluxes.