BILL NUMBER: ABX1 5 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Keeley
JANUARY 9, 2001
An act to amend Sections 335 and 341.2 of, to add Section 352 to,
and to repeal and add Sections 337 and 338 of, the Public Utilities
Code, relating to public utilities, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 5, as introduced, Keeley. Electrical restructuring: Oversight
Board: Independent System Operator: Power Exchange.
(1) The existing restructuring of the electrical services industry
within the Public Utilities Act provides for the authorization of
direct transactions between electricity suppliers and end use
customers and for the establishment of an Independent System Operator
and a Power Exchange as separately incorporated public benefit,
nonprofit corporations. An Electricity Oversight Board is also
established to oversee the Independent System Operator and the Power
Exchange. The Oversight Board has the exclusive right to approve
procedures for the election, submission for confirmation, and
qualification for Independent System Operator and Power Exchange
governing board members, all of whom are required to be electricity
consumers in the area served by the Independent System Operator and
the Power Exchange. The governing boards are required to include
representatives of investor-owned utility transmission owners,
publicly owned utility transmission owners, nonutility electricity
sellers, public buyers and sellers, private buyers and sellers,
industrial end users, commercial end users, residential end users,
agricultural end users, public interest groups, and nonmarket
participant representatives. A simple majority of each board is
required to consist of persons who are themselves unaffiliated with
electric generation, transmission, or distribution corporations. The
structural composition of the governing boards existing on July 1,
1999, is required to remain in effect until an agreement with a
participating state is legally in effect. However, prior to that
agreement, the state retains the right to change each governing board
into a nonstakeholder board. If that legislative change occurs,
revised bylaws are required to be filed with the Federal Energy
Regulatory Commission under a specified provision of federal law.
This bill, instead, would require that, within 90 days of the
effective date of the bill, the existing Independent System Operator
and Power Exchange governing boards be replaced by 3-member
independent governing boards of directors appointed by the Governor.
The bill would prohibit a member of the independent governing
board appointed by the Governor from being affiliated with any actual
or potential participant in any market administered by the
Independent System Operator or the Power Exchange.
The bill would prohibit the Independent System Operator from
entering into a multistate entity or a regional organization unless
that entry is approved by the board. Since a violation of the act is
a crime, this bill would impose a state-mandated local program by
establishing a new crime.
The bill would require the board to require the articles of
incorporation and bylaws of the Independent System Operator and the
Power Exchange to be revised, and to make filings with the Federal
Energy Regulatory Commission as the board determines to be necessary.
The bill would make other, conforming changes in existing law.
(2) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(3) The bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 335 of the Public Utilities Code is amended to
read:
335. In order to ensure that the interests of the people of
California are served, a five-member Electricity Oversight Board is
hereby created as provided in Section 336. For purposes of this
chapter, any reference to the Oversight Board shall mean the
Electricity Oversight Board. Its functions shall be all of the
following:
(a) To oversee the Independent System Operator and the Power
Exchange.
(b) To determine the composition and terms of service and
to exercise the exclusive right to decline to confirm the
appointments of specific members of the governing
boards of the Independent System Operator and the Power Exchange
, as specified in subdivision (d) .
(c) To serve as an appeal board for majority decisions of the
Independent System Operator governing board, as they relate to
matters subject to exclusive state jurisdiction, as specified in
Section 339.
(d) Those members of the Independent System Operator and Power
Exchange governing boards whose appointments the Oversight Board has
the exclusive right to decline to confirm include proposed governing
board members representing agricultural end-users, industrial
end-users, commercial end-users, residential end-users, end-users at
large, nonmarket participants, and public interest groups.
SEC. 2. Section 337 of the Public Utilities Code is repealed:
337. The Oversight Board shall have the exclusive right to
approve procedures for the election and submission for confirmation
and the qualifications for Independent System Operator governing
board members specified in subdivision (d) of Section 335, all of
whom shall be required to be electricity consumers in the area served
by the Independent System Operator. The Independent System Operator
governing board shall include, but not be limited to,
representatives of investor-owned utility transmission owners,
publicly owned utility transmission owners, nonutility electricity
sellers, public buyers and sellers, private buyers and sellers,
industrial end-users, commercial end-users, residential end-users,
agricultural end-users, public interest groups, and nonmarket
participant representatives. A simple majority of the board shall
consist of persons who are themselves unaffiliated with electric
generation, transmission or distribution corporations. The
structural composition of the Independent System Operator governing
board existing on July 1, 1999, shall remain in effect until an
agreement with a participating state is legally in effect. However,
prior to such an agreement, California shall retain the right to
change the Independent System Operator governing board into a
nonstakeholder board. In the event of such a legislative change,
revised bylaws shall be filed with the Federal Energy Regulatory
Commission under Section 205 of the Federal Power Act (16 U.S.C.A.
Sec. 824d).
SEC. 3. Section 337 is added to the Public Utilities Code, to
read:
337. (a) Within 90 days of the effective date of the act adding
this section, the existing Independent System Operator governing
board shall be replaced by a three-member independent governing board
of directors appointed by the Governor. Any reference in this
chapter or in any other provision of law to the Independent System
Operator governing board means the independent governing board
appointed under this subdivision.
(b) A member of the independent governing board appointed under
subdivision (a) may not be affiliated with any actual or potential
participant in any market administered by the Independent System
Operator.
(c) (1) All appointments shall be for one-year terms.
(2) There is no limit on the number of terms that may be served by
any member.
(d) The Oversight Board shall require the articles of
incorporation and bylaws of the Independent System Operator to be
revised in accordance with this section, and shall make filings with
the Federal Energy Regulatory Commission as the Oversight Board
determines to be necessary.
SEC. 4. Section 338 of the Public Utilities Code is repealed:
338. The Oversight Board shall have the exclusive right to
approve procedures and the qualifications for Power Exchange
governing board members specified in subdivision (d) of Section 335,
all of whom shall be required to be electricity customers in the area
served by the Power Exchange. The Power Exchange governing board
shall include, but not be limited to, representatives of
investor-owned electric distribution companies, publicly owned
electric distribution companies, nonutility generators, public buyers
and sellers, private buyers and sellers, industrial end-users,
commercial end-users, residential end-users, agricultural end-users,
public interest groups, and nonmarket participant representatives.
The structural composition of the Power Exchange governing board
existing on July 1, 1999, shall remain in effect until an agreement
with a participating state is legally in effect. However, prior to
such an agreement, California shall retain the right to change the
Power Exchange governing board into a nonstakeholder board. In the
event of such a legislative change, revised bylaws shall be filed
with the Federal Energy Regulatory Commission under Section 205 of
the Federal Power Act (16 U.S.C.A. Sec. 824d).
SEC. 5. Section 338 is added to the Public Utilities Code, to
read:
338. (a) Within 90 days of the effective date of the act adding
this section, the existing Power Exchange governing board shall be
replaced by a three-member independent governing board of directors
appointed by the Governor. Any reference in this chapter or in any
other provision of law to the Power Exchange governing board means
the independent governing board appointed under this subdivision.
(b) A member of the independent governing board appointed under
subdivision (a) may not be affiliated with any actual or potential
participant in any market administered by the Power Exchange.
(c) (1) All appointments shall be for one-year terms.
(2) There is no limit on the number of terms that may be served by
any member.
(d) The Oversight Board shall require the articles of
incorporation and bylaws of the Power Exchange to be revised in
accordance with this section, and shall make such filings with the
Federal Energy Regulatory Commission as the Oversight Board
determines to be necessary.
SEC. 6. Section 341.2 of the Public Utilities Code is amended to
read:
341.2. The Bagley-Keene Open Meeting Act (Article 9 (commencing
with Section 11120) of Chapter 1 of Part 1 of Division 3 of Title 2
of the Government Code) applies to meetings of the Oversight Board.
In addition to the allowances of that act, the Oversight Board may
hold a closed session to consider the appointment of one or more
candidates to the governing board of the Independent System Operator
or the Power Exchange , deliberate on matters involving the
removal of a member of the governing board of the Independent System
Operator or the Power Exchange, or to consider a matter
based on information that has received a grant of confidential status
pursuant to regulations of the Oversight Board, provided that any
action taken on any of these matters such a
matter shall be taken by vote in an open session .
SEC. 7. Section 352 is added to the Public Utilities Code, to
read:
352. The Independent System Operator may not enter into a
multistate entity or a regional organization as authorized in Section
359 unless that entry is approved by the Oversight Board.
SEC. 8. No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
SEC. 9. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
In order to make the Independent System Operator and the Power
Exchange more accountable to the people of this state by eliminating
stakeholder governing boards, thereby acting to mitigate the state's
current energy crisis, it is necessary for this act to take effect
immediately.