BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 5 x1
                                                                  Page  1

          Date of Hearing:   January 12, 2001

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Carole Migden, Chairwoman

                 AB 5 X1  (Keeley) - As Introduced:  January 9, 2001 

          Policy Committee:                              E.C. &  
          A.Vote:18-0

          Urgency:     Yes                  State Mandated Local Program:  
          Yes    Reimbursable:              No

           SUMMARY  


          This bill addresses governance of the Independent System  
          Operator (ISO) and the Power Exchange (PX), and oversight by the  
          Electricity Oversight Board (EOB).  Specifically, this bill:

          1)Replaces the ISO and PX stakeholder governing boards with  
            three-member boards of directors appointed by the governor.

          2)Requires the EOB to file revised ISO and PX articles of  
            incorporation and bylaws with the Federal Energy Regulatory  
            Commission (FERC) as deemed necessary by the EOB.

          3)Prohibits the ISO from entering into multi-state or regional  
            organizations without approval from the EOB.

           FISCAL EFFECT  

          Minor absorbable costs (less than $25,000) to the EOB for the  
          FERC filings and to review ISO proposals to join multi-state or  
          regional organizations.

           COMMENTS  

           Background and Purpose  .  The ISO and PX are non-public entities  
          engaged in the interstate transmission and wholesale power  
          markets whose operations are subject to FERC jurisdiction under  
          the Federal Power Act.  On December 15, 2000, FERC issued an  
          Order Proposing Remedies for California Wholesale Electric  
          Markets, which, in part, proposes to replace the existing  
          stakeholder boards of the ISO and PX with independent boards.   








                                                                  AB 5 x1
                                                                  Page  2

          The FERC order outlined a desire to establish procedures to  
          discuss with state representatives the process for selecting the  
          independent board members.  This bill proposes that the boards  
          consist of three members appointed by the governor.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916)319-2081