BILL NUMBER: ABX1 5 ENROLLED
BILL TEXT
PASSED THE SENATE JANUARY 17, 2001
PASSED THE ASSEMBLY JANUARY 17, 2001
AMENDED IN SENATE JANUARY 16, 2001
INTRODUCED BY Assembly Member Keeley
(Principal coauthor: Senator Bowen)
JANUARY 9, 2001
An act to amend Sections 335 and 341.2 of, to add Sections 352 and
352.5 to, and to repeal and add Section 337 of, the Public Utilities
Code, relating to public utilities, and declaring the urgency
thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 5, Keeley. Electrical restructuring: Oversight Board:
Independent System Operator.
(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
governing board be replaced by a 5-member independent governing board
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.
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 to be
revised, and to make filings with the Federal Energy Regulatory
Commission as the board determines to be necessary.
The bill would require the Independent System Operator to make
publicly available a list of all power plants located in the state
that are not operational due to a planned or unplanned outage, make
the list available over the Internet, and update the list daily.
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.
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) (1) To exercise the exclusive right to decline to confirm the
appointments of members of the governing board of the Independent
System Operator.
(2) 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 board of the Power Exchange.
(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 Power Exchange governing board 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:
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 five-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 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 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 such a matter shall be taken by
vote in an open session.
SEC. 5. 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. 6. Section 352.5 is added to the Public Utilities Code, to
read:
352.5. (a) The Independent System Operator shall make publicly
available a list of all power plants located in the state that are
not operational due to a planned or unplanned outage.
(b) For the purposes of complying with subdivision (a), the
Independent System Operator shall make the list available over the
Internet.
(c) The Independent System Operator shall update the list
established pursuant to subdivision (a) on a daily basis.
SEC. 7. 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. 8. 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 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.