BILL ANALYSIS
SB 47
Page 1
SENATE THIRD READING
SB 47 (Bowen)
As Amended June 19, 2001
Majority vote
SENATE VOTE :32-2
UTILITIES AND COMMERCE 16-0 APPROPRIATIONS 21-0
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|Ayes:|Wright, Pescetti, Bill |Ayes:|Migden, Bates, Alquist, |
| |Campbell, | |Aroner, Ashburn, Cedillo, |
| |John Campbell, Cardenas, | |Corbett, Correa, Daucher, |
| |Diaz, Jackson, Kelley, La | |Goldberg, Maldonado, |
| |Suer, Leonard, Maddox, | |Robert Pacheco, Oropeza, |
| |Nation, Papan, Reyes, | |Pavley, Runner, Simitian, |
| |Simitian, Wesson | |Thomson, Wesson, Wiggins, |
| | | |Wright, Zettel |
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SUMMARY : Requires Senate confirmation of Independent System
Operator (ISO) governing board members. Extends the terms of
ISO governing board members from one to three years and staggers
them.
EXISTING LAW provides that the Electricity Oversight Board (EOB)
oversees ISO and has the exclusive right to decline to confirm
the appointments of ISO governing board members.
FISCAL EFFECT : Negligible absorbable costs to the Senate for
confirmation proceedings.
COMMENTS : ISO was established by AB 1890 (Brulte), Chapter 854,
Statutes of 1996, as a separately incorporated public benefit,
nonprofit corporation. ISO's purpose is to ensure efficient use
and reliable operation of the state's electricity transmission
system. Originally, the ISO governing board was appointed by
EOB, according to classes of stakeholders. Because ISO is a
non-public entity involved in interstate transmission and
wholesale power markets, its operations are subject to Federal
Energy Regulatory Commission (FERC) jurisdiction, and FERC
rejected the portions of initial ISO tariffs requiring EOB
appointment of the governing board. FERC ordered ISO to
eliminate a bylaw requiring California residency as a
requirement for governing board members, EOB's appointment
SB 47
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function and EOB's authority to approve ISO bylaws and hear
appeals of ISO board decisions.
SB 96 (Peace), Chapter 510, Statutes of 1999, revised the
governance structure of ISO as well as EOB's authority. SB 96
limited EOB's confirmation powers to customer representatives to
the ISO board and its authority to serve as an appellate board
only to matters exclusively within the state's jurisdiction.
FERC's declaratory order approving the changes to the governance
structure of ISO asserted SB 96 changes outlined "an interim
role for the Oversight Board that is consistent with" prior FERC
orders. On December 15, 2000, FERC issued a final order on
California indicating that it would establish procedures to
discuss the selection process for an independent ISO board with
state representatives and that in the interim, the board should
turn over decision making power and operating control to ISO
management. The order also substantially diminished the role of
the Power Exchange (PX).
The Legislature enacted AB X1 5 (Kelley), Chapter 1, Statutes of
2001, First Extraordinary Session, requiring the replacement of
the ISO's 26 member stakeholder board with a governing board
composed of five members appointed by the Governor. The members
were required to be independent of any ISO market participant.
The five new members were confirmed by EOB on January 23, 2001.
SB 47, requires Senate confirmation of ISO governing board
members and requires establishment of appointments for up to
three year terms which are staggered among the members. This
bill allows people who have served on the PX board to serve on
the ISO board if they are not otherwise affiliated with an ISO
market participant. This bill follows up on the work started in
AB X1 5, which was an urgency measure. An urgency measure
cannot be the vehicle to remove confirmation duties of a state
office and EOB is a state office. Therefore, this regular
session bill is an appropriate vehicle to continue the necessary
reforms sought in AB X1 5.
Analysis Prepared by : Kelly Boyd / U. & C. / (916) 319-2083
FN: 0001943